Federal Register Vol. 81, No.158,

On June 3, 2016, the Agency published a final rule for the Business and Industry (B&I) Guaranteed Loan Program (81 FR 35984). Since then, the Agency has discovered three necessary technical corrections.

First. The Agency is clarifying that the list of eligible regulated lenders, which are identified in § 4279.29(a), can include “other financial institutions” that are, like the other entities already listed in said paragraph, “subject to credit examination and supervision by an agency of the United States or a State.” This clarification implements the intent of the Agency to offer eligibility to all regulated lenders. As currently written, an unintended consequence is that some of the program's historically highest performing lenders may be excluded from eligibility.

Second. The Agency is correcting an inconsistency between a provision in § 4279.131(b)(1)(ii), associated with how the value of collateral is calculated for newly acquired equipment and a provision in § 4279.144, identifying when an appraisal of collateral is required. Briefly, the first provision allows the value of the collateral to be based on the purchase price of the newly acquired equipment without the need for an appraisal regardless of the purchase price, while the second provision as currently written, requires an appraisal for such newly acquired equipment when the purchase price exceeds $250,000. This poses a contradiction for newly acquired equipment whose collateral value, based on purchase price, is greater than $250,000—is an appraisal required or not? The intent of the Agency is found in the first provision and the correction being made is to modify the second provision to indicate that an appraisal is not required for newly acquired equipment whose collateral value is based on the purchase price. This correction provides clarity to the regulation as well as saves borrowers the added processing time and expense of obtaining an appraisal when purchasing new equipment in excess of $250,000.

Third. One of the changes that the final rule put into effect was to limit interest accrual associated with guaranteed loans “closed on or after” the effective date of the rule (i.e., August 2, 2016). This provision was supposed to have been addressed consistently throughout the provisions. The Agency identified two places in bankruptcy provisions (§ 4287.170(b)(3)(i) and (ii)) where this change was unintentionally not made. This notice corrects those oversights.

Accordingly, 7 CFR chapter XLII is amended by making the following correcting amendments:

This release is the Commission's final response to the order of the United States District Court for the District of Columbia in SIFMA v. CFTC 1 remanding eight swaps-related rulemakings to the Commission. It addresses issues raised by public comments submitted in response to a previous Federal Register release setting forth the Commission's initial response to the remand order.2

The present release is organized as follows. Part II describes the SIFMA litigation, the district court order, and the Commission's Initial Response. Part III discusses the Commission's general approach to extraterritorial costs and benefits in this release and potential methods for addressing extraterritorial cost-benefit issues. Part IV supplements the consideration of costs and benefits in the preambles to the original rulemakings and in the Initial Response by describing and evaluating the cost-benefit issues raised in the comments. Section IV.A discusses certain issues related to the costs of the extraterritorial application of the remanded rules. Section IV.B discusses certain issues related to the benefits of the extraterritorial application of the remanded rules. Section IV.C discusses the Commission's efforts to mitigate costs of the extraterritorial application of the Commission's rules, including the Commission's substituted compliance program and other actions. Section IV.D discusses consideration of substantive rule changes outside the scope of the remand order that may affect cross-border costs and benefits. Section IV.E discusses commenters' concerns about “market fragmentation,” primarily in the context of the Swap Execution Facility (“SEF”) Registration Rule. Section IV.F discusses cost-benefit issues related to the use of a test for the application of transaction-level Dodd-Frank rules to non-U.S. swap dealers based on dealing activities physically located in the United States as described in a November 2013 Division of Swap Dealer and Intermediary Oversight staff advisory. It also discusses cost-benefit issues related to a test for the application of the SEF Registration Rule based on the provision of swap execution services to traders located in the United States as described in a Division of Market Oversight guidance document, also issued in November 2013. Section IV.G discusses certain additional cost-benefit issues specific to particular rules. Part V discusses commenters' recommendations for changes in the substance of the remanded rules and evaluates whether these changes are justified in light of the international cost-benefit considerations addressed in Part IV and other relevant considerations. Finally, Part VI concludes that, taking into account the facts and analysis in the original rulemaking preambles as well as the additional consideration of costs and benefits in the Initial Response and this release, the remanded rules are legally sound, and the Commission will not propose changes in the context of the SIFMA v. CFTC remand order.

The Commission emphasizes that the purpose of the discussion of costs and benefits in Part IV and of potential rule changes in Parts V and VI is to respond to the mandate of the SIFMA remand order and to evaluate the present legal sufficiency of the remanded rulemaking proceedings. The discussion and conclusions in this release should not be interpreted to mean that the Commission will not consider other actions with respect to the rules, including substantive amendments, looking forward. To the contrary, the Commission will amend the rules in the future when amendment is in the public interest, whether in response to new information, experience, or the evolution of the markets and the international legal landscape.

On December 4, 2013, three trade associations sued the Commission in the United States District Court for the District of Columbia, challenging the Commission's Interpretive Guidance and Policy Statement Regarding Compliance with Certain Swap Regulations 4 (“Cross-Border Guidance” or “Guidance”) as well as the extraterritorial application of fourteen of the rules promulgated by the Commission to implement the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act 5 regarding swaps.6

The eight remanded rulemakings are:

Real-Time Public Reporting of Swap Transactions Data 11 (“Real-Time Reporting Rule”);

Swap Data Recordkeeping and Reporting Requirements 12 (“SDR Reporting Rule”);

Registration of Swap Dealers and Major Swap Participants 13 (“Swap Entity Registration Rule”);

Swap Dealer and Major Swap Participant Recordkeeping, Reporting, and Duties Rule; Futures Commission Merchant and Introducing Broker Conflicts of Interest Rules; and Chief Compliance Officer Rules for Swap Dealers, Major Swap Participants, and Futures Commission Merchants 14 (“Daily Trading Records,” “Risk Management,” and “Chief Compliance Officer” Rules);

Further Definition of “Swap Dealer,” “Security-Based Swap Dealer,” “Major Swap Participant,” “Major Security-Based Swap Participant,” and “Eligible Contract Participant” 15 (“Swap Entity Definition Rule”);

Swap Data Recordkeeping and Reporting Requirements: Pre-Enactment and Transition Swaps 16 (“Historical SDR Reporting Rule”);

Confirmation, Portfolio Reconciliation, Portfolio Compression, and Swap Trading Relationship Documentation Requirements for Swap Dealers and Major Swap Participants 17 (“Portfolio Reconciliation Rule”); and

Core Principles and Other Requirements for Swap Execution Facilities 18 (“SEF Registration Rule”).

The district court remanded the eight rulemakings “for further proceedings consistent with the Opinion issued this same day.” 19 As the Commission explained in its Initial Response to the remand order, the court's opinion included a number of holdings and observations that provide guidance as to the actions the Commission must take on remand.

1. The court held that, because Congress made the determination that the swaps rules apply overseas to the extent specified in section 2(i), the CEA provision on consideration of costs and benefits, section 15(a), does not require the Commission to consider whether it is necessary or desirable for particular rules to apply to overseas activities as specified in section 2(i).20 Indeed, the court explained, the Commission cannot, based on a consideration of costs and benefits, second-guess Congress's decision that swaps rules apply to certain overseas activities.21 As a result, the court stated that “the only issues necessarily before the CFTC on remand would be the substance of the Title VII rules, not the scope of those Rules' extraterritorial applications under 7 U.S.C. 2(i).” 22

2. At the same time, the court held that, in considering costs and benefits of the substantive regulatory choices it makes when promulgating a swaps rule, the Commission is required to take into consideration the fact that the rule, by statute, will apply to certain overseas activity.23 Thus, the Commission's consideration of costs and benefits of the application of the rule must encompass both foreign and domestic business activities.24 The court held that the Commission failed to meet this requirement because, the court stated, in the cost-benefit discussions for the rules at issue, the Commission did not state explicitly whether the identified costs and benefits regarding overseas activities are the same as, or differ from, those pertinent to domestic activities.25

3. The court held that the Commission has discretion either to consider costs and benefits of the international application of swaps rules separately from domestic application or to evaluate them together, “so long as the cost-benefit analysis makes clear that the CFTC reasonably considered both.” 26 The district court found that, at the time the rules at issue in the litigation were promulgated, foreign swaps regulations were still under development so that costs of possible duplicative regulation were hypothetical and did not have to be considered.27 The court noted that this fact raised the possibility that the costs and benefits of the rules' extraterritorial applications “were essentially identical to those of the Rules' domestic applications” so that the Commission “functionally considered the extraterritorial costs and benefits” of the rules “by considering the Rules' domestic costs and benefits.” 28 However, the court concluded that it did not need to address that possibility because the cost-benefit discussions in the rule preambles gave “no indication” that this was so.29 The court further noted that foreign swaps regulations passed since the promulgation of the rules at issue in the litigation “may now raise issues of duplicative regulatory burdens,” but that “the CFTC may well conclude that its policy of substituted compliance largely negates these costs.” 30

4. Finally, the court noted that “[p]laintiffs raise no complaints regarding the CFTC's evaluation of the general, often unquantifiable, benefits and costs of the domestic application of the Title VII Rules.” 31 As a result, the court held, “[o]n remand, the CFTC would only need to make explicit which of those benefits and costs similarly apply to the Rules' extraterritorial applications.” 32

On March 10, 2015, the Commission published its Initial Response to the district court remand order. In that release, the Commission described the district court litigation and order and took two substantive actions.

First, the Commission supplemented the discussion of costs and benefits in the preambles of the remanded rulemakings by stating that it:

Second, to further inform its consideration of costs and benefits on remand, the Commission solicited comments on four questions:

The Commission requested that commenters focus on information and analysis specifically relevant to the inquiry required by the remand order, and supply relevant data to support their comments.35

The Initial Response stated that, following review of the comments, the Commission would publish a further response to the district court remand order, which would include any necessary supplementation of the Commission's consideration of costs and benefits for the remanded rules. The Commission also stated that it would consider whether to amend any of the remanded rules based on information developed in this process.36

The Commission received four comments in response to its Initial Response to the remand order: A five-page comment jointly filed by the International Swaps and Derivatives Association and the Securities Industry and Financial Markets Association (“ISDA-SIFMA”); a three-page comment filed by the Japanese Bankers Association (“JBA”); a two-page comment filed by UBS Securities LLC (“UBS”); and a twenty-one page comment filed by the Institute of International Bankers (“IIB”).37 The substance of the comments is discussed in detail in the remainder of this release.

Briefly, ISDA-SIFMA cautioned against an overly narrow conception of the burdens of overseas application of Commission rules, stating that, in addition to costs such as registration fees and expenses to construct and administer compliance systems, foreign entities would incur additional costs of “engag[ing] with an unfamiliar, non-domestic regulator and face uncertainty regarding the ramifications of being subject to a new regime.” 38 The comment stated that “internal conflicts and customer resistance frequently may follow.” 39 ISDA-SIFMA further stated that these costs and uncertainties function as barriers to engagement in U.S. markets, potentially resulting in market fragmentation and decreased liquidity available to U.S. persons.40 ISDA-SIFMA stated that these costs must be weighed against what ISDA-SIFMA described as “attenuated or minimal benefits” from Commission rules where “foreign regulations . . . meet the objectives outlined by the G-20 jurisdictions.” 41

As evidence of market fragmentation, ISDA-SIFMA referred to ISDA research indicating a reduced percentage of transactions by European swap dealers with U.S. swap dealers in the market for euro denominated interest rate swaps following the implementation of the SEF Registration Rule.42 ISDA-SIFMA made suggestions for specific substantive changes in two remanded rules. In the Swap Entity Definition Rule, it recommended greater use of safe harbors to reduce uncertainty for businesses hedging financial risk in applying the de minimis exception for determining swap dealer status.43 In the SDR Reporting Rule, it recommended that the Commission “re-examine” the requirement of Commission rule 45.2(h) that swap counterparties who are not Commission registrants make their books and records available to the Commission and other U.S. authorities.44

ISDA-SIFMA also urged the Commission to undertake greater harmonization with foreign jurisdictions. In connection with the SEF Registration Rule, ISDA-SIFMA stated that there was a “stark contrast” between what it described as “very rigid execution methods” under the Commission's rule and “greater flexibility” under the rules that the European Union plans to implement, and urged the Commission to “re-examine its approach.” 45 ISDA-SIFMA also supported greater international harmonization in the area of swap data reporting.46 ISDA-SIFMA further stated that significant costs would be incurred if the Commission implemented the test for the application of certain Commission rules based on swap dealing activities within the United States by non-U.S. swap dealers set forth in the Division of Swap Dealer and Intermediary Oversight Advisory, Applicability of Transaction-Level Requirements to Activity in the United States (CFTC Staff Advisory No. 13-69, Nov. 14, 2013) (“DSIO Advisory”).47 Finally, with respect to the use of substituted compliance as a means for addressing issues of duplicative regulation, ISDA-SIFMA stated that “broad, holistic” substituted compliance “can be of substantial help.” 48

JBA stated that banks are faced with legal and consulting fees to comply with Dodd-Frank rules and that remaining areas of ambiguity cause them to manage their business in a conservative manner.49 Banks have also incurred costs to comply with regulatory requirements that differ across jurisdictions, including where comparability is not established.50 With respect to foreign banks registered as swap dealers, JBA stated that the Commission's initial cost-benefit analysis did not take into consideration the fact that entity-level requirements apply to all of a bank's swaps business even though, for a non-U.S. bank, transactions with U.S. persons account for only 10% of that business.51 JBA further stated that foreign banks not registered as swap dealers have avoided transacting with U.S. financial institutions to avoid U.S. regulation, inconveniencing their customers and increasing risks and costs for maintaining market liquidity.52 JBA also stated that customers have avoided transacting with subsidiaries of foreign banks incorporated in the U.S. in order to avoid U.S. regulation, resulting in costs to book transactions with these customers with non-U.S. entities to maintain business relationships.53 JBA identified the reporting of swap data to trade repositories as one area where banks have been subject to differing requirements in multiple jurisdictions, resulting in increased compliance costs.54 JBA therefore recommended that the swap data reporting process should be established “through an industry-wide initiative.” 55 JBA identified the swaps push-out rule as a second area of particular concern.56 However, this statutory provision 57 was not part of the SIFMA litigation or remand order.

UBS focused on the benefits of the SEF Registration Rule in promoting a level playing field for market participants, facilitating access to liquidity providers, and making the workflow from execution to clearing as robust and efficient as possible.58 UBS stated that application of the rule to all activities under the Commission's jurisdiction pursuant to section 2(i) helps to ensure that the core principles and benefits of the rule “remain relevant as the global swaps market continues to evolve.” 59 UBS also urged the Commission to work with foreign regulators to maximize harmonization, avoid regulatory arbitrage, and establish substituted compliance regimes that address duplicative regulatory burdens, while also maintaining consistency with the principles of the Dodd-Frank Act and Commission regulations in the SEF area.60

IIB dealt primarily with cost-benefit issues that would arise from implementation of the test based on swap dealing activities physically located in the United States articulated in the DSIO Advisory.61 IIB focused on swaps between a non-U.S. swap dealer and its non-U.S. counterparties that—under the test set forth in the Advisory—would be subject to transaction-level Dodd-Frank rules if the relevant swaps are arranged, negotiated, or executed by personnel or agents of the non-U.S. swap dealer located in the United States, but not otherwise. According to IIB, in such transactions, the costs of U.S. rules would be greater and benefits lower than in other transactions to which Dodd-Frank rules apply. IIB stated that, in order to avoid U.S. regulation, foreign swap dealers would forgo using staff located in the United States in transactions with foreign counterparties even in circumstances where employing U.S. personnel would be advantageous, for example because a trader located in the United States is more familiar with a particular market.62 IIB also stated that such a test could result in covered transactions being subject to duplicative and possibly contradictory regulation by multiple jurisdictions and in costs to establish systems to keep track of which swaps are handled by personnel or agents located in the United States.63 IIB further stated that benefits would be doubtful in transactions made subject to Commission rules by such a test because the resulting swaps would be between two foreign entities and thus, according to IIB, pose little threat to the U.S. financial system.64 IIB also discussed cost-benefit implications of a test based on physical presence in the United States in the context of several particular Dodd-Frank rules, including, but not limited to, some of the rules subject to the SIFMA remand order.65 IIB urged the Commission either to not implement such a test or to implement a version considerably narrower than the one described in the DSIO Advisory.66 IIB also was critical of a different standard based on services provided within the United States by non-U.S. persons, set forth in a Division of Market Oversight guidance document. Under this standard, the SEF Registration Rule applies to foreign-based entities that provide swap execution services to traders located in the United States, even if the traders execute swaps for non-U.S. persons.67

In addition to discussing the application of Commission rules to non-U.S. firms based on activities within the United States, IIB stated that, in the area of swap data reporting, duplicative requirements create costs that could be avoided if the Commission could obtain information from foreign regulators and trade repositories.68 IIB stated that it supported Commission efforts to address legal and other obstacles to cross-border information sharing.69 Pending completion of these international efforts, IIB recommended that the Commission formalize existing no-action relief relating to the extraterritorial application of the SDR and Historical SDR Reporting Rules.70 IIB made no recommendations for specific changes in the substantive requirements of the remanded rules.

These amendments are promulgated under the authority of the TVA Act, as amended, 16 U.S.C. 831-831ee, the Archaeological Resources Protection Act, 16 U.S.C. 470aa-470mm, and the Antiquities Act of 1906, 16 U.S.C.431, 432 & 433.

This final rule amends TVA's regulations implementing the Archaeological Resources Protection Act of 1979 (Pub. L. 96-95, as amended by Pub. L. 100-555, Pub. L. 100-588; 93 Stat. 721; 102 Stat. 2983; 16 U.S.C. 470aa-mm) to provide for the issuance of petty offense citations by TVA's law enforcement agents for violations of ARPA or AA.

Section 10(a) of ARPA requires the Departments of Interior, Agriculture and Defense and the Tennessee Valley Authority to promulgate such uniform rules and regulations as may be necessary to carry out the purposes of ARPA. The first purpose of ARPA is “to secure, for the present and future benefit of the American people, the protection of archaeological resources and sites which are on public lands and Indian lands.” 16 U.S.C. 470aa(b). The uniform regulations for ARPA originally were published on January 6, 1984 to implement the Act of 1979. The uniform regulations were then revised on January 26, 1995 to incorporate the amendments to ARPA promulgated by Congress in 1988.

Section 10(b) of ARPA requires each Federal land manager (FLM) to promulgate such regulations, consistent with the uniform regulations under Section 10(a), as may be appropriate for the carrying out of the FLM's functions and authorities under the Act. Thus, Section 10(b) allows individual Federal agencies to tailor the uniform regulations to suit their own particular needs with a view to effectively implementing the authorities under the Act. TVA has adopted the uniform regulations as its own. See 18 CFR part 1312 (1984 and 1995). This final rule amends TVA's ARPA regulations by enabling TVA's law enforcement agents to issue petty offense citations for violations of ARPA 1 or AA 2 occurring on lands owned by the United States that are entrusted to TVA.3 The issuance of petty offense citations is consistent with the authority granted to TVA's law enforcement agents under the TVA Act, and advances the effective prosecution of violations of ARPA and AA.

Under the TVA Act, the TVA Board of Directors “may designate employees of the Corporation to act as law enforcement agents” to “make arrests without warrant for any offense against the United States committed in the agent's presence” that occurs “on any lands or facilities owned or leased by the Corporation.” See 16 U.S.C. 831c-3. Based on this authority, the final rule amends TVA's regulations for protection of archaeological resources to authorize certain TVA law enforcement agents to issue petty offense citations for the violation of any provision of 16 U.S.C. 470ee or 16 U.S.C. 433. Those TVA law enforcement agents that are designated by the Director of TVA Police and Emergency Management for the purpose of conducting archaeological investigations shall have the authority to issue petty offense citations for ARPA or AA violations committed in the agent's presence on lands owned by the United States that are entrusted to TVA. For any such petty offense committed on lands entrusted to TVA, the citation may be issued at the site of the offense, or on non-TVA land (a) when the person committing the offense is in the process of fleeing the site of the offense to avoid arrest, or (b) to protect the archaeological artifacts involved in the commission of the offense.4 The citation will require the person charged with the violation to appear before a United States Magistrate Judge within whose jurisdiction the affected archaeological resource is located.5

Public comment was sought for a 30-day period following publication of the proposed amendments in the Federal Register on May 20, 2016 (81 FR 31873). The comment period closed on June 20, 2016. No comments were received in response to the publication of the proposed amendments.

The final rule corrects a typographical error in the proposed rule published on May 20, 2016. The reference to “Title 8” in the final sentence of § 1312.22 (on page 31875 of the proposed rule) has been corrected to “Title 18” in this final rule.

A. Unfunded Mandates Reform Act and various Executive Orders including E.O. 12866, Regulatory Planning and Review; E.O. 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations; E.O. 13045, Protection of Children from Environmental Health Risks; E.O. 13132, Federalism; E.O. 13175, Consultation and Coordination with Indian Tribal Governments; and E.O. 13211, Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, and Use; E.O. 12988, Civil Justice Reform Act.

This final rule amends TVA's regulations for the protection of archaeological resources by providing for issuance of petty offense citations by TVA's law enforcement agents for violations of ARPA or AA. The rule is not subject to Office of Management and Budget Review under Executive Order 12866. The rule contains no Federal mandates for State, local, or tribal government or for the private sector. TVA has determined that these amendments will not have a significant annual effect of $100 million or more or result in expenditures of $100 million in any one year by State, local, or tribal governments or by the private sector. Nor will the amendments have concerns for environmental health or safety risks that may disproportionately affect children, have significant effect on the supply, distribution, or use of energy, or disproportionally impact low-income or minority populations. Accordingly, this final rule has no implications for any of the referenced authorities.

Under the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., TVA is required to prepare a regulatory flexibility analysis unless the head of the agency certifies that the proposal will not have a significant economic impact on a substantial number of small entities. TVA's Chief Executive Officer has certified that the amendments promulgated in this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act. This determination is based on the finding that the amendments are directed toward Federal resource management to help prevent loss or destruction of archaeological resources, with no economic impact on the public.

This rule does not contain information collection requirements that require approval by OMB under the Paperwork Reduction Act.

For the reasons set out in the preamble, 18 CFR part 1312 is amended as follows:

I. Background

In the Federal Register of December 1, 2014 (79 FR 71259), we issued a final rule requiring vending machine operators who own or operate 20 or more vending machines, or who voluntarily register to be covered, to provide calorie declarations for those foods sold from vending machines for which the Nutrition Facts label cannot be examined before purchase or for which visible nutrition information is not otherwise provided at the point of purchase (the final rule). Covered vending machine operators must comply with the rule by December 1, 2016. However, in the Federal Register of August 1, 2016 (81 FR 50303), we issued a final rule entitled “Food Labeling; Calorie Labeling of Articles of Food in Vending Machines; Extension of Compliance Date.” This rule provides that the compliance date for type size front-of-pack labeling requirements (§ 101.8(b)(2) (21 CFR 101.8(b)(2))) and calorie disclosure requirements (§ 101.8(c)(2)) for certain gums, mints, and roll candy products in glass-front machines in the final rule published December 1, 2014 (79 FR 71259) is extended to July 26, 2018. The compliance date for all other requirements in the final rule (79 FR 71259) remains December 1, 2016.

We examined the economic implications of the final rule as required by the Regulatory Flexibility Act (5 U.S.C. 601-612) and determined that the final rule will have a significant economic impact on a substantial number of small entities. In compliance with section 212 of the Small Business Regulatory Enforcement Fairness Act (Pub. L. 104-121, as amended by Pub. L. 110-28), we are making available the SECG to explain the actions that a small entity must take to comply with the rule.

We are issuing the SECG consistent with our good guidance practices regulation (21 CFR 10.115(c)(2)). The SECG represents our current thinking on calorie labeling for foods sold in vending machines operated by a person engaged in the business of owning or operating 20 or more vending machines, or a person who voluntarily registers with FDA to be covered by the rule. It does not create or confer any rights for or on any person and does not operate to bind FDA or the public. An alternative approach may be used if such approach satisfies the requirements of the applicable statutes and regulations.

This SECG refers to collections of information described in FDA's final rule that published in the Federal Register of December 1, 2014, and that will be effective on December 1, 2016. As stated in the final rule, these collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (the PRA) (44 U.S.C. 3501-3520). The collections of information in the final rule have been approved under OMB control number 0910-0782. An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

Persons with access to the Internet may obtain the SECG at either http://www.fda.gov/Food/GuidanceRegulation/GuidanceDocumentsRegulatoryInformation/default.htm or http://www.regulations.gov. Use the FDA Web site listed in the previous sentence to find the most current version of the guidance.

We are announcing the availability of a draft guidance for industry entitled “Calorie Labeling of Articles of Food in Vending Machines.” We are issuing the draft guidance consistent with our good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the current thinking of the FDA on this topic. It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternate approach if it satisfies the requirements of the applicable statutes and regulations.

In the Federal Register of December 1, 2014 (79 FR 71259), we issued a final rule entitled “Food Labeling: Calorie Labeling of Articles of Food in Vending Machines” (“the rule”). The rule is codified at 21 CFR 101.8. The rule requires vending machine operators who own or operate 20 or more vending machines, or who voluntarily register with FDA to be covered, to declare calories for those vending machine foods for which the Nutrition Facts label cannot be examined before purchase or for which visible nutrition information is not otherwise provided at the point of purchase. Covered vending machine operators must comply with the rule by December 1, 2016. However, in the Federal Register of August 1, 2016 (81 FR 50303), we issued a final rule entitled “Food Labeling; Calorie Labeling of Articles of Food in Vending Machines; Extension of Compliance Date.” This rule provides that the compliance date for type size front-of-pack labeling requirements (§ 101.8(b)(2) (21 CFR 101.8(b)(2))) and calorie disclosure requirements (§ 101.8(c)(2)) for certain gums, mints, and roll candy products in glass-front machines in the final rule published December 1, 2014 (79 FR 71259) is extended to July 26, 2018. The compliance date for all other requirements in the final rule (79 FR 71259) remains December 1, 2016.

This draft guidance refers to previously approved collections of information found in FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in 21 CFR 101.8 have been approved under OMB Control No. 0910-0782.

Persons with access to the Internet may obtain the draft guidance at either http://www.fda.gov/FoodGuidances or http://www.regulations.gov. Use the FDA Web site listed in the previous sentence to find the most current version of the guidance.

Throughout this document “we,” “us,” or “our” refer to EPA. This section provides additional information by addressing the following:

The EPA is approving two submissions from the State of Iowa: The infrastructure SIP submissions for the 1997 and 2006 PM2.5 NAAQS received on March 31, 2008 and July 29, 2013. The SIP submissions from Iowa addressed the requirements of CAA sections 110(a)(1) and (2) as applicable to the 1997 and 2006 PM2.5 NAAQS. The March 31, 2008 SIP submission also included the state adoption of the 1997 PM2.5 standard. The EPA is also approving the 1997 PM2.5 standard in today's action.

For the 1997 PM2.5 NAAQS, the EPA took previous action to address section 110(a)(2)(D)(i)(I)—prongs 1 and 2 for Iowa. (72 FR 10380, March 8, 2007, as revised in 76 FR 48208, August 8, 2011). Therefore, in this final action, we are not acting on these portions since they have already been acted upon by the EPA.

A Technical Support Document is included as part of the docket to discuss the details of this final action.

The public comment period on EPA's proposed regulation opened June 23, 2016, the date of its publication in the Federal Register, and closed on July 25, 2016. 81 FR 40825. During this period, EPA received one comment that is addressed as follows:

Comment: The commenter stated that EPA must disapprove the Prevention of Significant Deterioration (PSD) portions of the infrastructure SIP, 110(a)(2)(C), (D)(i)(II) (prong 3) and (J), because the local air agencies in Iowa with their own PSD programs lack the PM2.5 increment or do not treat NOX as a precursor for ozone.

Response to comment: Iowa has a delegated PSD program (see 72 FR 27056) that is not delegated to local air agencies. PSD permits are only issued by the Iowa Department of Natural Resources. 81 FR 44795, 44796. Therefore, no changes will be made in response to this comment.

The EPA is approving two submissions from the State of Iowa: The infrastructure SIP submissions for the 1997 and 2006 PM2.5 NAAQS received on March 31, 2008 and July 29, 2013. The SIP submissions from Iowa address the requirements of CAA sections 110(a)(1) and (2) as applicable to the 1997 and 2006 PM2.5 NAAQS. Today's action also approves the adoption of the 1997 PM2.5 standard.

The EPA's analysis of these submissions is addressed in a TSD as part of the docket.

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

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

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 17, 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. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

The statutory authority for this action is provided by section 110 of the CAA, as amended (42 U.S.C. 7410).

For the reasons stated in the preamble, EPA to amends 40 CFR part 52 as set forth below:

On December 28, 2015, the District submitted a formal SIP revision to its SIP. The District's SIP revision submittal addresses the following infrastructure elements for the implementation of the 2012 annual PM2.5 NAAQS: section 110(a)(2)(A), (B), (C), (D)(i)(I), (D)(i)(II), (D)(ii), (E), (F), (G), (H), (J), (K), (L), and (M) of the CAA. The infrastructure SIP submittal does not address section 110(a)(2)(I) which pertains to the nonattainment requirements of part D, title I of the CAA, since this element is not required to be submitted by the 3-year submission deadline of CAA section 110(a)(1), and will be addressed in a separate process.

In accordance with 40 CFR part 51, appendix V, EPA found that the District's December 28, 2015 infrastructure SIP submittal is technically incomplete for the portions addressing the infrastructure elements in section 110(a)(2)(C), (D)(i)(II), (D)(ii), and (J) relating to the permitting program for prevention of significant deterioration (PSD), because the District has not adequately addressed the requirements of part C of title I of the CAA for having a SIP approved PSD permit program. EPA found the remainder of the SIP submittal to be administratively and technically complete. On May 11, 2016, EPA sent a letter to the District Department of Environment and Energy (DDOEE) notifying the District of this determination.

As a result of this incompleteness finding, EPA is not taking rulemaking action on the PSD related portions of section 110(a)(2)(C), (D)(i)(II), (D)(ii), and (J) for the 2012 annual PM2.5 NAAQS, until the District through DDOEE submits a SIP to address the PSD permit program requirements of part C of title I of the CAA. EPA recognizes, however, that the District is already subject to a Federal Implementation Plan (FIP) containing the federal PSD program to correct the SIP deficiency and that DDOEE would not have to take further action for the FIP based permitting process to continue operating, as incorporated by reference in the District SIP in 40 CFR 52.499.1 EPA's PSD FIP for the District consists of the implementation of the federal PSD provisions as codified in 40 CFR 51.21, with the exception of paragraph (a)(1).

EPA does not anticipate any adverse consequences to DDOEE as a result of this incompleteness finding for the PSD related portions of section 110(a)(2)(C), (D)(i)(II), (D)(ii), and (J) for the District's 2012 annual PM2.5 infrastructure SIP revision. First, mandatory sanctions would not apply to the District under CAA section 179 because the failure to submit a PSD SIP is neither required under title I part D of the CAA, nor in response to a SIP call under section 110(k)(5) of the CAA. Second, EPA is not subject to any further FIP duty from our finding of incompleteness because of the PSD FIP that is already been approved, which addresses the SIP deficiency.

EPA finds that the remainder of the District's December 28, 2015 infrastructure submittal provides the basic program elements specified in section 110(a)(2) of the CAA necessary to implement, maintain, and enforce the 2012 annual PM2.5 NAAQS. A detailed summary of EPA's review and rationale for approving the District's infrastructure SIP submittal for the 2012 annual PM2.5 NAAQS may be found in the technical support document (TSD) for this rulemaking action which is available on line at www.regulations.gov, Docket ID Number EPA-R03-OAR-2016-0350.

EPA is approving the District's December 28, 2015 infrastructure submittal for the 2012 annual PM2.5 NAAQS as meeting the requirements of section 110(a)(2) of the CAA, including specifically section 110(a)(2)(A), (B), (C), (D)(i)(I), (D)(i)(II), (D)(ii), (E), (F), (G), (H), (J), (K), (L), and (M) for this NAAQS, with the exception of the requirements related to the PSD permitting program of part C, title I of the CAA in section 110(a)(2)(C), (D)(i)(II), (D)(ii), and (J). This rulemaking does not include action on section 110(a)(2)(I) which pertains to the nonattainment planning requirements of part D, title I of the CAA, because this element is not required to be submitted by the 3-year submission deadline of section 110(a)(1) of the CAA, and will be addressed in a separate process where necessary and applicable. EPA is publishing this rule without prior proposal because EPA views this as a noncontroversial amendment and anticipates no adverse comment. However, in the “Proposed Rules” section of today's Federal Register, EPA is publishing a separate document that will serve as the proposal to approve the SIP revision if adverse comments are filed. This rule will be effective on October 17, 2016 without further notice unless EPA receives adverse comment by September 15, 2016. If EPA receives adverse comment, EPA will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. EPA will address all public comments in a subsequent final rule based on the proposed rule. EPA will not institute a second comment period on this action. Any parties interested in commenting must do so at this time. Please note that if EPA receives adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment.

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

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 17, 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 action. This action which satisfies certain infrastructure requirements of section 110(a)(2) of the CAA for the 2012 annual PM2.5 NAAQS for the District may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

40 CFR part 52 is amended as follows:

On February 5, 2016, the Commonwealth of Virginia, through the Virginia Department of Environmental Quality (VADEQ), submitted a formal revision to the Virginia SIP. The SIP revision submittal includes revised provisions within 9VAC5 Chapter 40, Existing Stationary Sources, to include revised notification and compliance dates for sources subject to RACT for the 2008 8-hour ozone NAAQS to submit a case-by-case RACT demonstration to VADEQ.

On March 27, 2008, EPA revised the 8-hour ozone standard to a new 0.075 parts per million (ppm) level (73 FR 16436). On May 21, 2012, EPA finalized designations for the 2008 8-hour ozone NAAQS (77 FR 30087) in which the Washington, DC-MD-VA area was designated marginal nonattainment. See 40 CFR 81.347. The northern portion of Virginia is also part of the Metropolitan Statistical Area of the District Columbia which is in the ozone transport region (OTR) established under section 184(a) of the CAA. Pursuant to section 184(b) of the CAA, all areas in the OTR must comply with the CAA requirements for a moderate nonattainment area which includes RACT requirements. On March 6, 2015, EPA published a final implementation rule (80 FR 12264) which specifies the compliance date (January 1, 2017) by which RACT measures must be implemented for the 2008 8-hour ozone NAAQS. See 40 CFR 51.1112. Thus, the northern portion of Virginia which is within the OTR must implement RACT per CAA sections 172 and 182 for major stationary sources of nitrogen oxides (NOX) and volatile organic compounds (VOCs).1

This SIP revision includes revised 9VAC5-40-7400 and 9VAC5-40-7420 which incorporate EPA's compliance date for implementation of RACT requirements for the 2008 8-hour ozone NAAQS (i.e., January 1, 2017) into VADEQ's regulations. The SIP revision consists of amended versions of 9VAC5-40-7400 and 9VAC5-40-7420, which were previously included in the Virginia SIP, to add notification and compliance dates for RACT case-by-case determinations to meet CAA deadlines for implementing RACT for major stationary sources of NOX and VOC within Virginia for the 2008 8-hour ozone NAAQS. These provisions now include the RACT compliance date stated in EPA's implementation rule for the 2008 8-hour ozone NAAQS. The notification date included in the Virginia regulations is the date by which facilities subject to RACT for the 2008 ozone NAAQS must notify the State Air Pollution Control Board of their applicability status, commit to making a RACT determination, and provide an acceptable schedule for implementing the proposed RACT determination so the source achieves compliance with the RACT emission standard as expeditiously as possible, but no later than the compliance date of January 1, 2017 as required by CAA.

Specifically, in section 9VAC5-40-7400, pertaining to stationary sources of VOCs, Table 4-51B was amended to add the 2008 8-hour ozone standard, emissions control area, source threshold limit in tpy which subjects sources to VOC RACT, date for submission of notification to VADEQ, and the compliance date to implement RACT. Table 1, in this rulemaking action, describes Table 4-51B, Notification and Compliance Dates for Facilities Located in VOC Emissions Control Areas.

In section 9VAC5-40-7420, pertaining to stationary sources of NOX, Table 4-51E and Table 4-51F were amended to include the 2008 8-hour ozone standard, emissions control area, source threshold limit in tpy which subjects sources to NOX RACT, date for submission of notification to VADEQ, and compliance date to implement RACT. Table 2, of this rulemaking action, describes Table 4-51E for facilities in an emission control area where there is no applicable presumptive RACT. Table 3, of this rulemaking action describes Table 4-51F which pertains to facilities in an emission control area where presumptive RACT is defined or applicable.

The amendments to 9VAC5-40-7400 and 9VAC5-40-7420 are consistent with the federal requirements for RACT implementation for the 2008 8-hour ozone NAAQS contained within EPA's final implementation rule for this NAAQS and with CAA requirements for RACT in CAA sections 172, 182, and 184. See 80 FR 12264.

EPA is approving the February 5, 2016 SIP submission from Virginia which includes amended Virginia regulations to include notification and compliance dates for the submission and implementation of case-by-case RACT to address requirements for the 2008 8-hour NAAQS. EPA is publishing this rule without prior proposal because EPA views this as a noncontroversial amendment and anticipates no adverse comment. However, in the “Proposed Rules” section of today's Federal Register, EPA is publishing a separate document that will serve as the proposal to approve the SIP revision if adverse comments are filed. This rule will be effective on October 17, 2016 without further notice unless EPA receives adverse comment by September 15, 2016. If EPA receives adverse comment, EPA will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. EPA will address all public comments in a subsequent final rule based on the proposed rule. EPA will not institute a second comment period on this action. Any parties interested in commenting must do so at this time. Please note that if EPA receives adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment.

In 1995, Virginia adopted legislation that provides, subject to certain conditions, for an environmental assessment (audit) “privilege” for voluntary compliance evaluations performed by a regulated entity. The legislation further addresses the relative burden of proof for parties either asserting the privilege or seeking disclosure of documents for which the privilege is claimed. Virginia's legislation also provides, subject to certain conditions, for a penalty waiver for violations of environmental laws when a regulated entity discovers such violations pursuant to a voluntary compliance evaluation and voluntarily discloses such violations to the Commonwealth and takes prompt and appropriate measures to remedy the violations. Virginia's Voluntary Environmental Assessment Privilege Law, Va. Code Sec. 10.1-1198, provides a privilege that protects from disclosure documents and information about the content of those documents that are the product of a voluntary environmental assessment. The Privilege Law does not extend to documents or information that: (1) Are generated or developed before the commencement of a voluntary environmental assessment; (2) are prepared independently of the assessment process; (3) demonstrate a clear, imminent and substantial danger to the public health or environment; or (4) are required by law.

On January 12, 1998, the Commonwealth of Virginia Office of the Attorney General provided a legal opinion that states that the Privilege Law, Va. Code § 10.1-1198, precludes granting a privilege to documents and information “required by law,” including documents and information “required by federal law to maintain program delegation, authorization or approval,” since Virginia must “enforce federally authorized environmental programs in a manner that is no less stringent than their federal counterparts. . . .” The opinion concludes that “[r]egarding § 10.1-1198, therefore, documents or other information needed for civil or criminal enforcement under one of these programs could not be privileged because such documents and information are essential to pursuing enforcement in a manner required by federal law to maintain program delegation, authorization or approval.” Virginia's Immunity law, Va. Code Sec. 10.1-1199, provides that “[t]o the extent consistent with requirements imposed by federal law,” any person making a voluntary disclosure of information to a state agency regarding a violation of an environmental statute, regulation, permit, or administrative order is granted immunity from administrative or civil penalty. The Attorney General's January 12, 1998 opinion states that the quoted language renders this statute inapplicable to enforcement of any federally authorized programs, since “no immunity could be afforded from administrative, civil, or criminal penalties because granting such immunity would not be consistent with federal law, which is one of the criteria for immunity.”

Therefore, EPA has determined that Virginia's Privilege and Immunity statutes will not preclude the Commonwealth from enforcing its program consistent with the federal requirements. In any event, because EPA has also determined that a state audit privilege and immunity law can affect only state enforcement and cannot have any impact on federal enforcement authorities, EPA may at any time invoke its authority under the CAA, including, for example, sections 113, 167, 205, 211 or 213, to enforce the requirements or prohibitions of the state plan, independently of any state enforcement effort. In addition, citizen enforcement under section 304 of the CAA is likewise unaffected by this, or any, state audit privilege or immunity law.

In this rulemaking action, 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 VADEQ regulations described in the amendments to 40 CFR 52 set forth below which added notification and compliance dates for sources seeking case-by-case RACT. The EPA has made, and will continue to make, these documents generally available electronically through www.regulations.gov and/or may be viewed at the appropriate EPA office (see the ADDRESSES section of this preamble for more information).

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

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

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

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

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

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

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

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

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

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

The SIP is not approved to apply on any Indian reservation land as defined in 18 U.S.C. 1151 or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 17, 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 action. This action pertaining to submission and compliance dates for case-by-case RACT determinations in Virginia for the 2008 8-hour ozone NAAQS may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

40 CFR part 52 is amended as follows:

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

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Printing Office's e-CFR site at http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl. To access the OCSPP test guidelines referenced in this document electronically, please go to http://www.epa.gov/ocspp and select “Test Methods and Guidelines.”

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2015-0652 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before October 17, 2016. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2015-0652, by one of the following methods:

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

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

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

In the Federal Register of April 25, 2016 (81 FR 24046) (FRL-9944-86), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 5F8353) by Valent USA Corporation, 1600 Riviera Avenue, Suite 200, Walnut Creek, CA 94596 U.S.A. The petition requested that 40 CFR 180.180.568 be amended by establishing tolerances for residues of the herbicide flumioxazin, in or on soybean forage at 0.05 parts per million (ppm) and hay at 0.02 ppm. That document referenced a summary of the petition prepared by Valent USA Corporation, the registrant, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing.

Based upon review of the data supporting the petition, EPA has determined that the tolerance for soybean forage should be lowered from the proposed level of 0.05 ppm to 0.03 ppm. The reason for these changes are explained in Unit IV.D.

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

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

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

In the Federal Register of April 05, 2013 (78 FR 20462) (FRL-9381-7), EPA published a final rule establishing tolerances for residues of flumioxazin on globe artichoke, chinese cabbage, olive, pomegranate, and prickly pear cactus commodities based on EPA's conclusion that aggregate exposure to flumioxazin is safe for the general population, including infants and children. Since that rulemaking, the toxicity profile for flumioxazin has not changed. The requested tolerances will not result in residues on human food commodities, only animal feed (soybean forage and hay). The available residue data submitted for use in soybean forage and hay indicates that the dietary burden for livestock will not change from the current levels that were previously assessed. Therefore, the residues of flumioxazin soybean forage and hay from the proposed new use will not impact the existing human dietary and aggregate risk assessments for flumioxazin. For a detailed discussion of the aggregate risk assessments and determination of safety, as well as a summary of the toxicological endpoints used for human risk assessment, please refer to the final rule published in the Federal Register of April 05, 2013. EPA relies upon those supporting risk assessments and the findings made in the Federal Register document in support of this final rule.

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

Adequate enforcement methodology (gas chromatography/nitrogen-phosphorus detection (GC/NPD) method, Valent Method RM30-A-1) is available to enforce the tolerance expression. The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address: [email protected].

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

The Codex has not established a MRL for flumioxazin.

The agency has determined that the tolerance for soybean forage should be lowered from the proposed level of 0.05 ppm to 0.03 ppm. The modifications were due to the Agency's use of the Organization for Economic Co-operation and Development (OECD) calculation procedures to determine the appropriate tolerance levels.

Therefore, tolerances are established for residues of flumioxazin, in or on soybean forage at 0.03 parts per million (ppm) and hay at 0.02 (ppm).

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

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

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

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

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

Therefore, 40 CFR chapter I is amended as follows:

I. Background

On March 17, 2014, a hazardous liquid pipeline company was notified by emergency responders of crude oil leaking up from below the pavement in a residential area in Wilmington, California. The leak was close to a refinery. The company initially informed the regulator that it had no active lines in the area but responded anyway.

On March 18, 2014, the company excavated the area surrounding the leaking oil and learned that the leak originated from a pipeline that it owned. The pipeline had been purchased 16 years ago and the company understood that the previous operator had properly abandoned and purged the pipeline prior to purchase. Regulators determined the pipeline leaked due to an internal “pinhole” corrosion leak on a weld.

Subsequent investigations determined that while the pipeline was not in operation, its valves were positioned to prevent flow but the pipeline had never been purged and cleaned. Some regulators and industry representatives informally referred to such pipelines as “idled.”

On May 31, 2015, a 24-inch natural gas “auxiliary” pipeline crossing the Arkansas River in North Little Rock, Arkansas, failed due to vortex-induced vibration after high water levels eroded the ground cover and exposed the pipeline to the river's flow. The failure released 3,858 cubic feet of natural gas into the atmosphere and resulted in the temporary closure of the Arkansas River to vessel traffic for five days. The pipeline at the time of the failure was isolated by two mainline valves, at an approximate pressure of 700 pounds per square inch (psig). The pipeline, considered an emergency back-up pipeline crossing the river, has not been fully operated since 1972. However, the company did maintain the pipeline as an active pipeline, subject to in-line inspection, cathodic protection, and other maintenance requirements.

On October 28, 2015, Cypress, California, city public works employees identified an oil-water mixture on a local road. Approximately 28 barrels of oil-water mixture was determined to have leaked from an oil pipeline that was believed to have been purged of oil prior to deactivation in 1997. The owner of the pipeline had purchased it from another company just prior to the failure.

Congress recognized the need for PHMSA to provide clarification of operational terms and ensure all operators are aware of and abide by the regulatory requirements for properly abandoning pipelines. In its “Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016,” Congress required PHMSA to issue an advisory bulletin to owners and operators of gas or hazardous liquid pipeline facilities and Federal and State pipeline safety personnel regarding procedures required to change the status of a pipeline facility from active to abandoned, including specific guidance on the terms recognized by the Secretary for each pipeline status referred to in such advisory bulletin.

PHMSA regulations do not recognize an “idle” status for hazardous liquid or gas pipelines. The regulations consider pipelines to be either active and fully subject to all relevant parts of the safety regulations or abandoned. The process and requirements for pipeline abandonment are captured in §§ 192.727 and 195.402(c)(10) for gas and hazardous liquid pipelines, respectively. These requirements include purging all combustibles and sealing any facilities left in place. The last owner or operator of abandoned offshore facilities and abandoned onshore facilities that cross over, under, or through commercially navigable waterways must file a report with PHMSA. PHMSA regulations define the term “abandoned” to mean permanently removed from service (§ 192.3).

A 1998 report by the Research and Special Programs Administration (RSPA), a predecessor agency to PHMSA, titled: “Analysis of Pipeline Burial Surveys in the Gulf of Mexico,” stated: “Abandonment involves the permanent and, for all practical purposes, irreversible process of discontinuing the use of a pipeline. The physical asset is abandoned in the truest sense of the word; no future use or value is attributed to it, and no attempts are made to maintain serviceability. Pipeline systems or segments that are not abandoned, but only idled, decommissioned, or mothballed, are considered to have the potential for reuse at some point in the future. The maintenance and inspection to be performed in these cases is a function of the probability of reuse, the cost and difficulty of remediation which may be required, and the potential impact of the in-place and idled facility on human safety and the environment.”

PHMSA is aware that some pipelines may have been abandoned prior to the effective date of the abandonment regulations. Companies may not have access to records relating to where these pipelines are located or whether they were properly purged of combustibles and sealed. Owners and operators have a responsibility to assure facilities for which they are responsible or last owned do not present a hazard to people, property or the environment.

In the case study from Wilmington, California, provided above, the pipeline company was aware of the pipeline and believed it to have been properly abandoned by the previous owner/operator. The pipeline company was cited and fined by a State regulator because it did not properly maintain the active line or, alternatively, properly abandon the pipeline facility.

Pipelines not currently in operation but that may be used in the future are sometimes informally referred to as “idled,” “inactive,” or “decommissioned.” These pipelines may be shut down and still contain hazardous liquids or gas. Usually, the mainline valves on these pipelines are closed, isolating them from other pipeline segments. Frequently, blind flanges or welded end caps are used for further isolation. Some pipelines do not operate for short periods of time such as weeks or months. Other pipelines do not operate for years. If a pipeline is not properly abandoned and may be used for the future for transportation of hazardous liquid or gas, PHMSA regulations consider it an active pipeline. Owners and operators of pipelines that are not operating but contain hazardous liquids and gas must comply with all relevant safety requirements, including periodic maintenance, integrity management assessments, damage prevention programs, and public awareness programs.

PHMSA is aware that some owners and operators may properly purge a pipeline of combustibles without abandonment because of an expectation to later continue using the pipeline in hazardous materials transportation. A purged pipeline presents different risks, and different regulatory treatment may be appropriate. Degradation of such a pipeline can occur, but it is not likely to result in significant safety impacts to people, property, or the environment. PHMSA will accept deferral of certain activities for purged but active pipelines. These deferred activities might include actions impractical on most purged pipelines such as in-line inspection. PHMSA is considering proposing procedures in a future rulemaking that would address methods owners or operators could use to notify regulators of purged but active pipelines. In the interim, owners or operators planning to defer certain activities for purged pipelines should coordinate the deferral in advance with regulators. All deferred activities must be completed prior to, or as part, of any later return-to-service. Pipeline owners and operators are fully responsible for the safety of their pipeline facilities at all times and during all operational statuses.

To: Owners and Operators of Hazardous Liquid, Carbon Dioxide and Gas Pipelines.

Subject: Clarification of Terms Relating to Pipeline Operational Status.

Advisory: PHMSA regulations do not recognize an “idle” status for a hazardous liquid or gas pipelines. The regulations consider pipelines to be either active and fully subject to all parts of the safety regulations or abandoned. The process and requirements for pipeline abandonment are captured in §§ 192.727 and 195.402(c)(10) for gas and hazardous liquid pipelines, respectively. Pipelines abandoned after the effective date of the regulations must comply with requirements to purge all combustibles and seal any facilities left in place. The last owner or operator of abandoned offshore facilities and abandoned onshore facilities that cross over, under, or through commercially navigable waterways must file a report with PHMSA. PHMSA regulations define the term “abandoned” to mean permanently removed from service.

Companies that own pipelines abandoned prior to the effective date of the abandonment regulations may not have access to records relating to where these pipelines are located or whether they were properly purged of combustibles and sealed. To the extent feasible, owners and operators have a responsibility to assure facilities for which they are responsible or last owned do not present a hazard to people, property or the environment.

Pipelines not currently in operation are sometimes informally referred to as “idled,” “inactive,” or “decommissioned.” These pipelines may be shut down and still contain hazardous liquids or gas. Usually, the mainline valves on these pipelines are closed, isolating them from other pipeline segments. If a pipeline is not properly abandoned and may be used in the future for transportation of hazardous liquid or gas, PHMSA regulations consider it as an active pipeline. Owners and operators of pipelines that are not operating but contain hazardous liquids and gas must comply with all applicable safety requirements, including periodic maintenance, integrity management assessments, damage prevention programs, response planning, and public awareness programs.

PHMSA is aware that some owners and operators may properly purge a pipeline of combustibles with the expectation to later use that pipeline in hazardous materials transportation. A purged pipeline presents different risks, and therefore different regulatory treatment may be appropriate. Degradation of such a pipeline can occur, but is not likely to result in significant safety impacts to people, property, or the environment. PHMSA will accept deferral of certain activities for purged but active pipelines. These deferred activities might include actions impractical on most purged pipelines, such as in-line inspection. PHMSA is considering proposing procedures in a future rulemaking that would address methods owners or operators could use to notify regulators of purged but active pipelines. In the interim, owners or operators planning to defer certain activities for purged pipelines should coordinate the deferral in advance with regulators. All deferred activities must be completed prior to, or as part of, any later return-to-service. Pipeline owners and operators are fully responsible for the safety of their pipeline facilities at all times and during all operational statuses.

In a final rule published in the Federal Register on July 25, 2016, at 81 FR 48648, the following corrections are made:

Regulations governing the red hake fishery are found at 50 CFR part 648. The small-mesh multispecies fishery is managed primarily through a series of exemptions from the Northeast Multispecies Fisheries Management Plan. The regulations describing the process to adjust inseason commercial possession limits of northern red hake are described in § 648.86(d)(4) and (5). These regulations require the National Marine Fisheries Service Regional Administrator, Greater Atlantic Region, to reduce the northern red hake possession limit from 3,000 lb (1,361 kg) to 1,500 lb (680 kg) when landings have been projected to reach or exceed 45 percent of the total allowable landings (TAL). The possession limit is required to be further reduced from 1,500 lb (680 kg) to 400 lb (181 kg) if landings are projected to reach or exceed 62.5 percent of the TAL, unless such a reduction would be expected to prevent the TAL from being reached. The final rule implementing the small-mesh multispecies specifications for 2016-2017, which published in the Federal Register on June 28, 2016 (81 FR 41866), set these inseason adjustment thresholds for the 2016 fishing year. These trip limit adjustment thresholds are accountability measures put in place because the annual catch limits (ACL) for northern red hake were exceeded for the 2012 and 2013 fishing years, and the northern red hake stock was experiencing overfishing.

On August 8, 2016, the northern red hake commercial possession limit was reduced from 3,000 lb (1,361 kg) to 1,500 lb (680 kg) because the overall commercial landings reached 45 percent of the TAL. Based on commercial landings data reported through July 27, 2016, the northern red hake fishery is projected to reach 65.2 percent of the TAL on August 6, 2016. Based on this projection, we are required to reduce the commercial northern red hake possession limit from 1,500 lb (680 kg) to 400 lb (181 kg) to prevent the TAL from being exceeded. On the effective date of this action, no person may possess on board or land more than 400 lb (181 kg) of northern red hake per trip for the remainder of the fishing year (i.e., through April 30, 2017).

This action is taken under 50 CFR part 648 and is exempt from review under Executive Order 12866.

Regulations governing the Atlantic bluefish fishery are found in 50 CFR 648.160 through 648.167. The regulations require annual specification of a commercial quota that is apportioned among the coastal states from Maine through Florida. The process to set the annual commercial quota and the percent allocated to each state are described in § 648.162.

The final rule implementing Amendment 1 to the Bluefish Fishery Management Plan published in the Federal Register on July 26, 2000 (65 FR 45844), and provided a mechanism for transferring bluefish quota from one state to another. Two or more states, under mutual agreement and with the concurrence of the Administrator, Greater Atlantic Region, NMFS (Regional Administrator), can transfer or combine bluefish commercial quota under § 648.162(e)(1)(i) through (iii). The Regional Administrator is required to consider the criteria in § 648.162(e) in the evaluation of requests for quota transfers or combinations.

Florida is transferring 50,000 lb (22,679 kg) of Atlantic bluefish commercial quota to New York. This quota transfer was requested by the State of New York to ensure that its 2016 quota would not be exceeded. The Regional Administrator has determined that the criteria set forth in § 648.162(e)(1)(i) through (iii) have been met. The revised bluefish quotas for calendar year 2016 are: Florida, 391,394 lb (177,533 kg); and New York, 587,289 lb (266,390 kg). These quotas are based on the final rule implementing the 2016-2018 Atlantic Bluefish Specifications that became effective August 4, 2016, inclusive of previous commercial bluefish transfers that were implemented in that rule.

This action is taken under 50 CFR part 648 and is exempt from review under Executive Order 12866.