Federal Register Vol. 81, No.112,

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2011-17-10, Amendment 39-16774 (76 FR 50111, August 12, 2011) (“AD 2011-17-10”). AD 2011-17-10 applied to all Model F.28 Mark 1000, 2000, 3000, and 4000 airplanes. The NPRM published in the Federal Register on January 4, 2016 (81 FR 34) (“the NPRM”). The NPRM was prompted by the issuance of revised service information to update the CDCCLs that address potential ignition sources inside fuel tanks. The NPRM proposed to retain the requirements of AD 2011-17-10, and to require revising the airplane maintenance or inspection program by incorporating the instructions in the revised service information. The NPRM also proposed to remove certain airplanes from the applicability. We are issuing this AD to prevent potential ignition sources inside the fuel tanks, which, in combination with flammable fuel vapors, could result in fuel tank explosions and consequent loss of the airplane.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2014-0111, dated May 8, 2014 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition on certain Model F.28 Mark 1000 airplanes. The MCAI states:

The CDCCL requirement in AD 2011-17-10 for Model F.28 Mark 2000, 3000, and 4000 airplanes is now addressed in other related rulemaking. Therefore, this AD does not include Model F.28 Mark 2000, 3000, and 4000 airplanes in the applicability.

This AD also removes airplanes having serial numbers 11993 and 11994 from the applicability because those airplanes were scrapped and removed from the type certificate data sheet.

The unsafe condition is the potential of ignition sources inside fuel tanks. Such ignition sources, in combination with flammable fuel vapors, could result in fuel tank explosions and consequent loss of the airplane. You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating it in Docket No. FAA-2015-8138.

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public.

We reviewed the available data and determined that air safety and the public interest require adopting this AD as proposed, except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

Fokker Services B.V. has issued Fokker Service Bulletin SBF28-28-053, Revision 3, dated January 9, 2014. The service information describes procedures for inspecting for a by-pass wire between the housing of each in-tank FQI cable plug and the cable shield, and installing a by-pass wire if necessary. The service information also describes CDCCL Item 1.7 for fuel quantity indicating system (FQIS) wiring in wing tanks. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

We estimate that this AD affects 5 airplanes of U.S. registry. This AD adds a requirement to revise the airplane maintenance or inspection program by incorporating the instructions in revised service information. The current costs associated with this AD are repeated as follows for the convenience of affected operators:

The actions required by AD 2011-17-10 will take about 6 work-hours per product, at an average labor rate of $85 per work-hour. Required parts cost about $0 per product. Based on these figures, the estimated cost of the actions that were required by AD 2011-17-10 is $510 per product.

In addition, we estimate that any necessary follow-on actions required by AD 2011-17-10 take about 7 work-hours and require parts costing $308, for a cost of $903 per product. We have no way of determining the number of products that may need these actions.

We also estimate that it takes about 1 work-hour per product to revise the maintenance or inspection program. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this AD on U.S. operators to be $425, or $85 per product.

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

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

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

For the reasons discussed above, I certify that this AD:

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

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

3. Will not affect intrastate aviation in Alaska; and

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

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 99-16-01, Amendment 39-11236 (64 FR 40743, July 28, 1999) (“AD 99-16-01”). AD 99-16-01 superseded AD 95-20-02, Amendment 39-9380 (60 FR 52618, October 10, 1995). AD 99-16-01 applied to certain Airbus Model A300 B4-600, B4-600R, and F4-600R series airplanes, and Model A300 C4-605R Variant F airplanes (collectively called Model A300-600 series airplanes). The NPRM published in the Federal Register on November 17, 2015 (80 FR 71751) (“the NPRM”).

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2013-0180, dated August 9, 2013 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus Model A300 B4-600, B4-600R, and F4-600R series airplanes, and Model A300 C4-605R Variant F airplanes (collectively called Model A300-600 series airplanes). The MCAI states:

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public.

We reviewed the available data and determined that air safety and the public interest require adopting this AD as proposed except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

We reviewed Airbus Service Bulletin A300-57-6017, Revision 04, including Appendix 1, dated February 4, 2011. This service information describes procedures for repetitive inspections of certain bolt holes where parts of the MLG are attached to the wing rear spar, and repair. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

We estimate that this AD affects 71 airplanes of U.S. registry.

The actions required by AD 99-16-01 and retained in this AD, take about 226 work-hours per product, at an average labor rate of $85 per work hour. Required parts cost about $0 per product. Based on these figures, the estimated cost of the actions that are required by AD 99-16-01 is $19,210 per product, per inspection cycle.

We also estimate that it will take about 226 work-hours per product to comply with the new basic requirements of this AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this AD on U.S. operators to be $1,363,910, or $19,210 per product.

We have received no definitive data that will enable us to provide cost estimates for the on-condition actions specified in this AD.

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

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

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

For the reasons discussed above, I certify that this AD:

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

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

3. Will not affect intrastate aviation in Alaska; and

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

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

Discussion

We issued a supplemental notice of proposed rulemaking (SNPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain B/E Aerospace protective breathing equipment (PBE) that is installed on airplanes. The SNPRM published in the Federal Register on January 15, 2016 (81 FR 2131). We preceded the SNPRM with a notice of proposed rulemaking (NPRM) that published in the Federal Register on June 16, 2015 (80 FR 34330). The NPRM proposed to require inspecting the PBE to determine if the pouch has the proper vacuum seal and replacing if necessary. The NPRM was prompted by a report of a PBE catching fire upon activation by a crewmember. The SNPRM proposed to require replacement of the PBE following newly issued service information, regardless of inspection results. We are issuing this AD to correct the unsafe condition on these products.

We gave the public the opportunity to participate in developing this AD. We have considered the comments received. We received one anonymous comment in support of the SNPRM (81 FR 2131, January 15, 2016).

Penney Baudin of United Airlines requested a change to the PBE replacement compliance time.

The commenter requested a 12-month repetitive inspection with a 36-month terminating replacement action. The commenter stated that the change would alleviate restrictive shipping means and complex distribution of the PBEs since the units contain oxygen generators.

We do not agree with the commenter. We believe that the replacement compliance time of 18 months after the effective date of this AD is sufficient time since we are allowing even more time than specified in the related service information. Also, the public has been aware of this safety issue since we first published the first NPRM on June 16, 2015 (80 FR 34330). We have not changed the final rule AD action based on this comment.

John Barker of B/E Aerospace stated that Service Bulletin 119003-35-009, dated November 9, 2015, is incorrectly referenced as Rev. 009 instead of Rev. 000 in the preamble of the SNPRM (81 FR 2131, January 15, 2016). The commenter requested the reference to the revision number be corrected.

We agree with the commenter. However, on April 12, 2016, Rev. 001 of B/E Aerospace Service Bulletin 119003-35-009 was released. We are incorporating the Revision 001, dated April 12, 2016, into the final rule AD action because the procedures for doing the inspection and replacement of the PBE have not changed.

We have changed the final rule AD action to include the newly revised service bulletin and to give credit to owners/operators who may have already done the required replacement following B/E Aerospace Service Bulletin No. 119003-35-009, Rev. 000, dated November 9, 2015, which was correctly referenced in paragraph (h) of the regulatory text in the SNPRM (81 FR 2131, January 15, 2016).

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD as proposed except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the SNPRM (81 FR 2131, January 15, 2016) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the SNPRM (81 FR 2131, January 15, 2016).

We reviewed B/E Aerospace Service Bulletin No. 119003-35-011, Rev. 000, dated February 4, 2015, and B/E Aerospace Service Bulletin 119003-35-009, Rev. 001, dated April 12, 2016. B/E Aerospace Service Bulletin No. 119003-35-011, Rev. 000, dated February 4, 2015, describes procedures for inspecting PBE, part number (P/N) 119003-11, to determine if the vacuum seal of the pouch containing the PBE is compromised. B/E Aerospace Service Bulletin 119003-35-009, Rev. 001, dated April 12, 2016, describes procedures for replacing PBE P/N 119003-11 with P/N 119003-21. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

B/E Aerospace Service Bulletin No. 119003-35-011, Rev. 000, dated February 4, 2015, applies to all PBE with P/N 119003-11 and P/N 119003-21. We have determined that this AD will apply only to a PBE P/N 119003-11 with regard to the inspection requirement of paragraph (g) of this AD. B/E Aerospace Service Bulletin 119003-35-009, Rev. 001, dated April 12, 2016, includes instructions for disposal. In this AD, we are requiring only the replacement action.

We estimate that this AD affects 9,000 products installed on airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

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

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

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

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

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

(3) Will not affect intrastate aviation in Alaska, and

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

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

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to PILATUS AIRCRAFT LTD. Models PC-12, PC-12/45, PC-12/47, and PC-12/47E airplanes. The NPRM was published in the Federal Register on March 28, 2016 (81 FR 17107). The NPRM proposed to correct an unsafe condition for the specified products and was based on mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country. The MCAI states:

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (81 FR 17107, March 28, 2016) or on the determination of the cost to the public.

We reviewed the relevant data and determined that air safety and the public interest require adopting the AD as proposed except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (81 FR 17107, March 28, 2016) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (81 FR 17107, March 28, 2016).

We reviewed PILATUS AIRCRAFT LTD. PC-12 Service Bulletin No: 57-007, dated September 29, 2015. The service information describes procedures for inspection, and if necessary realignment or replacement of the torlon plates in the forward lower wing-to-fuselage attachments. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section of the AD.

We estimate that this AD will affect 268 products of U.S. registry. We also estimate that it would take about 1 work-hour per wing per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour.

Based on these figures, we estimate the cost of the AD on U.S. operators to be $45,560, or $170 per product.

In addition, we estimate that any necessary follow-on actions would take about 3 work-hours per wing and require parts costing $1,000 per wing, for a total cost of $2,510 per product. We have no way of determining the number of products that may need these actions.

According to the manufacturer, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.

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

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

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

For the reasons discussed above, I certify this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

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

(3) Will not affect intrastate aviation in Alaska, and

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

You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-5284; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

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

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to various aircraft equipped with a BRP-Powertrain GmbH & Co KG (formerly Rotax Aircraft Engines) 912 A series engine. The NPRM was published in the Federal Register on March 28, 2016 (81 FR 17109). The NPRM proposed to correct an unsafe condition for the specified products and was based on mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country. The MCAI states:

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (81 FR 17109, March 28, 2016) or on the determination of the cost to the public.

We reviewed the relevant data and determined that air safety and the public interest require adopting the AD as proposed except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (81 FR 17109, March 28, 2016) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (81 FR 17109, March 28, 2016).

We reviewed BRP-Powertrain GmbH & CO KG issued Rotax Aircraft Engines BRP Service Bulletin SB-912-068 and SB-914-049 (co-published as one document), dated April 16, 2015. The service information describes procedures for re-identifying the engine that has new cylinder heads, part numbers 413235 and 413236 installed. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section of the AD.

We estimate that this AD will affect 65 products of U.S. registry.

We also estimate that it will take about 1 work-hour per product to comply with the engine re-identification requirement of this AD. The average labor rate is $85 per work-hour.

Based on these figures, we estimate the cost of this portion of this AD on U.S. operators to be $5,525, or $85 per product.

We also estimate that it will take about 1 work-hour per product to comply with the engine installation modification to indicate a Maximum Coolant Temperature requirement of this AD. The average labor rate is $85 per work-hour.

Based on these figures, we estimate the cost of this portion of this AD on U.S. operators to be $5,525, or $85 per product.

We also estimate that it will take about 1.5 work-hours per product to comply with the cylinder head replacement option of this AD. The average labor rate is $85 per work-hour. Required parts will cost about $2,500 to replace a single engine cylinder head.

Based on these figures, we estimate the cost of this portion of this AD on U.S. operators to be $2,627.50 per engine cylinder head.

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

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

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

For the reasons discussed above, I certify this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

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

(3) Will not affect intrastate aviation in Alaska, and

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

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

In accordance with section 513(f)(1) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 360c(f)(1)), devices that were not in commercial distribution before May 28, 1976 (the date of enactment of the Medical Device Amendments of 1976), generally referred to as postamendments devices, are classified automatically by statute into class III without any FDA rulemaking process. These devices remain in class III and require premarket approval, unless and until the device is classified or reclassified into class I or II, or FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the FD&C Act, to a predicate device that does not require premarket approval. The Agency determines whether new devices are substantially equivalent to predicate devices by means of premarket notification procedures in section 510(k) of the FD&C Act (21 U.S.C. 360(k)) and part 807 (21 CFR part 807) of the regulations.

Section 513(f)(2) of the FD&C Act, as amended by section 607 of the Food and Drug Administration Safety and Innovation Act (Pub. L. 112-144), provides two procedures by which a person may request FDA to classify a device under the criteria set forth in section 513(a)(1) of the FD&C Act. Under the first procedure, the person submits a premarket notification under section 510(k) of the FD&C Act for a device that has not previously been classified and, within 30 days of receiving an order classifying the device into class III under section 513(f)(1) of the FD&C Act, the person requests a classification under section 513(f)(2). Under the second procedure, rather than first submitting a premarket notification under section 510(k) of the FD&C Act and then a request for classification under the first procedure, the person determines that there is no legally marketed device upon which to base a determination of substantial equivalence and requests a classification under section 513(f)(2) of the FD&C Act. If the person submits a request to classify the device under this second procedure, FDA may decline to undertake the classification request if FDA identifies a legally marketed device that could provide a reasonable basis for review of substantial equivalence with the device or if FDA determines that the device submitted is not of “low-moderate risk” or that general controls would be inadequate to control the risks and special controls to mitigate the risks cannot be developed.

In response to a request to classify a device under either procedure provided by section 513(f)(2) of the FD&C Act, FDA will classify the device by written order within 120 days. This classification will be the initial classification of the device.

On June 27, 2014, Innovatex, Inc., submitted a request for classification of the Tear Duct Occluder (originally referred to as the Glaucoma Companion Nasolacrimal Compression Device) under section 513(f)(2) of the FD&C Act. The manufacturer recommended that the device be classified into class I (Ref. 1).

In accordance with section 513(f)(2) of the FD&C Act, FDA reviewed the request in order to classify the device under the criteria for classification set forth in section 513(a)(1) of the FD&C Act. FDA classifies devices into class I if general controls by themselves are sufficient to provide reasonable assurance of safety and effectiveness of the device for its intended use. After review of the information submitted in the de novo request, FDA determined that the device can be classified into class I. FDA believes general controls will provide reasonable assurance of the safety and effectiveness of the device.

Therefore, on April 20, 2016, FDA issued an order to the requestor classifying the device into class I. FDA is codifying the classification of the device by adding 21 CFR 886.5838.

The device is assigned the generic name nasolacrimal compression device, and it is identified as a prescription device that is fitted to apply mechanical pressure to the nasal aspect of the orbital rim to reduce outflow through the nasolacrimal ducts.

The risks to health that may be associated with use of the nasolacrimal compression device are improper fit of the device (extended or aggressive use of this device may cause sequelae such as bruising and/or soreness) and improper use of the device (for the uncoordinated, a corneal abrasion may occur inadvertently). General controls of the FD&C Act, including compliance with the labeling requirements in 21 CFR part 801 and the Quality System Regulation (21 CFR part 820), are sufficient to mitigate these risks and reasonably assure safety and effectiveness. FDA believes that the general controls provide reasonable assurance of safety and effectiveness.

The nasolacrimal compression device is not safe for use except under the supervision of a practitioner licensed by law to direct the use of the device. As such, the device is a prescription device and must satisfy prescription labeling requirements (see 21 CFR 801.109, Prescription devices).

Section 510(l) of the FD&C Act provides that a class I device is not subject to the premarket notification requirements under section 510(k) of the FD&C Act, unless the device is of substantial importance in preventing impairment of human health or presents a potential unreasonable risk of illness or injury. FDA has determined that the device does meet these criteria and, therefore, premarket notification is not required for the device. Thus, persons who intend to market this device need not submit a premarket notification containing information on the nasolacrimal compression device they intend to market prior to marketing the device, subject to the limitations on exemptions in 21 CFR 886.9.

The Agency has determined under 21 CFR 25.34(b) 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.

This final order refers to previously approved collections of information found in other FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in part 807, subpart E, regarding premarket notification submissions, have been approved under OMB control number 0910-0120; the collections of information in 21 CFR part 820, regarding the quality system regulation, have been approved under OMB control number 0910-0073; and the collections of information in 21 CFR part 801, regarding labeling, have been approved under OMB control number 0910-0485.

The following reference is on display in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852, and is available for viewing by interested persons between 9 a.m. and 4 p.m., Monday through Friday; it is also available electronically at http://www.regulations.gov.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 886 is amended as follows:

I. Background

FDA is announcing the availability of a guidance for industry entitled “Interim Policy on Compounding Using Bulk Drug Substances Under Section 503B of the Federal Food, Drug, and Cosmetic Act.” A new section 503B (21 U.S.C. 353b), added to the FD&C Act by the Drug Quality and Security Act in 2013, describes the conditions that must be satisfied for human drug products compounded by an outsourcing facility to be exempt from the following three sections of the FD&C Act: Section 505 (21 U.S.C. 355) (concerning the approval of drugs under new drug applications or abbreviated new drug applications); section 502(f)(1) (21 U.S.C. 352(f)(1)) (concerning the labeling of drugs with adequate directions for use); and section 582 (21 U.S.C. 360eee-1) (concerning drug supply chain security requirements). One of the conditions that must be met for a drug product compounded by an outsourcing facility to qualify for these exemptions is that the outsourcing facility does not compound drug products using a bulk drug substance unless: It appears on a list established by the Secretary identifying bulk drug substances for which there is a clinical need (see section 503B(a)(2)(A)(i) of the FD&C Act); or the drug compounded from such bulk drug substances appears on the drug shortage list in effect under section 506E of the FD&C Act (21 U.S.C. 356e) at the time of compounding, distribution, and dispensing (see section 503B(a)(2)(A)(ii) of the FD&C Act).

This guidance describes the conditions under which FDA does not intend to take action against an outsourcing facility for compounding a drug product from a bulk drug substance that does not appear on a list of bulk drug substances that can be used in compounding and is not used to compound a drug product that appears on the FDA drug shortage list at the time of compounding, distribution, and dispensing, while FDA develops the list of bulk drug substances that can be used in compounding pursuant to section 503B(a)(2)(A)(i) of the FD&C Act (503B bulks list).1

The guidance also describes FDA's process to establish the 503B bulks list, and it describes categories of substances that were nominated for inclusion on the 503B bulks list. These categories include:

• 503B Category 1—Bulk Drug Substances Under Evaluation: These bulk drug substances may be eligible for inclusion on the 503B bulks list, were nominated with sufficient supporting information for FDA to evaluate them, and do not appear on any other list.

• 503B Category 2—Bulk Drug Substances That Raise Significant Safety Risks: These bulk drug substances were nominated with sufficient supporting information to permit FDA to evaluate them and they may be eligible for inclusion on the 503B bulks list. However, FDA has identified significant safety risks relating to the use of these bulk substances in compounding, and therefore does not intend to adopt the policy described for the bulk substances in Category 1.

• 503B Category 3—Bulk Drug Substances Nominated Without Adequate Support: These bulk drug substances may be eligible for inclusion on the 503B bulks list but were nominated with insufficient supporting information for FDA to evaluate them. These substances can be re-nominated with sufficient supporting information through a docket that FDA has established.

In the Federal Register of October 27, 2015 (80 FR 65768), FDA issued a notice announcing the availability of the draft version of this guidance. The comment period on the draft guidance ended on December 28, 2015. FDA received 11 comments on the draft guidance. In response to received comments or on its own initiative, FDA made several changes to the guidance to clarify particular points. In addition, FDA has made the following updates to the lists on its Web site of bulk drug substances that were nominated for inclusion on the 503A bulks list: 2

• 503B Category 2: FDA has added one bulk drug substances to Category 2, germanium sesquioxide, because FDA identified significant safety risks relating to the use of this bulk drug substance in compounding.

• 503B Category 4: The draft interim guidance included a fourth category of bulk drug substances that would have identified substances that FDA evaluated for inclusion on the 503B bulks list but, after obtaining and considering public comments, decided not to place on the 503B bulks list. In the final interim guidance, FDA removed this fourth category because the Agency intends to identify the bulk drug substances that will not be placed on the 503B bulks list in the Federal Register notice that establishes the 503B bulks list. Therefore, we do not believe it is necessary to also include them in the categories identified in this guidance.

Persons with access to the Internet may obtain the document at either http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/default.htm or http://www.regulations.gov.

I. Background

FDA is announcing the availability of a guidance for industry entitled “Interim Policy on Compounding Using Bulk Drug Substances Under Section 503A of the Federal Food, Drug, and Cosmetic Act.” Section 503A of the FD&C Act (21 U.S.C. 353a) describes the conditions that must be satisfied for human drug products compounded by a licensed pharmacist in a State-licensed pharmacy or Federal facility, or by a licensed physician, to be exempt from the following three sections of the FD&C Act:

• Section 505 (21 U.S.C. 355) (concerning the approval of drugs under new drug applications or abbreviated new drug applications);

• Section 502(f)(1) (21 U.S.C. 352(f)(1)) (concerning the labeling of drugs with adequate directions for use); and

• Section 501(a)(2)(B) (21 U.S.C. 351(a)(2)(B)) (concerning current good manufacturing practice requirements).

One of the conditions that must be met for a compounded drug product to qualify for these exemptions is that a licensed pharmacist, or licensed physician, compounds the drug product using bulk drug substances that:

(1) Comply with the standards of an applicable United States Pharmacopeia (USP) or National Formulary (NF) monograph, if a monograph exists, and the USP chapter on pharmacy compounding;

(2) If such a monograph does not exist, are drug substances that are components of drugs approved by the Secretary; or

(3) If such a monograph does not exist and the drug substance is not a component of a drug approved by the Secretary, appears on a list developed by the Secretary through regulations issued by the Secretary under subsection (c) of section 503A (503A bulks list).

(See section 503A(b)(1)(A)(i) of the FD&C Act).

This guidance describes the conditions under which FDA does not intend to take action against a licensed pharmacist or licensed physician for compounding a drug product from a bulk drug substance that is not the subject of an applicable USP or NF monograph, is not a component of an FDA-approved drug, or does not appear on the list of bulk drug substances that can be used in compounding under section 503A(b)(1)(A)(i)(III) of the FD&C Act while FDA is developing the 503A bulks list.1 The guidance also describes FDA's process to establish the 503A bulks list and describes categories of substances that were nominated for inclusion on the 503A bulks list. The guidance includes a link to FDA's Web site listing bulk drug substances in each of the following categories:

503A Category 1—Bulk Drug Substances Under Evaluation: These bulk drug substances may be eligible for inclusion on the 503A bulks list, were nominated with sufficient supporting information for FDA to evaluate them, and do not appear on any other list.

503A Category 2—Bulk Drug Substances That Raise Significant Safety Risks: These bulk drug substances were nominated with sufficient supporting information to permit FDA to evaluate them and they may be eligible for inclusion on the 503A bulks list. However, FDA has identified significant safety risks relating to the use of these bulk substances in compounding, and therefore does not intend to adopt the policy described for the bulk substances in Category 1.

503A Category 3—Bulk Drug Substances Nominated Without Adequate Support: These bulk drug substances may be eligible for inclusion on the 503A bulks list, but were nominated with insufficient supporting information for FDA to evaluate them. These substances can be re-nominated with sufficient supporting information through a docket that FDA has established.

In the Federal Register of October 27, 2015 (80 FR 65781), FDA issued a notice announcing the availability of the draft version of this guidance. The comment period on the draft guidance ended on December 28, 2015. FDA received 14 comments on the draft guidance. In response to received comments or on its own initiative, FDA made several changes to the guidance to clarify particular points. In addition, FDA has made the following updates to the lists on its Web site of bulk drug substances that were nominated for inclusion on the 503A bulks list: 2

1. 503A Category 2: FDA has added two bulk drug substances to Category 2, quinacrine hydrochloride for intrauterine administration and germanium sesquioxide, because FDA identified significant safety risks relating to the use of these bulk substances in compounding.

2. 503A Category 3: FDA removed bulk drug substances from Category 3 that the Agency previously included on this list in error. Many of these substances are components of FDA-approved drugs or the subject of an applicable USP or NF monograph, and, therefore, can be used in compounding under section 503A without being placed on the 503A bulks list.

3. 503A Category 4: The draft interim guidance included a fourth category of bulk drug substances that would have identified substances that FDA evaluated for inclusion on the 503A bulks list but, after notice-and-comment rulemaking, decided not to place on the 503A bulks list. In the final interim guidance, FDA removed this fourth category because the Agency intends to identify the bulk drug substances that will not be placed on the 503A bulks list in the final rule that establishes the 503A bulks list. Therefore, we do not believe it is necessary to also include them in the categories identified in this guidance.

In this document, FDA is also announcing a Level 2 change to the final guidance, “Pharmacy Compounding of Human Drug Products Under Section 503A of the FD&C Act,” (503A Final Guidance) published in 2014 (79 FR 37742) and revised in 2015 (80 FR 65781). That guidance stated, “Until a bulk drug substances list is published in the Federal Register as a final rule, human drug products should be compounded using only bulk drug substances that are components of drugs approved under section 505 of the FD&C Act, or are the subject of USP or NF monographs.”

When FDA issued the interim guidance concerning compounding using certain bulk drug substances under section 503A (Interim 503A Bulks Guidance) as a draft guidance for public comment, FDA announced in the notice of availability that because this draft interim guidance proposed to change the Agency's policy relating to compounding with bulk drug substances while FDA develops a list of bulk drug substances that can be used in compounding, FDA was adding a footnote to the 503A final guidance referencing this draft interim guidance. FDA stated that once this Interim 503A Bulks Guidance is finalized, FDA would remove that footnote from the 503A final guidance and cross-reference the final Interim 503A Bulks Guidance as establishing the policy for compounding with bulk drug substances during the development of the 503A bulks list.

Therefore, concurrent with the issuance of the final Interim 503A Bulks Guidance, FDA is removing the sentence in the 503A final guidance referenced previously and is replacing it with the following statement, which the Agency proposed for public comment in the draft Interim 503A Bulks Guidance: “FDA's interim policy concerning bulk drug substances that are not components of drugs approved under section 505 of the FD&C Act or that are not the subject of applicable USP or NF monographs can be found in the guidance, ‘Interim Policy on Compounding Using Bulk Drug Substances Under Section 503A of the Federal Food, Drug and Cosmetic Act.' ” This change is a Level 2 change under 21 CFR 10.115, and comments on the proposed change in policy were solicited as part of the notice of availability of the draft Interim 503A Bulks Guidance.

Persons with access to the Internet may obtain the guidance at either http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/default.htm or http://www.regulations.gov.

Background

These final regulations contain amendments to the Income Tax Regulations (26 CFR part 1) under section 108 of the Internal Revenue Code (Code). Section 61(a)(12) provides that income from the discharge of indebtedness is includible in gross income. However, such income may be excludable from gross income under section 108 in certain circumstances. Section 108(a)(1)(A) and (B) exclude from gross income any amount that would be includible in gross income by reason of the discharge of indebtedness of the taxpayer if the discharge occurs in a title 11 case or when the taxpayer is insolvent. Section 108(d)(1) through (3) provide the meaning of the terms “indebtedness of the taxpayer,” “title 11 case,” and “insolvent,” for purposes of applying section 108, and each definition uses the term “taxpayer.” Section 7701(a)(14) defines “taxpayer” as any person subject to any internal revenue tax.

On April 13, 2011, the Treasury Department and the IRS published in the Federal Register (76 FR 20593) a notice of proposed rulemaking (REG-154159-09) (the proposed regulations) to provide rules under section 108(a) regarding the term “taxpayer” for purposes of applying section 108 to the discharge of indebtedness income of a grantor trust or an entity that is disregarded as an entity separate from its owner (disregarded entity). The proposed regulations provide that, for purposes of applying section 108(a)(1)(A) and (B) to the discharge of indebtedness income of a grantor trust or a disregarded entity, the term “taxpayer,” as used in section 108(a)(1) and (d)(1) through (3), refers to the owner of the grantor trust or the disregarded entity. The proposed regulations also provide that, in the case of a partnership, the owner rules apply at the partner level to the partners to whom the discharge of indebtedness is allocable. For example, if a partnership holds an interest in a grantor trust or a disregarded entity, the applicability of section 108(a)(1)(A) and (B) to the discharge of indebtedness income is tested by looking to each partner to whom the income is allocable. Lastly, the proposed regulations clarify that, subject to the special rule for partnerships under section 108(d)(6), the insolvency exclusion is available only if the owner is insolvent and the bankruptcy exclusion is available only if the owner is under the bankruptcy court's jurisdiction.

The Treasury Department and the IRS received written comments responding to the notice of proposed rulemaking. The comments are available for public inspection at www.regulations.gov. No public hearing was requested or held. The comments are discussed in this preamble.

After consideration of all the comments, the final regulations adopt the proposed regulations as modified by this Treasury decision. The purpose and scope of the proposed regulations and these final regulations are primarily limited to defining the term “taxpayer” for purposes of applying the bankruptcy and the insolvency exclusions from gross income, under section 108(a)(1)(A) and (B), to the discharge of indebtedness income of a grantor trust or a disregarded entity. These final regulations are not intended to address section 108 in general and are not intended to address liabilities in general.

Two commenters recommended that the final regulations apply the provisions of the proposed regulations to all exclusions in section 108(a), not only to the bankruptcy and the insolvency exclusions. Guidance on the other exclusions in section 108(a) is beyond the scope of these regulations.

Section 108(a)(1)(A) provides, in part, that gross income does not include any amount which would be includible in gross income by reason of the discharge of the indebtedness of the taxpayer if the discharge occurs in a title 11 case. Section 108(d)(2) defines “title 11 case” as a case under title 11 of the United States Code (relating to bankruptcy), but only if the taxpayer is under the jurisdiction of the court in such case and the discharge of indebtedness is granted by the court or is pursuant to a plan approved by the court.

Consistent with the proposed regulations, these regulations provide that the bankruptcy exclusion is available only if the owner of the grantor trust or the owner of the disregarded entity is under the jurisdiction of the court in a title 11 case. It is insufficient for the grantor trust or the disregarded entity to be under the jurisdiction of the court in a title 11 case. These regulations further clarify that the owner of the grantor trust or the owner of the disregarded entity must be under the jurisdiction of the court in a title 11 case of that owner as the “debtor,” as that term is defined in title 11 of the United States Code (the title 11 debtor).

The commenters suggested that section 108(d)(2) does not require that the taxpayer be a title 11 debtor to be considered under the jurisdiction of the court in a title 11 case. One commenter recommended that an owner of a grantor trust or a disregarded entity be considered under the jurisdiction of the court in a title 11 case when that owner is indirectly liable for the debt of the grantor trust or the disregarded entity and the court in a title 11 case eliminates the owner's liability in conjunction with the cancellation of the debt of the grantor trust or disregarded entity. Another commenter recommended that an owner of a grantor trust or a disregarded entity be considered under the jurisdiction of the court in a title 11 case when either the owner has taken affirmative actions, such as filing a proof of claim or a proof of interest, that place the owner under the court's jurisdiction in a title 11 case, or the court otherwise asserts jurisdiction over the owner in connection with a title 11 case. A third commenter recommended that the owner of a disregarded entity be considered under the jurisdiction of the court in a title 11 case when: (1) The court asserts jurisdiction over that owner during the title 11 proceeding of the disregarded entity; (2) the owner's liability on the discharged debt had been previously established (by contract or otherwise); (3) the owner is liable for all, or substantially all, of the discharged debt; and (4) qualifying for the bankruptcy exclusion was not a principal purpose of the owner's undertaking of such liability.

The Treasury Department and the IRS have not adopted these recommendations because extending the bankruptcy exclusion to the owner of a grantor trust or a disregarded entity when that owner is not itself in bankruptcy would be inconsistent with the intended purpose of section 108(a)(1)(A), as reflected in the legislative history of that provision. Congress added the bankruptcy exclusion to the Code to allow insolvent debtors a “fresh start” after they have liquidated their assets to pay off creditors. S. Rep. No. 1035, 96th Cong., 2d Sess. 9-10 (1980), 1980-2 CB 620, 624, provides:

The Bankruptcy Tax Act of 1980 was enacted to supplement the Bankruptcy Reform Act of 1978, Public Law 95-598, 92 Stat. 2549 (1978). See S. Rep. No. 1035, 96th Cong., 2d Sess. 9 (1980), 1980-2 CB 620, 624. As indicated in the legislative history of the Bankruptcy Reform Act of 1978, the debtor's “fresh start” is conditioned upon the debtor committing all of its nonexempt assets to the jurisdiction of the bankruptcy court, either for sale by the trustee or to determine an appropriate plan to repay creditors. See H.R. Rep. No. 595, 95th Cong., 1st Sess. 118, 125-26, 176 (1977). Congress did not intend that a solvent, non-debtor owner of a grantor trust or a disregarded entity, which has committed some but not all of its nonexempt assets to the bankruptcy court's jurisdiction, have an exclusion from discharge of indebtedness income merely by virtue of having some of its assets subject to the jurisdiction of the bankruptcy court.

The commenters' recommendations are thus inconsistent with the Congressional intent underlying the Bankruptcy Tax Act of 1980 because those recommendations would provide a non-debtor owner that conducts only some of its activities through the grantor trust or disregarded entity with an unwarranted benefit when that owner is not a title 11 debtor and is able to pay its tax liability.

Accordingly, these regulations clarify that the owner of the grantor trust or disregarded entity must itself be under the jurisdiction of the court in a title 11 case as the title 11 debtor to qualify for the bankruptcy exclusion.

A commenter noted uncertainty under existing law as to whether the holding in certain case law would be followed by the IRS. See Gracia v. Commissioner, T.C. Memo. 2004-147; Mirarchi v. Commissioner, T.C. Memo. 2004-148; Price v. Commissioner, T.C. Memo. 2004-149; Estate of Martinez v. Commissioner, T.C. Memo. 2004-150 (collectively, the Gracia Cases). Because the bankruptcy court had asserted jurisdiction over non-debtor partners for certain matters, the Tax Court in the Gracia Cases upheld the application of the bankruptcy exclusion to the partners of a partnership that was a title 11 debtor, despite the fact that the partners were not title 11 debtors. The IRS's position is that the Gracia Cases failed to interpret correctly the limited scope of section 108(a)(1)(A), which applies only to partners that are also title 11 debtors. See Action on Decision 2015-01 (2015-6 IRB 579) (nonacquiescence in the Gracia Cases).

These regulations provide that, in the case of a partnership that holds an interest in a grantor trust or a disregarded entity, the owner rules apply at the level of the partners to whom the income is allocable. These regulations provide that the owner must be under the jurisdiction of the court in a title 11 case as the title 11 debtor to qualify for the bankruptcy exclusion. Accordingly, when the owner of the grantor trust or disregarded entity is a partnership, the partner to whom the income is allocable must be under the jurisdiction of the court in a title 11 case of that partner as the title 11 debtor to qualify for the bankruptcy exclusion.

One commenter noted that a trust cannot generally be a debtor in a title 11 case. On the other hand, a business trust can be a debtor in a title 11 case but is generally treated as a business entity for both bankruptcy and Federal tax purposes. As such, the commenter noted uncertainty as to whether these regulations concerning the bankruptcy exclusion could ever apply to the bankruptcy of a grantor trust.

These regulations account for the possibility that a trust that is treated as a grantor trust for Federal tax purposes may be treated as a business trust for purposes of eligibility to be a debtor in a title 11 case. To provide comprehensive guidance, the Treasury Department and the IRS have retained references in these regulations to grantor trusts in the provisions concerning the bankruptcy exclusion.

A grantor trust is any portion of a trust that is treated, under subpart E of part I of subchapter J of chapter 1, as being owned by a grantor or another person. One commenter recommended that future guidance specify how a grantor's share of a multiple-owner grantor trust's liability should be determined for purposes of determining insolvency under section 108(d)(3). Specifically, that commenter recommended that future guidance or tax forms provide that a grantor trust is required to report the owner's share of the trust's liabilities. These regulations do not address these issues but the Treasury Department and the IRS invite comments regarding the application of section 108(d)(3) to the owners of a multiple-owner grantor trust. Submissions should be submitted to:

In the case of submissions to the IRS submitted by U.S. Mail: Internal Revenue Service, Attn: Frank J. Fisher, CC:PSI:1, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.

In the case of submissions to the IRS submitted by a private delivery service: Internal Revenue Service, Attn: Frank J. Fisher, CC:PSI:1, 1111 Constitution Ave. NW., Washington, DC 20224.

For purposes of section 108, section 108(d)(1) defines the term “indebtedness of the taxpayer” as any indebtedness for which the taxpayer is liable or subject to which the taxpayer holds property. One commenter recommended that the final regulations clarify that, for purposes of section 108(d)(1), indebtedness of a disregarded entity is indebtedness of the owner. In addition, a commenter recommended that the Treasury Department and the IRS clarify whether debt of a disregarded entity should be treated as recourse or nonrecourse debt of the owner for purposes of determining the amount of cancellation of debt income realized by the owner. That commenter suggested that the Treasury Department and the IRS issue guidance, in the form of an example in a regulation or a revenue ruling, as to whether the indebtedness of a grantor trust or a disregarded entity is recourse or nonrecourse indebtedness of the owner.

In addition, commenters recommended approaches for determining the extent to which liabilities of a grantor trust or a disregarded entity are taken into account in measuring the owner's insolvency under section 108(d)(3) for purposes of the insolvency exclusion under section 108(a)(1)(B), including applying the principles of Revenue Ruling 92-53 (1992-2 CB 48). For purposes of the insolvency exclusion, section 108(d)(3) defines “insolvency” as the excess of liabilities over the fair market value of assets. Revenue Ruling 92-53 provides that the amount by which a nonrecourse debt exceeds the fair market value of the property securing the debt (excess nonrecourse debt) is taken into account in determining whether a taxpayer is insolvent within the meaning of section 108(d)(3) only to the extent that the excess nonrecourse debt is discharged.

Comprehensive guidance on these issues is beyond the scope of these regulations. However, the Treasury Department and the IRS are of the view that indebtedness of a grantor trust or a disregarded entity is indebtedness of the owner for purposes of section 108(d)(1); assuming the owner has not guaranteed the indebtedness and is not otherwise liable for the indebtedness under applicable law, such indebtedness should generally be treated as nonrecourse indebtedness for purposes of applying the section 108(a)(1)(B) insolvency exclusion; and accordingly the principles of Revenue Ruling 92-53 apply to determine the extent to which such indebtedness is taken into account in determining the owner's insolvency under section 108(d)(3). The Treasury Department and the IRS continue to study these issues and anticipate publishing additional guidance providing further clarification. Accordingly, the Treasury Department and the IRS invite comments on these issues. Submissions should be submitted to:

In the case of submissions to the IRS submitted by U.S. Mail: Internal Revenue Service, Attn: Seoyeon Sharon Park, CC:ITA:5, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.

In the case of submissions to the IRS submitted by a private delivery service: Internal Revenue Service, Attn: Seoyeon Sharon Park, CC:ITA:5, 1111 Constitution Ave. NW., Washington, DC 20224.

One commenter requested that the Treasury Department and the IRS clarify whether valuation discounts, if applicable to the owner's interest in a disregarded entity, could apply to the valuation of the assets and liabilities held by a disregarded entity for purposes of determining insolvency under section 108(d)(3). Guidance on this issue is beyond the scope of these regulations.

These final regulations apply to the discharge of indebtedness income occurring on or after the date these final regulations are published in the Federal Register.

Some commenters requested that the Treasury Department and the IRS permit taxpayers to apply the final regulations retroactively to taxable years for which the period of limitations remain open. Another commenter requested that the final regulations specifically provide that the IRS will not challenge positions taken by taxpayers that apply the rules in the proposed regulations. The proposed regulations and these regulations are consistent with the existing statute. Accordingly, the IRS will not challenge return positions consistent with the proposed regulations, as clarified in these final regulations, for the period prior to the effective/applicability date of these final regulations.

For copies of recently issued Revenue Procedures, Revenue Rulings, notices, and other guidance published in the Internal Revenue Bulletin, please visit the IRS Web site at http://www.irs.gov.

Certain IRS regulations, including this one, are exempt from the requirements of Executive Order 12866, as supplemented and reaffirmed by Executive Order 13563. Therefore, a regulatory impact assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because the regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. 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 its impact on small business, and no comments were received.

The principal authors of these regulations are Frank J. Fisher and Amy Chang, Office of the Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the Treasury Department and the IRS participated in the development of these regulations.

Accordingly, 26 CFR part 1 is amended as follows:

I. Table of Abbreviations COTP Captain of the Port DHS Department of Homeland Security E.O. Executive Order NAD 83 North American Datum of 1983 NPRM Notice of Proposed Rulemaking II. Background History and Regulatory Information

On June 11, 2016, the Toledo Rowing Club is holding a rowing regatta in which at least 200 rowers will participate in a race on the Maumee River. Due to the projected amount of human-powered watercraft on the water, there is a need to require vessels in the affected waterways to maintain a minimum speed for safe navigation. The rowing regatta will occur between 5 a.m. and 2:30 p.m. on June 11, 2016. This event is taking place under the same sponsorship in the same location as last year.

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231, 33 CFR 1.05-1 and 160.5; and Department of Homeland Security Delegation No. 0170.1. Having reviewed the application for a marine event submitted by the sponsor on January 11, 2016, the Captain of the Port Detroit (COTP) has determined that the likely combination of recreation vessels, commercial vessels, and an unknown number of spectators in close proximity to a rowing regatta along the water pose extra and unusual hazards to public safety and property. Therefore, the COTP is establishing a Special Local Regulation around the event location to help minimize risks to safety of life and property during this event.

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 with respect to this rule because waiting for a notice and comment period to run would be impracticable, unnecessary, and contrary to the public interest. Although an initial marine event application was submitted on January 11, 2016, final details regarding event area and patrol parameters were not known to the Coast Guard with sufficient time for the Coast Guard to solicit public comments before the start of the event. Thus, delaying the effective date of this rule to wait for a notice and comment period to run would be impracticable and contrary to the public interest because it would inhibit the Coast Guard's ability to protect the public from the hazards associated with this power boat race.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register. For the same reasons discussed in the preceding paragraph, waiting for a 30 day notice period to run would be impracticable and contrary to the public interest.

This rule establishes a temporary special local regulation from 5 a.m. until 2:30 p.m. on June 11, 2016. In light of the aforementioned hazards, the COTP has determined that a special local regulation is necessary to protect spectators, vessels, and participants. The special local regulation will encompass the following waterway: All waters of the Maumee River, Toledo, OH from the Veterans Glass Memorial Bridge at River Mile 3.25 to the Norfolk Southern Railroad Bridge at River Mile 5.76.

An on-scene representative of the COTP or event sponsor representatives may permit vessels to transit the area when no race activity is occurring. The on-scene representative may be present on any Coast Guard, state or local law enforcement vessel assigned to patrol the event. Vessel operators desiring to transit through the regulated area must contact the Coast Guard Patrol Commander to obtain permission to do so. The COTP or his designated on-scene representative may be contacted via VHF Channel 16.

The COTP or his designated on-scene representative will notify the public of the enforcement of this rule by all appropriate means, including a Broadcast Notice to Mariners and Local Notice to Mariners.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on these statutes or executive orders (E.O.).

This rule is not a significant regulatory action under section 3(f) of E.O. 12866, Regulatory Planning and Review, as supplemented by E.O. 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of E.O. 12866 or under section 1 of E.O. 13563. The Office of Management and Budget has not reviewed it under those Orders.

We conclude that this rule is not a significant regulatory action because we anticipate that it will have minimal impact on the economy, will not interfere with other agencies, will not adversely alter the budget of any grant or loan recipients, and will not raise any novel legal or policy issues.

The Coast Guard's use of this special local regulation will be of relatively small size and only nine and a half hours in duration, and it is designed to minimize the impact on navigation. Moreover, vessels may transit through the area affected by this special local regulation at a minimum speed for safe navigation. Overall, the Coast Guard expects minimal impact to vessel movement from the enforcement of this special local regulation.

As per the Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, we have considered the potential impact of regulations on small entities during rulemaking. 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 rule will affect the following entities, some of which might be small entities: The owners or operators of vessels intending to transit or anchor in this portion of the Maumee River, in the vicinity of Toledo, OH between 5 a.m. and 2:30 p.m. on June 11, 2016.

This special local regulation will not have a significant economic impact on a substantial number of small entities for the reasons cited in the Regulatory Planning and Review section. Additionally, before the enforcement of the regulation, Coast Guard Sector Detroit will issue a local Broadcast Notice to Mariners so vessel owners and operators can plan accordingly.

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 so that they can better evaluate its effects on them. If this 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 section 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 entities that question or complain about this rule or any policy or action of the Coast Guard.

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

A rule has implications for federalism under E.O. 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.

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.

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 expenditure, we do discuss the effects of this rule elsewhere in this preamble.

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.

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

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

This rule does not have tribal implications under E.O. 13175, Consultation and Coordination with Indian Tribal Governments, because it does 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.

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

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

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 concluded this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This rule involves the establishment of a special local regulation and is therefore categorically excluded from further review under paragraph 34(h) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under ADDRESSES. We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 100 as follows:

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 an NPRM with respect to this rule because doing so would be impracticable and contrary to the public interest. The Coast Guard was provided the final details for this event on March 31, 2016. Macy's is unable to move their event to a later date because of the highly publicized nature of this 4th of July event. Due to a major change in the location of the event from the Hudson, to East River, the Coast Guard was unable to use the safety zone established by the recurring Macy's 4th of July fireworks regulation published in Table 1 of 33 CFR 165.160.

We are issuing this rule, and under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making it effective less than 30 days after publication in the Federal Register. Any delay in this rule becoming effective would be contrary to public interest since immediate action is needed to provide for the safety of life and property on the navigable waters due to the inherent hazards created by the high concentration of spectator vessels expected in attendance for the event.

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1233. This Special Local Regulation is necessary to ensure the safety of spectators and vessels from hazards associated with the anticipated concentration of vessels, before, during, and after the scheduled event.

The Coast Guard is establishing a Special Local Regulation on the navigable waters of the East River and Upper New York Bay along Manhattan and Brooklyn, NY for the on water management of vessels associated with the 2016 Macy's 4th of July event. The Special Local Regulation is necessary to ensure the safety of spectators from hazards associated with the anticipated concentration of vessels for the event.

The event is scheduled to occur from 9:20 p.m. through 9:50 p.m. and the COTP New York anticipates a large number of vessels will congregate to view the fireworks display. This rule will be enforced from 6 p.m. through 11 p.m. on July 4, 2016 in order to ensure that the area is clear of persons and vessels before the fireworks display begins, and to ensure that no hazards remain after the fireworks display ends. If the event is cancelled due to inclement weather, then this regulation will be enforced from 6 p.m. through 11 p.m. on July 5, 2016.

The COTP New York will establish seven limited access areas within the boundary of the regulated area. Access to these areas will be restricted to vessels of a certain size. The seven limited access areas are: (1) A “spectator area” designated ALFA in which access is limited to vessels greater than or equal to 20 meters in length (65.6ft); (2) a “spectator area” designated BRAVO in which access is limited to vessels less than 20 meters in length (65.6ft); (3) a “buffer zone” around the fireworks launch barges, designated area CHARLIE, limited to all vessels tending the fireworks launch barges; (4) a “spectator area” designated DELTA in which access is limited to vessels greater than 20 meters in length (65.6ft); (5) a “spectator area” designated ECHO in which access is limited to vessels less than or equal to 20 meters in length (65.6ft); (6) a “buffer zone” around the fireworks launch barge, designated area FOXTROT, limited to all vessels tending the fireworks launch barges; (7) a “spectator area” designated GOLF in which access is open to all vessels all lengths.

Based on the inherent hazards associated with large concentrations of vessels in tight confines, the COTP New York has determined that the event poses a significant risk to public safety and property. The combination of an increased number of recreational vessels, congested waterways, and darkness has the potential to result in serious injuries or fatalities. The buffer zone along with the designated viewing areas will restrict vessels from a portion of the East River around the location of the fireworks launch platform before, during, and immediately after the event. All persons and vessels shall comply with the instructions of the COTP New York or a designated representative during the enforcement of the Special Local Regulation.

Consistent with 33 CFR 165.7, the Coast Guard will notify the public and local mariners of this Special Local Regulation through appropriate means, which may include, but are not limited to, publication in the Federal Register, the Local Notice to Mariners, and Broadcast Notice to Mariners.

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 and Executive orders, and we discuss First Amendment rights of protestors.

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. 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 not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, it has not been reviewed by the Office of Management and Budget.

This regulatory action determination is based on the size, location, duration, and time-of-day of the safety zone. Vessel traffic will only be restricted from the regulated area for a limited duration, and the Special Local Regulation is in effect during late night hours when vessel traffic is low. Advanced public notifications will also be made to local mariners through appropriate means, which may include, but would not be limited to, Local Notice to Mariners and Broadcast Notice to Mariners.

The Regulatory Flexibility Act of 1980, 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 received no comments from the Small Business Administration on this rulemaking. 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.

While some owners or operators of vessels intending to enter or transit within the Special Local Regulation may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.

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 section.

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.

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

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 have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does 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. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

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.

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 (42 U.S.C. 4321-4370f), and have determined 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 temporary rule involves restricting vessel movement within a Limited Access Area established by a Special Local Regulation. This rule is categorically excluded from further review under paragraph 34(h) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination will be available in the docket where indicated under ADDRESSES, though due to the short timeline it may be made available after publication of this rule in the FR. We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

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.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 100 as follows:

The Coast Guard will enforce the special local regulation listed in 33 CFR 100.903 from 6 a.m. until 7 p.m. on each day of June 18 and 19, 2016. This special local regulation encompasses the waters of the Black River in South Haven, MI within the following coordinates starting at 42°24′13.6″ N., 086°16′41″ W.; then southeast 42°24′12.6″ N., 086°16′40″ W.; then northeast to 42°24′19.2″ N., 086°16′26.5″ W.; then northwest to 42°24′20.22″ N., 086°16′27.4″ W.; then back to point of origin (NAD 83). As specified in 33 CFR 100.903, no vessel may enter, transit through, or anchor within the regulated area without the permission of the Coast Guard Patrol Commander. Furthermore, the regulations in § 100.901 apply. Vessels desiring to transit the regulated area may do so only with prior approval of the Patrol Commander and when so directed by that officer. Vessels will be operated at a no wake speed to reduce the wake to a minimum, and in a manner which will not endanger participants in the event or any other craft. The rules contained in the above two sentences shall not apply to participants in the event or vessels of the patrol operating in the performance of their assigned duties. The Patrol Commander may direct the anchoring, mooring, or movement of any boat or vessel within the regatta area. A succession of sharp, short signals by whistle or horn from vessels patrolling the area under the direction of the U.S. Coast Guard Patrol Commander shall serve as a signal to stop. Vessels so signaled shall stop and shall comply with the orders of the Patrol Commander. Failure to do so may result in expulsion from the area, citation for failure to comply, or both.

This notice of enforcement is issued under authority of 33 CFR 165.903, Harborfest Dragon Boat Race; South Haven, MI, and 5 U.S.C. 552(a). In addition to this notice of enforcement in the Federal Register, the Coast Guard plans to provide the maritime community with advance notification for the enforcement of this regulation via Broadcast Notice to Mariners or Local Notice to Mariners. The Patrol Commander may be contacted via Channel 16, VHF-FM.

Town of Hempstead Department of Public Safety requested and the bridge owner of both bridges, the State of New York Department of Transportation, concurred with this temporary deviation from the normal operating schedule to facilitate a public event, the Annual Salute to Veterans and Fireworks Display.

The Loop Parkway Bridge, mile 0.7, across Long Creek has a vertical clearance in the closed position of 21 feet at mean high water and 25 feet at mean low water. The existing bridge operating regulations are found at 33 CFR 117.799(f).

The Meadowbrook State Parkway Bridge, mile 12.8, across Sloop Channel has a vertical clearance in the closed position of 22 feet at mean high water and 25 feet at mean low water. The existing bridge operating regulations are found at 33 CFR 117.799(h).

Long Creek and Sloop Channel are transited by commercial fishing and recreational vessel traffic.

Under this temporary deviation, the Loop Parkway and the Meadowbrook State Parkway Bridges may remain in the closed position between 9:30 p.m. and 11:59 p.m. on June 25, 2016 (rain date: June 26, 2016 between 9:30 p.m. and 11:59 p.m.).

Vessels able to pass under the bridge in the closed position may do so at anytime. The bridges will not be able to open for emergencies and there are no immediate alternate routes for vessels to pass.

The Coast Guard will also inform the users of the waterways through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so that vessels can arrange their transits to minimize any impact caused by the temporary deviation.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.

The Town of Ocean City, on behalf of the Maryland State Highway Administration, who owns the US 50 (Harry W. Kelly Memorial) Bridge, has requested a temporary deviation from the current operating regulations set out in 33 CFR 117.559, to accommodate increased vehicular traffic of the 2016 Ocean City Air Show.

Under this temporary deviation, the bridge will be closed-to-navigation from 3:55 p.m. to 4:55 p.m. on June 18, 2016, and from 3:55 p.m. to 4:55 p.m. on June 19, 2016. The bridge is a double bascule bridge and has a vertical clearance in the closed-to-navigation position of 13 feet above mean high water.

The Isle of Wight (Sinetuxent) Bay is used by a variety of vessels including small fishing vessels and recreational vessels. The Coast Guard has carefully considered the nature and volume of vessel traffic on the waterway in publishing this temporary deviation.

Vessels able to pass through the bridge in the closed position may do so at anytime. The bridge will be able to open for emergencies and there is no immediate alternate route for vessels to pass. The Coast Guard will also inform the users of the waterway through our Local Notice and Broadcast Notices to Mariners of the change in operating schedule for the bridge so that vessel operators can arrange their transits to minimize any impact caused by the temporary deviation.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.

I. Table of Abbreviations CFR Code of Federal Regulations COTP Captain of the Port San Francisco DHS Department of Homeland Security E.O. Executive Order FR Federal Register MOTCO Military Ocean Terminal Concord NPRM Notice of Proposed Rulemaking Pub. L. Public Law § Section U.S.C. United States Code II. Background Information and Regulatory History

On August 27, 1996, the Department of the Army, Corps of Engineers published a final rule in the Federal Register (61 FR 43969) establishing a restricted area 1 around the MOTCO piers (33 CFR 334.1110). Although the restricted area prohibits public access to the piers at all times, it lacks a conditional boundary extension to be enforced during the presence of munitions laden vessels and/or military onload/offload activities. Prior to January 24, 2005, the Coast Guard would address this lack of a conditional boundary by publishing a temporary security zone of sufficient size in the area for each operation at MOTCO (see e.g., 68 FR 33382).

On January 24, 2005, to address this issue on a more permanent basis, the Coast Guard published a final rule in the Federal Register (70 FR 3299) establishing a conditional 500-yard security zone around MOTCO's piers to be enforced during military onload/offload operations (33 CFR 165.1199). The security zone provides necessary security for military operations by providing a standoff distance for blast and collision, a surveillance and detection perimeter, and a margin of response time for security personnel.

On July 1, 2015, the Coast Guard published a NPRM (80 FR 48787), with proposed changes to clarify responsibilities and authorities for enforcement of the security zone. There we stated why we issued the NPRM, and invited comments on our proposed regulatory action related to this security zone. During the comment period that ended on September 14, 2015, we received 0 comments.

The legal basis for this rule is 33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1, which collectively authorize the Coast Guard to establish security zones. This authority is separate from the Department of the Army, Corps of Engineers authority to provide appropriate security in defense of their waterfront facilities and for vessels moored thereto in accordance with the restricted area in 33 CFR 334.1110.

The purpose of this rulemaking is to advance the Coast Guard's efforts to thwart potential terrorist activity through security measures on U.S. ports and waterways.

The current regulation at § 165.1199 contains several items that are the subject of the revisions in this FR. The revisions to § 165.1199 will clarify the regulations in a concise, understandable format.

First, the Coast Guard revises § 165.1199(c) by clarifying the Coast Guard's enforcement role during active loading operations, and the ability of the COTP to designate other representatives as having authority to enforce the security zone. The Coast Guard proposes to replace the existing term “patrol personnel,” in favor of a more appropriate term, “designated representative,” which includes federal, state and local officials designated by the COTP. This revision clarifies that the COTP may designate law enforcement officials other than Coast Guard personnel to patrol and enforce the security zone.

The Coast Guard also revises the security zone so that it is enforceable at any time a vessel loaded with munitions is present at a pier (in addition to during military onload/offload operations). Without this revision, the existing security zone is enforceable during military onload or offload operations only.

Additionally, the Coast Guard proposes to remove the existing provision regarding “Local Notice to Mariners” as a means of notifying the public that the security zone will be enforced. The security concern related to providing advance notification of the presence of an explosive load at a military base outweighs the benefit of advance notice of the security zone. Instead, the Coast Guard would notify the public of security zone enforcement (and suspensions of enforcement) via Broadcast Notice to Mariners and/or actual notice on-scene during military onloads or offloads. This revision would better align the notification method of this security zone with the notification method for the existing safety zone in the area (see § 165.1198).

No changes in the regulatory text of the rule in the NPRM.

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.

E.O.s 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has not been designated a “significant regulatory action,” under E.O. 12866. Accordingly, it has not been reviewed by the Office of Management and Budget.

Security zone enforcement would be limited in duration, and limited to a narrowly tailored geographic area. In addition, although this rule would restrict access to the waters encompassed by the security zone, the effect of this rule would not be significant because the local waterway users will be notified via Broadcast Notice to Mariners and/or actual notice on-scene during military onloads or offloads. The entities most likely to be affected are waterfront facilities, commercial vessels, and pleasure craft engaged in recreational activities.

The Regulatory Flexibility Act of 1980, 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 received 0 comments from the Small Business Administration on this rulemaking. 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 rule may affect owners and operators of waterfront facilities, commercial vessels, and pleasure craft engaged in recreational activities and sightseeing. The security zone would not have a significant economic impact on a substantial number of small entities for the following reasons. The security zone would be activated, and thus subject to patrol and enforcement, for a limited duration. When the security zone is activated, vessel traffic would be directed to pass safety around the security zone. The maritime public would be advised when transiting near the activated zone.

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 section.

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.

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

A rule has implications for federalism under E.O. 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 have determined that it is consistent with the fundamental federalism principles and preemption requirements described in E.O. 13132.

Also, this rule does not have tribal implications under E.O. 13175, Consultation and Coordination with Indian Tribal Governments, because it does 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. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section above.

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.

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 (42 U.S.C. 4321-4370f), and have determined 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 security zone of limited size and duration. This rule is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under ADDRESSES. We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

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.

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

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

Section 109 of the Clean Air Act (CAA) requires EPA to establish national primary (protective of human health) and secondary (protective of human welfare) air quality standards for pollutants for which air quality criteria have been issued under Section 108 of the CAA (the criteria pollutants 1 ). Individually and 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 and welfare data, to revise each NAAQS every five years. If a NAAQS is revised, states whose rules include state air quality standards may revise their rules to address the revised NAAQS and associated monitoring requirements, and submit them to EPA as SIP revision requests. See, e.g., 415 ILCS 5/10(H).

On December 18, 2014, the Illinois Environmental Protection Agency (IEPA) submitted to EPA for approval as SIP revisions updates to the methods used by Illinois to monitor air quality for several NAAQS. These updates correspond to EPA's revised monitoring methods promulgated during the period of July 1, 2013, through December 31, 2013. The Illinois Pollution Control Board (IPCB) adopted these rule revisions on June 5, 2014, as rule revision group R14-17.

On April 23, 2015, IEPA submitted to EPA for approval as SIP revisions an additional update to include the 2012 primary annual and 24-hour PM2.5 NAAQS and a provision incorporating by reference EPA-promulgated monitoring methods. These rule updates correspond to the NAAQS and monitoring methods promulgated by EPA during the period of January 1, 2013, through June 30, 2013, and on July 3, 2013, and August 5, 2013. This state submittal also addressed the “sunset provisions” of 40 CFR 50.4(e), finding that the 1971 NAAQS for sulfur dioxide (SO2) no longer applies to the Lemont and Pekin areas in Illinois. Finally, the revised rules contain the timing requirements for the “flagging of exceptional events” and the submitting of documentation supporting the determination of exceptional events for the 2012 primary annual PM2.5 standard. The IPCB adopted these rule revisions on September 5, 2013, as rule revision group R14-6.

The rule revisions contained in the April 23, 2015 submittal are summarized below.

Illinois amended this section to apply applicable monitoring requirements to the 2012 primary annual and 24-hour PM2.5 NAAQS, which Illinois codified at 35 IAC 243.120(d). Volume 35 of the Illinois Administrative Code section 243.107 (35 IAC 243.107) sets forth the reference air temperature and reference pressure measurements to determine air quality concentrations of monitored air pollutants, and mirrors the requirements of title 40 of the Code of Federal Regulations (CFR) 50.3. Among other things, this section requires that measurements of PM2.5 must be reported based on actual ambient air volume measured at actual temperature and pressure at the monitoring site. See also the discussion of 35 IAC 243.120(d), below.

Illinois updated 35 IAC 243.108 to incorporate by reference the 2013 versions of appendices A-1, A-2, B, C, D, F, G, H, I, J, K, L, N, O, P, Q, R, S, and T of 40 CFR part 50. These appendices contain the reference monitoring methods for and the “interpretation” of (i.e., data handling conventions and computations) the ambient standards for the criteria air pollutants.

EPA made two changes in the 2013 versions of these appendices relative to the 2012 versions. First, EPA revised the appendix G reference method for the determination of lead in suspended particulate matter (78 FR 40000, July 3, 2013). Second, EPA revised appendix N for the data handling conventions and computations necessary for determining when the primary and secondary NAAQS for PM2.5 are met. 78 FR 3086, 3277-3281 (January 15, 2013). Illinois' rule revisions incorporate by reference these amended CFR appendices.

Additionally, Illinois references an August 5, 2013, (78 FR 47191) EPA Federal Register document as revising appendix N of 40 CFR part 50. However, EPA's August 5, 2013 Federal Register document establishes area designations for the 2010 SO2 primary NAAQS, and does not address or relate to appendix N. Therefore, this rule revision contains an incorrect reference to EPA rulemaking, and is further discussed in Section IV, below.

Illinois added Subsection (d) to incorporate EPA's 2012 primary annual and 24-hour NAAQS for PM2.5. These revised PM2.5 standards include an annual average level of 12 micrograms per cubic meter and a 24-hour average level of 35 micrograms per cubic meter. See 78 FR 3086 (January 15, 2013).

Consistent with 40 CFR 50.13, this section also requires that the revised PM2.5 standards be measured by either a Federal Reference Method (FRM) based on appendix L of 40 CFR part 50, incorporated by reference in 35 IAC 243.108, or a Federal Equivalent Method (FEM) designated by EPA in accordance with 40 CFR part 53 and listed in EPA's “List of Designated Reference and Equivalent Methods,” which is also incorporated by reference in 35 IAC 243.108.2 See http://www3.epa.gov/ttnamti1/files/ambient/criteria/reference-equivalent-methods-list.pdf.

Illinois amended the IPCB Board Note in subsection (a)(5) to address the “sunset provisions” in 40 CFR 50.4(e). Under 40 CFR 50.4(e), the 1971 primary annual and 24-hour NAAQS for SO2 no longer apply to the Lemont and Pekin areas, effective October 4, 2014, because: (1) One year has passed since EPA designated these areas as nonattainment for the 2010 primary 1-hour SO2 NAAQS, effective October 3, 2013; (2) these areas were not designated as nonattainment for the 1971 SO2 NAAQS as of June 22, 2010; and (3) there has not been a SIP call for the 1971 SO2 NAAQS for these areas. See 75 FR 47191 (August 5, 2013). The 1971 SO2 NAAQS continues to apply for other areas in Illinois until these areas meet the sunset provisions specified in 40 CFR 50.4(e).

Illinois has amended Table A to add the flagging deadlines by year for the 2012 annual PM2.5 standard adopted in 2012 and promulgated on January 15, 2013 (78 FR 3086). For PM2.5 data collected in 2010 and 2011, the exceptional events were required to be flagged and described by July 1, 2013, and supported by complete documentation by December 12, 2013. For PM2.5 data collected in 2012, the exceptional events were required to be flagged and described by July 1, 2013, and supported by complete documentation by December 12, 2013. For PM2.5 data collected in 2013, the exceptional events were required to be flagged and described by July 1, 2014, and supported by complete documentation by August 1, 2014. The flagging and demonstration submittal deadlines are the same as the deadlines provided in Table 1 in 40 CFR 50.14.

Table A lists the deadlines for exceptional event flagging and documentation of such flagging by pollutant standard. Under 40 CFR 50.14, a state may request that EPA exclude data showing violations or exceedances of the NAAQS from air quality determinations if the state can demonstrate to EPA's satisfaction that these violations or exceedances were due to exceptional events unlikely to reoccur and cause additional violations of the NAAQS at any monitoring site. Where such an event has occurred, the state may flag air quality data affected by the event and request that EPA approve the exclusion of these data from further air quality determinations, including designation of nonattainment areas and assessment of air quality data used for purposes of redesignation to attainment. The criteria for approval of exceptional event exclusion are given in 40 CFR 50.14(b) and the schedule and procedures for data flagging by the state are discussed in 40 CFR 50.14(c).

The rule revisions contained in the December 18, 2014, submittal are summarized below.

Illinois revised this section to incorporate by reference EPA's updated “List of Designated Reference and Equivalent Methods” from June 27, 2013, to December 17, 2013. On December 17, 2013, EPA issued an updated version of the “List of Designated Reference and Equivalent Methods” that includes five new FEMs for monitoring of PM10, PM2.5-10, PM2.5, and oxides of nitrogen (NOx) promulgated by EPA. See 78 FR 67360 (November 12, 2013). More specifically, EPA promulgated the following FEMs: (1) For PM2.5-10, Automated Equivalent Method EQPM-1013-207 (“Thermo Scientific TEOM® 1405-Dichotomous Ambient Particulate Monitor with FDMS”); (2) for PM10, Automated Equivalent Method EQPM-1013-208 (“Thermo Scientific TEOM® 1405-Dichotomous Ambient Particulate Monitor with FDMS”); (3) for PM2.5, Automated Equivalent Method EQPM-1013-209 (“Met One BAM-1022 Real Time Beta Attenuation Mass Monitor-Outdoor PM2.5 FEM Configuration”) and Automated Equivalent Method EQNA-1013-210 (“Environment S.A. Model MP101M PM2.5 Beta Attenuation Monitor”); and (4) for NOx, Automated Equivalent Method EQNA-1013-210 (“Environment S.A. Model AS32M cavity attenuated phase shift spectroscopy Nitrogen Dioxide Analyzer”). Illinois also added a statement to 35 IAC 243.108 that the incorporation by reference of EPA's promulgated monitoring methods “does not include USEPA methods approvals that occurred after December 17, 2013.”

Illinois held a public hearing for the rule changes discussed in the December 18, 2014, submittal (R14-17) on May 7, 2014. Illinois held a public hearing for the rule revisions discussed in the April 23, 2015, submittal (R14-6) on October 31, 2013. The state received one comment for the R14-6 rule revisions in support of adoption of the proposed rule revisions.

EPA finds the state's requested SIP revisions to be acceptable because the state's rule revisions make the state's air quality standards and associated monitoring requirements identical-in-substance to EPA's promulgated NAAQS and monitoring methods, as revised through December 17, 2013.

Additionally, EPA finds that the specified exceptional event flagging and demonstration submittal deadlines are acceptable because they are consistent with the deadlines in 40 CFR 50.14.

EPA also agrees with Illinois' application of the “sunset provisions” in 40 CFR 50.4(e) to the Lemont and Pekin areas. EPA has designated the Lemont and Pekin areas as nonattainment for the 2010 SO2 NAAQS, which means that Illinois must submit a regulation for SIP approval that meets Federal requirements and that provides for attainment of the 2010 SO2 NAAQS in these areas no later than October 4, 2018. The 1971 SO2 NAAQS no longer applies to the Lemont and Pekin areas because EPA designated the Lemont and Pekin areas as nonattainment for the 2010 SO2 NAAQS, these areas were not designated as nonattainment for the 1971 SO2 NAAQS as of June 22, 2010, and there has not been a SIP call for the 1971 SO2 NAAQS. See 78 FR 47192.

Finally, as discussed above, the state's rule revisions to 35 IAC 243.108 incorrectly cite an August 5, 2013 EPA rulemaking at 78 FR 47191 as amending appendix N to 40 CFR part 50. Appendix N sets forth the data handling and computational requirements needed to demonstrate compliance with the 2012 PM2.5 NAAQS. The August 5, 2013, EPA rulemaking establishes area designations for the 2010 SO2 NAAQS, but does not amend appendix N to 40 CFR part 50. Although this citation is incorrect, we are still approving the submission because Illinois has also incorporated by reference the 2013 version of appendix N to 40 CFR part 50 at 35 IAC 243.108. Appendix N, as codified in the CFR, contains the reference monitoring methods for SO2 under the 2010 NAAQS and does not contain a citation to the August 5, 2013, EPA rulemaking. Therefore, it is unlikely that the public would be confused when determining the applicable data handling and computational requirements to demonstrate compliance with the 2012 PM2.5 NAAQS. Illinois should correct this incorrect citation in a subsequent rule revision, but it does not appear to present any implementation or enforcement issues for the state or EPA.

EPA is approving the submitted rule revisions as revisions of the Illinois SIP. Specifically, we are approving 35 IAC sections 243.107, 243.108, 243.120, 243.122, and 243.Table A revised as discussed above, and we are incorporating by reference these revised rules into the Illinois SIP.

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 August 9, 2016 without further notice unless we receive relevant adverse written comments by July 11, 2016. 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 August 9, 2016.

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).

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 August 9, 2016. 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).)

40 CFR part 52 is amended as follows:

I. Does this action apply to me?

The Agency included in the March 2, 2016 final rule a list of those who may be potentially affected by this action.

EPA issued a final rule in the Federal Register of March 2, 2016 (81 FR 10776) (FRL-9942-48) that increases the poly(oxyethylene) content from 16-30 moles to 16-60 moles. EPA inadvertently mistyped the final ratio of poly(oxyethylene) ratio as 16-30 moles instead of 16-60 moles.

The preamble for FR Doc. 2016-04599 published in the Federal Register issue of Wednesday, March 2, 2016 (81 FR 10776) (FRL-9942-48) is corrected as follows:

1. On page 10776, second column, under the heading Summary, paragraph one, line 9 and line 23, correct 16-30 to read 16-60.

2. On page 10777, first column, paragraph 6, line 17 is corrected to read: 16-60 moles.

3. On page 10778, second column, paragraph two, line 7 is corrected to read: 16-60 moles.

Section 553 of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)(3)(B)) provides that, when an agency for good cause finds that notice and public procedure are impracticable, unnecessary, or contrary to the public interest, the agency may issue a final rule without providing notice and an opportunity for public comment. EPA has determined that there is good cause for making this technical correction final without prior proposal and opportunity for comment, because it does not affect or change the Agency's original regulatory decision nor does it adversely affect human or environmental health. EPA finds that this constitutes good cause under 5 U.S.C. 553(b)(3)(B).

No. For a detailed discussion concerning the statutory and executive order review, refer to Unit X of the March 2, 2016 final rule.

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

Therefore, 40 CFR Chapter 1 is corrected as follows:

I. Background

On October 18, 2012, FRA published a notice of proposed rulemaking (NPRM) as a first step towards the agency's promulgation of Crossing Inventory regulations per the Congressional mandate contained in Section 204(a) of the Rail Safety Improvement Act of 2008 (RSIA) (codified at 49 U.S.C. 20160). See 77 FR 64077. After careful consideration of comments received in response to the NPRM and testimony received at a February 19, 2013, public hearing, FRA published a final rule on January 6, 2015, requiring railroads that operate one or more trains through highway-rail or pathway crossings to submit initial reports to the Crossing Inventory, including current information about warning devices and signs for previously unreported and new highway-rail and pathway crossings through which they operate. The final rule also requires railroads to periodically update the data in the Crossing Inventory, including the prompt reporting of a crossing sale, crossing closure, or changes in certain crossing characteristics. See 80 FR 746.

The Association of American Railroads (AAR) filed a petition for reconsideration (Petition) of the final rule. In its Petition, AAR asks FRA: (1) For additional time to comply with the final rule; (2) to reconsider the rule's requirement that railroads, in certain instances, submit data to the Crossing Inventory that State agencies have historically submitted voluntarily. Specifically, AAR asks FRA to amend 49 CFR 234.405 and 234.407 to address that issue and issues associated with the assignment of inventory numbers to certain crossings located in private companies', ports', and docks' areas; (3) to amend those same sections, and § 234.409, to remove the requirement that railroads operating trains through highway-rail or pathway crossings, that are not the “primary operating railroad” for those crossings, ensure information the relevant primary operating railroad provides to the Crossing Inventory is submitted and updated; and (4) to revise the Inventory Guide 1 to disallow states from reporting crossing closures to the Crossing Inventory.

The specific issues AAR raised, and FRA's responses to those issues, are discussed in detail in the “Section-by-Section Analysis” below. The Section-by-Section Analysis also contains a discussion of each provision of the final rule which FRA is amending or clarifying in response to practical implementation issues it has discovered since it promulgated the final rule. These amendments also allow greater flexibility in complying with the rule. These amendments are within the scope of the issues and options discussed, considered, or raised in the NPRM.

FRA is adding definitions of “general railroad system of transportation” and “general system railroad” to this section because these terms are used in the revised definition of “primary operating railroad”, which is discussed below. For purposes of this subpart, FRA is defining a general railroad system of transportation as the network of standard gage track over which goods may be transported throughout the nation and passengers may travel between cities and within metropolitan and suburban areas. Consistent with the definition of “general railroad system of transportation”, FRA is defining general system railroad as a railroad that operates on track, which is part of the general railroad system of transportation. Thus, a general system railroad is not a plant railroad, as defined in § 234.5 of this part.

As applied to highway-rail and pathway crossings located within private companies', ports', or docks' areas, the final rule defines “primary operating railroad” as “each railroad that owns track leading to the private company, port, or dock area.” After FRA issued the final rule, at least one regulated entity expressed concern about a private company where a railroad owns track leading into the private company, but does not actually operate on track within the company. Because the railroad does not operate over any crossings within the company's area, the railroad stated it does not have ready access to the information the rule requires it to report to the Crossing Inventory for crossings within the private company.

FRA did not intend to require railroads merely owning track leading to a private company, port, or dock area, where the only railroad that operates through crossings within the area is a plant railroad, as defined in § 234.5, to report to the Crossing Inventory information on the crossings within the private area. Accordingly, FRA is revising the definition of “primary operating railroad” to clarify that mere ownership of track leading to a private company, port, or dock area does not make a railroad a primary operating railroad for crossings within that area, if no general system railroad operates over that track and through at least one crossing within the private area.

If a general system railroad operates over track leading to a private area and through at least one highway-rail or pathway crossing within the private area, the railroad that owns the track leading to the area and over which the general system railroad operates, is responsible for reporting to the Crossing Inventory information on all the crossings within the private area. The railroad owning the track leading to the private area should be able to obtain access to the information required to be submitted to the Crossing Inventory (e.g., number and speed of train movements through the crossings within the area) through the railroad operating over the track it owns.

For example, if one general system railroad (Railroad A) owns a track leading to a private company, port, or dock area and operates over that track and through at least one crossing within the private area, that Railroad (Railroad A) is the primary operating railroad for all crossings within the private area. Similarly, if Railroad A owns track leading to a private company, port, or dock area, but does not operate over that track or any crossings within the private area but instead allows another general system railroad (Railroad B) to operate over its track leading to the private area and Railroad B also operates through at least one crossing within the private area, Railroad A (the railroad that owns the track leading to the private area) is considered the primary operating railroad for all of the crossings within the private area—even though it does not actually operate over the track.

On the other hand, if two general system railroads (e.g., Railroad C and Railroad D) own separate tracks leading to a private company, port, or dock area, and Railroad C operates over its own track leading to the private area and through at least one crossing within that area (and Railroad D does not operate over its track leading to the private area or through any crossings within the area), Railroad C (the general system railroad that owns and operates over its track leading to the private area and through at least one crossing within that area) is considered the primary operating railroad for all of the crossings within that area.

Likewise, if Railroads C and D each own track leading to a private company, port, or dock area, and Railroad E (another general system railroad) operates over one of their tracks leading to the private area and through at least one crossing within the area, the owner of the track leading to the area over which Railroad E operates is the primary operating railroad for all crossings within the private area. If both Railroads C and D own track leading to a private company, port, or dock area, and they each operate over their owned track into the area and through at least one crossing within the area, they both will be considered primary operating railroads for all crossings within the private area.

Finally, if in any scenario a general system railroad (or more than one railroad) owns track leading to a private company, port, or dock area, but neither that railroad nor any other general system railroad operates over that track and through at least one crossing within the area, then the crossings in the private area do not need to be reported to the Crossing Inventory. For example, if a general system railroad owns track leading up to the entrance of a private area and operates over that track (or allows another general system railroad to operate over that track), but does not operate over any crossing within the area, that railroad is not considered a primary operating railroad for purposes of the crossings within the private area.

Section 234.403 of the final rule contains the general requirements for submission of information to the Crossing Inventory. Paragraph (e) of that section of the final rule allows a parent corporation to submit crossing data to the Crossing Inventory on behalf of one or more of its subsidiaries, if the parent corporation and subsidiary railroad(s): (1) Provide written notice (signed by the chief executive officer of the parent corporation) to FRA that the parent corporation is assuming the reporting and updating responsibility; and (2) operate as a “single, seamless, integrated” railroad system. Since publication of the final rule, numerous railroads that voluntarily submitted crossing data in the past on behalf of their subsidiaries notified FRA they would like to continue to do so. However, because they do not operate as a “single, seamless, integrated” railroad system they cannot report on behalf of their subsidiaries under the final rule. Railroads also questioned the need for the chief executive officer, as opposed to any railroad official, to sign the written notice the parent corporation submits. After considering these concerns, which could inadvertently prevent parent corporations from reporting crossing data on behalf of their subsidiaries, FRA is amending § 234.403(e) by removing the requirement that parent corporations and their subsidiary railroads operate as a “single, seamless, integrated” railroad system. As a result, all railroad parent corporations can now report on behalf of their subsidiaries under paragraph (e).

This final rule also simplifies the notification process a parent corporation must follow if it wants to submit Crossing Inventory data on behalf of one or more of its subsidiary railroads. At least one regulated entity raised concerns about current paragraph (e)(1) of this section of the final rule that requires the chief executive officer of the parent corporation to sign the required notice to FRA that the parent corporation is assuming reporting and updating responsibility for its subsidiaries. In response to those concerns, FRA is amending paragraph (e)(1) to allow any appropriate management official with authority to bind the company to sign the notice. This notice must include a statement that the parent corporation is agreeing to (1) submit and update crossing data for the named subsidiaries and the parent corporation, and (2) be subject to enforcement action for noncompliance with the final rule. FRA is also amending paragraph (e)(1) to require only the parent corporation, instead of the parent corporation and the named subsidiary, to submit the required written notice to FRA.

Current paragraph (a)(1)(ii) of § 234.405 requires each primary operating railroad that operates through at least one previously unreported crossing within a private company, port, or dock area to assign one or more Inventory Numbers to those crossings. AAR asserts that (1) this requirement is contrary to current practice that allows a single Inventory Number to be assigned to all crossings in these areas, and (2) this new requirement could create reporting confusion if an accident were to occur at a crossing within a private company, port, or dock area. AAR requests that FRA amend this requirement to allow multiple primary operating railroads to share an assigned Inventory Number for one or more previously unreported highway-rail and pathway crossings located within a private company, port, or dock area.

After careful consideration, FRA is not adopting AAR's request to modify the language of § 234.405(a)(1)(ii) for two reasons. First, for purposes of enforcement of this rule's reporting requirements, if the railroads share a single Inventory Number, FRA will not know which railroad is responsible for misreporting or failure to report. Second, if a reportable accident/incident occurs at a previously unreported highway-rail or pathway crossing located within a private company, port, or dock area, it benefits both FRA and the railroads involved for the railroad responsible for reporting the accident/incident under 49 CFR part 225 to have its own unique Inventory Number it can use in the accident/incident report it files with FRA.2

FRA disagrees with AAR's argument that assigning multiple Inventory Numbers to the same highway-rail or pathway crossing could create reporting confusion. It is possible that a railroad that operates over its own track into a private company, port, or dock area may not know if another railroad with its own track leading into the area assigned an Inventory Number to the crossings within the area. By requiring each railroad to assign its own Inventory Number to the crossings within a private company, port, or dock area, a railroad involved in a crossing collision inside the area will not have to rely on another railroad to provide the Inventory Number so it can report the accident as required under part 225.

FRA also disagrees with AAR's assertion that requiring each primary operating railroad to assign one or more Inventory Numbers to crossings located within a private company, port, or dock area could result in multiple railroads having multiple signs at each vehicular entrance that provide multiple Inventory Numbers and emergency notification information for the same crossings. However, FRA regulations do not require railroads to post emergency notification signs (ENS signs) at crossings located within a private company. As for port and dock areas, subpart E of 49 CFR part 234 (subpart E) requires railroads to post at least one ENS sign only at each vehicular entrance if any highway-rail and/or pathway crossings are located within that area (and provided the port or dock area does not meet the definition of “plant railroad” in § 234.5.) See 49 CFR 234.311(a)(2)(ii). Subpart E does not require railroads to post signs at each crossing within such an area. The track owner or lessee that maintains the highway-rail or pathway grade crossing (the “maintaining railroad” under 49 CFR 234.301) is responsible for the placement and maintenance of ENS signs at each vehicular entrance. See 49 CFR 234.311(a)(2)(ii). Under subpart E, if the primary dispatching railroad under 49 CFR 234.306 and the maintaining railroad are not the same entity, the primary dispatching railroad must provide the emergency telephone number to display on the ENS sign to the maintaining railroad. See 49 CFR 234.309(a).

If there is more than one primary operating railroad that operates through highway-rail or pathway crossings in a port or dock area, subpart E does not require multiple signs at each vehicular entrance with multiple Inventory Numbers and emergency notification information for the crossings. Instead, under subpart E, the maintaining railroad (not the primary operating railroad under this final rule) is responsible for posting ENS signs that display the emergency telephone number and the Inventory Number assigned to the crossings in the port or dock area by the primary dispatching railroad.

Paragraph (a)(3) of § 234.405 of the final rule requires primary operating railroads to submit to the Crossing Inventory “accurate and complete [U.S. DOT Crossing] Inventory Forms, or their electronic equivalent,” for previously unreported highway-rail and pathway crossings through which the railroads operate. AAR requests that FRA amend this provision (and the corresponding provision in § 234.407(a)(3) addressing new highway-rail and pathway crossings) by removing the requirement that primary operating railroads submit “completed” U.S. DOT Crossing Inventory Forms (Inventory Forms) for such crossings.

AAR also objects to the voluntary process in paragraph 234.405(d) (and the corresponding provision in § 234.407(d) (addressing new highway-rail and pathway crossings). Section 234.405(d) provides that if a railroad requests data necessary to complete an Inventory Form from a State agency, but does not timely receive that information from the State agency, the railroad may notify FRA in writing of the State's non-responsiveness. AAR asserts that railroads should not be held responsible for supplying state-controlled information not maintained by the railroads. AAR urges FRA to revise this requirement to limit primary operating railroads' reporting responsibilities to crossing data within their control.

FRA acknowledges that State agencies generally maintain the crossing data in Parts III, IV, and V of the Inventory Form. However, the RSIA, as amended by sec. 11316(g) of the Fixing America's Surface Transportation Act (FAST Act), specifically requires railroads to report “[n]ot later than 1 year after the date of enactment of the RSIA or 6 months after a new crossing becomes operational, whichever occurs later . . . current information, including information about warning devices and signage, as specified by the Secretary, concerning each previously unreported crossing through which it operates with respect to the trackage over which it operates.” 49 U.S.C. 20160. Crossing data about warning devices and signage is primarily in Part III of the Inventory Form, under the heading “Highway or Pathway Traffic Control Device Information.” Thus, in addition to the crossing data in Parts I and II of the Inventory Form, which railroads have historically collected and maintained in the Crossing Inventory, the RSIA specifically requires railroad carriers to submit additional crossing data “about warning devices and signage” for previously unreported and new crossings.

The RSIA also contains language granting the Secretary of Transportation (and by delegation, FRA) the authority to exercise discretion in determining the scope of the crossing data railroads must submit to the Crossing Inventory. In the final rule, FRA determined that submission of complete Inventory Forms for previously unreported and new public highway-rail grade crossings is needed to increase the accuracy and utility of the Crossing Inventory. FRA continues to maintain that position. Railroads generally work closely with the State agency responsible for grade crossing safety before any new public highway-rail grade crossings become operational. Therefore, any burden associated with obtaining State-maintained crossing data for new public highway-rail grade crossings should be minimal.

Nevertheless, to clarify this requirement, FRA is revising § 234.405(a)(3) (and the corresponding provision in § 234.407(a)(3) on new highway-rail and pathway crossings) to require primary operating railroads to submit “accurate Inventory Forms, or their electronic equivalent,” (as opposed to “accurate and complete” Inventory Forms) to the Crossing Inventory for previously unreported highway-rail and pathway crossings through which they operate. Primary operating railroads must fill out these accurate Inventory Forms as the Inventory Guide requires. In other words, primary operating railroads are only required to complete the entire Inventory Form for new and previously unreported public highway-rail grade crossings. The Inventory Guide only requires primary operating railroads to complete Parts I and II of the Inventory Form for new and previously unreported pathway grade crossings and new and previously unreported private highway-rail grade crossings.

Since the final rule requires primary operating railroads to complete Inventory Forms (or their electronic equivalent) for new and previously unreported public highway-rail grade crossings, those railroads may need to obtain crossing data from the State agency responsible for maintaining highway-rail and pathway crossing data to complete the Inventory Form (or its electronic equivalent). Current § 234.405(d) of the final rule explains how a primary operating railroad that requests State-maintained crossing data from the appropriate State agency responsible for maintaining the data, but does not timely receive the requested data, may notify FRA in writing that the railroad requested the required data, but did not receive the data. Under the final rule, if a railroad properly submits such notification, FRA would not hold the primary operating railroad responsible for failing to complete and submit accurate Inventory Forms (or their electronic equivalent) for previously unreported public highway-rail grade crossings.

In its Petition, AAR asserts that “FRA has taken a relatively straightforward process, whereby primary operating railroads could provide the data which they possess and state agencies could provide the remaining highway traffic and other non-railroad data, and has made it burdensome and complex.” Noting that a primary operating railroad may operate in dozens of states, AAR further asserts that contacting each relevant State agency, tracking the responses of those agencies, and creating a certification process would be an unmerited burden on the industry.

As noted previously, FRA continues to maintain its position that submission of complete Inventory Forms for previously unreported and new public highway-rail grade crossings is needed to increase the accuracy and utility of the Crossing Inventory. To achieve this goal, FRA is requiring primary operating railroads to provide the crossing data they possess and to request any additional required crossing data from the State agency responsible for maintaining that data. FRA anticipates that State agencies will generally respond promptly to railroad requests for State-maintained crossing data. However, primary operating railroads may submit copies of their written requests for State-maintained crossing data to FRA and to each operating railroad that operates through the crossing. This is not mandatory, but, if FRA audits the Crossing Inventory, FRA would know the primary operating railroad made an effort to obtain State data for one or more previously unreported public highway-rail grade crossings.

After considering AAR's request, FRA is simplifying the written notification process in § 234.405(d). Instead of providing written notice to FRA certifying that State-maintained crossing data was requested at least 60 days earlier and has not yet been received, a primary operating railroad can send a copy of its written request for State-maintained crossing data to FRA and to each operating railroad that operates through the crossing. As long as the primary operating railroad submits the State-maintained crossing data within 60 days of receipt, FRA will consider the written request for State-maintained crossing data to be an affirmative defense to potential liability for failure to timely submit an Inventory Form (or its electronic equivalent) to the Crossing Inventory for a previously unreported public highway-rail grade crossing.

Paragraphs (a)(3) and (b) of § 234.405 of the final rule provide a deadline of March 7, 2016, for operating railroads and primary operating railroads to submit the required Inventory Forms, or their electronic equivalent, for previously unreported highway-rail and pathway crossings. AAR requests that FRA extend the deadline to three years from the final rule's effective date (i.e., until March 9, 2018). AAR asserts this additional time will allow railroads to hire and train additional staff to physically locate and inspect tens of thousands of previously unreported private crossings. AAR also asserts that railroads need this additional time to add newly acquired information to the Crossing Inventory and to modify their IT systems to meet the new requirements.

After careful consideration, FRA is not adopting AAR's request to extend the reporting deadline for new and previously unreported highway-rail and pathway crossings to three years from the final rule's effective date. However, FRA acknowledges that railroads may need additional time to incorporate the changes that FRA is making in this amendment to the final rule as a result of AAR's Petition. Therefore, FRA is revising § 234.405(a)(3) to extend the deadline for primary operating railroads to submit crossing data to the Crossing Inventory for previously unreported highway-rail and pathway crossings to August 9, 2016. Consistent with this extension of time, FRA is also extending the deadline for operating railroads that operate on separate tracks to submit crossing data to the Crossing Inventory to August 9, 2016. FRA is not adjusting any other deadlines in § 234.405(a) and (b).

Paragraph (c) of § 234.405 requires operating railroads (railroads other than the primary operating railroad that operate through a crossing) to notify FRA if a primary operating railroad has not submitted a completed Inventory Form, or its electronic equivalent, to the Crossing Inventory consistent with the rule for a new or previously unreported crossing the railroad operates through. AAR requests that FRA amend this requirement (along with the corresponding requirement in § 234.407(c) related to new crossings) so operating railroads will not be liable for a primary operating railroad's failure to submit the required crossing data. AAR asserts this provision imposes a significant burden on operating railroads and constitutes an inappropriate shift of regulatory compliance policing responsibility to a private business. AAR asserts that the final rule requires operating railroads to include and validate data for other railroads' crossings in their databases on an ongoing basis to ensure the primary operating railroad properly submitted required crossing data to the Crossing Inventory. AAR further asserts it is unrealistic to require railroads to audit the crossing data of other railroads, in addition to their own crossing data, all within 14 months.

After careful consideration of AAR's request, with respect to the initial reporting of new and previously unreported highway-rail and pathway crossings, FRA cannot legally adopt AAR's request. Paragraph (c) of § 234.405 (and paragraph (c) of § 234.407 related to new crossings) implements the RSIA mandate that each railroad carrier ensure current information about each previously unreported highway-rail or pathway crossing is reported to the Crossing Inventory. See 49 U.S.C. 20160(a). Congress left FRA no discretion to ignore this mandate. Clearly, Congress thought operating railroads that operate over new and unreported highway-rail and pathway crossings are in the best position to identify crossings that have not been reported to the Crossing Inventory.

Paragraph (b) of this section of the final rule requires operating railroads that operate on separate tracks through a new highway-rail or pathway crossing to submit crossing data to the Crossing Inventory by March 7, 2016, but erroneously fails to provide a future deadline for highway-rail and pathway crossings that become operational after the final rule's effective date. This document corrects this technical error by amending § 234.407(b) to require operating railroads that operate on separate tracks through a new highway-rail or pathway crossing to submit crossing data no later than six months after the crossing becomes operational or August 9, 2016, whichever occurs later.

FRA is also making a technical amendment to correct a typographical error in the second sentence of paragraph (d)(1)(i) of this section in this final rule. The original version of this sentence in the final rule contained an erroneous reference to § 234.405(a)(3).

Paragraph (a)(1)(ii) of § 234.407 of the final rule requires each primary operating railroad to assign one or more Inventory Numbers to new highway-rail and pathway crossings within a private company, port, or dock area and through which the railroad operates. See discussion of § 234.405 above. AAR requests that FRA amend this requirement to allow multiple primary operating railroads to assign a shared Inventory Number to new highway-rail and pathway crossings that are located within a private company, port, or dock area. AAR asserts that as drafted, § 234.407(a)(1)(ii) is contrary to current practice. AAR also asserts that this new requirement could create reporting confusion if an accident were to occur at a crossing within a private company, port, or dock area. After careful consideration, FRA is not adopting AAR's request to modify § 234.407(a)(1)(ii) for the reasons explained in the Section-by-Section analysis of § 234.405(a)(1)(ii) above.

Paragraph (a)(3) of § 234.407 requires primary operating railroads to submit to the Crossing Inventory “accurate and complete [U.S. DOT Crossing] Inventory Forms, or their electronic equivalent,” for new highway-rail and pathway crossings through which railroads operate. As discussed in the Section-by-Section Analysis of § 234.405 above, under the heading “Submission of Completed Inventory Forms for Previously Unreported Highway-Rail Grade Crossings”, AAR requests that FRA amend § 234.407(a)(3) to remove the requirement that primary operating railroads submit “completed” Inventory Forms for new highway-rail and pathway crossings. AAR also objects to the voluntary process in paragraph (d) of this section which provides that if a railroad requests data necessary to complete an Inventory Form from a State agency and that agency does not timely respond, the railroad may notify FRA in writing of the State's non-responsiveness.

After careful consideration, FRA is revising § 234.407(a)(3) consistent with the revisions to § 234.405(a)(3), to clarify that primary operating railroads must submit “accurate Inventory Forms, or their electronic equivalent,” (as opposed to “accurate and complete” Inventory Forms) to the Crossing Inventory for new highway-rail and pathway crossings through which they operate. The primary operating railroad must fill out these accurate Inventory Forms consistent with the Inventory Guide, which requires completion of the entire Inventory Form only for new public highway-rail grade crossings.

The final rule provides that “[e]ach primary operating railroad shall submit accurate and complete Inventory Forms, or their electronic equivalent, to the Crossing Inventory for new highway-rail and pathway crossings through which it operates, no later than six (6) months after the crossing becomes operational or March 7, 2016, whichever occurs later.” 49 CFR 234.407(a)(3). The final rule also provides that “[f]or each new highway-rail and pathway crossing where operating railroads operate trains on separate tracks through the crossing, each operating railroad (other than the primary operating railroad) shall submit accurate crossing data specified in the Inventory Guide to the Crossing Inventory no later than March 7, 2016.” 49 CFR 234.407(b).

AAR requests that FRA amend § 234.407(a)(3) to establish a deadline three years from the final rule effective date for operating railroads and primary operating railroads to submit crossing data for new highway-rail and pathway crossings to the Crossing Inventory. AAR asserts that railroads need this additional time to add newly acquired information to the Inventory and to modify their IT systems to meet the new requirements. For the reasons explained in the Section-by-Section analysis of § 234.405(a)(3) above, FRA is not adopting the AAR's request to extend the reporting deadline for new highway-rail and pathway crossings to March 9, 2018 (three years from the final rule effective date). However, with respect to new crossings (highway-rail and pathway crossings that become operational on or after June 10, 2016), primary operating railroads will have six (6) months from the date on which the highway-rail or pathway crossing becomes operational to report the new crossing to the Crossing Inventory, consistent with § 234.403 and the Inventory Guide. Similarly, operating railroads that operate on separate tracks through a new highway-rail or pathway crossing will have six (6) months from the date on which the highway-rail or pathway crossing becomes operational to submit crossing data to the Crossing Inventory, consistent with § 234.403 and the Inventory Guide.

Paragraph (c) of § 234.407 requires operating railroads (railroads other than the primary operating railroad that operate through a crossing) to notify FRA if a completed Inventory Form, or its electronic equivalent, has not been submitted to the Crossing Inventory consistent with the final rule for a new crossing that the railroad operates through. Consistent with its request to amend § 234.405(c) regarding previously unreported crossings, AAR requests that FRA amend § 234.407(c), so operating railroads will not be held liable for the primary operating railroad's failure to timely report a new highway-rail or pathway crossing to the Crossing Inventory. For the reasons discussed in the Section-by-Section analysis of § 234.405(c), FRA is not adopting AAR's request to amend § 234.407(c).

As explained in the Section-by-Section analysis of § 234.405(d), primary operating railroads are required to complete Inventory Forms (or their electronic equivalent) for new public highway-rail grade crossings. Therefore, primary operating railroads may need to obtain crossing data from the State agency responsible for maintaining highway-rail and pathway crossing data to complete the Inventory Form (or its electronic equivalent). Like paragraph (d) of § 234.405, current paragraph (d) of § 234.407 of the final rule explains how a primary operating railroad may submit written notification to the FRA Associate Administrator that they requested certain crossing data from the appropriate State agency responsible for maintaining highway-rail and pathway crossing data, which the State has not yet provided. As long as the primary operating railroad submits the State-maintained crossing data within 60 days of receipt, FRA will consider a properly filed written notification to be an affirmative defense to potential violations for failure to timely submit an Inventory Form (or its electronic equivalent) to the Crossing Inventory for a new public highway-rail grade crossing.

FRA is revising the written notification process in § 234.407(d). FRA is no longer asking primary operating railroads to provide their written notifications by certified mail, return receipt requested. Instead, a primary operating railroad can send copies of its request for State-maintained crossing data to the FRA Associate Administrator and to each operating railroad that operates through the new public highway-rail grade crossing. As long as the primary operating railroad: (1) Sends copies of its written request for State-maintained crossing data to the FRA Associate Administrator and to each operating railroad that operates through the new public highway-rail grade crossing no later than six (6) months after the crossing becomes operational; and (2) submits the State-maintained crossing data within 60 days of receipt, FRA will consider the written request for State-maintained crossing data to be an affirmative defense to potential liability for failure to timely submit an Inventory Form (or its electronic equivalent) to the Crossing Inventory for a new public highway-rail grade crossing.

AAR's Petition states that some primary operating railroads share a single Inventory Number for highway-rail and pathway crossings located within a private company, port, or dock area that have already been reported to the Crossing Inventory. (As explained in the definition of “primary operating railroad” in § 234.401 above, each railroad that owns track leading to a private company, port, or dock area is considered a primary operating railroad for the crossings within that area, if a general system railroad operates over the track owned by that railroad and through at least one crossing within that private area.)

Paragraph (a) of § 234.409 requires each primary operating railroad to submit periodic updates to the Crossing Inventory. To comply with this requirement, primary operating railroads that currently share Inventory Numbers for highway-rail and pathway crossings located within a private company, port, or dock area must exercise one of two options.

First, each primary operating railroad that operates through the crossing(s) may choose to assign a new unique Inventory Number (or set of Inventory Numbers) to the crossing(s) located within a private company, port, or dock area through which it operates. Each primary operating railroad (except the primary operating railroad that assigned the original Inventory Number to the crossing(s)) would then use its new Inventory Number(s) to submit crossing data to the Crossing Inventory as a new crossing record. After the new crossing record is established, each primary operating railroad can submit periodic updates to the Crossing Inventory for the highway-rail and pathway crossing(s) located within a private company, port, or dock area using the Inventory Number(s) it assigned to the crossing(s).

Second, FRA will accommodate primary operating railroads that wish to continue sharing a single Inventory Number which has already been used to report highway-rail and pathway crossings located within a private company, port, or dock area to the Crossing Inventory. As explained in Frequently Asked Question (FAQ) number 37 in Appendix E to the Inventory Guide, the primary operating railroad of record in the Crossing Inventory can submit an up-to-date and accurate periodic update to the Crossing Inventory for all of the railroad-assigned data fields in Appendix B to the Inventory Guide (“Responsibility Table for Periodic Updates to the Crossing Inventory”). As part of this update, the primary operating railroad of record must check the “Yes” box in Part I, item 7 (“Do Other Railroads Operate a Separate Track at Crossing”) of the Inventory Form (or its electronic equivalent) and provide railroad codes for all of the other primary operating railroads.

The other primary operating railroads that share the Inventory Number can satisfy the periodic updating requirement in § 234.409 by using the shared Inventory Number to submit up-to-date and accurate crossing data for the data fields specified in Appendix C to the Inventory Guide (“Reporting Crossings that have Multiple Operating Railroads”). This method for submitting periodic updates is identical to the method operating railroads that operate on separate tracks through a crossing use, under paragraph (b) of § 234.409.

This second option is only available for new or previously unreported highway-rail and pathway crossings located within a private company, port, or dock area that have already been reported to the Crossing Inventory and assigned one or more Inventory Numbers that are shared by multiple primary operating railroads.

The final rule requires primary operating railroads to submit, consistent with the Inventory Guide, “up-to-date and accurate crossing data” to the Crossing Inventory for each highway-rail and pathway crossing through which it operates. Paragraph (a) of § 234.409 of the final rule requires primary operating railroads to submit updated data at least every three (3) years from the date of the primary operating railroad's most recent submission of data (or most recent submission on behalf of the primary operating railroad) for the crossing or by March 7, 2016. Paragraph (b) requires operating railroads that operate trains on separate tracks through a crossing to similarly update the data required by the Inventory Guide.

As it did for §§ 234.405 and 234.407, AAR requests that FRA amend the compliance deadlines in paragraphs (a) and (b) of § 234.409 for three years from the final rule's effective date. This would allow railroads to submit updated crossing data for highway-rail and pathway grade crossings at least every three (3) years from the date of the most recent submission of data by that railroad for the crossing or by March 7, 2018, whichever occurs later.

Consistent with FRA's responses to AAR's requests to amend the compliance deadlines in §§ 234.405 and 234.407 discussed above, FRA is not adopting AAR's request to extend the compliance deadlines for railroads in paragraphs (a) and (b) of § 234.409 by three years. As with the compliance deadlines in §§ 234.405 and 234.407, however, FRA acknowledges that railroads may need additional time to incorporate the changes that are being made in these amendments to the final rule being made as a result of AAR's Petition. Therefore, FRA is revising § 234.409(a) and (b) to extend the deadline for primary operating railroads and operating railroads to submit updated crossing data to the Crossing Inventory for highway-rail and pathway crossings over which they operate to every three (3) years from the date of the most recent submission of data by the railroad (or on behalf of the railroad) for the crossing or August 9, 2016, whichever occurs later.

Paragraph (c) of § 234.409 requires operating railroads (other than primary operating railroads), that operate through a highway-rail or pathway crossing for which up-to-date information has not been timely submitted to the Crossing Inventory to notify FRA of this oversight. Written notification the operating railroad provides must include, at a minimum, the Inventory Number for each highway-rail or pathway crossing that has not been updated.

AAR requests that FRA amend § 234.409(c), so that operating railroads will not be held liable for the primary operating railroad's failure to timely submit updated crossing data to the Crossing Inventory. AAR asserts that this provision imposes a significant burden on operating railroads, which will need to include and validate data for other railroads' crossings in their databases on an ongoing basis to ensure that the primary operating railroad has properly submitted required crossing data to the Crossing Inventory. AAR further asserts that this language constitutes an inappropriate shift of regulatory compliance policing responsibility to a private business and that it is unrealistic to require railroads to audit the crossing data of other railroads, in addition to their own crossing data, within 14 months.

After considering AAR's request, FRA is removing § 234.409(c). The RSIA requires each railroad carrier to ensure that periodic updates are submitted to the Crossing Inventory for each highway-rail and pathway crossing through which it operates. See 49 U.S.C. 20160(b). However, unlike previously unreported and new crossings that have not yet been reported to the Crossing Inventory, FRA can use the Grade Crossing Inventory System (GCIS) to generate reports that identify out-of-date highway-rail and pathway crossing data. FRA can use these reports to verify that primary operating railroads (and any operating railroads that operate on separate tracks through the crossing) are timely submitting periodic updates to the Crossing Inventory, as required by § 234.409(a) and (b). Therefore, FRA is revising the final rule to remove the requirement that operating railroads monitor the Crossing Inventory and provide the agency written notification if a primary operating railroad fails to timely submit updates to the highway-rail and pathway crossing data for which it is responsible.

Consistent with the extended deadline by which railroads are required to report new and previously unreported highway-rail and pathway crossings to the Crossing Inventory, this final rule revises § 234.411 to clarify the primary operating railroad is required to report the following events to the Crossing Inventory within three (3) months, if they occur on or after June 10, 2016: (1) The sale of all or part of a crossing; (2) the closure of a highway-rail or pathway crossings; or (3) a change in crossing surface or warning device at a public highway-rail grade crossing.

Current paragraph (a) of § 234.411 requires any railroad that sells all or part of a highway-rail or pathway crossing to report the crossing sale to the Crossing Inventory within three (3) months of the date of sale or March 7, 2016, whichever occurs later. However, with respect to railroads, GCIS is primarily designed to accept crossing data from the primary operating railroad, unless other operating railroads operate on separate tracks through the crossing (or the primary operating railroad delegates reporting and updating responsibility to another entity). (As stated in the Inventory Guide, GCIS will accept partial data submissions from other operating railroads once the primary operating railroad submits an Inventory Form, or its electronic equivalent, which indicates that one or more operating railroads operate on separate tracks through the crossing.) Therefore, FRA is also amending § 234.411(a)(1) to require a selling railroad that is not the primary operating railroad to notify the primary operating railroad of the sale of all or part of a highway-rail or pathway crossing within three (3) months of the date of sale.

Under new § 234.411(a)(2)(i), if the primary operating railroad sells all or part of a highway-rail or pathway crossing for which it has reporting and updating responsibility under this subpart, it would be required to submit an Inventory Form, or its electronic equivalent, which reflects the crossing sale to the Crossing Inventory consistent with § 234.403 and the Inventory Guide within three (3) months of the date of sale. However, under new § 234.411(a)(2)(ii), if a primary operating railroad is notified of the sale of all or part of a highway-rail or pathway crossing under paragraph (a)(1) of this section, then it would be required to submit an Inventory Form, or its electronic equivalent, which reflects the crossing sale to the Crossing Inventory consistent with § 234.403 and the Inventory Guide within three (3) months of the date of notification.

This document makes a technical amendment to the heading of this section to correct a typographical error.

This document revises the civil penalty schedule in appendix A to this part to reflect changes that were made to individual sections in these final rule amendments. FRA is revising the civil penalty schedule to reflect violations may be assessed under §§ 234.405(a) and 234.407(a) if the primary operating railroad fails to timely submit an accurate Inventory Form (or electronic equivalent) to the Crossing Inventory for a new or previously unreported crossing. (Previously, the civil penalty schedule indicated that violations may be assessed under these sections if the primary operating railroad fails to timely submit an accurate and complete Inventory Form or the electronic equivalent to the Crossing Inventory for a new or previously unreported crossing. However, as discussed above, primary operating railroads are only required to submit complete Inventory Forms or their electronic equivalent for public highway-rail grade crossings.) FRA is also revising the civil penalty schedule to remove the recommended civil penalty associated with § 234.409(c) because this provision has been removed.

FRA is clarifying a statement made in the final rule preamble discussion of the “Crossing Type” data field in Part I of the Inventory Form. Specifically, in the preamble to the final rule, FRA stated that it

FAQ number 22 in Appendix E to the Inventory Guide states that “[t]he primary operating railroad must report the closure of a highway-rail or pathway crossing to the Crossing Inventory, but the State may also report the closure of a public crossing.” AAR requests that FRA amend this FAQ to state that only railroads can report the closure of a crossing to the Crossing Inventory. AAR asserts that allowing dual reporting is problematic because a State may close crossings in the Crossing Inventory on the basis of inaccurate information and without informing the operating railroad, which causes railroads to incur additional research and effort to address and resolve the discrepancy.

FRA declines to adopt AAR's recommendation to modify FAQ number 22 in Appendix E to the Inventory Guide. While the primary operating railroad is the only entity that can report the closure of a private highway-rail or pathway crossing to the Inventory, both railroads and States collect and maintain data related to public highway-rail and pathway crossings. Both entities have an interest in ensuring that the Crossing Inventory reflects up-to-date and accurate data related to crossing status. By allowing States to report the closure of public highway-rail and pathway crossings to the Crossing Inventory, States can provide needed updates to crossing status in the event that the primary operating railroad ceases to operate.

FRA is revising FAQ number 24 in Appendix E to the Inventory Guide to incorporate an FRA recommendation when railroads report crossing sales that result in a new primary operating railroad. As stated in revised FAQ number 24, if the sale of a highway-rail or pathway crossing results in a new primary operating railroad, FRA strongly recommends that the new primary operating railroad submit updated crossing data to the Crossing Inventory for all of the railroad-assigned data fields on the Inventory Form (or its electronic equivalent) within six (6) months of the date of sale.

FRA analyzed the potential costs and benefits of the amendments to the final rule adopted in this document. FRA estimates that the amendments will not materially impact the findings of the previously published regulatory evaluation. The extension of time for compliance with changes that are being made in these final rule amendments will grant some relief to railroads. However, the twenty-year analysis is still valid.

FRA evaluated both the final rule and these amendments under existing policies and procedures and determined both to be non-significant under both Executive Order 12866 and 13563 and DOT policies and procedures. See 44 FR 11034, Feb. 26, 1979. FRA previously placed in the docket a regulatory evaluation addressing the economic impact of the final rule. The primary purpose of the Crossing Inventory is to provide a uniform inventory database that can be merged with highway-rail crossing collision files and used to analyze information for planning and implementation of crossing improvement programs by public and private agencies responsible for highway-rail crossing safety, as well as the railroad industry and academia.

FRA has determined these amendments to the final rule do not change FRA's position that the anticipated benefits justify the costs.

To ensure the impact of this rulemaking on small entities is properly considered, FRA developed these final rule amendments consistent with Executive Order 13272 (“Proper Consideration of Small Entities in Agency Rulemaking”) and DOT's procedures and policies to promote compliance with the Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.).

The Regulatory Flexibility Act requires an agency to review regulations to assess their impact on small entities. FRA certified that this final rule will not have a significant economic impact on a substantial number of small entities. Although a substantial number of small railroads will be affected by the final rule, none of these entities will be significantly impacted. The amendments to this final rule will grant some relief to small entities by granting them additional time to comply with changes that are being made in these the final rule amendments. However, the amendments to the final rule will not change the overall impact on small entities. Therefore, FRA is confident that its previous certification for the final rule is still valid.

Executive Order 13132, “Federalism” (64 FR 43255, Aug. 10, 1999), requires FRA 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” are 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.” Under Executive Order 13132, the agency may not issue a regulation with federalism implications that imposes substantial direct compliance costs and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or the agency consults with State and local government officials early in the process of developing the regulation. Where a regulation has federalism implications and preempts State law, the agency seeks to consult with State and local officials in the process of developing the regulation.

FRA analyzed this amended final rule in accordance with the principles and criteria contained in Executive Order 13132. Based on this analysis, FRA concluded that this rule will not have a substantial effect on the States or their political subdivisions; it will not impose any compliance costs; and it will not affect the relationships between the Federal government and the States or their political subdivisions, or the distribution of power and responsibilities among the various levels of government. Therefore, the consultation and funding requirements of Executive Order 13132 do not apply and FRA determined that preparation of a federalism summary impact statement for this amended final rule is not required. This amended final rule could have preemptive effect by operation of law under a provision of the former Federal Railroad Safety Act of 1970 (repealed and recodified at 49 U.S.C. 20106). Section 20106 provides that States may not adopt or continue in effect any law, regulation, or order related to railroad safety or security that covers the subject matter of a regulation prescribed or order issued by the Secretary (with respect to railroad safety matters) or the Secretary of Homeland Security (with respect to railroad security matters), except when the State law, regulation, or order qualifies under the “essentially local safety or security hazard” exception to sec. 20106.

The information collection requirements in this amended final rule are being submitted for approval to the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq. The sections that contain new information collection requirements and the estimated time to fulfill each requirement are as follows:

Organizations and individuals desiring to submit comments on the collection of information requirements should direct them to the Office of Management and Budget, Office of Information and Regulatory Affairs, Washington, DC 20503, Attention: FRA Desk Officer. Comments may also be sent via email to OMB at the following address: [email protected].

OMB is required to make a decision concerning the collection of information requirements contained in this amended final rule between 30 and 60 days after publication of this document in the Federal Register. Therefore, a comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication.

FRA cannot impose a penalty on persons for violating information collection requirements which do not display a current OMB control number, if required. FRA intends to obtain current OMB control numbers for any new information collection requirements resulting from this rulemaking action on the effective date of this amended final rule. The OMB control number, when assigned, will be announced by separate notice in the Federal Register.

FRA has evaluated this rule under its “Procedures for Considering Environmental Impacts” (FRA's Procedures) (64 FR 28545, May 26, 1999) as required by the National Environmental Policy Act (42 U.S.C. 4321 et seq.), other environmental statutes, Executive Orders, and related regulatory requirements. FRA has determined that this amended final rule is not a major FRA action (requiring the preparation of an environmental impact statement or environmental assessment) because it is categorically excluded from detailed environmental review under section 4(c)(20) of FRA's Procedures. See 64 FR 28547, May 26, 1999.

Under section 4(c) and (e) of FRA's Procedures, the agency has further concluded that no extraordinary circumstances exist with respect to this regulation that might trigger the need for a more detailed environmental review. As a result, FRA finds that this amended final rule is not a major Federal action significantly affecting the quality of the human environment.

Under Section 201 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 2 U.S.C. 1531), each Federal agency “shall, unless otherwise prohibited by law, assess the effects of Federal regulatory actions on State, local, and tribal governments, and the private sector (other than to the extent that such regulations incorporate requirements specifically set forth in law).” Section 202 of the Act (2 U.S.C. 1532) further requires that before promulgating any general notice of proposed rulemaking that is likely to result in the promulgation of any rule that includes any Federal mandate that may result in expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year, and before promulgating any final rule for which a general notice of proposed rulemaking was published, the agency shall prepare a written statement detailing the effect on State, local, and tribal governments and the private sector. This amended final rule will not result in the expenditure, in the aggregate, of $155,000,000 or more (as adjusted annually for inflation) in any one year, and thus preparation of such a statement is not required.

Executive Order 13211 requires Federal agencies to prepare a Statement of Energy Effects for any “significant energy action.” 66 FR 28355, May 22, 2001. Under the Executive Order, a “significant energy action” is defined as any action by an agency (normally published in the Federal Register) that promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking: (1)(i) That is a significant regulatory action under Executive Order 12866 or any successor order, and (ii) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (2) that is designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. FRA evaluated this amended final rule consistent with Executive Order 13211. FRA determined that this amended final rule is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Consequently, FRA determined that this regulatory action is not a “significant energy action” within the meaning of Executive Order 13211.

The Trade Agreements Act of 1979 (TAA) (Pub. L. 96-39, 19 U.S.C. 2501 et seq.) prohibits Federal agencies from engaging in any standards setting or related activities that create unnecessary obstacles to the foreign commerce of the United States. Legitimate domestic objectives, such as safety, are not considered unnecessary obstacles. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards. FRA assessed the potential effect of this amended final rule on foreign commerce and believes that its requirements are consistent with the TAA. The requirements imposed are safety standards which, as noted, are not considered unnecessary obstacles to trade.

Anyone is able to search the electronic form of any written communications and comments received into any of our dockets by the name of the individual submitting the comment (or signing the document, if submitted on behalf of an association, business, labor union, etc.). See http://www.regulations.gov/#!privacyNotice for the privacy notice of regulations.gov or interested parties may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477). Under 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to www.regulations.gov, as described in the system of records notice (DOT/ALL-14 FDMS), which can be reviewed at www.dot.gov/privacy.

For the reasons discussed in the preamble, FRA amends part 234 of chapter II, subtitle B of title 49, Code of Federal Regulations as follows:

NMFS manages the groundfish fisheries in the exclusive economic zone of the Bering Sea and Aleutian Islands Management Area (BSAI) under the FMP. The North Pacific Fishery Management Council (Council) prepared the FMP under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), 16 U.S.C. 1801 et seq. Regulations governing U.S. fisheries and implementing the FMP appear at 50 CFR parts 600 and 679.

NMFS published the Notice of Availability for Amendment 110 in the Federal Register on January 8, 2016 (81 FR 897), with comments invited through March 8, 2016. NMFS published the proposed rule to implement Amendment 110 on February 3, 2016 (81 FR 5681), with comments invited through March 4, 2016. The Secretary of Commerce approved Amendment 110 on March 29, 2016. NMFS received 15 comment letters containing 27 unique substantive comments on the FMP amendment and proposed rule. A summary of these comments and the responses by NMFS are provided under the heading Response to Comments below.

A detailed review of the provisions of Amendment 110, the proposed regulations to implement Amendment 110, and the rationale for these regulations is provided in the preamble to the proposed rule (81 FR 5681, February 3, 2016) and is briefly summarized in this final rule. The preamble to the proposed rule describes 1) the Bering Sea pollock fishery, 2) salmon bycatch in the Bering Sea pollock fishery, 3) the importance of salmon in western Alaska, 4) management of salmon bycatch in the BSAI, 5) objectives of and rationale for Amendment 110 and the implementing regulations, 6) proposed salmon bycatch management measures, 7) proposed changes to monitoring and enforcement requirements, and 8) other regulatory changes in the proposed rule.

Amendment 110 and this final rule apply to owners and operators of catcher vessels, catcher/processors, motherships, inshore processors, and the six Western Alaska Community Development Quota (CDQ) Program groups participating in the pollock (Gadus chalcogrammus) fishery in the Bering Sea. The Bering Sea pollock fishery is managed under the American Fisheries Act (AFA) (16 U.S.C. 1851 note) and the Magnuson-Stevens Act. The AFA defines the sectors of the Bering Sea pollock fishery, determines which vessels and processors are eligible to participate in each sector, establishes allocations of Bering Sea pollock total TAC to each sector as directed fishing allowances, and establishes excessive share limits for harvesting pollock. As required by section 206(b) of the AFA, NMFS allocates a specified percentage of the Bering Sea pollock TAC to each of the three AFA fishery sectors: 1) 50 percent to catcher vessels delivering to inshore processors, called the “inshore sector”; 2) 40 percent to catcher/processors and catcher vessels delivering to those catcher/processors, called the “catcher/processor sector”; and 3) 10 percent to catcher vessels harvesting pollock for processing by motherships, called the “mothership sector.”

Pollock is harvested with trawl vessels that tow large nets through the water. Pollock can occur in the same locations as Chinook salmon and chum salmon. Consequently, Chinook salmon and chum salmon are incidentally caught in the nets as fishermen target pollock.

Section 3 of the Magnuson-Stevens Act defines bycatch as fish that are harvested in a fishery, which are not sold or kept for personal use. Therefore, Chinook salmon and chum salmon caught in the pollock fishery are considered bycatch under the Magnuson-Stevens Act, the FMP, and NMFS regulations at 50 CFR part 679. Bycatch of any species, including discard or other mortality caused by fishing, is a concern of the Council and NMFS. National Standard 9 and section 303(a)(11) of the Magnuson-Stevens Act require the Council to recommend, and NMFS to implement, conservation and management measures that, to the extent practicable, minimize bycatch and bycatch mortality.

The bycatch of culturally and economically valuable species like Chinook salmon and chum salmon, which are fully allocated and, in some cases, facing conservation concerns, are categorized as prohibited species under the FMP. They are the most regulated and closely managed category of bycatch in the groundfish fisheries off Alaska, and specifically in the pollock fishery. In addition to Pacific salmon, other species including steelhead trout, Pacific halibut, king crab, Tanner crab, and Pacific herring are also classified as prohibited species in the groundfish fisheries off Alaska. Fishermen must avoid salmon bycatch and any salmon caught must either be donated to the Prohibited Species Donation (PSD) Program (see § 679.26), or returned to Federal waters as soon as practicable, with a minimum of injury, after an observer has determined the amount of salmon bycatch and collected any scientific data or biological samples.

The Council and NMFS have been concerned about the potential impact of Chinook and chum salmon bycatch on returns to western Alaska given the relatively large proportion of bycatch from western Alaska that occurs in the pollock fishery. Chinook salmon and chum salmon destined for western Alaska support commercial, subsistence, sport, and personal use fisheries. The State of Alaska (State) manages the salmon commercial, subsistence, sport, and personal use fisheries. The Alaska Board of Fisheries adopts regulations through a public process to conserve salmon and to allocate salmon to the various users. The first management priority is to meet spawning escapement goals to sustain salmon resources for future generations. The next priority is for subsistence use under both State and Federal law. Salmon is a primary subsistence food in some areas. Subsistence fisheries management includes coordination with U.S. Federal agencies where Federal rules apply under the Alaska National Interest Lands Conservation Act. Section 3.4 of the Analysis describes the State and Federal management process. Appendix A-4 of the Analysis provides an overview of the importance of subsistence salmon harvests and commercial salmon harvests.

Over the last 20 years, the Council and NMFS have adopted and implemented several management measures to limit salmon bycatch in the BSAI trawl fisheries, and particularly in the pollock fishery. Most recently, NMFS implemented Amendment 84 to the FMP to enhance the effectiveness of salmon bycatch measures (72 FR 61070, October 29, 2007) and Amendment 91 to the FMP to provide incentives to minimize Chinook salmon bycatch to the extent practicable (75 FR 53026, August 30, 2010).

Amendment 84 exempted pollock vessels from Chinook Salmon Savings Area and Chum Salmon Savings Area closures in the Bering Sea if they participate in an intercooperative agreement (ICA) to reduce salmon bycatch. Amendment 84 also exempted vessels participating in non-pollock trawl fisheries in the Bering Sea from area closures because these fisheries intercept minimal amounts of salmon. Additional information on the provisions of Amendment 84 is provided in the final rule prepared for that action (72 FR 61070, October 29, 2007).

Amendment 91 was implemented to manage Chinook salmon bycatch in the pollock fishery. Amendment 91 combined a limit on the amount of Chinook salmon that may be caught incidentally with a novel approach designed to minimize bycatch to the extent practicable in all years and prevent bycatch from reaching the limit in most years, while providing the fleet the flexibility to harvest the total allowable catch (TAC) of Bering Sea pollock. Amendment 91 removed Chinook salmon from the Amendment 84 regulations, and established two Chinook salmon PSC limits for the pollock fishery—60,000 and 47,591 Chinook salmon. Under Amendment 91, the PSC limit is 60,000 Chinook salmon if some, or all, of the pollock fishery participates in an industry-developed contractual arrangement, called an incentive plan agreement (IPA). An IPA establishes a program to minimize bycatch at all levels of Chinook salmon abundance. Participation in an IPA is voluntary; however, any vessel or CDQ group that chooses not to participate in an IPA is subject to a restrictive opt-out allocation (also called a backstop cap). Since Amendment 91 was implemented, all AFA vessels (i.e., vessels authorized to directed fish for Bering Sea pollock) have participated in an IPA. Additional information on the provisions of Amendment 91 is provided in the final rule prepared for that action (75 FR 53026, August 30, 2010).

The following sections describe 1) the salmon bycatch management measures implemented with Amendment 110 and this final rule, 2) the changes from proposed to final rule, and 3) response to comments.

The objective of Amendment 110 and this final rule is to create a comprehensive salmon bycatch avoidance program that works more effectively than current management to avoid Chinook salmon bycatch and Alaska-origin chum salmon bycatch in the pollock fishery. The Council and NMFS recognize that salmon are an extremely important resource to Alaskans who depend on local fisheries for their sustenance and livelihood.

Amendment 110 and this final rule adjust the existing Chinook salmon bycatch program to incorporate revised chum salmon bycatch measures into the existing IPAs. Amendment 110 and this final rule are designed to consider the importance of continued production of critical chum salmon runs in western Alaska by focusing on bycatch avoidance of Alaskan chum salmon runs. Historically, western Alaska chum salmon run strength has varied substantially and chum salmon are important to the subsistence lifestyle of Alaskans. Amendment 110 and this final rule also provide additional protections to chum salmon stocks other than those from western Alaska, recognizing that most of the non-western Alaska chum salmon are likely from Asian hatcheries.

In addition, the Council and NMFS sought to provide greater incentives to avoid Chinook salmon by strengthening existing incentives during times of historically low Chinook salmon abundance in western Alaska. Thus, the management measures included in Amendment 110 focus on retaining the incentives to avoid Chinook salmon bycatch at all levels of abundance as intended by Amendment 91. Multiple years of historically low Chinook salmon abundance have resulted in significant restrictions for subsistence users in western Alaska and failure to achieve conservation objectives. While Chinook salmon bycatch impact rates have been low under Amendment 91, the Council and NMFS determined that there is evidence that improvements could be made to ensure the program is reducing Chinook salmon bycatch at low levels of salmon abundance. An analysis of the possible improvements is provided in Section 3.5.3 of the Analysis.

Amendment 110 and this final rule—

• incorporate chum salmon avoidance into the IPAs established under Amendment 91 to the FMP, and remove the non-Chinook salmon bycatch reduction ICA previously established under Amendment 84 to the FMP;

• modify the requirements for the content of the IPAs to increase the incentives for fishermen to avoid Chinook salmon;

• change the seasonal apportionments of the pollock TAC to allow more pollock to be harvested earlier in the year when Chinook salmon PSC use tends to be lower;

• reduce the Chinook salmon PSC limit and performance standard in years with low Chinook salmon abundance in western Alaska; and

• improve the monitoring of salmon bycatch in the pollock fishery.

Amendment 110 and this final rule incorporate chum salmon avoidance, and the important chum salmon avoidance features of the Amendment 84 ICAs, into the IPAs established under Amendment 91. This final rule removes the Amendment 84 implementing regulations at § 679.21(g). However, Amendment 110 and this final rule maintain the current non-Chinook salmon PSC limit of 42,000 fish and the closure of the Chum Salmon Savings Area to the pollock fishery when the 42,000 non-Chinook salmon PSC limit has been reached. Vessels that participate in an IPA are exempt from the Chum Salmon Savings Area closure. The purpose of maintaining the non-Chinook salmon PSC limit and the Chum Salmon Savings Area closure is to provide additional incentives for vessels to join an IPA, and to serve as back-stop chum salmon bycatch management measures for those vessels that choose not to participate in an IPA.

To incorporate chum salmon into the IPAs, this final rule modifies the required contents of the IPAs at § 679.21(f)(12), to include the following eight provisions.

• Incentives for the operator of each vessel to avoid Chinook salmon and chum salmon bycatch under any condition of pollock and Chinook salmon abundance in all years.

• An explanation of how the incentives to avoid chum salmon do not increase Chinook salmon bycatch.

• Rewards for avoiding Chinook salmon, penalties for failure to avoid Chinook salmon at the vessel level, or both.

• An explanation of how the incentive measures in the IPA are expected to promote reductions in a vessel's Chinook salmon and chum salmon bycatch rates relative to what might have occurred in absence of the incentive program.

• An explanation of how the incentive measures in the IPA promote Chinook salmon savings and chum salmon savings in any condition of pollock abundance or Chinook salmon abundance and influence the vessel operator's decisions to avoid Chinook salmon and chum salmon.

• An explanation of how the IPA ensures that the operator of each vessel governed by the IPA will manage that vessel's Chinook salmon bycatch to keep total bycatch below the performance standard for the sector in which the vessel participates.

• An explanation of how the IPA ensures that the operator of each vessel governed by the IPA will manage that vessel's chum salmon bycatch to avoid areas and times where the chum salmon are likely to return to western Alaska.

• The rolling hot spot program for salmon bycatch avoidance and the agreement to provide notifications of closure areas and any violations of the rolling hot spot program to at least one third party group representing western Alaskans who depend on salmon and do not directly fish in a groundfish fishery.

This final rule also adds reporting requirements to the IPA Annual Report at § 679.21(f)(13) to require the IPA representative to describe how the IPA addresses the goals and objectives in the IPA provisions related to chum salmon. Section 3.5.2 of the Analysis provides more detail on adding elements of chum salmon bycatch management.

Amendment 110 and this final rule modify the IPAs to increase the incentives to reduce Chinook salmon bycatch within the IPAs. To incorporate additional incentives for Chinook salmon savings into the IPAs, this final rule modifies the required contents of the IPAs at § 679.21(f)(12) to include the following six provisions.

• Restrictions or penalties targeted at vessels that consistently have significantly higher Chinook salmon PSC rates relative to other vessels fishing at the same time.

• Requirement that vessels enter a fishery‐wide in‐season salmon PSC data sharing agreement.

• Requirement for a rolling hotspot program that operates throughout the entire pollock A season (January 20 through June 10) and B season (June 10 through November 1).

• Requirement for the use of salmon excluder devices, with recognition of contingencies, from January 20 through March 31 and from September 1 until the end of the B season.

• For savings-credit-based IPAs, limitation on the salmon savings credits to maximum of three years.

• Restrictions or performance criteria to ensure that Chinook salmon PSC rates in October are not significantly higher than those achieved in the preceding months, thereby avoiding late-season spikes in salmon PSC.

This final rule changes the allocation of the Bering Sea pollock TAC between the A and B seasons at § 679.20(a)(5)(i)(B)(1). This final rule allocates five percent of the pollock allocation from the B season to the A season, resulting in new seasonal apportionments of 45 percent of the TAC in the A season and 55 percent of the TAC in the B season. This final rule maintains the rollover of any remaining pollock from the A season to the B season. The revised season allocation works in conjunction with the new IPA requirements to shift effort out of the late B season and provide fishery participants more flexibility to avoid Chinook salmon PSC when it tends to be higher in the late B season.

Amendment 110 and this final rule add a new lower Chinook salmon performance standard and PSC limit for the pollock fishery in years of low Chinook salmon abundance in western Alaska. The Council and NMFS determined that a lower performance standard and PSC limit would be appropriate at low levels of Chinook salmon abundance in western Alaska because most of the Chinook salmon bycatch comes from western Alaska. These provisions work in conjunction with the changes to the IPA requirements to ensure that Chinook salmon bycatch is avoided at all times, particularly at low abundance levels.

Each year, NMFS will determine whether Chinook salmon is at low abundance based on information provided by the State. By October 1 of each year, the State will provide a Chinook salmon abundance using the 3-System Index for western Alaska based on the post-season in-river Chinook salmon run size for the Kuskokwim, Unalakleet, and Upper Yukon aggregate stock grouping. When this index is less than or equal to 250,000 Chinook salmon, NMFS will apply the new lower performance standard and low PSC limit for the following year.

If NMFS determines it is a low Chinook salmon abundance year, NMFS will set the performance standard at 33,318 Chinook salmon and the PSC limit at 45,000 Chinook salmon for the following fishing year. NMFS will publish the lower PSC limit and performance standard in the annual harvest specifications. In years with no determination of a low Chinook salmon abundance, NMFS will manage under the current 47,591 Chinook salmon performance standard and 60,000 Chinook salmon PSC limit.

The inclusion of a lower PSC limit and performance standard is based on the need to reduce bycatch when these Chinook salmon stocks are low in order to minimize the impact of the pollock fishery on the stocks. Any additional Chinook salmon returning to Alaska rivers improves the ability to meet the State's spawning escapement goals, which is necessary for long-term sustainability of Chinook salmon and the people reliant on salmon fisheries. While the performance standard is the functional limit in the IPAs, the Council and NMFS determined that the 60,000 PSC limit should also be reduced given the potential for decreased bycatch reduction incentives should a sector exceed its performance standard before the PSC limit is reached. The reduced PSC limit is intended to encourage vessels to avoid bycatch to a greater degree in years of low abundance, and to set a maximum permissible PSC limit that reduces the risk of adverse impact on stocks in western Alaska during periods of low abundance.

This final rule amends the monitoring and enforcement regulations to clarify and strengthen those implemented under Amendment 91. These changes—

• revise salmon retention and handling requirements on catcher vessels;

• improve observer data entry and transmission requirements aboard catcher vessels;

• clarify the requirements applicable to viewing salmon in a storage container; and

• clarify the requirements for the removal of salmon from an observer sampling station at the end of a haul or delivery.

This final rule also makes a number of other revisions to the regulations for clarity and efficiency. All of these regulatory changes are detailed in the preamble to the proposed rule (81 FR 5681, February 3, 2016).

NMFS made no changes to the final rule in response to comments received on the proposed rule.

NMFS made three minor changes in this final rule to reflect final rules published after NMFS published the proposed rule for Amendment 110. First, this final rule removed the definition of prohibited species quota (PSQ) reserve because that definition was corrected in the final rule to implement halibut PSC limit reductions under Amendment 111 to the FMP (81 FR 24714, April 27, 2016). Second, this final rule revises the heading for § 679.21(e) that was modified under regulations that implemented Amendment 111 to the FMP to clarify that paragraph (e) applies to PSC limits for BSAI crab and herring. Third, this final rule adds the parenthetical phrase “(except for a catcher/processor placed in the partial observer coverage category under paragraph (a)(3) of this section)” to § 679.51(e)(1)(iii)(B) to be consistent with the final rule to allow qualifying small catcher/processors to be in the partial observer coverage category under the North Pacific Groundfish and Halibut Observer Program (81 FR 17403, March 29, 2016).

Additionally, this final rule makes a minor editorial clarification to revise § 679.21(f)(2) to clarify that the State will provide to NMFS an estimate of Chinook salmon abundance using a the 3-System Index for western Alaska based on the Kuskokwim, Unalakleet, and Upper Yukon aggregate stock grouping.

NMFS received 15 comment letters containing 27 specific comments, which are summarized and responded to below. The commenters consisted of individuals, representatives of the pollock fishery participants, a representative of groundfish fishery participants, Alaska Native organizations, and the State.

Comment 1: We support the comprehensive salmon bycatch avoidance program outlined in the proposed rule for Amendment 110 and believe it will be more effective in meeting the Council's objectives, including minimizing salmon bycatch, responding to changing conditions of abundance, and avoiding Alaska-origin salmon stocks.

Response: NMFS acknowledges the comment.

Comment 2: Consistent genetic stock composition data show that Alaska-origin stocks continue to comprise a majority of the Chinook salmon bycatch and almost a quarter of the chum salmon bycatch in the Bering Sea pollock fishery. Recognizing the importance of these stocks to western Alaska commercial and subsistence users, and our increased understanding of the areas and times of year in which Alaska Chinook and chum salmon stocks are more predominate in the bycatch, Amendment 110 provides the necessary flexibility to respond to and incorporate new information in the bycatch avoidance program.

Response: NMFS acknowledges the comment.

Comment 3: Reducing salmon bycatch in the Bering Sea pollock fishery is critical to the future of Chinook salmon runs. Amendment 110 is urgently needed because of the dire status of Chinook salmon stocks in western Alaska. Amendment 110 and the proposed regulations are an important step in further reducing salmon bycatch in the pollock fishery. Amendment 110 will continue to lower Chinook salmon bycatch, however, constant vigilance is required to ensure that the Chinook salmon PSC limits established in regulation are never actually met.

Response: NMFS acknowledges the comment.

Comment 4: It is essential to integrate chum salmon bycatch measures into the IPAs and include the accountability and transparency measures.

Response: Amendment 110 and this final rule incorporate chum salmon avoidance measures into the IPAs established for Chinook salmon bycatch management under Amendment 91. Incorporating chum salmon into the IPAs provides measures to prevent high chum salmon bycatch, while also giving participants in the pollock fishery the flexibility to use coordinated management under the IPAs to adapt quickly to changing conditions. The Council determined and NMFS agreed that Amendment 110 and this final rule strike an appropriate balance between regulatory requirements and adaptive management necessary for chum salmon bycatch management.

Comment 5: Make sure the theoretical salmon avoidance schemes proposed do not make matters worse for Chinook salmon in the attempt to avoid chum salmon.

Response: The chum salmon-specific requirements in the Amendment 84 implementing regulations sometimes prevented fishery participants from making decisions to avoid Chinook salmon when vessels encountered both chum salmon and Chinook salmon. Adding chum salmon measures to the IPAs provides vessel operators with the flexibility to respond to changing conditions and provides greater incentives to reduce bycatch of both salmon species, thereby making salmon bycatch management more effective, comprehensive, and efficient.

Comment 6: The measures designed to reduce Chinook salmon bycatch in the proposed rule provide useful tools to fine-tune the IPAs to mandate greater bycatch reduction.

Response: NMFS agrees. Amendment 110 and this final rule modify the IPAs to increase the incentives for fishermen to avoid Chinook salmon. The Council and NMFS recognize that the IPAs were effective at providing incentives for each vessel operator to avoid Chinook salmon, but that additional measures were necessary to address higher Chinook salmon PSC rates observed in October (the last month when the pollock fishery is authorized to operate). Amendment 110 and this final rule also address concerns with individual vessels that consistently have significantly higher Chinook salmon PSC rates relative to other vessels fishing at the same time. The Council and NMFS want to ensure the use of salmon excluder devices (i.e., gear modifications that are designed to exclude salmon bycatch while retaining pollock) and a rolling hotspot program. These new provisions increase the incentives to reduce Chinook salmon bycatch within the IPAs, provide an opportunity for IPAs to increase vessels' responsiveness in October, and improve performance of individual vessels.

Comment 7: The entire history of the Bering Sea pollock fishery and its impacts on western Alaska salmon has been a disaster and it is within this context that we remain opposed to the allowance of any salmon bycatch during the pollock fishery. Driving bycatch continuously lower, with an ultimate goal of zero, is essential. NMFS should prioritize its responsibilities based on moral and ethical obligations, in addition to its legal obligations, to those tribal communities whose very survival depends on a future of salmon returning in sufficient numbers to their rivers.

Response: The Council recommended and NMFS approved Amendment 110 because it best balances the need to minimize salmon bycatch to the extent practicable while providing the pollock fleet the flexibility to harvest the pollock TAC. NMFS has complied with all applicable laws, executive orders, and international obligations in approving and implementing Amendment 110. Preventing all salmon bycatch would not meet the purpose and need for this action and would not meet NMFS' obligations under the Magnuson-Stevens Act.

While salmon bycatch in the pollock fishery may be a contributing factor in the decline of salmon, NMFS expects the numbers of the ocean bycatch that would have returned to western Alaska would be relatively small due to ocean mortality and the large number of other river systems contributing to the total Chinook or chum salmon bycatch. For Chinook salmon, Section 3.5.1 of the Analysis explains that the Chinook salmon bycatch expected to have returned to western Alaska rivers is approximately 2.3 percent of coastal western Alaska run size in recent years. For chum salmon, Section 3.5.1 of the Analysis explains that the chum salmon bycatch expected to have returned to western Alaska rivers is approximately 0.5 percent of the coastal western Alaska run size in recent years. Under Amendment 110 and this final rule, these impact rates are anticipated to be further reduced as the pollock fleet improves its ability to avoid salmon at all times.

Although the reasons for the decline of Chinook salmon and some runs of chum salmon are not completely understood, scientists believe they are predominately natural. Changes in ocean and river conditions, including unfavorable shifts in temperatures and food sources, likely cause poor survival of Chinook salmon and some runs of chum salmon. The EIS prepared for Amendment 91 provides more detail on the decline of salmon in western Alaska (see ADDRESSES). Section 3.4 of the Analysis describes the stocks status of Chinook and chum salmon.

Comment 8: A key component of Amendment 110 and the proposed rule is to reduce the performance standard and PSC limit in years of low Chinook salmon abundance in western Alaska. The limits set in Amendment 91 were far too high to ensure a healthy future for western Alaska salmon runs. The mechanism to lower these limits in times of low Chinook salmon abundance is the minimum step NMFS must take at this time to fulfill numerous legal responsibilities to reduce the allowable salmon bycatch in the pollock fishery. Taking action now to lower the PSC limit and performance standard in years of extremely low abundance is a critical step to ensure that bycatch is reduced in the years when every source of mortality must be reduced.

Response: Amendment 110 and this final rule add a new lower Chinook salmon performance standard and PSC limit for the pollock fishery in years of low Chinook salmon abundance in western Alaska. These provisions work in conjunction with the changes to the IPA requirements to ensure that Chinook salmon bycatch is avoided at all times, particularly at low abundance levels.

Each year, NMFS will determine whether Chinook salmon is at low abundance based on information provided by the State using the 3-System Index. When this index is less than or equal to 250,000 Chinook salmon, NMFS will apply the new lower performance standard and reduced PSC limit for the following year. If NMFS determines it is a low Chinook salmon abundance year, NMFS will set the performance standard at 33,318 Chinook salmon and the PSC limit at 45,000 Chinook salmon for the following fishing year. The reduced PSC limit is intended to encourage vessels to avoid bycatch to a greater degree in years of low abundance, and to set a maximum permissible PSC limit that reduces the risk of adverse impact on stocks in western Alaska during periods of low abundance.

In years with no determination of low Chinook salmon abundance, NMFS will manage under the current 47,591 Chinook salmon performance standard and 60,000 Chinook salmon PSC limit. The Council determined, and NMFS agrees, that these limits are appropriate given that the IPAs maintain bycatch well below these limits. Average Chinook salmon bycatch has been approximately 16,647 Chinook salmon per year since implementation of Amendment 91 in 2011.

Comment 9: Amendment 110 reduces the number of Chinook salmon that can be taken as bycatch in years of very low Chinook salmon abundance in western Alaska, which is critical to maintaining objectives under National Standard 9. In years of very low Chinook salmon abundance, the State struggles to meet salmon escapement goals in important western Alaska systems, and only does so by prohibiting any directed Chinook salmon harvest for subsistence, as well as restricting subsistence harvest of other species, such as chum salmon, to minimize Chinook salmon mortalities.

Response: NMFS acknowledges the comment.

Comment 10: Amendment 110 links bycatch limits to a broad index of Chinook salmon abundance based on the Kuskokwim, Unalakleet, and Upper Yukon aggregate stock grouping — the 3-System Index. The 3-System Index includes significant river systems for subsistence fisheries in Alaska and provides a broad regional representation of western Alaska Chinook salmon stocks. Any additional fish returning to these rivers in years of very low abundance improves the State's ability to meet escapement goals.

The Analysis clearly outlined the objectives that proposed indices were evaluated against, and the 3-System Index was identified as the most robust and appropriate index for this purpose. The primary component of the 3-System Index is preliminary escapement information from total run reconstruction using methods outlined in State publications. The State will provide the 3-System Index estimate to NMFS annually by October 1 and is committed to maintaining a transparent and accessible process for stakeholders as the State improves its understanding of these systems. The State will present any substantive changes to the methods used in developing the 3-System Index to the Council and its Scientific and Statistical Committee (SSC).

Response: NMFS acknowledges the comment.

Comment 11: The provision to reduce the PSC limit and performance standard in years of low Chinook salmon abundance based on the State's 3-System Index is unwarranted, unnecessary, not sound science, and not responsible management. It unfairly targets and penalizes the pollock fishery for circumstances beyond its control. Science has shown that there is not a relationship between Chinook salmon bycatch in the pollock fishery and the size of the runs in coastal western Alaska.

Response: NMFS disagrees. The provisions to reduce the Chinook salmon PSC limit and performance standard in years of low abundance are necessary to achieve the program goals. The Council and NMFS determined that a lower performance standard and PSC limit are appropriate at low levels of Chinook salmon abundance in western Alaska because most of the Chinook salmon bycatch in the pollock fishery comes from western Alaska. These provisions work in conjunction with the changes to the IPA requirements to ensure that Chinook salmon bycatch is avoided at all times, particularly at low abundance levels.

The Council and State conducted an extensive analysis about the appropriate index to use to indicate a low Chinook salmon abundance year. Low Chinook salmon abundance years are characterized by difficulty meeting escapement goals and severely restricted or fully closed in-river salmon fisheries. Section 2.6 of the Analysis evaluates various indices and shows that the 3-System Index (Unalakleet, Upper Yukon, and Kuskokwim river systems) meets the objectives. The Analysis also shows a clear natural break in the data analyzed indicating that when the index is less than 250,000 Chinook salmon, the index is strongly correlated to years with historically low run sizes. These river systems provide a broad regional representation of stocks and signify very important river systems and subsistence fisheries in western Alaska. Subsistence harvests from these three river systems account for up to 87 percent of the statewide subsistence harvest of Chinook salmon. As shown in the Analysis, having more than one system in the index and having broad regional representation makes the index more robust and able to account for changing environmental conditions.

The inclusion of a lower PSC limit and performance standard is based on the need to reduce bycatch when the abundance of Chinook salmon stocks in western Alaska is low, in order to minimize the impact of the pollock fishery on the stocks. Any additional Chinook salmon returning to Alaska rivers improves the ability to meet the State's spawning escapement goals, which is necessary for long-term sustainability of Chinook salmon, and to meet subsistence management objectives for the people reliant on salmon fisheries. While the performance standard is the functional limit in the IPAs, the Council and NMFS determined that the 60,000 PSC limit should also be reduced given the potential for decreased bycatch reduction incentives if a sector exceeds its performance standard before the PSC limit is reached. The reduced PSC limit is intended to encourage vessels to avoid bycatch to a greater degree in years of low Chinook salmon abundance, and to set a maximum permissible PSC limit that reduces the risk of adverse impact on stocks in western Alaska during periods of low abundance.

See the response to Comment 7 for a discussion of the relationship between Chinook salmon bycatch in the pollock fishery and the size of the runs in coastal western Alaska.

Comment 12: The dramatic changes the Council made to the Chinook salmon abundance index, Chinook salmon PSC limit, and the performance standard between initial review in December 2014 and final action in April 2015 are hard to track and are not well documented in the final Analysis.

Response: Sections 2.6.3 and 2.6.4 of the Analysis discuss the management measures to reduce the PSC limit and performance standard in years of low Chinook salmon abundance (see ADDRESSES). Section 2.6.4 explains the history of the 3-System Index and the analysis the State undertook to develop the appropriate Chinook salmon abundance index for determining low Chinook salmon abundance in western Alaska.

Comment 13: There is no discussion in the EA about the methods used to determine a “natural break.” The EA identifies 250,000 Chinook as a natural break in the “data”. However, the data presented is actually the output of a model used to assess Chinook salmon run size. A formal definition for this threshold is required, as there is no guarantee that future models, or revisions to input data, will result in the same natural break in the model output. Instead of the 250,000 Chinook salmon threshold, NMFS should define (in probabilistic terms) a threshold to set the performance standard and PSC limit, rather than identifying an arbitrary natural break in future model output.

Response: Section 2.6.4 of the Analysis provides a description of the methods for use of in-river run reconstructions with the 3-System Index and rationale for this choice of index and for the 250,000 Chinook salmon threshold. The evaluation of the estimated Chinook salmon run size by year is included in the Analysis and represents the best available scientific information.

In-river run reconstructions represent an estimate of all fish harvested in the river and respective coastal areas plus escapement. The relationship upon which the threshold was determined is the relationship between final in-river run abundance of the 3-System Index and the bycatch of adult equivalent Chinook salmon attributed to all western Alaska stocks. In Section 2.6.4.2 of the Analysis, each point in Figure 8 represents a single year showing this relationship during the years analyzed. The years were referred to in the Analysis as data points for purposes of describing the clustering of these years below a breakpoint which falls above 200,486 Chinook salmon and below 286,692 Chinook salmon (see Table 6 in Section 2.6.4.5 of the Analysis).

The clustering of years below 200,486 Chinook salmon also matches years which have been categorized as low abundance years for all three systems due to documented failures to meet escapement goals, restrictions on subsistence harvests, or declarations of Federal fishery resource disasters under the provisions of section 312 of the Magnuson-Stevens Act (Section 2.6.4 of the Analysis). Based on this information, the Council determined that a threshold of 250,000 Chinook salmon was an appropriate value within this range to represent a year when Chinook salmon were in a low abundance and as a threshold to determine that the lower PSC limit and lower performance standard would be in place for the subsequent year.

This information was also used by the Council to select the 3-System Index. As explained in Section 2.6.4 of the Analysis, the 3-System index is a transparent and annually updated index that relies on easily accessible information from reports published by the State.

The management measure to reduce the PSC limit and performance standard is tied to the selected threshold of 250,000 Chinook salmon based on the 3-System Index. No re-estimation of the threshold is planned on an annual basis or in subsequent years.

Comment 14: Many comments expressed concerned over a letter the State had sent to NMFS on September 17, 2015, before Amendment 110 was approved and implemented. In this letter, the State provided an index estimate of 252,000 Chinook salmon to provide NMFS, the Council, and the public with a preview of Chinook salmon abundance using the 3-System Index for 2016. Commenters are concerned that this estimate reflected changes the State made in how it modeled abundance from the methods outlined in the Analysis. The State subsequently sent another letter on March 3, 2016, revising the index estimate to 279,000 Chinook salmon. The State made this revision to the index estimate based largely on the public review of the 3-System Index used to inform the State's September 17, 2015, letter.

Response: In their March 3, 2016, letter, the State explains that the September 2015 letter's post-season run size estimate for the 3-System Index used a Kuskokwim River run reconstruction estimate that employed a modification to the model that had not yet been reviewed by the Council. As such, the State amended the 2015 post-season run size estimate to reflect the original version of the model and has committed to using the original model in the 3-System Index until the Council determines the modification is appropriate to use.

Further, the State explains in their comment letter submitted on the proposed rule (see ADDRESSES) that the primary components of the post-season run index are preliminary escapement information and the total run reconstruction methods outlined in State publications. The State is committed to maintaining a transparent and accessible process for stakeholders, and the State will present any substantive changes to the methods used in developing the 3-System Index to the Council and its SSC.

Comment 15: Clarify in the final rule a transparent public process for ensuring that the State provides the data, assumptions, and methods it uses to generate the 3-System Index to NMFS, the public, and the Council.

Response: NMFS agrees that a transparent public process is necessary for ensuring that the 3-System Index represents the best available scientific information. NMFS is committed to working with the Council and the State to define a transparent process to ensure that the data, assumptions, and methods used in the 3-System Index continue to incorporate the best available scientific information and provide a reliable indicator of Chinook salmon abundance necessary to reduce the PSC limit and performance standard. NMFS will work with the State and the Council to refine this process before the State provides the index for the 2017 fishing year on October 1, 2016.

Comment 16: The State must use the 3-System Index and associated methods and models described the Analysis and recommended by the Council in April 2015. Any changes to the 3-System Index and associated methods and models should be vetted through the Council and its SSC. Other models and methods may produce different run size estimates and a different threshold of low abundance. Structural changes to the run-reconstruction model would have resulted in a different “natural break” in the data that was used to determine the threshold for the 3-System Index. There are no provisions in the proposed rule to accommodate changes in the threshold that are associated with future changes to the run-reconstruction model, or revisions to the historical input data.

Response: The Council and State conducted an extensive analysis about the appropriate index to indicate a low Chinook salmon abundance year. Low Chinook salmon abundance years are characterized by difficulty meeting escapement goals and in-river salmon fisheries being severely restricted or fully closed. Section 2.6 of the Analysis evaluates various indices and shows that the 3-System Index (Unalakleet, Upper Yukon, and Kuskokwim river systems) meets the objectives. These river systems provide a broad regional representation of stocks and signify very important river systems and subsistence fisheries in western Alaska. Subsistence harvests from these three river systems account for up to 87 percent of the statewide subsistence harvest of Chinook salmon. As shown in the Analysis, having more than one system in the index and having broad regional representation makes the index more robust. The Analysis also shows a clear natural break in the data such that index sizes less than 250,000 Chinook salmon correspond to years with historically low run sizes.

NMFS agrees that any changes to the 3-System Index or the methods used should have a transparent review process by the Council and its SSC. Scientific methods change over time based on the best available scientific information. NMFS is committed to working with the State and the Council to define a transparent process for review of the State's 3-System Index and associated scientific methods. However, neither Amendment 110 nor the proposed rule prescribes the process to review the State's scientific methods on an ongoing basis, or that the State must use the same scientific methods that were used to develop the 3-System Index. NMFS does not prescribe scientific methods for stock assessments in Federal regulations. To do so would preclude NMFS, the Council, and the State from incorporating the best scientific information available into the stock assessment.

In recommending Amendment 110, the Council chose a threshold of 250,000 Chinook salmon on which to determine when Chinook salmon are at low abundance. In order to change that threshold amount, the Council would need to amend the FMP and NMFS would need to amend the regulations. The process for changing the 250,000 Chinook salmon threshold would be the same as for any FMP amendment with implementing regulations.

Comment 17: NMFS does not have the latitude to just receive and apply the State's estimate of Chinook salmon abundance from the 3-System Index without analysis to independently verify the estimates. Applying the State's estimate would constitute delegation of management to the State of vessels fishing for pollock in the exclusive economic zone, which cannot occur because the FMP does not authorize delegation to the State. The proposed rule grants the State sole authority over the annual run size estimate and does not contemplate independent verification of the estimate by NMFS. NMFS compares the estimate to the low abundance threshold fixed in the regulations to determine whether or not a year is one of low Chinook salmon abundance, which in turn determines the following year's Chinook salmon PSC limit and performance standard applicable to vessels participating in the Federal pollock fishery. That determination does not involve any discretion on the part of NMFS.

Response: Each year, NMFS will rely on a Chinook salmon abundance estimate from the State using the established 3-System Index as the best available scientific information on Chinook salmon abundance in western Alaska. The 3-System Index was reviewed by the Council's SSC and recommended by the Council. NMFS relies on the State for this abundance estimate because the State has management authority over salmon in western Alaska and collects and analyzes the scientific data necessary to estimate Chinook salmon abundance. Relying on the State to provide this type of scientific information is not the same as delegating management authority of the pollock fishery to the State. NMFS manages, and will continue to manage, the pollock fishery. In furtherance of that effort, NMFS will use information collected by the State. Specifically, NMFS will use the 3-System Index for Chinook salmon abundance to apply the appropriate PSC limit and performance standard. The PSC limit and performance standard are the measures the Council and NMFS determined were required in low Chinook salmon abundance years to achieve the program goals. NMFS will publish the PSC limit and performance standard in the annual harvest specifications. That is clearly a management action undertaken by NMFS, and not the State.

Under Amendment 110, it is each pollock vessel's responsibility to avoid salmon bycatch at all times. If fishery participants maintain their bycatch below their PSC limit, then these measures achieve their purpose without closing the pollock fishery. Alternatively, the Council could have recommended to permanently reduce the performance standard and PSC limit in order to achieve the goals of encouraging vessels to avoid bycatch to a greater degree in years of low abundance and reducing the risk of adverse impact on stocks in western Alaska during periods of low abundance. Instead, by using the 3-System Index, the Council recommended a reduced PSC limit and performance standard only during years of low Chinook salmon abundance.

Comment 18: To avoid unauthorized delegation, the proposed rule should be revised to require that NMFS annually confirm that the State estimate was calculated using the Council-approved index and models from April 2015 and reproduce the estimate using the data provided by the State. These standards would address the requirement that, when a core agency function—such as PSC management—is involved, there must be Federal standards in place and a process for NMFS to review the application of those standards.

Response: NMFS did not change this final rule in response to this comment. The Council designed, and this final rule implements, a program where the State provides NMFS an estimate of Chinook salmon abundance using the 3-System Index for western Alaska. Neither Amendment 110 nor the proposed rule constrains the State to use the methods, data sources, and models developed for Council final action in April 2015. To do so would be inconsistent with the manner in which science develops generally, and would result in an index that may fail to incorporate the best scientific information available.

NMFS relies on the State to produce the 3-System Index annually because the State has management authority over salmon and collects and analyzes the scientific data necessary to estimate Chinook salmon abundance. While NMFS will review the 3-System Index provided each October 1, NMFS will not recalculate the State's Chinook salmon abundance estimate each year.

Comment 19: What action would NMFS take if the State is unable to provide an estimate of Chinook salmon abundance by October 1? NMFS should not determine low abundance if the State does not timely deliver an estimate, whether because of difficulty obtaining relevant data, budget restrictions, or other reason. The final rule should specify that NMFS will not determine it is a year of low Chinook salmon abundance if the State does not provide a Chinook salmon abundance estimate by October 1. If no such determination is made, the 60,000 Chinook salmon PSC limit and 47,591 Chinook salmon performance standard would apply.

Response: Absent a letter from the State showing Chinook salmon abundance under the 3-System Index is equal to or below the 250,000 Chinook salmon threshold, the 60,000 PSC limit and 45,591 performance standard will remain in effect. The State's reporting of the 3-System Index by October 1 is necessary to determine if it is a low Chinook salmon abundance year and to reduce the PSC limit and performance standard in the next fishing year. A change to this final rule is not necessary.

Comment 20: Change the text of Amendment 110 to state that NMFS will verify the State's estimate of abundance and that the State must use the index approved by the Council at its April 2015 meeting.

Response: NMFS cannot change amendment text after it has been transmitted by the Council and NMFS as published in the Notice of Availability. Under section 304(a) of the Magnuson-Stevens Act, NMFS is limited to approval, disapproval, or partial approval of a fishery management plan amendment. If NMFS disapproves or partially approves an amendment, NMFS has to notify the Council and specify the applicable law with which the amendment is inconsistent, the nature of such inconsistencies, and make recommendations to conform to applicable law. The Council may then submit a revised amendment to the Secretary of Commerce. Amendment 110 and the provision to reduce the PSC limit and performance standard are consistent with applicable law, and the commenter did not recommend disapproval or partial disapproval of Amendment 110.

NMFS responds to the issue of verifying the State's Chinook salmon abundance index in the response to Comment 17. NMFS responds to the issue of requiring the State to use the index approved by the Council at its April 2015 meeting in the response to Comment 16.

Comment 21: Commenters made a number of technical comments on the State's 3-System Index and the methods and models that the State used to develop the index and to generate the September 17, 2015, index estimate of 252,000 Chinook salmon.

Response: The State can modify the 3-System Index over time to represent the best available scientific information. These comments concerning the intricacies of the State's scientific methods are important for that process. However, they are outside of the scope of Amendment 110 and this final rule.

Comment 22: Good fisheries management calls for a reduction in salmon bycatch. The pollock fishery should be managed in a way that rewards those fishermen that successfully avoid salmon and other bycatch and reduces quota and opportunity for those fishermen that have significant salmon or other bycatch.

Response: Amendment 110 and this final rule improve the IPAs implemented under Amendment 91 to include chum salmon avoidance measures and to increase the ability for each vessel to avoid Chinook salmon. The IPA component is an innovative approach that is designed to provide incentives for each vessel to avoid bycatch at all times with the goal of bringing bycatch to minimum achievable levels. The requirements for an IPA are performance based (i.e., they address what an IPA should accomplish); any number of different incentive plans could meet these objectives. The requirements for the IPA are performance based because fishery participants have more tools available to them to create incentives to minimize bycatch at the vessel level than could be prescribed through Federal regulation. As designed, an IPA can be more responsive and adaptive than Federal regulations. IPAs are flexible in allowing the pollock fleet to modify the IPAs as performance information becomes available to ensure that the IPAs meet the goal to provide incentives for each vessel to avoid bycatch at all times in Amendment 91 and Amendment 110.

Additionally, this final rule requires the IPA representative to submit an annual report to the Council that is the primary tool through which the Council will evaluate whether the IPAs meet the goal for each vessel to avoid salmon bycatch at all times.

Comment 23: Include a well thought-out plan for this Chinook salmon bycatch avoidance program and outline the possible increased incentives to achieve maximum effectiveness. Without this, the program could have little to no impact on Chinook salmon bycatch. It is ideal to have the IPA incentives visible to the public in order to have complete transparency of industry.

Response: The Council analyzed a number of specific incentive measures in Section 3.5.3 of the Analysis. The Analysis describes the new IPA requirements implemented with this final rule and provides examples of ways the fishery participants could modify their IPAs to meet those requirements. Regulations establish the performance based requirements that each IPA must accomplish. Any number of different incentive plans could meet these regulatory requirements. The requirements for the IPA are performance based because fishery participants have more tools available to them to create incentives to minimize bycatch at the vessel level than could be prescribed through Federal regulation. As designed, an IPA can be more responsive and adaptive than Federal regulations and can use tools not available to managers, such as fees and penalties.

Additionally, Federal regulations include a number of provisions to ensure transparency of the IPAs. First, regulations require the IPA representative to submit an annual report so the Council can evaluate whether its goals for the IPAs are being met (§ 679.21(f)(13)). Second, existing regulations require vessel owners to submit an annual economic data report to provide quantitative information so the Council can evaluate how the IPA influences a vessel's operational decisions to avoid Chinook salmon bycatch (§ 679.65). Third, this final rule adds additional requirements for IPA transparency, including a requirement that IPA representatives notify at least one third party group representing western Alaskans of closure areas and any violations of the rolling hot spot program. Finally, the final rule requires the IPA representative to describe in the IPA annual report how the IPA addresses the goals and objectives in the IPA provisions related to chum salmon (§ 679.21(f)).

Comment 24: Research should be done on Chinook salmon bycatch in the pollock fishery to determine which stock they are from since there are some stocks where the State has limited commercial and subsistence harvests. If Chinook salmon from those stocks are being taken by the pollock fishery, then the pollock fishery should have to wait to fish until those Chinook salmon leave the areas in which pollock are taken.

Response: NMFS conducts research on the Chinook salmon caught in the pollock fishery. Amendment 91 improved the collection of Chinook salmon information by increasing observer coverage to full coverage for all vessels and shoreside processing facilities and by requiring a census of Chinook salmon in every haul or fishing trip. NMFS also collects and analyzes scientific data and biological samples from the Chinook salmon bycatch. NMFS conducts a genetic analysis of samples from the Chinook salmon bycatch in the pollock fishery to determine the overall stock composition of the bycatch. The most recent analysis is available from the NMFS Alaska Fisheries Science Center (http://www.afsc.noaa.gov/Publications/AFSC-TM/NOAA-TM-AFSC-310.pdf).

However, this genetic analysis takes time and the results are not available in time to delay or move the pollock fishery. Instead, the IPAs use a rolling hotspot program to provide real-time Chinook salmon bycatch information so that the fleet can avoid areas of high Chinook salmon bycatch rates. A Chinook salmon rolling hotspot program is a component of the current IPAs, however, it is not a mandatory requirement. The catcher/processor IPA and the mothership IPA have a rolling hotspot program in place throughout the year. The inshore IPA has a rolling hotspot program that can be suspended during the season. Amendment 110 and this final rule require all IPAs to have a rolling hot spot program throughout the A and B seasons. This provision also requires notifications of closure areas and any violations of the rolling hot spot program to at least one third-party group representing western Alaskans, consistent with the requirement for the chum salmon rolling hotspot program. Section 3.5.3.3 of the Analysis provides more detail on this addition to the IPA requirements (see ADDRESSES).

Comment 25: The over allocation of pollock has ruined the livelihoods of all that depend on it for a living. A two-thirds reduction in the Bering Sea pollock TAC would increase escapement to the Yukon River system and raise the price of the pollock products. We have been giving pollock away at the expense of traditional Alaskan salmon fisheries. Everything that swims in the Bering Sea eats pollock and every fishery and northern fur seals have declined due to the over allocation of pollock.

Response: The process for assessing and specifying the Bering Sea pollock TAC is outside the scope of this action. There is no evidence that a two-thirds reduction in the pollock TAC would measurably increase salmon escapement to the Yukon River system. While salmon bycatch in the pollock fishery may be a contributing factor in the decline of salmon, NMFS expects the numbers of the ocean bycatch that would have returned to western Alaska would be relatively small due to ocean mortality and the large number of other river systems contributing to the total Chinook or chum salmon bycatch. For Chinook salmon, Section 3.5.1 of the Analysis explains that the Chinook salmon bycatch expected to have returned to western Alaska rivers is approximately 2.3 percent of coastal western Alaska run size in recent years. For chum salmon, Section 3.5.1 of the Analysis explains that the chum salmon bycatch expected to have returned to western Alaska rivers is approximately 0.5 percent of the coastal western Alaska run size in recent years. Under Amendment 110 and this final rule, these impact rates will be reduced further as the pollock fleet improves its ability to avoid salmon at all times.

NMFS is actively pursuing research on northern fur seals to help us understand the reasons for the decline and potential threats to the population. A description of past and ongoing research is available on the National Marine Mammal Laboratory's Web site (http://www.afsc.noaa.gov/nmml/species/species_nfs.php). The research projects investigate a broad range of topics related to fisheries interactions around the Pribilof Islands, including studies to quantify area-specific food habits and animal conditions, describe foraging behavior in different environments, delineate foraging habitats, and model habitat suitability in relation to fur seals and commercial fisheries.

Comment 25: The Analysis did not fully describe the potential impacts to the pollock fishery under the lower PSC performance standard and limits in years of low Chinook salmon abundance. The Analysis compared the impacts only to current Chinook salmon bycatch levels and not to potential or historical levels. Little to no forgone pollock harvest was noted under any scenario. Amendment 110 and the proposed rule are a potential threat that could suspend fishing operations in one of the largest fisheries in the world. Large juvenile Chinook salmon year classes persist in the marine environment for multiple years before returning as mature fish to the river systems. Recent unpredictability in the BSAI ecosystem likely only increases the probability of constraining the pollock fishery in future years based on management decisions made today. The Analysis should have attempted to quantify the probability of the limit shutting the fishery down in a given year.

Response: The purpose of a RIR is to analyze the potential costs and benefits associated with a regulatory change. To do so, the RIR must compare potential effects of the alternatives being considered with the regulatory status quo condition. In this case, the status quo is defined by the incentive-based Chinook salmon PSC avoidance structure established under Amendment 91. Since Amendment 91, Chinook salmon PSC has been much lower than the “potential or historical” levels the commenter presumably is referring to and these lower levels, as properly considered in the analysis, represent the regulatory status quo condition. Historically higher levels of bycatch occurred under differing regulatory conditions, do not represent status quo conditions, and are not appropriate to consider in the Analysis. Note that historical bycatch was considered in the EIS prepared for Amendment 91 (see ADDRESSES).

Amendment 110 and this final rule provide further incentives for industry to avoid Chinook salmon PSC, particularly in years of low Chinook salmon abundance. As explained in Section 4.8.2 of the Analysis, economic analysis has demonstrated the ability of a catcher-processor fleet to adapt their behavior to reduce PSC when faced with individual vessel caps. The reduced individual vessel caps that could result under this final rule during times of low Chinook abundance in western Alaska are not intended to close the pollock fishery. They are intended to alter fishing behavior to further avoid Chinook PSC. The flexibility given to industry to self-regulate PSC avoidance, provided in Amendment 91, remains and is augmented by this rule. Thus, the probability of the limit shutting down the fishery in a given year is dependent on changes in fishing activity that are not presently known and are dependent on the actions of the fishing fleet.

Comment 26: Revise the Regulatory Flexibility Act (RFA) analysis to determine the number of directly regulated entities that are defined as small entities without applying affiliations among directly regulated entities based on their participation in a pollock harvesting cooperative. NMFS considers a vessel owner's membership in a harvesting cooperative to be an affiliation; this shows a misunderstanding of the nature of harvesting cooperatives. Harvesting cooperatives in Alaska are not large vertically or horizontally integrated businesses. Cooperative members are joined by simple rules to help remove the race for fish by coordinating selected fishing activities, but each catcher vessel (or collection of commonly owned catcher vessels) is a distinct business unit. The fact that cooperatives coordinate harvests in a manner that allows for more complete harvest of the quota should not be interpreted as creating a single business unit in the manner intended for defining a small business that is appropriate for protection by the RFA.

Response: When NMFS calculates the size of an entity to determine if it is a small entity, NMFS must include the annual receipts and the employees of affiliates. Affiliation is determined by the ability to control. Control may arise through ownership, management, or other relationships or interactions between the parties. When the ability to control exists, even if it is not exercised, affiliation exists. The Small Business Administration (SBA) has a specific set of rules that explain when another person, business, or entity is considered an affiliate for size purposes in its Small Business Size Regulations (13 CFR 121.103). NMFS has applied these rules in the evaluation it conducted in this RFA analysis.

Harvesting cooperatives meet the definition of affiliation because cooperatives have the ability to control member vessels. Cooperatives are predicated on collective agreements among their members, to abide by the terms and practices set out for membership. That is, the entity formed by creation of the cooperative is, by definition, a third party that controls or has the power to control its members. Cooperatives coordinate harvests, which is operational control of the input side of the business. The small entity standard is “independently owned and operated.” Cooperative members may be independently owned but still not be considered small entities because the cooperative has enough operational control that its members are not considered to be independently operated for purposes of the definition of affiliation.

Cooperative membership does not automatically mean an entity is large (not small). A cooperative may be a small entity if the combined annual gross receipts of all cooperative members meet the size standard used by the SBA or, after July 1, 2016, NMFS' small business size standard for RFA compliance at 50 CFR 200.2(a). For more information on NMFS' small business size standard for RFA compliance, see 80 FR 81194 (December 29, 2015). NMFS's RFA analysis to estimate the number of small entities directly regulated by this action is correct.

Comment 27: NMFS' aggregation of cooperative member's gross earnings eliminates a fishing business's access to the benefits of SBA review and runs against the intent of the RFA.

Response: The RFA is primarily concerned with ensuring that Federal agency decision-makers seriously and systematically consider disproportionate economic impacts on small entities that may result from their actions. To comply with the RFA, NMFS has prepared an IRFA and a FRFA following the required contents specified in the RFA. The IRFA was prepared and summarized in the “Classification” section of the preamble to the proposed rule (81 FR 5681, February 3, 2016). The FRFA is in the “Classification” section of the preamble to this final rule.

If a specific business applies to the SBA to participate in an SBA program, the SBA conducts an independent review of that business to determine if that business qualifies as a small business for purposes of participating in an SBA program. That business must satisfy SBA's definition of a business concern, along with SBA's size standards for small businesses. The SBA does not rely on the analysis conducted by NMFS under the RFA to determine whether a particular entity satisfies SBA's definition of a small business. See https://www.sba.gov/ for more information on SBA's assessment of a small business.

The NMFS Assistant Administrator has determined that Amendment 110 to the FMP and this rule are necessary for the conservation and management of the groundfish fishery and that they are consistent with the Magnuson-Stevens Act and other applicable law.

This rule has been determined to be not significant for the purposes of Executive Order (E.O.) 12866.

Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule, and shall designate such publications as “small entity compliance guides.” The preambles to the proposed rule and this final rule serve as the small entity compliance guide. This action does not require any additional compliance from small entities that is not described in the preambles. Copies of the proposed rule and this final rule are available from the NMFS Web site at http://alaskafisheries.noaa.gov.

This FRFA incorporates the IRFA, a summary of the significant issues raised by the public comments, NMFS' responses to those comments, and a summary of the analyses completed to support the action.

Section 604 of the Regulatory Flexibility Act requires that, when an agency promulgates a final rule under section 553 of Title 5 of the U.S. Code, after being required by that section or any other law to publish a general notice of proposed rulemaking, the agency shall prepare a FRFA. Section 604 describes the required contents of a FRFA: (1) A statement of the need for, and objectives of, the rule; (2) a statement of the significant issues raised by the public comments in response to the initial regulatory flexibility analysis, a statement of the assessment of the agency of such issues, and a statement of any changes made in the proposed rule as a result of such comments; (3) the response of the agency to any comments filed by the Chief Counsel for Advocacy of the SBA in response to the proposed rule, and a detailed statement of any change made to the proposed rule in the final rule as a result of the comments; (4) a description of and an estimate of the number of small entities to which the rule will apply or an explanation of why no such estimate is available; (5) a description of the projected reporting, recordkeeping and other compliance requirements of the rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record; and (6) a description of the steps the agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each one of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected.

A statement of the need for, and objectives of, this rule is contained earlier in this preamble and is not repeated here.

NMFS published a proposed rule on February 3, 2016 (81 FR 5681). An IRFA was prepared and summarized in the “Classification” section of the preamble to the proposed rule. The comment period closed on March 4, 2016. NMFS received 15 letters of public comment on the proposed rule and Amendment 110. The Chief Counsel for Advocacy of the SBA did not file any comments on the proposed rule.

One comment letter was received with two comments on the IRFA. These are Comment 26 and Comment 27 under Response to Comments, above. No changes were made to this rule or the RFA analysis as a result of these comments on the IRFA.

Comment 26 disagrees with NMFS using affiliation to determine whether a member of a fishery cooperative is a small entity in the IRFA. The comment requests NMFS to revise the analysis to determine whether the vessels that are directly regulated entities under this action are small entities without applying the cooperative affiliations. We disagree because when we calculate the size of an entity to determine if it is a small entity, we must include the annual receipts and the employees of affiliates, per the Small Business Size Regulations (13 CFR 121.103).

Comment 27 is concerned that NMFS' aggregation of a cooperative member's gross earnings eliminates a fishing business's access to the benefits of SBA review and runs against the intent of the RFA. To comply with the RFA, agencies prepare an IRFA and a FRFA following the required contents specified in the RFA. NMFS has complied with the RFA for this action. NMFS has prepared an IRFA and a FRFA following the required contents specified in the RFA. If a specific business applies to the SBA to participate in an SBA program, the SBA conducts an independent review of that business to determine if that business qualifies as a small business for purposes of participating in an SBA program. That business must satisfy SBA's definition of a business concern, along with SBA's size standards for small businesses. The SBA does not rely on the analysis conducted by NMFS under the RFA to determine whether a particular entity satisfies SBA's definition of a small business.

The action directly regulates those entities that participate in the directed pollock trawl fishery in the Bering Sea. These entities include vessels harvesting pollock under the AFA and the six CDQ groups that receive allocations of pollock.

The SBA requires consideration of affiliations among entities for the purpose of assessing if an entity is small. The AFA pollock cooperatives are a type of affiliation. All the non-CDQ entities directly regulated by this action are members of AFA cooperatives and, therefore, NMFS considers them “affiliated” large (non-small) entities for RFA purposes. AFA cooperatives have gross annual revenues that are substantially greater than $20.5 million, the standard used by the SBA to define the annual gross revenue of a large (non-small) business engaged in finfish harvesting, such as pollock. Therefore, all the non-CDQ pollock fishery participants are defined as large (non-small) entities.

Due to their status as non-profit corporations, the six CDQ groups are identified as “small” entities for RFA purposes. This action directly regulates the six CDQ groups. As described in regulations implementing the RFA (13 CFR 121.103), the CDQ groups' affiliations with other large entities do not define them as large entities.

The six CDQ groups, formed to manage and administer the CDQ allocations, investments, and economic development projects, are the Aleutian Pribilof Island Community Development Association, the Bristol Bay Economic Development Corporation, the Central Bering Sea Fishermen's Association, the Coastal Villages Region Fund, the Norton Sound Economic Development Corporation, and the Yukon Delta Fisheries Development Association. The 65 communities, with approximately 27,000 total residents, that benefit from participation in the CDQ Program are not directly regulated by this action.

This final rule revises some existing requirements and removes some requirements. The revised requirements are those related to—

• Development and submission of proposed IPAs and amendments to approved IPAs;

• An annual report from the participants in each IPA, documenting information and data relevant to the Bering Sea Chinook salmon bycatch management program; and

• Salmon handling and storage on board a vessel, and obligations to facilitate observer data reporting.

This final rule removes the requirements for an application form for a proposed IPA or amended IPA.

This action is a comprehensive program to minimize Chinook salmon and chum salmon bycatch in a manner that accomplishes the stated objectives and is consistent with applicable statutes. No alternatives were identified in addition to those analyzed in the IRFA that had the potential to further reduce the economic burden on small entities, while achieving the objectives of this action. Section 2.10 of the Analysis discusses alternatives considered and eliminated from detailed analysis (see ADDRESSES).

This final rule includes performance standards to minimize Chinook salmon and chum salmon bycatch, while limiting the burden on CDQ groups. A system of transferable PSC allocations and a performance standard, even in years of low Chinook salmon abundance, will allow CDQ groups to decide how best to comply with the requirements of this action, given the other constraints imposed on the pollock fishery (e.g., pollock TAC, market conditions, area closures associated with other rules, gear restrictions, climate and oceanographic change).

Based on the best available scientific data and information, none of the alternatives except the preferred alternative have the potential to accomplish the stated objectives of the Magnuson-Stevens Act and other applicable statutes (as reflected in this action), while minimizing any significant adverse economic impact on small entities.

E.O. 13175 of November 6, 2000 (25 U.S.C. 450 note), the Executive Memorandum of April 29, 1994 (25 U.S.C. 450 note), the American Indian and Alaska Native Policy of the U.S. Department of Commerce (March 30, 1995), and the Tribal Consultation and Coordination Policy of the U.S. Department of Commerce (May 21, 2013), outline the responsibilities of NMFS in matters affecting tribal interests. Section 161 of Public Law 108-199 (188 Stat. 452), as amended by section 518 of Public Law 108-447 (118 Stat. 3267), extends the consultation requirements of E.O. 13175 to Alaska Native corporations. Under the E.O. and agency policies, NMFS must ensure meaningful and timely input by tribal officials and representatives of Alaska Native corporations in the development of regulatory policies that have tribal implications.

Section 5(b)(2)(B) of E.O. 13175 requires NMFS to prepare a tribal summary impact statement as part of the final rule. This statement must contain (1) a description of the extent of the agency's prior consultation with tribal officials, (2) a summary of the nature of their concerns, (3) the agency's position supporting the need to issue the regulation, and (4) a statement of the extent to which the concerns of tribal officials have been met.

The consultation process for this action began during the Council process when the Council started developing Amendment 110 in 2012. A number of tribal representatives and tribal organizations provided written public comments and oral public testimony to the Council during Council outreach meetings on Amendment 110 and at the numerous Council meetings at which Amendment 110 was discussed.

NMFS conducted two tribal consultations, one in December 2014 and one in April 2015, with representatives from the Tanana Chiefs Conference; the Association of Village Council Presidents; the Yukon River Drainage Fisheries Association; the Kawerak, Inc.; and the Bering Sea Fishermen's Association. These organizations prepared letters for the Council and requested the consultations to discuss the salmon bycatch management measures under consideration by the Council. NMFS posted reports from these consultations on the NMFS Alaska Region Web site at https://alaskafisheries.noaa.gov/tribal-consultations.

NMFS continued the consultation process by sending a letter to Alaska tribal governments, Alaska Native corporations, and related organizations (“Alaska Native representatives”) when the Notice of Availability for Amendment 110 published in the Federal Register in March 2016. The letter included a copy of the Notice of Availability and notified representatives of the opportunity to comment and consult. NMFS received 4 letters of comment on Amendment 110 and the proposed rule from tribal members and representatives of tribal governments, tribal organizations, or Alaska Native corporations. The comment summaries and NMFS' responses are provided in this preamble under Response to Comments and are summarized below.

The concerns expressed in consultations and reflected in written comments from tribal representatives and members center on four themes. First, Chinook salmon is vitally important to tribal members, and they suffer great hardships when Chinook salmon abundance is low. Second, tribal representatives attribute low Chinook salmon in-river returns directly to bycatch in the Bering Sea pollock fishery. Third, tribal members want Chinook salmon bycatch greatly curtailed. Fourth, NMFS should exercise its trust responsibilities by advocating for Alaska native interests on the Council.

The comment letter from Tanana Chiefs Conference; the Association of Village Council Presidents; the Yukon River Drainage Fisheries Association; the Kawerak, Inc.; and the Bering Sea Fishermen's Association supported Amendment 110 and the implementing regulations as an important step in further reducing salmon bycatch but urged NMFS and the pollock industry to continue working towards greater bycatch reduction, with an ultimate goal of zero bycatch. In particular, these comments support the provision to reduce the PSC limit and performance standard in years of low Chinook salmon abundance in western Alaska as critical to ensuring Chinook salmon bycatch is reduced in the years when every source of mortality must be reduced.

The comment from the Native Village of Kotzebue expressed concern that although Amendment 110 is going in the right direction towards zero salmon bycatch, the bycatch limits are still too high.

The comment from Ahtna, Incorporated, encourages the Secretary of Commerce to take all reasonable measures to reduce Chinook salmon bycatch in the Bering Sea and Gulf of Alaska.

The comment from the Aleut Corporation supports Amendment 110, but is strongly opposed to the provision to reduce the PSC limit and performance standard in low Chinook salmon abundance years because it is unwarranted, unnecessary, not sound science, and not responsible management. The Aleut Corporation believes this provision unfairly restricts the pollock fishery when science has shown that there is not a relationship between salmon bycatch and the size of the salmon runs in coastal western Alaska.

This final rule is needed to implement Amendment 110, a complex and innovative program to minimize salmon bycatch to the extent practicable in the pollock fishery. This final rule is also needed to create a comprehensive salmon bycatch avoidance program that works more effectively than the current salmon bycatch programs to avoid Chinook salmon bycatch and Alaska-origin chum salmon bycatch. The Council and NMFS recognize that salmon are an extremely important resource to Native Alaskans who depend on local fisheries for their sustenance and livelihood.

Amendment 110 and this final rule adjust the existing Chinook salmon bycatch program to, among other things, incorporate revised chum salmon bycatch measures into the existing IPAs. Amendment 110 and this final rule are designed to consider the importance of continued production of critical chum salmon runs in western Alaska by focusing on bycatch avoidance of Alaskan chum salmon runs. These runs have substantial variation in run sizes over time, and are of historic importance in the subsistence lifestyle of Native Alaskans. Additional protections to other chum stocks from outside of Alaska are embedded in the objective to avoid the high bycatch of chum salmon overall, recognizing that most non-Alaska chum salmon are likely from Asian hatcheries.

In addition, the Council and NMFS sought to provide greater incentives to avoid Chinook salmon by strengthening incentives during times of historically low Chinook salmon abundance in western Alaska. Thus, the management measures included in Amendment 110 focus on retaining the incentives to avoid Chinook salmon bycatch at all levels of abundance as intended by Amendment 91. Multiple years of historically low Chinook salmon abundance have resulted in significant restrictions for subsistence users in western Alaska and failure to achieve conservation objectives. While Chinook salmon bycatch impact rates have been low under Amendment 91, the Council and NMFS have determined that there is evidence that improvements could be made to ensure the program is reducing Chinook salmon bycatch at low levels of salmon abundance.

One of the primary factors in initiating this action was concern over the potential impacts of Chinook salmon and chum salmon bycatch in the Bering Sea pollock fishery on the return of these salmon to western Alaska river systems and the recognition of the importance of salmon to the people in western Alaska. While the final program is not as restrictive on the pollock fishery as advocated by some Alaska Native representatives, it will minimize salmon bycatch to the extent practicable.

This rule contains collection-of-information requirements subject the Paperwork Reduction Act (PRA) and which have been approved by OMB. The collections are listed below by OMB control number.

Public reporting burden is estimated to average 5 minutes per individual response for use of a vessel's computer, software, and data transmission; 5 minutes per individual response for notification of observer before handling the vessel's Bering Sea pollock catch; and 5 minutes for notification of crew person responsible for ensuring all sorting, retention, and storage of salmon.

Public reporting burden is estimated to average 8 hours per individual response for the Application to Receive Transferable Chinook Salmon PSC Allocations, including the contract; 4 hours for the amendment to the contract; and 15 minutes for the Application for the Transfer of Chinook Salmon PSC Allocations.

Public reporting burden is estimated to average 40 hours per individual response for the Salmon Bycatch IPA; and 8 hours for the IPA Annual Report.

Public reporting burden includes the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

Send comments on this data collection, including suggestions for reducing the burden, to NMFS Alaska Region (see ADDRESSES), or by email to [email protected], or fax to (202) 395-5806.

Notwithstanding any other provision of the 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 of information displays a currently valid OMB control number. All currently approved NOAA collections of information may be viewed at: http://www.cio.noaa.gov/services_programs/prasubs.html.

For the reasons set out in the preamble, NMFS amends 50 CFR part 679 as follows: