Federal Register Vol. 81, No.141,

On December 26, 2013, OMB published Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards final guidance (78 FR 78589) giving all federal award making agencies one year to implement conforming changes to all regulations as needed to address changes in requirements associated with this new Uniform Guidance. On December 19, 2014, OMB published a joint interim final rule and conforming changes in the Federal Register (79 FR 75871), making the conforming changes for award making agencies across the Federal government. Included in this joint interim final rule were conforming changes to regulations regarding procurement methods under Federal awards for the Rural Utilities Service Water and Waste Disposal program to ensure consistency with the Uniform Guidance.

The United States Department of Agriculture finalized its portion of the conforming changes in the Federal Register on Tuesday, February 16, 2016 (81 FR 7695), that inadvertently stated instructions in § 1780.72, as published, which contains errors that may prove to be misleading and need to be clarified.

Accordingly, 7 CFR part 1780 is corrected by making the following correcting amendment:

I. Background

On November 2, 2015, the President signed into law the 2015 Improvements Act, which amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (FCPIAA) and required all agencies to adjust for inflation their levels of civil monetary penalties via rulemaking by July 1, 2016, to be effective no later than August 1, 2016. In an interim final rule published in the Rules and Regulations section of the Federal Register (81 FR 43019; July 1, 2016), the NRC is amending its regulations to implement the 2015 Improvements Act by adjusting the amount in § 2.205(j) of title 10 of the Code of Federal Regulations (10 CFR), according to a statutory formula based on the Consumer Price Index (CPI), from $140,000 to $280,469. This amount represents the new maximum civil penalty that the NRC may impose for a violation of the AEA, or any regulation or order issued under the AEA, per violation per day. Starting in January 2017, the 2015 Improvements Act also requires that the NRC make annual inflation adjustments to the maximum civil penalty amount in 10 CFR 2.205, rounded to the nearest multiple of $1.

To incorporate the updated maximum civil penalty amount specified in its regulations, the NRC is issuing a revision to its Enforcement Policy (ADAMS Accession No. ML16197A561). Specifically, the NRC is updating Table A in Section 8.0, “Table of Base Civil Penalties,” which currently lists $140,000 as the maximum civil penalty amount the agency may assess for the most significant severity level of violation. To promote regulatory certainty and save NRC staff resources by lessening the chances that the Enforcement Policy will have to be revised on an annual basis alongside 10 CFR 2.205 resulting from minor increases in inflation (less than one half percent), the maximum civil penalty amount in the revised Table A will be calculated by rounding the maximum civil penalty amount in 10 CFR 2.205 down to the nearest multiple of $10,000 (assuming the amount in 10 CFR 2.205 is not already a multiple of $10,000). Therefore, the new maximum civil penalty in Table A is now $280,000, rounded down from $280,469. The 2015 Improvements Act does not limit the Commission's authority to exercise discretion and assess civil penalty levels below the statutory maximum, and the gains to be realized from a more stable table of base civil penalties outweighs any arguable loss of deterrent effect from rounding this maximum figure down, at most, $9,999 in a given year. Additionally (and as stated in the Preface to the Enforcement Policy), this is a statement of policy, not regulation, and the Commission still reserves the right to deviate from the Enforcement Policy where particular circumstances warrant and assess the full statutory maximum.

The revised Table A in Section 8.0 of the Enforcement Policy also now includes a note explaining how the table's maximum civil penalty amount is generated as a result of rounding down from the number in 10 CFR 2.205. The note also explains that other amounts listed in the table have been adjusted to maintain the same proportional relationship between penalties. The revised table also now includes a footnote explaining that the maximum civil penalty is adjusted on an annual basis to put the regulated community on notice that the NRC may periodically update the amount in 10 CFR 2.205 pursuant to the 2015 Improvements Act, which would necessitate a change to the amounts in Table A in Section 8.0 of the Enforcement Policy. In the event of such an update, the NRC may assess civil penalties consistent with the updated amount in 10 CFR 2.205 even if it has not yet performed an update to Table A (though the NRC will strive to provide timely updates of the Enforcement Policy when necessitated by updates to 10 CFR 2.205). Additionally, as stated in Section 6 of the FCPIAA (28 U.S.C. 2461 note), when the NRC increases civil penalty amounts through rulemaking pursuant to the 2015 Improvements Act, it will apply those increased amounts when assessing any penalty after the effective date of that rulemaking, regardless of whether the underlying violation occurred before that effective date.

The NRC is not adjusting the civil penalty amounts in Table A for the “loss, abandonment, or improper transfer of disposal of regulated material, regardless of the use or type of licensee,” other than to note that these values will be periodically reviewed and updated, since these civil penalty amounts are determined by the estimated or actual cost of authorized disposal.

Lastly, because the agency's authority to issue civil penalties for violations of the AEA has more than doubled as a result of the 2015 Improvements Act, the NRC is also including new language in Section 3.6 of the Enforcement Policy, “Use of Discretion in Determining the Amount of a Civil Penalty,” to confirm that, notwithstanding the outcome of the normal civil penalty process, the agency may take into account mitigating factors based on the merits of an individual case, including the ability of various classes of licensees to pay. It is not the NRC's intention that the economic impact of a civil penalty be so severe that it adversely affects a licensee's ability to safely conduct licensed activities or puts a licensee out of business. Section 3.6 now allows NRC staff to consider enforcement discretion for cases where there is a concern that imposition of a base civil penalty would be overly punitive rather than a deterrent for the individual or licensee.

This policy statement is a rule as defined in the Congressional Review Act (5 U.S.C. 801-808). However, the Office of Management and Budget has not found it to be a major rule as defined in the Congressional Review Act.

The objective of this final rule is to reflect changes to the FCA's organizational structure and correct the zip code for the field office located in Irving, TX. In addition, references in our regulations to various FCA offices, which have changed, have been revised. We also are re-ordering the list of FCA offices into a more logical progression that is consistent with FCA's organizational chart.

On April 27, 2016, the FCA Board approved an organizational chart that separated the unrelated functions of the Office of Management Services (OMS) into the Office of Agency Services (OAS) and the Office of the Chief Financial Officer (OCFO). This change will allow the Directors of the new offices to better focus on the core functions and duties of the offices.

The Freedom of Information Act, 5 U.S.C. 552, requires, in part, that each Federal agency publish in the Federal Register, for the guidance of the public, a description of its organization structure. Accordingly, we revise our regulations by:

(1) In § 600.2, changing the zip code for the Irving, TX field office from 75602-3957 to 75062-3906;

(2) In § 600.4,

(a) Including the Office of the Chief Financial Officer in FCA's organization structure;

(b) Including the Office of Agency Services in FCA's organizational structure;

(c) Removing the Office of Management Services from the FCA's organizational structure; and

(d) Re-ordering the list of FCA offices into a more logical progression that is consistent with FCA's organizational chart.

(3) In §§ 602.8, 603.340, and 606.670, changing the Office of Management Services to the Office of Agency Services, and corresponding office name abbreviations, where appropriate;

(4) In § 602.25, removing “Regulation and Policy Division” and changing the Office of Policy and Analysis to the Office of Regulatory Policy.

We have determined that the amendments involve Agency management and personnel and other minor technical changes. Therefore, the amendments do not constitute a rulemaking under the Administrative Procedure Act (APA), 5 U.S.C. 551, 553(a)(2). Under the APA, the public may participate in the promulgation of rules that have a substantial impact on the public. The amendments to our regulations relate to Agency management and personnel and a minor technical change only and have no direct impact on the public and, therefore, do not require public participation.

Even if these amendments were a rulemaking under 5 U.S.C. 551, 553(a)(2) of the APA, we have determined that notice and public comment are unnecessary and contrary to the public interest. Under 5 U.S.C. 553(b)(A) and (B) of the APA, an agency may publish regulations in final form when they involve matters of agency organization or where the agency for good cause finds that notice and public comment are impracticable, unnecessary, or contrary to the public interest. As discussed above, these amendments result from recent office reorganizations. Because the amendments will provide accurate and current information on the organization of the FCA and update the citation to the Act, it would be contrary to the public interest to delay amending the regulations.

Pursuant to section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), FCA hereby certifies that the final rule will not have a significant economic impact on a substantial number of small entities. Each of the banks in the Farm Credit System (System), considered together with its affiliated associations, has assets and annual income in excess of the amounts that would qualify them as small entities. Therefore, System institutions are not “small entities” as defined in the Regulatory Flexibility Act.

For the reasons stated in the preamble, parts 600, 602, 603, and 606 of chapter VI, title 12 of the Code of Federal Regulations are amended as follows:

The Board's PSR policy establishes the procedures, referred to as posting rules, for the settlement of credits and debits to institutions' Federal Reserve accounts for different payment types.1 The application of these posting rules determines an institution's intraday account balance and whether it has incurred a negative balance (daylight overdraft).

As announced on September 23, 2015, the Board approved enhancements to the Reserve Banks' FedACH® SameDay Service (FedACH SameDay Service) effective September, 23, 2016.2 The enhancements are intended to align the Reserve Banks' existing opt-in same-day ACH service with amendments to NACHA's Operating Rules and Guidelines.3 Under the newly enhanced Reserve Bank service, all receiving depository financial institutions will be required to participate in same-day ACH, and originating depository financial institutions will be required to pay a fee to receiving depository financial institutions for each same-day ACH forward transaction. The NACHA amendments, as incorporated into the Reserve Bank Operating Circulars, will become effective in multiple phases, beginning with same-day credit and return transactions this September and followed by same-day debit transactions in September 2017. Upon implementation of the first phase, the Reserve Banks' current opt-in same-day ACH service will cease to exist and will be supplanted by the newly-enhanced same-day service. The PSR policy's posting rules for forward and return same-day ACH transactions are being updated to conform to the Reserve Banks' new FedACH SameDay Service, effective September 23, 2016.

Under the Reserve Banks' current same-day ACH service, credits and debits for forward same-day ACH transactions post at 5:00 p.m.4 Beginning September 23, 2016, credits and debits for same-day ACH credit transactions will post at 1:00 p.m. or 5:00 p.m., depending on when the ACH file is received by the Reserve Banks for processing. Forward ACH debit transactions will be eligible to settle same-day beginning September 15, 2017, as part of the implementation of the second phase of the NACHA rule amendments, and credits and debits for same-day ACH debit transactions will post according to the same posting rules as same-day ACH credit transactions.5 The posting of future-dated ACH forward transactions will not be affected, and credits and debits for these transactions will continue to post at 8:30 a.m. on the effective settlement date.

The approved enhancements effective this September also alter the settlement of ACH return items processed by the Reserve Banks. Under the current posting rules, credits and debits for returns of future-dated and same-day ACH forward items post either at 8:30 a.m. or in the afternoon at 5:00 p.m. and 5:30 p.m., respectively, with the specific posting time determined by when the item is received by the Reserve Banks. Effective September 23, 2016, all ACH return items, regardless of whether the associated forward item was future-dated or same-day, will post at the next available posting time or following the settlement of the associated forward transaction. Thus, credits and debits for return items will post at 8:30 a.m., 1:00 p.m., 5:00 p.m., or 5:30 p.m., with the specific posting time determined by when the item is received by the Reserve Banks.6

The Federal Reserve Policy on Payment System Risk, section II.A, under the heading “Procedures for Measuring Daylight Overdrafts” and the subheadings “Post at 8:30 a.m. eastern time,” “Post at 1:00 p.m. eastern time,” “Post at 5:00 p.m. eastern time,” and “Post at 5:30 p.m. eastern time,” is amended as follows:

Post at 8:30 a.m. eastern time:

Post by 1:00 p.m. eastern time:

Post at 5:00 p.m. eastern time:

Post at 5:30 p.m. eastern time:

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all M7 Aerospace LLC Models SA26-AT, SA26-T, SA226-AT, SA226-T, SA226-T(B), SA226-TC, SA227-AC (C-26A), SA227-AT, SA227-BC (C-26A), SA227-CC, SA227-DC (C-26B), and SA227-TT airplanes. The NPRM published in the Federal Register on April 1, 2016 (81 FR 18804). The NPRM was prompted by reports of multiple cracks in the cockpit control column horizontal tube at the corners of the access panel cutout, at the pulley bolt welds, and at the elevator arm weld in the steel horizontal tube of the control column on M7 Aerospace SA26, SA226, and SA227 airplanes. The NPRM proposed to require inspection of the cockpit control column horizontal tube for cracks and repair or replacement of the cockpit control column as necessary. This condition, if not corrected, could result in partial or complete control column failure with partial or complete loss of pitch and/or roll control. 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. The following presents the comment received on the NPRM (81 FR 18804, April 1, 2016) and the FAA's response to the comment.

Michael O'Brien at Bearskin Airlines commented they had been complying with this AD by accomplishing the service bulletins that are listed in the proposed AD. He asked if it would be acceptable to just accomplish a technical records research to see when the required actions were last done.

We agree that credit should be given for actions previously done with the service bulletins called out in the NPRM. The NPRM already allows for this with the phrase “unless already done” in paragraphs (g)(1) and (2) of the NPRM.

Because the requested change is already part of this AD, we have not changed the final rule AD action based on this comment.

We reviewed the relevant data, considered the comment 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 NPRM (81 FR 18804, April 1, 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 18804, April 1, 2016).

We reviewed M7 Aerospace LLC SA26 Series Service Bulletin (SB) 26-27-002, M7 Aerospace LLC SA226 Series SB 226-27-078, M7 Aerospace LLC SA227 Series SB 227-27-058, and M7 Aerospace LLC SA227 Series SB CC7-27-030, all dated October 8, 2015. The service information describes procedures for inspection of the cockpit control column horizontal tube for cracks and repair or replacement of the cockpit control column as necessary. All of the related 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 this NPRM.

We estimate that this AD affects 350 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

We estimate the following costs to do any necessary repairs/replacements that would be required based on the results of the inspection. We have no way of determining the number of airplanes that might need these repairs/replacements:

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:

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Airbus Model A300 series airplanes; Model A300 B4-600, B4-600R, F4-600R series airplanes, and Model A300 C4-605R Variant F airplanes (collectively called Model A300-600 series airplanes); and Model A310 series airplanes. The NPRM published in the Federal Register on March 7, 2016 (81 FR 11690) (“the NPRM”). The NPRM was prompted by reports of partial loss of NBB efficiency on the THSA. The NPRM proposed to require an inspection to determine THSA part numbers, serial numbers, and flight cycles on certain THSAs; and repetitive replacement for certain THSAs. We are issuing this AD to prevent loss of THSA NBB efficiency, which, in conjunction with the inability of the power gear to keep the ball screw in its last commanded position, could lead to an uncommanded movement of the horizontal stabilizer, possibly resulting in loss of control 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 AD 2015-0081, dated May 7, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition on all Airbus Model A300 series airplanes; Model A300 B4-600, B4-600R, F4-600R series airplanes, and Model A300 C4-605R Variant F airplanes (collectively called Model A300-600 series airplanes); and Model A310 series airplanes. The MCAI states:

You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-3993.

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM and the FAA's response to each comment.

The Airline Pilots Association International stated that it fully supports the intent of the NPRM.

Airbus, FedEx Express, and United Parcel Service requested that we revise the compliance date in paragraph (j)(3) of the proposed AD from February 1, 2018, to February 1, 2019. The commenters stated that this revision would match the MCAI.

We agree with the commenters' request. This was a typographical error. Our intent was to match the MCAI. We have revised paragraph (j)(3) of this AD accordingly.

FedEx Express requested that we allow a review of the operator's maintenance records to determine the part number and serial number of the THSA specified in paragraph (h)(1) of the proposed AD. FedEx Express stated that this review would accomplish the same intent as a physical inspection of the THSA.

We agree with the commenter's request. We have revised paragraph (h)(1) of this AD to allow doing a review of airplane maintenance records in lieu of the THSA inspection if the part number and serial number of the THSA can be conclusively determined from that review.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and 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 also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.

Airbus has issued Airbus Service Bulletin A300-27-6070, dated February 17, 2015; and Airbus Service Bulletin A310-27-2106, dated February 17, 2015. This service information describes procedures for inspection and replacement of the THSA.

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 152 airplanes of U.S. registry.

We also estimate that it would take about 27 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Required parts would cost about $590,000 per product. Based on these figures, we estimate the cost of this AD on U.S. operators to be $90,028,840, or $592,295 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.

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

Section 553(b)(3)(B) of the Administrative Procedure Act (APA) (5 U.S.C.) authorizes agencies to dispense with notice and comment procedures for rules when the agency for “good cause” finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under this section, an agency, upon finding good cause, may issue a final rule without seeking comment prior to the rulemaking.

The FAA finds that good cause exists under APA section 553(b)(3)(B) for this technical amendment to published without public notice and comment because this amendment is limited to providing additional clarity concerning specific airspace subject to the existing SFAR restriction, by adding latitude and longitude coordinates in lieu of the names for the FIRs.

In addition, section 553(d)(3) of the Administrative Procedure Act requires publication of a substantive rule must be made not less than 30 days before the effective date except when the agency finds good cause and publishes such justification with the rule.

Good cause exists under section 553(d)(3) of the APA for this technical amendment to become effective on the date of its filing for public inspection. Section 553(d)(3) allows an effective date less than 30 days after publication “as otherwise provided by the agency for good cause found and published with the rule.” 5 U.S.C. 553(d)(3). This rule merely provides additional clarity for the specific airspace subject to the existing restriction, by adding latitude and longitude coordinates in lieu of the names for the FIRs. In addition, the public interest is served by avoiding delay in the effective date of this technical amendment because clarity in the coverage of airspace subject to the rule is necessary to address the potential hazard to civil aviation that exists in the Simferopol (UKFV) and Dnepropetrovsk (UKDV) FIRs, as described in the FAA's final rule promulgating the SFAR. 80 FR 65621, 65622. For these reasons, the FAA finds good cause under APA section 553(d)(3) exists for this amendment to become effective on July 21, 2016.

SFAR 113, § 91.1607, Prohibition Against Certain Flights in the Simferopol (UKFV) and Dnipropetrovsk (UKDV) Flight Information Regions (FIRs) was published on December 29, 2014, and subsequently extended on October 27, 2015. As explained in the preamble accompanying the December 29, 2014 rule, the FAA first restricted flights over Simferopol (UKFV) by publishing the SFAR on April 25, 2014. On December 29, 2014, the FAA extended the scope of the airspace covered by the SFAR, based on increased safety concerns. The December 29, 2014, rule was extended on October 27, 2015. During this time period, the State Aviation Administration of Ukraine restructured the airspace. The new configuration altered both the Simferopol (UKFV) and Dnipropetrovsk (UKDV) Flight Information Region (FIR) altitude structures. In order to address the Ukraine airspace restructuring, this technical amendment specifically identifies the prohibited airspace in which SFAR 113, § 91.1607, applies, to provide inclusive altitudes and lateral limitations (latitude and longitude coordinates).

Consistent with the foregoing, the FAA clarifies the lateral limits of the prohibited airspace to include that area previously described as the Simferopol (UKFV) FIR, which is defined as:

The prohibited airspace within the above lateral limits extends in altitude from the surface to unlimited.

Additionally, prohibited airspace includes that area previously described as the Dnipropetrovsk (UKDV) FIR, which is defined as:

The prohibited airspace within the above lateral limits extends in altitude from the surface to unlimited.

In consideration of the foregoing, the Federal Aviation Administration amends chapter I of title 14, Code of Federal Regulations, as follows:

Background

These temporary regulations amend the Income Tax Regulations (26 CFR part 1) under section 50(d)(5) to provide the income inclusion rules applicable to a lessee of investment credit property when a lessor elects to treat the lessee as having acquired such property. Section 50(d)(5) provides that, for purposes of the investment credit, rules similar to former section 48(d) (as in effect prior to the enactment of Revenue Reconciliation Act of 1990 (Pub. L. 101-508, 104 Stat 1388 (November 5, 1990))) apply.

Former section 48(d)(1) permitted a lessor of new section 38 property to elect to treat that property as having been acquired by the lessee for an amount equal to its fair market value (or, if the lessor and lessee were members of a controlled group of corporations, equal to the lessor's basis). Former section 48(d)(3) provided that if the lessor made the election provided in former section 48(d)(1) with respect to any such property, the lessee would be treated for all purposes of subpart E, part IV, subchapter A, Chapter 1, subtitle A, as having acquired such property. Section 50(a)(5)(A) replaced the term “section 38 property” with the term “investment credit property.”

Under former section 48(q), if a credit was determined under section 46 with respect to section 38 property, the basis of the property was reduced by 50 percent of the amount of the credit determined (or 100 percent of the amount of the credit determined in the case of a credit for qualified rehabilitation expenditures). Former section 48(d)(5) provided specific rules coordinating the effect of the former section 48(d) election with the basis adjustment rules under former section 48(q). Because the lessee would have no basis in the property that the lessee was only deemed to have acquired pursuant to the election, former section 48(d)(5)(A) provided that the basis adjustment rules under former section 48(q) did not apply. Section 50(c) replaced former section 48(q) and provides the current basis adjustment rules.

In lieu of a basis adjustment, former section 48(d)(5)(B) provided that the lessee was required to include ratably in gross income, over the shortest recovery period which could be applicable under section 168 with respect to the property, an amount equal to 50 percent of the amount of the credit allowable under section 38 to the lessee with respect to such property. In the case of the rehabilitation credit, former section 48(q)(3) provided that former section 48(d)(5)(B) was to be applied without the phrase “50 percent of.”

Former section 48(d)(5)(C) provided that, in the case of a disposition of property to which former section 47 (the former recapture rules) applied, the income inclusion rules of former section 48(d)(5) applied in accordance with regulations prescribed by the Secretary. Section 50(a) replaced former section 47 and provides the current recapture rules.

These temporary regulations provide the applicable rules that the Secretary has determined are similar to the rules of former section 48(d)(5). Thus, these temporary regulations are limited in scope to the income inclusion rules that apply when a lessor elects under § 1.48-4 of the Treasury Regulations to treat the lessee as having acquired investment credit property.

Section 1.50-1T(b) provides the general rules for coordinating the basis adjustment rules under section 50(c) (the successor to former section 48(q)) with the rules under § 1.48-4 pursuant to which a lessor may elect to treat the lessee of investment credit property as having acquired such property for purposes of calculating the investment credit. Similar to the rule in former section 48(d)(5)(A), which provided that the basis adjustment rules under former section 48(q) did not apply when a § 1.48-4 election was made, § 1.50-1T(b)(1) provides that section 50(c) does not apply when the election is made. Thus, the lessor is not required to reduce its basis in the property by the amount of the investment credit determined under section 46 (or 50 percent of the amount of the credit in the case of the energy credit under section 48).

Under § 1.50-1T(b)(2), in lieu of a basis adjustment, and similar to the rule contained in former section 48(d)(5)(B), a lessee must include in gross income an amount equal to the amount of the credit (or, in the case of the section 48 energy credit, 50 percent of the amount of the credit) determined under section 46. Generally, the lessee includes such amount ratably over the shortest recovery period applicable under the accelerated cost recovery system provided in section 168, beginning on the date the investment credit property is placed in service and continuing on each one year anniversary date thereafter until the end of the applicable recovery period. The amount required to be included by the lessee is not subject to any limitations under section 38(c) on the amount of the credit allowed based on the amount of the lessee's income tax.

Because section 50(c) replaces the old basis adjustment rules under former section 48(q), the amount the lessee is required to include in gross income under these temporary regulations in § 1.50-1T(b)(2) corresponds to the current basis adjustment amounts required under section 50(c), rather than the former basis adjustment amounts provided in former section 48(q).

Section 1.50-1T(b)(3) provides that, in the case of a partnership (other than an electing large partnership) or an S corporation for which an election is made under § 1.48-4 to treat such entity as having acquired the investment credit property, each partner or S corporation shareholder that is the “ultimate credit claimant” is treated as the lessee for purposes of the income inclusion rules under § 1.50-1T(b)(2). The term ultimate credit claimant is defined in § 1.50-1T(b)(3)(ii) as any partner or S corporation shareholder that files (or that would file) Form 3468, “Investment Credit” (or its successor form), with such partner's or S corporation shareholder's income tax return to claim the investment credit determined under section 46 that results in the corresponding income inclusion under § 1.50-1T(b)(2). Each partner or S corporation shareholder that is the ultimate credit claimant must include in gross income the amount required under § 1.50-1T(b)(2) in proportion to the amount of the credit determined under section 46 (or 50 percent of the amount of the credit in the case of the energy credit under section 48) with respect to the partner or S corporation shareholder.

The Treasury Department and the IRS believe that, because the investment credit and any limitations on the credit itself are determined at the partner or S corporation shareholder level, it is appropriate that the income inclusion occurs at the partner or shareholder level. In the case of a partnership that actually owns the investment credit property, a partner in a partnership is treated as the taxpayer with respect to the partner's share of the basis of partnership investment credit property under § 1.46-3(f)(1) and separately computes the investment credit based on its share of the basis of the investment credit property. Similarly, in the case of a lessee partnership where the lessor makes an election under § 1.48-4 to treat the partnership as having acquired investment credit property, each partner in the lessee partnership is the taxpayer with respect to whom the investment credit is determined under section 46. Each partner in the lessee partnership will separately compute the investment credit based on each partner's share of the investment credit property. The credit is therefore computed at the partner level based on partner level limitations. Section 1.704-1(b)(4)(ii), which requires allocations with respect to the investment tax credit provided by section 38 to be made in accordance with the partners' interests in the partnership, provides that allocations of cost or qualified investment (as opposed to the investment credit itself, which is not determined at the partnership level) made in accordance with § 1.46-3(f) shall be deemed to be made in accordance with the partners' interests in the partnership.

Under similar principles, in the case of a lessor that makes an election under § 1.48-4 to treat an S corporation as having acquired investment credit property, each shareholder in the lessee S corporation is the taxpayer with respect to whom the investment credit is determined under section 46. The credit is therefore computed at the S corporation shareholder level based on shareholder level limitations.

The Treasury Department and the IRS believe that the burden of income inclusion should match the benefits of the allowable credit. Therefore, because the investment credit and any limitations on the credit are determined at the partner or shareholder level, these temporary regulations in § 1.50-1T(b)(3) provide that the gross income required to be ratably included under § 1.50-1T(b)(2) is not an item of partnership income for purposes of subchapter K or an item of S corporation income for purposes of subchapter S. Accordingly, the rules that would apply were such gross income an item of income under section 702 or section 1366, such as section 705(a) (providing for an increase in the partner's outside basis for items of income) or section 1367(a) (providing for an increase in the S corporation shareholder's stock basis for items of income) do not apply.

The Treasury Department and the IRS are aware that some partnerships and S corporations have taken the position that this income is includible by the partnership or S corporation and that their partners or S corporation shareholders are entitled to increase their bases in their partnership interests or S corporation stock as a result of the income inclusion. The Treasury Department and the IRS believe that such basis increases are inconsistent with Congressional intent as they thwart the purpose of the income inclusion requirement in former section 48(d)(5)(B) and confer an unintended benefit upon partners and S corporation shareholders of lessee partnerships and S corporations that is not available to any other credit claimant.

The investment credit rules operate to allow a taxpayer to claim the immediate benefit of the full amount of the allowable credit in exchange for the recoupment of that amount (or 50 percent of that amount in the case of the section 48 energy credit) over time. Where the taxpayer claiming the credit owns the investment credit property, the basis reduction provided in section 50(c) results in reduced cost recovery deductions over the life of the property or the realization of gain (or a reduction in the amount of loss realized) upon the disposition of the property. In the case of a lessor that elects under § 1.48-4 to treat the lessee of investment credit property as having acquired such property, § 1.50-1T(b)(2) instead requires the lessee to ratably include this amount in gross income over the life of the property.

If that lessee is a partnership or an S corporation, however, some partnerships and S corporations contend that this income inclusion is treated as an item of partnership or S corporation income that entitles their partners or S corporation shareholders to a corresponding basis increase under section 705(a) or section 1367(a). As a result of the basis increase, these partners or S corporation shareholders claim a loss (or reduce the amount of gain realized) upon the disposition of their partnership interests or S corporation shares.

As noted, the Treasury Department and the IRS have concluded that the income inclusion is not properly treated as an item of partnership income or of S corporation income. Nonetheless, had the Treasury Department and the IRS determined otherwise, the Treasury Department and the IRS believe that in addition to being inconsistent with the purpose of section 48(d)(5)(B), allowing a basis increase for the income inclusion would also be inconsistent with the purpose of sections 705 and 1367. The income to be included is a notional amount, which has no current or future economic effect on the basis of assets held by a partnership or S corporation. In general, Congress intended for sections 705 and 1367 to preserve inside and outside basis parity for partnerships and S corporations so as to prevent any unintended tax benefit or detriment to the partners or shareholders. See H.R. Rep. No. 1337, 83d Cong., 2d Sess. A225 (1954); S. Rep. No. 1622, 83d Cong., 2d Sess. 384 (1954); H.R. Rep. No. 97-826, 97th Cong. 2d Sess. p. 17 (1982); S. Rep. No. 97-640, 97th Cong. 2d Sess. 16, 18 (1982); and Rev. Rul. 96-11 (1996-1 CB 140). Ultimately, the Treasury Department and the IRS have concluded that, under any approach, allowing partners and S corporation shareholders a basis increase to offset the income inclusion required by § 1.50-1T(b)(2) upon disposition of their partnership interests or S corporation shares is inappropriate, and that Congress did not intend to allow partners and S corporation shareholders the full benefit of the credit without any of the corresponding burden.

Section 1.50-1T(c) provides that if the investment credit recapture rules under section 50(a) are triggered (including if there is a lease termination), causing a recapture of the credit or a portion of the credit, an adjustment will be made to the lessee's (or, as applicable, the ultimate credit claimant's) gross income for any discrepancies between the total amount included in gross income under these temporary regulations in § 1.50-1T(b)(2) and the total credit allowable after recapture. The adjustment amount is taken into account in the taxable year in which the property is disposed of or otherwise ceases to be investment credit property.

If the amount of the unrecaptured credit (that is, the allowable credit after taking into account the recapture amount), or 50 percent of the unrecaptured credit in the case of the energy credit, exceeds the amount previously included in gross income under § 1.50-1T(b)(2), the lessee's (or the ultimate credit claimant's) gross income is increased. The lessee (or the ultimate credit claimant) is required to include in gross income an amount equal to the excess of the amount of the credit that is not recaptured (or 50 percent of the amount of the credit that is not recaptured in the case of the energy credit) over the amount of the total increases in gross income previously made under § 1.50-1T(b)(2). This amount is in addition to the amounts previously included in gross income under § 1.50-1T(b)(2).

If the income inclusion prior to recapture under § 1.50-1T(b)(2) exceeds the unrecaptured credit (that is, the allowable credit after taking into account the recapture amount), or 50 percent of the unrecaptured credit in the case of the energy credit, the lessee's (or the ultimate credit claimant's) gross income is reduced. The lessee's or ultimate credit claimant's gross income is reduced by an amount equal to the excess of the total increases in gross income previously made under § 1.50-1T(b)(2) over the amount of the credit that is not recaptured (50 percent of the amount of the credit that is not recaptured in the case of the energy credit).

Section 1.50-1T(d)(1) provides that a lessee or an ultimate credit claimant may make an irrevocable election to include in gross income any remaining income required to be taken into account under § 1.50-1T(b)(2) in the taxable year in which the lease terminates or is otherwise disposed of. Similarly, § 1.50-1T(d)(1) provides that if an ultimate credit claimant disposes of its entire interest, either direct or indirect, in a partnership (other than an electing large partnership) or an S corporation, the ultimate credit claimant may make an irrevocable election to include in gross income any remaining income required to be taken into account under § 1.50-1T(b)(2) in the taxable year in which the ultimate credit claimant no longer owns a direct or indirect interest in the lessee of the investment credit property. The availability of this election allows a lessee or an ultimate credit claimant to account for any remaining required gross income inclusion in the taxable year in which it is exiting its investment.

This election is available only outside of the section 50(a) recapture period, and only if the lessee or the ultimate credit claimant was not already required to accelerate the gross income required to be included under § 1.50-1T(b)(2) because of a recapture event during the recapture period. Additionally, a former partner or S corporation shareholder that owns no direct or indirect interest in the lessee partnership or S corporation may not elect to accelerate the gross income required to be included under § 1.50-1T(b)(2) at the time of a termination or disposition of the lease by the lessee partnership or S corporation. The appropriate time for a former partner or S corporation shareholder that is an ultimate credit claimant to elect income acceleration is the taxable year that it disposes of its entire interest in a lessee partnership or S corporation.

Section 1.50-1T(d)(2) provides that the election to accelerate the income inclusion must be made by the due date (including any extension of time) of the lessee's return, or, in the case of a partnership or S corporation, by the due date (including any extension of time) of the ultimate credit claimant's return for the taxable year in which the relevant event occurs (for example, the lease termination, lease disposition, or disposition of the entire interest in the lessee partnership or S corporation). The election is made by including the remaining gross income required by these temporary regulations in the taxable year of the relevant event (for example, the lease termination, lease disposition, or disposition of the entire interest in the lessee partnership or S corporation).

These temporary regulations apply with respect to investment credit property placed in service on or after the date that is 60 days after the date of filing of these regulations in the Federal Register. The temporary regulations should not be construed to create any inference concerning the proper interpretation of section 50(d)(5) prior to the effective date of the regulations.

Rev. Proc. 2014-12 (2014-3 IRB 415) establishes the requirements under which the IRS will not challenge partnership allocations of section 47 rehabilitation credits by a partnership to its partners. Section 3 states that Rev. Proc. 2014-12 does not address how a partnership is required to allocate the income inclusion required by section 50(d)(5). Furthermore, section 4.07 provides that, solely for purposes of determining whether a partnership meets the requirements of that section, the partnership's allocation to its partners of the income inclusion required by section 50(d)(5) shall not be taken into account.

Because § 1.704-1(b)(4)(ii) provides that allocations of cost or qualified investment, and not the investment credit itself (which is not determined at the partnership level), made in accordance with § 1.46-3(f) shall be deemed to be made in accordance with the partners' interests in a partnership, this Treasury decision modifies Rev. Proc. 2014-12 by changing all references to allocations of section 47 rehabilitation credits to refer instead to allocations of qualified rehabilitation expenditures under section 47(c)(2). Additionally, because § 1.50-1T(b)(3) provides that the gross income required to be included under section 50(d)(5) is not an item of partnership income to which the rules of subchapter K apply, this Treasury decision modifies Rev. Proc. 2014-12 by deleting the sentences in section 3 and section 4.07 that refer to allocation by a partnership of the income inclusion required under section 50(d)(5).

Rev. Proc. 2014-12 (2014-3 IRB 415) is modified by: (1) Changing all references to allocations of section 47 rehabilitation credits to refer instead to allocations of qualified rehabilitation expenditures under section 47(c)(2); and (2) deleting the sentences in section 3 and section 4.07 that refer to allocation by a partnership of the income inclusion required under section 50(d)(5).

Rev. Proc. 2014-12 (2014-3 IRB 415) is published in the Internal Revenue Bulletin (or Cumulative Bulletin) and is available from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402, or by visiting 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. For applicability of the Regulatory Flexibility Act, please refer to the Special Analyses section of the preamble to the cross-referenced notice of proposed rulemaking published in the Proposed Rules section in this issue of the Federal Register. Pursuant to section 7805(f) of the Code, these regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.

The principal author of these temporary regulations is Jennifer A. Records, Office of the Associate Chief Counsel (Passthroughs and Special Industries), IRS. However, other personnel from the Treasury Department and the IRS participated in their development.

Accordingly, 26 CFR part 1 is amended as follows:

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

This amendment provides notice that the DAJAG (Admiralty and Maritime Law), under authority delegated by the Secretary of the Navy, has certified that USS RAFAEL PERALTA (DDG 115) is a vessel of the Navy which, due to its special construction and purpose, cannot fully comply with the following specific provisions of 72 COLREGS without interfering with its special function as a naval ship: Annex I, paragraph 3(a), pertaining to the location of the forward masthead light in the forward quarter of the ship, and the horizontal distance between the forward and after masthead lights; Annex I, paragraph 3(c), pertaining to placement of task lights not less than two meters from the fore and aft centerline of the ship in the athwartship direction; and Annex I, paragraph 2(f)(ii), pertaining to the vertical placement of task lights. The DAJAG (Admiralty and Maritime Law) has also certified that the lights involved are located in closest possible compliance with the applicable 72 COLREGS requirements.

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

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

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

This amendment provides notice that the DAJAG (Admiralty and Maritime Law), under authority delegated by the Secretary of the Navy, has certified that USS LITTLE ROCK (LCS 9) is a vessel of the Navy which, due to its special construction and purpose, cannot fully comply with the following specific provisions of 72 COLREGS without interfering with its special function as a naval ship: Annex I paragraph 2(a)(i), pertaining to the height of the forward masthead light above the hull; Annex I, paragraph 3(a), pertaining to the location of the forward masthead light in the forward quarter of the ship, and the horizontal distance between the forward and after masthead light. The DAJAG (Admiralty and Maritime Law) has also certified that the lights involved are located in closest possible compliance with the applicable 72 COLREGS requirements.

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

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

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA.

Organization of this document. The following outline is provided to aid in locating information in this preamble.

On September 22, 2008, the Rhode Island Department of Environmental Management (RI DEM) submitted a SIP revision to EPA. This SIP revision includes fifteen revised Rhode Island Air Pollution Control Regulations, with the revisions mainly being administrative in nature, but several rules also included technical corrections and four rules included additional changes. In addition, in a letter dated May 24, 2016, Rhode Island requested that EPA remove Rhode Island's Air Pollution Control Regulation No. 17 “Odors” from the existing SIP, a revision to which was initially included in Rhode Island's September 22, 2008 SIP submittal. Also, on March 25, 2015, Rhode Island submitted a separate SIP revision with revised versions of three regulations that were part of the September 22, 2008 SIP submittal. These three revisions consisted of minor technical corrections. In a letter dated May 25, 2016, Rhode Island submitted another letter, withdrawing from its SIP revision several provisions of the fifteen regulations included in the original September 22, 2008 SIP submittal.1

Rhode Island's new “Air Pollution Control General Definitions Regulation” was also included in the September 22, 2008 SIP revision. However, an updated version of that regulation (effective in the state of Rhode Island on September 29, 2010) was subsequently submitted by RI DEM on March 25, 2011, and was approved by EPA on March 1, 2012. See 77 FR 14691.

In addition, by letters dated June 27, 2014, March 28, 2016, and May 24, 2016, Rhode Island withdrew seventeen of the regulations originally included in the September 22, 2008 SIP submittal. Consequently, we are taking action only on the following revised regulations from Rhode Island's September 22, 2008 submittal: Rhode Island's Air Pollution Control (APC) Regulation No. 1 “Visible Emissions,” No. 3 “Particulate Emissions from Industrial Processes,” No. 4 “Open Fires,” No. 6 “Continuous Emissions Monitors,” No. 7 “Emissions of Air Contaminants Detrimental to Person or Property,” No. 12 “Incinerators,” No. 14 “Record Keeping and Reporting,” No. 15 “Control of Organic Solvent Emissions,” No. 19 “Control of Volatile Organic Compounds from Surface Coating Operations,” No. 21 “Control of Volatile Organic Compounds from Printing Operations,” No. 26 “Control of Organic Solvent Emissions from Manufacturers of Synthesized Pharmaceutical Products,” No. 27 “Control of Nitrogen Oxide Emissions,” No. 30 “Control of Volatile Organic Compounds from Automobile Refinishing Operations,” No. 32 “Control of Volatile Organic Compounds from Marine Vessel Loading Operations,” and No. 35 “Control of Volatile Organic Compounds and Volatile Hazardous Air Pollutants from Wood Product Manufacturing Operations.” All of these regulations were effective in the State of Rhode Island on July 19, 2007.

See section II of this document for details about the correction to Rhode Island's SIP to remove the odor regulation. See section III for details about the rule changes we are taking action on, which were contained in Rhode Island's September 22, 2008 SIP revision. See section IV for a summary of EPA's evaluation of the State's amended September 22, 2008 SIP submittal. Please note that if EPA receives adverse comment(s) on a particular amendment, paragraph, or section of Rhode Island's SIP revision and if that amendment, paragraph, or section is severable from the remainder of the regulation in question, EPA may adopt as final those provisions of the regulation that are not the subject of the adverse comment(s).

A revision to APC Regulation No. 17 “Odors” was initially included in Rhode Island's September 22, 2008 SIP submittal. However, in a letter dated May 24, 2016, Rhode Island withdrew that revision from its SIP submittal and also requested that EPA remove Rhode Island's already existing Air Pollution Control Regulation No. 17 “Odors” from the SIP. EPA has determined that Rhode Island's Air Pollution Control Regulation No. 17 “Odors,” which was originally approved into the SIP in 1981, does not have reasonable connection to the National Ambient Air Quality Standards (NAAQS) and related air quality goals of the Clean Air Act and thus is not properly part of the SIP. Consequently, pursuant to CAA section 110(k)(6), EPA is correcting the erroneous approval of Rhode Island's odor regulation into the SIP. Section 110(k)(6) of the CAA provides that “[w]henever the Administrator determines that the Administrator's action approving, disapproving, or promulgating any plan or plan revision (or part thereof), area designation, redesignation, classification or reclassification was in error, the Administrator may in the same manner as the approval, disapproval, or promulgation revise any such action as appropriate without requiring any further submission from the State. Such determination and the basis thereof shall be provided to the State and the public.” It should be noted that Section 110(k)(6) has been used by EPA to delete improperly approved odor provisions from the Wyoming SIP and the New York SIP. See 61 FR 47058 and 63 FR 65557.

For ten of the fifteen regulations included in Rhode Island's amended September 22, 2008 SIP submittal, Rhode Island removed common definitions from each of those individual regulations and recodified them in Rhode Island's Air Pollution Control General Definitions Regulation. As noted above, the “Air Pollution Control General Definitions Regulation” with those added definitions was approved into the SIP on March 1, 2012. In addition, for all of the fifteen regulations included in Rhode Island's amended September 22, 2008 SIP submittal, Rhode Island added General Provisions to each of the regulations. These General Provisions state the purpose of the rule, cite the authority pursuant to which the regulations were promulgated, and provide the effective date of the regulation.

On March 25, 2015, Rhode Island amended the September 22, 2008 SIP submittal by submitting revised versions of Air Pollution Control Regulations No. 15, No. 26, and No. 32, including minor technical corrections. Rhode Island's APC Regulation No. 15 was revised to correct the numbering of subsections 15.4.10(g) and (h) and was revised to correct the references to these sections in subsections 15.2.4(b) and 15.2.5(b). Rhode Island's APC Regulation No. 26 was revised in subsection 26.6.2 to correct a cross reference to another subsection. Rhode Island's APC Regulation No. 32 was revised to correct a typographical error in subsection 32.1.1 and to correct the symbol for degrees in subsection 32.4.3(f).

In addition to the changes noted above, in the amended September 22, 2008 SIP submittal, the following eight regulations added a Table of Contents in each regulation: Rhode Island's APC Regulation No. 15, No. 19, No. 21, No. 26, No. 27, No. 30, No. 32, and No. 35. Furthermore, APC Regulation No. 4, No. 7, No. 12, and No. 14 included additional changes. The following discussion provides a summary of the changes to these four regulations.

Rhode Island's APC Regulation No. 4 “Open Fires” was approved into the SIP in 1981. See 46 FR 25446. The currently approved standard prohibits burning of any material in an open fire at a solid waste management facility or in connection with any salvage, industrial, commercial or institutional operation. Rhode Island added a definition for hazardous waste disposal facility to mean real and personal property acquired, constructed or operated for the purpose of the disposal of hazardous waste, and added an explicit prohibition for open burning at hazardous wastes disposal facilities. In addition, Rhode Island added a provision allowing the RI DEM Air Director to approve open burning of solid or liquid fuels or structures for the purpose of instruction and training of municipal, volunteer and industrial firefighters in the method of fighting fires when conducted under the direct control and supervision of qualified instructors. The rule also added a provision allowing the Director to approve the combustion of material if no alternative means of disposal is available, and so long as the burning is conducted during periods of good ventilation, without causing a nuisance, and using smoke minimizing starters if smoke starters are used. Alternative disposal methods may include chipping, cutting for forest products, landfilling, piling for protective cover for wildlife and others. EPA concluded that sufficient, concrete bounds and conditions were placed on the Director's ability to approve alternative means of combusting material, such that the Director's discretion in this particular instance is approvable under the CAA.

Rhode Island's Air Pollution Control Regulation No. 7 “Emissions of Air Contaminants Detrimental to Person or Property” was approved into the SIP in 1981. See 46 FR 25446. The standard prohibits emissions of any contaminant that may be injurious to human, plant or animal life, or cause damage to property or which unreasonably interferes with the enjoyment of life and property. Rhode Island's APC Regulation No. 7 was revised to include criteria for determining compliance with the standard for new sources or modifications. In the issuance of any approval under Rhode Island's APC Regulation No. 9 “Air Pollution Control Permits” the criteria for determining compliance with regard to the APC Regulation No. 7 standards will be based on compliance with the primary and secondary NAAQS.

Rhode Island's Air Pollution Control Regulation No. 12 “Incinerators” was approved into the SIP in 1982. See 47 FR 17816. Rhode Island's APC Regulation No. 12 was amended to exclude new hospital, medical, and infectious waste incinerators subject to sections 39.3-39.10 of Rhode Island's APC Regulation No. 39. Rhode Island's APC Regulation No. 39 was approved by EPA as part of a State Plan required by sections 111(d) and 129 of the Clean Air Act. See 66 FR 21092.

Rhode Island's APC Regulation No. 14, Recordkeeping and Reporting, was approved into the SIP in 1999. See 64 FR 67495. Rhode Island's APC Regulation No. 14 was revised to require emission statements to be submitted by April 15 of each year instead of “within 45 days of the end of the calendar year.”

We have reviewed the regulations included in Rhode Island's amended September 22, 2008 SIP submittal and have found that all of the regulations currently pending before EPA from that submittal had previously been approved into the Rhode Island SIP (without the revisions included in the amended September 22, 2008 submission).2 The changes to Rhode Island's APC Regulation No. 4 “Open Fires” to allow open burning for the instruction and training of firefighters or where there are no alternatives to open burning available, are practical and properly limited exceptions to the general prohibition against open fires. Rhode Island's APC Regulation No. 7 “Emissions of Air Contaminants Detrimental to Person or Property” was strengthened by adding criteria for determining compliance with the standard for new and modified sources. Rhode Island's APC Regulation No. 12 “Incinerators” now excludes incinerators more appropriately regulated by Rhode Island's APC Regulation No. 39 as part of an EPA approved State Plan under sections 111(d) and 129 of the Clean Air Act. Lastly, the change to the date for submissions in Rhode Island's APC Regulation No. 14 “Record Keeping and Reporting” is minor in nature and has no bearing on air quality. As described above, the revisions to the majority of those regulations submitted as part of the amended September 22, 2008 submittal are primarily administrative in nature and also include certain minor technical corrections, as well as a few substantive changes we find acceptable to several of the rules. Therefore, EPA is approving the revised regulations into the Rhode Island SIP.

EPA is removing Rhode Island's APC Regulation No. 17 “Odors” from the approved Rhode Island SIP pursuant to Section 110(k)(6) of the Act. In addition, EPA is approving, and incorporating into the Rhode Island SIP, the following revised Rhode Island Air Pollution Control Regulations, effective in the state of Rhode Island on July 19, 2007:

The EPA is publishing this action without prior proposal because the Agency views this as a noncontroversial amendment and anticipates no adverse comments. However, in the proposed rules section of this Federal Register publication, EPA is publishing a separate document that will serve as the proposal to approve the SIP revision should relevant adverse comments be filed. This rule will be effective September 20, 2016 without further notice unless the Agency receives relevant adverse comments by August 22, 2016.

If the EPA receives such comments, then EPA will publish a notice withdrawing the final rule and informing the public that the rule will not take effect. All public comments received will then be addressed in a subsequent final rule based on the proposed rule. The EPA will not institute a second comment period on the proposed rule. All parties interested in commenting on the proposed rule should do so at this time. If no such comments are received, the public is advised that this rule will be effective on September 20, 2016 and no further action will be taken on the proposed rule. 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.

In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of Rhode Island's Air Pollution Control Regulations No. 1 “Visible Emissions” (except section 1.5.3 of the General Provisions which was formally withdrawn from consideration as part of the SIP revision), No. 3 “Particulate Emissions from Industrial Processes” (except section 3.4.3 of the General Provisions and the “director discretion” provisions in section 3.3(a), which were formally withdrawn from consideration as part of the SIP revision), No. 4 “Open Fires” (except section 4.5.3 of the General Provisions which was formally withdrawn from consideration as part of the SIP revision), No. 6 “Continuous Emissions Monitors” (except section 6.4.3 of the General Provisions which was formally withdrawn from consideration as part of the SIP revision), No. 7 “Emissions of Air Contaminants Detrimental to Person or Property” (except section 7.5.3 of the General Provisions and the air toxics provisions in sections 7.4.1(b), (c), and (d), which were formally withdrawn from consideration as part of the SIP revision), No. 12 “Incinerators” (except section 12.8.3 of the General Provisions and the “director discretion” provisions in sections 12.5(a) and (c), which were formally withdrawn from consideration as part of the SIP revision), No. 14 “Record Keeping and Reporting” (except section 14.4.3 of the General Provisions which was formally withdrawn from consideration as part of the SIP revision), No. 15 “Control of Organic Solvent Emissions” (except section 15.5.3 of the General Provisions which was formally withdrawn from consideration as part of the SIP revision, and section 15.2.2 which was not submitted as part of the SIP revision), No. 19 “Control of Volatile Organic Compounds from Surface Coating Operations” (except section 19.9.3 of the General Provisions which was formally withdrawn from consideration as part of the SIP revision, and section 19.2.2 which was not submitted as part of the SIP revision), No. 21 “Control of Volatile Organic Compounds from Printing Operations” (except section 21.8.3 of the General Provisions which was formally withdrawn from consideration as part of the SIP revision, and section 21.2.3 which was not submitted as part of the SIP revision), No. 26 “Control of Organic Solvent Emissions from Manufacturers of Synthesized Pharmaceutical Products” (except section 26.8.3 of the General Provisions which was formally withdrawn from consideration as part of the SIP revision, and section 26.2.3 which was not submitted as part of the SIP revision), No. 27 “Control of Nitrogen Oxide Emissions” (except section 27.7.3 of the General Provisions which was formally withdrawn from consideration as part of the SIP revision), No. 30 “Control of Volatile Organic Compounds from Automobile Refinishing Operations” (except section 30.9.3 of the General Provisions which was formally withdrawn from consideration as part of the SIP revision, and section 30.2.2 which was not submitted as part of the SIP revision), No. 32 “Control of Volatile Organic Compounds from Marine Vessel Loading Operations” (except section 32.7.3 of the General Provisions which was formally withdrawn from consideration as part of the SIP revision, and section 32.2.2 which was not submitted as part of the SIP revision), and No. 35 “Control of Volatile Organic Compounds and Volatile Hazardous Air Pollutants from Wood Product Manufacturing Operations” (except section 35.9.3 of the General Provisions which was formally withdrawn from consideration as part of the SIP revision, and section 35.2.3 which was not submitted as part of the SIP revision), described in the amendments to 40 CFR part 52 set forth below. The EPA has made, and will continue to make, these documents generally available electronically through http://www.regulations.gov.

Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. 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 Clean Air Act; 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 Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 20, 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 today's 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).)

Part 52 of chapter I, title 40 of the Code of Federal Regulations is amended as follows:

This rule makes nondiscretionary, ministerial changes to FMCSA regulations that are required by the FAST Act (Pub. L. 114-94, 129 Stat. 1312, December 4, 2015). The FAST Act made several notable changes to the authorities implemented by requirements in the Code of Federal Regulations (CFR). For example, it exempts welding trucks used in the construction and maintenance of pipelines from FMCSA's regulations. It excepts drivers of ready-mixed concrete trucks and hi-rail vehicles, as well as drivers of commercial motor vehicles (CMVs) transporting livestock and bees, from some of the hours of service (HOS) requirements in 49 CFR part 395. It also extends the length of the time (from 2 years to 5 years) that an exemption or renewal of an exemption may provide relief from the regulations.

A full explanation of all changes made in this rule is included below in section III. Fast Act Provisions Implemented by this Rulemaking. A copy of the FAST Act has been placed in the docket for this rulemaking for reference.

The economic impact of this rule's provisions, considered both individually and in the aggregate, does not rise to the level of economic significance, and a cost-benefit analysis is therefore not required.

This rule is based on the FAST Act. Certain provisions of the FAST Act made mandatory, non-discretionary changes to FMCSA programs. The majority of these statutory changes went into effect on October 1, 2015, while others will go into effect on October 1, 2016.1 This rule makes only those changes that went into effect on October 1, 2015, that can be implemented without prior notice and opportunity for comment as addressed in section II(B) below. Publication of today's rule triggers the 3-year period during which the States are required to adopt compatible provisions under FMCSA's Motor Carrier Safety Assistance Program (MCSAP). 49 CFR 350.331(d), 350.335(b), and part 355, appendix A.

At a later date, before October 1, 2016, the Agency will issue another final rule to implement additional ministerial requirements that will become effective on October 1, 2016.2 The Agency also expects that there will be rulemakings required to address additional provisions of the FAST Act, where Congress either provided the Agency with some discretion regarding implementation, or specifically required that notice and comment rulemaking procedures be followed.

It is necessary to make conforming changes to ensure that FMCSA's regulations are current and consistent with the applicable statutes. The provisions implemented in this final rule are from the following sections of the FAST Act, which impacted Title 49, United States Code (U.S.C.):

1. Section 5206 Applications.

2. Section 5507 Electronic Logging Device Requirements.

3. Section 5518 Covered Farm Vehicles.

4. Section 5519 Operators of Hi-Rail Vehicles.

5. Section 5521 Ready Mix Concrete Delivery Vehicles.

6. Section 5522 Transportation of Construction Materials and Equipment.

7. Section 5524 Exemptions from Requirements for Certain Welding Trucks Used in Pipeline Industry.

8. Section 7208 Hazardous Materials Endorsement Exemption.

FMCSA is authorized to implement these statutory provisions by delegation from the Secretary of Transportation in 49 CFR 1.87.

Generally, agencies may promulgate final rules only after issuing a notice of proposed rulemaking and providing an opportunity for public comment under procedures required by the APA [5 U.S.C. 553(b) and (c)]. Section 553(b)(3)(B) allows an exception from these requirements when notice and public comment procedures are “impracticable, unnecessary, or contrary to the public interest.” FMCSA finds that prior notice and an opportunity for comment are unnecessary because the changes adopted in this final rule are statutorily mandated, and the Agency is performing a nondiscretionary, ministerial act. For these same reasons, the rule will be effective upon publication, as these statutory changes went into effect on October 1, 2015 [5 U.S.C. 553(d)].

FMCSA is aware of the regulatory reform requirements imposed by section 5202 of the FAST Act concerning public participation in rulemaking (49 U.S.C. 31136(g)). These requirements pertain to certain major rules, but because this final rule is not major, they are not applicable. In any event, the Agency finds that, for the reasons stated below, publication of an advance notice of proposed rulemaking under 49 U.S.C. 31136(g)(1)(A), or a negotiated rulemaking under 49 U.S.C. 31136(g)(1)(B), is unnecessary and contrary to the public interest in accordance with the waiver provision in 49 U.S.C. 31136(g)(3).

This section describes those portions of the FAST Act that require FMCSA to make conforming changes to the regulations, which are also listed here. These regulatory changes are non-discretionary; in other words, the FAST Act provided all of the necessary content of the regulations. As noted in the executive summary, there are additional regulatory changes that will be required by the FAST Act, but those either have a later effective date, will require FMCSA to exercise some degree of discretion, or are required to be subject to notice and comment.

FMCSA has included here a table of affected CFR sections, which will cross-reference corresponding requirements of the FAST Act. This table will make it easier for the reader to move back and forth between the revised regulations and the corresponding section(s) of the FAST Act.

Previously, 49 U.S.C. 31315(b) allowed an exemption from a regulation for no longer than 2 years from its approval date, and allowed an exemption to be renewed upon application to the Secretary for subsequent periods of no more than 2 years. Section 5206(a)(3) of the FAST Act amends section 31315(b) to allow an exemption to be granted for no longer than 5 years and to be renewed, upon request, for subsequent periods no longer than 5 years, if the Secretary finds that such an exemption would likely achieve an equivalent, or greater, level of safety. This rulemaking changes § 381.300(b) to allow exemptions for up to 5 years that may be renewed for subsequent periods of up to 5 years.

Section 5206(a)(3) of the FAST Act also added subsection (b)(3) to 49 U.S.C. 31315 to permit an applicant whose application for exemption has been denied to resubmit the application addressing the reason for denial. FMCSA adds a new § 381.317 describing this process.

Section 5206(b)(1) of the FAST Act made permanent three existing exemptions from the 30-minute rest break requirements in § 395.3(a)(3)(ii). The first was granted to the National Ready Mixed Concrete Association (80 FR 17819, April 2, 2015). In this rulemaking, FMCSA adds new § 395.1(t) allowing a driver of a ready-mixed concrete delivery vehicle to use time spent waiting with the vehicle at a job site or terminal to meet the requirement for a 30-minute rest break. The driver may not perform any other work during this time waiting. FMCSA also adds a definition of “ready mix concrete delivery vehicle” to § 395.2, to reflect the definition in related section 5521 of the FAST Act, Ready Mix Concrete Delivery Vehicles, which is discussed below.

The second exemption, also from the requirements in § 395.3(a)(3)(ii), was granted to the California Farm Bureau Federation (80 FR 35425, June 19, 2015). In this rule, FMCSA adds new § 395.1(u) that provides that the 30-minute rest break requirements do not apply to a driver transporting bees in interstate commerce if there are bees on the vehicle.

The third exemption from the 30-minute rest break was granted to the Agricultural and Food Transporters Conference (AFTC) of the American Trucking Associations (80 FR 33584, June 12, 2015). In this rulemaking, FMCSA implements this requirement of the Act by adding new § 395.1(v) that provides that the 30-minute rest break requirements do not apply to a driver transporting livestock while the livestock are on the vehicle. FMCSA also adds a definition of livestock to § 395.2, to reflect the classification in the regulatory exemption developed in response to the AFTC petition.

Section 5507 of the FAST Act amends 49 U.S.C. 31137(b) to provide an exception for motor carriers transporting a motor home or recreation vehicle trailer in a driveaway-towaway operation, as defined in 49 CFR 390.5. Under this provision, a motor carrier could comply with the HOS requirements by using either a paper record of duty status form or an electronic logging device. FMCSA changes § 395.8(a)(1)(iii)(A) by adding this new exception.

Previously, section 32934(b)(1) of the Moving Ahead for Progress for the 21st Century Act (MAP-21) (Pub. L. 112-141, 126 Stat. 405, 830, July 6, 2012; 49 U.S.C. 31136 note) provided that Federal transportation funding to a State could not be terminated, limited, or interfered with because the State exempts a covered farm vehicle, including its operator, from “any State requirement relating to the operation of that vehicle.” The term “covered farm vehicle” is defined in section 32924(c) of MAP-21. Section 5518 of the FAST Act amends section 32934(b)(1) of MAP-21 to specify that the requirements are those in section 32934(a) or any other minimum standard provided by a State relating to the operation of that vehicle. The specific requirements outlined in section 32934(a) of MAP-21 exempt a covered farm vehicle and its driver from any requirement relating to (1) operating with a commercial driver's license (CDL) or drug and alcohol testing established under 49 U.S.C. chapter 313; (2) medical certificates established under 49 U.S.C. chapter 311, subchapter III, or 49 U.S.C. chapter 313; and (3) HOS and vehicle inspection, repair, and maintenance established under 49 U.S.C. chapter 311, subchapter III, or 49 U.S.C. chapter 315. The Agency revises § 390.39(b)(1) to reflect these changes, which should clarify which exemptions found in State laws for covered farm vehicles may not be taken into consideration during Federal grants management.

For the CMV driver of a hi-rail vehicle who is subject to the HOS regulations in 49 CFR part 395, section 5519 of the FAST Act provides that the maximum on-duty time under § 395.3 shall not include certain time in transportation to or from a duty assignment. Time in transportation, to or from a duty assignment, will not be included in the 14 hours on-duty time under § 395.3(a)(2) if (1) it does not exceed 2 hours per calendar day or a total of 30 hours per calendar month, and (2) the motor carrier fully and accurately accounts for this time in the records it maintains and makes such records available to FMCSA or the Federal Railroad Administration upon request. Section 5519(b) defines “hi-rail vehicle” as “an internal rail flaw detection vehicle equipped with flange hi-rails.”

FMCSA adds a new paragraph (w) to § 395.1 to reflect this exception. In addition, FMCSA adds a definition of hi-rail vehicle to § 395.2.

Section 5521 of the FAST Act amends 49 U.S.C. 31502 by adding a new subsection (f) that exempts drivers of ready-mixed concrete delivery vehicles from keeping records of duty status under certain circumstances. The driver of the ready-mixed concrete delivery vehicle must (1) operate within a 100-mile radius of the normal work reporting location; (2) return to the work reporting location and be released from work within 14 consecutive hours; (3) have at least 10 hours off duty following each 14 hours on duty; and (4) not exceed 11 hours of driving time following 10 consecutive hours off duty. The motor carrier that employs the driver must keep accurate time records. This change essentially allows the driver of a ready-mixed concrete truck to use the short-haul exception in § 395.1(e)(1), but with a 14-hour on-duty period. Section 5521 also adds a definition of “driver of a ready mixed concrete delivery vehicle.”

FMCSA revises § 395.1(e)(1) to reflect new 49 U.S.C. 31502(f)(1). The Agency also adds a new definition of “ready-mixed concrete delivery vehicle” to § 395.2. “Driver” is already defined in § 390.5.

Section 5522 of the FAST Act amends section 229(e)(4) of the Motor Carrier Safety Improvement Act of 1999, as transferred and amended (49 U.S.C. 31136 note), which is the definition of transportation of construction materials and equipment. That definition provided that, for a driver who transports construction materials and equipment within a 50 air mile radius of the normal work reporting location of the driver, any period of 7 or 8 consecutive days may end with the beginning of any off-duty period of 24 or more successive hours. The FAST Act increases this to a 75 air mile radius. The Act also allows a State to establish a different air mile radius limitation if such limitation is between 50 and 75 air miles and applies only to movements that take place entirely within the State. FMCSA changes the definition of transportation of construction materials and equipment in § 395.2 to conform to this change.

Section 5524 of the FAST Act defines a welding truck used in the pipeline industry as a pick-up style truck, owned by a welder, equipped with a welding rig that is used in the construction or maintenance of pipelines, and that has a gross vehicle weight and combination weight rating and weight of 15,000 pounds or less. Section 5524 exempts the operator of such a vehicle and the operator's employer from any requirement relating to: (1) Registration as a motor carrier, including obtaining and displaying a U.S. Department of Transportation (DOT) number (49 U.S.C. chapters 139 and 311); (2) driver qualifications (49 U.S.C. chapter 311); (3) driving a CMV (49 U.S.C. chapter 311); (4) parts and accessories and inspection, repair, and maintenance of CMVs (49 U.S.C. chapter 311); and HOS of drivers, including maximum driving and on duty time (49 U.S.C. chapter 315). To reflect this section of the FAST Act, FMCSA adds new § 390.38 that excepts welding trucks, equipped with a welding rig used in the construction and maintenance of pipelines, from the requirements in 49 CFR parts 365, 390, 391, 392, 393, 395, and 396. The new § 390.38 also defines “pipeline welding trucks” to conform to the FAST Act.

The Agency also adds specific exemptions in each of the parts listed in new § 390.38, to ensure that the exemption is clear. These new exemptions are found at: §§ 365.101(j) (exemption from requirement to apply for operating authority in part 365); 391.2 (e) (exemption from minimum qualifications for CMV drivers in part 391); 392.1 (b) (exemption from CMV operating rules in part 392); 393.1(e) (exemption from parts and accessories requirements in part 393); 395.1(x) (exemption from the HOS rules in part 395); and 396.1(d) (exemption from inspection, repair, and maintenance requirements in part 396).

Section 7208 of the FAST Act provides that the Secretary allow a State, at its discretion, to waive the requirement for a holder of a Class A CDL to obtain a hazardous materials endorsement to transport 1,000 gallons or less of diesel fuel. A State may waive the requirement if the license holder is (1) acting within the scope of the license holder's employment as an employee of a custom harvester operation, agrichemical business, farm retail outlet and supplier, or livestock feeder; and (2) is operating a service vehicle that is transporting diesel in a quantity of 3,785 liters (1,000 gallons) or less and that is clearly marked with a “flammable” or “combustible” placard, as appropriate. FMCSA adds a new paragraph (i) to § 383.3 to reflect this exemption. Note that if a State exercises this discretion, a driver may still be required to obtain a hazardous materials endorsement if they travel to a State that has not opted to waive the requirement.

This rule adopts as final certain regulations required by the FAST Act. These statutory changes went into effect retroactively on October 1, 2015. Because adoption of these rules is a nondiscretionary, ministerial action, FMCSA did not issue an NPRM or receive public comment.

In § 365.101, paragraph (j) is added to exempt pipeline welding trucks from the rules of part 365.

In § 381.300, paragraph (b) is revised, changing the timeframe from 2 years to 5 years.

Section 381.317 is added to allow an application for exemption to be resubmitted if it has been denied.

In § 383.3, a new paragraph (i) is added to provide that a State may waive the requirement that a driver obtain a hazardous materials endorsement to transport diesel fuel under certain circumstances.

FMCSA adds new § 390.38 to exempt pipeline welding trucks from certain requirements of the FMCSRs. Paragraph (a) describes those parts of the FMCSRs from which the pipeline welding truck is exempt. Paragraph (b) provides a definition of “pipeline welding truck.”

In § 390.39, paragraph (b)(1) is revised to reflect changes in the statutes concerning exemptions found in State laws for covered farm vehicles.

In § 391.2, paragraph (e) is added to exempt drivers of pipeline welding trucks from the rules of part 391.

In § 392.1, the existing text is designated as paragraph (a), and a paragraph (b) is added to exempt drivers of pipeline welding trucks from the rules of part 392.

In § 393.1, paragraph (e) is added to exempt pipeline welding trucks from the rules of part 393.

FMCSA makes a number of changes to § 395.1 to exempt certain operations from aspects of the hours of service rules. Paragraph (e)(1) is changed to provide that drivers of ready-mixed concrete delivery vehicles who are on duty for 14 consecutive hours may be exempt from the requirements of § 395.8.

Section 395.1(t) is added to allow the driver of a ready-mixed concrete delivery vehicle to use 30-minutes or more of time spent waiting with the vehicle to meet the requirement for the 30-minute rest break in § 395.3(a)(3)(ii). Paragraphs (u) and (v) are added to exempt drivers engaged in the interstate transportation of bees or livestock, respectively, from the requirement for a 30-minute rest break. FMCSA adds paragraph (w) to provide that on-duty time for the driver of a hi-rail vehicle does not include time in transportation to or from a duty assignment under certain circumstances. Paragraph (x) exempts drivers of pipeline welding trucks from the rules of part 395.

The definitions in § 395.2 are changed to conform to the changes in the statutes. FMCSA adds definitions of “hi-rail vehicle,” “livestock,” and “ready-mixed concrete delivery vehicle.” FMCSA changes the definition of “transportation of construction material and equipment” to increase the air mile radius to the normal work reporting location. The definition is also changed to allow the States to establish a different air mile radius limitation upon notice to the Administrator.

Section 395.8(a) is changed to allow a motor carrier to require the driver transporting a motor home or recreation vehicle trailer, in a driveaway-towaway operation, to record his or her records of duty status manually.

In § 396.1, paragraph (d) is added to exempt pipeline welding trucks from the rules of part 396.

FMCSA has determined this final rule is not a significant regulatory action within the meaning of Executive Order (E.O.) 12866, as supplemented by E.O. 13563 (76 FR 3821, January 21, 2011), and is also not significant within the meaning of DOT regulatory policies and procedures (44 FR 11034, February 26, 1979). As explained above, this final rule is strictly ministerial in that it incorporates nondiscretionary statutory requirements. These statutory changes went into effect retroactively on October 1, 2015. The regulatory changes included in this rule are necessary to make FMCSA's regulations consistent with the FAST Act and their economic impact will not exceed the $100 million annual threshold. Any costs associated with this action are attributable to the non-discretionary statutory provisions. This final rule is not expected to generate substantial congressional or public interest. Therefore, a full regulatory impact analysis has not been conducted nor has there been a review by the Office of Management and Budget (OMB).

Although a full regulatory evaluation is unnecessary because of the low economic impact of this rulemaking, FMCSA analyzed the cost impact of the FAST Act provisions implemented by this final rule. This rule's provisions generally provided exemptions to FMCSA regulations and should ease the economic burden on regulated entities. The impacts of these provisions should be small and affect a small number of individuals and businesses.

Pursuant to the Regulatory Flexibility Act (RFA) of 1980 (5 U.S.C. 601 et seq.), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857), FMCSA is not required to prepare a final regulatory flexibility analysis under 5 U.S.C. 604(a) for this final rule because the Agency has not issued a notice of proposed rulemaking prior to this action. FMCSA has determined that it has good cause to adopt the rule without notice and comment.

In accordance with section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996, FMCSA wants to assist small entities in understanding this rule so that they can better evaluate its effects on themselves and participate in the rulemaking initiative. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please consult the FMCSA point of contact, Kathryn Sinniger, listed in the FOR FURTHER INFORMATION CONTACT section of this rule.

Small businesses may send comments on the actions of Federal employees who enforce or otherwise determine compliance with Federal regulations to the SBA's 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 FMCSA, call 1-888-REG-FAIR (1-888-734-3247). DOT has a policy ensuring the rights of small entities to regulatory enforcement fairness and an explicit policy against retaliation for exercising these rights.

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 $155 million (which is the value equivalent of $100,000,000 in 1995, adjusted for inflation to 2014 levels) or more in any 1 year. Though this final rule will not result in such an expenditure, the Agency does discuss the effects of this rule elsewhere in this preamble.

This final rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520), nor does it revise any existing approved collections of information.

A rule has implications for Federalism under section 1(a) of Executive Order 13132 if it has “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.”

FMCSA has determined that this rule would not have substantial direct costs on or for States, nor would it limit the policymaking discretion of States. Nothing in this document preempts any State law or regulation. Therefore, this rule does not have sufficient federalism implications to warrant the preparation of a Federalism summary impact statement.

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

E.O. 13045, Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, Apr. 23, 1997), requires agencies issuing “economically significant” rules, if the regulation also concerns an environmental health or safety risk that an agency has reason to believe may disproportionately affect children, to include an evaluation of the regulation's environmental health and safety effects on children. The Agency determined this final rule is not economically significant. Therefore, no analysis of the impacts on children is required. In any event, this regulatory action does not pose an environmental or safety risk that could disproportionately affect children.

FMCSA reviewed this final rule in accordance with E.O. 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights, and has determined it will not effect a taking of private property or otherwise have takings implications.

Section 522 of title I of division H of the Consolidated Appropriations Act, 2005, enacted December 8, 2004 (Pub. L. 108-447, 118 Stat. 2809, 3268, 5 U.S.C. 552a note), requires the Agency to conduct a privacy impact assessment (PIA) of a regulation that will affect the privacy of individuals. This rule does not require the collection of personally identifiable information (PII), therefore the Agency finds that there will be no impact on the privacy of individuals.

The Privacy Act (5 U.S.C. 552a) applies only to Federal agencies and any non-Federal agency which receives records contained in a system of records from a Federal agency for use in a matching program.

The regulations implementing E.O. 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this action.

FMCSA analyzed this action under E.O. 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. FMCSA determined that it is not a “significant energy action” under that E.O. because it is not economically significant and is not likely to have an adverse effect on the supply, distribution, or use of energy.

This final 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.

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through OMB, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) are standards that are developed or adopted by voluntary consensus standards bodies. This final rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

FMCSA analyzed this rule in accordance with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321, et seq.) and FMCSA's NEPA Implementing Procedures and Policy for Considering Environmental Impacts, Order 5610.1 (FMCSA Order), March 1, 2004 (69 FR 9680). FMCSA's Order states that “[w]here FMCSA has no discretion to withhold or condition an action if the action is taken in accordance with specific statutory criteria and FMCSA lacks control and responsibility over the effects of an action, that action is not subject to this Order.” Id. at chapter 1(D). Because Congress specifies the Agency's precise action here, thus leaving the Agency no discretion over such action, and since the Agency lacks jurisdiction and therefore control and responsibility over the effects of this action, this rulemaking falls under chapter 1(D). Therefore, no further analysis is considered.

In addition to the NEPA requirements to examine impacts on air quality, the Clean Air Act (CAA) as amended (42 U.S.C. 7401, et seq.) also requires FMCSA to analyze the potential impact of its actions on air quality and to ensure that FMCSA actions conform to State and local air quality implementation plans. This non-discretionary action is expected to fall within the CAA de minimis standards and is not subject to the Environmental Protection Agency's General Conformity Rule (40 CFR parts 51 and 93).

Additionally, FMCSA evaluated the effects of this final rule in accordance with Executive Order 12898 and determined that there are no environmental justice issues associated with its provisions nor any collective environmental impacts resulting from its promulgation. Environmental justice issues would be raised if there were a “disproportionate” and “high and adverse impact” on minority or low-income populations. This final rule is exempt from analysis under the National Environmental Policy Act. This final rule simply makes ministerial, mandatory changes and would not result in high and adverse environmental impacts.

For the reasons stated in this preamble, FMCSA amends 49 CFR chapter III as set forth below:

I. Rulemaking Documents A. Availability of Rulemaking Documents

For access to docket FMCSA-2015-0176 to read background documents and comments received, go to http://www.regulations.gov at any time, or to Docket Services at U.S. Department of Transportation, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

In accordance with 5 U.S.C. 553(c), DOT accepts 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.

FMCSA is responsible for regulations to ensure that all commercial motor vehicles (CMVs) are systematically inspected, repaired, and maintained and that all parts and accessories necessary for the safe operation of CMVs are in safe and proper operating condition at all times. In response to several petitions for rulemaking from CVSA and ATA and two safety recommendations from the NTSB, FMCSA amends various provisions in parts 393 and 396 of the FMCSRs. The amendments generally do not involve the establishment of new or more stringent requirements, but instead clarify existing requirements to increase consistency of enforcement activities, and therefore the economic impact of these changes is negligible.

Specifically, the Agency (1) adds a definition of “major tread groove” in § 393.5 and an illustration in § 393.75 to indicate the location of tread wear indicators or wear bars on a tire signifying a major tread groove; (2) revises the rear license plate lamp requirement to eliminate the requirement in Table 1 of § 393.11 for vehicles to have an operable rear license plate lamp when there is no rear license plate present; (3) amends the regulations regarding tires to prohibit the operation of a vehicle with speed-restricted tires at speeds that exceed the rated limit of the tire; (4) clarifies § 396.9 regarding when violations or defects noted on a roadside inspection report need to be corrected; (5) amends Appendix G to the FMCSRs, “Minimum Periodic Inspection Standards,” to include provisions for the inspection of ABS and automatic brake adjusters, speed-restricted tires, and motorcoach passenger seat mounting anchorages; (6) amends § 396.17(f) and removes § 396.23(a) to eliminate the option for a motor carrier to meet the periodic inspection requirements through roadside inspections; and (7) amends § 396.19(b) regarding inspector qualifications as a result of the amendments to § 396.17(f) described above. In addition, the Agency eliminates as unnecessary a portion of Appendix G to the FMCSRs that describes the differences between the out-of-service criteria and FMCSA's annual inspection requirement. Elsewhere in today's issue of the Federal Register, FMCSA amends certain regulatory guidance to ensure consistency between the FMCSRs, as amended by this final rule, and the published guidance.

This rulemaking is based on the authority of the Motor Carrier Act of 1935 [1935 Act] and the Motor Carrier Safety Act of 1984 [1984 Act].

The 1935 Act, as amended, provides that “[t]he Secretary of Transportation may prescribe requirements for—(1) qualifications and maximum hours of service of employees of, and safety of operation and equipment of, a motor carrier; and (2) qualifications and maximum hours of service of employees of, and standards of equipment of, a private motor carrier, when needed to promote safety of operation” (49 U.S.C. 31502(b)).

This final rule amends the FMCSRs in response to several petitions for rulemaking. The adoption and enforcement of such rules is specifically authorized by the 1935 Act. This rulemaking rests squarely on that authority.

The 1984 Act provides concurrent authority to regulate drivers, motor carriers, and vehicle equipment. It requires the Secretary to “prescribe regulations on commercial motor vehicle safety.” The regulations shall prescribe minimum safety standards for CMVs. At a minimum, the regulations shall ensure that: (1) CMVs are maintained, equipped, loaded, and operated safely; (2) the responsibilities imposed on operators of CMVs do not impair their ability to operate the vehicles safely; (3) the physical condition of operators of CMVs is adequate to enable them to operate vehicles safely; (4) the operation of CMVs does not have a deleterious effect on the physical condition of the operators; and (5) drivers are not coerced by motor carriers, shippers, receivers, or transportation intermediaries to operate a vehicle in violation of a regulation promulgated under 49 U.S.C. 31136 or 49 U.S.C. chapters 51 or 313 (49 U.S.C. 31136(a)).

This final rule concerns (1) parts and accessories necessary for the safe operation of CMVs, and (2) the inspection, repair, and maintenance of CMVs. It is based primarily on section 31136(a)(1) and (2), and secondarily on section 31136(a)(4). This rulemaking ensures that CMVs are maintained, equipped, loaded, and operated safely by requiring certain vehicle components, systems, and equipment to meet minimum standards such that the mechanical condition of the vehicle is not likely to cause a crash or breakdown. Section 31136(a)(3) is not applicable because this rulemaking does not deal with driver qualification standards. Because the amendments are primarily technical changes that clarify existing requirements and improve enforcement consistency, FMCSA believes they will be welcomed by motor carriers and drivers alike and that coercion to violate them will not be an issue.

Before prescribing any such regulations, FMCSA must consider the “costs and benefits” of any proposal (49 U.S.C. 31136(c)(2)(A) and 31502(d)). As discussed in greater detail in the “Regulatory Analyses” section, FMCSA determined that this final rule is not a significant regulatory action. The economic impact is negligible because the amendments generally do not involve the adoption of new or more stringent requirements, but rather the clarification of existing requirements. As such, the costs of the final rule do not approach the $100 million annual threshold for economic significance.

On October 7, 2015, FMCSA published a notice of proposed rulemaking (NPRM) in the Federal Register titled Parts and Accessories Necessary for Safe Operation; Inspection, Repair, and Maintenance; General Amendments (80 FR 60592). FMCSA received 16 comments on the NPRM.

FMCSA proposed to amend § 393.5 to define “major tread groove” as “The space between two adjacent tread ribs or lugs on a tire that contains a tread wear indicator or wear bar. (In most cases, the locations of tread wear indicators are designated on the upper sidewall/shoulder of the tire on original tread tires.)” In addition, FMCSA proposed adding an illustration to § 393.75 to indicate the location of tread wear indicators or wear bars signifying a major tread groove. FMCSA agreed that uniformity and consistency in enforcement and maintenance is critical. By including a definition of “major tread groove” in § 393.5—a term that is currently included in the regulatory text of § 393.75(b) and (c), but not specifically defined—and a corresponding illustration in § 393.75, the Agency expects increased consistency in the application and citation of § 393.75 during roadside inspections.

FMCSA proposed to amend Footnote 11 to Table 1 of § 393.11 to indicate that “No rear license plate lamp is required on truck tractors registered in States that do not require tractors to display a rear license plate.” As noted in both the National Highway Traffic Safety Administration's (NHTSA) Federal Motor Vehicle Safety Standard (FMVSS) No. 108 and the FMCSRs, the only function of the rear license plate lamp is to illuminate the rear license plate. FMCSA agreed with ATA that if a truck tractor is not required to display a rear license plate, then there is no corresponding safety need for a functioning rear license plate light.

FMCSA proposed to amend Appendix G to include a review of ABS and automatic brake adjusters and brake adjustment indicators to maintain consistency between part 393 and Appendix G. FMCSA agreed that the failure of a motor carrier to properly maintain an important safety technology such as ABS should result in the vehicle failing the periodic inspection. Although CVSA did not mention automatic brake adjusters and brake adjustment indicators in its petition to amend Appendix G, FMCSA proposed changes in Appendix G relating to these brake components to ensure that vehicles may not pass the periodic inspection without this important safety equipment.

To clarify the intent of § 396.9(d)(2), FMCSA proposed to amend that section by including a specific cross reference to § 396.11(a)(3). Section 396.11(a)(3) makes it clear that all defects and deficiencies discovered by or reported to a driver—including those identified during a roadside inspection conducted under the authority of § 396.9—must be corrected (or a certification must be provided stating that repair is unnecessary) before a vehicle is operated each day. However, the Agency agreed that the language of § 396.9(d)(2) is not as explicit as it could be, and could lead to uncertainty and/or inconsistency in both the enforcement community and the motor carrier industry regarding when violations and defects noted on roadside inspection reports need to be corrected.

FMCSA proposed to amend § 396.17(f) to remove the words “roadside or” from the current regulatory text. The proposed amendment would eliminate any uncertainties and make clear that a roadside inspection is not equivalent to the periodic/annual inspection required under § 396.17. FMCSA does not believe it is appropriate to continue to allow carriers relief from this responsibility by using a roadside inspection conducted by enforcement officials to meet the periodic inspection requirement. Motor carriers will now be responsible for ensuring the completion of a periodic inspection irrespective of whether a roadside inspection is performed, and amending the regulations will require them to do so at least once every 12 months, irrespective of whether a roadside inspection is performed during that period.

In light of the proposed amendments to § 396.17(f), and to further decrease the possibility of confusion regarding differing requirements of the roadside inspection program and the periodic/annual inspection program, FMCSA proposed to delete the section at the end of Appendix G titled “Comparison of Appendix G, and the new North American Uniform Driver-Vehicle Inspection Procedure (North American Commercial Vehicle Critical Safety Inspection Items and Out-Of-Service Criteria). . .”

Consistent with the proposed amendments to § 396.17, FMCSA also proposed to amend § 396.19(b) by deleting language regarding a “random roadside inspection program.”

FMCSA proposed to add language to section 10 of Appendix G that would prohibit the use of speed-restricted tires on CMVs subject to the FMCSRs unless the use of such tires is specifically designated by the motor carrier. FMCSA agreed that speed-restricted tires should not be used on CMVs operating on highways in excess of 55 mph for extended periods of time.

FMCSA proposed to add a new section to Appendix G that would require an examination of motorcoach seats during the conduct of a periodic inspection in accordance with § 396.17 to ensure that they are securely attached to the vehicle structure. However, given the wide range of seat anchorage designs, coupled with the lack of testing requirements specifically for seat anchorage strength in the FMVSSs, it is not practicable for FMCSA to develop a detailed methodology for the inspection of motorcoach passenger seat mounting anchorages.

In response to the NPRM, the Agency received 16 comments from two motor carriers (Capitol Bus Lines and Southern Company), eight organizations (the Advocates for Highway and Auto Safety (Advocates), the American Bus Association (ABA), ATA, CVSA, the National Automobile Dealers Association (NADA), the Owner-Operator Independent Drivers Association (OOIDA)), the Rubber Manufacturers Association (RMA), and the Transportation Safety Equipment Institute (TSEI), and six individuals (Steve Bixler, Jim Bramm, Richard Crawford, Richard Pingel, Robert Spoon, and Miles Verhoef).

Comments: RMA supported adding a definition for “major tread groove,” but recommended that “major tread groove” be defined as “the full depth space between two adjacent tread ribs or lugs on a tire that repeats along the circumference and/or at an angle across the tread area and contains a tread wear indicator. (In most cases, the locations of tread wear indicators are designated on the upper sidewall or shoulder of the tire on original tread tires.)” In addition, RMA noted that new tire tread designs feature tread grooves that are “hidden” on a new tire, but that appear and deepen and/or widen as the tire tread wears. RMA states that in most cases, the locations of tread wear indicators are designated on the tire's upper sidewall/shoulder, but that those markings are voluntary and not required by the Federal Motor Vehicle Safety Standards (FMVSS).

FMCSA Response: FMCSA believes that the definition proposed in the NPRM is sufficiently clear. The language provided by RMA added complexity without clarifying the language proposed by FMCSA. While the preamble to the NPRM stated that an illustration would be added to § 393.75 to indicate the location of tread wear indicators or wear bars on a tire signifying a major tread groove, and FMCSA included a proposed illustration in the preamble, the illustration inadvertently was not included in the proposed regulatory changes. FMCSA did not receive any comments regarding the illustration, and adds it to § 393.75 as discussed in the NPRM. We anticipate that inclusion of the illustration will further enhance clarity of the regulatory language.

Comments: Jim Bramm, CVSA, and NADA recommended that the exception for vehicles not required to have a rear license plate light be extended to apply to all types of CMVs, and not be limited to truck tractors as proposed in the NPRM. Mr. Bramm stated “Our company's corporate office is located in Wisconsin and the majority of our commercial motor vehicles are registered in this state. When registering a vehicle for an apportioned plate you have the ability in this state to not only register truck tractors but other types of commercial vehicles such as dump trucks and pickup trucks. Wisconsin law states only 1 plate will be issued for apportioned registered vehicles and that plate is to be affixed to the front. Therefore I believe the wording should remain as petitioned by the ATA so that the regulation would apply to any commercial vehicle not just truck tractors.”

OOIDA stated “. . . state inspectors do not have the authority to write up violations of rules that their state has not adopted. Therefore, inspectors from states that do not require rear license plates (or illumination) do not have the authority to find violations for failing to illuminate a license plate. Nor may such enforcement officials use their observation of lack of a license plate (or illumination) as probable cause to stop a truck for inspection. They only have the authority to use probable cause that there is a violation of their own state law.” In addition, OOIDA noted that FMCSA “should consider what role the requirement for a license plate light plays in highway safety. The requirements for conspicuity systems clearly address night time visibility in a manner which far exceeds a license plate light. The role of a license plate light in vehicle safety should be explained and justified by FMCSA or dropped from the requirements.”

FMCSA Response: FMVSS No. 108, “Lamps, reflective devices, and associated equipment” (incorporated by reference in section 393.11 of the FMCSRs), specifies comprehensive requirements to enhance the conspicuity of all motor vehicles, including CMVs, on the public roads so that their presence is perceived and their signals understood, both in daylight and in darkness or other conditions of reduced visibility. While NHTSA has required license plate lamps on all vehicles since 1968, license plate lamps are not intended to enhance safety in a manner similar to the other required lamps and conspicuity treatments, and eliminating the requirement for a rear license plate lamp when no license plate is required will not reduce safety to the motoring public.

FMCSA agrees with the commenters that any regulatory changes to the requirements for license plate lamps should apply to all CMVs, and not just truck tractors as proposed in the NPRM. However, if adopted, the proposed regulatory changes would have required roadside enforcement officials in each State to know the license plate display requirements of every other State. FMCSA believes that enforcement of the license plate lamp requirement can be simplified—without compromising safety—by requiring an operable rear license plate lamp only when there is a license plate present at the time of inspection. FMCSA believes that this approach will simplify enforcement and avoid enforcement confusion and inconsistency that would likely result from the State-by-State approach outlined in the NPRM. FMCSA does not expect drivers and/or motor carriers to remove license plates to avoid citations in the event that a rear license plate lamp is missing or inoperative, and if they do, they will be subject to the more severe penalties associated with not displaying a license plate when required by law.

In response to OOIDA's concerns about the authority of an inspector to enforce regulations adopted by another State that the inspector's state has not similarly adopted, FMCSA notes that under the Motor Carrier Safety Assistance Program (MCSAP), each State is required to adopt regulations that are compatible with the FMCSRs within 3 years as a condition of receiving Federal grant funding. As such, each State will be required to adopt a regulation consistent with today's final rule requiring an operable rear license plate lamp only when there is a rear license plate present, eliminating the possibility of inconsistent State regulations.

Comments: CVSA supports the proposed language adding ABS to Appendix G but recommended a number of additions, corrections, and clarifications. First, CVSA states that the effective date for ABS regarding hydraulic-braked vehicles should be September 1, 1999, and not March 1, 1999, as stated in the NPRM. CVSA notes that while NHTSA originally proposed a March 1, 1999, compliance date, NHTSA later granted a petition extending the deadline to September 1, 1999. Second, CVSA recommends the addition of a second footnote to clarify that certain power units have two ABS malfunction indicators—one for the power unit and one for the towed unit(s)—and that both need to be fully functional. Third, CVSA notes that ABS powered by a backup power source (i.e., the backup power from the brake lamp circuit) is not compliant with FMVSS No. 121. As such, CVSA recommends that subparagraph (2) of the proposed Appendix G requirements for ABS be amended to specifically state “ABS malfunction indicator that does not illuminate when power is first applied to the ABS controller (ECU) during initial power up.” Fourth, CVSA recommends adding two subparagraphs under the proposed ABS requirements in Appendix G to address FMVSS No. 121 requirements that (1) a power unit manufactured with ABS supply continuous power to the trailer, and (2) the stoplight switch power the trailer ABS system if the continuous power from the towing vehicle is interrupted.

CVSA agrees with FMCSA's proposal to add requirements for automatic brake adjusters to Appendix G, but noted that FMCSA failed to include proposed regulatory text for automatic brake adjusters in the NPRM. In its comments, CVSA (1) provided suggested language for inclusion in Appendix G, and (2) recommended use of the term “self-adjusting brake adjusters” as opposed to “automatic brake adjusters.”

CVSA and Southern Company opposed the need to include requirements for brake adjustment indicators in Appendix G. CVSA states “. . . the requirement is not necessary or practical. If all brakes are in proper adjustment during the inspection, the indicators (pushrod markings) will not be visible and checking for their presence would require disassembly of or a major adjustment/readjustment of the brakes, which is not advisable. To our knowledge, the likelihood of finding a vehicle without pushrod markings is extremely low.” Southern Company states that “Over the last 20 years the industry has adopted automatic slack adjusters, alleviating the concerns which lead to the brake adjustment indicators,” and “This technology [brake adjustment indicators] has proven to be ineffective. After a very short time frame, the tape or plastic wears off and is no longer visible,” and “Manufacturers no longer install the brake adjustment indicator.”

FMCSA Response: CVSA is correct in noting that NHTSA had extended the compliance date for ABS on hydraulic-braked vehicles from March 1, 1999, to September 1, 1999, but that action was limited to an extension of the malfunction indicator lamp requirement in S5.3.3(b) of FMVSS No. 105 (64 FR 9446, February 26, 1999)—and not for the general requirement to equip hydraulic-braked vehicles with ABS. As such, all hydraulic-braked vehicles were still expected to be equipped with ABS effective March 1, 1999. As subparagraphs (1)—(3) under the ABS section in Appendix G refer specifically to the malfunction indicator, FMCSA amends footnote (1) to that section to reflect the September 1, 1999, compliance date for hydraulic-braked vehicles. In addition, FMCSA clarifies that footnote (1) applies only to subparagraphs (1)—(3) of the ABS section, and not to subparagraph (4) which addresses “other missing or inoperative ABS components.” Further, FMCSA agrees with CVSA's other largely editorial recommended changes to the ABS section in Appendix G and adopts those changes as suggested.

Automatic brake adjusters automatically maintain proper brake adjustment, thus eliminating the need for frequent inspection and manual adjustment of the brakes. CVSA correctly notes that while FMCSA discussed the intent to include requirements for automatic brake adjusters in Appendix G in the preamble to the NPRM, the Agency did not provide corresponding proposed regulatory text in the NPRM. The omission of proposed regulatory text in the NPRM was inadvertent. The language recommended by CVSA in its comments is accurate and complete, and properly complements the requirements for automatic brake adjusters in FMVSS Nos. 105 and 121 that need to be included in Appendix G. FMCSA amends Appendix G to include requirements for automatic brake adjusters as suggested. With respect to CVSA's recommendation to use the term “self-adjusting brake adjusters” as opposed to “automatic brake adjusters,” FMCSA retains the terminology “automatic brake adjusters” to maintain consistency with existing regulatory language in both the FMVSSs and the FMCSRs.

FMCSA discussed its intent to add requirements in Appendix G for brake adjustment indicators in the preamble to the NPRM, but did not provide corresponding proposed regulatory text. Brake adjustment indicators can improve brake adjustment by increasing the convenience of checking brake adjusters and their proper functioning. A brake adjustment indicator can reduce the time needed to assess brake adjustment status by providing a visible indication of pushrod stroke as opposed to physically measuring the push rod length before and during brake application.

While brake adjustment indicators can simplify brake inspection, CVSA is correct in noting that if brakes are in proper adjustment during an inspection, the indicators will not be visible. In this case, an inspector would have to either disassemble the brake (unhook the clevis from the slack adjuster and pull out the pushrod), or back the brakes off until they are out of adjustment to confirm that the indicators are present. Further, although both the FMVSSs and the FMCSRs require brake adjustment indicators, FMCSA understands that virtually all evaluations of brake adjustment—both during roadside inspections and periodic inspections—are made by physically measuring pushrod length before and during brake application, and that very few inspections rely solely on brake adjustment indicators. Based on the above, FMCSA has not included any specific requirements for brake adjustment indicators in Appendix G.

Comments: FMCSA did not receive any comments on§ 396.9(d)(2) and amends as proposed.

FMCSA also requested comments regarding whether the current 15-day requirement in § 396.9(d)(3) for motor carriers to certify that all violations have been corrected by completing and returning the roadside inspection form to the issuing agency remains appropriate, or whether a different time period should be considered. CVSA, OOIDA, and Advocates stated that the 15-day requirement is appropriate. ABA and Capitol Bus Lines noted that, in limited circumstances, the 15-day requirement may not be sufficient when replacement parts are not readily available to conduct repairs, either because the parts need to be ordered from a different country or because the replacement parts are no longer available for older buses.

FMCSA Response: FMCSA believes that, in most cases, repairs can be made and certification of those repairs can be sent within the current 15-day time period specified in the FMCSRs. In instances where a motor carrier can demonstrate that extenuating circumstances (such as those described in the ABA and Capitol Bus Lines comments) preclude repairs from being completed and certified within the 15-day time period specified, FMCSA will address those circumstances on a case-by-case basis. However, FMCSA does not believe that the 15-day requirement in § 396.9(d)(3) for motor carriers to certify that all violations have been corrected by completing and returning the roadside inspection form to the issuing agency needs to be amended at this time.

CVSA agreed with the proposed changes, but also recommended additional changes to § 396.17 to make it clear that inspections conducted by FMCSA inspectors, investigators, and safety auditors are not equivalent to required periodic inspections. Capitol Bus Lines and ABA commented that, while several States permit motor carriers to self-certify the conduct and completion of the annual inspections required under § 396.17, other States that have implemented mandatory annual inspection programs refuse to accept the “self-certified” annual inspections conducted by the motor carrier as “legitimate annual inspections.” ATA commented that “The basis for . . . this rule change appears to be . . . a change in agency philosophy rather than . . . data or factual evidence. ATA has great difficulty supporting a national policy change of this magnitude without factual evidence showing an enhanced safety benefit from this change.”

Four members of OOIDA—Steve Bixler, Richard Pingel, Robert Spoon, and Miles Verhoef—submitted nearly identical comments stating that (1) they “have never seen a copy of how roadside truck inspections are supposed to be conducted;” (2) they “have never seen a copy of CVSA's out of service criteria;” (3) “If FMCSA were to publish roadside inspection and out-of-service criteria standards and procedures, it would help me know what parts of my equipment FMCSA and CVSA think I should focus on in between my periodic inspections;” and (4) “It is my right under the Constitution to be told the scope of any government search of me or my truck.”

OOIDA stated that, “Where the Notice begins to discuss roadside inspection standards and the Commercial Vehicle Safety Alliance's out-of-service criteria however, the Notice is woefully deficient in informing the public what exactly these standards are. It appears that CVSA has proposed, and FMCSA consented, to proposals that remove all references to roadside inspections and the content of the out-of-service criteria in the rules. Without making those standards public, FMCSA has not given the public an adequate opportunity to comment on its proposal. If there is any imperative upon FMCSA to deal with roadside inspections and the out-of-service criteria differently than it does now, that imperative is to give the regulated public notice of their contents and scope.” OOIDA also asked numerous, more specific questions relating to the general concerns noted above.

FMCSA Response: Today, the overwhelming majority of the approximately 3.5 million roadside inspections of CMVs performed annually in the United States are conducted by State personnel using funding provided under the MCSAP.

The scope of a roadside inspection conducted under the North American Standard (NAS) Inspection is quite comprehensive, and covers both (1) critical vehicle inspection items (brake systems; cargo securement; coupling devices; driveline/driveshaft; exhaust systems; frames; fuel systems; lighting devices; steering mechanisms; suspensions; tires; van and open-top trailer bodies; wheels, rims and hubs; windshield wipers; and emergency exits, electrical cables and systems in engine and battery compartments; and seating on passenger-carrying vehicles), and (2) other parts and accessories required under part 393.

However, while a roadside inspection conducted under the NAS Inspection is far-reaching, there are certain limitations to roadside procedures that prevent inspectors from properly examining all of the items in Appendix G. These include, but are not necessarily limited to, the following:

• Brake linings and pads and brake drums or rotors: Inspectors cannot remove wheels or dust shields; only visible components can be examined at roadside.

• Hydraulic brakes: Inspectors cannot disassemble components; only visible components can be examined at roadside.

• Fifth wheels, pintle hooks: Combination vehicles are not typically decoupled to view upper and lower fifth wheel assemblies and other coupler assemblies; only visible components can be examined at roadside.

• Tires: Low boy, car hauler, and other low profile or tight clearance vehicles, and dual tire sets have limited access to the entire tire circumference without wheel removal; only visible components can be examined at roadside.

• Wheels and rims: Dual wheel sets may have limited access to inside wheel visibility; only visible components can be examined at roadside.

Because not every element of Appendix G is reviewed/inspected during a roadside inspection conducted under the NAS Inspection, most roadside inspections do not meet the periodic (annual) inspection requirements under § 396.17. For this reason, FMCSA does not believe it is appropriate to continue to allow motor carriers to use roadside inspections conducted by enforcement officials to satisfy the annual inspection requirements in § 396.17(f). Motor carriers or their agents will now be required to complete a periodic inspection of every CMV under its control in accordance with Appendix G at least once every 12 months, irrespective of whether a roadside inspection is performed, unless the vehicle is subject to a mandatory State inspection program in accordance with § 396.23(b)(1) which has been determined to be as effective as the requirements of § 396.17.

Section 396.23, Equivalent to periodic inspection, currently outlines two options that are deemed to be equivalent to the periodic inspections required under § 396.17—a roadside inspection program of a State or other jurisdiction, or a mandatory State inspection program which has been determined to be as effective as the Federal requirements. FMCSA did not propose any amendments to § 396.23 in the NPRM. However, and given the amendments to § 396.17(f) discussed above, it is also necessary to remove § 396.23(a) to ensure that the FMCSRs are consistent regarding the determination that a roadside inspection will no longer be considered as meeting the periodic inspection requirements of § 396.17.

In response to the specific comments to the October 2015 NPRM:

FMCSA agrees that inspections conducted by FMCSA inspectors, investigators, and safety auditors are not equivalent to required periodic inspections, and corresponding changes have been made to § 396.17, as suggested by CVSA.

In response to the comments from Capitol Bus Lines and ABA, FMCSA notes that if a motor carrier is located in a State that permits motor carriers to self-certify the conduct and completion of the annual inspections required under § 396.17, section 210 of the Motor Carrier Safety Act of 1984 (49 U.S.C. 31142) establishes the principle that State inspections meeting federally approved criteria must be recognized by every other State. If, as Capitol Bus Lines and ABA contend, States that have implemented mandatory annual inspection programs refuse to accept the “self-certified” annual inspections conducted by motor carriers in other States as legitimate annual inspections, aggrieved motor carriers are encouraged to contact the FMCSA Division Administrator in their State for assistance. FMCSA notes that States may require additional inspections as a condition of issuing some type of permit or license, but additional inspections cannot be required otherwise.

While ATA argued that FMCSA failed to provide “factual evidence” to show an “enhanced safety benefit” of the proposed change, FMCSA has clearly shown that current roadside inspections conducted under the NAS Inspection do not examine every component listed in Appendix G. As such, roadside inspections conducted using the NAS Inspection procedures cannot be considered as meeting the annual inspection requirements of § 396.17. While FMCSA does not track the number of motor carriers that use a violation-free roadside inspection to meet the periodic inspection requirement or the number of roadside inspections so used, the Agency has reason to believe these numbers are small. Roadside inspections are not “scheduled” inspections, and a motor carrier therefore cannot plan to defer its periodic inspections until roadside inspections are conducted. OOIDA also commented that it “is not aware of any truck owners who have used a roadside inspection to comply with the periodic inspection requirement.” Given that the estimated number of roadside inspections used to meet the periodic inspection requirement is very small, today's rule will not significantly affect carriers who relied on such inspections in the past, nor will the number of motor carrier inspection personnel and facilities now needed to perform Appendix G periodic inspections be significantly increased. Eliminating the possibility that roadside inspections can be used as equivalent to periodic inspections in the future will only enhance safety.

In response to the comments from OOIDA members Bixler, Pingel, Spoon, and Verhoef, FMCSA reiterates that all parts and accessories specified in part 393, as well as any additional parts and accessories as allowed by § 393.3, are required to be in safe and proper operating condition at all times. As such, any and all components of a CMV are subject to examination during a roadside inspection, regardless of whether those components are included in any inspection procedure or the CVSA Out-of-Service Criteria (OOSC). Importantly, the amendments made in today's rule do not have anything to do with the OOSC, which are simply a set of enforcement tolerances used by inspectors in determining whether violations discovered during an inspection pose such serious safety risks that they must be corrected immediately before the vehicle is allowed to continue. OOIDA's tangential argument that the scope of a search—its characterization of roadside inspections—“must be widely published in advance so that the regulated parties have notice of it” and that the CVSA OOSC do not meet that standard, is misguided. The Federal courts have long recognized that “[t]he CVSA's OOSC are not themselves federal rules subject to our review . . . Rather, the OOSC merely interpret the standards set forth in existing federal and state laws and regulations. . . . [T]he federal regulations are the binding legal norms and the operation of a commercial vehicle that falls below the regulatory criteria is unlawful.” National Tank Truck Carriers, Inc. v. Federal Highway Administration, 170 F.3d 203, 207-208 (D.C. Cir. 1999) (emphasis in original). The FMCSRs adopted through notice and comment rulemaking provide motor carriers and drivers the constitutionally required notice of their legal obligations.

Similar to the discussion above, the questions posed by OOIDA regarding roadside inspections, specific inspection procedures, and the CVSA OOSC are outside the scope of this rulemaking. The amendments made by this rule eliminate the possibility that a roadside inspection can be considered equivalent to an annual inspection, for the simple reason that not every element required to be examined during an annual inspection as identified in Appendix G to the FMCSRs is examined during a roadside inspection conducted under the NAS Inspection.

Comments: FMCSA did not receive any comments on § 396.19(b) and amends as proposed.

Comments: In its comments, Southern Company states:

ABA supported FMCSA's intent to address speed-restricted tires in Appendix G, but stated that “absent a requirement for labeling maximum speeds on all tires, it will be difficult for the law enforcement community to easily determine whether tires on a vehicle in use, are appropriate.” ABA recommended that FMCSA provide additional guidance regarding (1) the intended meaning of “extended periods of time,” (2) how a carrier would designate the appropriate use of speed-restricted tires, and (3) when/where such designation would need to be produced for the purposes of compliance.

RMA supported the proposed amendments to Appendix G. In addition, RMA noted that amendments to (1) FMVSS No. 119 to require all tires to be labeled with a maximum speed rating, and (2) FMVSS No. 120 to include such information on a required label, would “greatly improve the ability of consumers, fleets, tire service personnel, [and] State and Federal inspection personnel to correctly identify appropriate tires for a given vehicle and vehicle operation.”

FMCSA Response: Vehicles should be equipped with tires that have the proper speed rating for the vehicle's intended use, because operating a vehicle at speeds that exceed the specified tire speed rating could lead to heat build-up in a tire and cause premature or sudden tire failure. This potential safety issue could have significant consequences, especially in passenger carrier operations, and FMCSA believes that regulatory measures are necessary to ensure—to the extent practicable—that speed-restricted tires are properly installed in accordance with a vehicle's intended use.

Although the October 2003 crash in Tallulah, LA, involved a motorcoach, the NTSB Safety Recommendation was not specific only to motorcoach tires, but advised the Agency to “address a tire's speed rating to ensure that it is appropriate for a vehicle's intended use.” As noted above, tires labeled with a specific speed restriction/limit should not be operated at speeds that exceed that specified limit, as doing so could lead to heat build-up and cause premature or sudden tire failure. As such, FMCSA believes that any regulatory requirements regarding speed-restricted tires should apply to all CMVs, and not to just motorcoaches as suggested by Southern Company.

The NPRM proposed to amend Appendix G to prohibit the use of speed-restricted tires on CMVs unless the use of such tires is specifically designated by the motor carrier. FMCSA believes that amending only the periodic (annual) inspection requirements in Appendix G—without a corresponding amendment to § 393.75, “Tires”—will not fully address the potential safety problem of using speed-restricted tires on vehicles that operate at speeds that exceed the rated limit of the tire as specified by the tire manufacturer. By including requirements relating to the appropriate use of speed-restricted tires in both § 393.75 and Appendix G, potential safety issues associated with the improper use of speed-restricted tires can be identified at any time and not just during periodic inspections conducted once a year. However, and because FMVSS No. 119 currently requires only tires that are speed-restricted to 55 mph or less to be labeled on the sidewall of the tire, it is not practicable to apply requirements to all tires (to include those that are rated for above 55 mph) as inspectors would have no way of easily determining the design maximum speed capability of the tire for the specified maximum load rating and corresponding inflation pressure.

Based on the above, FMCSA adopts new language in § 393.75 to prohibit the use of speed-restricted tires labeled for 55 mph or less in accordance with S6.5(e) of FMVSS No. 119 on vehicles that operate at speeds that exceed the rated limit of the tire. In addition, FMCSA amends Appendix G as proposed in the NPRM to prohibit the use of speed-restricted tires unless specifically designated by the motor carrier. This will require every CMV to be examined for the possible improper use of speed-restricted tires at least once a year.

Given that not all tires are currently required to be marked with a maximum speed rating, FMCSA understands ABA's concerns regarding how a motor carrier will adequately “designate the appropriate use of speed-restricted tires” as proposed in the NPRM. NHTSA estimates that speed-restricted tires comprise less than 2 percent of the heavy truck tires, and, as Southern Company notes, these are typically used on utility, refuse, logging, livestock, farming, construction, and similar vehicles that are more often operated in heavy mixed-use service (on/off road operations in lower speed applications). Inspectors conducting roadside inspections will rarely encounter speed-restricted tires, and can generally expect that regional and long haul trucks and motorcoaches should not be equipped with speed-restricted tires. By including a requirement in Appendix G that prohibits the use of speed-restricted tires on vehicles “unless designated by the motor carrier,” motor carrier or other personnel conducting periodic inspections of the limited number of vehicles with speed-restricted tires will be prompted to confirm with the motor carrier that the use of such tires is appropriate for the specific vehicle. FMCSA retains the amendment to Appendix G as proposed in the NPRM.

Comments: Capitol Bus Lines agrees that seat anchor points should be inspected, and believes that “most reputable motorcoach operators check [the anchor points] as part of their `best practices.'” However, Capitol Bus Lines also noted that “to add this item to Appendix G with no guidance as to the inspection criteria puts an undue burden on carrier maintenance personnel as to the inspection standard. The lack of guidance can also result in different interpretations as to what is acceptable between operator and enforcement personnel. It would seem appropriate that for this item to be included in Appendix G, some minimum guidance must be provided for clarity and for the benefit of both operator and enforcement personnel.” ABA commented that “. . . an alternative . . . may be to make a more complimentary change to Appendix G in line with the requirements of § 393.93, and develop a proposal to look for the presence of, and evidence of well maintained, seat belt assemblies at all driver and passenger seating positions, as appropriate.”

FMCSA Response: As noted in the NPRM, the wide range of seat anchorage designs, coupled with the lack of testing requirements specifically for seat anchorage strength in the FMVSSs, makes it impracticable for FMCSA to develop a detailed methodology for the inspection of motorcoach passenger seat mounting anchorages. FMCSA adopts the amendment as proposed in the NPRM.

Today's final rule codifies changes to parts 393 and 396 by adding a definition of “major tread groove” and an illustration to show the location of tread wear indicators or wear bars on a tire signifying a major tread groove; revising the rear license plate lamp requirement to eliminate the requirement for an operable rear license plate lamp on vehicles when there is no rear license plate present; prohibiting the operation of a vehicle with speed-restricted tires at speeds that exceed the rated limit of the tire; providing specific requirements regarding when violations or defects noted on an inspection report must be corrected; amending Appendix G to the FMCSRs, “Minimum Periodic Inspection Standards,” to include provisions for the inspection of antilock braking systems (ABS) and automatic brake adjusters, speed-restricted tires, and motorcoach passenger seat mounting anchorages; amending the periodic inspection rules to eliminate the option for a motor carrier to satisfy the periodic inspection requirement through use of a violation-free roadside inspection; and amending the inspector qualification requirements as a result of the amendments to the periodic inspection rules. In addition, the Agency eliminates introductory regulatory text from Appendix G to the FMCSRs.

FMCSA modifies this section by adding a definition of “major tread groove.”

FMCSA modifies Footnote 11 to Table 1 of § 393.11 dealing with rear license plates lights.

FMCSA adds a new paragraph (f) dealing with speed-restricted tires and tread wear indicators and an illustration of a tread wear indicator.

FMCSA amends paragraph (d)(2) dealing with correction of violations of defects.

FMCSA amends paragraph (f) to bar roadside inspections from serving as annual inspections.

FMCSA amends paragraph (b) to make it consistent with amended § 396.17.

FMCSA removes § 396.23(a) to make it consistent with § 396.17, and renumbers the remainder of the section accordingly.

FMCSA amends Appendix G by adding sections 1.l and 1.m, revising section 10.c, adding section 14, and eliminating introductory regulatory text, as explained in detail above.

Elsewhere in today's issue of the Federal Register, FMCSA amends certain regulatory guidance to ensure consistency between the FMCSRs, as amended by this final rule, and the published guidance.

This final rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by E.O. 13563 (76 FR 3821, January 21, 2011), and is also not significant within the meaning of DOT regulatory policies and procedures (DOT Order 2100.5 dated May 22, 1980; 44 FR 11034, February 26, 1979) and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed this final rule under that Order.

The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) requires Federal agencies to consider the effects of their regulatory actions on small business and other small entities and to minimize any significant economic impact. The term “small entities” encompasses small businesses and 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 50,000.1 Accordingly, DOT policy requires an analysis of the impact of all regulations on small entities and mandates that agencies strive to lessen any adverse effects on these businesses.

Under the Regulatory Flexibility Act, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) (Title II, Pub. L. 104-121, 110 Stat. 857, March 29, 1996), this final rule is not expected to have a significant economic impact on a substantial number of small entities because the amendments generally do not involve the adoption of new or more stringent requirements, but, instead, the clarification of existing requirements. Therefore, there is no disproportionate burden to small entities.

Consequently, I certify that the action will not have a significant economic impact on a substantial number of small entities.

In accordance with section 213(a) of the SBREFA, FMCSA wants to assist small entities in understanding this final rule so that they can better evaluate its effects on themselves. If the final rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please consult the FMCSA point of contact, Mike Huntley, listed in the FOR FURTHER INFORMATION CONTACT section of the rule.

Small businesses may send comments on the actions of Federal employees who enforce or otherwise determine compliance with Federal regulations to the Small Business Administration's 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 FMCSA, call 1-888-REG-FAIR (1-888-734-3247). DOT has a policy ensuring the rights of small entities to regulatory enforcement fairness and an explicit policy against retaliation for exercising these rights.

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, taken together, or by the private sector, of $155 million (which is the value equivalent of $100 million in 1995, adjusted for inflation to 2014 levels) or more in any 1 year. This final rule would not result in such an expenditure.

This final rule calls for no new collection of information and is therefore not subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for Federalism under Section 1(a) of Executive Order 13132 if it has “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.” FMCSA has determined that this final rule does not have substantial direct effects on or costs to States, nor does it limit the policymaking discretion of States. Nothing in this document preempts any State law or regulation.

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

E.O. 13045, Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, Apr. 23, 1997), requires agencies issuing “economically significant” rules, if the regulation also concerns an environmental health or safety risk that an agency has reason to believe may disproportionately affect children, to include an evaluation of the regulation's environmental health and safety effects on children. The Agency determined this final rule is not economically significant. Therefore, no analysis of the impacts on children is required. In any event, this regulatory action could not present an environmental or safety risk that would disproportionately affect children.

FMCSA has reviewed this final rule in accordance with Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights, and has determined it will not effect a taking of private property or otherwise have taking implications.

Section 522 of title I of division H of the Consolidated Appropriations Act, 2005, enacted December 8, 2004 (Pub. L. 108-447, 118 Stat. 2809, 3268, 5 U.S.C. 552a note), requires the Agency to conduct a privacy impact assessment (PIA) of a regulation that will affect the privacy of individuals.

The Privacy Act (5 U.S.C. 552a) applies only to Federal agencies and any non-Federal agency which receives records contained in a system of records from a Federal agency for use in a matching program.

The E-Government Act of 2002, Public Law 107-347, § 208, 116 Stat. 2899, 2921 (Dec. 17, 2002), requires Federal agencies to conduct a PIA for new or substantially changed technology that collects, maintains, or disseminates information in an identifiable form.

This rule does not require a PIA because it does not require the collection of personally identifiable information (PII).

The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this program.

FMCSA has analyzed this final rule under E.O. 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. The Agency has determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, it does not require a Statement of Energy Effects under E.O. 13211.

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.

The National Technology Transfer and Advancement Act (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through OMB, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) are standards that are developed or adopted by voluntary consensus standards bodies. This final rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

FMCSA analyzed this final rule for purposes of the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and determined this action is categorically excluded from further analysis and documentation in an environmental assessment or environmental impact statement under FMCSA Order 5610.1 (69 FR 9680, March 1, 2004), Appendix 2, paragraphs 6(z)(aa) and 6(z)(bb). The Categorical Exclusion (CE) in paragraph 6(z)(aa) covers regulations requiring motor carriers, their officers, drivers, agents, representatives, and employees directly in control of CMVs to inspect, repair, and provide maintenance for every CMV used on a public road. The CE in paragraph 6(z)(bb) covers regulations concerning vehicle operation safety standards (e.g., regulations requiring: certain motor carriers to use approved equipment which is required to be installed such as an ignition cut-off switch, or carried on board, such as a fire extinguisher, and/or stricter blood alcohol concentration (BAC) standards for drivers, etc.), equipment approval, and/or equipment carriage requirements (e.g., fire extinguishers and flares). The CE determination is available for inspection or copying in the Regulations.gov Web site listed under ADDRESSES.

FMCSA also analyzed this rule under the Clean Air Act, as amended (CAA), section 176(c) (42 U.S.C. 7401 et seq.), and implementing regulations promulgated by the Environmental Protection Agency. Approval of this action is exempt from the CAA's general conformity requirement since it does not affect direct or indirect emissions of criteria pollutants.

Under E.O. 12898 (Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations), each Federal agency must identify and address, as appropriate, “disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on minority populations and low-income populations” in the United States, its possessions, and territories. FMCSA has determined that this rule will have no environmental justice effects, nor would its promulgation have any collective environmental impact.

For the reasons stated above, FMCSA amends 49 CFR chapter III, subchapter B, as follows:

On November 17, 1993, the Federal Highway Administration (FHWA) 1 published “Regulatory Guidance for the Federal Motor Carrier Safety Regulations” at 58 FR 60734. The publication included interpretations of 49 CFR 396.17, a rule that requires all CMVs to be inspected at least once every 12 months in accordance with Appendix G to the FMCSRs (“Minimum Periodic Inspection Standards”), and 49 CFR 396.23, a rule that identifies alternative inspections that are considered equivalent to the annual inspection required under 49 CFR 396.17. The Agency interpreted the regulations to permit a roadside inspection to be considered as equivalent to the annual inspection. The regulatory guidance was republished on April 4, 1997, at 62 FR 16370.

A final rule issued by FMCSA, published elsewhere in today's issue of the Federal Register, amends 49 CFR 396.17(f) and removes 49 CFR 396.23(a) to eliminate the option for a motor carrier to meet the periodic inspection requirements through roadside inspections.

Because not every element of Appendix G is reviewed/inspected during a roadside inspection conducted under the North American Standard Inspection, most roadside inspections do not meet the periodic (annual) inspection requirements under 49 CFR 396.17. For this reason, FMCSA does not believe it is appropriate to continue to allow motor carriers to use roadside inspections conducted by enforcement officials to satisfy the annual inspection requirements in 49 CFR 396.17(f). Motor carriers or their agents will now be required to complete a periodic inspection of every CMV under their control in accordance with Appendix G at least once every 12 months, irrespective of whether a roadside inspection is performed, unless the vehicle is subject to a mandatory State inspection program in accordance with 49 CFR 396.23 which has been determined to be as effective as the requirements of 49 CFR 396.17.

Given the amendments to 49 CFR 396.17(f) discussed above, the final rule also removes 49 CFR 396.23(a), which currently permits a roadside inspection program of a State or other jurisdiction to be considered as meeting the periodic inspection requirements of 49 CFR 396.17.

As a result of the final rule, and to maintain consistency between the amended FMCSRs and the published regulatory guidance, two regulatory guidance questions/answers are amended as follows:

Question 1: Some of a motor carrier's vehicles are registered in a State with a mandated inspection program which has been determined to be as effective as the Federal periodic inspection program, but these vehicles are not used in that State. Is the motor carrier required to make sure the vehicles are inspected under that State's program in order to meet the Federal periodic inspection requirements?

Guidance: If the State requires all vehicles registered in the State to be inspected through its mandatory program, then the motor carrier must use the State program to satisfy the Federal requirements. If, however, the State inspection program includes an exception or exemption for vehicles which are registered in the State but domiciled outside of the State, then the motor carrier may meet the Federal requirements through a self-inspection, a third party inspection, or a periodic inspection performed in any State with a program that the Federal Motor Carrier Administration (FMCSA) determines is comparable to, or as effective as, the part 396 requirements.

Question 1: Can a violation-free Commercial Vehicle Safety Alliance (CVSA) Level I or Level V inspection be used to satisfy the periodic inspection requirements of § 396.17?

Guidance: No, a CVSA Level I or Level V inspection is not equivalent to the Federal periodic inspection requirements.

The shrimp fishery in the Gulf is managed under the FMP. The FMP was prepared by the Council and implemented through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).

On April 5, 2016, NMFS published a notice of availability for Amendment 17A and requested public comment (81 FR 19547). On April 14, 2016, NMFS published a proposed rule for Amendment 17A and requested public comment (81 FR 22042). The proposed rule and Amendment 17A outline the rationale for the actions contained in this final rule. A summary of the action implemented by Amendment 17A and this final rule is provided below.

This final rule extends the Gulf shrimp Federal permit moratorium until October 26, 2026. Through Amendment 13 to the FMP, the Council established a 10-year moratorium on the issuance of new Federal commercial shrimp vessel permits (71 FR 56039, September 26, 2006). The moratorium on permits indirectly controls shrimping effort in Federal waters and thereby bycatch levels of juvenile red snapper and sea turtles. The final rule implementing the moratorium became effective October 26, 2006, and the moratorium permits became effective in March 2007. Extending the moratorium for an additional 10 years until October 26, 2026, is expected to maintain the biological, social, and economic benefits to the shrimp fishery achieved under the moratorium permit over the past 10 years.

NMFS received a total of 831 submissions from the public on Amendment 17A and the proposed rule. Of these submissions, 702 expressed general support for an extension of the permit moratorium. Some comments within the submissions addressed issues beyond the scope of Amendment 17A or the proposed rule, such as prohibiting shrimp trawling to reduce the impact on sea turtles and other marine life and modifying the requirements for turtle excluder devices and observers. From the submissions, NMFS has identified six issues related to Amendment 17A and the proposed rule. These comments and NMFS' respective responses are summarized below.

Comment 1: Extending the permit moratorium would protect and expand gains in the shrimp fishery by limiting potential exploitation. Gulf shrimp landings have only slightly declined during the past 10 years and catch per day has increased.

Response: NMFS agrees that continuing the moratorium would constrain effort and protect economic gains from higher catch rates. Returning the fishery to open access could undo any positive effects of the moratorium.

Removing the moratorium would allow an unlimited number of new entrants into the commercial shrimp fishery and could have negative effects if the fishery then became overcapitalized. Overcapitalization or effort increases could lead to increases in sea turtle and red snapper bycatch and could result in additional requirements to reduce bycatch.

Before the moratorium was implemented, increasing fuel costs, decreasing shrimp prices, and increasing foreign shrimp imports were all contributing to the overcapitalization of the commercial shrimp fleet. Since implementation of the moratorium, the catch per unit effort for the offshore shrimp fishery increased and has remained relatively constant. Additional effort in the fishery could negate, or at least lessen, profitability for the Gulf shrimp fleet as a whole.

Comment 2: There is no need for continuing the moratorium because of the decreasing number of valid permits over last 10 years.

Response: NMFS disagrees that the moratorium should be allowed to expire. The Council determined, and NMFS agrees, that extending the moratorium for an additional 10 years will continue stability for the fishery. As explained in the response to Comment 1, continuing the moratorium would constrain effort and protect economic gains from higher catch rates. The moratorium also indirectly controls effort and, therefore, bycatch levels of juvenile red snapper and sea turtles. Returning to an open access fishery would promote a return to less stable economic conditions.

Comment 3: Continuing the permit moratorium will help protect sea turtles and other marine life.

Response: NMFS agrees. In 2014, NMFS issued a biological opinion on the continued authorization of the Southeast U.S. shrimp fisheries in Federal waters on threatened and endangered species (including sea turtles) and designated critical habitat, in accordance with the Endangered Species Act (ESA). The sea turtle effects analyses and incidental take statement in the opinion were based on the expectation that future total effort levels in the southeastern shrimp fisheries would remain at or below 2009 effort levels. An increase in shrimp effort greater than the 2009 level may require re-initiation of the Endangered Species Act consultation and further rulemaking to address any increased effects on sea turtles. Continuing the moratorium would cap effort and reduce the chance of exceeding the 2009 effort levels, thereby continuing to limit any adverse effects of the shrimp fishery on sea turtles and other marine life.

Comment 4: Gulf shrimp permit holders who have lost their moratorium permit due to non-renewal should be allowed to re-apply for a shrimp permit.

Response: NMFS disagrees. The purpose of the moratorium was to limit the number of permits available to fish for shrimp because the fishery was overcapitalized, as described in the response to Comment 1.

The Federal Gulf shrimp moratorium permit is renewable for up to 1 year from its date of expiration. NMFS sends a renewal letter and permit application to the permit holder 1 month prior to the permit's expiration date. After a year with no permit renewal, a permit is terminated and permanently removed from the permit pool. However, valid permits are fully transferable, which may allow someone who has lost a permit as a result of non-renewal to obtain a new permit.

Comment 5: As a result of the moratorium, the current market price of permits is too high.

Response: NMFS disagrees. Based on the best available information, the current average price of a moratorium permit is approximately $5,000, and this price has been relatively constant since the moratorium was put in place. Thus, permits are not any more costly than they were 10 years ago, and in fact are likely less costly in real (inflation-adjusted) terms. Moreover, as previously noted, average profitability in the fishery has improved in recent years. An economically efficient business desiring to enter the fishery would be expected to recoup this cost relatively quickly and, thus, NMFS does not consider the cost of obtaining a permit to be onerous for businesses wanting to enter the fishery.

Comment 6: Permit holders who sub-lease shrimp moratorium permits should be required to forfeit the permits.

Response: NMFS disagrees. Although shrimp moratorium permits are fully transferable and a permit may be transferred to a vessel that is leased, there is no mechanism to sub-lease a permit through NMFS. To the extent the commenter is stating that the permits should not be transferable, economic efficiency is promoted when resources are allowed to shift to their most valuable use. The full transferability of permits is expected to improve economic efficiency by allowing those who place the greatest economic value on these permits to buy them. Any restrictions on the transferability of permits would be expected to reduce economic efficiency in the fishery, contrary to the objectives of Amendment 17A and this final rule.

The Regional Administrator, Southeast Region, NMFS has determined that this final rule is consistent with Amendment 17A, the FMP, the Magnuson-Stevens Act, and other applicable law.

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

The Magnuson-Stevens Act provides the statutory basis for this rule.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration (SBA) during the proposed rule stage that this rule, if adopted, would not have a significant economic impact on a substantial number of small entities. NMFS did not receive any comments from SBA's Office of Advocacy or the public on the certification in the proposed rule. NMFS received two comments regarding the economic analysis of Amendment 17A and the proposed rule. One comment suggested that the current market price of moratorium permits is too high and the other comment stated that permit holders who sub-lease shrimp moratorium permits should be required to forfeit the permits. NMFS disagrees with these comments as explained in the responses to comments 5 and 6, above. The factual basis for the certification was published in the proposed rule and is repeated below.

The current moratorium on Gulf shrimp permits became effective on October 26, 2006 (71 FR 56039, September 26, 2006). This final rule extends the current moratorium on Federal Gulf shrimp permits until October 26, 2026. The purpose of this rule is to maintain the biological, social, and economic benefits to the Gulf shrimp fishery achieved under the current moratorium. The objectives of this rule are to protect federally managed Gulf shrimp stocks, and promote catch efficiency, economic efficiency, and stability in the Gulf shrimp fishery.

This final rule is expected to directly regulate businesses that possess Federal Gulf shrimp moratorium permits. As of September 21, 2015, there were 1,464 vessels with valid or renewable Gulf shrimp moratorium permits. Although some permits are thought to be held by businesses with the same or substantively the same individual owners, and thus would likely be considered affiliated, ownership data for Gulf shrimp permit holders is incomplete and thus it is not currently feasible to accurately determine whether businesses that have these permits are in fact affiliated. NMFS is currently making changes to its permit application forms so that such determinations can be accurately made for future regulatory actions in this fishery. As a result of the incomplete ownership data, for purposes of this analysis, NMFS assumes each vessel is independently owned by a single business, which will result in an overestimate of the actual number of businesses directly regulated by this final rule. Thus, NMFS estimates the number of businesses directly regulated by this final rule to be 1,464.

Based on landings and economic data from 2013, which is the most current year for which complete economic data is available, all of these businesses are thought to be primarily engaged in shellfish harvesting activities (e.g., Gulf shrimp, South Atlantic shrimp, and Atlantic sea scallops fisheries). In 2013, the primary source of gross revenue for approximately 84 percent of these businesses was landings from one or more of these shellfish fisheries, while the other 16 percent did not have commercial landings in any fishery. A certain percentage of businesses with Gulf shrimp permits are usually inactive in the Gulf shrimp fishery in a given year, because of economic conditions in that fishery, other fisheries, or other industries (e.g., oil and gas) in which these businesses, their owners, and their crew sometimes participate. Some businesses may have also been inactive due to issues associated with the Deepwater Horizon MC252 event in 2010, and subsequent payouts from British Petroleum (BP). NMFS only possesses data on such payouts and other transfer payments for a sample of the permitted businesses, and thus cannot confirm the extent to which such payouts contributed to the lack of commercial harvesting activity by all of the inactive businesses. Given the lack of data to the contrary and because these businesses possess Gulf shrimp moratorium permits, for the purpose of this analysis, these 1,464 businesses are assumed to be primarily engaged in commercial shellfish harvesting.

From 2011 through 2013, the greatest average annual gross revenue earned by a single business was approximately $2.48 million. On average, a business with a Gulf shrimp moratorium permit had an annual gross revenue of approximately $247,000, annual net revenue from operations (commercial fishing activities) of approximately $6,300, and an annual economic profit of approximately $37,000. All monetary estimates are in 2001 dollars. Average annual economic profit was greater between 2011 and 2013 compared to the 2006 through 2009 time period, and greater than net revenue from operations, partly because of non-fishing related income, mostly in the form of payouts from BP (i.e., transfer payments) due to the Deepwater Horizon MC252 event in 2010. Thus, although the average profit margin from 2011 through 2013 was nearly 15 percent of gross revenue, the average margin from operations was only about 2.6 percent. Though relatively small, this margin from operations is still greater than what these businesses earned between 2006 and 2009 when net revenue from operations was generally negative, on average.

On December 29, 2015, NMFS issued a final rule establishing a small business size standard of $11 million in annual gross receipts for all businesses primarily engaged in the commercial fishing industry (NAICS 11411) for Regulatory Flexibility Act (RFA) compliance purposes only (80 FR 81194, December 29, 2015). The $11 million standard became effective on July 1, 2016, and is to be used in place of the SBA's current standards of $20.5 million, $5.5 million, and $7.5 million for the finfish (NAICS 114111), shellfish (NAICS 114112), and other marine fishing (NAICS 114119) sectors of the U.S. commercial fishing industry in all NMFS rules subject to the RFA after July 1, 2016. Id. at 81194.

Pursuant to the RFA, and prior to July 1, 2016, a certification was developed for this regulatory action using SBA's size standards. NMFS has reviewed the analyses prepared for this regulatory action in light of the new size standard. All of the entities directly regulated by this regulatory action are shellfish commercial fishing businesses and were considered small under the SBA's size standards, and thus they all would continue to be considered small under the new standard. Thus, NMFS has determined that the new size standard does not affect analyses prepared for this regulatory action.

Based on the information above, a reduction in profits for a substantial number of small entities is not expected. The Chief Counsel for Regulation of the Department of Commerce hereby reaffirms that the rule will not have a significant economic impact on a substantial number of small entities. Because this final rule, if implemented, is not expected to have a significant economic impact on a substantial number of small entities, a final regulatory flexibility analysis is not required and none has been prepared.

No duplicative, overlapping, or conflicting Federal rules have been identified. This final rule will not establish any new reporting or record-keeping requirements.

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