Federal Register Vol. 81, No.188,

Federal Register Volume 81, Issue 188 (September 28, 2016)

Page Range66487-66790
FR Document

81_FR_188
Current View
Page and SubjectPDF
81 FR 66538 - Air Plan Approval; Georgia; Prong 4-2008 Ozone, 2010 NO2PDF
81 FR 66789 - Gold Star Mother's and Family's Day, 2016PDF
81 FR 66787 - National Public Lands Day, 2016PDF
81 FR 66785 - National Hunting and Fishing Day, 2016PDF
81 FR 66705 - Order of Suspension of TradingPDF
81 FR 66671 - Accreditation and Approval of Viswa Lab as a Commercial Gauger and LaboratoryPDF
81 FR 66670 - Accreditation and Approval of SGS North America, Inc., as a Commercial Gauger and LaboratoryPDF
81 FR 66669 - Accreditation and Approval of Inspectorate America Corporation, as a Commercial Gauger and LaboratoryPDF
81 FR 66713 - Culturally Significant Object Imported for Exhibition Determinations: “Nuit d'été (Summer Night)” ExhibitionPDF
81 FR 66754 - Affirmatively Furthering Fair Housing: Assessment Tool for States and Insular Area-Information Collection: Solicitation of Comment First 30-Day Notice Under Paperwork Reduction Act of 1995PDF
81 FR 66645 - Combined Notice of Filings #1PDF
81 FR 66648 - Combined Notice of Filings #1PDF
81 FR 66647 - Combined Notice of Filings #1PDF
81 FR 66649 - Modifications to Commission Requirements for Review of Transactions Under Section 203 of the Federal Power Act and Market-Based Rate Applications Under Section 205 of the Federal Power ActPDF
81 FR 66555 - Balancing Authority Control, Inadvertent Interchange, and Facility Interconnection Reliability StandardsPDF
81 FR 66712 - Culturally Significant Objects Imported for Exhibition Determinations: “World War I and American Art” ExhibitionPDF
81 FR 66672 - 30-Day Notice of Proposed Information Collection for Public Comment Under the Paperwork Reduction Act-Rental Assistance Demonstration (RAD) DocumentsPDF
81 FR 66656 - Registration Review Proposed Decisions for Sulfonylurea Herbicides; Reopening of Comment PeriodPDF
81 FR 66751 - Submission for OMB Review; Comment RequestPDF
81 FR 66622 - Lake Tahoe Basin Federal Advisory CommitteePDF
81 FR 66750 - Submission for OMB Review; Comment RequestPDF
81 FR 66737 - Proposed Collection; Comment Request for Tip Reporting Alternative Commitment Agreement (TRAC) for Use in Industries Other Than the Food and Beverage Industry and the Cosmetology and Barber Industry.PDF
81 FR 66712 - Certification Related to Foreign Military Financing for Colombia Under Section 7045(b)(2) of The Department of State, Foreign Operations, and Related Programs Appropriations Act, 2016 (Div. K, Pub. L. 114-113)PDF
81 FR 66717 - Notice of Intent To Rule on Disposal of Aeronautical Property at Everett-Stewart Regional Airport, Union City, TN (UCY)PDF
81 FR 66743 - Proposed Collection; Comment Request for Forms 1065, 1065-B, 1066, 1120, 1120-C, 1120-F, 1120-H, 1120-ND, 1120-S, 1120-SF, 1120-FSC, 1120-L, 1120-PC, 1120-REIT, 1120-RIC, 1120-POL and Related AttachmentsPDF
81 FR 66621 - Eastern Region Recreation Resource Advisory CommitteePDF
81 FR 66740 - Proposed Collection; Comment Request for Revenue Procedure 98-25PDF
81 FR 66737 - Proposed Collection; Comment RequestPDF
81 FR 66716 - Agency Information Collection Activities: Requests for Comments; Clearance of Renewed Approval of Information Collection: Flight Operational Quality Assurance (FOQA) ProgramPDF
81 FR 66745 - Proposed Collection; Comment Request for Notice 2001-1PDF
81 FR 66717 - Notice of Land Use Change and Release of Grant Assurance Restrictions at the Oceano County Airport, Oceano, San Luis Obispo County, CaliforniaPDF
81 FR 66688 - Renewal of Charter of Advisory Committee on Actuarial ExaminationsPDF
81 FR 66738 - Proposed Collection; Comment Request for Form 8865PDF
81 FR 66749 - Proposed Collection; Comment Request for Form 1098-TPDF
81 FR 66749 - Proposed Collection; Comment Request for Form 4506-TPDF
81 FR 66748 - Proposed Collection; Comment Request for Form 5471 (and Related Schedules)PDF
81 FR 66576 - Guidance under Section 851 Relating to Investments in Stock and SecuritiesPDF
81 FR 66739 - Proposed Collection; Comment Request for Form 1128PDF
81 FR 66748 - Proposed Collection; Comment Request for Notice 89-61PDF
81 FR 66741 - Proposed Collection; Comment Request on Disclosure Requirements With Respect to Prohibited Tax Shelter TransactionsPDF
81 FR 66742 - Proposed Collection; Comment Request on Information Collection Tools Relating to the Offshore Voluntary Disclosure Program (OVDP)PDF
81 FR 66746 - Proposed Collection; Comment Request for Form 720-TOPDF
81 FR 66661 - Notice of Agreements FiledPDF
81 FR 66642 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Application for Borrower Defense to Loan Repayment FormPDF
81 FR 66750 - Proposed Collection; Comment Request on Treatment of Acquisition of Certain Financial InstitutionsPDF
81 FR 66740 - Proposed Collection; Comment Request for Regulation ProjectPDF
81 FR 66747 - Proposed Collection; Comment Request on Effectively Connected Income and the Branch Profits TaxPDF
81 FR 66741 - Proposed Collection; Comment Request for Revenue Procedure 2001-20PDF
81 FR 66746 - Proposed Collection; Comment Request for Revenue Procedure 98-20PDF
81 FR 66738 - Proposed Collection; Comment Request for Regulation ProjectPDF
81 FR 66666 - The National Heart, Lung, and Blood Institute (NHLBI) COPD National Action Plan; Request for Public CommentsPDF
81 FR 66665 - Notice of Listing of Members of the National Institutes of Health's Senior Executive Service 2016 Performance Review Board (PRB)PDF
81 FR 66628 - Takes of Marine Mammals Incidental to Specified Activities; Taking Marine Mammals Incidental to a Pier Replacement ProjectPDF
81 FR 66689 - Notice of Lodging of Proposed Consent Decree Under the Comprehensive Environmental Response, Compensation, and Liability ActPDF
81 FR 66658 - Information Collection Request Submitted to OMB for Review and Approval; Comment Request; Recordkeeping for Institutional Dual Use Research of Concern (iDURC) Policy CompliancePDF
81 FR 66657 - Agency Information Collection Activities; Information Collection Request Submitted to OMB for Review and Approval; Comment Request; Recordkeeping and Reporting Requirements for Allegations of Significant Adverse Reactions to Human Health or the EnvironmentPDF
81 FR 66711 - Maryland Disaster #MD-00034PDF
81 FR 66711 - Pennsylvania Disaster # PA-00071PDF
81 FR 66659 - Information Collections Being Reviewed by the Federal Communications CommissionPDF
81 FR 66623 - Notice of National Advisory Council on Innovation and Entrepreneurship MeetingPDF
81 FR 66622 - Notice of National Advisory Council on Innovation and Entrepreneurship MeetingPDF
81 FR 66689 - Notice of Lodging of Proposed Consent Decree Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the Clean Water Act (CWA), and the Oil Pollution Act (OPA)PDF
81 FR 66699 - Proposal Review Panel for Materials Research; Notice of MeetingPDF
81 FR 66621 - Land Between The Lakes Advisory BoardPDF
81 FR 66711 - Kansas Disaster #KS-00097PDF
81 FR 66702 - We Need Information About Your Missing Payment-OPM Form RI 38-31, OMB No. 3206-0187PDF
81 FR 66700 - License Renewal Application for Fermi 2 Nuclear Power PlantPDF
81 FR 66699 - Advisory Committee on Reactor Safeguards; Notice of MeetingPDF
81 FR 66671 - Legal Interpretation of “Field of Transportation”PDF
81 FR 66730 - Commercial Driver's License Standards: Application for Exemption; State of Idaho, Idaho Transportation Department (ITD)PDF
81 FR 66641 - Submission for OMB Review; Comment RequestPDF
81 FR 66527 - Use of the Term “Healthy” in the Labeling of Human Food Products: Guidance for Industry; AvailabilityPDF
81 FR 66562 - Use of the Term “Healthy” in the Labeling of Human Food Products; Request for Information and CommentsPDF
81 FR 66734 - Hours of Service of Drivers: Transco, Inc.; Application for ExemptionPDF
81 FR 66720 - Qualification of Drivers; Exemption Applications; VisionPDF
81 FR 66731 - Qualification of Drivers; Exemption Applications; VisionPDF
81 FR 66718 - Qualification of Drivers; Exemption Applications; VisionPDF
81 FR 66722 - Qualification of Drivers; Exemption Applications; VisionPDF
81 FR 66728 - Parts and Accessories Necessary for Safe Operation; Application for an Exemption From the International Institute of Towing and RecoveryPDF
81 FR 66726 - Qualification of Drivers; Exemption Applications; VisionPDF
81 FR 66733 - Qualification of Drivers; Exemption Applications; Diabetes MellitusPDF
81 FR 66724 - Qualification of Drivers; Exemption Applications; VisionPDF
81 FR 66698 - Records Schedules; Availability and Request for CommentsPDF
81 FR 66701 - OPM.GOV Feedback Tab Survey 3206-NEWPDF
81 FR 66699 - Notice of Permits Issued Under the Antarctic Conservation Act of 1978PDF
81 FR 66641 - Renewal of the Global Markets Advisory CommitteePDF
81 FR 66751 - Multiemployer Pension Plan Application To Reduce BenefitsPDF
81 FR 66529 - Gulf Coast Restoration Trust FundPDF
81 FR 66688 - Meeting of the California Desert District Advisory CouncilPDF
81 FR 66643 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; National Teacher and Principal Survey of 2017-2018 (NTPS 2017-18) Preliminary Field ActivitiesPDF
81 FR 66644 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; FFEL/Direct Loan/Perkins Military Service Deferment/Post-Active Duty Student Deferment RequestPDF
81 FR 66644 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Middle Grades Longitudinal Study of 2017-18 (MGLS:2017) Operational Field Test (OFT) and Recruitment for Main Study Base-YearPDF
81 FR 66661 - Agency Forms Undergoing Paperwork Reduction Act ReviewPDF
81 FR 66627 - Marine Mammals; File No. 15330PDF
81 FR 66624 - Open Meeting of the Information Security and Privacy Advisory BoardPDF
81 FR 66624 - Advisory Committee on Earthquake Hazards Reduction MeetingPDF
81 FR 66625 - Taking and Importing of Marine Mammals and Dolphin-Safe Tuna ProductsPDF
81 FR 66713 - Hazardous Materials: Emergency Restriction/Prohibition OrderPDF
81 FR 66662 - Determination of Regulatory Review Period for Purposes of Patent Extension; IONSYSPDF
81 FR 66689 - Notice of Lodging of Proposed Stipulation and Settlement Agreement Under the Clean Air ActPDF
81 FR 66639 - Notice of Intent To Prepare an Environmental Assessment on the Issuance of Incidental Take Authorizations in Cook Inlet, AlaskaPDF
81 FR 66708 - Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing of Proposed Rule Change To Amend BX Rules 4702 and 4703PDF
81 FR 66702 - Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Proposed Rule Change To Amend Nasdaq Rules 4702 and 4703PDF
81 FR 66706 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees SchedulePDF
81 FR 66736 - Decision That Certain Nonconforming Motor Vehicles Are Eligible for ImportationPDF
81 FR 66620 - Submission for OMB Review; Comment RequestPDF
81 FR 66530 - Safety Zone; Main Branch of the Chicago River, Chicago, ILPDF
81 FR 66640 - Limitations of Duty- and Quota-Free Imports of Apparel Articles Assembled in Beneficiary Sub-Saharan African Countries From Regional and Third-Country FabricPDF
81 FR 66627 - Marine Mammals; File Nos. 19436 and 19592PDF
81 FR 66666 - National Institute of Diabetes and Digestive and Kidney Diseases; Notice of Closed MeetingsPDF
81 FR 66665 - National Institute of Diabetes and Digestive and Kidney Diseases; Notice of MeetingPDF
81 FR 66665 - National Institute of Biomedical Imaging and Bioengineering; Notice of Closed MeetingsPDF
81 FR 66667 - National Center for Advancing Translational Sciences; Notice of Closed MeetingPDF
81 FR 66668 - Center for Scientific Review; Notice of Closed MeetingsPDF
81 FR 66690 - Notice of Lodging of Proposed Consent Decree Under the Oil Pollution ActPDF
81 FR 66642 - Submission for OMB Review; Comment RequestPDF
81 FR 66664 - Agency Information Collection Activities: Proposed Collection: Public Comment Request; The Division of Independent Review Grant Reviewer Recruitment FormPDF
81 FR 66602 - Air Plan Approval; Ohio; Redesignation of the Ohio Portion of the Cincinnati-Hamilton, Ohio-Kentucky-Indiana Area to Attainment of the 2008 Ozone StandardPDF
81 FR 66591 - Air Plan Approval; Mississippi; Interstate Transport (Prongs 1 and 2) for the 2010 1-hour NO2PDF
81 FR 66617 - Reclassification of the Sheboygan, Wisconsin Area To Moderate Nonattainment for the 2008 Ozone NAAQSPDF
81 FR 66578 - Air Plan Approval; Ohio; Redesignation of the Columbus, Ohio Area to Attainment of the 2008 Ozone StandardPDF
81 FR 66596 - Air Plan Approval; Tennessee; Regional Haze Progress ReportPDF
81 FR 66545 - Federal Home Loan Bank Membership for Non-Federally-Insured Credit UnionsPDF
81 FR 66500 - Coordination of Federal Authorizations for Electric Transmission FacilitiesPDF
81 FR 66565 - Project Approval for Single-Family CondominiumsPDF
81 FR 66500 - Methodology and Formulas for Allocation of Loan and Grant Program Funds; CorrectionPDF
81 FR 66526 - Political Contributions by Certain Investment Advisers: Ban on Third-Party Solicitation; Order With Respect to FINRA Rule 2030PDF
81 FR 66526 - Political Contributions by Certain Investment Advisers: Ban on Third-Party Solicitation; Order With Respect to MSRB Rule G-37PDF
81 FR 66538 - Railroad Police Officers To Access Public Safety Interoperability and Mutual Aid ChannelsPDF
81 FR 66532 - Approval and Promulgation of Implementation Plans; Oklahoma; Revisions to Major New Source Review PermittingPDF
81 FR 66553 - Airworthiness Directives; The Boeing Company AirplanesPDF
81 FR 66513 - Airworthiness Directives; Saab AB, Saab Aeronautics (Formerly Known as Saab AB, Saab Aerosystems) AirplanesPDF
81 FR 66691 - Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in Fiscal Year 2017PDF
81 FR 66524 - Airworthiness Directives; REIMS AVIATION S.A. AirplanesPDF
81 FR 66516 - Airworthiness Directives; Bombardier, Inc. AirplanesPDF
81 FR 66487 - Regulatory Implementation of Office of Management and Budget's Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal AwardsPDF
81 FR 66518 - Airworthiness Directives; Airbus AirplanesPDF

Issue

81 188 Wednesday, September 28, 2016 Contents Agricultural Marketing Agricultural Marketing Service NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 66620-66621 2016-23319 Agriculture Agriculture Department See

Agricultural Marketing Service

See

Farm Service Agency

See

Food and Nutrition Service

See

Forest Service

See

Rural Business-Cooperative Service

See

Rural Housing Service

See

Rural Utilities Service

Centers Disease Centers for Disease Control and Prevention NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 66661-66662 2016-23340 Coast Guard Coast Guard RULES Safety Zones: Main Branch of the Chicago River, Chicago, IL, 66530-66532 2016-23318 Commerce Commerce Department See

Economic Development Administration

See

National Institute of Standards and Technology

See

National Oceanic and Atmospheric Administration

Committee Implementation Committee for the Implementation of Textile Agreements NOTICES Limitations of Duty and Quota Free Imports: Apparel Articles Assembled in Beneficiary Sub-Saharan African Countries from Regional and Third-Country Fabric, 66640-66641 2016-23317 Commodity Futures Commodity Futures Trading Commission NOTICES Committee Renewals: Global Markets Advisory Committee, 66641 2016-23351 Defense Department Defense Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 66641-66642 2016-23307 2016-23368 Economic Development Economic Development Administration NOTICES Meetings: National Advisory Council on Innovation and Entrepreneurship, 66622-66623 2016-23379 2016-23380 Education Department Education Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Application for Borrower Defense to Loan Repayment Form, 66642-66643 2016-23400 FFEL/Direct Loan/Perkins Military Service Deferment/Post-Active Duty Student Deferment Request, 66644 2016-23342 Middle Grades Longitudinal Study of 2017-18 Operational Field Test and Recruitment for Main Study Base-Year, 66644-66645 2016-23341 National Teacher and Principal Survey of 2017-2018 Preliminary Field Activities, 66643-66644 2016-23343 Energy Department Energy Department See

Federal Energy Regulatory Commission

RULES Coordination of Federal Authorizations for Electric Transmission Facilities, 66500-66513 2016-23285
Environmental Protection Environmental Protection Agency RULES Air Quality State Implementation Plans; Approvals and Promulgations: Georgia; Prong 4-2008 Ozone, 2010 NO2, SO2, and 2012 PM2.5, 66538 C1--2016--22887 Oklahoma; Revisions to Major New Source Review Permitting, 66532-66538 2016-23189 PROPOSED RULES Air Quality State Implementation Plans; Approvals and Promulgations: Mississippi; Interstate Transport (Prongs 1 and 2) for the 2010 1-hour NO2 Standard, 66591-66596 2016-23300 Ohio; Redesignation of the Columbus, OH Area to Attainment of the 2008 Ozone Standard, 66578-66591 2016-23293 Reclassification of the Sheboygan, WI Area to Moderate Nonattainment for the 2008 Ozone NAAQS, 66617-66619 2016-23294 Redesignation of the Ohio Portion of the Cincinnati-Hamilton, Ohio-Kentucky-Indiana Area to Attainment of the 2008 Ozone Standard, 66602-66617 2016-23301 Tennessee; Regional Haze Progress Report, 66596-66602 2016-23291 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Recordkeeping and Reporting Requirements for Allegations of Significant Adverse Reactions to Human Health or the Environment, 66657-66658 2016-23384 Recordkeeping for Institutional Dual Use Research of Concern (iDURC) Policy Compliance, 66658-66659 2016-23385 Registration Reviews: Sulfonylurea Herbicides; Reopening of Comment Period, 66656-66657 2016-23437 Farm Service Farm Service Agency RULES Methodology and Formulas for Allocation of Loan and Grant Program Funds; Correction, 66500 2016-23228 Federal Aviation Federal Aviation Administration RULES Airworthiness Directives: Airbus Airplanes, 66518-66523 2016-21150 Bombardier, Inc. Airplanes, 66516-66518 2016-22705 REIMS AVIATION S.A. Airplanes, 66524-66526 2016-22830 Saab AB, Saab Aeronautics (Formerly Known as Saab AB, Saab Aerosystems) Airplanes, 66513-66516 2016-23081 PROPOSED RULES Airworthiness Directives: The Boeing Company Airplanes, 66553-66555 2016-23082 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Flight Operational Quality Assurance Program, 66716-66717 2016-23419 Disposals of Aeronautical Properties: Everett-Stewart Regional Airport, Union City, TN (UCY), 66717-66718 2016-23425 Hazardous Materials: Emergency Restriction/Prohibition Order, 66713-66716 2016-23332 Non-Aeronautical Land-Use Changes: Oceano County Airport, Oceano, San Luis Obispo County, CA, 66717 2016-23417 Federal Communications Federal Communications Commission RULES Railroad Police Officers to Access Public Safety Interoperability and Mutual Aid Channels, 66538-66544 2016-23206 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 66659-66661 2016-23381 Federal Energy Federal Energy Regulatory Commission PROPOSED RULES Balancing Authority Control, Inadvertent Interchange, and Facility Interconnection Reliability Standards, 66555-66562 2016-23442 NOTICES Combined Filings, 66645-66649 2016-23444 2016-23445 2016-23446 Commission Requirements for Review: Transactions under Section 203 of the Federal Power Act and Market-Based Rate Applications under Section 205 of the Federal Power Act, 66649-66656 2016-23443 Federal Housing Finance Agency Federal Housing Finance Agency PROPOSED RULES Federal Home Loan Bank Membership for Non-Federally-Insured Credit Unions, 66545-66553 2016-23289 Federal Maritime Federal Maritime Commission NOTICES Agreements Filed, 66661 2016-23401 Federal Motor Federal Motor Carrier Safety Administration NOTICES Commercial Driver's License Standards: Idaho Transportation Department; Application for Exemption, 66730 2016-23369 Hours of Service of Drivers; Exemption Applications: Transco, Inc., 66734-66736 2016-23364 Parts and Accessories Necessary for Safe Operation, Exemption Applications: International Institute of Towing and Recovery, 66728-66730 2016-23358 Qualification of Drivers; Exemption Applications: Diabetes Mellitus, 66733-66734 2016-23356 Vision, 66718-66728, 66731-66732 2016-23355 2016-23357 2016-23359 2016-23361 2016-23362 2016-23363 Food and Drug Food and Drug Administration RULES Guidance for Industry: Use of the Term “Healthy” in the Labeling of Human Food Products, 66527-66529 2016-23367 PROPOSED RULES Use of the Term “Healthy” in the Labeling of Human Food Products, 66562-66565 2016-23365 NOTICES Determination of Regulatory Review Periods: IONSYS, 66662-66664 2016-23330 Food and Nutrition Food and Nutrition Service RULES Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 66487-66499 2016-21760 Forest Forest Service NOTICES Meetings: Eastern Region Recreation Resource Advisory Committee, 66621-66622 2016-23422 Lake Tahoe Basin Federal Advisory Committee, 66622 2016-23431 Land Between The Lakes Advisory Board, 66621 2016-23376 Health and Human Health and Human Services Department See

Centers for Disease Control and Prevention

See

Food and Drug Administration

See

Health Resources and Services Administration

See

National Institutes of Health

Health Resources Health Resources and Services Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: The Division of Independent Review Grant Reviewer Recruitment Form, 66664-66665 2016-23306 Homeland Homeland Security Department See

Coast Guard

See

Transportation Security Administration

See

U.S. Customs and Border Protection

Housing Housing and Urban Development Department PROPOSED RULES Project Approval for Single-Family Condominiums, 66565-66576 2016-23258 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Fair Housing: Assessment Tool for States and Insular Area, 66754-66782 2016-23449 Rental Assistance Demonstration Documents, 66672-66688 2016-23438 Interior Interior Department See

Land Management Bureau

Internal Revenue Internal Revenue Service PROPOSED RULES Guidance under Section 851 Relating to Investments in Stock and Securities, 66576-66578 2016-23408 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 66737-66740, 66743-66746, 66748-66750 2016-23402 2016-23405 2016-23407 2016-23409 2016-23412 2016-23413 2016-23415 2016-23418 2016-23420 2016-23421 2016-23424 2016-23428 Agency Information Collection Activities; Proposals, Submissions, and Approvals: Disclosure Requirements With Respect to Prohibited Tax Shelter Transactions, 66741-66742 2016-23404 Effectively Connected Income and the Branch Profits Tax, 66747 2016-23396 Offshore Voluntary Disclosure Program, 66742-66743 2016-23403 Regulation Project, 66738-66741 2016-23393 2016-23398 Revenue Procedure, 66741, 66746-66747 2016-23394 2016-23395 Treatment of Acquisition of Certain Financial Institutions, 66750 2016-23399 Joint Joint Board for Enrollment of Actuaries NOTICES Charter Renewals: Advisory Committee on Actuarial Examinations, 66688-66689 2016-23416 Justice Department Justice Department NOTICES Proposed Consent Decrees under CERCLA, 66689 2016-23386 Proposed Consent Decrees under CERCLA, the Clean Water Act, and the Oil Pollution Act, 66689-66690 2016-23378 Proposed Consent Decrees under the Oil Pollution Act, 66690-66691 2016-23309 Proposed Stipulations and Settlement Agreements under the Clean Air Act, 66689 2016-23328 Land Land Management Bureau NOTICES Meetings: California Desert District Advisory Council, 66688 2016-23344 Millenium Millennium Challenge Corporation NOTICES Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in Fiscal Year 2017, 66691-66698 2016-22988 National Archives National Archives and Records Administration NOTICES Records Schedules, 66698-66699 2016-23354 National Highway National Highway Traffic Safety Administration NOTICES Petitions for Inconsequential Noncompliance; Approvals: Certain Nonconforming Motor Vehicles are Eligible for Importation, 66736-66737 2016-23320 National Institute National Institute of Standards and Technology NOTICES Meetings: Advisory Committee on Earthquake Hazards Reduction, 66624 2016-23337 Information Security and Privacy Advisory Board, 66624-66625 2016-23338 National Institute National Institutes of Health NOTICES Meetings: Center for Scientific Review, 66668-66669 2016-23311 National Center for Advancing Translational Sciences, 66667-66668 2016-23312 National Institute of Biomedical Imaging and Bioengineering, 66665-66666 2016-23313 National Institute of Diabetes and Digestive and Kidney Diseases, 66665-66666 2016-23314 2016-23315 National Heart, Lung, and Blood Institute Chronic Obstructive Pulmonary Disease National Action Plan, 66666-66667 2016-23392 Senior Executive Service 2016 Performance Review Board, 66665 2016-23391 National Oceanic National Oceanic and Atmospheric Administration NOTICES Environmental Assessments; Availability, etc.: Issuance of Incidental Take Authorizations in Cook Inlet, AK, 66639-66640 2016-23327 Permits: Marine Mammals; File No. 15330, 66627 2016-23339 Marine Mammals; File Nos. 19436 and 19592, 66627 2016-23316 Takes of Marine Mammals Incidental to Specified Activities: Pier Replacement Project, 66628-66639 2016-23389 Takes of Marine Mammals: Dolphin-safe Tuna Products, 66625-66627 2016-23333 National Science National Science Foundation NOTICES Meetings: Review Panel for Materials Research, 66699 2016-23377 Permits Issued under the Antarctic Conservation Act, 66699 2016-23352 Nuclear Regulatory Nuclear Regulatory Commission NOTICES Environmental Impact Statements; Availability, etc.: Fermi 2 Nuclear Power Plant License Renewal Applications, 66700-66701 2016-23372 Meetings: Advisory Committee on Reactor Safeguards, 66699-66700 2016-23371 Personnel Personnel Management Office NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: OPM.GOV Feedback Tab Survey, 66701-66702 2016-23353 We Need Information About Your Missing Payment—OPM Form RI 38-31, OMB No. 3206-0187, 66702 2016-23373 Presidential Documents Presidential Documents PROCLAMATIONS Special Observances: Gold Star Mother's and Family's Day (Proc. 9502), 66789-66790 2016-23634 National Hunting and Fishing Day (Proc. 9500), 66783-66786 2016-23631 National Public Lands Day (Proc. 9501), 66787-66788 2016-23632 Rural Business Rural Business-Cooperative Service RULES Methodology and Formulas for Allocation of Loan and Grant Program Funds; Correction, 66500 2016-23228 Rural Housing Service Rural Housing Service RULES Methodology and Formulas for Allocation of Loan and Grant Program Funds; Correction, 66500 2016-23228 Rural Utilities Rural Utilities Service RULES Methodology and Formulas for Allocation of Loan and Grant Program Funds; Correction, 66500 2016-23228 Securities Securities and Exchange Commission RULES Political Contributions by Certain Investment Advisers: Ban on Third-Party Solicitation; Order with Respect to FINRA Rule 2030, 66526 2016-23225 Ban on Third-Party Solicitation; Order with Respect to MSRB Rule G-37, 66526-66527 2016-23224 NOTICES Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc., 66706-66708 2016-23322 NASDAQ BX, Inc., 66708-66711 2016-23324 The Nasdaq Stock Market LLC, 66702-66705 2016-23323 Suspension of Trading Orders: A.A. Importing Co., Inc., ACM Corp., Alleghany Pharmacal Corp., et al., 66705-66706 2016-23561 Small Business Small Business Administration NOTICES Disaster Declarations: Kansas, 66711 2016-23375 Maryland, 66711 2016-23383 Pennsylvania, 66711-66712 2016-23382 State Department State Department NOTICES Certifications Pursuant to the Department of State, Foreign Operations, and Related Programs Appropriations Act, 66712 2016-23426 Culturally Significant Objects Imported for Exhibition: Nuit d'ete (Summer Night), 66713 2016-23464 World War I and American Art, 66712 2016-23440 Transportation Department Transportation Department See

Federal Aviation Administration

See

Federal Motor Carrier Safety Administration

See

National Highway Traffic Safety Administration

Security Transportation Security Administration NOTICES Legal Interpretation: Field of Transportation, 66671-66672 2016-23370 Treasury Treasury Department See

Internal Revenue Service

RULES Gulf Coast Restoration Trust Fund, 66529-66530 2016-23348 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 66750-66751 2016-23429 2016-23436 Applications: Multiemployer Pension Plan, 66751-66752 2016-23350
Customs U.S. Customs and Border Protection NOTICES Accreditation and Approval as a Commercial Gauger and Laboratory: Inspectorate America Corp., 66669-66670 2016-23466 SGS North America, Inc., 66670-66671 2016-23467 Viswa Lab, 66671 2016-23468 Separate Parts In This Issue Part II Housing and Urban Development Department, 66754-66782 2016-23449 Part III Presidential Documents, 66783-66790 2016-23634 2016-23631 2016-23632 Reader Aids

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81 188 Wednesday, September 28, 2016 Rules and Regulations DEPARTMENT OF AGRICULTURE Food and Nutrition Service 7 CFR Parts 210, 215, 220, 225, 226, 227, 235, 240, 246, 247, 248, 249, 253, 272, 273, 274, 276, and 277 RIN 0584-AE42 Regulatory Implementation of Office of Management and Budget's Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards AGENCY:

Food and Nutrition Service (FNS), USDA.

ACTION:

Final rule.

SUMMARY:

This rule amends FNS regulations to implement the Department of Agriculture final guidance of USDA-specific requirements in the Federal Agency Regulations for Grants and Agreements.

DATES:

Effective September 28, 2016.

FOR FURTHER INFORMATION CONTACT:

Lael Lubing, Food and Nutrition Service, Financial Management, Grants Division, 3101 Park Center Drive, Room 732, Alexandria, VA or [email protected]

SUPPLEMENTARY INFORMATION:

This rule amends FNS regulations to implement the Department of Agriculture final guidance of USDA-specific requirements at 2 CFR part 400 on December 19, 2014 (79 FR 75871). Prior to that, on December 26, 2013, the Office of Management and Budget (OMB) published “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards” in 2 CFR part 200 (78 FR 78589). OMB's final guidance at 2 CFR part 200 followed a Notice of Proposed Guidance issued February 1, 2013, and an Advanced Notice of Proposed Guidance issued February 28, 2012. The OMB final guidance incorporated feedback received from the public in response to those earlier issuances. Additional supporting resources are available from the Council on Financial Assistance Reform at www.cfo.gov/COFAR. In accordance with the good cause exception under the APA, it is unnecessary to engage in the Notice and Comment provisions of 5 U.S.C. 553 because the provisions set forth in this rulemaking are a non-discretionary implementation of USDA requirements codified at 2 CFR part 400. The APA exempts from the prior notice and opportunity for comment requirements rules “relating to Agency management or personnel or to public property, loans, grants, benefits, or contracts” (5 U.S.C. 553 (a)(2)).

Currently, references appear throughout the FNS regulations to the OMB guidance consolidated under the “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards” and the USDA implementing regulations in Title 2, of the CFR. There are over 100 references throughout 19 Parts of the FNS regulations that must be revised to accurately reference the revised OMB and USDA regulations. FNS is therefore proposing nomenclature revisions to the following Parts of Title 7: 210, 215, 220, 225, 226, 227, 235, 240, 246, 247, 248, 249, 253, 272, 273, 274, 276, and 277. The revisions will remove the following references, and other associated outdated references, and replace them as appropriate:

References: 7 CFR Part 3015 7 CFR Part 3016 7 CFR Part 3017 7 CFR Part 3018 7 CFR Part 3019 7 CFR Part 3021 7 CFR Part 3052 OMB Circular A-133 OMB Circular A-102 OMB Circular A-87 SF-269

As noted above, the final OMB guidance incorporated feedback received from the public.

Procedural Matters Executive Order 12866 and 13563

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This final rule has been determined to be not significant and, therefore, was not reviewed by the Office of Management and Budget (OMB) in conformance with Executive Order 12866.

Regulatory Impact Analysis

This rule has been designated as not significant by the Office of Management and Budget, therefore, no Regulatory Impact Analysis is required.

Regulatory Flexibility Act

The Regulatory Flexibility Act (5 U.S.C. 601-612) requires Agencies to analyze the impact of rulemaking on small entities and consider alternatives that would minimize any significant impacts on a substantial number of small entities. Pursuant to that review, it has been certified that this rule would not have a significant impact on a substantial number of small entities.

Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local and tribal governments and the private sector. Under section 202 of the UMRA, the Department generally must prepare a written statement, including a cost benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures by State, local or tribal governments, in the aggregate, or the private sector, of $100 million or more in any one year. When such a statement is needed for a rule, Section 205 of the UMRA generally requires the Department to identify and consider a reasonable number of regulatory alternatives and adopt the most cost effective or least burdensome alternative that achieves the objectives of the rule.

This rule does not contain Federal mandates (under the regulatory provisions of Title II of the UMRA) for State, local and tribal governments or the private sector of $100 million or more in any one year. Thus, the rule is not subject to the requirements of sections 202 and 205 of the UMRA.

Federalism Summary Impact Statement

Executive Order 13132 requires Federal agencies to consider the impact of their regulatory actions on State and local governments. Where such actions have federalism implications, agencies are directed to provide a statement for inclusion in the preamble to the regulations describing the agency's considerations in terms of the three categories called for under Section (6)(b)(2)(B) of Executive Order 13121. The Department has considered the impact of this rule on State and local governments and has determined that this rule does not have federalism implications. Therefore, under section 6(b) of the Executive Order, a federalism summary is not required.

Executive Order 12988, Civil Justice Reform

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is intended to have preemptive effect with respect to any State or local laws, regulations or policies which conflict with its provisions or which would otherwise impede its full and timely implementation. This rule is not intended to have retroactive effect unless so specified in the Effective Dates section of the final rule. Prior to any judicial challenge to the provisions of the final rule, all applicable administrative procedures must be exhausted.

Civil Rights Impact Analysis

FNS has reviewed this rule in accordance with USDA Regulation 4300-4, “Civil Rights Impact Analysis,” to identify any major civil rights impacts the rule might have on program participants on the basis of age, race, color, national origin, sex or disability. After a review of the rule's intent and provisions, FNS has determined that this rule is not expected to affect the participation of protected individuals in FNS program(s).

Executive Order 13175

Executive Order 13175 requires Federal agencies to consult and coordinate with Tribes on a government-to-government basis on policies that have Tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. FNS has assessed the impact of this rule on Indian tribes and determined that this rule does not, to our knowledge, have tribal implications that require tribal consultation under E.O. 13175. If a Tribe requests consultation, FNS will work with the Office of Tribal Relations to ensure meaningful consultation is provided where changes, additions and modifications identified herein are not expressly mandated by Congress.

Paperwork Reduction Act

The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; 5 CFR 1320) requires the Office of Management and Budget (OMB) approve all collections of information by a Federal agency before they can be implemented. Respondents are not required to respond to any collection of information unless it displays a current valid OMB control number. This rule does not contain information collection requirements subject to approval by the Office of Management and Budget under the Paperwork Reduction Act of 1994.

E-Government Act Compliance

The Department is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

List of Subjects 7 CFR Part 210

Grant programs—education, Grant programs—health.

7 CFR Part 215

Grant programs—education, Grant programs—health.

7 CFR Part 220

Grant programs—education, Grant programs—health.

7 CFR Part 225

Grant programs—health.

7 CFR Part 226

Grant programs, Grant programs—health.

7 CFR Part 227

Grant programs—education, Grant programs—health.

7 CFR Part 235

Grant programs—education, Grant programs—health.

7 CFR Part 240

Grant programs—education, Grant programs—health.

7 CFR Part 246

Grant programs—health, Grant programs—social programs.

7 CFR Part 247

Grant programs—health, Grant programs—social programs.

7 CFR Part 248

Grant programs—social programs.

7 CFR Part 249

Grant programs—social programs.

7 CFR Part 253

Grant programs—social programs.

7 CFR Part 272

Grant programs—social programs.

7 CFR Part 273

Grant programs—social programs.

7 CFR Part 274

Grant programs—social programs.

7 CFR Part 276

Grant programs—social programs.

7 CFR Part 277

Grant programs—social programs.

Accordingly, 7 CFR parts 210, 215, 220, 225, 226, 227, 235, 240, 246, 247, 248, 249, 253, 272, 273, 274, 276, and 277 are amended as follows:

PART 210—NATIONAL SCHOOL LUNCH PROGRAM 1. The authority citation for 7 CFR part 210 continues to read as follows: Authority:

42 U.S.C. 1751-1760, 1779.

§§ 210.5, 210.9, 210.19, 210.20, 210.22, 210.24, 210.25 [Amended]
2. In the table below, for each section indicated in the left column, remove the words indicated in the middle column from wherever they appear in the section, and add the words indicated in the right column: Section Remove Add 210.5 7 CFR part 3016 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 210.9 7 CFR part 3015 and 7 CFR part 3016, or 7 CFR part 3019, as applicable 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 210.19 7 CFR part 3015 and 7 CFR part 3016, or 7 CFR part 3019 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 210.22 Office of Management and Budget Circular A-133 and the Department's implementing regulations at 7 CFR part 3052. For availability of the OMB Circular mentioned in this paragraph, please refer to 5 CFR 1310.3 2 CFR part 200, subpart F and Appendix XI (Compliance Supplement) and USDA implementing regulations 2 CFR part 400 and part 415. 210.22 7 CFR part 3015 2 CFR part 200, subpart F and Appendix XI, and USDA implementing regulations 2 CFR part 400 and part 415. 210.24 §§ 3016.43 and 3019.62 of this title 2 CFR 200.338 through 200.342. 210.25 7 CFR part 3016 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 3. In § 210.2: a. Remove the definitions for 7 CFR part 3015, 7 CFR part 3016, 7 CFR part 3018; 7 CFR part 3019, and 7 CFR part 3052; b. Add a definition, in alphabetical order, for 2 CFR part 200. c. Revise the definition for Applicable credits. d. Add a definition, in alphabetical order, for USDA implementing regulations.

The additions and revision read as follows:

§ 210.2 Definitions.

2 CFR part 200, means the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards published by OMB. The part reference covers applicable: Acronyms and Definitions (subpart A), General Provisions (subpart B), Post Federal Award Requirements (subpart D), Cost Principles (subpart E), and Audit Requirements (subpart F). (NOTE: Pre-Federal Award Requirements and Contents of Federal Awards (subpart C) does not apply to the National School Lunch Program).

Applicable credits shall have the meaning established in 2 CFR part 200 and USDA implementing regulations 2 CFR part 400 and part 415.

USDA implementing regulations include the following: 2 CFR part 400, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; 2 CFR part 415, General Program Administrative Regulations; 2 CFR part 416, General Program Administrative Regulations for Grants and Cooperative Agreements to State and Local Governments; and 2 CFR part 418, New Restrictions on Lobbying.

4. In § 210.3: a. Revise the last sentence of paragraph (b). b. Revise the last sentence of paragraph (d).

The revisions read as follows:

§ 210.3 Administration.

(b) * * * Each State agency desiring to administer the Program shall enter into a written agreement with the Department for the administration of the Program in accordance with the applicable requirements of this part; parts 235 and 245 of this chapter; parts 15, 15a, and 15b of this title, and 2 CFR part 200; USDA implementing regulations 2 CFR part 400 and part 415; and FNS instructions.

(d) * * * State agencies shall ensure that school food authorities administer the Program in accordance with the applicable requirements of this part; part 245 of this chapter; parts 15, 15a, and 15b, and 3016 or 3019, as applicable, of this title and 2 CFR part 200; USDA implementing regulations 2 CFR part 400 and part 415 and FNS instructions.

5. Revise § 210.21(a) and (b), and the introductory text of paragraph (c), to read as follows:
§ 210.21 Procurement.

(a) General. State agencies and school food authorities shall comply with the requirements of this part and 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415, as applicable, which implement the applicable requirements, concerning the procurement of all goods and services with nonprofit school food service account funds.

(b) Contractual responsibilities. The standards contained in this part and 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415, as applicable, do not relieve the State agency or school food authority of any contractual responsibilities under its contracts. The State agency or school food authority is the responsible authority, without recourse to FNS, regarding the settlement and satisfaction of all contractual and administrative issues arising out of procurements entered into in connection with the Program. This includes, but is not limited to source evaluation, protests, disputes, claims, or other matters of a contractual nature. Matters concerning violation of law are to be referred to the local, State, or Federal authority that has proper jurisdiction.

(c) Procedures. The State agency may elect to follow either the State laws, policies and procedures as authorized by 2 CFR 200.317, or the procurement standards for other governmental grantees and all governmental subgrantees in accordance with 2 CFR 200.318 through 2 CFR 200.326. Regardless of the option selected, States must ensure that all contracts include any clauses required by Federal statutes and executive orders and that the requirements 2 CFR 200.236 and Appendix II, Contract Provisions for Non-Federal Entity Contracts Under Federal Award are followed. A school food authority may use its own procurement procedures which reflect applicable State and local laws and regulations, provided that procurements made with nonprofit school food service account funds adhere to the standards set forth in this part and in 2 CFR part 200, subpart D, as applicable. School food authority procedures must include a written code of standards of conduct meeting the minimum standards of 2 CFR 200.318, as applicable.

§ 210.25 [Amended]
6. In § 210.25, remove the words “or the parallel provisions of 7 CFR part 3019,”. PART 215—SPECIAL MILK PROGRAM FOR CHILDREN 7. The authority citation for 7 CFR part 215 continues to read as follows: Authority:

42 U.S.C. 1772 and 1779.

§§ 215.3, 215.11, 215.13, 215.15, 215.16 [Amended]
8. In the table below, for each section indicated in the left column, remove the words indicated in the middle column from wherever they appear in the section, and add the words indicated in the right column: Section Remove Add 215.3 7 CFR part 3015, 7 CFR part 3016 and 7 CFR part 3019, and with 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400, subparts B and D and USDA implementing regulations 2 CFR part 400 and part 415, and. 215.11 SF-269 FNS-777. 215.13 Office of Management and Budget Circular A-133 and the Department's implementing regulations at 7 CFR part 3052 2 CFR part 200, subpart F, and Appendix XI, Compliance Supplement and USDA's implementing regulations 2 CFR part 400 and part 415. 215.15 at §§ 3016.43 and 3019.62 of this title 2 CFR 200.338 through 200.342. 215.16 7 CFR part 3016 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR subparts B and D and USDA implementing regulations 2 CFR part 400 and part 415. 9. In § 215.2: a. Remove the definitions for 7 CFR part 3015, 7 CFR part 3016, 7 CFR part 3018, 7 CFR part 3019, and 7 CFR part 3052. b. Add a definition, in alphabetical order, for 2 CFR part 200. c. Revise the definition for Applicable credits. d. Add a definition, in alphabetical order, for USDA implementing regulations.

The additions and revision read as follows:

215.2 Definitions.

2 CFR part 200, means the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards published by OMB. The part reference covers applicable: Acronyms and Definitions (subpart A), General Provisions (subpart B), Post Federal Award Requirements (subpart D), Cost Principles (subpart E), and Audit Requirements (subpart F). (NOTE: Pre-Federal Award Requirements and Contents of Federal Awards (subpart C) does not apply to the National School Lunch Program).

Applicable credits shall have the meaning established in 2 CFR part 200 and USDA implementing regulations 2 CFR part 400 and part 415.

USDA implementing regulations include the following: 2 CFR part 400, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; 2 CFR part 415, General Program Administrative Regulations; 2 CFR part 416, General Program Administrative Regulations for Grants and Cooperative Agreements to State and Local Governments; and 2 CFR part 418, New Restrictions on Lobbying.

§ 215.13 [Amended]
10. Amend § 215.13(a) by removing the last sentence. 11. Revise § 215.14a (a) and (b), and the introductory text of paragraph (c), to read as follows:
§ 215.14a Procurement standards.

(a) General. State agencies and school food authorities shall comply with the requirements of this part and 2 CFR part 200 and USDA implementing regulations 2 CFR part 400 and part 415, as applicable concerning the procurement of all goods and services with nonprofit school food service account funds.

(b) Contractual responsibilities. The standards contained in this part and 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 200 subparts B and D and USDA implementing regulations 2 CFR part 400 and part 415, as applicable, do not relieve the State agency or School Food Authority of any contractual responsibilities under its contract. The State agency or School Food Authority is the responsible authority, without recourse to FNS, regarding the settlement and satisfaction of all contractual and administrative issues arising out of procurements entered into in connection with the Program. This includes but is not limited to: Source evaluation, protests, disputes, claims, or other matters of a contractual nature. Matters concerning violation of law are to be referred to the local, State or Federal authority that has proper jurisdiction.

(c) Procedures. The State agency may elect to follow either the State laws, policies and procedures as authorized by 2 CFR 200.317, or the procurement standards for other governmental grantees and all governmental subgrantees in accordance with 2 CFR 200.318 through 2 CFR 200.326. Regardless of the option selected, States must ensure that all contracts include any clauses required by Federal statutes and executive orders and that the requirements of 2 CFR 200.236 and Appendix II, Contract Provisions for Non-Federal Entity Contracts Under Federal Award are followed. The school food authority or child care institution may use its own procurement procedures which reflect applicable State or local laws and regulations, provided that procurements made with nonprofit school food service account funds adhere to the standards set forth in this part and in 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415 as applicable. School food authority procedures must include a written code of standards of conduct meeting the minimum standards of 2 CFR 200.318, as applicable.

§ 215.16 [Amended]
12. In § 215.16, remove the words “, or the parallel provisions of 7 CFR part 3019, as applicable,”. PART 220—SCHOOL BREAKFAST PROGRAM 13. The authority citation for 7 CFR part 220 continues to read as follows: Authority:

42 U.S.C. 1773, 1779, unless otherwise noted.

§§ 220.3, 220.13, 220.15, 220.18, 220.19 [Amended]
14. In the table below, for each section indicated in the left column, remove the words indicated in the middle column from wherever they appear in the section, and add the words indicated in the right column: Section Remove Add 220.3 7 CFR part 3015, 7 CFR part 3016 and 7 CFR part 3019, and with 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 subparts B and D and USDA implementing regulations 2 CFR part 400 and part 415 and. 220.13 7 CFR Part 3015, and 7 CFR Part 3016 or 7 CFR Part 3019 2 CFR part 200, subpart D and E, as applicable, and USDA implementing regulations 2 CFR part 400 and part 415. 220.15 Office of Management and Budget Circular A-133 and the Department's implementing regulations at 7 CFR part 3052. For availability of the OMB Circular mentioned in this paragraph, please refer to 5 CFR 1310.3 2 CFR part 200, subpart F and Appendix XI, Compliance Supplement, and USDA implementing regulations 2 CFR part 400 and part 415. 220.18 Departmental regulations at §§ 3016.43 and 3019.62 of this title 2 CFR 200.338 through 342. 220.19 7 CFR part 3016 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 subparts B and D and USDA implementing regulations 2 CFR part 400 and part 415. 15. In § 220.2: a. Remove the definitions for 7 CFR part 3015, 7 CFR part 3016, 7 CFR part 3018; 7 CFR part 3019, and 7 CFR part 3052. b. Add a definition, in alphabetical order, for 2 CFR part 200. c. Revise the definition for Applicable credits. d. Add a definition, in alphabetical order, for USDA implementing regulations.

The additions and revision read as follows:

§ 220.2 Definitions.

2 CFR part 200, means the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards published by OMB. The part reference covers applicable: Acronyms and Definitions (subpart A), General Provisions (subpart B), Post Federal Award Requirements (subpart D), Cost Principles (subpart E), and Audit Requirements (subpart F). (NOTE: Pre-Federal Award Requirements and Contents of Federal Awards (subpart C) does not apply to the National School Lunch Program).

Applicable credits shall have the meaning established in 2 CFR part 200 and USDA implementing regulations 2 CFR part 400 and part 415.

USDA implementing regulations include the following: 2 CFR part 400, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; 2 CFR part 415, General Program Administrative Regulations; 2 CFR part 416, General Program Administrative Regulations for Grants and Cooperative Agreements to State and Local Governments; and 2 CFR part 418, New Restrictions on Lobbying.

16. Revise § 220.16 (a) and (b), and the introductory text of paragraph (c), to read as follows:
§ 220.16 Procurement standards.

(a) General. State agencies and school food authorities shall comply with the requirements of this part 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415, as applicable, which implement the applicable Office of Management and Budget Circulars, concerning the procurement of all goods and services with nonprofit school food service account funds.

(b) Contractual responsibilities. The standards contained in 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415, as applicable, do not relieve the State agency or School Food Authority of any contractual responsibilities under its contract. The State agency or School Food Authority is the responsible authority, without recourse to FNS, regarding the settlement and satisfaction of all contractual and administrative issues arising out of procurements entered into in connection with the Program. This includes but is not limited to: Source evaluation, protests, disputes, claims, or other matters of a contractual nature. Matters concerning violation of law are to be referred to the local, State or Federal authority that has proper jurisdiction.

(c) Procedures. The State agency may elect to follow either the State laws, policies and procedures as authorized by 2 CFR 200.317, or the procurement standards for other governmental grantees and all governmental subgrantees in accordance with 2 CFR 200.318 through 2 CFR 200.326. Regardless of the option selected, States must ensure that all contracts include any clauses required by Federal statutes and executive orders and that the requirements of 2 CFR 200.326 are followed. The school food authority may use its own procurement procedures which reflect applicable State and local laws and regulations, provided that procurements made with nonprofit school food service account funds adhere to the standards set forth in this part 2 CFR 200.326 and Appendix II, Contract Provisions for Non-Federal Entity Contracts Under Federal Award as applicable. School food authority procedures must include a written code of standards of conduct meeting the minimum standards of 2 CFR 200.318, as applicable.

§ 220.19 [Amended]
17. In § 220.19, remove the words “, or the parallel provisions of 7 CFR part 3019, as applicable,”. PART 225—SUMMER FOOD SERVICE PROGRAM 18. The authority citation for 7 CFR part 225 continues to read as follows: Authority:

Secs. 9, 13 and 14, Richard B. Russell National School Lunch Act, as amended (42 U.S.C. 1758, 1761 and 1762a).

§§ 225.7, 225.8, 225.10, 225.17, 225.18 [Amended]
19. In the table below, for each section indicated in the left column, remove the words indicated in the middle column from wherever they appear in the section, and add the words indicated in the right column: Section Remove Add 225.7 7 CFR part 3015, and 7 CFR part 3016 or 7 CFR part 3019 2 CFR part 200, subpart D and E, and USDA implementing regulations 2 CFR part 400 and part 415. 225.8 SF-269 FNS-777. 225.10 the Department's Uniform Federal Assistance Regulations (7 CFR part 3015) 2 CFR part 200, subpart F and USDA implementing regulations 2 CFR part 400 and part 415. 225.10 7 CFR part 3015 2 CFR part 200, subpart F and USDA implementing regulations 2 CFR part 400 and part 415. 225.10 OMB Circular A-133 and the Department's implementing regulations at 7 CFR part 3052. (To obtain the OMB circular referenced in this paragraph, see 5 CFR 1310.3.) 2 CFR part 200, subpart F and Appendix XI, Compliance Supplement and USDA implementing regulations 2 CFR part 400 and part 415. 225.17 7 CFR part 3016 or 7 CFR part 3019 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 225.17 set forth in 7 CFR part 3016 set forth in 2 CFR part 200, subpart F and USDA implementing regulations 2 CFR part 400 and part 415. 225.17 set forth in 7 CFR part 3019 set forth in 2 CFR part 200, subpart F and USDA implementing regulations 2 CFR part 400 and part 415. 225.18 7 CFR part 3016 or 7 CFR part 3019 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 20. In § 225.2: a. Remove the definitions for 7 CFR part 3015, 7 CFR part 3016, 7 CFR part 3019, and 7 CFR part 3052. b. Add a definition, in alphabetical order, for 2 CFR part 200. c. Add a definition, in alphabetical order, for USDA implementing regulations.

The additions read as follows:

§ 225.2 Definitions.

2 CFR part 200, means the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards published by OMB. The part reference covers applicable: Acronyms and Definitions (subpart A), General Provisions (subpart B), Post Federal Award Requirements (subpart D), Cost Principles (subpart E), and Audit Requirements (subpart F). (NOTE: Pre-Federal Award Requirements and Contents of Federal Awards (subpart C) does not apply to the National School Lunch Program).

USDA implementing regulations include the following: 2 CFR part 400, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; 2 CFR part 415, General Program Administrative Regulations; 2 CFR part 416, General Program Administrative Regulations for Grants and Cooperative Agreements to State and Local Governments; and 2 CFR part 418, New Restrictions on Lobbying.

PART 226—CHILD AND ADULT CARE FOOD PROGRAM 21. The authority citation for 7 CFR part 226 continues to read as follows: Authority:

Secs. 9, 11, 14, 16, and 17, Richard B. Russell National School Lunch Act, as amended (42 U.S.C. 1758, 1759a, 1762a, 1765 and 1766).

§§ 226.4, 226.7, 226.10, 226.22, 226.24, 226.25 [Amended]
22. In the table below, for each section indicated in the left column, remove the words indicated in the middle column from wherever they appear in the section, and add the words indicated in the right column: Section Remove Add 226.4 7 CFR part 3016 2 CFR part 200, subpart D, and USDA implementing regulations 2 CFR part 400 and part 415, as applicable. 226.6 parts 3015, 3016, and 3019 of this title 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 226.7 7 CFR part 3015, 7 CFR part 3016 and 7 CFR part 3019 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 226.7 SF-269 FNS-777. 226.7 parts 3015, 3016, and 3019 of this title 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 226.10 7 CFR part 3016 or 7 CFR part 3019 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 226.22 7 CFR part 3016 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 226.22 7 CFR part 3019 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 226.22 § 3015.175 2 CFR part 200, subpart D and Appendix II, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards and USDA implementing regulations 2 CFR part 400 and part 415. 226.24 7 CFR part 3016 or 7 CFR part 3019 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 226.25 7 CFR part 3016 or 7 CFR part 3019 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 23. In § 226.2: a. Remove the definitions for 7 CFR part 3015, 7 CFR part 3016, 7 CFR part 3019, and 7 CFR part 3052; and b. Add a definition, in alphabetical order, for 2 CFR part 200. c. Add a definition, in alphabetical order, for USDA implementing regulations.

The additions read as follows:

§ 226.2 Definitions.

2 CFR part 200, means the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards published by OMB. The part reference covers applicable: Acronyms and Definitions (subpart A), General Provisions (subpart B), Post Federal Award Requirements (subpart D), Cost Principles (subpart E), and Audit Requirements (subpart F). (NOTE: Pre-Federal Award Requirements and Contents of Federal Awards (subpart C) does not apply to the National School Lunch Program).

USDA implementing regulations include the following: 2 CFR part 400, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; 2 CFR part 415, General Program Administrative Regulations; 2 CFR part 416, General Program Administrative Regulations for Grants and Cooperative Agreements to State and Local Governments; and 2 CFR part 418, New Restrictions on Lobbying.

24. Revise § 226.8(a) and (b) to read as follows:
§ 226.8 Audits.

(a) Unless otherwise exempt, audits at the State and institution levels must be conducted in accordance with 2 CFR part 200, subpart F, Appendices X and XI, Data Collection Form and Compliance Supplement, respectively and USDA implementing regulations 2 CFR parts 400, 415 and 416. State agencies must establish audit policy for for-profit institutions. However, the audit policy established by the State agency must not conflict with the authority of the State agency or the Department to perform, or cause to be performed, audits, reviews, agreed-upon procedures engagements, or other monitoring activities.

(b) The funds provided to the State agency under § 226.4(j) may be made available to institutions to fund a portion of organization-wide audits made in accordance with 2 CFR part 200, subpart F and USDA implementing regulations 2 CFR part 400 and part 415. The funds provided to an institution for an organization-wide audit must be determined in accordance with 2 CFR part 200, subpart F and USDA implementing regulations 2 CFR part 400 and part 415.

PART 227—NUTRITION EDUCATION AND TRAINING PROGRAM
§§ 227.30, 227.31, 227.35, 227.42 [Amended]
25. In the table below, for each section indicated in the left column, remove the words indicated in the middle column from wherever they appear in the section, and add the words indicated in the right column: Section Remove Add 227.30 7 CFR part 3015 2 CFR part 200, subpart D, and USDA implementing regulations 2 CFR part 400 and part 415, as applicable. 227.30 OMB Circular A-102 Attachment C 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 227.30 SF-269 FNS-777. 227.30 OMB Circular A-102, Attachment H 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 227.30 Federal Management Circular 74-4 and OMB Circular A-102, Attachment G 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 227.30 OMB Circular A-102, Attachments N and O, and Federal Management Circular 74-4 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 227.30 OMB Circular A-102, Attachment E 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 227.31 OMB Circular A-102, Attachment G 2 CFR part 200, subpart F and Appendix XI, Compliance Supplement. 227.35 SF-269 FNS-777. 227.42 OMB Circular A-102, Attachment L 2 CFR part 200, subpart D, and USDA implementing regulations 2 CFR part 400 and part 415. PART 235—STATE ADMINISTRATIVE EXPENSE FUNDS
26. The authority citation for 7 CFR part 235 continues to read as follows: Authority:

Secs. 7 and 10 of the Child Nutrition Act of 1966, 80 Stat. 888, 889, as amended (42 U.S.C. 1776, 1779).

§§ 235.3, 235.5, 235.6, 235.7, 235.8, 235.9, 235.11 [Amended]
27. In the table below, for each section indicated in the left column, remove the words indicated in the middle column from wherever they appear in the section, and add the words indicated in the right column: Section Remove Add 235.3 3015, and 3016 and 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 235.5 Office of Management and Budget Circular A-87, Attachment B, to establish cost categories 2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400 and part 415. 235.5 (SF) 269 FNS 777. 235.6 Office of Management and Budget Circular A-87 2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400 and part 415. 235.7 SF-269 FNS-777. 235.8 Office of Management and Budget Circular A-133, and the Department's implementing regulations at 7 CFR part 3052. (To obtain the OMB circular referenced in this definition, see 5 CFR 1310.3.) 2 CFR part 200, subpart F and Appendix XI, Compliance Supplement and USDA implementing regulations 2 CFR part 400 and part 415. 235.9 7 CFR part 3016 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 235.11 SF-269 FNS-777. 235.11(a) 7 CFR part 3016 2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400 and part 415. 235.11(b)(5)(v) 7 CFR part 3016 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 235.11(d) 7 CFR part 3016 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 28. In § 235.2: a. Remove the definitions for 7 CFR part 3015, 7 CFR part 3016, 7 CFR part 3018, 7 CFR part 3019, and 7 CFR part 3052; and b. Add a definition, in alphabetical order, for 2 CFR part 200. c. Add a definition, in alphabetical order, for USDA implementing regulations.

The additions read as follows:

§ 235.2 Definitions.

2 CFR part 200, means the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards published by OMB. The part reference covers applicable: Acronyms and Definitions (subpart A), General Provisions (subpart B), Post Federal Award Requirements (subpart D), Cost Principles (subpart E), and Audit Requirements (subpart F). (NOTE: Pre-Federal Award Requirements and Contents of Federal Awards (subpart C) does not apply to the National School Lunch Program).

USDA implementing regulations include the following: 2 CFR part 400, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; 2 CFR part 415, General Program Administrative Regulations; 2 CFR part 416, General Program Administrative Regulations for Grants and Cooperative Agreements to State and Local Governments; and 2 CFR part 418, New Restrictions on Lobbying.

PART 240—CASH IN LIEU OF DONATED FOODS
§ 240.9 [Amended]
29. In § 240.9(c), remove the words “the Department's Uniform Federal Assistance Regulations (7 CFR part 3015)” and add, in their place, the words “2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415”. PART 246—SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN 30. The authority citation for 7 CFR part 246 continues to read as follows: Authority:

42 U.S.C. 1786.

§§ 246.3, 246.4, 246.12, 246.13, 246.14, 246.15, 246.17, 246.20, 246.24, 246.25 [Amended]
31. In the table below, for each section indicated in the left column, remove the words indicated in the middle column from wherever they appear in the section, and add the words indicated in the right column: Section Remove Add 246.3 7 CFR part 3016 2 CFR part 200, subpart A-F and USDA implementing regulations 2 CFR part 400 and part 415. 246.3 7 CFR part 3018 2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400, part 415, and part 418. 246.4 7 CFR part 3017 2 CFR part 180, OMB Guidelines to Agencies on Government-wide Debarment and Suspension and USDA implementing regulations 2 CFR part 417. 246.4 7 CFR part 3021 2 CFR part 180, Government-wide Requirements for Drug-Free Workplace (Financial Assistance) and USDA implementing regulation 2 CFR part 421. 246.12 Part 3016 2 CFR part 200, subpart D, and USDA implementing regulations 2 CFR part 400 and part 415. 246.12 part 3016 of this title 2 CFR part 200, subpart D, and USDA implementing regulations 2 CFR part 400 and part 415. 246.13 7 CFR part 3016 2 CFR part 200, subpart D, USDA implementing regulations 2 CFR part 400 and part 415. 246.14 7 CFR part 3016 2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400 and part 415. 246.15 § 3016.25(g) of this title 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 246.17 7 CFR part 3016 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 246.20 part 3052 of this title 2 CFR part 200, subpart F and Appendix XI, Compliance Supplement and USDA implementing regulations 2 CFR part 400 and part 415. 246.24(b) 7 CFR part 3016 2 CFR part 200, subpart D and Appendix II, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards and USDA implementing regulations 2 CFR part 400 and part 415. 246.24(c) 7 CFR part 3016 2 CFR part 200, subpart D and Appendix II, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards and USDA implementing regulations 2 CFR part 400 and part 415. 246.24(d) 7 CFR part 3016 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 246.25 7 CFR part 3016 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 32. In § 246.2: a. Remove the definitions for 7 CFR part 3016, 7 CFR part 3017, 7 CFR part 3018, and 7 CFR part 3021; and b. Add a definition, in alphabetical order, for 2 CFR part 200. c. Add a definition, in alphabetical order, for USDA implementing regulations.

The addition and revisions read as follows:

§ 246.2 Definitions.

2 CFR part 200, means the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards published by OMB. The part reference covers applicable: Acronyms and Definitions (subpart A), General Provisions (subpart B), Post Federal Award Requirements (subpart D), Cost Principles (subpart E), and Audit Requirements (subpart F). (NOTE: Pre-Federal Award Requirements and Contents of Federal Awards (subpart C) does not apply to the National School Lunch Program).

USDA implementing regulations include the following: 2 CFR part 400, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; 2 CFR part 415, General Program Administrative Regulations; 2 CFR part 416, General Program Administrative Regulations for Grants and Cooperative Agreements to State and Local Governments; and 2 CFR part 418, New Restrictions on Lobbying.

33. Revise § 246.3(f) to read as follows:
§ 246.3 Administration.

(f) Delegation to local agency. The local agency shall provide Program benefits to participants in the most effective and efficient manner, and shall comply with this part, the Department's regulations governing nondiscrimination (7 CFR parts 15, 15a, 15b), the regulations governing the administration of grants (2 CFR part 200, subpart A-F and USDA implementing regulations 2 CFR part 400 and part 415), Office of Management and Budget Circular A-130, and State agency and FNS guidelines and instructions.

34. Revise § 246.6(b)(1) to read as follows:
§ 246.6 Agreements with local agencies.

(b) * * *

(1) Complies with all the fiscal and operational requirements prescribed by the State agency pursuant to debarment and suspension requirements and if applicable, the lobbying restrictions of 2 CFR part 200, subpart E, and USDA implementing regulations 2 CFR part 400, part 415, and part 417, and FNS guidelines and instructions, and provides on a timely basis to the State agency all required information regarding fiscal and Program information;

35. Revise § 246.24(a) to read as follows:
§ 246.24 Procurement and property management.

(a) Requirements. State and local agencies shall ensure that subgrantees comply with the requirements for the nonprocurement debarment/suspension requirements and, if applicable, the lobbying restrictions as required in 2 CFR part 180, OMB Guidelines to Agencies on Government-wide Debarment and Suspension, 2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400, part 415, and part 417 concerning the procurement and allowability of food in bulk lots, supplies, equipment and other services with Program funds. These requirements are adopted to ensure that such materials and services are obtained for the Program in an effective manner and in compliance with the provisions of applicable law and executive orders.

PART 247—COMMODITY SUPPLEMENTAL FOOD PROGRAM 36. The authority citation for 7 CFR part 247 continues to read as follows: Authority:

Sec. 5, Pub. L. 93-86, 87 Stat. 249, as added by Sec. 1304(b)(2), Pub. L. 95-113, 91 Stat. 980 (7 U.S.C. 612c note); sec. 1335, Pub. L. 97-98, 95 Stat. 1293 (7 U.S.C. 612c note); sec. 209, Pub. L. 98-8, 97 Stat. 35 (7 U.S.C. 612c note); sec. 2(8), Pub. L. 98-92, 97 Stat. 611 (7 U.S.C. 612c note); sec. 1562, Pub. L. 99-198, 99 Stat. 1590 (7 U.S.C. 612c note); sec. 101(k), Pub. L. 100-202; sec. 1771(a), Pub. L. 101-624, 101 Stat. 3806 (7 U.S.C. 612c note); sec 402(a), Pub. L. 104-127, 110 Stat. 1028 (7 U.S.C. 612c note); sec. 4201, Pub. L. 107-171, 116 Stat. 134 (7 U.S.C. 7901 note); sec. 4221, Pub. L. 110-246, 122 Stat. 1886 (7 U.S.C. 612c note); sec. 4221, Pub. L. 113-79, 7 U.S.C. 612c note).

37. In § 247.1: a. Remove the definitions for 7 CFR part 3016, 7 CFR part 3019, and 7 CFR part 3052; b. Add a definition, in alphabetical order, for 2 CFR part 200; and c. Add a definition, in alphabetical order, for USDA implementing regulations.

The additions read as follows:

§ 247.1 Definitions.

2 CFR part 200, means the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards published by OMB. The part reference covers applicable: Acronyms and Definitions (subpart A), General Provisions (subpart B), Post Federal Award Requirements (subpart D), Cost Principles (subpart E), and Audit Requirements (subpart F). (NOTE: Pre-Federal Award Requirements and Contents of Federal Awards (subpart C) does not apply to the National School Lunch Program).

USDA implementing regulations include the following: 2 CFR part 400, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; 2 CFR part 415, General Program Administrative Regulations; 2 CFR part 416, General Program Administrative Regulations for Grants and Cooperative Agreements to State and Local Governments; and 2 CFR part 418, New Restrictions on Lobbying.

38. Revise § 247.25(a) introductory text to read as follows:
§ 247.25 Allowable uses of administrative funds and other funds.

(a) What are allowable uses of administrative funds provided to State and local agencies? Administrative funds may be used for costs that are necessary to ensure the efficient and effective administration of the program, in accordance with 2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400 and part 415, which set out the principles for determining whether specific costs are allowable. Some examples of allowable costs in CSFP include:

PART 248—WIC FARMERS' MARKET NUTRITION PROGRAM (FMNP) 39. The authority citation for 7 CFR part 248 continues to read as follows: Authority:

42 U.S.C. 1786.

§§ 248.10, 248.11, 248.12, 248.13, 248.14, 248.15, 248.18, 248.21, 248.23 [Amended]
40. In the table below, for each section indicated in the left column, remove the words indicated in the middle column from wherever they appear in the section, and add the words indicated in the right column: Section Remove Add 248.10 7 CFR part 3016, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments 2 CFR part 200, subpart D and Appendix II, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards and USDA implementing regulations 2 CFR part 400 and 415. 248.11 7 CFR part 3016 2 CFR part 200, subparts D and E and USDA implementing regulations 2 CFR part 400 and part 415. 248.12 7 CFR 3016.22 2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400 and part 415. 248.12 7 CFR part 3016 2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400 and part 415. 248.13 7 CFR 3016.25(g)(2) 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 248.14 7 CFR 3016.24 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 248.15 7 CFR part 3016 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 248.18 7 CFR part 3015, § 3016.26 or part 3051 2 CFR part 200, subpart F and Appendix XI Compliance Supplement and USDA implementing regulations 2 CFR part 400 and part 415. 248.21(a) 7 CFR part 3016 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 248.21(b) 7 CFR part 3016 2 CFR part 200, subpart D and Appendix II, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards and USDA implementing regulations 2 CFR part 400 and part 415. 248.21(c) 7 CFR part 3016 2 CFR part 200, subpart D and Appendix II, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards and USDA implementing regulations 2 CFR part 400 and part 415. 248.21(d) 7 CFR part 3016 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 248.23 7 CFR part 3016 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 41. Revise § 248.3(b) to read as follows:
§ 248.3 Administration.

(b) Delegation to State agency. The State agency is responsible for the effective and efficient administration of the FMNP in accordance with the requirements of this part; the requirements of the Department's regulations governing nondiscrimination (7 CFR parts 15, 15a and 15b), administration of grants (2 CFR part 200, subparts A, B, D, E and F and USDA implementing regulations 2 CFR part 400 and part 415), nonprocurement debarment/suspension (2 CFR part 180, OMB Guidelines to Agencies on Government-wide Debarment and Suspension and USDA implementing regulations 2 CFR part 417), drug-free workplace (2 CFR part 182, Government-wide Requirements for Drug-Free Workplace), and lobbying (2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400, part 415 and part 418); and, Office of Management and Budget Circular A-130, FNS guidelines, and Instructions issued under the FNS Directives Management System. The State agency shall provide guidance to cooperating WIC State and local agencies on all aspects of FMNP operations. Pursuant to section 17(m)(2) of the CNA, State agencies may operate the FMNP locally through nonprofit organizations or local government entities and must ensure coordination among the appropriate agencies and organizations.

42. Revise § 248.22 to read as follows:
§ 248.22 Nonprocurement debarment/suspension, drug-free workplace, and lobbying restrictions.

The State agency shall ensure compliance with the requirements of the Department's regulations governing nonprocurement debarment/suspension (2 CFR part 180, OMB Guidelines to Agencies on Government-wide Debarment and Suspension and USDA implementing regulations 2 CFR part 417), drug-free workplace (2 CFR part 182, Government-wide Requirements for Drug-Free Workplace), and the Department's regulations governing restrictions on lobbying (2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400, part 415 and part 418), where applicable.

PART 249—SENIOR FARMERS' MARKET NUTRITION PROGRAM (SFMNP) 43. The authority citation for 7 CFR part 249 continues to read as follows: Authority:

7 U.S.C. 3007.

§§ 249.2, 249.3, 249.10, 249.11, 249.12, 249.13, 249.15, 249.18, 249.21, 249.23 [Amended]
44. In the table below, for each section indicated in the left column, remove the words indicated in the middle column from wherever they appear in the section, and add the words indicated in the right column: Section Remove Add 249.2 § 3016.3 of this chapter 2 CFR part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, subpart A, Acronyms and Definitions and USDA implementing regulations 2 CFR part 400 and part 415. 249. 3 part 3016 of this title 2 CFR part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and USDA implementing regulations 2 CFR part 400 and part 415. 249.3 part 3017 of this title 2 CFR part 180, OMB Guidelines to Agencies on Government-wide Debarment and Suspension and USDA implementing regulations 2 CFR part 417. 249.3 part 3021 of this title 2 CFR part 182, Government-wide Requirements for Drug-Free Workplace. 249.3 part 3018 of this title 2 CFR part 200, subpart E, Cost Principles; and USDA implementing regulations 2 CFR part 400, part 415, and part 418. 249.10 part 3016 of this title 2 CFR part 200 and USDA implementing regulations 2 CFR part 400 and part 415. 249.11 part 3016 of this title, a claim 2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400 and part 415, a claim. 249.12 part 3016.22 of this title 2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400 and part 415. 249.12 part 3016 of this title 2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400 and part 415. 249.12 part 3016 of this title or this Part 2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400 and part 415. 249.13 part 3016.25(g)(2) of this title 2 CFR part 200, subpart D, Post Federal Award Requirements and USDA implementing regulations 2 CFR part 400 and part 415. 249.15 part 3016 of this title 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 249.18 parts 3015, 3016 (§ 3016.26 of this title), or 3051 of this title 2 CFR part 200, subpart F, Audit Requirements and USDA implementing regulations 2 CFR part 400 and part 415. 249.21(a) part 3016 of this title 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 249.21(b) part 3016 of this title 2 CFR part 200, subpart D; Appendix II Contract Provisions for Non-Federal Entity Contracts Under Federal Awards; and USDA implementing regulations 2 CFR part 400 and part 415. 249.21(d) part 3016 of this title 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 249.23 part 3016 of this title 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 45. Revise § 249.22 to read as follows:
§ 249.22 Nonprocurement debarment/suspension, drug-free workplace, and lobbying restrictions.

The State agency must ensure compliance with the requirements of FNS' regulations governing nonprocurement debarment/suspension (2 CFR part 180, OMB Guidelines to Agencies on Government-wide Debarment and Suspension and USDA implementing regulations 2 CFR part 417) and drug-free workplace (2 CFR part 182, Government-wide Requirements for Drug-Free Workplace), as well as FNS' regulations governing restrictions on lobbying (2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400, part 415, and part 418), where applicable.

PART 253—ADMINISTRATION OF THE FOOD DISTRIBUTION PROGRAM FOR HOUSEHOLDS ON INDIAN RESERVATIONS
§§ 253.5 and 253.11 [Amended]
46. In the table below, for each section indicated in the left column, remove the words indicated in the middle column from wherever they appear in the section, and add the words indicated in the right column: Section Remove Add 253.5 SF-269 SF-425. 253.11 7 CFR part 3015, Subpart V 2 CFR part 200, subpart D, and USDA implementing regulations 2 CFR part 400 and part 415. 253.11 OMB Circular No. A-102, Attachment K 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 253.11 SF-269 SF-425. PART 272—REQUIREMENTS FOR PARTICIPATING STATE AGENCIES
§§ 272.1 and 272.2 [Amended]
47. In the table below, for each section indicated in the left column, remove the words indicated in the middle column from wherever they appear in the section, and add the words indicated in the right column: Section Remove Add 272.1 OMB Circular A-87 (2 CFR Part 225) 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 272.2 OMB Circular A-87 (available on OMB's Web site at http://www.whitehouse.gov/omb/circulars_default/) 2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400 and part 415. PART 273—CERTIFICATION OF ELIGIBLE HOUSEHOLDS 48. The authority citation for 7 CFR part 273 continues to read as follows: Authority:

7 U.S.C. 2011-2036.

§ 273.7 [Amended]
49. In the table below, for each section indicated in the left column, remove the words indicated in the middle column from wherever they appear in the section, and add the words indicated in the right column: Section Remove Add 273.7(d)(7) SF-269 SF-425 using FNS-778/FNS-778A worksheet. 50. Revise § 273.7(l)(4) to read as follows:
§ 273.7 Work provisions.

(l) * * *

(4) Reporting. State agencies operating work supplementation and support programs are required to comply with all FNS reporting requirements, including reporting the amount of benefits contributed to employers as a wage subsidy on the FNS-388, State Issuance and Participation Estimates; FNS-388A, Participation and Issuance by Project Area; FNS-46, Issuance Reconciliation Report; and SF-425, using FNS-778 worksheet, Addendum Financial Status Report. State agencies are also required to report administrative costs associated with work supplementation programs on the FNS-366A, Budget Projection and SF-425 using FNS-778/FNS-778A worksheet, Financial Status Report. Special codes for work supplementation programs will be assigned for reporting purposes.

PART 274—ISSUANCE AND USE OF PROGRAM BENEFITS 51. The authority citation for 7 CFR part 274 continues to read as follows: Authority:

7 U.S.C. 2011-2036.

§ 274.1 [Amended]
52. In the table below, for each section indicated in the left column, remove the words indicated in the middle column from wherever they appear in the section, and add the words indicated in the right column: Section Remove Add 274.1 the Office of Management and Budget (OMB) Circular A-133 Compliance Supplement 2 CFR part 200, subpart F and Appendix XI, Compliance Supplement, and USDA implementing regulations 2 CFR part 400 and part 415. 274.1 General Accountability Office Government Accountability Office. 274.1 OMB Circular A-133 2 CFR part 200, subpart F and Appendix XI, Compliance Supplement and USDA implementing regulations 2 CFR part 400 and part 415. 274.1 OMB Circular A-87 (available on OMB's Web site at http://www.whitehouse.gov/omb/circulars_default/) in determining and claiming allowable costs for the EBT system 2 CFR part 200, subparts D and E and USDA implementing regulations 2 CFR part 400 and part 415, as applicable.
§ 274.1 [Amended]
53. Amend § 274.1(i)(2)(i), by removing the last sentence. PART 276—STATE AGENCY LIABILITIES AND FEDERAL SANCTIONS 54. The authority citation for 7 CFR part 276 continues to read as follows: Authority:

7 U.S.C. 2011-2036.

§ 276.4 [Amended]
55. In § 276.4(d), remove the words “OMB Circular A-87 (available on OMB's Web site at http://www.whitehouse.gov/omb/circulars_default/)” and add, in their place, the words “2 CFR part 200, subparts D and E and USDA implementing regulations 2 CFR part 400 and part 415”. PART 277—PAYMENTS OF CERTAIN ADMINISTRATIVE COSTS OF STATE AGENCIES
§§ 277.5, 277.6, 277.9, 277.11, 277.13, 277.16, 277.17, 277.18 [Amended]
56. In the table below, for each section indicated in the left column, remove the words indicated in the middle column from wherever they appear in the section, and add the words indicated in the right column: Section Remove Add 277.5 OMB Circular A-102, Attachment J 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 277.6 OMB Circular A-87 (available on OMB's Web site at http://www.whitehouse.gov/omb/circulars_default/) 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 277.9 OMB Circular A-87 (available on OMB's Web site at http://www.whitehouse.gov/omb/circulars_default/) 2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400 and part 415. 277.11 7 CFR part 3015 2 CFR part 200, subpart F and Appendix XI, Compliance Supplement and USDA implementing regulations 2 CFR part 400 and part 415. 277.11 Form SF-269 SF-425, using FNS-778/FNS-778A worksheet. 277.11(d)(1) SF-269 report, SF-425 report, using FNS-778/FNS-778A worksheet. 277.11(d)(5) SF-269 SF-425, using FNS-778/FNS-778A worksheet. 277.13 OMB Circular A-87 (available on OMB's Web site at http://www.whitehouse.gov/omb/circulars_default/) 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 277.16 OMB Circular A-87 (available on OMB's Web site at http://www.whitehouse.gov/omb/circulars_default/) 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 277.17 OMB Circular A-102, Attachment P 2 CFR part 200, subpart F and Appendix XI, Compliance Supplement and USDA implementing regulations 2 CFR part 400 and part 415. 277.17 Attachment H of OMB Circular A-102 2 CFR part 200, subpart F and Appendix XI, Compliance Supplement and USDA implementing regulations 2 CFR part 400 and part 415. 277.17 OMB Circular A-102, Attachment O 2 CFR part 200, subpart D and USDA implementing regulations 2 CFR part 400 and part 415. 277.18 OMB Circular A-87 (available on OMB's Web site at http://www.whitehouse.gov/omb/circulars_default/) 2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400 and part 415. Dated: August 17, 2016. Audrey Rowe, Administrator, Food and Nutrition Service.
[FR Doc. 2016-21760 Filed 9-27-16; 8:45 am] BILLING CODE 3410-30-P
DEPARTMENT OF AGRICULTURE Rural Housing Service Rural Business-Cooperative Service Rural Utilities Service Farm Service Agency 7 CFR Part 1940 RIN 0570-AA30 Methodology and Formulas for Allocation of Loan and Grant Program Funds; Correction AGENCY:

Rural Housing Sevice, Rural Business-Cooperative Service, Rural Utilities Service, and Farm Service Agency, USDA.

ACTION:

Correcting amendment.

SUMMARY:

This document contains a correction to 7 CFR part 1940, subpart L, “Methodology and Formulas for Allocation of Loan and Grant Program Funds” to provide reference to the Rural Business Development Program, which replaced the Rural Business Enterprise Grant program and the Rural Business Opportunity Grant program.

DATES:

Effective on September 28, 2016.

FOR FURTHER INFORMATION CONTACT:

Kristi Kubista-Hovis, Rural Development, Business Programs, U.S. Department of Agriculture, 1400 Independence Avenue SW., STOP 3226, Washington, DC 20250-3225; telephone (202) 720-0424; email [email protected]/gov.

SUPPLEMENTARY INFORMATION:

Background

The Agricultural Act of 2014 (2014 Farm Bill) directed the Agency to combine the Rural Business Enterprise Grant (RBEG) program and the Rural Business Opportunity Grant (RBOG) program into a single new program entitled the Rural Business Development Grant (RBDG) program. The Agency issued an interim rule with request for comment on March 25, 2015 (80 FR 15665) establishing the RBDG program and removing the applicable provisions associated with the RBEG and RBOG programs. In the interim rule, the Agency inadvertently did not update the title to 7 CFR 1940.588 to reflect the replacement of the RBEG and RBOG programs with the new RBDG program. To correct this oversight, the Agency is revising the title to 7 CFR 1940.588. This correction has no substantive effect on how State allocations are made for the RBDG program.

Need for Correction

As found in the Code of Federal Regulations, the title to 7 CFR 1940.588 contains reference to two programs (i.e., RBEG and RBOG) that no longer exist as stand-alone programs and does not reference their replacement program (i.e., the RBDG program). This technical change is necessary to claify how the Agency allocates funds for the RBDG program and to remove reference to programs that no longer exist.

List of Subjects in 7 CFR Part 1940

Administrative practice and procedure, Agriculture, Allocations, Grant programs—Housing and community development, Loan programs—Agriculture, Rural areas.

Accordingly, 7 CFR part 1940 is corrected by making the following correcting amendment:

PART 1940—GENERAL 1. The authority citation for part 1940 continues to read as follows: Authority:

5 U.S.C. 301; 7 U.S.C. 1989; 42 U.S.C. 1480.

2. Revise the heading for § 1940.588 to read as follows:
§ 1940.588 Business and Industry Guaranteed and Direct Loans, Rural Business Development Grants, and Intermediary Relending Program.
Dated: September 9, 2016. Lisa Mensah, Under Secretary, Rural Development. Dated: September 16, 2016. Alexis M. Taylor, Deputy Under Secretary, Farm and Foreign Agricultural Services.
[FR Doc. 2016-23228 Filed 9-27-16; 8:45 am] BILLING CODE 3410-XY-P
DEPARTMENT OF ENERGY 10 CFR Part 900 RIN 1901-AB36 Coordination of Federal Authorizations for Electric Transmission Facilities AGENCY:

Office of Electricity Delivery and Energy Reliability, Department of Energy.

ACTION:

Final rule.

SUMMARY:

The Department of Energy (DOE) is amending its regulations for the timely coordination of Federal authorizations for proposed interstate electric transmission facilities pursuant to the Federal Power Act (FPA). The amendments are intended to improve the pre-application procedures and result in more efficient processing of applications.

DATES:

This final rule will become effective November 28, 2016. This rule contains a collection of information requirement subject to OMB approval under the Paperwork Reduction Act. DOE has submitted the collection to OMB for approval and will provide separate notice in the Federal Register of OMB approval and the OMB control number.

FOR FURTHER INFORMATION CONTACT:

Julie A. Smith, Ph.D., U.S. Department of Energy, Office of Electricity Delivery and Energy Reliability, Mailstop OE-20, Room 8G-017, 1000 Independence Avenue SW., Washington, DC 20585; 202-586-7668; or [email protected]

SUPPLEMENTARY INFORMATION:

Acronyms and Abbreviations. A number of acronyms and abbreviations are used in this preamble. While this may not be an exhaustive list, to ease the reading of this preamble and for reference purposes, the following terms, acronyms, and abbreviations are defined as follows:

CEQ Council on Environmental Quality CFR Code of Federal Regulations DOE Department of Energy EIS Environmental Impact Statement E.O. Executive Order EPAct Energy Policy Act of 2005 FERC Federal Energy Regulatory Commission FPA Federal Power Act FR Federal Register IIP Integrated Interagency Pre-Application MOU Memorandum of Understanding NEPA National Environmental Policy Act OMB Office of Management and Budget PM Presidential Memorandum PMA Federal Power Marketing Administration RFI Request for Information RRTT Rapid Response Team for Transmission RTO Regional Transmission Operators I. Background II. Discussion of Final Rule and Responses to Comment A. General B. Applicability C. Definitions D. Integrated Interagency Pre-Application (IIP) Process E. Selection of NEPA Lead Agency F. IIP Process Administrative File III. Regulatory Review A. Executive Orders 12866 and 13563 B. National Environmental Policy Act C. Regulatory Flexibility Act D. Paperwork Reduction Act E. Unfunded Mandates Reform Act of 1995 F. Treasury and General Government Appropriations Act, 1999 G. Executive Order 13132 H. Executive Order 12988 I. Treasury and General Government Appropriations Act, 2001 J. Executive Order 13211 K. Congressional Review Act IV. Approval of the Office of the Secretary I. Background

In this final rule, DOE establishes a simplified Integrated Interagency Pre-application (IIP) process for the siting of electric transmission facilities, as described in Section II. This process is established pursuant to DOE's authority under section 216(h) of the Federal Power Act (16 U.S.C. 791-828c) (FPA), which sets forth provisions relevant to the siting of interstate electric transmission facilities. section 216(h) of the FPA (16 U.S.C. 824p(h)), “Coordination of Federal Authorizations for Transmission Facilities,” provides for DOE to coordinate all Federal authorizations and related environmental reviews needed for siting certain interstate electric transmission projects, including National Environmental Policy Act of 1969 (NEPA) reviews. Specifically, section 216(h)(3) requires the Secretary, to the maximum extent practicable under Federal law, to coordinate the Federal authorization and review process with any Indian tribes, multi-state entities, and state agencies that have their own separate permitting and environmental reviews. Section 216(h)(4)(C) further requires that DOE establish an expeditious pre-application mechanism to allow project proponents to confer with Federal agencies involved, and for each such agency to communicate to the proponent any information needs relevant to a prospective application and key issues of concern to the agencies and public.

On February 2, 2016, DOE published a notice of proposed rulemaking (NOPR) to amend its existing procedures to provide for this revised, simplified IIP Process for certain electric transmission facilities (81 FR 5383). Publication of the NOPR began a 60-day public comment period that ended on April 4, 2016. On March 22, 2016, DOE conducted a public workshop to discuss the NOPR, which included a presentation describing the proposed rule and allowed for questions about and comments on the proposed rule by workshop participants. Comments on the proposed rulemaking were received from approximately 12 sources, including electric industry groups, other organizations, and individuals. The NOPR, IIP public workshop presentation and transcript, and any comments that DOE received are available on the DOE Web site at http://energy.gov/oe/services/electricity-policy-coordination-and-implementation/transmission-planning/improving.

For additional information on the legal authority for this final rule, as well as the Executive Orders and Presidential Memoranda this rule is intended to implement, please see the proposed IIP rule (81 FR 5383; Feb. 2, 2016). The proposed rule also contains information on previous rulemaking and information gathering activities that DOE conducted pursuant to its authority under section 216(h) of the FPA, as well as information on the significant interagency coordination activities that preceded this final rule.

II. Discussion of Final Rule and Responses to Comment

DOE has considered and evaluated the comments received during the public comment period and public workshop. In this section, DOE discusses comments received, provides DOE's responses to the comments, and describes any resulting changes to the proposal adopted in this final rule. Several commenters expressed overall support for DOE's efforts to develop an IIP Process, acknowledging the importance of this effort to improving transmission project planning and siting through early engagement, information sharing, and coordination of federal, tribal, state, and other permitting entities. Comments suggested that implementation of this rule should prove beneficial during pre-application process, as well as provide good information and analysis for informing subsequent NEPA reviews. Specific elements of the proposed rulemaking for which many commenters expressed support include: The voluntary nature of the IIP Process for project proponents; a proposed process that is coordinated by a single agency; the simplified proposal for a two meeting IIP structure; development of IIP Process deliverables maintained by DOE as a part of an IIP Process administrative file; and DOE's required use of information technology, which is intended to reduce costs while increasing the likelihood of remote participation in IIP meetings and discussions by all potentially affected federal agency, tribal, and state and/or local agency representatives.

Commenters did express continued concern that while this final rule is a positive move toward realizing transmission line permitting efficiencies, much more is needed to address challenges in siting infrastructure development and coordination of Federal regulatory authorities and related review processes. Commenters urged DOE to take the lead in developing a systemic, legislative overhaul of the Federal environmental review procedures that lead to lengthy permitting times for important transmission infrastructure that, in their view, necessitated this rulemaking. Commenters also contended that the existing authority afforded to DOE to lead transmission permitting efforts under section 216(h) extends to post-application activities, such as NEPA reviews; that this rule should put a mechanism in place for Federal entities to recover costs associated with participating in a pre-application processes like the IIP Process; and, that this final rule should provide a mechanism for enforcing Federal entity adherence to post-application Federal permitting timelines. In this rule, DOE implements only section 216(h)(4)(C) of the FPA, which requires DOE establish an expeditious pre-application mechanism for siting transmission line projects. As a result, these comments are outside the scope of this final rule, and DOE does not address these comments in this final rulemaking. All other comments are addressed as appropriate in sections II.A. through II.F.

A. General

10 CFR 900.1 states the purpose of the regulations, which is to provide a process for the timely coordination of Federal authorizations for proposed electric transmission facilities pursuant to section 216(h) of the FPA (16 U.S.C. 824p(h)), including the development of an early pre-application process in support of this coordination and the selection of a NEPA lead agency. This final rule provides a framework for DOE to coordinate and facilitate early cooperation and exchange of environmental information required to site qualified electric transmission facilities. This early cooperation and information sharing promotes understanding of all permitting requirements and information needs to support agency decision making enabling applicants to prepare more robust applications for submission to relevant Federal, Tribal or State/local permitting agencies. Applications prepared through the IIP Process are expected to better inform post-application regulatory review and consultation processes, such as those under NEPA, the Endangered Species Act, and the National Historic Preservation Act.

The activities that comprise the IIP Process in this final rule occur prior to an applicant filing a request for authorization with Federal permitting agencies. The IIP Process is intended for a project proponent who has identified potential study corridors and/or potential routes within an established project area for a qualifying project. In DOE's experience, the summary-level project and environmental background information and supporting data, including discussion of the project proponent stakeholder outreach activities, requested as a part of the initiation request as described in § 900.4 of this final rule, is typically under development or available at this stage of project development.

Commenters expressed concerns that the IIP Process would be counterproductive or duplicative of the information developed for and provided to Federal entities in support of an application and subsequent NEPA review. Some commenters pointed to the amount of time needed to prepare the IIP Initiation Meeting Request and asked DOE to explain how this pre-application process supports review activities under NEPA.

Pre-application activities, such as those provided for in this final rule, can be incorporated into a NEPA review process and resultant NEPA document in a variety of ways. For example, Federal entities should incorporate information gained from any pre-application activities into their public notices initiating NEPA reviews and information about the project. In addition, identification of any issues during the pre-application is expected to inform and be shared in scoping meetings and other public meetings that are part of the NEPA process. Information shared through the IIP Process and documented in the Final IIP Resources Report and IIP Meeting Summaries, as described in § 900.4 of this final rule, can be included as part of the background information for developing the proposed action under NEPA, and would also aid in the development of alternatives and be reflected in the alternatives section of the NEPA document, either as part of the alternatives considered but eliminated from further analysis, or as an alternative that is given detailed consideration in the NEPA document.

IIP Process deliverables such as the IIP Final Resources Report or an IIP Meeting Summary, and the information contained therein, as well as the supporting information or data maintained by DOE as a part of the IIP Process administrative file should be incorporated by the NEPA Lead Agency or a cooperating agency under NEPA in a subsequent NEPA document that supports an application requesting Federal authorizations for transmission lines. The IIP Process administrative file as defined in § 900.6 of this final rule would contain IIP Process deliverables that could be referenced directly in NEPA documents post-application. DOE agrees with commenters to the NOPR that the Department should work with CEQ to develop guidance for Federal entities in their implementation of this final rule, specifically focusing on how to use the IIP Process deliverables to inform a post-application environmental review process.

A commenter asked if a prospective applicant, or project proponent, would need to submit application(s) to relevant state(s) responsible for siting transmission lines within their boundaries before submitting its request for initiation of the IIP Process to DOE. Under this final rule, a project proponent may submit an initiation request to DOE before, at the same time as, or after submitting applications for authorizations by relevant states. DOE developed the IIP Process in this final rule to promote flexibility for project proponents with regard to timing of filing all applications for siting authorizations necessary for siting a proposed transmission line project. The IIP Process will notify and provide an opportunity for non-Federal agencies (tribal, state, or local governments) to engage in early planning and coordination of separate non-Federal permitting and environmental reviews with that of the Federal permitting agencies.

DOE also received requests during the public comment period and workshop for clarification about the interaction of this final rule with provisions of the Fixing America's Surface Transportation (FAST) Act (Pub. L. No: 114-94). Passed by Congress in December 2015, the FAST Act contains provisions related to improving environmental review and permitting of infrastructure projects, including but not limited to, transmission infrastructure. For example, Title XLI of the FAST Act creates a new interagency entity—the Federal Permitting Improvement Council—to oversee interagency Federal infrastructure project permitting and review processes, establishes new procedures to standardize interagency consultation and coordination practices, addresses infrastructure project delivery process, and adds tracking of environmental review and permitting milestones. The activities comprising the IIP Process described in this final rule would inform the development of more robust applications for transmission infrastructure projects that could be considered for and benefit from the environmental review and permitting improvement provisions of Title XLI of the FAST Act.1

1 Title XLI of the Fast Act (section 41001(6)(B)(i)) defines the term “covered project” as any activity in the United States that requires authorization or environmental review by a Federal agency involving construction of infrastructure for renewable or conventional energy production, electricity transmission, surface transportation, aviation, ports and waterways, water resource projects, broadband, pipelines, manufacturing, or any other sector as determined by a majority vote of the Council that: (1) Is subject to NEPA; (2) is likely to require a total investment of more than $200,000,000; and, (3) does not qualify for abbreviated authorization or environmental review processes under any applicable law. A covered project may also be one that is subject to NEPA and the size and complexity of which, in the opinion of the Federal Permitting Improvement Council, make the project likely to benefit from enhanced oversight and coordination, including a project likely to require: (1) Authorization from or environmental review involving more than two Federal agencies; or (2) the preparation of an environmental impact statement under NEPA.

B. Applicability

Section 900.2 of the final rule explains when the provisions of part 900 would apply to the coordination of Federal authorizations. The provisions of part 900, which are consistent with DOE's prior regulations and the 2009 MOU (for additional background on the MOU, please refer to the proposed rule (81 FR 5383, Feb. 2, 2016)), will apply to qualifying projects, and will also apply to Other Projects at the discretion of the Assistant Secretary of DOE's Office of Electricity Delivery and Energy Reliability (OE-1). Both types of projects must be for transmission facilities used for the transmission of electric energy in interstate commerce, but qualifying projects are generally 230 kV or above and cross jurisdictions administered by more than one Federal entity or MOU signatory agency.

Commenters on the NOPR encouraged DOE to apply its coordination of Federal authorizations to transmission line project proposals that would be a part of a “bulk electric system,” as defined in FERC Order No. 773,2 to include all facilities operated at or above 100 kV under the definition of “Other Projects.” DOE clarifies that the definition of “Other Projects” in § 900.3 of this final rule would include transmission projects defined by FERC as a part of a bulk electric power system assistance.

2Revisions to Electric Reliability Organization Definition of Bulk Electric System and Rules of Procedure, Order No. 773, 141 FERC ¶ 61,236 (December 20, 2012).

DOE emphasizes that there will be no coordination role for DOE for Federal authorizations for electric transmission facilities located within the Electric Reliability Council of Texas (ERCOT) interconnection because section 216(k) of the FPA states that section 216 of the FPA shall not apply within the ERCOT area (16 U.S.C. 824p(k)). Section 900.2 also provides that section 216(h) does not apply when an application has been submitted to FERC for issuance of a permit for construction or modification of a transmission facility, or a pre-filing procedure has been initiated, under section 216(b) of the FPA (16 U.S.C. 824p(b)) (transmission lines within a DOE-designated National Interest Electric Transmission Corridor). In those circumstances, DOE has delegated its section 216(h) coordination authority to FERC and, in Order No. 689,3 FERC adopted regulations setting forth the procedures it will follow in such circumstances.

3 Department of Energy Delegation Order No. 00-004-00A, § 1.22, issued May 16, 2006.

This part does not apply to transmission lines that cross the U.S. international border, Federal submerged lands, national marine sanctuaries, marine national monuments, or facilities constructed by Federal Power Marketing Administrations (PMAs).4 Section 216(h) does not affect any requirements of U.S. environmental laws, and in the above mentioned cases, does not waive any requirements to obtain necessary Federal authorizations for electric transmission facilities.

4 DOE does not consider applications to the PMAs for transmission interconnections to be Federal authorization requests within the meaning of section 216(h).

C. Definitions

Section 900.3 defines terms for this part. DOE removed the definition of the term “Stakeholder Outreach Plan” from the list of defined terms as it is not a term that is used in this final rule.

D. Integrated Interagency Pre-Application (IIP) Process

Section 900.4 provides the procedures and information requirements of the IIP Process. This section sets forth a framework for implementing the IIP Process, provisions for how DOE would fulfill its section 216(h) Lead Coordinating Agency role as defined in § 900.2 of this final rule, provisions describing expected outcomes of the IIP Initial Meeting and IIP Close-Out Meeting, and provisions describing the nature and purpose of products generated during the IIP Process (e.g., Final IIP Resources Report).

For proponents of qualifying projects or Other Projects, participation in the IIP Process is voluntary. A project proponent initiates the IIP Process by submitting an initiation request as described in § 900.4 of this final rule. A project proponent may elect to request initiation of the IIP Process for a qualifying project or other project as defined in § 900.3. The timing of the initiation request is determined by the project proponent. A project proponent electing to utilize the IIP Process must submit Initial and Close-Out meeting requests to DOE and actively participate in initial and close-out meetings coordinated by DOE to complete the IIP Process. Completion of the IIP Process as proposed in this Final rule is expected to assist the project proponent in determining the likelihood that the project proponent would efficiently obtain permits necessary to construct a proposed project in the competitive, regional transmission planning processes.

The project proponent would be expected, among other things, to provide the project-related and environmental information required as part of the initiation request to DOE. DOE must determine that adequate information has been provided by the project proponent consistent with § 900.4 before DOE will initiate its coordination function under this part.5

5 The specific information requested as a part of section 216(h) process initiation is listed in the regulatory language in § 900.4(a)-(d). DOE will determine that the initiation request is adequate based on the requested list of summary information (that comprises the “initiation request”) in § 900.4(a)-(d).

Information requested as part of the initiation request in this proposed rule retains many of the requirements contained in § 900.5 “Request for coordination” of the existing section 216(h) regulation (73 FR 54456; September 19 2008), and expands on some of those elements based on RRTT agency experience and information received in response to the August 2013 RFI (78 FR 53436). DOE will also consider electronic access to a checklist and an IIP Process timeline, as suggested by commenters. These elements would make process determinations and IIP Process deliverables more clear. DOE may also consider providing publicly-available resources in a central electronic repository, as currently provided for in § 900.6(b) of the existing regulations.6

6 Electronic tools currently exist that may serve as a resource for the information required as a part of the IIP Process. For example, the Regulatory and Permitting Information Desktop (RAPID) Toolkit is an online tool that streamlines siting and permitting transmission lines in the West. The RAPID Toolkit offers a single location for agencies, developers, and industry stakeholders to work together on electric energy transmission regulatory processes by using a wiki environment to collaborate on regulatory processes, permit guidance, regulations, contacts, and other relevant information. The RAPID Toolkit can be accessed at http://en.openei.org/wiki/RAPID.

Comments received on the NOPR also expressed concern that the information requested to satisfy the initiation request represents a substantial level of effort and involves preparation time that would be better served by starting NEPA processes (e.g., early scoping) before applications for Federal authorizations are filed with Federal entities. As indicated previously, NEPA environmental review and process requirements are not triggered until an application for Federal authorization is filed and accepted by the recipient permitting Federal entity. The IIP Process would occur prior to submission of an application. Use of the IIP Process is voluntary, and DOE expects that a project proponent requesting DOE coordination assistance has made the calculation that the request, including active participation and preparation of information constituting an IIP initiation request, is in the best interests of the project proponent.

Another commenter was critical of the requirements of the initiation request related to the Early Identification of Project Issues, suggesting that they are duplicative of public scoping under NEPA. The Project Issues summary-level information would be informed by a project proponent's public and stakeholder outreach activities that typically occur during project planning and inform the potential study corridors or potential routes that would be described in the Summary of the qualifying project portion of the IIP Process Initiation request. DOE does not expect that a separate public participation plan would be developed for and specific to the IIP Process nor does the initiation request as described in § 900.4 of this final rule mandate the development of such a plan. Rather, the final rule requires that a project proponent would provide a concise description of how a project proponent coordinates stakeholder interface, communications, and involvement during its own project planning and development efforts to establish potential study corridors or potential routes for a qualifying project.

DOE will notify and request participation by all Federal entities in the IIP Process that have a potential authorization or consultation for a qualifying project after DOE has reviewed and determined that an initiation request meets the informational requirements of § 900.4(a) through (d). All Federal entities notified by DOE as having a potential authorization or consultation required for the siting of a qualifying project will be expected to participate in the Initial Meeting and the Close Out Meeting, unless the notified agency clarifies in writing to DOE within fifteen (15) calendar days of notification that they do not have any involvement or have minimal involvement, along with the supporting rationale used by the notified agency for their non- or minimal involvement.7 (DOE notes that this notification was required within seven (7) days in the NOPR, but has determined that seven days may not be adequate and so lengthened the time period to 15 days for this final rule.) Several comments on the NOPR suggested that the IIP Process would not be effective in minimizing inefficiencies of multiple agency environmental review and permitting processes if Federal entities and Non-Federal entities cannot be required to participate fully in the IIP Process. This final rule is issued pursuant to Section 216(h)(4)(C) of the FPA, which requires DOE establish an expeditious pre-application mechanism for siting transmission line projects. While this provision authorizes DOE to coordinate pre-application activities among agencies involved in an authorization or permit of a proposed transmission line project, it does not authorize DOE to enforce participation by any Federal entity or non-Federal entity in the IIP Process. Rather, this final rule strongly encourages and establishes a structure by which DOE expects full and timely participation by Federal entities and non-Federal entities through timely notification, and use of electronic collaboration tools, like the use of teleconferencing and electronic collaborative tools, which are intended to support remote, lower-cost participation as described in this final rule.

7 Provided, however, that a Federal entity whose permitting authority for the construction or modification of electric transmission facilities is limited to those facilities for which an application is filed under section 216(b) of the Federal Power Act may participate at its sole discretion.

DOE will schedule IIP meetings no less than thirty (30) calendar days from each other and only after Federal entities are given notice of the need for their participation in the IIP Process. The notification described applies to both Initiation and Close-Out of the IIP Process, in response to the project proponent's request for such meetings.

The list of Federal entities notified by DOE following its review of the initiation request as having a potential authorization or consultation required for the siting of a Qualified Project may be revised as necessary during the IIP Process based on information provided by the project proponent, a Federal entity, and otherwise publicly-available information. DOE will oversee the IIP Process and coordinate the involvement of the Federal entities as described in § 900.4. DOE will provide Federal entities and Non-Federal entities access to all information received from the project proponent as a part of an initiation request determined by DOE to meet the information requirements of this part in § 900.4, which will be coordinated through the use of electronic collaborative tools, specifically the Office of Management and Budget's (OMB's) MAX electronic system (https://max.omb.gov/maxportal) throughout an IIP Process for a qualifying project.

In-person attendance at IIP Process meetings by each Federal entity will depend on the availability of resources or the authority to recover costs from project proponents. Currently, certain Federal entities may recover costs only after an application has been submitted, and some Federal entities lack cost recovery authority altogether. Even in instances where cost recovery may be available, each Federal agency will make its own determination regarding its participation and use of resources. Each Federal agency with concerns regarding their level of participation in the IIP Process meetings will provide its rationale to DOE in writing when or if a determination is made that it may not be an expeditious use of staff time and funds to attend all or some meetings. To the extent allowed by law, Federal entities may seek cost recovery from the project proponents during the IIP Process. DOE will provide an opportunity for Federal and Non-Federal entities to participate in IIP meetings by using teleconferencing and webinars.

Coordinating the preparation of the Final IIP Resources Report document prepared by DOE and related administrative file will facilitate more efficient preparation of a single environmental review document that all agencies should strive to utilize to inform their relevant decision making. The Final IIP Resources Report is purposefully designed in terms of format and substance to be consistent with provisions for early application of NEPA and the consideration of applicant proposals in: (1) Council on Environmental Quality (CEQ) regulations implementing NEPA (40 CFR parts 1500 through 1508); (2) CEQ guidance related to early consultation or engagement of Federal agencies with prospective applicants; and (3) NEPA's Forty Most Asked Questions (46 FR 18026; March 23, 1981, as amended).8 For example, the format and substance of the Final IIP Resources Report could be similar to an “early corporate environmental assessment” or typical applicant generated environmental study. CEQ explains that provisions to promote the early application of NEPA, including by encouraging private parties to initiate environmental studies early and encouraging pre-application consultation between private parties and federal agencies “are intended to encourage and enable private and other non-federal entities to build environmental considerations into their own planning processes in a way that facilitates the application of NEPA and avoids delay.” 9 Comments on the NOPR highlight the importance of the Final IIP Resources Report and its use by a NEPA Lead Agency in informing the post-application environmental review process (e.g., informing scoping) and resultant NEPA document (e.g., alternatives development or incorporation by reference). DOE acknowledges this comment, and notes that, as discussed previously in this preamble, DOE will coordinate its guidance efforts with CEQ to best integrate the information contained in the Final IIP Resources Report into post-application environmental review(s).

8 CEQ, NEPA's Forty Most Asked Questions (46 FR 18026; March 23, 1981, as amended).

9Id.

The Final IIP Resources Report will be included by DOE, along with all other support information, datasets, maps, figures, etc. collected as part of the IIP Process in an IIP Process administrative file that would be provided to the NEPA Lead Agency to inform their environmental reviews once an application is filed. This information can, and should, also be used by other agencies on related decision making. DOE will maintain the IIP Process administrative file for the duration of the IIP Process and after the IIP Close out Meeting has been convened.

E. Selection of NEPA Lead Agency

Section 900.5 provides a mechanism for the identification and selection of a potential NEPA Lead Agency responsible for meeting Federal environmental review requirements 10 for permitting interstate transmission lines across multiple Federal jurisdictions once applications are filed with permitting agencies. This section incorporates the terms and mechanisms provided for identification and determination of NEPA Lead Agency for transmission facilities proposed for siting on majority Federal lands as set forth in the 2009 MOU and in accordance with CEQ's NEPA regulations. DOE provided clarifying changes to the § 900.5 provisions of this final rule, including allowing for agencies to notify DOE of the potential lead agency within 30 calendar days. DOE has determined that more time was needed for agencies to consider this designation and notify DOE of the determination.

10 Each participating Federal entity is responsible for meeting its own agency-specific requirements.

F. IIP Process Administrative File

Section 900.6 defines the contents of a consolidated IIP Process administrative file intended to document IIP Process-related information. This new section replaces § 900.6 of the existing Section 216(h) regulations (73 FR 54456). This section also describes the process by which this file will be maintained by DOE as Lead section 216(h) Agency in coordination with the Federal entities for the duration of the IIP Process. DOE will coordinate its guidance efforts with CEQ to appropriately integrate the information contained in the IIP Process Administrative File into post-application environmental review(s) and related agency decision records.

III. Regulatory Review A. Executive Orders 12866 and 13563

This regulatory action has been determined to be a “significant regulatory action” under Executive Order 12866, “Regulatory Planning and Review,” 58 FR 51735 (October 4, 1993). Accordingly, this action was subject to review under that Executive Order by the Office of Information and Regulatory Affairs of the Office of Management and Budget.

DOE has also reviewed this regulation pursuant to Executive Order 13563, issued on January 18, 2011. (76 FR 3281, Jan. 21, 2011) E.O. 13563 is supplemental to and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, agencies are required by Executive Order 13563 to: (1) Propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs (recognizing that some benefits and costs are difficult to quantify); (2) tailor regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations; (3) select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity); (4) to the extent feasible, specify performance objectives, rather than specifying the behavior or manner of compliance that regulated entities must adopt; and (5) identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public.

DOE concludes that this final rule is consistent with these principles. Specifically, this final rule sets forth voluntary procedures for DOE coordination of Federal authorizations for the siting of interstate electric transmission facilities. Therefore, any additional costs associated with the implementation of the rule will primarily impact Federal implementing agencies. However, as described in section III.C., because the rule seeks to streamline the IIP process, additional costs to Federal Agencies may actually be minimized or costs may be reduced. As discussed below, DOE will attempt to characterize the effect of this regulation on Federal Agencies as part of its retrospective review efforts. Additionally actions taken by this rule to coordinate information and agency communication before applications for Federal authorizations are submitted to Federal agencies for review and consideration may help reduce application review and decision-making timelines thereby potentially benefiting applicants as well as the Federal government. Because use of the IIP Process is voluntary, DOE further expects that the project proponent requesting assistance has made the calculation that the request was in the best interests of the project proponent. The request would also help transmission developers determine the likelihood that they would successfully obtain permits, which is necessary to make their proposed project successful in the competitive, regional transmission planning processes. As part of its semi-annual retrospective review plan or other performance tracking efforts, DOE will (1) peridocially review the efficacy of the IIP process, including an analysis of how the revised process under this rulemaking has: (a) Improved times to permit approval; (b) streamlined overall process performance, and (c) impacted costs to the Federal government; (2) share the results with the public; and (3) seek and respond to comments from the public, including applicants and other federal agencies on how the process may be improved.

B. National Environmental Policy Act

DOE has determined that promulgation of these regulations fall into a class of actions that does not individually or cumulatively have a significant impact on the human environment as set forth under DOE's regulations implementing the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). Specifically, this rulemaking is covered under the Categorical Exclusion found in the DOE's National Environmental Policy Act regulations at paragraph A6 of appendix A to subpart D, 10 CFR part 1021, which applies to Rulemakings that are strictly procedural. Accordingly, neither an environmental assessment nor an environmental impact statement is required.

C. Regulatory Flexibility Act

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires preparation of an initial regulatory flexibility analysis for any rule that by law must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. As required by Executive Order 13272, “Proper Consideration of Small Entities in Agency Rulemaking,” 67 FR 53461 (August 16, 2002), DOE published procedures and policies on February 19, 2003, to ensure that the potential impacts of its rules on small entities are properly considered during the rulemaking process (68 FR 7990). DOE has made its procedures and policies available on the Office of General Counsel's Web site: http://www.gc.doe.gov.

DOE has reviewed this final rule under the provisions of the Regulatory Flexibility Act and the procedures and policies published on February 19, 2003. This final rule sets forth simplified or revised procedures for DOE coordination of Federal authorizations for the siting of interstate electric transmission facilities. As a result, the rule directly impacts Federal agencies and not small entities. In those cases where a project proponent requests DOE assistance for a project that is not a qualifying project, DOE expects that the provisions of this final rule, if adopted, would not affect the substantive interests of such project proponents, including any project proponents that are small entities. DOE expects actions taken under the provisions to coordinate information and agency communication before applications for Federal authorizations are submitted to Federal agencies for review and consideration would help reduce application review and decision-making timelines. Because use of the IIP Process set forth in this final rule is voluntary, DOE further expects that the project proponent requesting assistance has made the calculation that the request was in the best interests of the project proponent. The request would also help facilitate transmission developers with determining the likelihood that they would successfully obtain permits, which is necessary to make their proposed project successful in the competitive, regional transmission planning processes. On the basis of the foregoing, DOE certifies that this final rule would not have a significant economic impact on a substantial number of small entities. Accordingly, DOE has not prepared a regulatory flexibility analysis for this rulemaking. DOE's certification and supporting statement of factual basis will be provided to the Chief Counsel for Advocacy of the Small Business Administration pursuant to 5 U.S.C. 605(b).

D. Paperwork Reduction Act

The rule contains information collection requirements subject to review and approval by OMB pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) and the procedures implementing that Act, 5 CFR 1320.1 et seq. This requirement has been submitted to OMB for approval. Public reporting burden for providing information during the pre-application process is estimated to average twenty-five (25) hours per response. Public reporting burden for requesting DOE assistance in the Federal authorization process is estimated to average one hour per response. Both of these burden estimates include the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. The pre-application burden estimate also includes time necessary to share and discuss information during pre-application meetings.

Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number.

E. Unfunded Mandates Reform Act of 1995

The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) generally requires Federal agencies to examine closely the impacts of regulatory actions on tribal, state, and local governments. Subsection 101(5) of title I of that law defines a Federal intergovernmental mandate to include any regulation that would impose upon tribal, state, or local governments an enforceable duty, except a condition of Federal assistance or a duty arising from participating in a voluntary Federal program. Title II of that law requires each Federal agency to assess the effects of Federal regulatory actions on tribal, state, and local governments, in the aggregate, or to the private sector, other than to the extent such actions merely incorporate requirements specifically set forth in a statute. Section 202 of that title requires a Federal agency to perform a detailed assessment of the anticipated costs and benefits of any rule that includes a Federal mandate which may result in costs to tribal, state, or local governments, or to the private sector, of $100 million or more in any one year (adjusted annually for inflation). 2 U.S.C. 1532(a) and (b). Section 204 of that title requires each agency that proposes a rule containing a significant Federal intergovernmental mandate to develop an effective process for obtaining meaningful and timely input from elected officers of tribal, state, and local governments. 2 U.S.C. 1534.

This final rule would revise procedures for an Integrated Interagency Pre-application process by which transmission developers, Federal, state, local agencies and tribes may coordinate early either in person or via teleconference/web conference and share information electronically. DOE has determined that the final rule would not result in the expenditure by tribal, state, and local governments in the aggregate, or by the private sector, of $100 million or more in any one year. Accordingly, no assessment or analysis is required under the Unfunded Mandates Reform Act of 1995.

F. Treasury and General Government Appropriations Act, 1999

Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any final rule that may affect family well-being. The final rule would not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.

G. Executive Order 13132

Executive Order 13132, “Federalism,” 64 FR 43255 (August 4, 1999) imposes certain requirements on agencies formulating and implementing policies or regulations that preempt state law or that have Federalism implications. Agencies are required to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the states and carefully assess the necessity for such actions. DOE has examined this rule and has determined that it would not preempt state law and would 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. No further action is required by Executive Order 13132.

H. Executive Order 12988

With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” 61 FR 4729 (February 7, 1996), imposes on Executive agencies the general duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; and (3) provide a clear legal standard for affected conduct rather than a general standard and promote simplification and burden reduction. With regard to the review required by section 3(a), section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, the final rule meets the relevant standards of Executive Order 12988.

I. Treasury and General Government Appropriations Act, 2001

The Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most disseminations of information to the public under guidelines established by each agency pursuant to general guidelines issued by OMB.

OMB's guidelines were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines were published at 67 FR 62446 (October 7, 2002). DOE has reviewed this rule under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines.

J. Executive Order 13211

Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001) requires Federal agencies to prepare and submit to the OMB, a Statement of Energy Effects for any proposed significant energy action. A “significant energy action” is defined as any action by an agency that promulgated or is expected to lead to promulgation of a final rule, and that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy, or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use. This regulatory action, which is intended to improve the pre-application procedures for certain transmission projects and therefore result in the more efficient processing of applications, would not have a significant adverse effect on the supply, distribution, or use of energy and is therefore not a significant energy action. Accordingly, DOE has not prepared a Statement of Energy Effects.

K. Congressional Notification

As required by 5 U.S.C. 801, DOE will report to Congress on the promulgation of this rule before its effective date. The report will state that it has been determined that the rule is not a “major rule” as defined by 5 U.S.C. 804(2).

IV. Approval of the Office of the Secretary

The Secretary of Energy has approved the publication of this final rule.

List of Subjects in 10 CFR Part 900

Electric power, Electric utilities, Energy, Reporting and recordkeeping requirements.

Issued in Washington, DC, on September 16, 2016. Patricia Hoffman, Assistant Secretary, Office of Electricity Delivery and Energy Reliability. For the reasons stated in the preamble, DOE revises part 900 of chapter II of title 10, Code of Federal Regulations as set forth below: PART 900—COORDINATION OF FEDERAL AUTHORIZATIONS FOR ELECTRIC TRANSMISSION FACILITIES Sec. 900.1 Purpose. 900.2 Applicability. 900.3 Definitions. 900.4 Integrated Interagency Pre-application (IIP) process. 900.5 Selection of NEPA lead agency. 900.6 IIP Process administrative file. Authority:

16 U.S.C. 824p(h).

§ 900.1 Purpose.

This part provides a process for the timely coordination of information needed for Federal authorizations for proposed electric transmission facilities pursuant to section 216(h) of the Federal Power Act (FPA) (16 U.S.C. 824p(h)). This part seeks to ensure electric transmission projects are consistent with the nation's environmental laws, including laws that protect endangered and threatened species, critical habitats and historic properties. This part provides a framework called the Integrated Interagency Pre-Application (IIP) Process by which the U.S. Department of Energy (DOE) cooperates with applicable Federal and Non-Federal entities for the purpose of early coordination and information sharing for permitting and environmental reviews required under Federal law to site qualified electric transmission facilities prior to submission of required Federal request(s). The IIP Process provides for timely and focused pre-application meetings with key Federal and Non-Federal entities, as well as for early identification of potential siting constraints or opportunities, and seeks to promote thorough and consistent stakeholder outreach or engagement by a project proponent during its transmission line planning efforts. The IIP Process occurs before any application or request for authorization is submitted to Federal entities. This part improves the siting process by facilitating the early submission, compilation, and documentation of information needed for subsequent coordinated environmental review of a qualifying project or approved other project by Federal entities under the National Environmental Policy Act (NEPA) following the submission of an application or request for authorization. This part also provides an opportunity for Non-Federal entities to coordinate their non-Federal permitting and environmental reviews with the reviews of the Federal entities.

§ 900.2 Applicability.

(a) The regulations under this part apply to qualifying projects. At the discretion of the Assistant Secretary (OE-1) the provisions of part 900 may also apply to Other Projects.

(b) Other Projects. (1) Persons seeking DOE assistance in the Federal authorization process for Other Projects must file a request for coordination with the OE-1. The request must contain:

(i) The legal name of the requester; its principal place of business; whether the requester is an individual, partnership, corporation, or other entity; citations to the state laws under which the requester is organized or authorized; and the name, title, and mailing address of the person or persons to whom communications concerning the request for coordination are to be addressed;

(ii) A concise general description of the proposed other project sufficient to explain its scope and purpose;

(iii) A list of all potential Federal entities involved in the proposed Other Project; and

(iv) A list of anticipated Non-Federal entities involved in the proposed Other Project, including any agency serial or docket numbers for pending applications.

(2) Within thirty (30) calendar days of receiving this request, the OE-1, in consultation with the affected Federal entities with jurisdiction, will determine if the other project should be treated as a qualifying project under this part and will notify the project proponent of one of the following:

(i) If accepted for processing under this rule, the project will be treated as a qualifying project and the project proponent must submit an initiation request as set forth under § 900.5; or

(ii) If not accepted for processing under this rule, the project proponent must follow the standard procedures of Federal entities that will have jurisdiction over the project.

(c) This part does not apply to Federal authorizations for electric transmission facilities wholly located within the Electric Reliability Council of Texas interconnection.

(d) This part does not apply to electric transmission facilities in a DOE-designated National Interest Electric Transmission Corridor where a project proponent seeks a construction or modification permit from the Federal Energy Regulatory Commission (FERC) under section 216(b) of the Federal Power Act (16 U.S.C. 824p(b)).

(e) This part does not affect any requirements of Federal law. Participation or non-participation in the IIP Process does not waive any requirements to obtain necessary Federal authorizations for electric transmission facilities. This part shall not alter or diminish any responsibilities of the Federal entities to consult under applicable law.

(f) This part complements, and does not supplant, the Federal entities' pre-application procedures for a Federal authorization. Participation in the IIP Process does not guarantee issuance of any required Federal authorization for a proposed qualifying project or selection of the project proponent's proposed study corridors and proposed routes as a range of reasonable alternatives or the preferred alternative for NEPA purposes.

(g) DOE, in exercising its responsibilities under this part, will communicate regularly with the FERC, electric reliability organizations and electric transmission organizations approved by FERC, other Federal entities, and project proponents. DOE will use information technologies to provide opportunities for Federal entities to participate remotely.

(h) DOE, in exercising its responsibilities under this part, will to the maximum extent practicable and consistent with Federal law, coordinate the IIP Process with any Non-Federal entities. DOE will use information technologies to provide opportunities for Non-Federal entities to participate remotely.

§ 900.3 Definitions.

As used in this part:

Affected landowner means an owner of real property interests who is usually referenced in the most recent county or city tax records, and whose real property:

(1) Is located within either 0.25 miles of a proposed study corridor or route of a qualifying project or at a minimum distance specified by state law, whichever is greater; or

(2) Contains a residence within 3000 feet of a proposed construction work area for a qualifying project.

DOE means the United States Department of Energy.

Early identification of project issues refers to an early and open stakeholder participation process carried out by a project proponent as a part of its project development activities to identify potential environmental issues Federal and Non-Federal entities' may consider for further study, issues of concern to the affected public and stakeholders, and potential project alternatives.

Federal authorization means any authorization required under Federal law to site an electric transmission facility, including permits, rights-of-way, special use authorizations, certifications, opinions, or other approvals. This term includes those authorizations that may involve determinations under Federal law by either Federal or Non-Federal entities.

Federal entity means any Federal agency with jurisdictional interests that may have an effect on a proposed qualifying project, that is responsible for issuing a Federal authorization for the proposed qualifying project or attendant facilities, has relevant expertise with respect to environmental and other issues pertinent to or that are potentially affected by the proposed qualifying project or its attendant facilities, or provides funding for the proposed qualifying project or its attendant facilities. Federal entities include those with either permitting or non-permitting authority; for example, those entities with which consultation or review must be completed before a project may commence, such as the Department of Defense for an examination of military test, training or operational impacts.

FPA means the Federal Power Act (16 U.S.C. 791 through 828c).

IIP process administrative file means the information assembled and maintained by DOE as the Lead section 216(h) Agency. The IIP Process Administrative File will include the IIP Initiation Request, which includes a Summary of Qualifying Project, Affected Environmental Resources and Impacts Summary, associated Maps, Geospatial Information and Data (provided in electronic format), and a Summary of Early Identification of Project Issues. The IIP Process Administrative File will also include IIP Meeting Summaries, an IIP Resources Report, and other documents, including but not limited to maps, publicly-available data, and other supporting documentation submitted by the project proponent as part of the IIP Process that inform the Federal entities.

IIP resources report means the resource summary information provided by the project proponent as a part of the IIP Process that meets the content requirements pursuant to § 900.4 of this part. The IIP Resource Report contains the environmental information used by a project proponent to plan a qualifying project.

Indian tribe has the same meaning as provided for in 25 U.S.C. 450b(e).

Lead 216(h) agency means the Department of Energy, which section 216(h) of the FPA (16 U.S.C. 824p(h)) makes responsible for timely coordination of Federal authorization requests for proposed electric transmission facilities.

MOU principals means the heads of each of the MOU signatory agencies.

MOU signatory agency means a signatory of the Interagency MOU executed on October 23, 2009, entitled, “Memorandum of Understanding among the United States (U.S.) Department of Agriculture (USDA), the Department of Commerce, Department of Defense (DoD), Department of Energy (DOE), Environmental Protection Agency (EPA), the Council on Environmental Quality (CEQ), the Federal Energy Regulatory Commission (FERC), the Advisory Council on Historic Preservation (ACHP), and Department of the Interior (DOI), regarding Coordination in Federal Agency Review of Electric Transmission Facilities on Federal Lands.”

NEPA means the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.)

NEPA lead agency means the Federal agency or agencies preparing or having primary responsibility for preparing an environmental impact statement or environmental assessment as defined in 40 CFR 1508.16 and in accordance with 40 CFR 1501.5(c).

Non-federal entity means an Indian Tribe, multistate governmental entity, or state and local government agency with relevant expertise and/or jurisdiction within the project area, that is responsible for conducting permitting and environmental reviews of the proposed qualifying project or its attendant facilities, that has special expertise with respect to environmental and other issues pertinent to or that are potentially affected by the proposed qualifying project or its attendant facilities, or provides funding for the proposed qualifying project or its attendant facilities. Non-Federal entities may include those with either permitting or non-permitting authority, e.g., entities such as State Historic Preservation Offices, with whom consultation must be completed in accordance with section 106 of the National Historic Preservation Act, 54 U.S.C. 306108, before a project can commence.

OE-1 means the Assistant Secretary for DOE's Office of Electricity Delivery and Energy Reliability.

Other projects mean electric transmission facilities that are not qualifying projects. Other Projects may include facilities for the transmission of electric energy in interstate commerce for the sale of electric energy at wholesale that do not meet the 230 kV or above qualification, or are not otherwise identified as regionally or nationally significant with attendant facilities, in which all or part of a proposed transmission line—

(1) Crosses jurisdictions administered by more than one Federal entity; or

(2) Crosses jurisdictions administered by a Federal entity and is considered for Federal financial assistance from a Federal entity.

Project area means the geographic area considered when the project proponent develops study corridors and then potential routes for environmental review and potential project siting as a part of the project proponent's planning process for a qualifying project. It is an area located between the two end points of the project (e.g., substations), including their immediate surroundings within at least one-mile of that area, as well as any proposed intermediate substations. The size of the project area should be sufficient to allow for the evaluation of various potential alternative routes with differing environmental, engineering, and regulatory constraints. The project area does not necessarily coincide with “permit area,” “area of potential effect,” “action area,” or other defined terms of art that are specific to types of regulatory review.

Project proponent means a person or entity who initiates the IIP Process in anticipation of seeking Federal authorizations for a qualifying project or Other Project.

Qualifying project means a non-marine high voltage electric transmission line (230 kV or above) and its attendant facilities, or other regionally or nationally significant non-marine electric transmission line and its attendant facilities, in which:

(1) All or part of the proposed electric transmission line is used for the transmission of electric energy in interstate commerce for sale at wholesale, and

(2) All or part of the proposed electric transmission line crosses jurisdictions administered by more than one Federal entity or crosses jurisdictions administered by a Federal entity and is considered for Federal financial assistance from a Federal entity. qualifying projects do not include those for which a project proponent seeks a construction or modification permit from the FERC for electric transmission facilities in a DOE-designated National Interest Electric Transmission Corridor under section 216(b) of the FPA (16 U.S.C. 824p(b)).

Regional mitigation approach means an approach that applies the mitigation hierarchy (first seeking to avoid, then minimize impacts, then, when necessary, compensate for residual impacts) when developing mitigation measures for impacts to resources from qualifying projects at scales relevant to the resource, however narrow or broad, necessary to sustain, or otherwise achieve established goals for those resources. The approach identifies the needs and baseline conditions of targeted resources, potential impacts from the qualifying projects, cumulative impacts of past and likely projected disturbance to those resources, and future disturbance trends. The approach then uses such information to identify priorities for avoidance, minimization, and compensatory mitigation measures across that relevant area to provide the maximum benefit to the impacted resources.

Regional mitigation strategies or plans mean documents developed through or external to the NEPA process that apply a Regional Mitigation Approach to identify appropriate mitigation measures in advance of potential impacts to resources from qualifying projects.

Route means a linear area within which a qualifying project could be sited. It should be wide enough to allow minor adjustments in the alignment of the qualifying project so as to avoid sensitive features or to accommodate potential engineering constraints but narrow enough to allow detailed study.

Stakeholder means any Non-Federal entity, any non-governmental organization, Affected Landowner, or other person potentially affected by a proposed qualifying project.

Study corridor means a contiguous area (but not to exceed one-mile) in width within the project area where alternative routes may be considered for further study.

§ 900.4 Integrated Interagency Pre-application (IIP) process.

(a) The IIP Process is intended for a project proponent who has identified potential study corridors and/or potential routes within an established project area and the proposed locations of any intermediate substations for a qualifying project. The IIP Process is also intended to accommodate qualifying projects that have been selected in a regional electric transmission plan for purposes of cost allocation or a similar process where an electric transmission plan has been identified and the permitting and siting phase must commence. While the IIP Process is optional, the early coordination provided by DOE between Federal entities, Non-Federal entities, and the project proponent ensures that the project proponent fully understands application and permitting requirements, including data potentially necessary to satisfy application requirements for all permitting entities. The two-meeting structure of the IIP process also allows for early interaction between the project proponents, Federal entities, and Non-Federal entities in order to enhance early understanding by those having an authorization or consultation related to the qualifying project. The IIP process is expected to provide Federal entities and Non-Federal entities with a clear description of a qualifying project, the project proponent's siting process, and the environmental and community setting being considered by the project proponent for siting the transmission line, as well as facilitate the Early Identification of Project Issues.

(b) A project proponent electing to utilize the IIP Process must submit an initiation request to DOE to start the IIP Process. The timing of the submission of the initiation request for IIP Process is determined by the project proponent. The initiation request must include, based on best available information, a Summary of qualifying project, Affected Environmental Resources and Impacts Summary, associated Maps, Geospatial Information, and Studies (provided in electronic format), and a Summary of Early Identification of Project Issues. The initiation request must adhere to the page limits established by this part.

(c) Summary of the qualifying project is limited to a maximum length of ten (10) pages, single-spaced and must include:

(1) A statement that the project proponent requests to use the IIP Process;

(2) Primary contact information for the project proponent, including a primary email address;

(3) The legal information for the project proponent: Legal name; principal place of business; whether the requester is an individual, partnership, corporation, or other entity; the state laws under which the requester is organized or authorized; and if the project proponent resides or has its principal office outside the United States, documentation related to designation by irrevocable power of attorney of an agent residing within the United States;

(4) A description of the project proponent's financial and technical capability to construct, operate, maintain, and decommission the qualifying project;

(5) A statement of the project proponent's interests and objectives;

(6) To the extent available, regional electric transmission planning documents, including status of regional reliability studies, regional congestion or other related studies where applicable, and interconnection requests;

(7) A brief description of the evaluation criteria and methods used by the project proponent to identify and develop the potential study corridors or potential Routes for the proposed qualifying project;

(8) A brief description of the proposed qualifying project, including endpoints, voltage, ownership, justification for the line, intermediate substations if applicable, and, to the extent known, any information about constraints or flexibility with respect to the qualifying project;

(9) Project proponent's proposed schedule, including timeframe for filing necessary Federal and state applications, construction start date, and planned in-service date if the qualifying project receives needed Federal authorizations and approvals by Non-Federal entities; and

(10) A list of potentially affected Federal and Non-Federal entities.

(d) Affected Environmental Resources and Impacts Summary. The Affected Environmental Resources and Impacts Summary is limited to a maximum length of twenty (20), single-spaced pages, not including associated maps, and must include concise descriptions, based on existing, relevant, and reasonably-available information, of the known existing environment, and major site conditions in project area, including:

(1) An overview of topographical and resource features that are relevant to the siting of electric transmission lines present;

(2) Summary of known land uses, including Federal lands, Tribal lands, and state public lands of various types (e.g., parks and monuments), associated land ownership, where appropriate, and any land use restrictions;

(3) Summary of known or potential adverse effects to cultural and historic resources;

(4) Summary of known or potential conflicts with or adverse impacts on military activities;

(5) Summary of known or potential impacts on the U.S. aviation system, including FAA restricted airspace;

(6) Summary of known or potential impacts on the U.S. marine transportation system, including impacts on waterways under jurisdiction of the U.S. Coast Guard;

(7) Summary of known information about Federal- and state-protected avian, aquatic, and terrestrial species, and critical habitat or otherwise protected habitat, that may be present, as well as other biological resources information that is necessary for an environmental review;

(8) Summary of the aquatic habitats (to include estuarine environments, and water bodies, including wetlands, as well as any known river crossings and potential constraints caused by impacts to navigable waters of the United States considered for the qualifying project);

(9) Summary of known information about the presence of low-income communities and minority populations that could be affected by the qualifying project;

(10) Identification of existing or proposed qualifying project facilities or operations in the project area;

(11) Summary of the proposed use of previously-disturbed lands, existing, agency-designated corridors, including but not limited to corridors designated under section 503 of the Federal Land Policy and Management Act and section 368 of the Energy Policy Act of 2005, transportation rights-of-way, and the feasibility for co-location of the qualifying project with existing facilities or location in existing corridors and transportation rights-of-way; and

(12) Summary of potential avoidance, minimization, and conservation measures, such as compensatory mitigation (onsite and offsite), developed through the use of Regional Mitigation Approach or, where available, Regional Mitigation Strategies or Plans, and considered by the project proponent to reduce the potential impacts of the proposed qualifying project to resources warranting or requiring mitigation.

(e) Maps, Geospatial Information, and Studies. Maps, Geopspatial Information and Studies in support of the information provided in the summary descriptions for the known existing environmental, cultural, and historic resources in the project area under paragraph (d) in this section must be included, and do not contribute to the overall page length of the IIP initiation request. Project proponents must provide maps as electronic data files that may be readily accessed by Federal entities and Non-Federal entities, including:

(1) A map of the project area showing the locations of potential study corridors or potential routes;

(2) Detailed maps that accurately show information supporting summaries of the known existing environmental resources within the potential study corridors or potential routes;

(3) Electronic access to existing data or studies relevant to the summary information provided as part of paragraphs (a) through (d) of this section; and

(4) Citations identifying sources, data, and analyses used to develop the IIP Process initiation request materials.

(f) Summary of Early Identification of Project Issues. The Summary of Early Identification of Project Issues must not exceed ten (10), single-spaced pages in length and is intended to provide a summary of stakeholder outreach or interactions conducted for the qualifying project prior to submission of the initiation request and to inform the development of issues and project alternatives for study in an environmental review document. The Summary of Early Identification of Project Issues must also:

(1) Discuss the specific tools and actions used by the project proponent to facilitate stakeholder communications and public information, including an existing, current project proponent Web site for the proposed qualifying project, where available, and a readily-accessible, easily-identifiable, single point of contact for the project proponent;

(2) Identify how and when meetings on the location of potential study corridors or potential routes have been and would be publicized prior to the submission of applications for Federal authorization, as well as where and when those meetings were held and how many more meetings may be planned during the IIP Process;

(3) Identify known stakeholders and how stakeholders are identified;

(4) Briefly explain how the project proponent responds to requests for information from stakeholders, as well as records stakeholder requests, information received, and project proponent responses to stakeholders;

(5) Provide the type of location (for example, libraries, community reading rooms, or city halls) in each county potentially affected by the proposed qualifying project, where the project proponent has provided publicly-available copies of documents and materials related to the proposed qualifying project;

(6) Describe the evaluation criteria being used by the project proponent to identify and develop the potential study corridors or potential routes and that are presented by the project proponent to stakeholders during its project planning outreach efforts prior to submission of applications for Federal authorizations or non-Federal permits or authorizations;

(7) Provide information collected as a result of the project proponent's stakeholder outreach efforts; and

(8) Include a summary of issues identified, differing project alternative Corridors or routes, and revisions to routes developed as a result of issues identified by stakeholders during the project proponent's stakeholder outreach efforts for the qualifying project.

(g) Within fifteen (15) calendar days of receiving the initiation request, DOE shall notify by email all Federal entities and Non-Federal entities with an authorization potentially necessary to site the qualifying project that:

(1) Based on its initial review of information submitted by the project proponent in response to requirements in paragraphs (a) through (f) of this section, DOE has identified the contacted Federal entities or Non-Federal entities as potentially having an authorization or consultation responsibility or other relevant expertise related to the qualifying project;

(2) Federal and Non-Federal entities notified by DOE should participate in the IIP Process for the qualifying project with DOE's rationale for that determination provided; and

(3) Federal and Non-Federal entities notified by DOE will provide DOE with a name and information for a point of contact, and any initial questions or concerns, including supporting rationale, about their level of participation in the IIP Process based on DOE's justification in writing to DOE within fifteen (15) calendar days of receiving DOE's notification.

(h) Within thirty (30) calendar days of receiving the initiation request, DOE shall notify the project proponent that:

(1) The initiation request meets the requirements in paragraphs (a) through (f) of this section, including whether the project constitutes a qualifying project; or

(2) The initiation request does not meet the requirements in paragraphs (a) through (f) in this section. DOE will provide the reasons for that finding and a description of how the project proponent may, if applicable, address any deficiencies through supplementation of the information contained in the initiation request so that DOE may re-consider its determination.

(i) DOE shall provide Federal and Non-Federal entities with access to an electronic copy of the initiation request and associated maps, geospatial data, and studies that meet the requirements in paragraphs (a) through (f) of this section, at the same time that DOE provides notice to the project proponent.

(j) IIP Initial Meeting. DOE, in consultation with the identified Federal entities, shall convene the IIP Initial Meeting with the project proponent and all Federal entities and Non-Federal entities notified by DOE as having an authorization or consultation related to the qualifying project as soon as practicable and no later than forty-five (45) calendar days after notifying the project proponent and Federal and Non-Federal entities that the initiation request meets the requirements in paragraphs (a) through (f) of this section. The Initial Meeting shall be convened in the area or region where the proposed qualifying project is located. Federal and Non-Federal entities shall have at least thirty (30) calendar days to review the information provided by the project proponent as part of the initiation request prior to the meeting. Federal entities identified by DOE as having a Federal authorization related to the qualifying project are expected to participate in the Initial Meeting. DOE also shall invite Non-Federal entities identified by DOE as having an authorization or consultation related to the qualifying project to participate in the Initial Meeting. During the Initial Meeting:

(1) DOE and the Federal entities shall discuss the IIP Process and any cost recovery requirements, where applicable, with the project proponent;

(2) The project proponent shall describe the proposed qualifying project and the contents of its initiation request; and

(3) The Federal entities shall, to the extent possible and based on agency expertise and experience, review the information provided by the project proponent, and publicly-available information, and preliminarily identify the following and other reasonable criteria for adding, deleting, or modifying preliminary Routes from further consideration within the identified study corridors, including:

(i) Potential environmental, visual, historic, cultural, economic, social, or health effects or harm based on the potential project or proposed siting, and anticipated constraints;

(ii) Potential cultural resources and historic properties of concern;

(iii) Areas under special protection by Federal statute, or other Federal entity or Non-Federal entity decision that could potentially increase the time needed for project evaluation and potentially foreclose approval of siting a transmission line route through such areas. Such areas may include, but are not limited to, properties or sites which may be of traditional or cultural importance to Indian Tribe(s), National Scenic and Historic Trails, National Landscape Conservation system units managed by the Bureau of Land Management (BLM), National Wildlife Refuges, units of the National Park System, national marine sanctuaries, or marine national monuments;

(iv) Opportunities to site routes through designated corridors, previously disturbed lands, and lands with existing infrastructure as a means of potentially reducing impacts and known conflicts as well as the time needed for affected Federal land managers to evaluate an application for a Federal authorization if the route is sited through such areas (e.g., co-location with existing infrastructure or location on previously disturbed lands or in energy corridors designated by the DOI or USDA under Section 503 of the Federal Land Policy and Management Act or Section 368 of the Energy Policy Act of 2005, an existing right-of-way, or a utility corridor identified in a land management plan);

(A) Potential constraints caused by impacts on military test, training, and operational missions, including impacts on installations, ranges, and airspace;

(B) Potential constraints caused by impacts on the United States' aviation system;

(C) Potential constraints caused by impacts to navigable waters of the United States;

(D) Potential avoidance, minimization, and conservation measures, such as compensatory mitigation (onsite and offsite), developed through the use of a Regional Mitigation Approach or, where available, Regional Mitigation Strategies or Plans to reduce the potential impact of the proposed qualifying project to resources requiring mitigation; and

(E) Based on available information provided by the project proponent, biological (including threatened, endangered, or otherwise protected avian, aquatic, and terrestrial species and aquatic habitats), visual, cultural, historic, and other surveys and studies that may be required for preliminary proposed routes.

(v) Such information and feedback to the project proponent does not constitute a commitment by Federal entities to approve or deny any Federal authorization request. Moreover, no agency will determine that the project proponent's proposed preliminary routes presented or discussed during the IIP Process constitute a range of reasonable alternatives for NEPA purposes or that the environmental information provided during the IIP Process would satisfy the entirety of information needs for purposes of compliance with NEPA or other applicable laws and regulations. The IIP Process does not limit agency discretion regarding NEPA review. Participating Non-Federal entities are encouraged to identify risks and benefits of siting the proposed qualifying project within the preliminary proposed routes.

(vi) DOE shall record key issues, information gaps, and data needs identified by Federal and Non-Federal entities during the Initial Meeting, and shall convey a summary of the meeting discussions, key issues, and information gaps and requests to the project proponent, all Federal entities, and any Non-Federal entities that participate in the IIP Process in a draft Initial Meeting Summary within fifteen (15) calendar days after the meeting. Participating Federal entities and Non-Federal entities, and the project proponent will then have fifteen (15) calendar days following its receipt of the IIP Process Meeting Summary to review the IIP Process Meeting Summary and provide corrections to DOE for resolution in a final Initial Meeting Summary, as appropriate. Thirty (30) calendar days following the close of the 15-day review period, DOE will incorporate the final Initial Meeting Summary into the IIP Process Administrative File for the qualifying project, and, at the same time, provide all Federal and Non-Federal entities and the project proponent an electronic copy of a final IIP Initial Meeting Summary.

(k) IIP Close-Out Meeting Request. A project proponent electing to utilize the IIP Process pursuant to this section must submit a Close-Out Meeting Request to DOE to complete the IIP Process. The timing of the submission of the Close-Out Meeting Request for the IIP Process is determined by the project proponent but may only be submitted no less than forty-five (45) calendar days following the Initial Meeting. The Close-Out Meeting Request shall include:

(1) A statement that the project proponent is requesting the Close-Out Meeting for the IIP Process;

(2) A summary table of changes made to the qualifying project during the IIP Process, including potential environmental and community benefits from improved siting or design;

(3) Maps of updates to potential proposed routes within study corridors, including the line, substations and other infrastructure, which include at least as much detail as required for the Initial Meeting described above and as modified in response to early stakeholder input and outreach and agency feedback documented as a part of the IIP Initial Meeting Summary;

(4) An updated summary of all project-specific biological (including threatened, endangered or otherwise protected avian, aquatic, and terrestrial species, and aquatic habitats), visual, cultural, historic or other surveys sponsored by the project proponent;

(5) If known, a schedule for completing upcoming field resource surveys;

(6) An updated summary of all known or potential adverse impacts to natural resources;

(7) An updated summary of any known or potential adverse effects to cultural and historic resources;

(8) A conceptual plan for potential implementation and monitoring of mitigation measures, including avoidance, minimization, and conservation measures, such as compensatory mitigation (offsite and onsite), developed through the use of a Regional Mitigation Approach or, where available, Regional Mitigation Strategies or Plans to reduce the potential impact of the proposed qualifying project to resources warranting or requiring mitigation;

(9) An estimated time of filing its requests for Federal authorizations for the proposed qualifying project; and

(10) An estimated time of filing its requests for all other authorizations and consultations with Non-Federal entities.

(l) Close-Out Meeting. The IIP Process Close-Out Meeting shall result in a description by Federal entities of the remaining issues of concern, identified information gaps or data needs, and potential issues or conflicts that could impact the time it will take affected Federal entities to process applications for Federal authorizations for the proposed qualifying project. The Non-Federal entities shall also be encouraged to provide a description of remaining issues of concern, information needs, and potential issues or conflicts. The IIP Process Close-Out Meeting will also result in the identification of a potential NEPA Lead Agency pursuant to § 900.6 described.

(1) Within fifteen (15) calendar days of receiving the Close-Out Meeting Request, DOE shall notify by email the appropriate POCs of all Federal entities and Non-Federal entities with a known or potential authorization necessary to site the qualifying project.

(2) Within thirty (30) calendar days of receiving a Close-Out Meeting Request, DOE shall determine whether the Close-Out Meeting Request meets the requirements in paragraph (k) of this section and inform the project proponent of its acceptance, and provide Federal entities and Non-Federal entities with Close-Out Meeting Request materials, including map, geospatial data, and surveys in electronic format, via electronic means.

(3) Within sixty (60) calendar days of making a determination that the Close-Out Meeting Request meets the requirements of this section, DOE shall convene the Close-Out Meeting in the same region or location as the Initial Meeting with the project proponent and all Federal entities. All Non-Federal entities participating in the IIP Process shall also be invited to attend. During the Close-Out Meeting:

(i) The project proponent's updates to the siting process to date shall be discussed, including stakeholder outreach activities, resultant stakeholder input, and project proponent response to stakeholder input;

(ii) Based on information provided by the project proponent to date, the Federal entities shall discuss key issues of concern and potential mitigation measures identified for the proposed qualifying project;

(iii) Led by DOE, all Federal entities shall discuss statutory and regulatory standards that must be met to make decisions for Federal authorizations required for the proposed qualifying project;

(iv) Led by DOE, all Federal entities shall describe the process and estimated time to complete for required Federal authorizations and, where possible, the anticipated cost (e.g., processing and monitoring fees and land use fees);

(v) Led by DOE, all affected Federal entities shall describe their expectations for a complete application for a Federal authorization for the proposed qualifying project;

(vi) After the close out meeting, DOE shall prepare a Final IIP Resources Report for inclusion in the IIP Process Administrative File. The Final IIP Resources Report provides a description of the proposed qualifying project, including stakeholder outreach activities and feedback, summary information on environmental resources, and potential impacts (with electronic access to associated maps, geospatial data and/or survey data), potential issues, and identification of constraints by Federal entities and Non-Federal entities for the proposed qualifying project;

(vii) DOE shall recommend that participating Federal entities use the Final IIP Resources Report to inform the NEPA process for the proposed qualifying project. For example, Federal entities could use the Final IIP Resources Report during scoping for an EIS and identifying potential routes, to explain why certain alternatives were eliminated from further consideration, and to preliminarily identify impacts, potential avoidance, minimization, and conservation measures, such as compensatory mitigation (onsite and offsite), developed through the use of a Regional Mitigation Approach or, where available, Regional Mitigation Strategies or Plans and considered by the project proponent to reduce the potential impacts of the proposed qualifying project to resources requiring mitigation; and

(viii) All participating Federal and Non-Federal entities shall identify a preliminary schedule for authorizations for the proposed qualifying project contingent upon timely filing of applications and related materials by the project proponent.

§ 900.5 Selection of the NEPA lead agency.

DOE, in consultation with the Federal entities, shall coordinate the selection of a potential NEPA Lead Agency responsible for preparing an environmental review document under NEPA for proposed qualifying projects. Determination and responsibilities of the NEPA Lead Agency for preparing the EIS shall be in compliance with applicable law, including the National Environmental Policy Act of 1969 and CEQ implementing regulations at 40 CFR part 1500, and each agency's respective NEPA implementing regulations and procedures. However:

(a) For proposed qualifying projects that cross lands administered by both DOI and USDA, DOI and USDA shall consult and jointly determine within thirty (30) calendar days of receiving the initiation request information from DOE which Department has a greater land management interest in the proposed qualifying project and which Department should therefore assume the role of NEPA Lead Agency.

(b) DOI and USDA shall notify DOE of their determination regarding the NEPA Lead Agency in writing within thirty (30) calendar days of making the determination.

(c) Unless DOE notifies DOI and USDA in writing of its objection to that determination within ten (10) calendar days of the DOI/USDA notification, the determination shall be deemed accepted and final. In deciding whether to object to the determination, DOE shall consider the CEQ regulations pertaining to selection of the Lead Agency, including 40 CFR 1501.5(c).

(d) For proposed qualifying projects that do not cross lands administered by both DOI and USDA, DOE and the Federal entities that will likely constitute the cooperating agencies for an environmental review document under NEPA, shall consult and jointly recommend a potential NEPA Lead Agency within 45 calendar days of receiving an IIP Process Close-Out Meeting Request. If DOE and the Federal entities are unable to agree on a recommendation for a NEPA Lead Agency, the Federal entities shall request CEQ to make a final determination by the Close-Out Meeting. No determination of a Federal entity as the potential NEPA Lead Agency under this part shall be made absent that Federal entity's consent.

§ 900.6 IIP Process administrative file.

(a) When communicating with the project proponent during the IIP Process, Federal entities are expected to include DOE in all communications related to the IIP Process for the project proponent's proposed qualifying project.

(b) DOE shall maintain all information, including documents and communications, it disseminates or receives from the project proponent, Federal entities, and Non-Federal entities during the IIP Process in an IIP Process Administrative File for future use in reviewing any applications for required Federal authorizations for the proposed qualifying project. DOE will process any requests for information from the public in accordance with Freedom of Information Act requirements. DOE will share the IIP Process Administrative File with the selected or potential NEPA Lead Agency.

(c) DOE shall document the list of issues identified during the IIP Process for a proposed qualifying project and any updates to information provided as part of the Close-Out Meeting discussion in a Final IIP Resources Report for the IIP Process Administrative File.

(d) Each Federal entity is strongly encouraged to maintain the documents and communications developed in the IIP Process subject to each Federal entity's administrative record policies and, as appropriate and applicable, those documents and communications should become part of that Federal entity's administrative record for granting or denying a Federal authorization for each qualifying project.

[FR Doc. 2016-23285 Filed 9-27-16; 8:45 am] BILLING CODE 6450-01-P
DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2016-9114; Directorate Identifier 2016-NM-146-AD; Amendment 39-18671; AD 2016-20-05] RIN 2120-AA64 Airworthiness Directives; Saab AB, Saab Aeronautics (Formerly Known as Saab AB, Saab Aerosystems) Airplanes AGENCY:

Federal Aviation Administration (FAA), DOT.

ACTION:

Final rule; request for comments.

SUMMARY:

We are adopting a new airworthiness directive (AD) for all Saab AB, Saab Aeronautics Model SAAB 2000 airplanes. This AD requires an inspection to identify the type of fasteners installed on the upper longerons and upper fittings of the engine mounting structure (EMS), an inspection for discrepancies of certain fasteners, and corrective action if necessary. This AD was prompted by the discovery of blind fasteners installed in EMS upper fittings that do not meet the type design. We are issuing this AD to detect and correct discrepancies of blind fasteners that could cause crack development and vibration in the engine mount structure, which could lead to failure of the affected engine-mount-to-airplane structural connection and resultant detachment of an engine from the airplane when both sides of a nacelle are affected.

DATES:

This AD becomes effective October 13, 2016.

The Director of the Federal Register approved the incorporation by reference of a certain publications listed in this AD as of October 13, 2016.

We must receive comments on this AD by November 14, 2016.

ADDRESSES:

You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:

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

Fax: 202-493-2251.

Mail: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590.

Hand Delivery: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

For service information identified in this final rule, contact Saab AB, Saab Aeronautics, SE-581 88, Linköping, Sweden; telephone +46 13 18 5591; fax +46 13 18 4874; email [email protected]; Internet http://www.saabgroup.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221. It is also available on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-9114.

Examining the AD Docket

You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-9114; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT:

Shahram Daneshmandi, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-1112; fax 425-227-1149.

SUPPLEMENTARY INFORMATION: Discussion

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2016-0171, dated August 22, 2016 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Saab AB, Saab Aeronautics Model SAAB 2000 airplanes. The MCAI states:

During inspections, blind fasteners were found installed in engine mounting structure (EMS) upper fittings, frame NS204.7 and upper longerons. The type design specifies that the fasteners at this location must be Hi-Lok fasteners and two solid rivets (monel).

This condition, if not detected and corrected, could cause cracks development, vibration in the engine mount structure, leading to failure of the affected engine mount-to-aeroplane structural connection, possibly resulting in detachment of an engine from the aeroplane when affecting both sides of a nacelle.

To address this unsafe condition, SAAB issued Service Bulletin (SB) 2000-54-035 (hereafter referred to as `the SB' in this [EASA] AD) to provide inspection instructions.

For the reasons described above, this [EASA] AD requires a one-time * * * [general] visual inspection of the affected areas to determine which type(s) of fasteners are installed, and, depending on findings, accomplishment of applicable corrective action(s) [repair or additional actions as applicable]. This [EASA] AD also requires reporting of all inspection results to SAAB.

This [EASA] AD is considered an interim action and further AD action may follow.

Required actions include a detailed inspection for discrepancies, including gaps between the fastener head and structure, traces of movement, and deformation of the structure. You may examine the MCAI on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-9114.

Related Service Information Under 1 CFR Part 51

We reviewed SAAB 2000 Service Bulletin 2000-54-035, Revision 01, dated August 12, 2016. The service information describes procedures for an inspection to identify the type of fasteners installed on the upper longerons and upper fittings of the EMS, and a detailed inspection of incorrect (blind) fasteners to detect discrepancies, and corrective actions. 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.

FAA's Determination and Requirements of This AD

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are issuing this AD because we evaluated all pertinent information and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design.

FAA's Determination of the Effective Date

An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because discrepancies of blind fasteners could cause crack development and vibration in the engine mount structure, which could lead to failure of the affected engine-mount-to-airplane structural connection and resultant detachment of an engine from the airplane when both sides of a nacelle are affected. Therefore, we determined that notice and opportunity for public comment before issuing this AD are impracticable and that good cause exists for making this amendment effective in fewer than 30 days.

Comments Invited

This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2016-9114; Directorate Identifier 2016-NM-146-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD based on those comments.

We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this AD.

Costs of Compliance

We estimate that this AD affects 8 airplanes of U.S. registry.

We also estimate that it will take about 4 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this AD on U.S. operators to be $2,720, or $340 per product.

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

Authority for This Rulemaking

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.

Regulatory Findings

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.

List of Subjects in 14 CFR Part 39

Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

Adoption of the Amendment

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

PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

49 U.S.C. 106(g), 40113, 44701.

§ 39.13 [Amended]
2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): 2016-20-05 Saab AB, Saab Aeronautics (Formerly Known as Saab AB, Saab Aerosystems): Amendment 39-18671; Docket No. FAA-2016-9114; Directorate Identifier 2016-NM-146-AD. (a) Effective Date

This AD becomes effective October 13, 2016.

(b) Affected ADs

None.

(c) Applicability

This AD applies to all Saab AB, Saab Aeronautics (formerly known as Saab AB, Saab Aerosystems) Model SAAB 2000 airplanes, certificated in any category.

(d) Subject

Air Transport Association (ATA) of America Code 54, Nacelles/pylons.

(e) Reason

This AD was prompted by the discovery of blind fasteners installed in engine mounting structure (EMS) upper fittings that do not meet the type design. We are issuing this AD to detect and correct discrepancies of blind fasteners that could cause crack development and vibration in the engine mount structure, which could lead to failure of the affected engine-mount-to-airplane structural connection and resultant detachment of an engine from the airplane when both sides of a nacelle are affected.

(f) Compliance

Comply with this AD within the compliance times specified, unless already done.

(g) Fastener Identification

Within 30 days or 150 flight hours after the effective date of this AD, whichever occurs first, do a general visual inspection of the upper longerons and upper fittings of the EMS to identify the type of fasteners installed, in accordance with the Accomplishment Instructions of SAAB 2000 Service Bulletin 2000-54-035, Revision 01, dated August 12, 2016.

(h) Inspection for Discrepancies

For any fastener other than the fasteners specified in SAAB 2000 Service Bulletin 2000-54-035, Revision 01, dated August 12, 2016, found during the inspection required by paragraph (g) of this AD: Before further flight, do a detailed inspection for discrepancies of those fasteners, including gaps between the fastener heads and structure, traces of movement, and deformation of the structure, in accordance with the Accomplishment Instructions of SAAB 2000 Service Bulletin 2000-54-035, Revision 01, dated August 12, 2016.

(i) Corrective Action

(1) If, during the inspection as required by paragraph (h) of this AD, any gap between the fastener heads and structure, traces of movement, or deformation of the structure is found: Before further flight obtain repair instructions from the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or the European Aviation Safety Agency (EASA); or Saab AB, Saab Aeronautics' EASA Design Organization Approval (DOA); and before further flight accomplish those instructions accordingly.

(2) If all fasteners inspected as required by paragraph (h) of this AD are firmly attached, and no deformation of the structure is found: Within 30 days or 150 flight hours after the effective date of the AD, whichever occurs first, obtain repair instructions from the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or EASA; or Saab AB, Saab Aeronautics' EASA DOA; and at the applicable time required in the repair instructions, accomplish the repair accordingly.

(j) Credit for Previous Actions

This paragraph provides credit for actions required by paragraphs (g) and (h) of this AD, if those actions were performed before the effective date of this AD using SAAB 2000 Service Bulletin 2000-54-035, dated July 22, 2016.

(k) Other FAA AD Provisions

The following provisions also apply to this AD:

(1) Alternative Methods of Compliance (AMOCs): The Manager, International Branch, ANM-116, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the International Branch, send it to ATTN: Shahram Daneshmandi, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-1112; fax 425-227-1149. Information may be emailed to: [email protected] Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

(2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or EASA; or Saab AB, Saab Aeronautics' EASA DOA. If approved by the DOA, the approval must include the DOA-authorized signature.

(l) Related Information

(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2016-0171, dated August 22, 2016, for related information. You may examine the MCAI on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-9114.

(2) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (m)(3) and (m)(4) of this AD.

(m) Material Incorporated by Reference

(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.

(2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.

(i) SAAB 2000 Service Bulletin 2000-54-035, Revision 01, dated August 12, 2016.

(ii) Reserved.

(3) For service information identified in this AD, contact Saab AB, Saab Aeronautics, SE-581 88, Linköping, Sweden; telephone +46 13 18 5591; fax +46 13 18 4874; email [email protected]; Internet http://www.saabgroup.com.

(4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

Issued in Renton, Washington, on September 14, 2016. Michael Kaszycki, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service.
[FR Doc. 2016-23081 Filed 9-27-16; 8:45 am] BILLING CODE 4910-13-P
DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2016-6148; Directorate Identifier 2015-NM-154-AD; Amendment 39-18660; AD 2016-19-11] RIN 2120-AA64 Airworthiness Directives; Bombardier, Inc. Airplanes AGENCY:

Federal Aviation Administration (FAA), Department of Transportation (DOT).

ACTION:

Final rule.

SUMMARY:

We are adopting a new airworthiness directive (AD) for certain Bombardier, Inc. Model DHC-8-400 series airplanes. This AD was prompted by a malfunctioning No. 2 engine intake heater with corrosion on the thermostats and the fuselage skin where the thermostats made contact with the aircraft fuselage skin. This AD requires a general visual inspection for corrosion of the thermostats' mounting surfaces and fuselage skin surface, corrective actions if necessary, and relocating the existing thermostats. We are issuing this AD to prevent corrosion within the thermostats that might cause the switch mechanism to seize in the open position and prevent the activation of the associated engine air intake heater. An inactive engine air intake heater could lead to an engine failure.

DATES:

This AD is effective November 2, 2016.

The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of November 2, 2016.

ADDRESSES:

For service information identified in this final rule, contact Bombardier, Inc., Q-Series Technical Help Desk, 123 Garratt Boulevard, Toronto, Ontario M3K 1Y5, Canada; telephone: 416-375-4000; fax: 416-375-4539; email: [email protected]; Internet: http://www.bombardier.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221. It is also available on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-6148.

Examining the AD Docket

You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-6148; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone 800-647-5527) is Docket Management Facility, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT:

Assata Dessaline, Aerospace Engineer, Avionics and Services Branch, ANE-172, FAA, New York Aircraft Certification Office (ACO), 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7301; fax 516-794-5531.

SUPPLEMENTARY INFORMATION: Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Bombardier, Inc. Model DHC-8-400 series airplanes. The NPRM published in the Federal Register on May 2, 2016 (81 FR 26176) (“the NPRM”).

Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF-2015-24, dated August 24, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Bombardier, Inc. Model DHC-8-400 series airplanes. The MCAI states:

A malfunctioning Engine Air Intake Heater has been discovered with corrosion on the thermostats and the aeroplane skin where the thermostats are installed. The two thermostats are installed directly under the flight compartment floor along the aeroplane centre line where moisture accumulation and/or migration may occur, which can cause corrosion of the thermostats. Corrosion within the thermostats may seize the switch mechanism open, preventing the activation of the associated Engine Air Intake Heater. Failure of the Engine Air Intake Heater to activate may pose a safety risk to the aeroplane in icing conditions.

Bombardier has issued Service Bulletin (SB) 84-30-10 to inspect, replace if required and relocate the thermostat assembly to rectify this problem. [An inactive engine air intake heater could lead to an engine failure.]

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-2016-6148.

Comments

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

Conclusion

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

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

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

Related Service Information Under 1 CFR Part 51

Bombardier, Inc. has issued Bombardier Service Bulletin 84-30-10, Revision E, dated October 10, 2014. The service information describes procedures for a general visual inspection for corrosion of the thermostats' mounting surfaces and fuselage skin surface, corrective actions, and relocating the existing thermostats from a lower position on the aircraft skin at X 54.00 between stringers 31P and 32P (next to the centerline) to a higher position at X 54.00 between stringers 26P and 27P. 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.

Costs of Compliance

We estimate that this AD affects 76 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

Estimated Costs Action Labor cost Parts cost Cost per
  • product
  • Cost on U.S. operators
    Modification 12 work-hours × $85 per hour = $1,020 N/A $1,020 $77,520
    Authority for This Rulemaking

    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.

    Regulatory Findings

    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.

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    Adoption of the Amendment

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

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

    49 U.S.C. 106(g), 40113, 44701.

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): 2016-19-11 Bombardier, Inc.: Amendment 39-18660; Docket No. FAA-2016-6148; Directorate Identifier 2015-NM-154-AD. (a) Effective Date

    This AD is effective November 2, 2016.

    (b) Affected ADs

    None.

    (c) Applicability

    This AD applies to Bombardier, Inc. Model DHC-8-400, -401, and -402 airplanes, certificated in any category, serial numbers 4001 through 4184 inclusive.

    (d) Subject

    Air Transport Association (ATA) of America Code 30, Ice and rain protection.

    (e) Reason

    This AD was prompted by a malfunctioning No. 2 engine intake heater with corrosion on the thermostats and the fuselage skin where the thermostats made contact with the aircraft fuselage skin. We are issuing this AD to prevent corrosion within the thermostats that may cause the switch mechanism to seize in the open position and prevent the activation of the associated engine air intake heater. An inactive engine air intake heater could lead to an engine failure.

    (f) Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (g) Inspection of the Thermostats and Replacement

    Within 2,000 flight hours or 12 months, whichever occurs first after the effective date of this AD, do a general visual inspection of the thermostats' exterior for any signs of corrosion, in accordance with the Accomplishment Instructions of Bombardier Service Bulletin 84-30-10, Revision E, dated October 10, 2014. If any thermostat is corroded, replace the thermostat before further flight, in accordance with the Accomplishment Instructions of Bombardier Service Bulletin 84-30-10, Revision E, dated October 10, 2014.

    (h) Inspection of the Fuselage Skin Surface and Corrective Action

    Within 2,000 flight hours or 12 months, whichever occurs first after the effective date of this AD, do a general visual inspection of the fuselage skin surface for skin corrosion, and modify the engine air intake heater thermostat installation, in accordance with the Accomplishment Instructions of Bombardier Service Bulletin 84-30-10, Revision E, dated October 10, 2014.

    (1) If the skin corrosion is 0.001 inch deep or less, before further flight remove the corrosion and treat bare metal, in accordance with Accomplishment Instructions of Bombardier Service Bulletin 84-30-10, Revision E, dated October 10, 2014.

    (2) If the skin corrosion is greater than 0.001 inch deep, before further flight, repair using a method approved by the Manager, New York Aircraft Certification Office (ACO), ANE-170, Transport Airplane Directorate, FAA; or Transport Canada Civil Aviation (TCCA); or Bombardier, Inc.'s TCCA Design Approval Organization (DAO).

    (i) Credit for Previous Actions

    This paragraph provides credit for actions required by paragraphs (g) and (h) of this AD, if those actions were performed before the effective date of this AD using the service information identified in paragraphs (i)(1) through (i)(5) of this AD.

    (1) Bombardier Service Bulletin 84-30-10, dated September 7, 2007, provided that the thermostat location label is replaced, in accordance with the Accomplishment Instructions of Bombardier Service Bulletin 84-30-10, Revision E, dated October 10, 2014, within the compliance times specified in paragraph (g) of this AD.

    (2) Bombardier Service Bulletin 84-30-10, Revision A, dated April 7, 2008.

    (3) Bombardier Service Bulletin 84-30-10, Revision B, dated January 20, 2010.

    (4) Bombardier Service Bulletin 84-30-10, Revision C, dated July 14, 2011.

    (5) Bombardier Service Bulletin 84-30-10, Revision D, dated December 20, 2011.

    (j) Other FAA AD Provisions

    The following provisions also apply to this AD:

    (1) Alternative Methods of Compliance (AMOCs): The Manager, New York ACO, ANE-170, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the ACO, send it to ATTN: Program Manager, Continuing Operational Safety, FAA, New York ACO, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7300; fax 516-794-5531. Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

    (2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, New York ACO, ANE-170, Engine and Propeller Directorate, FAA; or TCCA; or Bombardier, Inc.'s TCCA DAO. If approved by the DAO, the approval must include the DAO-authorized signature.

    (k) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information (MCAI) Canadian Airworthiness Directive CF-2015-24, dated August 24, 2015, for related information. This MCAI may be found in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-6148.

    (2) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (l)(3) and (l)(4) of this AD.

    (l) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.

    (2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.

    (i) Bombardier Service Bulletin 84-30-10, Revision E, dated October 10, 2014.

    (ii) Reserved.

    (3) For service information identified in this AD, contact Bombardier, Inc., Q-Series Technical Help Desk, 123 Garratt Boulevard, Toronto, Ontario M3K 1Y5, Canada; telephone: 416-375-4000; fax: 416-375-4539; email: [email protected]; Internet: http://www.bombardier.com.

    (4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

    (5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Renton, Washington, on September 12, 2016. Michael Kaszycki, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service.
    [FR Doc. 2016-22705 Filed 9-27-16; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2013-0828; Directorate Identifier 2012-NM-036-AD; Amendment 39-18637; AD 2016-18-07] RIN 2120-AA64 Airworthiness Directives; Airbus Airplanes AGENCY:

    Federal Aviation Administration (FAA), Department of Transportation (DOT).

    ACTION:

    Final rule.

    SUMMARY:

    We are superseding Airworthiness Directive (AD) 2009-15-17 for certain Airbus Model A330-200 and -300 series airplanes; and Model A340-200 and -300 series airplanes. AD 2009-15-17 required an inspection for damage to the protective treatments or any corrosion of all main landing gear (MLG) bogie beams, and application of protective treatments if no damage or corrosion was found. If any damage or corrosion was found, corrective action followed by the application of protective treatments was required. This new AD continues to require inspections for damage to the protective treatments or any corrosion of all MLG bogie beams, application of protective treatments, and corrective action if necessary. This new AD also requires modification of the MLG bogie beams, which terminates the repetitive inspections for any modified bogie beam. This new AD allows optional methods of compliance for certain actions, and adds Airbus Model A330-200 Freighter series airplanes to the applicability. This new AD revises the compliance times and adds a one-time inspection for airplanes that were inspected too early. This AD was prompted by reports of thin paint coats and paint degradation on enhanced main landing gear (MLG) bogie beams, as well as reports that some airplanes have been inspected too early and not re-inspected as needed. We are issuing this AD to detect and correct damage or corrosion of the MLG bogie beams, which could cause a runway excursion event, bogie beam detachment from the airplane, or MLG collapse, and could result in damage to the airplane and injury to the occupants.

    DATES:

    This AD is effective November 2, 2016.

    The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of November 2, 2016.

    The Director of the Federal Register approved the incorporation by reference of certain other publications listed in this AD as of September 2, 2009 (74 FR 37523, July 29, 2009).

    ADDRESSES:

    For Airbus service information identified in this final rule, contact Airbus SAS, Airworthiness Office—EAL, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone: +33 5 61 93 36 96; fax: +33 5 61 93 45 80; email: [email protected]; Internet: http://www.airbus.com. For Messier-Dowty service information identified in this final rule, contact Messier-Dowty: Messier Services Americas, Customer Support Center, 45360 Severn Way, Sterling, VA 20166-8910; telephone: 703-450-8233; fax: 703-404-1621; Internet: https://techpubs.services/messier-dowty.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221. It is also available on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2013-0828.

    Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2013-0828; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The address for the Docket Office (telephone: 800-647-5527) is Docket Management Facility, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590.

    FOR FURTHER INFORMATION CONTACT:

    Vladimir Ulyanov, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone: 425-227-1138; fax: 425-227-1149.

    SUPPLEMENTARY INFORMATION:

    Discussion

    We issued a second supplemental notice of proposed rulemaking (SNPRM) to amend 14 CFR part 39 to supersede AD 2009-15-17, Amendment 39-15980 (74 FR 37523, July 29, 2009) (“AD 2009-15-17”). AD 2009-15-17 applied to certain Airbus Model A330-200 and -300 series airplanes, and Model A340-200 and -300 series airplanes. The second SNPRM published in the Federal Register on February 5, 2016 (81 FR 6185) (“the second SNPRM”). We preceded the second SNPRM with the first SNPRM, which was published in the Federal Register on March 5, 2014 (79 FR 12414) (“the first SNPRM”). We preceded the first SNPRM with a notice of proposed rulemaking (NPRM) that published in the Federal Register on September 25, 2013 (78 FR 58978) (“the NPRM”). The NPRM was prompted by reports of thin paint coats and paint degradation on enhanced MLG bogie beams. The NPRM proposed to continue to require inspections for damage to the protective treatments or any corrosion of all MLG bogie beams, application of protective treatments, and corrective action if necessary. The NPRM also proposed to require modification of the MLG bogie beams, which would terminate the repetitive inspections for any modified bogie beam. In addition, the NPRM proposed to allow optional methods of compliance for certain actions, and to add Airbus Model A330-200 Freighter series airplanes to the applicability. The first SNPRM proposed to revise the compliance times and add a one-time inspection for airplanes that were inspected too early. The second SNPRM proposed to clarify the required actions and the specific configurations to which the actions must be applied. We are issuing this AD to detect and correct damage or corrosion of the MLG bogie beams, which could cause a runway excursion event, bogie beam detachment from the airplane, or MLG collapse, and could result in damage to the airplane and injury to the occupants.

    The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2013-0267R1, dated March 4, 2014; corrected May 8, 2014 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus Model A330-200 Freighter, -200, and -300 series airplanes; and Model A340-200 and -300 series airplanes. The MCAI states:

    The operator of an A330 aeroplane (which has a common bogie beam with the A340) reported a fracture of the Right Hand (RH) main landing gear (MLG) bogie beam, which occurred while turning during low speed taxi maneuvers. The bogie fractured aft of the pivot point and remained attached to the sliding tube by the brake torque reaction rods. After this RH bogie failure, the aeroplane continued for approximately 40 meters on the forks of the sliding member before coming to rest on the taxiway.

    The investigations revealed that this event was due to corrosion pitting occurring on the bore of the bogie beam.

    This condition, if not detected and corrected, could lead to a runway excursion event or to detachment of the bogie from the aeroplane, or to MLG collapse, possibly resulting in damage to the aeroplane and injury to the occupants.

    To enable early detection and repair of corrosion of the internal surfaces, EASA issued EASA AD 2007-0314 to require a one-time inspection of all MLG bogie beams, except Enhanced MLG bogie beams, and the reporting of the results to Airbus. EASA AD 2007-0314 was revised and later superseded by EASA AD 2008-0093, reducing the inspection threshold period.

    The results of subsequent investigations showed thin paint coats and paint degradation, confirmed as well on Enhanced MLG bogie beams. To address this additional concern, EASA issued AD 2011-0141 [which was not mandated by the FAA], retaining the requirements of EASA AD 2008-0093, which was superseded, to require a one-time visual inspection of all MLG bogie beams, including a visual examination of the internal diameter for corrosion or damage to protective treatments of the bogie beam and measurement of the paint thickness on the internal bore, accomplishment of the applicable corrective actions and a modification of the MLG bogie beam to improve the coat paint application method, and application of corrosion protection.

    Prompted by in-service requests, EASA issued EASA AD 2012-0015 retaining the requirements of EASA AD 2011-0141, which was superseded, and introducing repetitive inspections of the MLG bogie beams, which allows extension of the compliance time for the MLG bogie beam modification from 15 years to 21 years. Modification of a MLG bogie beam constitutes terminating action for the repetitive inspections for that MLG bogie beam.

    Reports on inspection results provided to Airbus show that some aeroplanes were initially inspected too early (before 4 years and 6 months since aeroplane first flight with bogie beam installed/installed after overhaul) and have not been re-inspected as required.

    For the reasons described above, this [EASA] AD retains the requirements of EASA AD 2012-0015, which is superseded, and redefines the inspection periodicity. This [EASA] AD also introduces a specific one-time inspection for aeroplanes that have been inspected too early.

    Prompted by operator comments, this [EASA] AD is revised to clarify the required actions and the specific configurations to which the actions must be applied. Appendix 1 of this [EASA] AD has been amended accordingly.

    This [EASA] AD is republished to editorially correct paragraph (4).

    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-2013-0828.

    Comments

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

    Request To Revise the Applicability of the Second SNPRM

    American Airlines (AAL) requested that we revise the applicability of the proposed AD (in the second SNPRM) to exclude airplanes with MLG bogie beams that have had Airbus modification 58896 embodied in-service, as specified in Airbus Service Bulletin A330-32-3237. AAL pointed out that paragraph (c) of the proposed AD (in the second SNPRM) does not reflect MLG bogie beams that were modified in-service.

    We disagree with the request to revise the applicability of the proposed AD (in the second SNPRM). Paragraph (k) of this AD specifically requires inspection, repair, modification, and re-identification of the MLG bogie beams. However, paragraph (f) of this AD states that actions already done need not be repeated. If an operator has already accomplished the actions required by paragraph (k) of this AD before the effective date of this AD, then the modified airplane is already in compliance with the corresponding requirements of this AD. We have not made any changes to this AD in this regard.

    Additional Changes Made in This AD

    We have revised paragraph (m)(1) of this AD to remove reference to paragraph (g) of this AD; the reporting requirement specified in paragraph (m)(1) of this AD is required only for the inspection required by paragraph (k) of this AD.

    We have also revised paragraph (m)(2) of this AD to reference the correct service information for reporting inspection findings for the inspection required by paragraph (h) of this AD.

    Conclusion

    We reviewed the available data, including the comment 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 second SNPRM for correcting the unsafe condition; and

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

    Related Service Information Under 1 CFR Part 51

    Airbus has issued the following service information.

    • Airbus Service Bulletin A330-32-3225, Revision 02, including Appendix 1, dated October 26, 2012. This service information describes procedures for cleaning the internal bore and accomplishing a detailed inspection of internal surfaces of the left-hand (LH) and right-hand (RH) MLG bogie beams to detect any damage to the protective treatments and any corrosion, and measuring the paint thickness on the internal bore.

    • Airbus Service Bulletin A330-32-3237, Revision 01, including Reporting Sheet, dated October 14, 2011. This service information describes procedures for a detailed inspection for damage and corrosion of the internal bores of the LH and RH MLG bogie beam and repair, as well as modification and re-identification.

    • Airbus Service Bulletin A340-32-4268, Revision 03, including Appendix 1, dated January 14, 2013. This service information describes procedures for cleaning the internal bore and accomplishing a detailed inspection of internal surfaces of the LH and RH MLG bogie beams to detect any damage to the protective treatments and any corrosion, and measuring the paint thickness on the internal bore.

    • Airbus Service Bulletin A340-32-4279, Revision 01, including Reporting Sheet, dated October 14, 2011. This service information describes procedures for a detailed inspection for damage and corrosion of the internal bores of the LH and RH MLG bogie beam, repair, modification, and reidentification.

    Messier-Bugatti-Dowty has issued the following service information.

    • Messier-Dowty Service Bulletin A33/34-32-278, Revision 1, including Appendixes A and B, dated August 24, 2011. This service information describes procedures for inspections for damage and corrosion to the protective treatment of the internal bores of the LH and RH MLG bogie beam, and repairs.

    • Messier-Dowty Service Bulletin A33/34-32-283, Revision 1, including Appendix A, dated July 10, 2012. This service information describes procedures for modification of the LH and RH MLG bogie beams.

    • Messier-Dowty Service Bulletin A33/34-32-284, Revision 1, including Appendix A, dated July 10, 2012. This service information describes procedures for modification of the LH and RH MLG bogie beams.

    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.

    Costs of Compliance

    We estimate that this AD affects 51 airplanes of U.S. registry.

    We also estimate that it takes about 34 work-hours per product to comply with this AD, and 1 work-hour per product for reporting. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this AD on U.S. operators to be $151,725, or $2,975 per product.

    In addition, we estimate that any necessary follow-on actions would take about 10 work-hours at a labor rate of $85 per work-hour, for a cost of $850 per product. We have no way of determining the number of aircraft that might need these actions.

    Paperwork Reduction Act

    A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number. The control number for the collection of information required by this AD is 2120-0056. The paperwork cost associated with this AD has been detailed in the Costs of Compliance section of this document and includes time for reviewing instructions, as well as completing and reviewing the collection of information. Therefore, all reporting associated with this AD is mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at 800 Independence Ave. SW., Washington, DC 20591, ATTN: Information Collection Clearance Officer, AES-200.

    Authority for This Rulemaking

    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.

    Regulatory Findings

    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.

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    Adoption of the Amendment

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

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

    49 U.S.C. 106(g), 40113, 44701.

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by removing Airworthiness Directive (AD) 2009-15-17, Amendment 39-15980 (74 FR 37523, July 29, 2009), and adding the following new AD: 2016-18-07 Airbus: Amendment 39-18637; Docket No. FAA-2013-0828; Directorate Identifier 2012-NM-036-AD. (a) Effective Date

    This AD is effective November 2, 2016.

    (b) Affected ADs

    This AD replaces AD 2009-15-17, Amendment 39-15980 (74 FR 37523, July 29, 2009) (“AD 2009-15-17”).

    (c) Applicability

    This AD applies to the airplanes identified in paragraphs (c)(1) and (c)(2) of this AD, certificated in any category, all manufacturer serial numbers (MSN), except those on which Airbus modification 58896 has been embodied in production.

    (1) Airbus Model A330-223F, -243F, -201, -202, -203, -223, -243, -301, -302, -303, -321, -322, -323, -341, -342, and -343 airplanes.

    (2) Airbus Model A340-211, -212, -213, -311, -312, and -313 airplanes.

    (d) Subject

    Air Transport Association (ATA) of America Code 32, Landing gear.

    (e) Reason

    This AD was prompted by reports of thin paint coats and paint degradation on enhanced main landing gear (MLG) bogie beams, as well as reports that some airplanes have been inspected too early and not re-inspected as needed. We are issuing this AD to detect and correct damage or corrosion of the MLG bogie beams, which could cause a runway excursion event, bogie beam detachment from the airplane, or MLG collapse, and could result in damage to the airplane and injury to the occupants.

    (f) Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (g) Repetitive Inspections for Certain Airplane Configurations

    For airplanes equipped with basic MLG (201252 series), or growth MLG (201490 series): After 54 months at the earliest, but no later than 72 months since the left-hand (LH) or right-hand (RH) MLG bogie beam's first flight on an airplane, or since its first flight on an airplane after overhaul, as applicable, clean the internal bore and accomplish a detailed inspection of internal surfaces of the LH and RH MLG bogie beams to detect any damage to the protective treatments and any corrosion, and measure the paint thickness on the internal bore, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-32-3225, Revision 02, including Appendix 1, dated October 26, 2012; or Airbus Service Bulletin A340-32-4268, Revision 03, including Appendix 1, dated January 14, 2013; as applicable. Repeat the inspections thereafter at intervals not less than 54 months, but not exceeding 72 months, after the most recent inspection. During overhaul of a MLG bogie beam, any corrosion will be removed, which means that the first inspection after overhaul of that MLG bogie beam, as required by this paragraph, is between 54 months and 72 months since its first flight on an airplane after overhaul.

    (h) One-Time Detailed Inspection for Certain Airplane Configurations

    For airplanes equipped with basic MLG (201252 series), or growth MLG (201490 series) having a LH or RH MLG bogie beam that has already exceeded 72 months since its first flight on an airplane, or since its first flight on an airplane after overhaul, as applicable, as of the effective date of this AD; and that has been inspected as specified in Airbus Service Bulletin A330-32-3225 or Airbus Service Bulletin A340-32-4268, as applicable, earlier than 54 months since first flight of the affected MLG bogie beam on an airplane, or since its first flight on an airplane after its most recent overhaul, as applicable: Within the applicable compliance time indicated in paragraphs (h)(1) through (h)(4) of this AD, clean the internal bore and accomplish a detailed inspection of the internal surfaces of the LH and RH MLG bogie beams to detect any damage to the protective treatments and any corrosion, and measure the paint thickness on the internal bore, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-32-3225, Revision 02, including Appendix 1, dated October 26, 2012; or Airbus Service Bulletin A340-32-4268, Revision 03, including Appendix 1, dated January 14, 2013; as applicable.

    (1) For MLG bogie beams having the configurations specified in both paragraphs (h)(1)(i) and (h)(1)(ii) of this AD: Do the detailed inspection specified in the introductory text of paragraph (h) of this AD within 9 months after the effective date of this AD.

    (i) MLG bogie beams having between 72 and 120 months since first flight on an airplane, or since the MLG bogie beam's first flight on an airplane after the MLG bogie beam's most recent overhaul, as applicable.

    (ii) MLG bogie beams on which the first inspection was done after 51 months and before 54 months since first flight of the MLG bogie beam on an airplane, or since the MLG bogie beam's first flight on an airplane after the MLG bogie beam's most recent overhaul, as applicable.

    (2) For MLG bogie beams having the configurations specified in both paragraphs (h)(2)(i) and (h)(2)(ii) of this AD: Do the detailed inspection specified in the introductory text of paragraph (h) of this AD within 3 months after the effective date of this AD.

    (i) MLG bogie beams having between 72 and 120 months since first flight on an airplane, or since the MLG bogie beam's first flight on an airplane after the MLG bogie beam's most recent overhaul, as applicable.

    (ii) MLG bogie beams on which the first inspection was done after 45 months and before 51 months since first flight of the MLG bogie beam on an airplane, or since the MLG bogie beam's first flight on an airplane after the MLG bogie beam's most recent overhaul, as applicable.

    (3) For MLG bogie beams having the configurations specified in both paragraphs (h)(3)(i) and (h)(3)(ii) of this AD: Do the detailed inspection specified in the introductory text of paragraph (h) of this AD within 3 months after the effective date of this AD.

    (i) MLG bogie beams having between 72 and 96 months since first flight on an airplane, or since the MLG bogie beam's first flight on an airplane after the MLG bogie beam's most recent overhaul, as applicable.

    (ii) MLG bogie beams which have accumulated, at the effective date of this AD, less than 96 months and on which the first inspection was done before 51 months since first flight of the MLG bogie beam on an airplane, or since the MLG bogie beam's first flight on an airplane after the after the MLG bogie beam's most recent overhaul, as applicable.

    (4) For MLG bogie beams having the configurations specified in both paragraphs (h)(4)(i) and (h)(4)(ii) of this AD: Do the detailed inspection specified in the introductory text of paragraph (h) of this AD within 1 month after the effective date of this AD.

    (i) MLG bogie beams having between 96 and 120 months since first flight on an airplane, or since the MLG bogie beam's first flight on an airplane after the MLG bogie beam's most recent overhaul, as applicable.

    (ii) MLG bogie beams which has accumulated, at the effective date of this AD, 96 months or more and on which the first inspection was done before 45 months since first flight of the MLG bogie beam on an airplane, or since the MLG bogie beam's first flight on an airplane after the MLG bogie beam's most recent overhaul, as applicable.

    (i) Application of Protective Treatment

    If, during any inspection required by paragraph (g) or (h) of this AD, no damage or corrosion is found: Before further flight, apply the protective treatments to the MLG bogie beam, in accordance with the Accomplishment Instructions of Messier-Dowty Service Bulletin A33/34-32-272, Revision 1, including Appendixes A, B, C, and D, dated September 22, 2008.

    (j) Repair and Application of Protective Treatment

    If, during any inspection required by paragraph (g) or (h) of this AD, any damage or corrosion is found: Before further flight, repair and apply the protective treatments to the MLG bogie beam, in accordance with the Accomplishment Instructions of Messier-Dowty Service Bulletin A33/34-32-272, Revision 1, including Appendixes A, B, C, and D, dated September 22, 2008.

    (k) Inspection and Corrective Actions

    For airplanes equipped with basic MLG (201252 series), growth MLG (201490 series), or enhanced MLG (10-210 series): Before the accumulation of 252 total months on an MLG bogie beam, or within 90 days after the effective date of this AD, whichever occurs later, do the actions specified in paragraphs (k)(1) and (k)(2) of this AD concurrently and in sequence.

    (1) Except as provided by paragraph (k)(3) of this AD: Do a detailed inspection for damage and corrosion of the internal bores of the LH and RH MLG bogie beam, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-32-3237 or A340-32-4279, both Revision 01, both including Reporting Sheet, both dated October 14, 2011, as applicable. If any damage or corrosion is found, before further flight, repair in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-32-3237 or A340-32-4279, both Revision 01, both including Reporting Sheet, both dated October 14, 2011, as applicable.

    (2) Except as provided by paragraph (k)(3) of this AD: Modify and re-identify, as applicable, the LH and RH MLG bogie beams, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-32-3237 or A340-32-4279, both Revision 01, both including Reporting Sheet, both dated October 14, 2011, as applicable.

    (3) The inspection requirements of paragraph (k)(1) of this AD, and the modification requirements only of paragraph (k)(2) of this AD, do not apply to any MLG bogie beam with a serial number listed in Appendix A of Messier-Dowty Service Bulletin A33/34-32-283 or A33/34-32-284, both Revision 1, both dated July 10, 2012, as applicable.

    (l) Optional Methods of Compliance for Certain Airplane Configurations

    Inspections and corrective actions on both MLG bogie beams done in accordance with the instructions of Messier-Dowty Service Bulletin A33/34-32-271, Revision 1, including Appendixes A and B, dated November 16, 2007; or Messier-Dowty Service Bulletin A33/34-32-272, Revision 1, including Appendixes A, B, C, and D, dated September 22, 2008; as applicable; are acceptable methods of compliance for the requirements of paragraph (g) of this AD, provided each inspection is accomplished between 54 months and 72 months since the first flight of the affected MLG bogie beam on an airplane, or since the MLG bogie beam's first flight after the MLG bogie beam's most recent overhaul, as applicable.

    (m) Reporting Requirement

    (1) Submit a report of the findings (both positive and negative) of each inspection required by paragraph (k) of this AD, as applicable, to Airbus, Customer Service Directorate, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France, using the applicable Reporting Sheet in Airbus Service Bulletin A330-32-3237, Revision 01, including Reporting Sheet, dated October 14, 2011; or Airbus Service Bulletin A340-32-4279, Revision 01, including Reporting Sheet, dated October 14, 2011; at the applicable time specified in paragraph (m)(1)(i) or (m)(1)(ii) of this AD.

    (i) If the inspection was done on or after the effective date of this AD: Submit the report within 90 days after the inspection.

    (ii) If the inspection was done before the effective date of this AD: Submit the report within 90 days after the effective date of this AD.

    (2) Submit a report of the findings (both positive and negative) of the inspection required by paragraph (h) of this AD to Airbus, Customer Service Directorate, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France, using the applicable Reporting Sheet in Airbus Service Bulletin A330-32-3225, Revision 02, including Appendix 1, dated October 26, 2012; or Airbus Service Bulletin A340-32-4268, Revision 03, including Appendix 1, dated January 14, 2013; at the applicable time specified in paragraph (m)(2)(i) or (m)(2)(ii) of this AD.

    (i) If the inspection was done on or after the effective date of this AD: Submit the report within 30 days after the inspection.

    (ii) If the inspection was done before the effective date of this AD: Submit the report within 30 days after the effective date of this AD.

    (n) Optional Method of Compliance for Certain Requirements

    (1) Inspections for damage and corrosion to the protective treatment of the internal bores of the LH and RH MLG bogie beam, and repairs, done in accordance with Messier-Dowty Service Bulletin A33/34-32-278, Revision 1, including Appendixes A and B, dated August 24, 2011, are acceptable methods of compliance with the corresponding requirements of paragraph (k)(1) of this AD.

    (2) Modification of the LH and RH MLG bogie beams, done in accordance with Messier-Dowty Service Bulletins A33/34-32-283 or A33/34-32-284, both Revision 1, both including Appendix A, both dated July 10, 2012, as applicable, is an acceptable method of compliance with the corresponding requirements of paragraph (k)(2) of this AD.

    (o) Optional Terminating Action for Certain Requirements

    Modification of both LH and RH MLG bogie beams on an airplane, done in accordance with paragraph (k) of this AD, or as specified in paragraphs (n)(1) and (n)(2) of this AD, terminates the repetitive inspections required by paragraph (g) of this AD for this airplane.

    (p) Credit for Previous Actions

    (1) This paragraph provides credit for the corresponding inspections and corrective actions done on an LH or RH MLG bogie beam required by paragraph (g) of this AD, if those actions were performed before the effective date of this AD using Airbus Service Bulletin A330-32-3225, dated November 21, 2007; or Revision 1, dated October 30, 2008; provided the inspections and corrective actions were accomplished between 54 months and 72 months since first flight of the affected MLG bogie beam on an airplane, or since its first flight after the MLG bogie beam's most recent overhaul, as applicable. Airbus Service Bulletin A330-32-3225, dated November 21, 2007, is not incorporated by reference in this AD. Airbus Mandatory Service Bulletin A330-32-3225, Revision 01, including Appendix 1, dated October 30, 2008, was incorporated by reference in AD 2009-15-07.

    (2) This paragraph provides credit for the corresponding inspections and corrective actions done on an LH or RH MLG bogie beam required by paragraph (g) of this AD, if those actions were performed before the effective date of this AD using Airbus Mandatory Service Bulletin A340-32-4268, dated November 21, 2007; Revision 01, including Appendix 1, dated October 30, 2008; or Revision 02, dated October 26, 2012; provided these inspections and corrective actions were accomplished between 54 months and 72 months since first flight of the affected MLG bogie beam on an airplane, or since its first flight after the MLG bogie beam's most recent overhaul, as applicable. Airbus Service Bulletin A340-32-4268, dated November 21, 2007; and Revision 02, dated October 26, 2012; are not incorporated by reference in this AD. Airbus Mandatory Service Bulletin A340-32-4268, Revision 01, including Appendix 1, dated October 30, 2008, was incorporated by reference in AD 2009-15-17.

    (3) This paragraph provides credit for the corresponding actions required by paragraph (n)(1) of this AD, if those actions were performed before the effective date of this AD using Messier-Dowty Service Bulletin A33/34-32-271, dated September 13, 2007, which is not incorporated by reference in this AD.

    (4) This paragraph provides credit for the corresponding actions required by paragraphs (j) and (n)(1) of this AD, if those actions were performed before the effective date of this AD using Messier-Dowty Service Bulletin A33/34-32-272, including Appendixes A, B, C, and D, dated November 16, 2007, which is not incorporated by reference in this AD.

    (5) This paragraph provides credit for the corresponding actions required by paragraphs (k), (m), and (r)(1)(i) of this AD, if those actions were performed before the effective date of this AD using Airbus Service Bulletin A330-32-3237, including Reporting Sheet, dated January 18, 2011.

    (6) This paragraph provides credit for the corresponding actions required by paragraphs (k), (m), and (r)(1)(i) of this AD, if those actions were performed before the effective date of this AD using Airbus Service Bulletin A340-32-4279, including Reporting Sheet, dated January 18, 2011.

    (7) This paragraph provides credit for the corresponding actions required by paragraphs (k)(3), (n)(2), (r)(1)(ii), and (r)(1)(iii) of this AD, if those actions were performed before the effective date of this AD using Messier-Dowty Service Bulletin A33/34-32-283, including Appendix A, dated May 11, 2010, which is not incorporated by reference in this AD.

    (8) This paragraph provides credit for the corresponding actions required by paragraphs (k)(3), (n)(2), (r)(1)(ii), and (r)(1)(iii) of this AD, if those actions were performed before the effective date of this AD using Messier-Dowty Service Bulletin A33/34-32-284, including Appendix A, dated May 11, 2010, which is not incorporated by reference in this AD.

    (9) This paragraph provides credit for the corresponding actions required by paragraphs (n)(1) and (r)(1)(ii) of this AD, if those actions were performed before the effective date of this AD using Messier-Dowty Service Bulletin A33/34-32-278, including Appendixes A and B, dated February 17, 2010, which is not incorporated by reference in this AD.

    (q) Clarification of Inspection Compliance Times

    After accomplishment of the one-time detailed inspection required by paragraph (h) of this AD, the repetitive actions required by paragraph (g) of this AD remain applicable, and must be done within the compliance times specified in paragraph (g) of this AD.

    (r) Parts Installation Limitations

    (1) After modification of an airplane, as required by paragraph (k) of this AD, or as specified in paragraphs (n)(1) and (n)(2) of this AD, do not install an MLG bogie beam on any airplane unless it is done in compliance with the requirements of paragraph (r)(1)(i), (r)(1)(ii), or (r)(1)(iii) of this AD.

    (i) The MLG bogie beam has been modified and re-identified in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-32-3237 or A340-32-4279, both Revision 01, both including Reporting Sheet, both dated October 14, 2011, as applicable.

    (ii) The MLG bogie beam has been inspected and all applicable corrective actions have been done in accordance with the Accomplishment Instructions of Messier-Dowty Service Bulletin A33/34-32-278, Revision 1, dated August 24, 2011; and modified in accordance with the Accomplishment Instructions of Messier-Dowty Service Bulletin A33/34-32-283 or A33/34-32-284, both Revision 1, both including Appendix A, both dated July 10, 2012.

    (iii) The MLG bogie beam has a serial number listed in Appendix A of Messier-Dowty Service Bulletin A33/34-32-283 or A33/34-32-284, both Revision 1, both dated July 10, 2012, as applicable.

    (2) As of the effective date of this AD, except as specified in paragraph (r)(1) of this AD, installation of an MLG bogie beam on an airplane is allowed, provided that following the installation it is inspected and all applicable repairs and corrective actions have been done in accordance with the requirements of this AD.

    (s) Other FAA AD Provisions

    The following provisions also apply to this AD:

    (1) Alternative Methods of Compliance (AMOCs): The Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the International Branch, send it to ATTN: Vladimir Ulyanov, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone: 425-227-1138; fax: 425-227-1149. Information may be emailed to: [email protected] Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office. The AMOC approval letter must specifically reference this AD.

    (2) Contacting the Manufacturer: As of the effective date of this AD, for any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or the European Aviation Safety Agency (EASA); or Airbus's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.

    (3) Reporting Requirements: A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB Control Number. The OMB Control Number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to be approximately 5 minutes per response, including the time for reviewing instructions, completing and reviewing the collection of information. All responses to this collection of information are mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at: 800 Independence Ave. SW., Washington, DC 20591, Attn: Information Collection Clearance Officer, AES-200.

    (t) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information (MCAI) AD 2013-0267R1, dated March 4, 2014; corrected March 8, 2014, for related information. This MCAI may be found in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2013-0828.

    (2) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (u)(5), (u)(6), and (u)(7) of this AD.

    (u) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.

    (2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.

    (3) The following service information was approved for IBR on November 2, 2016.

    (i) Airbus Service Bulletin A330-32-3225, Revision 02, including Appendix 1, dated October 26, 2012.

    (ii) Airbus Service Bulletin A330-32-3237, Revision 01, including Reporting Sheet, dated October 14, 2011.

    (iii) Airbus Service Bulletin A340-32-4268, Revision 03, including Appendix 1, dated January 14, 2013.

    (iv) Airbus Service Bulletin A340-32-4279, Revision 01, including Reporting Sheet, dated October 14, 2011.

    (v) Messier-Dowty Service Bulletin A33/34-32-278, Revision 1, including Appendixes A and B, dated August 24, 2011.

    (vi) Messier-Dowty Service Bulletin A33/34-32-283, Revision 1, including Appendix A, dated July 10, 2012.

    (vii) Messier-Dowty Service Bulletin A33/34-32-284, Revision 1, including Appendix A, dated July 10, 2012.

    (4) The following service information was approved for IBR on September 2, 2009 (74 FR 37523, July 29, 2009).

    (i) Messier-Dowty Service Bulletin A33/34-32-271, Revision 1, including Appendixes A and B, dated November 16, 2007.

    (ii) Messier-Dowty Service Bulletin A33/34-32-272, Revision 1, including Appendixes A, B, C, and D, dated September 22, 2008.

    (5) For Airbus service information identified in this AD, contact Airbus SAS, Airworthiness Office—EAL, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone: +33 5 61 93 36 96; fax: +33 5 61 93 45 80; email: [email protected]; Internet: http://www.airbus.com.

    (6) For Messier-Dowty service information identified in this AD, contact Messier-Dowty: Messier Services Americas, Customer Support Center, 45360 Severn Way, Sterling, VA 20166-8910; telephone 703-450-8233; fax 703-404-1621; Internet: https://techpubs.services/messier-dowty.com.

    (7) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

    (8) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Renton, Washington, on August 24, 2016. John P. Piccola, Jr., Acting Manager, Transport Airplane Directorate, Aircraft Certification Service.
    [FR Doc. 2016-21150 Filed 9-27-16; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2016-8161; Directorate Identifier 2016-CE-018-AD; Amendment 39-18664; AD 2016-19-15] RIN 2120-AA64 Airworthiness Directives; REIMS AVIATION S.A. Airplanes AGENCY:

    Federal Aviation Administration (FAA), Department of Transportation (DOT).

    ACTION:

    Final rule.

    SUMMARY:

    We are adopting a new airworthiness directive (AD) for certain REIMS AVIATION S.A. Model F406 airplanes. This AD results from mandatory continuing airworthiness information (MCAI) issued by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as cracks found in the horizontal stabilizer rear attach structure and the vertical fin rear spar attach structure. We are issuing this AD to prevent structural failure of the horizontal stabilizer and/or the vertical fin rear spar attach structure, which could result in damage to the airplane and loss of control.

    DATES:

    This AD is effective November 2, 2016.

    The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of November 2, 2016.

    ADDRESSES:

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-8161; or in person at Document Management Facility, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590.

    For service information identified in this AD, contact ASI Aviation, Aérodrome de Reims Prunay, 51360 Prunay, France; telephone: +33 3 26 48 46 84; fax: +33 3 26 49 18 57; email: [email protected]; Internet: http://asi-aviation.fr/page-Accueil.html. You may view this referenced service information at the FAA, Small Airplane Directorate, 901 Locust, Kansas City, Missouri 64106. For information on the availability of this material at the FAA, call (816) 329-4148. It is also available on the Internet at http://www.regulations.gov by searching for Docket No. FAA-2016-8161.

    FOR FURTHER INFORMATION CONTACT:

    Albert Mercado, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone: (816) 329-4119; fax: (816) 329-4090; email: [email protected]

    SUPPLEMENTARY INFORMATION:

    Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain REIMS AVIATION S.A. Model F406 airplanes. The NPRM was published in the Federal Register on July 7, 2016 (81 FR 44244). The NPRM proposed to correct an unsafe condition for the specified products and was based on mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country. The MCAI states:

    Fatigue cracks and holes elongation were found on horizontal stabilizer fittings on F406 aeroplanes having accumulated more than 2 500 flight hours (FH).

    This condition, if not detected and corrected, could result in loss of structural integrity of the horizontal stabilizer fittings.

    To initially address this issue, DGAC France published AD 2001-161 to require repetitive visual inspections of the fittings, and, dependings on findings, replacement with a serviceable part.

    Since that AD was issued, during maintenance, cracks were found on a slice plate of horizontal stabilizer fittings. Consequently, ASI Aviation issued Service Bulletin (SB) CAB01-5 Revision 2 to provide instructions for additional eddy-current non-destructive test (NDT) inspections.

    For the reasons described above, this AD retains the requirements of DGAC France AD 2001-161, which is superseded, and requires the additional NDT inspections.

    The MCAI can be found in the AD docket on the Internet at https://www.regulations.gov/document?D=FAA-2016-8161-0002.

    Comments

    We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (81 FR 44244, July 7, 2016) or on the determination of the cost to the public.

    Conclusion

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

    • Are consistent with the intent that was proposed in the NPRM (81 FR 44244, July 7, 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 44244, July 7, 2016).

    Related Service Information Under 1 CFR Part 51

    We reviewed ASI Aviation Service Bulletin CAB01-5 Rev 2, dated December 3, 2015. The service information describes procedures for inspecting the horizontal stabilizer rear attach structure and the vertical fin rear spar attach structure for cracks and oversized bolt holes and making all necessary repairs and replacements. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section of this AD.

    Costs of Compliance

    We estimate that this AD will affect 7 products of U.S. registry. We also estimate that it will take about 20.5 work-hours per product to comply with the basic inspections requirements of this AD (18 work-hours to remove the horizontal stabilizer to gain access for the inspection and 2.5 work-hours to do the inspection). The average labor rate is $85 per work-hour.

    Based on these figures, we estimate the cost of the inspection on U.S. operators to be $12,197.50, or $1,742.50 per product.

    We estimate that it will take about 25 work-hours per product to reinstall the horizontal stabilizer after doing the inspection and any necessary repairs or replacements. Based on these figures, we estimate the cost of this action on U.S. operators to be $14,875, or $2,125 per product.

    In addition, we estimate any necessary corrective actions as follows:

    —Installing Service Kit SKRA406-11-Rev. 2 will take about 3 work-hours and require parts costing $65, for a cost of $320 per product. We have no way of determining the number of products that may need this action. —Installing Service Kit SK406-137 (which superseded Service Kit SKRA406-12-Rev. 2) will take about 20 work-hours and require parts costing $2,000, for a cost of $3,800 per product. We have no way of determining the number of products that may need this action. —Installing Service Kit SKRA406-13-Rev. 2 will take about 8 work-hours and require parts costing $1,800, for a cost of $2,480 per product. We have no way of determining the number of products that may need this action. Authority for This Rulemaking

    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.

    Regulatory Findings

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

    For the reasons discussed above, I certify this AD:

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

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

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

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

    Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-8161; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    Adoption of the Amendment

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

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

    49 U.S.C. 106(g), 40113, 44701.

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new AD: 2016-19-15 REIMS AVIATION S.A.: Amendment 39-18664; Docket No. FAA-2016-8161; Directorate Identifier 2016-CE-018-AD. (a) Effective Date

    This airworthiness directive (AD) becomes effective November 2, 2016.

    (b) Affected ADs

    None.

    (c) Applicability

    This AD applies to REIMS AVIATION S.A. F406 airplanes, serial numbers F406-0001 through F406-0098, certificated in any category.

    (d) Subject

    Air Transport Association of America (ATA) Code 55: Stabilizers.

    (e) Reason

    This AD was prompted by mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as cracks found in the horizontal stabilizer rear attach structure and the vertical fin rear spar attach structure. We are issuing this AD to prevent structural failure of the horizontal stabilizer and/or the vertical fin rear spar attach structure, which could result in damage to the airplane and loss of control.

    (f) Actions and Compliance

    Unless already done, do the following actions:

    (1) At whichever of the compliance times specified in paragraphs (f)(1)(i) through (iii) of this AD that occurs the latest after November 2, 2016 (the effective date of this AD), and repetitively thereafter every 2,400 hours time-in-service (TIS), do a visual and non-destructive test (NDT) inspection of the horizontal stabilizer splice plate assembly, part number (P/N) 6032183-1 or P/N 406-5518-32183-100 (as applicable), and the attach structure assembly P/N 6031210-1. Do the inspections following the Accomplishment Instructions in ASI Aviation Service Bulletin CAB01-5 Rev 2, dated December 3, 2015.

    (i) Before accumulating 2,500 hours TIS; or

    (ii) Within the next 100 hours TIS; or

    (iii) At the next 600-hour inspection.

    (2) During any inspection required by paragraph (f)(1) of this AD, if any oversized bolt hole or crack is detected on the horizontal stabilizer splice plate assembly or attach structure assembly, before further flight, repair or replace the affected part with a serviceable part following the Accomplishment Instructions in ASI Aviation Service Bulletin CAB01-5 Rev 2, dated December 3, 2015. After taking the necessary corrective action, continue with the repetitive inspection specified in paragraph (f)(1) of this AD.

    (g) Other FAA AD Provisions

    The following provisions also apply to this AD:

    (1) Alternative Methods of Compliance (AMOCs): The Manager, Standards Office, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. Send information to ATTN: Albert Mercado, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone: (816) 329-4119; fax: (816) 329-4090; email: [email protected] Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector (PI) in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO.

    (2) Airworthy Product: For any requirement in this AD to obtain corrective actions from a manufacturer or other source, use these actions if they are FAA-approved. Corrective actions are considered FAA-approved if they are approved by the State of Design Authority (or their delegated agent). You are required to assure the product is airworthy before it is returned to service.

    (3) Reporting Requirements: For any reporting requirement in this AD, a federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB Control Number. The OMB Control Number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to be approximately 5 minutes per response, including the time for reviewing instructions, completing and reviewing the collection of information. All responses to this collection of information are mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at: 800 Independence Ave SW., Washington, DC 20591, Attn: Information Collection Clearance Officer, AES-200.

    (h) Related Information

    Refer to MCAI European Aviation Safety Agency (EASA) AD No.: 2016-0101, dated 25 May 25, 2016, and ASI Aviation Service Kit SKRA40611-Rev. 2, dated December 3, 2015, ASI Service Kit SK406-137, dated December 3, 2015 (which superseded ASI Aviation Service Kit SKRA406-12-Rev. 2, dated December 3, 2015), and ASI Aviation Service Kit SKRA406-13-Rev. 2, dated December 3, 2015, for related information. You may examine the MCAI in the AD docket on the Internet at https://www.regulations.gov/document?D=FAA-2016-8161-0002.

    (i) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.

    (2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.

    (i) ASI Aviation Service Bulletin CAB01-5 Rev 2, dated December 3, 2015.

    (ii) Reserved.

    (3) For ASI Aviation service information identified in this AD, contact ASI Aviation, Aérodrome de Reims Prunay, 51360 Prunay, France; telephone: +33 3 26 48 46 84; fax: +33 3 26 49 18 57; email: [email protected]; Internet: http://asi-aviation.fr/page-Accueil.html.

    (4) You may view this service information at the FAA, Small Airplane Directorate, 901 Locust, Kansas City, Missouri 64106. For information on the availability of this material at the FAA, call (816) 329-4148. In addition, you can access this service information on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-8161.

    (5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Kansas City, Missouri, on September 16, 2016. Pat Mullen, Acting Manager, Small Airplane Directorate, Aircraft Certification Service.
    [FR Doc. 2016-22830 Filed 9-27-16; 8:45 am] BILLING CODE 4910-13-P
    SECURITIES AND EXCHANGE COMMISSION 17 CFR Part 275 [Release No. IA-4532; File No. S7-16-16] Political Contributions by Certain Investment Advisers: Ban on Third-Party Solicitation; Order With Respect to FINRA Rule 2030 AGENCY:

    Securities and Exchange Commission.

    ACTION:

    Order.

    SUMMARY:

    The Securities and Exchange Commission (“Commission” or “SEC”) is issuing an order finding that Financial Industry Regulatory Authority (“FINRA”) rule 2030 (the “FINRA Pay to Play Rule”) imposes substantially equivalent or more stringent restrictions on broker-dealers than rule 206(4)-5 (the “SEC Pay to Play Rule) under the Investment Advisers Act of 1940 (the “Advisers Act”) imposes on investment advisers and is consistent with the objectives of the SEC Pay to Play Rule.

    DATES:

    This Order was issued by the Commission on September 20, 2016.

    ADDRESSES:

    Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

    FOR FURTHER INFORMATION CONTACT:

    Sirimal R. Mukerjee, Senior Counsel, Melissa Roverts Harke, Senior Special Counsel, or Sara Cortes, Assistant Director, at (202) 551-6787 or [email protected], Investment Adviser Regulation Office, Division of Investment Management, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-8549.

    SUPPLEMENTARY INFORMATION:

    The SEC Pay to Play Rule [17 CFR 275.206(4)-5] under the Advisers Act [15 U.S.C. 80b] prohibits an investment adviser from providing advisory services for compensation to a government client for two years after the adviser or certain of its executives or employees (“covered associates”) make a contribution to certain elected officials or candidates. Rule 206(4)-5 also prohibits an adviser and its covered associates from providing or agreeing to provide, directly or indirectly, payment to any third-party for a solicitation of advisory business from any government entity on behalf of such adviser, unless such third-party is a “regulated person” (“third-party solicitor ban”). Rule 206(4)-5 defines a “regulated person” as an SEC-registered investment adviser, a registered broker or dealer subject to pay to play restrictions adopted by a registered national securities association that prohibit members from engaging in distribution or solicitation activities if certain political contributions have been made, or a registered municipal advisor subject to pay to play restrictions adopted by the Municipal Securities Rulemaking Board that prohibit members from engaging in distribution or solicitation activities if certain political contributions have been made. In addition, in order for a broker-dealer or municipal advisor to be a regulated person under rule 206(4)-5, the Commission must find, by order, that these pay to play rules impose substantially equivalent or more stringent restrictions on broker-dealers or municipal advisors than the SEC Pay to Play Rule imposes on investment advisers and are consistent with the objectives of the SEC Pay to Play Rule.

    On December 16, 2015, the Financial Industry Regulatory Authority (“FINRA”) proposed a rule change (Exchange Act Rel. No. 76767 (Dec. 24, 2015) [80 FR 81650 (Dec. 30, 2015)]) to adopt the FINRA Pay to Play Rule, which would establish pay to play rules for its member firms. On August 25, 2016, the Commission approved the FINRA Pay to Play Rule (Exchange Act Rel. No. 78683 (Aug. 25, 2016) [81 FR 60051 (Aug. 31, 2016)]).

    On August 25, 2016, the Commission also issued a notice of intent to issue an order (Investment Advisers Act Rel. No. 4511 (Aug. 25, 2016) [81 FR 60653 (Sept. 2, 2016)]) finding that the FINRA Pay to Play Rule imposes substantially equivalent or more stringent restrictions on brokers-dealers than the SEC Pay to Play Rule imposes on investment advisers and is consistent with the objectives of the SEC Pay to Play Rule. The notice gave interested persons an opportunity to request a hearing and stated that an order would be issued unless a hearing was ordered. The Commission has not received a request for a hearing.

    Accordingly, the Commission hereby finds that the FINRA Pay to Play Rule imposes substantially equivalent or more stringent restrictions on broker-dealers than the SEC Pay to Play Rule imposes on investment advisers and is consistent with the objectives of the SEC Pay to Play Rule.

    By the Commission.

    Dated: September 20, 2016. Brent J. Fields, Secretary.
    [FR Doc. 2016-23225 Filed 9-27-16; 8:45 am] BILLING CODE 8011-01-P
    SECURITIES AND EXCHANGE COMMISSION 17 CFR Part 275 [Release No. IA-4531; File No. S7-17-16] Political Contributions by Certain Investment Advisers: Ban on Third-Party Solicitation; Order With Respect to MSRB Rule G-37 AGENCY:

    Securities and Exchange Commission.

    ACTION:

    Order.

    SUMMARY:

    The Securities and Exchange Commission (“Commission” or “SEC”) is issuing an order finding that Municipal Securities Rulemaking Board (“MSRB”) rule G-37 (the “MSRB Pay to Play Rule”) imposes substantially equivalent or more stringent restrictions on municipal advisors than rule 206(4)-5 (the “SEC Pay to Play Rule) under the Investment Advisers Act of 1940 (the “Advisers Act”) imposes on investment advisers and is consistent with the objectives of the SEC Pay to Play Rule.

    DATES:

    This Order was issued by the Commission on September 20, 2016.

    ADDRESSES:

    Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

    FOR FURTHER INFORMATION CONTACT:

    Sirimal R. Mukerjee, Senior Counsel, Melissa Roverts Harke, Senior Special Counsel, or Sara Cortes, Assistant Director, at (202) 551-6787 or [email protected], Investment Adviser Regulation Office, Division of Investment Management, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-8549.

    SUPPLEMENTARY INFORMATION:

    The SEC Pay to Play Rule [17 CFR 275.206(4)-5] under the Advisers Act [15 U.S.C. 80b] prohibits an investment adviser from providing advisory services for compensation to a government client for two years after the adviser or certain of its executives or employees (“covered associates”) make a contribution to certain elected officials or candidates. Rule 206(4)-5 also prohibits an adviser and its covered associates from providing or agreeing to provide, directly or indirectly, payment to any third-party for a solicitation of advisory business from any government entity on behalf of such adviser, unless such third-party is a “regulated person” (“third-party solicitor ban”). Rule 206(4)-5 defines a “regulated person” as an SEC-registered investment adviser, a registered broker or dealer subject to pay to play restrictions adopted by a registered national securities association that prohibit members from engaging in distribution or solicitation activities if certain political contributions have been made, or a registered municipal advisor subject to pay to play restrictions adopted by the Municipal Securities Rulemaking Board (the “MSRB”) that prohibit members from engaging in distribution or solicitation activities if certain political contributions have been made. In addition, in order for a broker-dealer or municipal advisor to be a regulated person under rule 206(4)-5, the Commission must find, by order, that these pay to play rules impose substantially equivalent or more stringent restrictions on broker-dealers or municipal advisors than the SEC Pay to Play Rule imposes on investment advisers and are consistent with the objectives of the SEC Pay to Play Rule.

    On December 16, 2015, the MSRB filed with the Commission proposed amendments to the MSRB Pay to Play Rule to extend its application to municipal advisors, which the Commission published for notice and comment on December 23, 2015 pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the “Exchange Act”) and rule 19b-4 thereunder (Exchange Act Rel. No. 76763 (Dec. 23, 2015) [80 FR 81710 (Dec. 30, 2015)]). On February 17, 2016, the MSRB published a regulatory notice announcing that the proposed amendments to the MSRB Pay to Play Rule were deemed approved by the Commission under section 19(b)(2)(D) of the Exchange Act on February 13, 2016 and that the effective date of the rule was August 17, 2016.

    On August 25, 2016, the Commission issued a notice of intent to issue an order (Investment Advisers Act Rel. No. 4512 (Aug. 25, 2016) [81 FR 60651 (Sept. 2, 2016)]) finding that the MSRB Pay to Play Rule imposes substantially equivalent or more stringent restrictions on municipal advisors than the SEC Pay to Play Rule imposes on investment advisers and is consistent with the objectives of the SEC Pay to Play Rule. The notice gave interested persons an opportunity to request a hearing and stated that an order would be issued unless a hearing was ordered. The Commission has not received a request for a hearing.

    Accordingly, the Commission hereby finds that the MSRB Pay to Play Rule imposes substantially equivalent or more stringent restrictions on municipal advisors than the SEC Pay to Play Rule imposes on investment advisers and is consistent with the objectives of the SEC Pay to Play Rule.

    By the Commission.

    Dated: September 20, 2016. Brent J. Fields, Secretary.
    [FR Doc. 2016-23224 Filed 9-27-16; 8:45 am] BILLING CODE 8011-01-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 101 [Docket No. FDA-2016-D-2335] Use of the Term “Healthy” in the Labeling of Human Food Products: Guidance for Industry; Availability AGENCY:

    Food and Drug Administration, HHS.

    ACTION:

    Notification of availability.

    SUMMARY:

    The Food and Drug Administration (FDA or we) is announcing the availability of a guidance for industry entitled “Use of the Term ‘Healthy’ in the Labeling of Human Food Products: Guidance for Industry.” The guidance advises manufacturers who wish to use the implied nutrient content claim “healthy” to label their food products as provided by our regulations. More specifically, the guidance advises food manufacturers of our intent to exercise enforcement discretion with respect to the implied nutrient content claim “healthy” on foods that have a fat profile of predominantly mono and polyunsaturated fats, but do not meet the regulatory definition of “low fat”, or that contain at least 10 percent of the Daily Value (DV) per reference amount customarily consumed (RACC) of potassium or vitamin D.

    DATES:

    Submit either electronic or written comments on FDA guidances at any time.

    ADDRESSES:

    You may submit comments as follows:

    Electronic Submissions

    Submit electronic comments in the following way:

    Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. Comments submitted electronically, including attachments, to http://www.regulations.gov will be posted to the docket unchanged. Because your comment will be made public, you are solely responsible for ensuring that your comment does not include any confidential information that you or a third party may not wish to be posted, such as medical information, your or anyone else's Social Security number, or confidential business information, such as a manufacturing process. Please note that if you include your name, contact information, or other information that identifies you in the body of your comments, that information will be posted on http://www.regulations.gov.

    • If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).

    Written/Paper Submissions

    Submit written/paper submissions as follows:

    Mail/Hand delivery/Courier (for written/paper submissions): Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    • For written/paper comments submitted to the Division of Dockets Management, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”

    Instructions: All submissions received must include the Docket No. FDA-2016-D-2335 for “Use of the Term ‘Healthy’ in the Labeling of Human Food Products: Guidance for Industry.” Received comments will be placed in the docket and, except for those submitted as “Confidential Submissions,” publicly viewable at http://www.regulations.gov or at the Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday.

    • Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on http://www.regulations.gov. Submit both copies to the Division of Dockets Management. If you do not wish your name and contact information to be made publicly available, you can provide this information on the cover sheet and not in the body of your comments and you must identify this information as “confidential.” Any information marked as “confidential” will not be disclosed except in accordance with 21 CFR 10.20 and other applicable disclosure law. For more information about FDA's posting of comments to public dockets, see 80 FR 56469, September 18, 2015, or access the information at: http://www.fda.gov/regulatoryinformation/dockets/default.htm.

    Docket: For access to the docket to read background documents or the electronic and written/paper comments received, go to http://www.regulations.gov and insert the docket number, found in brackets in the heading of this document, into the “Search” box and follow the prompts and/or go to the Division of Dockets Management, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    Submit written requests for single copies of the guidance to the Office of Nutrition and Food Labeling, Center for Food Safety and Applied Nutrition (HFS-830), Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740. Send two self-addressed adhesive labels to assist that office in processing your request. See the SUPPLEMENTARY INFORMATION section for electronic access to the guidance.

    FOR FURTHER INFORMATION CONTACT:

    Vincent de Jesus, Center for Food Safety and Applied Nutrition (HFS-830), Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, 240-402-1450.

    SUPPLEMENTARY INFORMATION:

    I. Background

    We are announcing the availability of a guidance for industry entitled “Use of the Term ‘Healthy’ in the Labeling of Human Food Products: Guidance for Industry.” We are issuing this guidance consistent with our good guidance practices regulation (21 CFR 10.115). The guidance represents the current thinking of 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 alternative approach if it satisfies the requirements of the applicable statutes and regulations.

    Under section 403(r)(1)(A) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 343(r)(1)(A)), a food is misbranded if it bears claims, either express or implied, that characterize the level of a nutrient which is of a type required to be declared in nutrition labeling unless the claim is made in accordance with a regulatory definition established by FDA (see section 403(r)(2) of the FD&C Act). Our food labeling regulations at § 101.65(d) (21 CFR 101.65(d)) provide the regulatory definition for use of the term “healthy” or related terms (such as “health,” “healthful,” “healthfully,” “healthfulness,” “healthier,” “healthiest,” “healthily,” and “healthiness”) as an implied nutrient content claim on the label or in labeling of a food. This definition establishes the following nutrient conditions for bearing a “healthy” claim: (1) Specific criteria for nutrients to limit in the diet, such as total fat, saturated fat, cholesterol, and sodium; and (2) requirements for nutrients to encourage in the diet, including vitamin A, vitamin C, calcium, iron, protein, and fiber. The criteria are linked to elements in the Nutrition Facts label and serving size regulations (see §§ 101.9 and 101.12). The nutrient criteria to use the claim can vary for different food categories (e.g., fruits and vegetables, or seafood and game meat) (§ 101.65(d)(2)).

    In the Federal Register of May 27, 2016, we issued final rules updating the Nutrition Facts label and serving size information for packaged foods to reflect new scientific information, including the link between diet and chronic diseases such as obesity and heart disease (see 81 FR 33742, “Food Labeling: Revision of the Nutrition and Supplement Facts Labels”; 81 FR 34000 “Food Labeling: Serving Sizes of Foods That Can Reasonably Be Consumed At One Eating Occasion; Dual-Column Labeling; Updating, Modifying, and Establishing Certain Reference Amounts Customarily Consumed; Serving Size for Breath Mints; and Technical Amendments”). Updates to the Nutrition Facts label include changes in the individual nutrients that must be declared and also changes to the DV of other individual nutrients, reflecting changes in recommended intake levels, based on current science.

    Because the science supporting public health recommendations for intake of various nutrients has evolved, as reflected in the updated Nutrition Facts Label, FDA intends to exercise enforcement discretion with respect to some of the criteria for bearing the implied nutrient content claim “healthy.” In particular, we intend to exercise enforcement discretion with respect to the current requirement that any food bearing the nutrient content claim “healthy” meet the low fat requirement provided that: (1) The amounts of mono- and polyunsaturated fats are declared on the label; and (2) the amounts declared constitute the majority of the fat content.

    Similarly, we intend to exercise enforcement discretion with respect to the current requirement that any food bearing the nutrient content claim “healthy” contain at least 10 percent of the DV per RACC of vitamin A, vitamin C, calcium, iron, protein, or fiber, if the food instead contains at least 10 percent of the DV per RACC of potassium or vitamin D.

    We are issuing this guidance without prior public comment under 21 CFR 10.115(g)(2) because we have determined that prior public participation is not feasible or appropriate, as this guidance implements a temporary enforcement policy while we update our regulations to be consistent with the final Nutrition Facts Label rule. However, as with all Agency guidances, the public may comment on the guidance at any time.

    II. Electronic Access

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

    Dated: September 23, 2016. Leslie Kux, Associate Commissioner for Policy.
    [FR Doc. 2016-23367 Filed 9-27-16; 8:45 am] BILLING CODE 4164-01-P
    DEPARTMENT OF THE TREASURY 31 CFR Part 34 RIN 1505-AC52 Gulf Coast Restoration Trust Fund AGENCY:

    Office of the Fiscal Assistant Secretary, Treasury.

    ACTION:

    Interim Final Rule.

    SUMMARY:

    The Department of the Treasury is issuing this Interim Final Rule to change when the statutory three percent cap on administrative expenses is applied to the Gulf Coast Ecosystem Restoration Council (Council) under the Resources and Ecosystem Sustainability, Tourist Opportunities, and Revived Economies of the Gulf Coast States Act of 2012 (RESTORE Act or Act).

    DATES:

    Effective date for the Interim Final Rule: September 28, 2016. Written comments on the Interim Final Rule must be received on or before: November 14, 2016.

    ADDRESSES:

    Treasury invites comments on the topic addressed in this Interim Final Rule. Comments may be submitted by any of the following methods:

    Electronic Submission of Comments: Interested persons may submit comments electronically through the Federal eRulemaking Portal at http://www.regulations.gov. Electronic submission of comments allows the commenter maximum time to prepare and submit a comment, ensures timely receipt, and enables the Department to make them available to the public. Comments submitted electronically through the http://www.regulations.gov Web site can be viewed by other commenters and interested members of the public.

    Mail: Send to Department of the Treasury, Attention Janet Vail, Office of Gulf Coast Restoration, Office of the Fiscal Assistant Secretary, Room 2112; 1500 Pennsylvania Avenue NW., Washington, DC 20220.

    In general, Treasury will post all comments to http://www.regulations.gov without change, including any business or personal information provided, such as names, addresses, email addresses, or telephone numbers. Treasury also will make such comments available for public inspection and copying in Treasury's Library, Department of the Treasury, 1500 Pennsylvania Avenue NW., Washington, DC 20220, on official business days between the hours of 10:00 a.m. and 5:00 p.m. Eastern Time. All comments received, including attachments and other supporting materials, will be part of the public record and subject to public disclosure. You should submit only information that you wish to make publicly available.

    FOR FURTHER INFORMATION CONTACT:

    Janet Vail, Office of Gulf Coast Restoration, [email protected] or 202-622-6873.

    SUPPLEMENTARY INFORMATION:

    I. Background

    The Act makes funds available for the restoration and protection of the Gulf Coast region, and certain programs with respect to the Gulf of Mexico, through a trust fund in the Treasury of the United States known as the Gulf Coast Restoration Trust Fund (trust fund). The trust fund holds 80 percent of the administrative and civil penalties paid after July 6, 2012, under the Federal Water Pollution Control Act in connection with the Deepwater Horizon Oil Spill. The Act gives Treasury several roles in administering the trust fund. One role is to establish procedures, in consultation with the Departments of the Interior and Commerce, concerning the expenditure of amounts from the trust fund and compliance measures for the programs and activities carried out under the Act. On December 14, 2015, Treasury promulgated final regulations on the RESTORE Act, 80 FR 77239, which became effective on February 12, 2016.

    The Act established an independent Federal entity, the Gulf Coast Ecosystem Restoration Council (Council), to administer certain components of the Act, including the Comprehensive Plan Component. The Council is comprised of members from six Federal agencies or departments and the five Gulf Coast States. One of the Federal members, currently the Secretary of Agriculture, serves as Chairperson of the Council. The authority for the Council terminates on the date all funds in the trust fund have been expended.

    The Council is responsible for developing and implementing a Comprehensive Plan to restore and protect the natural resources, ecosystems, fisheries, marine and wildlife habitats, beaches, and coastal wetlands of the Gulf Coast region. To carry out the Comprehensive Plan, the Act makes available to the Council, 30 percent of penalties deposited into the trust fund plus one half of interest earned on trust fund investments.

    The Act provides that “[o]f the amounts received by the Council . . . , not more than 3 percent may be used for administrative expenses, including staff,” to carry out the Comprehensive Plan. 33 U.S.C. 1321(t)(2)(B)(iii).

    The Act does not specify when the statutory three percent cap on administrative expenses is applied to the Council.1 In its final regulations, Treasury specified that “the three percent limit is applied to the total amount of funds received by the Council, beginning with the first fiscal year the Council receives funds through the end of the fourth, or most recent fiscal year, whichever is later.” 31 CFR 34.204(b). The final regulations recognized that as a new independent Federal entity, the Council's startup administrative expenses would be greater in its initial years, and as a result the final regulations apply the three percent cap for administrative expenses at the end of the fourth fiscal year, and at the end of each fiscal year thereafter.

    1 Treasury considered whether the three percent limitation applies at any time, but determined that Congress did not provide for such a requirement. Specifically, the Act was enacted as part of Moving Ahead for Progress in the 21st Century Act (MAP-21). MAP-21 contains non-RESTORE Act sections that include limitations that apply “at any time.” See MAP-21 § 100121. Treasury believes that if Congress had intended the three percent limitation on administrative expenses to apply “at any time,” Congress would have included those words in the RESTORE Act just as it did elsewhere in MAP-21. Moreover, such a requirement would undermine the RESTORE Act's purpose of ensuring effective and long-term planning in the restoration of the Gulf Coast.

    However, in the Supplementary Information section of the final regulations, Treasury stated that it “will propose to cap the Council's administrative expenses at three percent of amounts the Council receives under the Comprehensive Plan Component before the termination of the Trust Fund,” and open this proposal for a 45 day comment period.2 Under this formulation, the application of the three percent limit to the Council's administrative expenses would be extended from the end of the fourth fiscal year to the date that the trust fund terminates. Treasury expects that the trust fund will terminate after 2032. Treasury included this language because the Council expressed a need for more flexibility on when the statutory three percent cap on administrative expenses will be applied. Specifically, Treasury understands that the Council anticipated its annual administrative expenses would remain relatively constant, while the amount of funds received and transferred by the Council for projects undertaken by its members may vary considerably from one year to the next, depending on the Council's funded priorities list. The Council also anticipated that its members would seek to fund large-scale projects under the Comprehensive Plan Component, but anticipated that such large-scale projects would occur in later years after sufficient civil penalties had been deposited into the trust fund. Treasury supports the Council's goal of restoring and protecting the Gulf Coast region under the Comprehensive Plan Component, and is amending section 34.204(b), with a 45 day comment period.

    2 80 FR 77239, 77241.

    II. This Interim Rule

    For the reasons described above, Treasury is amending when the statutory three percent cap on administrative expenses is applied to the Council under 31 CFR 34.204(b). This Interim Final Rule provides that the Council's three percent limit applies to the total amount the Council will receive under the Comprehensive Plan Component and ensures that the Council will not exceed the statutory three percent cap before the termination of the trust fund. Specifically, the Interim Final Rule provides that amounts used by the Council for administrative expenses may not at any time exceed three percent of the total of the amounts received by the Council from the trust fund and the amounts in the trust fund that are allocated to, but not yet received by, the Council. Treasury believes that this Interim Final Rule balances the Council's need for greater flexibility with compliance with the statutory limitation. The Interim Final Rule amends only section 34.204(b) pertaining to when the three percent cap on administrative expenses is measured. It does not amend the definition of “administrative expenses” found at section 34.2. Nor does it amend section 34.204(a) regarding limitations on administrative costs associated with grants from the Council under the Comprehensive Plan Component.3

    3 The final regulations define the term “administrative expenses.” 31 CFR 34.2. Note that the final regulations distinguish “administrative expenses” from “administrative costs,” also defined in 31 CFR 34.2.

    Treasury requests public comment on the amendment to section 34.204(b).

    III. Procedural Requirements A. Regulatory Flexibility Act

    Because no notice of proposed rulemaking is required, the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do not apply.

    B. Regulatory Planning and Review (Executive Orders 12866 and 13563)

    The amendment to the regulation is a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Accordingly, it has been reviewed by the Office of Management and Budget.

    C. Administrative Procedure Act

    The Administrative Procedure Act (5 U.S.C. 551 et seq.) (APA) provides that agencies issue regulations with prior notice and an opportunity for public comment and that rules should become effective 30 days after publication in the Federal Register. See 5 U.S.C. 553. The APA, however, allows agencies to dispense with these procedures when the agency finds that good cause exists. In this case, Treasury finds that good cause exists to dispense with prior notice and comment procedures and make this rule immediately effective. As discussed earlier in the preamble, the revision in this Interim Final Rule amends when the Council calculates the statutorily required three percent administrative expense limitation, and does not impose any new obligations on the Act's eligible recipients. While Treasury had previously indicated it would issue a proposed rule, Treasury has determined that the revision will have minimal, and more than likely no, effect on the Act's eligible recipients. Nor does the Interim Final Rule impact the receipt and deposit into the trust fund of the civil penalties which are generally fixed by consent decree. Finally, the revision will help ensure that the Council can continue to function effectively by supporting predictable, long term financial planning and operations. As a result, Treasury has determined that prior notice and comment and a delayed effective date are unnecessary and that good cause exists to make this Interim Final Rule effective immediately.

    List of Subjects in 31 CFR Part 34

    Coastal zone, Fisheries, Grant programs, Grants administration, Intergovernmental relations, Marine resources, Natural resources, Oil pollution, Research, Science and technology, Trusts, Wildlife.

    For the reasons set forth herein, the Department of the Treasury amends 31 CFR part 34 to read as follows:

    PART 34—RESOURCES AND ECOSYSTEMS SUSTAINABILITY, TOURIST OPPORTUNITIES, AND REVIVED ECONOMIES OF THE GULF COAST STATES 1. The authority citation for part 34 continues to read as follows: Authority:

    31 U.S.C. 301; 31 U.S.C. 321; 33 U.S.C. 1251 et seq.

    2. Revise paragraph (b) of § 34.204 to read as follows:
    § 34.204 Limitations on administrative costs and administrative expenses.

    (b) Of the amounts received by the Council under the Comprehensive Plan Component, not more than three percent may be used for administrative expenses. The three percent limit is applied to the amounts it receives under the Comprehensive Plan Component before termination of the Trust Fund. Amounts used for administrative expenses may not at any time exceed three percent of the total of the amounts received by the Council and the amounts in the Trust Fund that are allocated to, but not yet received by, the Council under § 34.103.

    David A. Lebryk, Fiscal Assistant Secretary.
    [FR Doc. 2016-23348 Filed 9-27-16; 8:45 am] BILLING CODE 4810-25-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket Number USCG-2016-0883] RIN 1625-AA00 Safety Zone; Main Branch of the Chicago River, Chicago, IL AGENCY:

    Coast Guard, DHS.

    ACTION:

    Temporary final rule.

    SUMMARY:

    The Coast Guard is establishing a temporary safety zone on the Main Branch of the Chicago River, Chicago, IL. This action is necessary and intended to ensure safety of life on the navigable waters of the United States immediately prior to, during, and after the filming of a motion picture from a low flying helicopter. Entry of vessels or persons into this zone is prohibited unless specifically authorized by the Captain of the Port Lake Michigan.

    DATES:

    This rule will be effective from 6 p.m. on October 1, 2016 to 11 p.m. on October 2, 2016.

    ADDRESSES:

    To view documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov, type USCG-2016-0883 in the “SEARCH” box and click “SEARCH.” Click on Open Docket Folder on the line associated with this rule.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions about this rule, call or email LT Lindsay Cook, Marine Safety Unit Chicago, U.S. Coast Guard; telephone (630) 986-2155, email [email protected].

    SUPPLEMENTARY INFORMATION: I. Table of Abbreviations CFR Code of Federal Regulations DHS Department of Homeland Security FR Federal Register NPRM Notice of proposed rulemaking § Section U.S.C. United States Code II. Background Information and Regulatory History

    The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because doing so would be impracticable. The final details for this event were not known to the Coast Guard until there was insufficient time remaining before the event to publish a NPRM. Thus, delaying the effective date of this rule to wait for a comment period to run would be impracticable because it would inhibit the Coast Guard's ability to protect the public and vessels from the hazards associated with the filming from a low flying helicopter on October 1, 2016, or an alternate date of October 2, 2016.

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

    III. Legal Authority and Need for Rule

    The legal basis for the rule is the Coast Guard's authority to establish safety zones: 33 U.S.C. 1231; 33 CFR 1.05-1, 160.5; Department of Homeland Security Delegation No. 0170.1.

    On October 1, 2016 or an alternate date of October 2, 2016, filming from a low flying helicopter will take place on the Main Branch of the Chicago River between the Franklin-Orleans Street Highway Bridge and the Michigan Avenue Highway Bridge in Chicago, IL. The Captain of the Port Lake Michigan has determined that the filming from a low flying helicopter will pose a significant risk to public safety and property. Such hazards include rotor turbulence, strong gusts of air, and close proximity of any vessel on the Chicago River.

    IV. Discussion of the Rule

    With the aforementioned hazards in mind, the Captain of the Port Lake Michigan has determined that this temporary safety zone is necessary to ensure the safety of the public during the filming from a low flying helicopter on the Main Branch of the Chicago River. This safety zone will be enforced intermittently from 6 p.m. to 11 p.m. on October 1, 2016, or an alternate date of October 2, 2016. This zone will encompass all waters of the Main Branch of the Chicago River between the Franklin-Orleans Street Highway Bridge and the Michigan Avenue Highway Bridge in Chicago, IL.

    Entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Lake Michigan, or a designated on-scene representative. The Captain of the Port or a designated on-scene representative may be contacted via VHF Channel 16.

    V. Regulatory Analyses

    We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.

    A. Regulatory Planning and Review

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

    We conclude that this rule is not a significant regulatory action because we anticipate that it will have minimal impact on the economy, will not interfere with other agencies, will not adversely alter the budget of any grant or loan recipients, and will not raise any novel legal or policy issues. The safety zone created by this rule will be relatively small and enforced intermittently on October 1, 2016, or an alternate date of October 2, 2016 from 6 p.m. to 11 p.m. Under certain conditions, moreover, vessels may still transit through the safety zone when permitted by the Captain of the Port.

    B. Impact on Small Entities

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

    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered the impact of this temporary rule on small entities. This rule will affect the following entities, some of which might be small entities: The owners or operators of vessels intending to transit on a portion of the Main Branch of the Chicago River on October 1, 2016, or an alternate date of October 2, 2016 from 6 p.m. to 11 p.m.

    This safety zone will not have a significant economic impact on a substantial number of small entities for the reasons cited in the Regulatory Planning and Review section. Additionally, before the enforcement of the zone, we will issue local Broadcast Notice to Mariners and Public Notice of Safety Zone so vessel owners and operators can plan accordingly.

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

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

    C. Collection of Information

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

    D. Federalism and Indian Tribal Governments

    A rule has implications for federalism under Executive order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive order 13132.

    Also, this rule does not have tribal implications under Executive order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section above.

    E. Unfunded Mandates Reform Act

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

    F. Environment

    We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves the establishment of a safety zone for filming from a low flying helicopter on the Main Branch of the Chicago River in Chicago, IL. It is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under ADDRESSES. We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

    G. Protest Activities

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

    List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.

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

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

    33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.

    2. Add § 165.T09-0883 to read as follows:
    § 165.T09-0883 Safety Zone; Main Branch of the Chicago River, Chicago, IL.

    (a) Location. All waters of the Main Branch of the Chicago River between the Franklin-Orleans Street Highway Bridge and the Michigan Avenue Highway Bridge.

    (b) Enforcement Period. This rule will be enforced intermittently on October 1, 2016 from 6 p.m. to 11 p.m. or an alternate date of October 2, 2016 from 6 p.m. to 11 p.m.

    (c) Regulations. (1) In accordance with the general regulations in § 165.23 of this part, entry into, transiting, or anchoring within this safety zone is prohibited unless authorized by the Captain of the Port Lake Michigan or a designated on-scene representative.

    (2) This safety zone is closed to all vessel traffic, except as may be permitted by the Captain of the Port Lake Michigan or a designated on-scene representative.

    (3) The “on-scene representative” of the Captain of the Port Lake Michigan is any Coast Guard commissioned, warrant or petty officer who has been designated by the Captain of the Port Lake Michigan to act on his or her behalf.

    (4) Vessel operators desiring to enter or operate within the safety zone shall contact the Captain of the Port Lake Michigan or an on-scene representative to obtain permission to do so. The Captain of the Port Lake Michigan or an on-scene representative may be contacted via VHF Channel 16. Vessel operators given permission to enter or operate in the safety zone must comply with all directions given to them by the Captain of the Port Lake Michigan, or an on-scene representative.

    Dated: September 21, 2016. A.B. Cocanour, Captain, U.S. Coast Guard, Captain of the Port, Lake Michigan.
    [FR Doc. 2016-23318 Filed 9-27-16; 8:45 am] BILLING CODE 9110-04-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R06-OAR-2014-0221; FRL-9951-54-Region 6] Approval and Promulgation of Implementation Plans; Oklahoma; Revisions to Major New Source Review Permitting AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Final rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is approving severable portions of revisions to the Oklahoma New Source Review (NSR) State Implementation Plan (SIP) submitted by the State of Oklahoma on June 24, 2010; July 16, 2010; December 27, 2010; February 6, 2012; and January 18, 2013. These revisions update the Prevention of Significant Deterioration (PSD) and Nonattainment NSR (NNSR) permit programs to be consistent with federal permitting requirements and make general updates to the Oklahoma SIP to support major NSR permitting. We are taking this final action under section 110, parts C and D of the Clean Air Act (CAA).

    DATES:

    This rule is effective on October 28, 2016.

    ADDRESSES:

    The EPA has established a docket for this action under Docket ID No. EPA-R06-OAR-2014-0221. All documents in the docket are listed on the http://www.regulations.gov Web site. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through http://www.regulations.gov or in hard copy at the EPA Region 6, 1445 Ross Avenue, Suite 700, Dallas, Texas 75202-2733.

    FOR FURTHER INFORMATION CONTACT:

    Ms. Adina Wiley, (214) 665-2115, [email protected].

    SUPPLEMENTARY INFORMATION:

    Throughout this document “we,” “us,” or “our” means the EPA.

    I. Background

    The background for this action is discussed in detail in our June 30, 2016 proposal at 81 FR 42587. In that document we proposed to approve revisions to the General Provisions in the Oklahoma SIP submitted on July 16, 2010 and December 27, 2010. These revisions included updates to the definitions and units, abbreviations, and acronyms used throughout the Oklahoma SIP; provisions establishing the ability to incorporate by reference federal requirements; revisions to the PSD increments regulated under the Oklahoma SIP; and updates to the Emission Inventory provisions. We also proposed to approve revisions to the Oklahoma PSD and NNSR Programs that had been submitted on June 24, 2010; July 16, 2010; February 6, 2012; and January 18, 2013. These proposed revisions had been submitted by the State of Oklahoma to address amendments to the federal PSD and NNSR regulations made in the following final rules:

    • NSR Reform Rule (67 FR 800186, December 31, 2002) and (68 FR 63021, November 7, 2003);

    • Implementation of the 8-hour Ozone (O3) NAAQS-Phase 2; Final Rule to Implement Certain Aspects of the 1990 Amendments Relating to NSR and PSD as They Apply to Carbon Monoxide (CO), PM and O3 NAAQS (70 FR 71612, November 29, 2005);

    • PSD and NNSR: Reasonable Possibility in Recordkeeping (72 FR 72607, December 21, 2007);

    • NSR PM2.5 Implementation Rule (73 FR 28321, May 16, 2008);

    • PSD for PM2.5—Increments, Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC) (75 FR 64864, October 20, 2010);

    • GHG Tailoring Rule (75 FR 31514, June 3, 2010) (specific to PSD permitting only); and

    • PSD and NNSR: Reconsideration of Inclusion of Fugitive Rule (76 FR 17548, March 30, 2011).

    The EPA provided a 30-day comment period on our proposed action. We did not receive any comments on our proposed action. As such, we are finalizing as proposed.

    II. Final Action

    We are approving the following severable revisions to the Oklahoma SIP submitted on June 24, 2010; July 16, 2010; December 27, 2010; February 6, 2012; and January 18, 2013. The revisions were adopted and submitted in accordance with the requirements of the CAA and the EPA's regulations regarding SIP development at 40 CFR part 51. Additionally, we have determined that the submitted revisions to the Oklahoma PSD and NNSR programs are consistent with our major source permitting regulations at 40 CFR 51.160-51.166 and the associated policy and guidance. Therefore, under section 110 and parts C and D of the Act, the EPA approves into the Oklahoma SIP the following revisions:

    Table 1—Revisions to the Oklahoma SIP Section Title Effective date Submittal date OAC 252:100-1-1 General Provisions, Purpose June 12, 2003 July 16, 2010. OAC 252:100-1-2 General Provisions, Statutory definitions June 12, 2003 July 16, 2010. OAC 252:100-1-3 General Provisions, Definitions June 12, 2003
  • July 1, 2008
  • July 1, 2009
  • June 15, 2006
  • July 1, 2011
  • July 1, 2012
  • July 16, 2010.
  • July 16, 2010.
  • July 16, 2010.
  • July 16, 2010.
  • February 6, 2012.
  • January 18, 2013.
  • OAC 252:100-1-4 General Provisions, Units, Abbreviations and acronyms June 12, 2003
  • July 1, 2009
  • July 1, 2011
  • July 16, 2010.
  • July 16, 2010.
  • February 6, 2012.
  • OAC 252:100-2-1 Incorporation by Reference (IBR) Purpose July 1, 2012 January 18, 2013. OAC 252:100-2-3 IBR, Incorporation by Reference July 1, 2012 January 18, 2013. OAC 252:100-3-4 Air Quality Standards and Increments, Significant Deterioration Increments June 15, 2005
  • July 1, 2011
  • December 27, 2010.
  • February 6, 2012.
  • OAC 252:100, Appendix P Regulated Air Pollutants June 15, 2007 July 16, 2010. OAC 252:100, Appendix Q Incorporation by Reference July 1, 2009
  • July 1, 2012
  • July 16, 2010.
  • January 18, 2013.
  • OAC 252:100-5-1.1 Definitions June 15, 2007 July 16, 2010. OAC 252:100-5-2.1 Emission Inventory June 11, 2004
  • June 15, 2007
  • July 16, 2010.
  • July 16, 2010.
  • OAC 252:100-8-1.1 General Provisions, Definitions June 15, 2006 July 16, 2010. OAC 252:100-8-30 Prevention of Significant Deterioration (PSD) Requirements for Attainment Areas, Applicability June 1, 2009
  • June 15, 2006
  • June 24, 2010.
  • July 16, 2010.
  • OAC 252:100-8-31 PSD, Definitions June 1, 2009
  • June 15, 2006
  • July 1, 2011
  • July 1, 2012
  • June 24, 2010.
  • July 16, 2010.
  • February 6, 2012.
  • January 18, 2013.
  • OAC 252:100-8-32 PSD, Source Applicability Determination Revoked June 15, 2006 Revoked July 16, 2010. OAC 252:100-8-32.1 PSD Ambient Air Increments and Ceilings June 15, 2006 July 16, 2010. OAC 252:100-8-32.2 PSD Exclusion from Increment Consumption June 15, 2006 July 16, 2010. OAC 252:100-8-32.3 PSD Stack Heights June 15, 2006 July 16, 2010. OAC 252:100-8-33 PSD, Exemptions June 1, 2009
  • June 15, 2006
  • July 1, 2011
  • July 1, 2012
  • June 24, 2010.
  • July 16, 2010.
  • February 6, 2012.
  • January 18, 2013.
  • OAC 252:100-8-34 PSD, Control Technology Review June 15, 2006 July 16, 2010. OAC 252:100-8-35 PSD Air Quality Impact Evaluation June 15, 2006
  • July 1, 2011
  • July 16, 2010.
  • February 6, 2012.
  • OAC 252:100-8-35.1 PSD Source Information June 15, 2006 July 16, 2010. OAC 252:100-8-35.2 PSD Additional Impact Analyses June 15, 2006 July 16, 2010. OAC 252:100-8-36 PSD Source Impacting Class I Areas June 15, 2006 July 16, 2010. OAC 252:100-8-36.2 PSD Source Obligation June 15, 2006 July 16, 2010. OAC 252:100-8-37 PSD, Innovative Control Technology June 1, 2009
  • June 15, 2006
  • June 24, 2010.
  • July 16, 2010.
  • OAC 252:100-8-38 PSD, Actuals PAL June 1, 2009
  • June 15, 2006
  • June 24, 2010.
  • July 16, 2010.
  • OAC 252:100-8-39 PSD Severability June 15, 2006 July 16, 2010. OAC 252:100-8-50 Majors Affecting Nonattainment Areas (NNSR), Applicability June 1, 2009
  • June 15, 2006
  • June 24, 2010.
  • July 16, 2010.
  • OAC 252:100-8-50.1 NNSR, Incorporation by Reference June 1, 2009
  • June 15, 2006
  • July 1, 2011
  • June 24, 2010.
  • July 16, 2010.
  • February 6, 2012.
  • OAC 252:100-8-51 NNSR, Definitions June 1, 2009
  • June 15, 2006
  • July 1, 2011
  • June 24, 2010.
  • July 16, 2010.
  • February 6, 2012.
  • OAC 252:100-8-51.1 NNSR Emission reductions and offsets June 15, 2006
  • July 1, 2011
  • July 1, 2012
  • July 16, 2010.
  • February 6, 2012.
  • January 18, 2013.
  • OAC 252:100-8-52 NNSR, Applicability determination for sources in attainment areas causing or contributing to NAAQS violations June 1, 2009
  • June 15, 2006
  • July 1, 2011
  • June 24, 2010.
  • July 16, 2010.
  • February 6, 2012.
  • OAC 252:100-8-53 NNSR, Exemptions June 1, 2009
  • June 15, 2006
  • June 24, 2010.
  • July 16, 2010.
  • OAC 252:100-8-54 NNSR Requirements for sources located in nonattainment areas June 15, 2006 July 16, 2010. OAC 252:100-8-54.1 NNSR, Ozone and PM10 precursors June 1, 2009 June 24, 2010. OAC 252:100-8-55 NNSR, Source Obligation June 1, 2009
  • June 15, 2006
  • June 24, 2010.
  • July 16, 2010.
  • OAC 252:100-8-56 NNSR, Actuals PAL June 1, 2009
  • June 15, 2006
  • June 24, 2010.
  • July 16, 2010.
  • OAC 252:100-8-57 NNSR Severability June 15, 2006 July 16, 2010.

    As a result of this final approval of the revisions to the Oklahoma SIP addressing the GHG Step 1 permitting requirements, we are removing the provisions at 40 CFR 52.1929(c), under which the EPA narrowed the applicability of the Oklahoma PSD program to regulate sources consistent with federal requirements because these provisions at 40 CFR 52.1929(c) are no longer necessary.

    The EPA finds that the February 6, 2012, revisions to the Oklahoma NNSR program address all required NNSR elements for the implementation of the 1997 and 2006 PM2.5 NAAQS. We note that the Oklahoma NNSR program does not include regulation of VOCs and ammonia as PM2.5 precursors. However, as section 189(e) of the Act requires regulation of PM2.5 precursors that significantly contribute to PM2.5 levels “which exceed the standard in the area” and Oklahoma does not have a designated PM2.5 nonattainment area, the revisions addressing only SO2 and NOX are not inconsistent with the requirements of the CAA. In the event that an area is designated nonattainment for the 2012 PM2.5 NAAQS, or any other future PM2.5 NAAQS, Oklahoma will have a deadline under section 189(a)(2) of the CAA to make a submission addressing the statutory requirements as to that area, including the requirements in section 189(e) that apply to the regulation of PM2.5 precursors.

    The EPA is also finalizing a ministerial correction to 40 CFR 52.1920(c) to remove a duplicate entry for the SIP approval of OAC 252:100-5-1. We are removing the first listing of this section; we retain the identical entry in numerical order under OAC, Title 252, Subchapter 5—Registration, Emissions Inventory, and Annual Operating Fees.

    III. Incorporation by Reference

    In this rule, we are finalizing regulatory text that includes incorporation by reference. In accordance with the requirements of 1 CFR 51.5, we are finalizing the incorporation by reference of the revisions to the Oklahoma regulations as described in the Final Action section above. We have made, and will continue to make, these documents generally available electronically through www.regulations.gov and/or in hard copy at the EPA Region 6 office.

    IV. Statutory and Executive Order Reviews

    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, the 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, 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 November 28, 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).)

    List of Subjects in 40 CFR Part 52

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

    Dated: September 21, 2016. Ron Curry, Regional Administrator, Region 6.

    40 CFR part 52 is amended as follows:

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

    42 U.S.C. 7401 et seq.

    Subpart LL—Oklahoma 2. In § 52.1920(c), the table titled “EPA Approved Oklahoma Regulations” is amended by: a. Revising the entries for 252:100-1-1, 252:100-1-2, 252:100-1-3, 252:100-3-4, 252:100-5-1.1, 252:100-5-2.1, 252:100-8-1.1, 252:100-8-30, 252:100-8-31, 252:100-8-33, 252:100-8-34, 252:100-8-35, 252:100-8-36, 252:100-8-37, 252:100-8-50, 252:100-8-51, 252:100-8-52, 252:100-8-53, and 252:100-8-54; b. Adding a centered heading titled “Subchapter 2: Incorporation by Reference” and entries for 252:100-2-1 and 252:100-2-3 in numerical order; c. Adding entries in numerical order for 252:100-1-4, 252:100-8-32.1, 252:100-8-32.2, 252:100-8-32.3, 252:100-8-35.1, 252:100-8-35.2, 252:100-8-36.2, 252:100-8-38, 252:100-8-39, 252:100-8-50.1, 252:100-8-51.1, 252:100-8-54.1, 252:100-8-55, 252:100-8-56, 252:100-8-57, 252:100 Appendix P, and 252:100 Appendix Q; and d. Removing the first centered heading titled “Subchapter 5. Registration, Emissions Inventory and Annual Operating Fees”, the first entry for 252:100-5-1, and the entry for 252:100-8-32.

    The additions and revisions read as follows:

    § 52.1920 Identification of plan.

    (c) * * *

    EPA Approved Oklahoma Regulations State citation Title/subject State
  • effective date
  • EPA approval date Explanation
    *         *         *         *         *         *         * Chapter 100 (OAC 252:100). Air Pollution Control Subchapter 1. General Provisions 252:100-1-1 Purpose 6/12/2003 9/28/2016, [Insert Federal Register citation] 252:100-1-2 Statutory definitions 6/12/2003 9/28/2016, [Insert Federal Register citation] 252:100-1-3 Definitions 7/1/2012 9/28/2016, [Insert Federal Register citation] SIP does not include revisions to the definition of “carbon dioxide equivalent emissions” for the GHG Biomass Deferral, effective on 7/1/2012 and submitted on 1/13/2013. 252:100-1-4 Units, abbreviations and acronyms 7/1/2011 9/28/2016, [Insert Federal Register citation] Subchapter 2: Incorporation by Reference 252:100-2-1 Purpose 7/1/2012 9/28/2016, [Insert Federal Register citation] 252:100-2-3 Incorporation by reference 7/1/2012 9/28/2016, [Insert Federal Register citation] Subchapter 3: Air Quality Standards and Increments *         *         *         *         *         *         * 252:100-3-4 Significant deterioration increments 7/1/2011 9/28/2016, [Insert Federal Register citation] Subchapter 5: Registration, Emissions Inventory and Annual Operating Fees *         *         *         *         *         *         * 252:100-5-1.1 Definitions 6/15/2007 9/28/2016, [Insert Federal Register citation] *         *         *         *         *         *         * 252:100-5-2.1 Emission inventory 6/15/2007 9/28/2016, [Insert Federal Register citation] *         *         *         *         *         *         * Subchapter 8: Permits for Part 70 Sources Part 1. General Provisions *         *         *         *         *         *         * 252:100-8-1.1 Definitions 6/15/2006 9/28/2016, [Insert Federal Register citation] *         *         *         *         *         *         * Part 7. Prevention of Significant Deterioration (PSD) Requirements for Attainment Areas 252:100-8-30 Applicability 6/1/2009 9/28/2016, [Insert Federal Register citation] 252:100-8-31 Definitions 7/1/2012 9/28/2016, [Insert Federal Register citation] SIP does not include paragraph (E) of the definition of “subject to regulation”, effective on 7/1/2011 and submitted 2/6/2012 for Step 2 GHG permitting.
  • SIP does not include revisions to the definition of “subject to regulation” paragraph (B)(i) for the GHG Biomass Deferral, effective on 7/1/2012 and submitted on 1/13/2013.
  • 252:100-8-32.1 Ambient air increments and ceilings 6/15/2006 9/28/2016, [Insert Federal Register citation] 252:100-8-32.2 Exclusion from increment consumption 6/15/2006 9/28/2016, [Insert Federal Register citation] 252:100-8-32.3 Stack heights 6/15/2006 9/28/2016, [Insert Federal Register citation] 252:100-8-33 Exemptions 7/1/2012 9/28/2016, [Insert Federal Register citation] SIP does not include OAC 252:100-8-33(c)(1)(C) effective on 7/1/2011 and submitted 2/6/2012. 252:100-8-34 Control technology review 6/15/2006 9/28/2016, [Insert Federal Register citation] 252:100-8-35 Air quality impact evaluation 7/1/2011 9/28/2016, [Insert Federal Register citation] SIP does not include OAC 252:100-8-35(a)(2) effective on 7/1/2011 and submitted 2/6/2012. 252:100-8-35.1 Source information 6/15/2006 9/28/2016, [Insert Federal Register citation] 252:100-8-35.2 Additional impact analyses 6/15/2006 9/28/2016, [Insert Federal Register citation] 252:100-8-36 Source impacting Class I areas 6/15/2006 9/28/2016, [Insert Federal Register citation] 252:100-8-36.2 Source obligation 6/15/2006 9/28/2016, [Insert Federal Register citation] 252:100-8-37 Innovative control technology 6/1/2009 9/28/2016, [Insert Federal Register citation] 252:100-8-38 Actuals PALs 6/1/2009 9/28/2016, [Insert Federal Register citation] 252:100-8-39 Severability 6/15/2006 9/28/2016, [Insert Federal Register citation] Part 9. Major Sources Affecting Nonattainment Areas 252:100-8-50 Applicability 6/1/2009 9/28/2016, [Insert Federal Register citation] 252:100-8-50.1 Incorporation by reference 7/1/2011 9/28/2016, [Insert Federal Register citation] 252:100-8-51 Definitions 7/1/2011 9/28/2016, [Insert Federal Register citation] 252:100-8-51.1 Emission reductions and offsets 7/1/2012 9/28/2016, [Insert Federal Register citation] 252:100-8-52 Applicability determination for sources in attainment areas causing or contributing to NAAQS violations 7/1/2011 9/28/2016, [Insert Federal Register citation] 252:100-8-53 Exemptions 6/1/2009 9/28/2016, [Insert Federal Register citation] 252:100-8-54 Requirements for sources located in nonattainment areas 6/15/2006 9/28/2016, [Insert Federal Register citation] 252:100-8-54.1 Ozone and PM10 precursors 6/1/2009 9/28/2016, [Insert Federal Register citation] 252:100-8-55 Source obligation 6/1/2009 9/28/2016, [Insert Federal Register citation] 252:100-8-56 Actuals PALs 6/1/2009 9/28/2016, [Insert Federal Register citation] 252:100-8-57 Severability 6/15/2006 9/28/2016, [Insert Federal Register citation] *         *         *         *         *         *         * Appendices for OAC 252: Chapter 100 *         *         *         *         *         *         * 252:100, Appendix P Regulated Air Pollutants 6/15/2007 9/28/2016, [Insert Federal Register citation] 252:100, Appendix Q Incorporation by Reference 7/1/2012 9/28/2016, [Insert Federal Register citation] *         *         *         *         *         *         *
    § 52.1929 [Amended]
    3. Section 52.1929 is amended by removing paragraph (c).
    [FR Doc. 2016-23189 Filed 9-27-16; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R04-OAR-2016-0315; FRL-9952-72-Region 4] Air Plan Approval; Georgia; Prong 4—2008 Ozone, 2010 NO2, SO2, and 2012 PM2.5 Correction

    In rule document 2016-22887 beginning on page 65899 in the issue of Monday, September 26, 2016, make the following correction:

    On page 65899, in the second column, under the DATES heading, in the first through third lines of that paragraph, ” [insert date 30 days after date of publication in the Federal Register].” should read “October 26, 2016”.

    [FR Doc. C1-2016-22887 Filed 9-27-16; 8:45 am] BILLING CODE 1301-00-D
    FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 90 [PS Docket No. 15-199; FCC 16-113] Railroad Police Officers To Access Public Safety Interoperability and Mutual Aid Channels AGENCY:

    Federal Communications Commission.

    ACTION:

    Final rule.

    SUMMARY:

    In this document, the Federal Communications Commission (Commission) provides railroad police officers access to the public safety interoperability channels. In this document, we amend our rules to permit railroad police officers to use public safety interoperability channels to communicate with public safety entities already authorized to use those channels. Specifically, we permit railroad police officers empowered to carry out law enforcement functions to use public safety interoperability channels in the VHF (150-174 MHz, and 220-222 MHz, UHF (450-470 MHz), 700 MHz narrowband (769-775/799-805 MHz)5 and 800 MHz National Public Safety Planning Advisory Committee (NPSPAC) bands (806-809/851-854 MHz). Allowing railroad police officers to use these channels will promote interoperability, facilitate improved emergency response in railroad-related emergencies, and streamline access to these channels for emergency public safety communications.

    DATES:

    Effective October 28, 2016, except for section 90.20(a)(2)(xiv) which contain new or modified information collection requirements that require approval by the Office of Management and Budget under the Paperwork Reduction Act of 1995. The Federal Communications Commission will publish a document in the Federal Register announcing such approval and effective date.

    FOR FURTHER INFORMATION CONTACT:

    John Evanoff, Policy and Licensing Division, Public Safety and Homeland Security Bureau, (202) 418-0848 or [email protected]

    SUPPLEMENTARY INFORMATION:

    This is a summary of the Commission's Report and Order in PS Docket No. 15-199, FCC 16-113, released on August 23, 2016. The document is available for download at http://fjallfoss.fcc.gov/edocs_public/. The complete text of this document is also available for inspection and copying during normal business hours in the FCC Reference Information Center, Portals II, 445 12th Street SW., Room CY-A257, Washington, DC 20554. To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to [email protected] or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (TTY).

    In the Report and Order we amend the Commission's rules to permit railroad police officers to use public safety interoperability channels to communicate with public safety entities already authorized to use those channels. Specifically, we permit railroad police officers empowered to carry out law enforcement functions to use public safety interoperability channels in the VHF (150-174 MHz, and 220-222 MHz, UHF (450-470 MHz), 700 MHz narrowband (769-775/799-805 MHz) and 800 MHz National Public Safety Planning Advisory Committee (NPSPAC) bands (806-809/851-854 MHz). Allowing railroad police officers to use these channels will promote interoperability, facilitate improved emergency response in railroad-related emergencies, and streamline access to these channels for emergency public safety communications.

    Procedural Matters A. Final Regulatory Flexibility Analysis

    As required by the Regulatory Flexibility Act of 1980, as amended (RFA) the Commission prepared this Final Regulatory Flexibility Analysis (FRFA) of the possible significant economic impact on a substantial number of small entities by the policies and rules adopted in this Report and Order. The Commission will send a copy of the Report and Order, including this FRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In addition, the Report and Order and FRFA (or summaries thereof) will be published in the Federal Register.

    B. Need for, and Objectives of, the Proposed Rules

    The Report and Order amends the Part 90 rules to facilitate railroad police access to public safety interoperability channels. Specifically, in response to a Petition for Rulemaking filed by the National Public Safety Telecommunications Council (NPSTC), the Commission issued a Notice of Proposed Rulemaking seeking comment on expanding eligibility to allow railroad police officers as defined by Federal Railroad Administration (FRA) to operate on public safety interoperability channels in the VHF, (including 220-222 MHz), UHF, 700 MHz narrowband and 800 MHz bands. Commenters were supportive of the NPRM proposals. Therefore, in light of the record, the Report and Order amends the Part 90 eligibility and licensing rules applicable to public safety interoperability spectrum.

    As discussed in Sections D and E of this FRFA, the Commission has endeavored to keep the burdens associated with these rule changes as simple and minimal as possible. The Report and Order requires employers of railroad police officers to obtain authorization to operate on the 700 MHz interoperability channels as required by sections 90.523 and 90.525 of the Commission's rules and section 337(f)(1) of the Communications Act of 1934, as amended. Further, the Report and Order, requires employers of railroad police officers seeking to license the interoperability channels to obtain frequency coordination and submit a license application in order to operate base and control stations on interoperability channels. Additionally, the Report and Order adopts several alternatives to licensing fixed infrastructure on the interoperability channels in order to minimize the burden on railroad police and provide flexibility in achieving interoperability with public safety, as discussed in Section E of the FRFA. Finally, we update section 90.20 of the Commission's rules to explicitly identify the nationwide interoperability channels to facilitate interoperability among Federal, State, Local, Tribal and Railroad Police entities.

    C. Estimate of the Number of Small Entities to Which the Proposed Rules Will Apply

    The RFA directs agencies to provide a description of and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” “Small governmental jurisdiction” generally means “governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than 50,000.” The official count of local governments in the United States for 2012 was 90,056, comprising 38,910 general-purpose governments and 51,146 special-purpose governments. General purpose governments include those classified as counties, municipalities, and townships. For this category, census data for 2012 show that there were approximately 37,132 counties, cities and towns that have populations of fewer than 50,000. In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA. Below, we describe and estimate the number of small entities that may be affected by the rules changes adopted in this Report and Order.

    Private Land Mobile Radio Licensees. PLMR systems serve an essential role in a range of industrial, business, land transportation, and public safety activities. These radios are used by companies of all sizes operating in all U.S. business categories, and are often used in support of the licensee's primary (non-telecommunications) business operations. Because of the vast array of PLMR users, which includes railroads, the Commission has not developed a small business size standard specifically applicable to PLMR users. The SBA rules, however, contain a definition for Wireless Telecommunications Carriers (except Satellite) which encompasses business entities engaged in radiotelephone communications employing no more than 1,500 persons. For this category, census data for 2007 show that there were 11,163 establishments that operated for the entire year. Of this total, 10,791 establishments had employment of 999 or fewer employees and 372 had employment of 1000 employees or more. Under this category and the associated small business size standard, the Commission estimates that the majority of wireless telecommunications carriers (except satellite) are small entities. The Commission, however, does not require PLMR licensees to disclose information about number of employees, so the Commission does not have information that could be used to determine how many PLMR licensees constitute small entities under this definition. We note that PLMR licensees generally use the licensed facilities in support of other business activities, and therefore, it would also be helpful to assess PLMR licensees under the standards applied to the particular industry subsector to which the licensee belongs.

    Public Safety Radio Pool Licensees. As a general matter, Public Safety Radio Pool licensees include police, fire, local government, forestry conservation, highway maintenance, and emergency medical services. Spectrum in the 700 MHz band for public safety services is governed by 47 U.S.C. 337. Non-Federal governmental entities may be eligible licensees for these services. All governmental entities with populations of less than 50,000 fall within the definition of a small entity. According to the Commission's records, there were (1) 1,318 public safety licensees licensed on at least one of the VHF and UHF public safety interoperability channels; (2) 59 public safety licensees licensed on at least one of the narrowband interoperability channels in the public safety band between 764-776 MHz/794-806 MHz; and (3) 4,715 public safety licensees operating in the public safety band between 806-809/851-854 MHz (NPSPAC band). In total there are 6,092 public safety entities, including small governmental jurisdictions, licensed to operate on at least one of the interoperability channels.

    Class I, Class II, and Class III Railroads. The Report and Order expands eligibility to operate on the interoperability channels to include railroad police employed by a Class I, II, or III railroad, Amtrak, the Alaska Railroad and passenger transit lines as defined by the Surface Transportation Board (STB). The SBA stipulates “size standards” for small entities. It provides that the largest a for-profit railroad business firm may be and still be classified as a “small entity” is 1,500 employees for “Line-Haul” railroads, and 500 employees for “Short-Line” railroads. SBA size standards may be altered by Federal agencies in consultation with SBA, and in conjunction with public comment. Pursuant to the authority provided to it by SBA, the FRA has published a final policy, which formally establishes small entities as railroads that meet the line haulage revenue requirements of a “Class III railroad.” This threshold is based on the s STB's threshold for a Class III railroad carrier, which is adjusted by applying the railroad revenue deflator adjustment. Consistent with FRA's approach, we are using this definition in this Report and Order. Approximately 700 railroads meet the criteria for small entity. We are using this as our estimate of the universe of small entities that could be directly impacted by the rule.

    The Report and Order expands eligibility to permit railroad police officers as defined by the FRA to operate on the interoperability channels. The primary beneficiaries of this increased flexibility would be railroads, including small railroads, and PLMR licensees, including small governmental jurisdictions, that have a need to interoperate with each other. The FCC notes that the requirement that railroads obtain governmental authorization to operate on the 700 MHz interoperability channels is statutorily required and the Commission is without authority to exempt railroads from this requirement. Additionally, railroad entities may be required to obtain frequency coordination and submit a license application on FCC Form 601 in order to license, construct and operate base and control stations on the interoperability channels. The Report and Order provides additional flexibility that may reduce the impact on railroad police officers operating on the interoperability channels. Those alternatives are discussed in Section E.

    D. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements

    This Report and Order contains modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be submitted to the Office of Management and Budget (OMB) for review under Section 3507(d) of the PRA. The Report and Order provides that railroad police officers who are certified and/or commissioned as a police officer under the laws of any state, in accordance with the regulations issued by the Secretary of the U.S. Department of Transportation and recognized by the Federal Railroad Administration (FRA) should be eligible to operate on the nationwide interoperability channels.

    The Report and Order requires employers of railroad police officers to obtain governmental authorization to operate on the 700 MHz interoperability channels as required by sections 90.523 and 90.525 of the Commission's rules and section 337(f)(1) of the Communications Act of 1934, as amended. In accordance with the Paperwork Reduction Act, the Office of Management and Budget (OMB) has already approved the collection of state and local government certifications from non-governmental organizations that seek to operate on the 700 MHz narrowband channels. See ICR Reference Number: 201403-3060-018, OMB Control No. 3060-0805. We do not change the wording of the OMB-approved collection in any material or substantive manner. Only the number of respondents would change as we would expect that employers of railroad police officers will comply with these existing statutory requirements and regulations, which are the minimum necessary to ensure effective use of the spectrum and to minimize interference potential to public safety entities, including State, local and tribal governments. Thus, requiring railroad police to obtain governmental authorization in order to operate on the 700 MHz interoperability channels would increase the number of respondents by approximately 763 entities. See ICR Reference Number: 201308-2130-009, OMB Control No. 2130-0537.

    The Report and Order permits the licensing of base and control stations on the interoperability channels. The licensing of base and control stations requires frequency coordination (i.e.), employers of railroad police would be required to submit a license application on Form 601 demonstrating evidence of frequency coordination). Similarly, mobile-only authorizations require frequency coordination and submission of FCC form 601. Railroad entities seeking licenses in the Industrial Land Transportation and Business Pool are required to obtain coordination from certain frequency coordinators specified in section 90.35 of the Commission's rules. However, the interoperability channels are subject to frequency coordination from the four certified public safety frequency coordinators specified in section 90.20(c). OMB has already approved the information collection requirements, including the frequency coordination requirement, associated with Form 601. See ICR Reference Number: 201311-3060-018, OMB Control No. 3060-0798. We do not make any substantive or material changes to the wording of the existing information collection. Instead, we amend the Part 90 eligibility rules to allow employers of railroad police officers to license the interoperability channels, thus increasing the number of respondents subject to the existing information collections by approximately 763 entities.

    Additionally, the 700 MHz interoperability channels are administered by State entities and/or regional planning committees (RPC). OMB has already approved the information collections associated with obtaining State/RPC concurrence to operate on the 700 MHz interoperability channels. See ICR Reference Number: 201404-3060-023, OMB Control No. 3060-1198. We do not make any substantive or material changes to the wording of this existing information collection but we allow railroad police to operate on these interoperability channels, thus increasing the number of respondents subject to the existing information collections by approximately 763 entities.

    The Report and Order adopts less burdensome alternatives to licensing, constructing and operating base stations and control stations on the interoperability channels. Specifically, the Report and Order allows railroad police officers to (1) operate mobile and portable stations on these channels under a “blanket” licensing approach; (2) allows public safety licensees to share their facilities with railroad police pursuant to a sharing agreement under section 90.179 of the Commission's Rules; and (3) permits railroad police officers to operate mobile stations under a public safety licensee's authorization pursuant to section 90.421, and therefore would not impose any new or modified information collections requirements. However, allowing public safety entities to “share” their facilities with railroad police would require reducing such an arrangement into writing as required by section 90.179. OMB has already approved the information collection requirements in section 90.179 and we do not make any substantive or material changes to the wording of the existing information collection. See ICR Reference Number: 200111-3060-016, OMB Control No. 3060-0262. Thus, the number of respondents would increase by approximately 763 entities.

    The Commission believes that applying the same information collection rules equally to public safety and railroad police entities in this context will promote interoperability and advance Congressional objectives. The Commission does not believe that the costs and/or administrative burdens associated with the rules will unduly burden small entities. The rule revisions the Commission adopts benefit public safety and railroad police entities by giving them more flexibility, and more options for gaining access to interoperability spectrum.

    However, in the interest of ensuring railroad police coordinate with state and local public safety entities, we require railroad police to obtain concurrence from the relevant state or state-designated interoperability coordinator before operating mobiles or portables on the VHF, (including 220-222 MHz), UHF, 700 MHz narrowband interoperability and 800 MHz mutual aid channels. Employers of railroad police officers shall execute a memorandum of understanding with the state interoperability coordinator. Similarly, we require employers of railroad police officers seeking to license the below-470 MHz interoperability channels to obtain concurrence from the relevant state interoperability coordinator. To facilitate interoperability coordination in the bands below 470 MHz, we provide states the option of administering the below-470 MHz interoperability channels. States may delegate the administration of the below-470 MHz interoperability channels to the existing 700 MHz and 800 MHz Regional Planning Committees.

    Finally, the rule amendment proposed relative to section 90.20(i) has been analyzed with respect to the Paperwork Reduction Act of 1980 and found to contain no new or modified form, information collection and/or record keeping, labeling, disclosure, or record retention requirements; and will not increase burden hours imposed on the public.

    E. Steps Taken To Minimize Significant Economic Impact on Small Entities, and Significant Alternatives Considered

    The RFA requires an agency to describe any significant, specifically small business, alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance and reporting requirements under the rule for small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof for small entities. We have evaluated our rule changes in this Report and Order in the context of small business entities and find no alternatives, to the benefit of small entities, that would achieve our goals of facilitating interoperability between public safety entities and railroad police officers and efficient use of nationwide interoperability spectrum. Additionally, the rules adopted in this Report and Order are deregulatory in nature and consistent with Federal railroad interoperability mandates. Accordingly, the rule changes minimize any significant economic impact on small entities.

    The Report and Order provides railroad police four alternatives that minimize the impact on small entities, including small railroads. First, the Report and Order permits “blanket licensing”, an approach that allows railroad police officers to operate on the interoperability channels provided their railroad employer already holds a license for PLMR spectrum and subject to coordination with the relevant state interoperability coordinator. Second, the Report and Order permits issuing mobile-only licenses that allow railroad police officers to operate mobiles on the interoperability channels without having to construct and operate base and control stations. Third, the Report and Order clarifies that section 90.421 of the Commission's rules allows railroad police officers to operate mobiles under the license of public safety licensees. Fourth, the Report and Order clarifies that section 90.179 of the Commission's rules permits public safety entities to “share” their facilities with railroad police. No significant alternative was presented in the comments.

    Finally, the Report and Order amends section 90.20 of the Commission's rules to explicitly identify the nationwide interoperability channels i.e. the VHF (including 220-222 MHz), UHF and 700 MHz narrowband, and on the 800 MHz mutual aid channels. We believe that flexible licensing policies are necessary to encourage the use of the most spectrally efficient technology to meet user-defined needs. Recognizing the budgetary constraints that small public safety entities face, we provide railroad police officers and public safety a flexible licensing approach to facilitate interoperability.

    F. Rules That May Duplicate, Overlap, or Conflict With the Proposed Rules

    None.

    G. Paperwork Reduction Act of 1995 Analysis

    This document contains new and modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be submitted to the Office of Management and Budget (OMB) for review under section 3507(d) of the PRA. OMB, the general public, and other Federal agencies will be invited to comment on the new or modified information collection requirements contained in this proceeding. In addition, we note that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we previously sought specific comment on how the Commission might further reduce the information collection burden for small business concerns with fewer than 25 employees.

    In this present document, we have assessed the effects of expanding railroad police eligibility to access the interoperability channels (i.e. (1) revising the number of respondents subject to certain existing information collection requirements and (2) requiring employers of railroad police officers to enter into memorandum of understanding with state interoperability coordinators), and find that businesses with fewer than 25 employees will not be unduly burdened.

    H. Congressional Review Act

    The Commission will send a copy of this Order on Reconsideration to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

    Ordering Clauses

    Accordingly, it is ordered, pursuant to sections 1, 2, 4(i), 4(j), 301, 303, 316, and 337 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 154(j), 301, 303, 316, and 337, that this Report and Order is hereby adopted.

    It is further ordered that part 90 of the Commission's rules, 47 CFR part 90, is amended, effective October 28, 2016, except that those amendments which contain new or modified information collection requirements that require approval by the Office of Management and Budget under the Paperwork Reduction Act will become effective after the Commission publishes a notice in the Federal Register announcing such approval and the relevant effective date.

    It is further ordered that the Final Regulatory Flexibility Analysis is adopted.

    It is further ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Report and Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

    List of Subjects in 47 CFR part 90

    Radio.

    Federal Communications Commission. Marlene H. Dortch, Secretary. Final Rules

    For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 90 as follows:

    PART 90—PRIVATE LAND MOBILE RADIO SERVICES 1. The authority citation for part 90 continues to read as follows: Authority:

    Sections 4(i), 11, 303(g), 303(r), and 332(c)(7) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 161, 303(g), 303(r), 332(c)(7).

    2. Section 90.20 is amended by adding paragraphs (a)(2)(xiv) and (i) to read as follows:
    § 90.20 Public Safety Pool.

    (a) * * *

    (2) * * *

    (xiv)(A) Railroad police officers are a class of users eligible to operate on the nationwide interoperability and mutual aid channels listed in 90.20(i) provided their employer holds a Private Land Mobile Radio (PLMR) license of any radio category, including Industrial/Business (I/B). Eligible users include full and part time railroad police officers, Amtrak employees who qualify as railroad police officers under this subsection, Alaska Railroad employees who qualify as railroad police officers under this subsection, freight railroad employees who qualify as railroad police officers under this subsection, and passenger transit lines police officers who qualify as railroad police officers under this subsection. Railroads and railroad police departments may obtain licenses for the nationwide interoperability and mutual aid channels on behalf of railroad police officers in their employ. Employers of railroad police officers must obtain concurrence from the relevant state interoperability coordinator or regional planning committee before applying for a license to the Federal Communications Commission or operating on the interoperability and mutual aid channels.

    (1) Railroad police officer means a peace officer who is commissioned in his or her state of legal residence or state of primary employment and employed, full or part time, by a railroad to enforce state laws for the protection of railroad property, personnel, passengers, and/or cargo.

    (2) Commissioned means that a state official has certified or otherwise designated a railroad employee as qualified under the licensing requirements of that state to act as a railroad police officer in that state.

    (3) Property means rights-of-way, easements, appurtenant property, equipment, cargo, facilities, and buildings and other structures owned, leased, operated, maintained, or transported by a railroad.

    (4) Railroad means each class of freight railroad (i.e. Class I, II, III); Amtrak, Alaska Railroad, commuter railroads and passenger transit lines.

    (5) The word state, as used herein, encompasses states, territories and the District of Columbia.

    (B) Eligibility for licensing on the 700 MHz narrowband interoperability channels is restricted to entities that have as their sole or principal purpose the provision of public safety services.

    (i) Nationwide interoperability channels. The nationwide interoperability and mutual aid channels are listed below for the VHF, (including 220-222 MHz), UHF, 700 MHz and 800 MHz bands. (See §§ 90.20(d)(80), 90.531(b)(1), 90.617(a)(1) and 90.720). Any Part 90 public safety eligible entity holding a Part 90 license may operate hand-held and vehicular mobile units on these channels without needing a separate authorization. Base stations or control stations operating on these channels must be licensed separately: Encryption may not be used on any of the interoperability or mutual aid calling channels.

    VHF interoperability channel
  • (MHz)
  • Purpose
    151.1375 MHz (base/mobile) Tactical. 154.4525 MHz (base/mobile) Tactical. 155.7525 MHz (base/mobile) Calling. 158.7375 MHz (base/mobile) Tactical. 159.4725 MHz (base/mobile) Tactical.
    VHF mutual aid channel
  • (MHz)
  • Purpose
    220.8025 MHz (base/mobile) Tactical. 220.8075 MHz (base/mobile) Tactical. 220.8125 MHz (base/mobile) Tactical. 220.8175 MHz (base/mobile) Tactical. 220.8225 MHz (base/mobile) Tactical. 220.8275 MHz (base/mobile) Tactical. 220.8325 MHz (base/mobile) Tactical. 220.8375 MHz (base/mobile) Tactical. 220.8425 MHz (base/mobile) Tactical. 220.8475 MHz (base/mobile) Tactical.
    UHF interoperability channel
  • (MHz)
  • Purpose
    453.2125 MHz (base/mobile) Calling. 458.2125 MHz (mobile) 453.4625 MHz (base/mobile) Tactical. 458.4625 MHz (mobile) 453.7125 MHz (base/mobile) Tactical. 458.7125 MHz (mobile) 453.8625 MHz (base/mobile) Tactical. 458.8625 MHz (mobile)
    700 MHz interoperability channel
  • (MHz)
  • Purpose
    769.14375 MHz (base/mobile) Tactical. 799.14375 MHz (mobile) 769.24375 MHz (base/mobile) Calling. 799.24375 MHz (mobile) 769.39375 MHz (base/mobile) Tactical. 769.39375 MHz (mobile) 769.49375 MHz (base/mobile) Tactical. 799.49375 MHz (mobile) 769.64375 MHz (base/mobile) Tactical. 799.64375 MHz (mobile) 769.74375 MHz (base/mobile) Tactical. 799.74375 MHz (mobile) 769.99375 MHz (base/mobile) Tactical. 799.99375 MHz (mobile) 770.14375 MHz (base/mobile) Tactical. 800.14375 MHz (mobile) 770.24375 MHz (base/mobile) Tactical. 800.24375 MHz (mobile) 770.39375 MHz (base/mobile) Tactical. 800.39375 MHz (mobile) 770.49375 MHz (base/mobile) Tactical. 800.49375 MHz (mobile) 770.64375 MHz (base/mobile) Tactical. 800.64375 MHz (mobile) 770.89375 MHz (base/mobile) Tactical. 800.89375 MHz (mobile) 770.99375 MHz (base/mobile) Tactical. 800.99375 MHz (mobile) 773.00625 MHz (base/mobile) Tactical. 803.00625 MHz (mobile) 773.10625 MHz (base/mobile) Tactical. 803.10625 MHz (mobile) 773.25625 MHz (base/mobile) Calling. 803.25625 MHz (mobile) 773.35625 MHz (base/mobile) Tactical. 803.35625 MHz (mobile) 773.50625 MHz (base/mobile) Tactical. 803.50625 MHz (mobile) 773.60625 MHz (base/mobile) Tactical. 803.60625 MHz (mobile) 773.75625 MHz (base/mobile) Tactical. 803.75625 MHz (mobile) 773.85625 MHz (base/mobile) Tactical. 803.85625 MHz (mobile) 774.00625 MHz (base/mobile) Tactical. 804.00625 MHz (mobile) 774.10625 MHz (base/mobile) Tactical. 804.10625 MHz (mobile) 774.25625 MHz (base/mobile) Tactical. 804.25625 MHz (mobile) 774.35625 MHz (base/mobile) Tactical. 804.35625 MHz (mobile) 774.50625 MHz (base/mobile) Tactical. 804.50625 MHz (mobile) 774.60625 MHz (base/mobile) Tactical. 804.60625 MHz (mobile) 774.85625 MHz (base/mobile) Tactical. 804.85625 MHz (mobile)
    800 MHz mutual aid channel
  • (MHz)
  • Purpose
    851.0125 MHz (base/mobile) Calling. 806.0125 MHz (mobile) 851.5125 MHz (base/mobile) Tactical. 806.5125 MHz (mobile) 852.0125 MHz (base/mobile) Tactical. 807.0125 MHz (mobile) 852.5125 MHz (base/mobile) Tactical. 807.0125 MHz (mobile) 853.0125 MHz (base/mobile) Tactical. 808.0125 MHz (mobile)
    3. Section 90.720 is amended by revising paragraph (a) introductory text, and paragraphs (a)(2) and (b) to read as follows:
    § 90.720 Channels available for public safety/mutual aid.

    (a) Part 90 licensees who meet the eligibility criteria of §§ 90.20(a)(1), 90.20(a)(2)(i), 90.20(a)(2)(ii), 90.20(a)(2)(iii), 90.20(a)(2)(iv), 90.20(a)(2)(vii), 90.20(a)(2)(ix), 90.20(a)(2)(xiii) or 90.20(a)(2)(xiv) are authorized by this rule to use mobile and/or portable units on Channels 161-170 throughout the United States, its territories, and the District of Columbia to transmit:

    (2) Communications to facilitate interoperability among entities eligible under §§ 90.20(a)(1), 90.20(a)(2)(i), 90.20(a)(2)(ii), 90.20(a)(2)(iii), 90.20(a)(2)(iv), 90.20(a)(2)(vii), 90.20(a)(2)(ix), 90.20(a)(2)(xiii) and 90.20(a)(2)(xiv); or

    (b) Any Government entity and any non-Government entity eligible to obtain a license under §§ 90.20(a)(1), 90.20(a)(2)(i), 90.20(a)(2)(ii), 90.20(a)(2)(iii), 90.20(a)(2)(iv), 90.20(a)(2)(vii), 90.20(a)(2)(ix), 90.20(a)(2)(xiii) or 90.20(a)(2)(xiv) is also eligible to obtain a license for base/mobile operations on Channels 161 through 170. Base/mobile or base/portable communications on these channels that do not relate to the immediate safety of life or to communications interoperability among the above-specified entities, may only be conducted on a secondary non-interference basis to such communications.

    [FR Doc. 2016-23206 Filed 9-27-16; 8:45 am] BILLING CODE 6712-01-P
    81 188 Wednesday, September 28, 2016 Proposed Rules FEDERAL HOUSING FINANCE AGENCY 12 CFR Part 1263 RIN 2590-AA85 Federal Home Loan Bank Membership for Non-Federally-Insured Credit Unions AGENCY:

    Federal Housing Finance Agency.

    ACTION:

    Notice of proposed rulemaking; request for comments.

    SUMMARY:

    The Federal Housing Finance Agency (FHFA or Agency) is proposing to amend its regulations governing Federal Home Loan Bank (Bank) membership to implement section 82001 of the Fixing America's Surface Transportation Act, which amended section 4(a) of the Federal Home Loan Bank Act (Bank Act) to authorize certain credit unions without Federal share insurance to become Bank members. This proposed rule also would make appropriate conforming changes to FHFA's membership regulations.

    DATES:

    Written comments must be received on or before November 28, 2016.

    ADDRESSES:

    You may submit your comments, identified by Regulatory Information Number (RIN) 2590-AA85, by any of the following methods:

    Agency Web site: www.fhfa.gov/open-for-comment-or-input.

    Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. If you submit your comment to the Federal eRulemaking Portal, please also send it by email to FHFA at [email protected] to ensure timely receipt by the agency. Please include Comments/RIN 2590-AA85 in the subject line of the message.

    Courier/Hand Delivery: The hand delivery address is: Alfred M. Pollard, General Counsel, Attention: Comments/RIN 2590-AA85, Federal Housing Finance Agency, 400 Seventh Street SW., Eighth Floor, Washington, DC 20219. Deliver the package to the Seventh Street entrance Guard Desk, First Floor, on business days between 9 a.m. to 5 p.m.

    U.S. Mail, United Parcel Service, Federal Express or Other Mail Service: The mailing address for comments is: Alfred M. Pollard, General Counsel, Attention: Comments/RIN 2590-AA85, Federal Housing Finance Agency, 400 Seventh Street SW., Eighth Floor, Washington, DC 20219.

    FOR FURTHER INFORMATION CONTACT:

    Eric M. Raudenbush, Associate General Counsel, Office of General Counsel, [email protected], (202) 649-3084; or Julie Paller, Senior Financial Analyst, Division of Bank Regulation, [email protected], (202) 649-3201 (not toll-free numbers), Federal Housing Finance Agency, 400 Seventh Street SW., Washington, DC 20219. The telephone number for the Telecommunications Device for the Hearing Impaired is (800) 877-8339.

    SUPPLEMENTARY INFORMATION:

    I. Comments

    FHFA invites comments on all aspects of the proposed rule and will take all comments into consideration before issuing a final rule. All comments received will be posted without change on the FHFA Web site at http://www.fhfa.gov, and will include any personal information provided, such as name, address (mailing and email), and telephone numbers. In addition, copies of all comments received will be available without change for public inspection on business days between the hours of 10 a.m. and 3 p.m., at the Federal Housing Finance Agency, 400 Seventh Street SW., Washington, DC 20219. To make an appointment to inspect comments, please call the Office of General Counsel at (202) 649-3804.

    II. Background

    Under the Bank Act, federally insured depository institutions, including state- and federally chartered credit unions whose member accounts are insured by the National Credit Union Share Insurance Fund (NCUSIF), have been eligible for Bank membership since 1989. Until recently, however, state-chartered credit unions without Federal share insurance were ineligible for Bank membership, except to the limited extent that a credit union certified as a “community development financial institution” (CDFI) could meet the eligibility requirements applicable to CDFIs. In December 2015, Congress amended the Bank Act to authorize the Banks to consider applications for membership from state-chartered credit unions without Federal share insurance and to approve such applicants for Bank membership (irrespective of their CDFI status), provided that certain prerequisites have been met.1 This proposed rule would implement those statutory amendments.

    1 Fixing America's Surface Transportation Act (FAST), Public Law 114-94, section 82001(a), 129 Stat. 1795 (2015), codified at 12 U.S.C. 1424(a)(5)(A) and (B).

    A. Amendment of the Bank Act To Authorize Membership for Non-Federally-Insured Credit Unions

    Section 4 of the Bank Act specifies the types of institutions that may be eligible for membership in one of the eleven district Banks and establishes requirements that each of those types of institutions must meet in order to be eligible for Bank membership.1 When enacted as part of the original Bank Act in 1932, section 4 authorized thrift institutions of various types, as well as insurance companies, to become Bank members, provided that the institution met the applicable eligibility requirements. At that time and for many decades afterward, the statute did not permit credit unions to become Bank members. This changed in 1989, when Congress amended section 4 to add “insured depository institution[s]” to the list of entities that may be eligible for Bank membership and defined that term to include any depository institution the accounts of which are insured by the Federal Deposit Insurance Corporation (FDIC) or by the NCUSIF.2 In effect, those amendments authorized federally insured commercial banks and credit unions to become Bank members for the first time. Commercial banks without Federal deposit insurance and credit unions without Federal share insurance remained ineligible for Bank membership even after the 1989 amendments.

    1See 12 U.S.C. 1424.

    2See Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), Public Law 101-73, section 704, 103 Stat. 183, 415 (1989).

    In 2008, Congress amended the Bank Act to authorize entities certified as CDFIs by the CFDI Fund of the United States Department of the Treasury to become Bank members, provided the CDFI meets the membership eligibility requirements established for such entities. By law, credit unions—including state-chartered credit unions without Federal share insurance—may be certified as CDFIs.3 Thus, since the adoption of the 2008 statutory amendments, a credit union that would otherwise have been ineligible for Bank membership due to a lack of Federal share insurance may nonetheless be eligible for membership if it is certified as a CDFI and meets the eligibility requirements applicable to CDFIs.

    3See 12 U.S.C. 4701-4719; 12 CFR part 1805.

    To implement those statutory amendments, FHFA in January 2010 adopted amendments to part 1263 to address membership eligibility and application requirements for CDFIs and to clarify the types of entities to be treated as CDFIs for membership purposes.4 That rule defined “CDFI” to mean any entity that the CDFI Fund has certified as a community development financial institution, with the exception of federally insured banks, thrifts, and credit unions.5 As insured depository institutions under the Bank Act, the latter types of entities had already been eligible for Bank membership prior to the enactment of the statutory provisions authorizing membership for CDFIs. By excluding federally insured depositories from the definition of “CDFI,” FHFA effectively required that they continue to be treated solely as insured depository institutions under the membership regulation, even in cases where the institution has been certified as a CDFI. In explaining its decision, the Agency cited its conclusion that, while Congress adopted the 2008 amendments to provide a new avenue to membership for CDFIs that had not previously been eligible, it did not intend to provide an additional avenue to membership for federally insured depository institutions that had already been eligible under the prior law.6

    4 75 FR 678 (Jan. 5, 2010).

    5See 12 CFR 1263.1.

    6 75 FR at 681.

    While it effectively required that a federally insured credit union certified as a CDFI be treated as an insured depository institution for Bank membership purposes, the 2010 rule mandated different treatment for state-chartered credit unions without Federal share insurance that have been certified as a CDFI—a type of entity that the rule termed a “CDFI credit union.” As amended by the 2010 rule, the membership regulation treats CDFI credit unions as a type of CDFI and generally subjects them to the same standards that apply to non-depository CDFIs, with the exception of those that must be met in order for an applicant to be deemed in compliance with the statutory eligibility requirement that an institution's financial condition be “such that advances may be safely made to it.” 7 With respect to the latter requirement, the regulation requires that CDFI credit unions demonstrate compliance in a manner similar to that which had already been required of all other types of depository institution applicants prior to the 2010 rulemaking.8 For non-depository CDFIs, such as loan funds and venture capital funds, the 2010 final rule established separate financial condition requirements that were tailored to the unique structure and business of those entities.9

    7See 12 U.S.C. 1424(a)(2)(B).

    8See 12 CFR 1263.11(b).

    9See 12 CFR 1263.16(b).

    In December 2015, Congress again amended section 4 of the Bank Act, in this case to permit state-chartered credit unions without Federal share insurance to be approved for Bank membership (irrespective of their CDFI status) where the credit union meets the membership eligibility requirements applicable to insured depository institutions and has taken enumerated steps to demonstrate that it meets the requirements for Federal share insurance, notwithstanding that it is not actually federally insured.10 Specifically, new section 4(a)(5) states that a credit union lacking Federal share insurance that has applied to become a member of a Bank shall be treated as an insured depository institution for purposes of determining its eligibility for Bank membership, provided that its state credit union regulator has first determined that the institution met the requirements for Federal share insurance as of the date of its application for membership.11 However, the new provision also provides that if the state regulator for such an applicant fails to make a determination as to whether the applicant met the requirements for Federal share insurance before the expiration of the six-month period that begins on the date of its application for membership, then the credit union applicant shall be deemed to have met those requirements.12

    10 Public Law 114-94, section 82001(a), 129 Stat. 1795 (2015).

    11 12 U.S.C. 1424(a)(5). Although the statutory text actually refers several times to “Federal deposit insurance,” FHFA construes those references to mean the federal share insurance that is provided to credit unions by the NCUSIF, in light of the evident purpose for which Congress adopted the NFICU amendments.

    12 12 U.S.C. 1424(a)(5)(B)(ii).

    Consistent with the regulatory definitions that would be in effect under the proposed rule, this Supplementary Information refers to credit unions without Federal share insurance that are not certified as CDFIs as “non-federally-insured credit unions” or “NFICUs” and to credit unions without Federal share insurance that are certified as CDFIs as “CDFI credit unions.” As discussed below, under the proposed rule, CDFI credit unions would continue to be treated as they are under the existing regulation and would not be subject to the new regulatory provisions governing NFICUs.

    B. Letters to Banks Providing Guidance on the Treatment of NFICUs Under the 2015 Statutory Amendments

    On April 12, 2016, in response to requests from several Banks for guidance addressing the manner in which they may accept and process membership applications from NFICUs that are newly eligible under the recent statutory amendments, FHFA sent a letter to each Bank describing how it should comply with the new statutory provisions. The guidance letters addressed the substantive requirements of the statutory amendments, the procedures each Bank should follow in processing applications, and the actions the Bank should take to document compliance with the new eligibility requirements. The letters also noted the Agency's intent to initiate a rulemaking to codify the substance of the guidance and advised each Bank to process membership applications from NFICUs in accordance with the guidance until FHFA adopts a final rule implementing the new statutory provisions.

    The amended statute provides that an NFICU may be eligible for Bank membership only if its state regulator has determined that it meets all the requirements for Federal share insurance “as of the date of the application for membership.” 13 With respect to the nature of this determination, the guidance letters expressed FHFA's view that the statute requires that the state regulator of an NFICU applicant determine that the applicant actually satisfies all of the applicable eligibility requirements for NCUSIF share insurance under the Federal Credit Union Act 14 and the implementing regulations of the NCUA.15 In response to specific questions FHFA had received, the guidance clarified that a determination by a state regulator that a particular NFICU applicant is “eligible to apply” for NCUA insurance or is operating and in good standing under state law is not sufficient to satisfy the statutory requirement.

    13 12 U.S.C. 1424(a)(5)(B)(i).

    14 12 U.S.C. 1751 et seq.

    15 12 CFR part 745.

    The guidance also addressed the meaning of the term “date of the application for membership,” which Congress designated as the date as of which the state regulator is to determine whether an NFICU meets the eligibility requirements for Federal share insurance and on which begins the statutory six-month period after which an NFICU shall be deemed to meet those requirements if its state regulator fails to act. Because Congress did not specify precisely what constitutes the “date of the application,” FHFA construed the term consistently with similar language in the existing membership regulation. The guidance explained that the “date of the application” should be the date on which an NFICU has provided to a Bank a “complete” membership application—i.e., an application that includes all information that is required to assess the applicant's compliance with the applicable statutory and regulatory membership eligibility requirements, as well as any other information the Bank deems necessary to act on an application. The existing membership regulation uses this concept of a “complete” application to establish the starting point of the 60-day period during which a Bank is generally required to make a determination on a membership application.16

    16See 12 CFR 1263.3(c).

    The guidance stated that a Bank generally should process a membership application from an NFICU in the same manner it would process a membership application from a federally insured credit union, up to the point when the Bank determines that the NFICU has provided all information required to assess its compliance with the applicable membership eligibility requirements. The existing membership regulation requires that, once a Bank makes such a determination with respect to the application of a federally insured credit union (or that of any other type of applicant), it must inform the applicant that the application is “complete” and generally must act on the application within 60 days. The guidance, however, advised that, when a Bank has made such a determination with respect to the application of an NFICU, the Bank should instead inform the NFICU that its application is “provisionally complete” and that it must take further steps before the application may be deemed fully complete and ready to be acted upon. Under the guidance, a Bank is to regard an NFICU's application to be only “provisionally” complete at that point because it would not include the documentation that the NFICU's state regulator either has determined that the applicant satisfied the requirements for Federal share insurance as of the date of the application or has failed to make that determination within six months. The guidance advised that, when informing an NFICU applicant that its application is provisionally complete, a Bank should instruct it to make a written request of its state regulator for a determination that the NFICU satisfied all of the eligibility requirements for Federal share insurance as of the date of that request, and to provide a copy of that request to the Bank on the same day it transmits the request to the regulator.17

    17 The guidance letters also included an example of a statement that an applicant could include in the request to its supervisor, which was intended to provide clarity as to the required nature of the request. The letters also noted that, in the event that a state supervisor were unable or unwilling to provide an affirmative response to the NFICU, then the applicant may ask the supervisor to provide a written statement to that effect.

    With respect to the completion of the membership application, the guidance advised that a Bank should act on an NFICU's application only after having received one of the following three items: (1) An affirmative written response from the regulator that the NFICU meets the eligibility requirements for Federal share insurance; (2) a written statement from the regulator that it cannot or will not make any determination regarding the NFICU's eligibility for Federal share insurance; or (3) a written statement from the NFICU applicant that six months have expired from the date of the membership application without the state regulator providing any response to the NFICU's request. Items (1) and (3) above closely track the statutory requirements. Regarding item (2), FHFA concluded that, although the statute does not address the possibility that a state regulator may expressly decline to make a determination (as opposed to merely failing to respond to a request), it is permissible to consider such a written statement as the substantive equivalent of a failure to respond within six months. The Agency noted that the statutory six-month review period appeared to be intended to ensure that a state credit union regulator would have a sufficient amount of time to determine whether a particular credit union satisfied the requirements for Federal share insurance. The guidance reflected FHFA's belief that, in the event that a state regulator were to conclude that it could not make such a determination for any credit union due to a lack of familiarity with the NCUA underwriting process or for other reasons, receipt of a written statement to that effect will suffice to allow a Bank to approve an NFICU's membership application without waiting for the six-month period to expire.18 The guidance advised the Banks to retain in each NFICU applicant's membership file copies of the relevant documents, including the applicant's request to its state regulator and any response from the regulator or statement from the applicant that the regulator had not responded, as part of its required records for all membership applications.

    18 FHFA is aware of one instance in which a state credit union regulator has advised a Bank that it could not make a determination regarding a state credit union's eligibility for federal share insurance because the state regulator was not familiar with the specific underwriting and related processes employed by NCUA when acting on applications for federal share insurance.

    Finally, the guidance letters addressed the possibility that an existing Bank member that is a state-chartered federally insured credit union might voluntarily cancel its Federal share insurance, thus becoming an NFICU—a scenario that the new statutory provisions do not explicitly address. The guidance made clear that such a credit union may voluntarily surrender its Federal share insurance without jeopardizing its status as a Bank member and without having to request from its state regulator the type of determination that the statute requires to be made with respect to NFICU applicants. The guidance letters reasoned that NCUA's prior approval of the credit union for Federal share insurance is dispositive as to the key issue under the statutory amendments—i.e., whether the institution satisfies the eligibility requirements for Federal share insurance—thus obviating any need for the member's state regulator to make that same decision.

    III. The Proposed Rule

    The proposed rule would codify into part 1263 of FHFA's regulations the core concepts of the guidance letters. The principal regulatory provisions regarding NFICUs would be located in a new § 1263.19 (a reserved section number under the existing regulation), which would set forth the prerequisites that an NFICU must meet in order to be treated as an insured depository institution for purposes of determining its eligibility for membership. As described in more detail below, the proposed rule would also make a number of conforming revisions to other sections of the regulation.

    A. Primary Revisions 1. Definitions of NFICU and Insured Depository Institution—§ 1263.1

    The proposed rule would define “non-federally-insured credit union” to mean a “State-chartered credit union that does not have Federal share insurance and that has not been certified as a CDFI by the CDFI Fund.” The proposed rule would not include CDFI credit unions within this definition, notwithstanding that they are also state-chartered credit unions that do not have Federal share insurance. The existing regulation generally requires CDFI credit unions to comply with the membership eligibility requirements that are applicable to CDFIs generally, rather than those applicable to depository institutions, with the exception of provisions relating to the applicant's financial condition. The proposed rule would make no substantive changes to any of the provisions that currently apply to CDFI credit unions and would treat them separately from NFICUs for membership purposes.

    The definition of “insured depository institution” in the existing membership regulation follows the Bank Act definition of that term and includes any federally insured bank, savings association, or credit union. The proposed rule would revise the regulatory definition of “insured depository institution” to include, in addition to federally insured depository institutions, NFICUs meeting the prerequisites of proposed § 1263.19. As an “insured depository institution” under the revised regulation, any qualifying NFICU applying for Bank membership would be subject to all of the provisions of the membership regulation that apply to insured depository institutions generally, except where otherwise provided. Thus, a qualifying NFICU applicant would be eligible for membership only if: It is duly organized under Federal or State law; it is subject to inspection and regulation under Federal or State banking laws, or similar laws; it makes long-term home mortgage loans; its financial condition is such that advances may be safely made to it (hereinafter the “financial condition” requirement); its management and its home financing policy are both consistent with sound and economical home financing;19 and it has at least 10 percent of its assets in “residential mortgage loans” (hereinafter the “10 percent” requirement).20 With the exception of the financial condition requirement, an NFICU applicant would be required to demonstrate compliance with each of those eligibility requirements in the same manner that is required of insured depository institutions generally. As discussed below, the proposed rule would require an NFICU applicant to demonstrate compliance with the financial condition requirement in the same manner as a CDFI credit union.21

    19 12 CFR 1263.6(a).

    20 12 CFR 1263.6(b). The Bank Act exempts certain smaller depository institutions—“community financial institutions” (CFIs)—from the 10 percent requirement, but defines CFI to include only institutions the deposits of which are insured under the Federal Deposit Insurance Act (FDIA) that have total assets below a certain threshold amount. 12 U.S.C. 1422(10)A)(i), 1424(a)(4). Because a credit union cannot obtain deposit insurance under the FDIA, it cannot qualify as a CFI regardless of its level of total assets.

    21See 12 CFR 1263.11(b).

    2. Prerequisites for an NFICU To Be Treated as an Insured Depository Institution—§ 1263.19

    The proposed rule would add to the membership regulation a new § 1263.19, which would set forth the prerequisites that an NFICU must meet in order to be treated as an insured depository institution for purposes of determining its eligibility for membership. The substantive and procedural requirements set forth in proposed § 1263.19 are, in all material respects, identical to those set forth in the guidance letters, although the proposed rule would provide additional clarification on certain points. As described below, paragraph (a) of the new section would address the treatment of NFICUs that are applying for Bank membership, while paragraph (b) would address the status of any credit union that already is a Bank member but that opts to become an NFICU by canceling its Federal share insurance.

    NFICUs Applying for Bank Membership

    Section 126319(a) addresses the prerequisites that must be met before a Bank may approve an NFICU applicant for membership. In parallel with the inclusion of qualifying NFICUs within the regulatory definition of “insured depository institution,” the introductory clause to this provision provides that an NFICU applicant shall be treated as an insured depository institution for purposes of determining its eligibility for membership, provided that it complies with all of the requirements of § 1263.19(a).

    The proposed rule would first require that a Bank obtain from an NFICU applicant all of the information that the Bank generally requires to process membership applications from federally insured depository institutions, including all of the information needed to demonstrate compliance with the eligibility requirements described above. Once a Bank has obtained that information, the rule would require that the Bank notify the NFICU that its application is provisionally complete and that the NFICU should request from its state regulator a determination that it satisfies the requirements for obtaining Federal share insurance as of the date of the request.22 The notice must also inform the NFICU that its application will not be deemed to be complete until the Bank has received acceptable documentation pertaining to the regulator's response to the NFICU applicant's request.

    22 The NFICU must simultaneously provide to the Bank a copy of its request to the state regulator. The guidance letters had included an example of language that an NFICU could use in its request to its state regulator, but the proposed rule would not do so. A number of NFICUs have since been admitted to membership, and appear to have encountered no difficulties in obtaining a response from the state regulators, which suggests that there is no need for the regulation to address this topic. Banks may continue to use the sample language if they choose to do so.

    Proposed § 1263.19(a)(3) would require a Bank to deem an NFICU's application to be complete after it has received any one of the following items: (1) A written statement from the regulator confirming that the NFICU satisfies the requirements for Federal share insurance; (2) a written statement from the regulator that it is unable to make that determination; or (3) a written statement from the NFICU that it has not received a response from the state regulator within the statutory six-month period, and that the regulator has not determined that the NFICU does not meet the requirements for Federal share insurance. Once a Bank has received one of those three items and has deemed the NFICU's application to be complete, the proposed rule would require that the Bank act upon the application in accordance with § 1263.3(c). That existing provision requires that a Bank notify an applicant when it deems the application to be complete and (with certain exceptions) either approve or deny the application within 60 calendar days of the date it made that determination.23 The cross-reference to § 1263.3(c) is intended to make clear that a Bank would be permitted the same amount of time to act upon a fully complete NFICU application as it has to act upon a complete application from any other type of eligible institution. However, given that an NFICU's application should already include all of the information needed to determine whether it meets the applicable membership eligibility requirements at the time it sends the request to its regulator, FHFA anticipates that in many cases Banks would be prepared to act upon an NFICU application shortly after receiving the required documentation regarding the response of the state regulator, especially when the regulator fails to respond within six months or does not provide a response until the end of that timeframe.

    23 The regulation allows a Bank to suspend the 60-day review period if it subsequently determines that it does not in fact have all of the information that is required to process the application. In such cases, a Bank may require that the applicant provide additional information, but must resume the 60-day review period when the applicant supplies the requested information. 12 CFR 1263.3(c).

    A Credit Union That Becomes an NFICU When Already a Member

    While proposed § 1263.19(a) addresses the treatment of NFICUs applying to become a Bank member, § 1263.19(b) addresses the status of any existing credit union Bank member that opts to become an NFICU by canceling its Federal share insurance. The guidance letters made clear that any such credit union may voluntarily surrender its Federal share insurance without affecting its status as a Bank member. Consistent with that position, proposed § 1263.19(b) would explicitly authorize such a credit union to remain a member without requiring it to request a determination of its state regulator as to whether it meets the requirements for Federal share insurance. The proposed rule would require that the Bank determine that the member has canceled its Federal share insurance voluntarily—i.e., that NCUA has approved the credit union's request to terminate its Federal share insurance.24 The Banks could make this determination by obtaining a copy of NCUA's approval of the credit union's request to terminate its Federal insurance. Upon converting to an NFICU, the credit union would remain subject to all regulatory provisions that apply to insured depository institution members.

    24See 12 U.S.C. 1786(a) (voluntary termination of federal share insurance); 12 CFR 708b.201(d) (termination of federal share insurance requires prior approval of NCUA).

    The recent statutory amendments focus on state-chartered credit unions that have not previously been eligible for Bank membership due to their lack of Federal share insurance; the amendments do not address whether all of the requirements that apply to NFICU applicants should also apply to existing Bank members that wish to surrender their Federal share insurance while remaining as members. As FHFA noted in the guidance letters, the key question with respect to whether any particular NFICU may be eligible for Bank membership under the statutory amendments is whether the institution actually meets all of the requirements for Federal share insurance. In the case of an existing Bank member that is a federally insured state-chartered credit union, NCUA has already definitively answered that question by having previously approved the credit union for Federal share insurance and having continued to provide that insurance up until the time the credit union voluntarily canceled it. For that reason, nothing would be gained by construing the statute as requiring existing credit union Bank members that voluntarily cancel their Federal share insurance to seek that same determination from their state regulators in order to remain a member as an NFICU.

    Requiring a Bank to confirm that the cancelation of a member's Federal share insurance was voluntary would provide reasonable assurance that the member satisfies the requirements for Federal share insurance and, thus, remains eligible for membership as an NFICU despite no longer being a federally insured depository institution. As noted above, the core requirement for NFICUs under the statutory amendments is a determination that the NFICU satisfies the requirements for Federal share insurance, and the best evidence that a newly converted NFICU satisfies those requirements would be that it had remained federally insured until voluntarily relinquishing the insurance. It is also possible, however, that a federally insured credit union could lose its Federal share insurance through an involuntary termination for cause by NCUA. If NCUA were to terminate a Bank member's share insurance involuntarily, then that institution would cease to be eligible for Bank membership because NCUA's action would demonstrate that the institution could not meet the prerequisites for membership as an NFICU and, without Federal share insurance, it would no longer be eligible for membership as a federally insured depository institution. In such a case, a Bank likely would be required to terminate the credit union's membership because, unless the credit union happened to be certified as a CDFI, it would no longer satisfy any of the provisions under which credit unions may eligible for membership.

    B. Conforming Amendments

    The proposed rule would also make a number of conforming revisions to part 1263, which are discussed below.

    1. Definitions—§ 1263.1

    In addition to the substantive revisions to § 1263.1 that are discussed above, the proposed rule would make a number of non-substantive revisions to that section. First, the rule would add a definition of “Federal share insurance” and define that term to mean “insurance coverage of credit union member accounts provided by the National Credit Union Share Insurance Fund under title II of the Federal Credit Union Act (12 U.S.C. 1781 et seq.).”

    The rule would also revise the definition of “CDFI credit union,” which is currently defined to mean “a State-chartered credit union that has been certified as a CDFI by the CDFI Fund and that does not have Federal share insurance,” to reverse the order of the two clauses so that it would instead refer to “a State-chartered credit union that does not have Federal share insurance and that has been certified as a CDFI by the CDFI Fund.” FHFA is proposing to make this minor change so that the definition of “CDFI credit union” will be structured in parallel with the definition of “non-federally-insured credit union.” The intent of this is to make clear that the amended regulation would address two types of state-chartered credit unions without Federal share insurance—those that are not certified as a CDFI (non-federally-insured credit unions) and those that are certified as a CDFI (CDFI credit unions)—and would subject them to different membership requirements.

    In the definition of “community development financial institution or CDFI,” the proposed rule would revise the reference to “a credit union insured under the Federal Credit Union Act (12 U.S.C. 1751 et seq.)” to refer instead to “a credit union that has Federal share insurance.” FHFA is proposing this minor non-substantive change so that the terminology used in the definition of “CDFI” will be consistent with that in the proposed definitions of “non-federally-insured credit union” and “CDFI credit union,” both of which would employ the newly-defined term “Federal share insurance” to refer to insurance obtained under the Federal Credit Union Act.

    Finally, the proposed rule would revise the definition of “regulatory financial report,” which currently refers to a financial report that an “applicant” is required to file with its regulator, to refer instead to a financial report that an “institution” is required to file with its regulator. In addition to requiring a Bank to obtain information from applicants' regulatory financial reports for many purposes, FHFA's regulations also require that a Bank obtain information from members' regulatory financial reports in some circumstances. The proposed revision would make clear that the term “regulatory financial report” refers to the reports of both applicants and members.

    2. Membership Application Requirements—§ 1263.2

    Section 1263.2(b) of the existing regulation requires a Bank to prepare for each applicant a written membership application digest addressing whether or not the applicant meets each of the applicable requirements for membership under the regulation. The proposed rule would revise that provision to require expressly that a Bank include in the application digest for each NFICU applicant a written summary of the manner in which the applicant has complied with the requirements of proposed § 1263.19(a). FHFA would expect a Bank to note in the digest the date on which the NFICU applicant transmitted to its state regulator the request required under proposed § 1263.19(a)(2), as well as the date on which the Bank received the written statement addressing the results of that request required under proposed § 1263.19(a)(3). The Agency would also expect the Bank to describe in the digest which of the three types of written statements that are permissible under § 1263.19(a)(3) was used to satisfy the requirement of that provision.

    The proposed rule would also revise § 1263.2(c), which requires a Bank to maintain a membership file for each applicant, to make clear that a Bank should include in the file for an NFICU applicant any documents required under proposed § 1263.19.

    3. Compliance With the Financial Condition Requirement—§ 1263.11

    Existing § 1263.11 governs the manner in which Banks are to determine whether depository institution applicants, including insured depository institutions and CDFI credit unions, are in compliance with the statutory “financial condition” eligibility requirement. Paragraph (a) requires that a Bank review a number of different items regarding the financial condition of depository institution applicants, including: (1) Regulatory financial reports the applicant filed with its regulator for the last six calendar quarters and three year-ends; (2) the applicant's most recent audited financial statements; (3) the applicant's most recent regulatory examination report; (4) a written description of any outstanding enforcement actions against the applicant; and (5) any other relevant document or information concerning the financial condition of the applicant that comes to the Bank's attention.

    In its 2010 final rule amending part 1263 to implement the statutory amendments that authorized Bank membership for CDFIs, FHFA revised § 1263.11(a) to make clear that the review requirement applies to CDFI credit unions, in addition to other types of depository institutions. In explaining its decision to make that revision, the Agency explained that “[a]lthough CDFI credit unions do not file regulatory financial reports with the NCUA, they do file comparable reports with their appropriate state regulator, and FHFA believes that those documents may be used to assess the financial condition of the CDFI credit unions.” 25 Similarly, Banks can and should use financial reports filed by NFICU applicants with their state regulators to assess the applicants' financial condition. Although the proposed rule would not revise § 1263.11(a) to refer expressly to NFICUs, the review requirements of that provision would nonetheless apply in the case of NFICU applicants, given that NFICUs meeting the prerequisites of § 1263.19 would generally be treated as insured depository institutions for purposes of determining their eligibility for membership under the amended regulation.

    25 75 FR at 684.

    Existing § 1263.11(b) establishes three standards that a depository institution applicant must meet to be deemed in compliance with the “financial condition” requirement: (1) It must have received a composite regulatory examination rating from its state regulator within the preceding two years; (2) it must meet all of its minimum statutory and regulatory capital requirements; and (3) it must meet the “minimum performance standard” described in § 1263.11(b)(3). The latter provision deems any applicant that received a composite rating of “1” on its most recent regulatory examination, except for a CDFI credit union, to be automatically in compliance with the “minimum performance standard.” 26 That provision requires that any non-CDFI depository institution with an examination rating of “2” or “3,” as well as any CDFI credit union regardless of its examination rating, satisfy performance trend criteria relating to its (A) earnings (the applicant must have positive income in four of the six most recent quarters), (B) nonperforming assets (nonperforming loans and leases plus other real estate owned must not exceed 10 percent of total loans and leases plus other real estate owned in the most recent quarter), and (C) allowance for loan and lease losses (the ratio must have been 60 percent or greater during four of the six most recent quarters) in order to meet the “minimum performance standard.” 27

    26 12 CFR 1263.11(b)(3)(i), (iii).

    27 12 CFR 1263.11(b)(3)(i).

    In adopting its final rule on membership for CDFIs in 2010, FHFA decided to require all CDFI credit union applicants—including those with a current state examination rating of “1”—to demonstrate compliance with the performance trend criteria specified in § 1263.11(b)(3), while continuing to exempt other types of depository institutions having a “1” rating from that requirement. In the Supplemental Information to the 2010 final rule, FHFA described its decision to require that even the most highly rated CDFI credit unions satisfy the performance trend criteria as “prudent.” The Agency noted that, because such institutions are not subject to oversight by the NCUA and because they had not previously been eligible for membership, the Banks were likely to be less familiar with the state examination processes and ratings systems to which they are subject than with those that apply to federally insured depository institutions.28

    28 75 FR at 684-685.

    For similar reasons, the proposed rule would revise § 1263.11(b)(3)(iii) to require that NFICUs meet the minimum performance standard in the same way that CDFI credit unions must under the existing provision—that is, by having received a “1,” “2,” or “3” composite rating in its most recent regulatory examination and by meeting the performance trend criteria for earnings, nonperforming assets, and allowance for loan and lease losses. FHFA believes that, given the Banks' lack of experience with non-federally-insured credit unions, it is also prudent to require all NFICUs to meet the performance trend criteria as part of satisfying the “financial condition” eligibility requirement. Despite the fact that a subset of credit unions without Federal share insurance—i.e., CDFI credit unions—have been permitted to become Bank members since 2010, it does not appear that the Banks have approved any such institutions for membership to date. Consequently, the safety and soundness concerns arising from the Banks' relative lack of familiarity with the regimes that apply to credit unions that are subject to regulation and supervision only at the state level continue to exist and apply with equal validity to both CDFI credit unions and NFICUs.29

    29 The proposed rule would differ from the guidance letters in making clear that the exemption that applies generally to depository institutions that have received a composite rating of “1” does not apply to NFICUs. The guidance letters did not address this point directly.

    The Bank Act requires that the primary Federal banking regulators make available to the Banks, in confidence, reports of condition and other information relating to the condition of any Bank member or other institution with which a Bank contemplates having transactions authorized by the Bank Act, such as applicants for membership.30 That provision, however, does not apply to state banking regulators and the supervisory reports that they prepare relating to depository institutions organized under state law. Although many Banks have arrangements with state banking regulators, including state credit union regulators, under which those regulators provide the Banks with access to confidential supervisory information, including reports of examination, for the institutions they regulate, that may not be the case for every state. This raises a question as to whether a Bank may approve an application for membership received from an NFICU whose state regulator declines to provide the Bank with access to the reports of examination for its regulated entities or to allow the credit unions it regulates to disclose the composite rating derived from those examinations.

    30 12 U.S.C. 1442(a)(1).

    Under the existing membership regulation, compliance with § 1263.11 creates a presumption that a depository institution applicant meets the statutory “financial condition” requirement. While failure to comply with § 1263.11 creates a presumption that a depository institution applicant does not meet the “financial condition” requirement, that presumption of noncompliance may be rebutted. Section 1263.17(d) provides that, if a depository institution applicant does not have a composite regulatory examination rating, does not have the minimum rating required by the regulations, or does not meet the performance trend criteria, the applicant may still meet the “financial condition” requirement if it or the Bank prepares a written justification providing substantial evidence that is acceptable to the Bank that it is in a sound financial condition, notwithstanding its failure to meet one or more of the requirements of § 1263.11.31 Although FHFA encourages all of the Banks to reach agreements with the appropriate state regulators to allow them to review the reports of examination for all state-chartered depository institutions, a Bank may rely on the alternative provisions of § 1263.17(d) to rebut any presumption of noncompliance with the “financial condition” requirement that arises from a state credit union regulator's decision not to provide a Bank with access to the reports of examination for its regulated entities.

    31 12 CFR 1263.17(d).

    4. Reports and Examinations—§ 1261.31

    Existing § 1263.31 sets forth a number of stipulations to which each Bank member is deemed to have agreed as a condition precedent to becoming a Bank member. Under paragraph (b) of this section, each institution admitted to Bank membership agrees that reports of examination by local, state or Federal agencies, or institutions may be furnished by those authorities to the Bank or to FHFA upon request. The proposed rule would revise § 1263.31(b) to specify that, with respect to any member that is an NFICU or CDFI credit union, the member also agrees that reports of examination by any private entity that provides it with share insurance may be furnished to the Bank or to FHFA. To the best of FHFA's knowledge, there is only one insurance company in the United States currently providing private share insurance for state-chartered credit unions.

    Under existing § 1263.31(e), each institution also agrees, as a condition of Bank membership, that it will provide to the Bank, within 20 days of filing, copies of reports of condition and operations filed with its appropriate Federal banking agency. The proposed rule would revise that provision to state that each member also agrees to provide any reports of condition and operations it may be required to file with its appropriate state regulator and that each member that is an NFICU or a CDFI credit union agrees to provide any such reports it may be required to file with a private entity providing it with share insurance.

    IV. Consideration of Differences Between the Banks and the Enterprises

    Section 1313(f) of the Safety and Soundness Act requires the Director of FHFA, when promulgating regulations relating to the Banks, to consider the differences between the Banks and the Enterprises (Fannie Mae and Freddie Mac) as they relate to: The Banks' cooperative ownership structure; the mission of providing liquidity to members; the affordable housing and community development mission; their capital structure; and their joint and several liability on consolidated obligations.32 The Director also may consider any other differences that are deemed appropriate. In preparing this proposed rule, the Director considered the differences between the Banks and the Enterprises as they relate to the above factors, and determined that the rule is appropriate. FHFA requests comments regarding whether differences related to those factors should result in any revisions to the proposed rule.

    32 12 U.S.C. 4513(f).

    V. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (PRA) requires that FHFA consider the impact of paperwork and other information collection burdens imposed on the public.33 Under the PRA and the implementing regulations of the Office of Management and Budget (OMB), an agency may not collect or sponsor the collection of information, nor may it impose an information collection requirement unless it displays a currently valid control number assigned by OMB.34 FHFA's regulation “Members of the Federal Home Loan Banks,” located at 12 CFR part 1263, contains several collections of information that OMB has approved under control number 2590-0003, which is due to expire on December 31, 2016. The proposed rule would not make any revisions that would affect the burden estimates for those collections of information. Therefore, FHFA has not submitted any materials to OMB for review.

    33See 44 U.S.C. 3507(a) and (d).

    34See 44 U.S.C. 3512(a); 5 CFR 1320.8(b)(3)(vi).

    VI. Regulatory Flexibility Act

    The Regulatory Flexibility Act 35 (RFA) requires that a regulation that has a significant economic impact on a substantial number of small entities, small businesses, or small organizations must include an initial regulatory flexibility analysis describing the regulation's impact on small entities. Such an analysis need not be undertaken if the agency has certified that the regulation will not have a significant economic impact on a substantial number of small entities.36 FHFA has considered the impact of the proposed rule under the RFA. The General Counsel of FHFA certifies that the proposed rule, if adopted as a final rule, is not likely to have a significant economic impact on a substantial number of small entities because the regulation applies only to the Banks, which are not small entities for purposes of the RFA.

    35 5 U.S.C. 601, et seq.

    36See 5 U.S.C. 605(b).

    List of Subjects in 12 CFR Part 1263

    Federal home loan banks, Reporting and recordkeeping requirements.

    Authority and Issuance

    For the reasons stated in the SUPPLEMENTARY INFORMATION, and under the authority of 12 U.S.C. 4511, 4513, and 4526, FHFA proposes to amend part 1263 of subchapter D of chapter XII of title 12 of the Code of Federal Regulations as follows:

    PART 1263—MEMBERS OF THE BANKS 1. The authority citation for part 1263 continues to read as follows: Authority:

    12 U.S.C. 1422, 1423, 1424, 1426, 1430, 1442, 4511, 4513.

    2. Amend § 1263.1 as follows: a. Revise the definitions of “CDFI credit union” and “Community development financial institution or CDFI”; b. Add, in alphabetical order, a definition for “Federal share insurance”; c. Revise the definition of “Insured depository institution”; d. Add, in alphabetical order, a definition for “Non-federally-insured credit union”; and e. Revise the definition of “Regulatory financial report”.

    The revisions and additions read as follows:

    § 1263.1 Definitions

    CDFI credit union means a State-chartered credit union that does not have Federal share insurance and that has been certified as a CDFI by the CDFI Fund.

    Community development financial institution or CDFI means an institution that is certified as a community development financial institution by the CDFI Fund under the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4701 et seq.), other than a bank or savings association insured under the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.), a holding company for such a bank or savings association, or a credit union that has Federal share insurance.

    Federal share insurance means insurance coverage of credit union member accounts provided by the National Credit Union Share Insurance Fund under subchapter II of the Federal Credit Union Act (12 U.S.C. 1781 et seq.).

    Insured depository institution means:

    (1) An insured depository institution as defined in section 2(9) of the Bank Act, as amended (12 U.S.C. 1422(9)); and

    (2) To the extent provided under § 1263.19, a non-federally-insured credit union.

    Non-federally-insured credit union means a State-chartered credit union that does not have Federal share insurance and that has not been certified as a CDFI by the CDFI Fund.

    Regulatory financial report means a financial report that an institution is required to file with its appropriate regulator on a specific periodic basis, including the quarterly call report for commercial banks and savings associations, quarterly or semi-annual call report for credit unions, NAIC's annual or quarterly statement for insurance companies, or other similar report, including such report maintained by the appropriate regulator in an electronic database.

    § 1263.2 [Amended]
    3. Amend § 1263.2: a. By removing the word “1263.18” wherever it appears and, in its place, adding the word “1263.19”; and b. In paragraph (b), by adding after the final period the words “In preparing a digest for a non-federally-insured credit union applicant, the Bank shall summarize the manner in which the applicant has complied with the requirements of § 1263.19(a).”.
    § 1263.3 [Amended]
    4. Amend § 1263.3, in paragraph (c), by removing from the second sentence the words “a Bank” and adding in their place the words “the Bank”.
    § 1263.11 [Amended]
    5. Amend § 1263.11, in paragraph (b)(3)(iii), by removing the words “A CDFI credit union applicant” and adding in their place the words “An applicant that is a CDFI credit union or a non-federally-insured credit union”. Subpart C—Eligibility Requirements 6. Add § 1263.19 and move it from subpart D to subpart C.

    The addition reads as follows:

    § 1263.19 Non-federally-insured credit unions.

    (a) Applicants. Except where otherwise provided, a non-federally-insured credit union applying to become a member of a Bank shall be treated as an insured depository institution for purposes of determining its eligibility for membership under this part, provided that all of the following requirements have been met:

    (1) Provisional completion of application. After a non-federally-insured credit union initiates the application process, the Bank shall obtain from the applicant all information required by this part, and any other information the Bank deems necessary, to process the application, except for the items required under paragraphs (a)(2) and (3) of this section. Upon obtaining all such information, the Bank shall notify the applicant in writing that its application is provisionally complete and that, in order to complete the application process, it must comply with paragraph (a)(2) of this section and subsequently provide one of the items listed in paragraph (a)(3) of this section.

    (2) Request to regulator. After receipt of the notice required under paragraph (a)(1) of this section, the applicant shall send to its appropriate State regulator a written request for a determination that the applicant meets all requirements for Federal share insurance as of the date of the request. The applicant shall provide to the Bank a copy of that request simultaneously with its transmittal to the regulator.

    (3) Final completion of application. The Bank shall deem an application to be complete, and shall act upon the application in accordance with § 1263.3(c), upon obtaining from the applicant any one of the following items:

    (i) A written statement from the applicant's appropriate State regulator that the applicant met all of the eligibility requirements for Federal share insurance as of the date of the request sent pursuant to paragraph (a)(2) of this section;

    (ii) A written statement from the applicant's appropriate State regulator that it cannot or will not make a determination regarding the applicant's eligibility for Federal share insurance; or

    (iii) A written statement from the applicant, prepared no earlier than the end of the six-month period beginning on the date of the request sent pursuant to paragraph (a)(2) of this section, certifying that the applicant did not receive from its appropriate State regulator within that six-month period either a response as described in paragraph (a)(3)(i) or (ii) or a response stating that that the applicant did not meet all of the eligibility requirements for Federal share insurance as of the date of the request sent pursuant to paragraph (a)(2) of this section.

    (b) Members canceling Federal share insurance. A Bank member that is a federally insured credit union and that subsequently cancels its Federal share insurance may remain a member of the Bank, subject to all regulatory provisions applicable to insured depository institution members, provided that the Bank has determined that the institution has canceled its Federal share insurance voluntarily.

    Subpart E—Withdrawal, Termination, and Readmission 7. Revise the heading of subpart E to read as set out above. 8. Amend § 1263.31 by revising paragraphs (b) and (e) to read as follows:
    § 1263.31 Reports and examinations.

    (b) Agrees that reports of examination by local, State, or Federal agencies or institutions, or by any private entity providing share insurance to a member that is a non-federally-insured credit union or a CDFI credit union, may be furnished by such authorities or entities to the Bank or FHFA upon request;

    (e) To the extent applicable, agrees to provide to the Bank, within 20 days of filing, copies of reports of condition and operations required to be filed with:

    (1) The member's appropriate Federal banking agency;

    (2) The member's appropriate State regulator; or

    (3) Any private entity providing share insurance to a member that is a non-federally-insured credit union or a CDFI credit union.

    Dated: September 22, 2016. Melvin L. Watt, Director, Federal Housing Finance Agency.
    [FR Doc. 2016-23289 Filed 9-27-16; 8:45 am] BILLING CODE 8070-01-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2016-9116; Directorate Identifier 2016-NM-068-AD] RIN 2120-AA64 Airworthiness Directives; The Boeing Company Airplanes AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    We propose to adopt a new airworthiness directive (AD) for all The Boeing Company Model 767-200, -300, and -400ER series airplanes. This proposed AD was prompted an evaluation by the design approval holder (DAH) indicating that the fuselage skin lap splices are subject to widespread fatigue damage (WFD). This proposed AD would require repetitive inspections to detect any crack in the fuselage skin at the skin lap splices. We are proposing this AD to detect and correct cracks at the fuselage skin lap splice, which can rapidly link up, possibly resulting in rapid decompression and loss of structural integrity of the airplane.

    DATES:

    We must receive comments on this proposed AD by November 14, 2016.

    ADDRESSES:

    You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:

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

    Fax: 202-493-2251.

    Mail: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590.

    Hand Delivery: Deliver to Mail address above between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    For service information identified in this NPRM, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone: 206-544-5000, extension 1; fax: 206-766-5680; Internet: https://www.myboeingfleet.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221. It is also available on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-9116.

    Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-9116; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (phone: 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

    FOR FURTHER INFORMATION CONTACT:

    Wayne Lockett, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office (ACO), 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6447; fax: 425-917-6590; email: [email protected]

    SUPPLEMENTARY INFORMATION:

    Comments Invited

    We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2016-9116; Directorate Identifier 2016-NM-068-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

    Discussion

    Fatigue damage can occur locally, in small areas or structural design details, or globally, in widespread areas. Multiple-site damage (MSD) is widespread damage that occurs in a large structural element such as a single rivet line of a lap splice joining two large skin panels. Widespread damage can also occur in multiple elements such as adjacent frames or stringers. Multiple-site damage and multiple-element damage cracks are typically too small initially to be reliably detected with normal inspection methods. Without intervention, these cracks will grow, and eventually compromise the structural integrity of the airplane. This condition is known as WFD. It is associated with general degradation of large areas of structure with similar structural details and stress levels. As an airplane ages, WFD will likely occur, and will certainly occur if the airplane is operated long enough without any intervention.

    The FAA's WFD final rule (75 FR 69746, November 15, 2010) became effective on January 14, 2011. The WFD rule requires certain actions to prevent structural failure due to WFD throughout the operational life of certain existing transport category airplanes and all of these airplanes that will be certificated in the future. For existing and future airplanes subject to the WFD rule, the rule requires that DAHs establish a limit of validity (LOV) of the engineering data that support the structural maintenance program. Operators affected by the WFD rule may not fly an airplane beyond its LOV, unless an extended LOV is approved.

    The WFD rule (75 FR 69746, November 15, 2010) does not require identifying and developing maintenance actions if the DAHs can show that such actions are not necessary to prevent WFD before the airplane reaches the LOV. Many LOVs, however, do depend on accomplishment of future maintenance actions. As stated in the WFD rule, any maintenance actions necessary to reach the LOV will be mandated by airworthiness directives through separate rulemaking actions.

    In the context of WFD, this action is necessary to enable DAHs to propose LOVs that allow operators the longest operational lives for their airplanes, and still ensure that WFD will not occur. This approach allows for an implementation strategy that provides flexibility to DAHs in determining the timing of service information development (with FAA approval), while providing operators with certainty regarding the LOV applicable to their airplanes.

    We determined that the existing Boeing 767 Maintenance Planning Document (MPD) Section 9 Airworthiness Limitation Instructions inspection program is not sufficient to preclude the occurrence of WFD in the fuselage skin lap splice as the airplane ages. The fuselage skin lap splice has multiple similar adjacent details that have the potential for MSD and the potential for WFD. 14 CFR 26.21 requires evaluation of such designs for the potential for WFD and implementation of the appropriate service actions to ensure that WFD is precluded before the airplane's LOV. We have received no reports of cracks in the fuselage skin lap splices. WFD cracking at the fuselage skin lap splice, if not corrected, could rapidly link up, possibly resulting in rapid decompression and loss of structural integrity of the airplane.

    Related Service Information Under 1 CFR Part 51

    We reviewed Boeing Alert Service Bulletin 767-53A0264, Revision 1, dated April 25, 2016. The service information describes procedures for repetitive inspections and repair for any crack in the fuselage skin at the skin lap splices. 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.

    FAA's Determination

    We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

    Proposed AD Requirements

    This proposed AD would require accomplishing the actions specified in the service information described previously. For information on the procedures and compliance times, see this service information at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-9116.

    Difference Between This Proposed AD and the Service Information

    Paragraph 1.B., “Concurrent Requirements,” of Boeing Alert Service Bulletin 767-53A0264, Revision 1, dated April 25, 2016, identifies Boeing Alert Service Bulletin 767-53A0260 as a concurrent service bulletin. However, this proposed AD would not require Boeing Alert Service Bulletin 767-53A0260, as a concurrent service bulletin.

    Costs of Compliance

    We estimate that this proposed AD affects 332 airplanes of U.S. registry. We estimate the following costs to comply with this proposed AD:

    Estimated Costs Action Labor cost Parts cost Cost per product Cost on U.S. operators Inspections 168 work-hours × $85 per hour = $14,280 per inspection cycle $0 $14,280 per inspection cycle $4,740,960 per inspection cycle.

    The size of the area that requires repair must be determined before material and work-hour costs can be estimated. Additionally, materials for repairs are operator supplied. Therefore, we cannot provide cost estimates for the on-condition actions specified in this proposed AD.

    Authority for This Rulemaking

    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.

    Regulatory Findings

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

    For the reasons discussed above, I certify this proposed regulation:

    (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.

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    The Proposed Amendment

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

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

    49 U.S.C. 106(g), 40113, 44701.

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): The Boeing Company: Docket No. FAA-2016-9116; Directorate Identifier 2016-NM-068-AD. (a) Comments Due Date

    We must receive comments by November 14, 2016.

    (b) Affected ADs

    None.

    (c) Applicability

    This AD applies to The Boeing Company Model 767-200, -300, and -400ER series airplanes, certificated in any category, as identified in Boeing Alert Service Bulletin 767-53A0264, Revision 1, dated April 25, 2016.

    (d) Subject

    Air Transport Association (ATA) of America Code 53, Fuselage.

    (e) Unsafe Condition

    This AD was prompted by an evaluation by the design approval holder (DAH) indicating that the fuselage skin lap splices are subject to widespread fatigue damage (WFD). We are issuing this AD to detect and correct cracks at the fuselage skin lap splice, which can rapidly link up, possibly resulting in rapid decompression and loss of structural integrity of the airplane.

    (f) Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (g) Repetitive Inspections and Corrective Actions

    Except as specified by paragraph (h) of this AD, at the applicable times specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 767-53A0264, Revision 1, dated April 25, 2016: Do external surface high frequency eddy current (HFEC), internal surface HFEC, and external surface low frequency eddy current (LFEC) inspections, as applicable, to detect cracks in the fuselage skin lap splices, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin 767-53A0264, Revision 1, dated April 25, 2016. If any crack is found during any inspection required by this AD, before further flight, repair in accordance with Part 8 of the Accomplishment Instructions of Boeing Alert Service Bulletin 767-53A0264, Revision 1, dated April 25, 2016. Repeat the inspections thereafter at the times specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 767-53A0264, Revision 1, dated April 25, 2016, as applicable.

    (h) Service Information Exception

    Where Boeing Alert Service Bulletin 767-53A0264, Revision 1, dated April 25, 2016, specifies a compliance time “after the original issue date of this service bulletin,” this AD requires compliance within the specified compliance time after the effective date of this AD.

    (i) Credit for Previous Actions

    This paragraph provides credit for the actions required by paragraph (g) of this AD, if those actions were performed before the effective date of this AD using Boeing Alert Service Bulletin 767-53A0264, dated May 12, 2015.

    (j) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (k)(1) of this AD. Information may be emailed to: [email protected]

    (2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

    (3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Seattle ACO, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.

    (4) For service information that contains steps that are labeled as Required for Compliance (RC), the provisions of paragraphs (j)(4)(i) and (j)(4)(ii) of this AD apply.

    (i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. An AMOC is required for any deviations to RC steps, including substeps and identified figures.

    (ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.

    (k) Related Information

    (1) For more information about this AD, contact Wayne Lockett, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle ACO, 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6447; fax: 425-917-6590; email: [email protected]

    (2) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone: 206-544-5000, extension 1; fax: 206-766-5680; Internet: https://www.myboeingfleet.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

    Issued in Renton, Washington, on September 16, 2016. Suzanne Masterson, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service.
    [FR Doc. 2016-23082 Filed 9-27-16; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 18 CFR Part 40 [Docket No. RM16-13-000] Balancing Authority Control, Inadvertent Interchange, and Facility Interconnection Reliability Standards AGENCY:

    Federal Energy Regulatory Commission.

    ACTION:

    Notice of proposed rulemaking.

    SUMMARY:

    The Commission proposes to approve Reliability Standards BAL-005-1 (Balancing Authority Control) and FAC-001-3 (Facility Interconnection Requirements) submitted by the North American Electric Reliability Corporation.

    DATES:

    Comments are due November 28, 2016.

    ADDRESSES:

    Comments, identified by docket number, may be filed in the following ways:

    Electronic Filing through http://www.ferc.gov. Documents created electronically using word processing software should be filed in native applications or print-to-PDF format and not in a scanned format.

    Mail/Hand Delivery: Those unable to file electronically may mail or hand-deliver comments to: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street NE., Washington, DC 20426.

    Instructions: For detailed instructions on submitting comments and additional information on the rulemaking process, see the Comment Procedures Section of this document.

    FOR FURTHER INFORMATION CONTACT:

    Syed Ahmad (Technical Information), Office of Electric Reliability, Division of Reliability Standards, Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, Telephone: (202) 502-8718, [email protected]

    Julie Greenisen (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, Telephone: (202) 502-6362, [email protected]

    SUPPLEMENTARY INFORMATION:

    1. Under section 215 of the Federal Power Act (FPA),1 the Commission proposes to approve Reliability Standards BAL-005-1 (Balancing Authority Control) and FAC-001-3 (Facility Interconnection Requirements), submitted by the North American Electric Reliability Corporation (NERC), and to retire Reliability Standards BAL-005-0.2b (Automatic Generation Control), FAC-001-2 (Facility Interconnection Requirements), and BAL-006-2 (Inadvertent Interchange). The Commission also proposes to approve the associated implementation plans, violation risk factors, and violation severity levels for Reliability Standards BAL-005-1 and FAC-001-3. Finally, the Commission proposes to approve three revised definitions for the glossary of terms used in NERC Reliability Standards (NERC Glossary).

    1 16 U.S.C. 824(o).

    2. Proposed Reliability Standards BAL-005-1 and FAC-001-3 will enhance the reliability of the Bulk-Power System, as compared to currently-effective Reliability Standards BAL-005-0.2b and FAC-001-2, by clarifying and consolidating existing requirements related to frequency control. The proposed Reliability Standards support more accurate and comprehensive calculation of Reporting Area Control Error (ACE) by requiring timely reporting of an inability to calculate Reporting ACE and by requiring balancing authorities to maintain minimum levels of annual availability of 99.5% for each balancing authority's system for calculating Reporting ACE.2

    2 NERC states that Reporting ACE “represents a Balancing Authority Area's [] Area Control Error [] measured in megawatts [] as the difference between the [Balancing Authority Area's] Actual and Scheduled Net Interchange, plus its Frequency Bias Setting obligation and meter error corrections. Reporting ACE helps Responsible Entities provide reliable frequency control by indicating the current state of the entity's contribution to Reliability.” NERC Petition at 3.

    3. As discussed below, we have questions regarding the proposed retirement of Requirement R15 of Reliability Standard BAL-005-0.2b, which requires responsible entities to maintain and periodically test backup power supplies at primary control centers and other critical locations. Depending on the explanation received in comments, the Commission may issue a directive in the final rule to restore the substance of Requirement R15 in the Reliability Standards. Separately, we propose to approve NERC's request to retire Reliability Standard BAL-006-2 upon the latter of the effective date of proposed Reliability Standard BAL-005-1 and the NERC Operating Committee's approval of an Inadvertent Interchange Guideline document.

    I. Background A. Mandatory Reliability Standards and Order No. 693 Directive

    4. Section 215 of the FPA requires a Commission-certified Electric Reliability Organization (ERO) to develop mandatory and enforceable Reliability Standards that are subject to Commission review and approval. Specifically, the Commission may approve, by rule or order, a proposed Reliability Standard or modification to a Reliability Standard if it determines that the Standard is just, reasonable, not unduly discriminatory or preferential and in the public interest.3 Once approved, the Reliability Standards may be enforced by NERC, subject to Commission oversight, or by the Commission independently.4

    3 16 U.S.C. 824o(d)(2).

    4Id. 824o(e).

    5. Pursuant to section 215 of the FPA, the Commission established a process to select and certify an ERO,5 and subsequently certified NERC as the ERO.6 On March 16, 2007, the Commission issued Order No. 693, approving 83 of the 107 Reliability Standards filed by NERC, including Reliability Standards BAL-005-0 (Automatic Generation Control), FAC-001-0 (Facility Interconnection Requirements), and BAL-006-1 (Inadvertent Interchange).7 However, in approving Reliability Standards BAL-005-0 and BAL-006-1, the Commission directed NERC to develop modifications to those Reliability Standards through the standards development process.

    5Rules Concerning Certification of the Electric Reliability Organization; and Procedures for the Establishment, Approval, and Enforcement of Electric Reliability Standards, Order No. 672, FERC Stats. & Regs. ¶ 31,204, order on reh'g, Order No. 672-A, FERC Stats. & Regs. ¶ 31,212 (2006).

    6North American Electric Reliability Corp., 116 FERC ¶ 61,062, order on reh'g and compliance, 117 FERC ¶ 61,126 (2006), aff'd sub nom. Alcoa, Inc. v. FERC, 564 F.3d 1342 (D.C. Cir. 2009).

    7Mandatory Reliability Standards for the Bulk-Power System, Order No. 693, FERC Stats. & Regs. ¶ 31,242 at PP 420, 439, and 680, order on reh'g, Order No. 693-A, 120 FERC ¶ 61,053 (2007).

    6. With respect to Reliability Standard BAL-005-0, the Commission directed NERC to develop a modification that:

    (1) Develops a process to calculate the minimum regulating reserve a balancing authority must have at any given time taking into account expected load and generation variation and transactions being ramped into or out of the balancing authority; (2) changes the title of the Reliability Standard to be neutral as to the source of regulating reserves and to allow the inclusion of technically qualified DSM and direct control load management; (3) clarifies Requirement R5 of this Reliability Standard to specify the required type of transmission or backup plans when receiving regulation from outside the balancing authority when using non-firm service; and (4) includes Levels of Non-Compliance and a Measure that provides for a verification process over the minimum required automatic generation control or regulating reserves a balancing authority must maintain.8

    8Id. P 420.

    Since then, the Commission has approved one interpretation of Reliability Standard BAL-005-0 and accepted two errata filings.9 The currently-effective version of the Reliability Standard is BAL-005-0.2b.

    9See Modification of Interchange and Transmission Loading Relief Reliability Standards; and Electric Reliability Organization Interpretation of Specific Requirements of Four Reliability Standards, Order No. 713, 124 FERC ¶ 61,071 (2008); North American Electric Reliability Corp., Docket No. RD09-2-000 (May 13, 2009) (delegated letter order); North American Electric Reliability Corp., Docket No. RD12-4-000 (Sept. 13, 2012) (delegated letter order).

    7. With respect to Reliability Standard BAL-006-1, the Commission directed NERC to develop a modification “that adds Measures concerning the accumulation of large inadvertent imbalances and Levels of Non-Compliance.” 10 The Commission explained the need for such a modification as follows:

    10 Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 428.

    While we agree that inadvertent imbalances do not normally affect the real-time operations of the Bulk-Power System and pose no immediate threat to reliability, we are concerned that large imbalances represent dependence by some balancing authorities on their neighbors and are an indication of less than desirable balancing of generation with load. The Commission also notes that the stated purpose of this Reliability Standard is to define a process for monitoring balancing authorities to ensure that, over the long term, balancing authorities do not excessively depend on other balancing authorities in the Interconnection for meeting their demand or interchange obligations.11

    11Id.

    Since then, the Commission has approved one revision to Reliability Standard BAL-006-1 to remove the regional waiver of certain requirements for the Midwest ISO, following the Midwest ISO's transition to a single balancing authority model.12 The currently-effective version of the Reliability Standard is BAL-006-2.

    12See North American Electric Reliability Corp., 134 FERC ¶ 61,007 (2011).

    B. NERC Petition

    8. On April 20, 2016, NERC filed a petition seeking approval of proposed Reliability Standards BAL-005-1 (Balancing Authority Control) and FAC-001-3 (Facility Interconnection Requirements), nine new or revised definitions associated with the proposed Reliability Standards, and retirement of currently-effective Reliability Standards BAL-005-0.2b (Automatic Generation Control), FAC-001-2 (Facility Interconnection Requirements), and BAL-006-2 (Inadvertent Interchange).

    9. NERC requests that the two revised Reliability Standards and the revised definitions of Automatic Generation Control, Pseudo-Tie, and Balancing Authority become effective on the first day of the first calendar quarter twelve months from the effective date of the applicable governmental authority's approval of NERC's petition. NERC also requests that the retirement of Reliability Standard BAL-006-2 become effective upon the latter of the effective date of proposed Reliability Standard BAL-005-1 and the NERC Operating Committee's approval of the Inadvertent Interchange Guideline document. For the six remaining definitions (Reporting ACE and its component definitions—Actual Frequency, Actual Net Interchange, Scheduled Net Interchange, Interchange Meter Error, and Automatic Time Error Correction), NERC requests an effective date of July 1, 2016, to coincide with the effective date for BAL-001-2.

    10. NERC subsequently withdrew its request for approval of the six Reporting ACE-related definitions from the instant docket, and filed for expedited approval of the six definitions in a separate docket. The six definitions were approved by delegated letter order on June 23, 2016, and are no longer at issue in the instant proceeding.13

    13North American Electric Reliability Corp., Docket No. RD16-7-000 (June 23, 2016) (delegated letter order).

    11. NERC explains in its petition that proposed Reliability Standards BAL-005-1 and FAC-001-3 and the proposed retirement of Reliability Standard BAL-006-2 came about as part of the second phase of NERC's project to “clarify, consolidate, streamline, and enhance the Reliability Standards addressing frequency control.” 14 NERC indicates in its petition that the standard drafting team developed the proposed revisions after reviewing applicable Commission directives, “Paragraph 81” criteria, and the recommendations of the periodic review team that examined Reliability Standards BAL-005-0.2b and BAL-006-2.15

    14 NERC Petition at 2 (referencing Project 2010-14.2.1 Phase 2 of Balancing Authority Reliability-based Controls).

    15Id. at 3 (citing North American Elec. Reliability Corp., 138 FERC ¶ 61,193 at P 81, order on reh'g and clarification, 139 FERC ¶ 61,168 (2012); Petition of the North American Electric Reliability Corporation for Approval of Retirement of Requirements in Reliability Standards, Docket No. RM13-8-000, at Exhibit A (“Paragraph 81 Criteria”) (filed Feb. 28, 2013); Electric Reliability Organization Proposed to Retire Requirements in Reliability Standards, Order No. 788, 145 FERC ¶ 61,147 (2013)).

    12. NERC describes the revisions to Reliability Standard BAL-005-0.2b as clarifying and refining the current requirements “for accurate, consistent, and complete” Reporting ACE, which is a key frequency control and reliability indicator.16 These revisions include relocating some of the current requirements of Reliability Standard BAL-005-0.2b, which relate to confirming that facilities are within a balancing authority's metered boundary, into the proposed Facility Interconnection Requirements Reliability Standard, FAC-001-3. In addition, NERC proposes to relocate Requirement R3 of currently-effective Reliability Standard BAL-006-2 into proposed Reliability Standard BAL-005-1, explaining that the requirement relates to ensuring that balancing authorities use consistent data sources to calculate Reporting ACE, and therefore more properly belongs in Reliability Standard BAL-005.

    16Id.

    13. NERC explains that the proposed Reliability Standards “represent substantial improvements over existing Reliability Standards by helping to support more accurate and comprehensive calculation of Reporting ACE and satisfying all remaining Commission directives for Reliability Standards BAL-005 and BAL-006.” 17 Further, NERC maintains that proposed Reliability Standard BAL-005-1 is an improvement over the currently-effective version, BAL-005-0.2b, because it “consolidates unnecessary or repetitive Requirements and moves certain metrics for calculating Reporting ACE to the revised, proposed definition of Reporting ACE.” 18 Among other things, NERC proposes to move requirements applicable to generator operators and transmission operators in currently-effective Reliability Standard BAL-005-0.2b, into a more appropriate standard, explaining that “[a]s the purpose of FAC-001-3 is more commensurate with interconnection responsibilities, interconnection procedures contained in currently effective BAL-005-0.2b should be included in proposed Reliability Standard FAC-001-3.” 19

    17Id. at 12.

    18Id. at 13.

    19Id. at 23.

    14. In addition, NERC asserts that proposed Reliability Standard BAL-005-1 improves on the currently-effective version of the Reliability Standard because proposed Requirement R2 clarifies the performance expectations for notification to reliability coordinators when a balancing authority is unable to calculate Reporting ACE for 30 minutes or more,20 and Requirement R5 “introduces a new obligation . . . to assure the availability of a BA's system used to calculate Reporting ACE,” requiring a minimum availability of 99.5% in each calendar year.21

    20Id. at 16.

    21Id. at 19.

    15. NERC states that the proposed package of revisions reflected in its petition address the outstanding directives related to Reliability Standards BAL-005 and BAL-006 from Order No. 693. Specifically, NERC states that the title of Reliability Standard BAL-005-1 has been modified from Automatic Generation Control to Balancing Authority Control “to reflect the connection to Reporting ACE and resource-neutral requirements.” 22 In addition, NERC indicates that it has revised the definition of Automatic Generation Control to ensure a resource-neutral process for controlling demand and resources.23

    22Id. at 13 (referencing Order No. 693, FERC Stats. & Regs. ¶ 31,242 at P 404, and noting that the Commission's directive related to resource-neutrality for regulating reserves is now moot, as Requirement R2 of Reliability Standard BAL-005-0.2b, which required entities to maintain regulating reserves, has been retired).

    23Id. at n.39.

    16. NERC states that the requirements of proposed Reliability Standard BAL-005-1 all have a “medium” violation risk factor, thereby addressing the Commission's directive to revise the violation risk factor for Reliability Standard BAL-005-0, Requirement R17 to “medium.” 24 Similarly, NERC asserts that it has met the directive to consider Xcel and FirstEnergy's comments about the scope of Requirement R17, which set minimum accuracy requirements for time error and frequency devices, by retiring part of the currently-effective requirement and moving the minimum accuracy requirements into Requirement R3 of Reliability Standard BAL-005-1. NERC maintains that this has “streamlined obligations to use specific frequency metering equipment that is necessary for operation of [automatic generation control (AGC)] and accurate calculation of Reporting ACE, as this ensures that costs associated with implementation are commensurate with reliability benefit.” 25

    24Id. at 17; see also North American Elec. Reliability Corp., 121 FERC P 61,179 at P 58 (2007).

    25Id. at 18.

    17. NERC proposes to move Requirement R3 from currently-effective Reliability BAL-006-2 into proposed Reliability Standard BAL-005-1, but proposes to retire the rest of the requirements of Reliability Standard BAL-006-2 (Requirements R1, R2, R4, and R5). NERC states that the standard drafting team determined that, aside from Requirement R3, each of the requirements in Reliability Standard BAL-006-2 are “energy accounting standards” and/or are “administrative” in nature, and should accordingly be retired.26

    26Id. at 25-26.

    18. While NERC acknowledges that the Commission previously directed it to develop measures concerning the accumulation of large inadvertent imbalances, based on the Commission's concern that large imbalances may indicate an underlying problem, NERC explains that the requirements of Reliability Standard BAL-001-2, which require balancing authorities to maintain clock-minute ACE within the Balancing Authority ACE Limit, as well as the requirements of Reliability Standard BAL-003-1 and proposed Reliability Standard BAL-002-2, which require entities to restore Reporting ACE within predefined bounds, prevent any excessive dependency on other entities. As NERC explains in its petition:

    Because entities are supporting frequency through this coordinated suite of reliability standards, entities will not excessively depend on other entities in the Interconnection such that the purely economic issue that was addressed by BAL-006-2 becomes a reliability issue for a NERC Reliability Standard.27

    27Id. at 27.

    19. In order to address “any remaining or potential concerns with retirement of BAL-006-2,” NERC proposes that the retirement become effective only upon the Operating Committee's approval of an Inadvertent Interchange Guideline document.28 NERC states that the Inadvertent Interchange Guideline document was based on a white paper developed by the standard drafting team for Reliability Standards BAL-005 and BAL-006, and maintains that it provides an in-depth justification for why a NERC Reliability Standard is not necessary for inadvertent interchange.

    28 The Inadvertent Interchange Guideline document is expected to be presented to the NERC Operating Committee in mid-September 2016, and will be posted for a 45-day comment period.

    20. With respect to the three proposed definitions that remain at issue in this proceeding, NERC explains that (1) “Automatic Generation Control” has been revised to set forth a resource-neutral process for controlling demand and resources; (2) “Pseudo-Tie” has been updated to reflect the use of the term “Reporting ACE”; and (3) “Balancing Authority” has been revised to more accurately describe a balancing authority's resource demand function.

    C. NERC Supplemental Filing

    21. On June 14, 2016, NERC submitted supplemental information in support of its April 20, 2016 petition (Supplemental Filing), to provide additional explanation and support for the retirement of Requirement R15 in currently-effective Reliability Standard BAL-005-0.2b.29 In its Supplemental Filing, NERC maintains that Requirement R15 should be retired because the objectives of that requirement (i.e., to ensure the continued operation of AGC and certain data recording equipment during the loss of normal power supply) are being addressed through other Reliability Standards and requirements. Specifically, NERC maintains that Reliability Standard EOP-008-1 requires a balancing authority to have a backup control center facility and an operating plan that allows it to meet its functional obligations with regard to the reliable operation of the bulk electric system in the event that its primary control center functionality is lost.30

    29 As NERC notes in its Supplemental Filing, NERC stated in its initial petition that “Requirements R2, R7 and R15 . . . are redundant, ineffective, and should be retired based on Commission-approved Paragraph 81 Criteria.” NERC Supplemental Filing at 1 (quoting April 20 Petition at 15).

    30 NERC Supplemental Filing at 2.

    22. In addition, NERC maintains that the proposed performance requirements of Requirement R3 of Reliability BAL-005-1, which would require balancing authorities to “use frequency metering equipment for the calculation of Reporting ACE that is available a minimum of 99.95% of each calendar year,” will help to ensure that balancing authorities can continuously operate the equipment necessary for the calculation of Reporting ACE, effectively eliminating the need for Requirement R15.31

    31Id. at 4.

    II. Discussion

    23. Pursuant to FPA section 215(d)(2), we propose to approve Reliability Standards BAL-005-1 and FAC-001-3 as just, reasonable, not unduly discriminatory or preferential, and in the public interest. Proposed Reliability Standard BAL-005-1 and FAC-001-3 will enhance reliability as compared to currently-effective Reliability Standards BAL-005-0.2b and FAC-001-2, because the proposed Reliability Standards clarify and consolidate existing requirements related to frequency control. In addition, proposed Reliability Standard BAL-005-1 supports more accurate and comprehensive calculation of Reporting ACE by requiring timely reporting of an inability to calculate Reporting ACE (Requirement R2) and by requiring minimum levels of availability and accuracy for each balancing authority's system for calculating Reporting ACE (Requirement R5).

    24. We also propose to approve the violation risk factors and violation severity levels associated with Reliability Standards BAL-005-1 and FAC-001-3; the proposed revisions to the definitions of Automatic Generation Control, Pseudo-Tie, and Balancing Authority; the proposed retirement of Reliability Standards BAL-005-0.2b, FAC-001-2, and BAL-006-2 in accordance with NERC's implementation plan; and NERC's implementation plans for proposed Reliability Standards BAL-005-1 and FAC-001-3.

    25. As discussed below, the Commission seeks comment from NERC and other interested entities regarding the retirement of Requirement R15 of Reliability Standard BAL-005-0.2b, which requires responsible entities to maintain and periodically test backup power supplies at primary control centers and other critical locations. Depending on the explanation received in the comments, the Commission may issue a directive in the final rule requiring NERC to restore this requirement through the standards development process.

    A. Retirement of Reliability Standard BAL-005-0.2b, Requirement R15

    26. Proposed Reliability Standard BAL-005-1 would eliminate currently-effective Requirement R15 from the standard, which states as follows:

    The Balancing Authority shall provide adequate and reliable backup power supplies and shall periodically test these supplies at the Balancing Authority's control center and other critical locations to ensure continuous operation of AGC and vital data recording equipment during loss of the normal power supply.

    27. NERC contends that Requirement R15 should be retired because it is “redundant” and “ineffective,” and points to a number of other Reliability Standards and requirements that, NERC maintains, achieve the same objective as Requirement R15. Specifically, NERC explains that requirements in Reliability Standard EOP-008-1 (Loss of Control Center Functionality) and the performance requirements of Requirement R3 in proposed Reliability Standard BAL-005-1 address the same objectives as existing Requirement R15 (i.e., to ensure the continued operations of AGC and certain data recording equipment during the loss of normal power supply).32

    32Id. at 2-4.

    28. NERC contends that Reliability Standard EOP-008-1 requires a balancing authority to have a backup control center facility and an operating plan that allows it to meet its functional obligations with regard to the reliable operation of the bulk electric system in the event that its primary control center functionality is lost. NERC asserts that these requirements effectively address the same reliability objective as Reliability Standard BAL-005-0.2b Requirement R15 because a balancing authority's “functional obligations regarding reliable operations” 33 include the continuous operation of AGC and the data recording equipment necessary to balance generation and load. Further, NERC contends that Requirement R7 of Reliability Standard EOP-008-1 requires balancing authorities to test their operating plans annually to demonstrate the viability of their backup functionality.

    33Id. at 3.

    29. NERC maintains that the proposed performance requirements in Requirement R3 of Reliability Standard BAL-005-1, which require balancing authorities to “use frequency metering equipment for the calculation of Reporting ACE that is available a minimum of 99.95% of each calendar year,” will help ensure that balancing authorities can continuously operate the equipment necessary for the calculation of Reporting ACE. NERC notes that if a balancing authority “fails[s] to have adequate and reliable backup power supplies at its control center to ensure continuous operation of its AGC and vital data recording equipment, the Balancing Authority risks violation of the performance obligation in proposed Reliability Standard BAL-005-1, Requirement R3 if its normal power supply is lost.” 34

    34Id. at 4-5.

    Commission Request for Comments

    30. We recognize that the approach taken in revised Reliability Standard BAL-005-1, combined with the requirements of Reliability Standard EOP-008-1, represents a more performance-based approach to maintaining functionality for reliable operation of the interconnected bulk electric system, including ensuring the continued operation of AGC and certain data recording equipment during the loss of normal power supply, compared to the more specific approach of Requirement R15 in Reliability Standard BAL-005-0.2b. Moreover, balancing authorities currently appear to be the only type of functional entity explicitly required to have and to test adequate and reliable backup supply at critical locations. For example, there is no provision parallel to Requirement R15 that reliability coordinators or transmission operators provide “adequate and reliable backup power supplies” at their primary control centers and “other critical locations.”

    31. Nonetheless, after considering NERC's Petition and Supplemental Filing addressing the matter, we continue to have questions as to whether the objectives of Requirement R15 are met, as NERC contends, by other requirements in Reliability Standard EOP-008-1 and proposed Reliability Standard BAL-005-1. In particular, Requirement R15 of currently-effective Reliability Standard BAL-005-0.2b helps to ensure continued operability of balancing authorities' primary control centers, despite the loss of normal power supply, without evacuation to or activation of backup control centers. Thus, this provision appears to provide additional robustness in the primary control center and mitigates the risk of problems occurring in the transition to a secondary control center. We also note that NERC's Independent Expert Review Project (IERP) report did not include Requirement R15 among the requirements recommended for retirement when it reviewed Reliability Standard BAL-005-0.2b in 2013.35 While the IERP report explicitly recommended retiring other provisions of Reliability Standard BAL-005-0.2b, it recommended retaining Requirement R15 as part of the Future Enforceable Set of requirements.36

    35 Standards Independent Experts Review Project at 26, http://www.nerc.com/pa/Stand/Resources/Documents/Standards_Independent_Experts_Review_Project_Report.pdf.

    36Id. at 1.

    32. Accordingly, we are not persuaded based on the current record that it is appropriate to eliminate balancing authorities' existing obligation to have and periodically test backup power supply at a primary control center. We, therefore, seek additional justification for the retirement of Requirement R15 of Reliability Standard BAL-005-0.2b. Specifically, the Commission seeks comment on the benefits and potential burden of retaining Requirement R15. We also seek an explanation as to why, historically, there is no parallel to Requirement R15 for reliability coordinators and transmission operators, and whether any reason exists to distinguish between balancing authorities and other entities, such as reliability coordinators and transmission operators, that may operate a control center or critical facility with respect to the need for backup power supply and testing at such locations.

    33. The Commission further seeks comment on the following questions:

    1. If Requirement R15 of Reliability Standard BAL-005-0.2b is retired, can balancing authorities comply with Reliability Standard EOP-008-1 by having a primary control center and “backup functionality” without a backup power supply at the primary control center or without a backup power supply at the location providing backup functionality? Are reliability coordinators and transmission operators compliant with Reliability Standard EOP-008-1 by having a primary control center and “backup functionality” without a backup power supply at the primary control center or without a backup power supply at the location providing backup functionality?

    2. Explain the benefits and potential burdens for the reliable operation of the bulk electric system in having a backup power supply at the primary control center. Is it more appropriate to have backup power supply sited at a location providing backup functionality? Does the potential impact to reliability change if the entity is a reliability coordinator or transmission operator?

    3. Describe current practices with respect to the availability of backup power supplies at primary control centers and other critical locations. In particular, do any reliability coordinators, transmission operators, or balancing authorities currently have a primary control center without a backup power supply?

    4. What does the reference in Reliability Standard BAL-005-0.2b Requirement R15 to “other critical locations” include? Does it include facilities beyond primary control centers and locations providing backup functionality?

    5. Does the use of frequency metering equipment to calculate Reporting ACE that is available a minimum of 99.95% of each calendar year, as proposed in Reliability Standard BAL-005-1, Requirement R3, ensure “continuous operation of AGC and vital data recording equipment during loss of the normal power supply,” per Reliability Standard BAL-005-0.2b, Requirement R15? What other functions would be included as part of the metering equipment and data collection of Reliability Standard BAL-005-1, Requirement R3? What functions currently part of Reliability Standard BAL-005-0.2b, Requirement R15 would be omitted?

    6. Do the requirements in Reliability Standard EOP-008-1 for backup functionality ensure the “continuous operation of AGC and vital data recording equipment,” and the ability to collect data to calculate Reporting ACE, in the case of the unavailability of such equipment for a period within the bounds of proposed Reliability Standard BAL-005-1, Requirement R3?

    III. Information Collection Statement

    34. The Paperwork Reduction Act (PRA) 37 requires each federal agency to seek and obtain Office of Management and Budget (OMB) approval before undertaking a collection of information directed to ten or more persons, or contained in a rule of general applicability. The OMB regulations require that OMB approve certain reporting and recordkeeping (collections of information) imposed by an agency.38 Upon approval of a collection(s) of information, OMB will assign an OMB control number and expiration date. Respondents subject to the filing requirements of this rule will not be penalized for failing to respond to these collections of information unless the collections of information display a valid OMB control number.

    37 44 U.S.C. 3501-3520.

    38 5 CFR 1320.11.

    35. The Commission is submitting these reporting and recordkeeping requirements to OMB for its review and approval under section 3507(d) of the PRA. Comments are solicited on the Commission's need for this information, whether the information will have practical utility, the accuracy of the provided burden estimate, ways to enhance the quality, utility, and clarity of the information to be collected, and any suggested methods for minimizing the respondent's burden, including the use of automated information techniques.

    36. This Notice of Proposed Rulemaking (NOPR) proposes to approve revisions to Reliability Standards BAL-005, associated with FERC-725R and FAC-001, associated with FERC-725D. These proposed revisions streamline and clarify the current requirements related to the calculation of Reporting ACE—a key frequency control and reliability indicator factor—including consolidating the seventeen requirements of currently-effective BAL-005-0.2b, associated with FERC-725R, into seven requirements in BAL-005-1, relocation of certain requirements related to interconnection requirements for transmission owners and generation owners into FAC-001-3, relocation of Requirement R3 in currently-effective BAL-006-2 into proposed BAL-005-1, and relocation of certain metrics and calculations required for calculating Reporting ACE into the NERC definition of Reporting ACE and its component definitions.

    37. NERC's proposed revisions to Reliability Standards BAL-005 and FAC-001will not result in an increase in the record-keeping and reporting requirements imposed on balancing authorities, other than the one-time cost of administering the change to the revised standard. All other recordkeeping and reporting obligations imposed on balancing authorities under the revised requirements essentially track those that already exist under currently-effective Reliability Standards BAL-005-0.2b and FAC-001-2. The proposed revisions to FAC-001-3 will result in a limited increase in the record-keeping and reporting requirements imposed on those transmission owners and generator owners that are not also transmission operators and generator operators (about 198 entities in the United States), as shown in the chart below.39 Many of the revisions to the Reliability Standards reflected in this NOPR were developed to help clarify and streamline existing requirements related to calculation of Reporting ACE, and are expected to simplify these entities' overall burden with respect to recordkeeping, reporting, and compliance. Moreover, the NOPR proposes to allow the retirement of the bulk of the requirements in Reliability Standard BAL-006-2, further reducing the overall record-keeping and reporting requirements for balancing authorities. Accordingly, the Commission estimates that the overall change in the record-keeping and reporting requirements as a result of this rulemaking will be de minimis on a per-entity basis.

    39 Proposed Reliability Standard FAC-001-3 replaces and strengthens currently effective Reliability Standard FAC-001-2 by moving currently effective Requirement R1 of Reliability Standard BAL-005-0.2b to proposed Reliability Standard FAC-001-3, requiring that transmission owner and generator owner interconnection requirements include procedures for confirming that new or materially modified facilities connecting to the bulk electric system are within a balancing authority's metered boundaries. NERC explains that these interconnection requirements should be relocated to Reliability Standard FAC-001-3, as FAC-001-3 establishes facility interconnection requirements.

    38. Public Reporting Burden: The changes reflected in proposed Reliability Standard BAL-005-1 are not expected to result in an increase in the annual record-keeping and reporting requirements on applicable entities (balancing authorities). However, balancing authorities will have to perform a one-time review of the new standard to ensure that their compliance practices (including record-keeping) are consistent with the revised requirements. The relocation of Requirement R1 of Reliability Standard BAL-005-0.2b into Reliability Standard FAC-003-1 will result in an increase in the number of entities subject to the requirement, as the requirement will be applicable to transmission owners and generator owners rather than transmission operators and generator operators. This limited increase in annual record-keeping and reporting burden, along with the one-time burden of administering the change from BAL-005-0.2b to BAL-005-1, is however expected to be offset to some extent by the decrease in record-keeping and reporting burden associated with the retirement of Reliability Standard BAL-006-2 (in considering the overall record-keeping and reporting requirements associated with the revised Reliability Standards).

    Data collection
  • FERC 725D & 725R
  • (modifications in
  • RM16-13-000)
  • Number of
  • respondents 40
  • Number of responses
  • per respondent
  • Total number of responses Average
  • burden hours
  • & cost per
  • response 41
  • Annual
  • burden hours
  • & total annual
  • cost 42
  • (1) (2) (1) × (2) = (3) (4) (3) × (4) = (5) BAL-005-1 (FERC-725R) BA 105 1 (one-time) 105 1
  • $95.35
  • 105
  • $10,325
  • FAC-001-3 R3 (FERC-725D) GO/TO 198 43 1 (annual) 198 1
  • 44 $63.25
  • $12,523.50
  • Retirement of current standard BAL-006-02 currently in (FERC-725R) BA 105 −1 (annual) −105 −1
  • −$31.15
  • 105
  • −$3,270.75
  • Total $19,577.75

    Title: FERC-725D, Mandatory Reliability Standards: FAC Reliability Standards; FERC-725R, Mandatory Reliability Standards: BAL Reliability Standards

    40 The estimated number of respondents is based on the NERC compliance registry as of August 12, 2016. According to the NERC compliance registry, there are 70 U.S. balancing authorities (BA) in the Eastern Interconnection, 34 balancing authorities in the Western Interconnection and one balancing authority in the Electric Reliability Council of Texas (ERCOT).

    41 The burden hours and cost are based on the hourly cost for an engineer for BAL-005-1, the average of the hourly cost for an engineer and clerical staff for FAC-001-3, and the hourly cost for clerical staff for changes associated with the retirement of BAL-006-2.

    42 For purposes of determining the overall annual cost of the record-keeping and reporting changes reflected in this NOPR, the one-time cost associated with administering the change to BAL-005-1 is being treated as an annual cost.

    43 Per the NERC compliance registry, there are 56 generator owners (GO) that are not also generator operators and 142 transmission owners (TO) that are not also transmission operators, for a total of 198 new entities in the United States subject to FAC-001-3 Requirement R3.

    44 The project cost per response for record-keeping and reporting associated with the revisions in FAC-001-3 reflect an average of the hourly cost for an engineer and for clerical staff.

    Action: Proposed Revisions.

    OMB Control No: 1902-0247 (FERC-725D); 1902-0268 (FERC-725R).

    Respondents: Business or other for-profit and not-for-profit institutions.

    Frequency of Responses: On-going.

    Necessity of the Information: The Commission has reviewed the requirements of Reliability Standards BAL-005-1 and FAC-001-3 and has made a determination that the requirements of these Reliability Standards are necessary to implement section 215 of the FPA.

    Internal Review: The Commission reviewed the proposed Reliability Standards and made a determination that its action is necessary to implement section 215 of the FPA. The Commission has assured itself, by means of its internal review, that there is specific, objective support for the burden estimates associated with the information requirements.

    39. Interested persons may obtain information on the reporting requirements by contacting the following: Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426 [Attention: Ellen Brown, Office of the Executive Director, email: [email protected], phone: (202) 502-8663, fax: (202) 273-0873].

    40. For submitting comments concerning the collection(s) of information and the associated burden estimate(s), please send your comments to the Commission and to the Office of Management and Budget, Office of Information and Regulatory Affairs, Washington, DC 20503 [Attention: Desk Officer for the Federal Energy Regulatory Commission, phone: (202) 395-4638, fax: (202) 395-7285]. For security reasons, comments to OMB should be submitted by email to: [email protected]. Comments submitted to OMB should include FERC-725R and Docket Number RM16-13-000.

    IV. Environmental Analysis

    41. The Commission is required to prepare an Environmental Assessment or an Environmental Impact Statement for any action that may have a significant adverse effect on the human environment.45 The Commission has categorically excluded certain actions from this requirement as not having a significant effect on the human environment. Included in the exclusion are rules that are clarifying, corrective, or procedural or that do not substantially change the effect of the regulations being amended.46 The actions proposed here fall within this categorical exclusion in the Commission's regulations.

    45Regulations Implementing National Environmental Policy Act of 1969, Order No. 486, FERC Stats. & Regs., ¶ 30,783 (1987).

    46 18 CFR 380.4(a)(2)(ii).

    V. Regulatory Flexibility Act Certification

    42. The Regulatory Flexibility Act of 1980 (RFA) 47 generally requires a description and analysis of proposed rules that will have significant economic impact on a substantial number of small entities. The RFA does not mandate any particular outcome in a rulemaking. It only requires consideration of alternatives that are less burdensome to small entities and an agency explanation of why alternatives were rejected. The Small Business Administration (SBA) revised its size standard effective January 22, 2014 for electric utilities from a standard based on megawatt hours to a standard based on the number of employees, including affiliates. Under SBA's size standards, some balancing authorities, generation owners, and transmission owners will fall under the following category and associated size threshold: Electric bulk power transmission and control, at 500 employees.48

    47 5 U.S.C. 601-612.

    48 13 CFR 121.201, Sector 22 (Utilities), NAICS code 221121 (Electric Bulk Power Transmission and Control).

    43. As noted above, the Commission estimates a very limited, one-time increase in record-keeping and reporting burden on balancing authorities due to the changes in the revised Reliability Standards, with no other increase in the cost of compliance. Approximately 24 of the 105 balancing authorities are expected to meet the SBA's definition for a small entity. In addition, approximately 198 entities will be subject to new record-keeping and reporting requirements under revised Reliability Standard FAC-001-3, with no other increase in the cost of compliance. Approximately 177 of these entities are expected to meet the SBA's definition of a small entity.

    44. Even assuming that the one-time cost of compliance for administering the change from Reliability Standard BAL-005-0.2b to BAL-005-1 is an annual cost, and assuming that all of the affected entities qualify as small entities, the total annual cost to the industry as a whole is minimal ($19,577.75), and the average cost per affected entity is $63.23.

    45. According to SBA guidance, the determination of significance of impact “should be seen as relative to the size of the business, the size of the competitor's business, and the impact the regulation has on larger competitors.” 49 The Commission does not consider the estimated burden to be a significant economic impact. As a result, the Commission certifies that the reforms proposed in this NOPR would not have a significant economic impact on a substantial number of small entities.

    49 U.S. Small Business Administration, A Guide for Government Agencies: How to comply with the Regulatory Flexibility Act, at 18 (May 2012), https://www.sba.gov/sites/default/files/advocacy/rfaguide_0512_0.pdf.

    VI. Comment Procedures

    46. The Commission invites interested persons to submit comments on the matters and issues proposed in this notice to be adopted, including any related matters or alternative proposals that commenters may wish to discuss. Comments are due November 28, 2016. Comments must refer to Docket No. RM16-13-000, and must include the commenter's name, the organization they represent, if applicable, and their address in their comments.

    47. The Commission encourages comments to be filed electronically via the eFiling link on the Commission's Web site at http://www.ferc.gov. The Commission accepts most standard word processing formats. Documents created electronically using word processing software should be filed in native applications or print-to-PDF format and not in a scanned format. Commenters filing electronically do not need to make a paper filing.

    48. Commenters that are not able to file comments electronically must send an original of their comments to: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street NE., Washington, DC 20426.

    49. All comments will be placed in the Commission's public files and may be viewed, printed, or downloaded remotely as described in the Document Availability section below. Commenters on this proposal are not required to serve copies of their comments on other commenters.

    VII. Document Availability

    50. In addition to publishing the full text of this document in the Federal Register, the Commission provides all interested persons an opportunity to view and/or print the contents of this document via the Internet through the Commission's Home Page (http://www.ferc.gov) and in the Commission's Public Reference Room during normal business hours (8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE., Room 2A, Washington, DC 20426.

    51. From the Commission's Home Page on the Internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field.

    52. User assistance is available for eLibrary and the Commission's Web site during normal business hours from the Commission's Online Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at [email protected], or the Public Reference Room at (202) 502-8371, TTY (202) 502-8659. Email the Public Reference Room at [email protected].

    By direction of the Commission.

    Issued: September 22, 2016. Nathaniel J. Davis, Sr., Deputy Secretary.
    [FR Doc. 2016-23442 Filed 9-27-16; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 101 [Docket No. FDA-2016-D-2335] Use of the Term “Healthy” in the Labeling of Human Food Products; Request for Information and Comments AGENCY:

    Food and Drug Administration, HHS.

    ACTION:

    Notification; establishment of docket; request for comments.

    SUMMARY:

    The Food and Drug Administration (FDA or we) is announcing the establishment of a docket to receive information and comments on the use of the term “healthy” in the labeling of human food products. This action is consistent with our recently released 2016-2025 Foods and Veterinary Medicine (FVM) Program's strategic plan with specific goals for nutrition and other planned and recent activity including the issuance of final rules updating certain of our nutrition labeling regulations. In addition, we received a citizen petition asking that we update, among other things, our nutrient content claim regulations to be consistent with current federal dietary guidance. In particular, the petitioners request that FDA amend the regulation defining the nutrient content claim “healthy” with respect to total fat intake and amend the regulation to emphasize whole foods and dietary patterns rather than specific nutrients. We invite public comment on the term “healthy”, generally, and as a nutrient content claim in the context of food labeling and on specific questions contained in this document.

    DATES:

    Submit either electronic or written comments by January 26, 2017.

    ADDRESSES:

    You may submit comments as follows:

    Electronic Submissions

    Submit electronic comments in the following way:

    Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. Comments submitted electronically, including attachments, to http://www.regulations.gov will be posted to the docket unchanged. Because your comment will be made public, you are solely responsible for ensuring that your comment does not include any confidential information that you or a third party may not wish to be posted, such as medical information, your or anyone else's Social Security number, or confidential business information, such as a manufacturing process. Please note that if you include your name, contact information, or other information that identifies you in the body of your comments, that information will be posted on http://www.regulations.gov.

    • If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).

    Written/Paper Submissions

    Submit written/paper submissions as follows:

    Mail/Hand delivery/Courier (for written/paper submissions): Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    • For written/paper comments submitted to the Division of Dockets Management, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”

    Instructions: All submissions received must include the Docket No. FDA-2016-D-2335 for “Use of the Term “Healthy” in the Labeling of Human Food Products; Request for Information and Comments.” Received comments will be placed in the docket and, except for those submitted as “Confidential Submissions,” publicly viewable at http://www.regulations.gov or at the Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday.

    • Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on http://www.regulations.gov. Submit both copies to the Division of Dockets Management. If you do not wish your name and contact information to be made publicly available, you can provide this information on the cover sheet and not in the body of your comments and you must identify this information as “confidential.” Any information marked as “confidential” will not be disclosed except in accordance with 21 CFR 10.20 and other applicable disclosure law. For more information about FDA's posting of comments to public dockets, see 80 FR 56469, September 18, 2015, or access the information at: http://www.fda.gov/regulatoryinformation/dockets/default.htm.

    Docket: For access to the docket to read background documents or the electronic and written/paper comments received, go to http://www.regulations.gov and insert the docket number, found in brackets in the heading of this document, into the “Search” box and follow the prompts and/or go to the Division of Dockets Management, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    FOR FURTHER INFORMATION CONTACT:

    Vincent de Jesus, Center for Food Safety and Applied Nutrition (HFS-830), Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, 240-402-1450.

    SUPPLEMENTARY INFORMATION:

    I. Background A. What has been FDA's position regarding the use of the term “healthy?”

    Under section 403(r)(1)(A) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 343(r)(1)(A)), a food is deemed misbranded if it bears claims, either express or implied, that characterize the level of a nutrient which is of a type required to be declared in nutrition labeling unless the claim is made in accordance with a regulatory definition established by FDA (see section 403(r)(2) of the FD&C Act). Section 201(f) of the FD&C Act (21 U.S.C. 321(f)) defines the term “food” to mean articles used for food or drink for man or other animals, chewing gum, and articles used for components of any such article. Section 201(n) of the FD&C Act (21 U.S.C. 321(n)) provides that labeling is misleading if, among other things, it fails to reveal facts that are material in light of representations made or suggested in the labeling, or material with respect to consequences that may result from the use of the food to which the labeling relates under the conditions of use prescribed in the labeling, or under such conditions of use as are customary or usual. Section 201(m) of the FD&C Act defines “labeling” as all labels and other written, printed, or graphic matter upon any article or any of its containers or wrappers or accompanying such article.

    The definition in 21 CFR 101.65(d) establishes the parameters for use of the implied nutrient content claim “healthy” or related terms (such as “health”, “healthful”, “healthfully”, “healthfulness”, “healthier”, “healthiest”, “healthily”, and “healthiness”) on the label or in labeling of a food to suggest that a food, because of its nutrient content, may be useful in creating a diet that is consistent with dietary recommendations, if the food meets certain nutrient conditions, and the claim is made with an explicit or implicit claim or statement about a nutrient (e.g., “healthy, contains 3 grams of fat”). The conditions include specific criteria for nutrients to limit in the diet, such as total fat, saturated fat, cholesterol, sodium, as well as requirements for nutrients to encourage in the diet, including vitamin A, vitamin C, calcium, iron, protein, and fiber. The criteria are linked to elements in the Nutrition Facts label and serving size regulations (see 21 CFR 101.9 and 101.12). The nutrient criteria to use this nutrient content claim can vary for different food categories (e.g., fruits and vegetables, or seafood and game meat) (21 CFR 101.65(d)(2)).

    In addition, under section 403(a)(1) of the FD&C Act, a food is deemed misbranded if its labeling is false or misleading in any particular.

    B. What has prompted FDA to request information and comments?

    On July 14, 2016, we released the FVM Program's Strategic Plan for fiscal years 2016-2025. The strategic plan is organized under four goals: Food safety, nutrition, animal health, and organizational excellence (The strategic plan is available on our Web site at http://www.fda.gov/downloads/AboutFDA/CentersOffices/OfficeofFoods/UCM507379.pdf.)

    FDA's nutrition-related strategic goals include: Providing and supporting accurate and useful nutrition information to consumers so they can choose healthier diets consistent with the Dietary Guidelines for Americans and other evidence-based recommendations; and encouraging and facilitating new products and product reformulation to promote a healthier food supply. A key element in achieving these goals is the modernization of FDA's regulations for nutrition-related labeling claims to reflect current science, provide information in ways that are understandable and useful to consumers, and reduce barriers and encourage industry efforts to develop and introduce healthier food products through innovation or reformulation.

    In the Federal Register of May 27, 2016, we issued final rules updating the Nutrition Facts label and serving size information for packaged foods to reflect new scientific information, including the link between diet and chronic diseases such as obesity and heart disease (see 81 FR 33742, “Food Labeling: Revision of the Nutrition and Supplement Facts Labels”; 81 FR 34000, “Food Labeling: Serving Sizes of Foods That Can Reasonably Be Consumed At One Eating Occasion; Dual-Column Labeling; Updating, Modifying, and Establishing Certain Reference Amounts Customarily Consumed; Serving Size for Breath Mints; and Technical Amendments”). Updates to the Nutrition Facts label include changes in the individual nutrients that are required to be declared and also changes to the Daily Value of other individual nutrients, reflecting changes in recommended intake levels, based on current science. Because the framework for many of FDA's nutrition labeling regulations is linked to elements in the Nutrition Facts label and serving size regulations, FDA has been planning to update these regulations to align with the updated Nutrition Facts label regulations. These regulations include those for health claims and nutrient content claims (including the implied nutrient content claim “healthy”).

    The science underlying FDA's new requirements for the Nutrition Facts label and serving size information is also reflected in the recently published 2015-2020 Dietary Guidelines for Americans (2015-2020 Dietary Guidelines) (Ref. 1). The Dietary Guidelines are designed for professionals to help all individuals ages 2 years and older and their families consume a healthy, nutritionally adequate diet. The Dietary Guidelines are the foundation of federal nutrition guidance and are fundamental in shaping federal policies and programs related to food, nutrition, and health. Specific recommendations in the Dietary Guidelines have evolved over time, as nutrition science has advanced. They provide information and perspectives on consumption of foods from various food groups, as well as the intake of specific macronutrients such as fats and sugars, and micronutrients such as vitamins and minerals. The 2015-2020 Dietary Guidelines emphasize the importance of eating patterns as a whole, the combination of foods and drinks that people consume over time. The scientific evidence on which the Dietary Guidelines are based and the recommendations in the Dietary Guidelines will help inform additional updates to FDA's regulations on nutrition-related claims that are permitted on the food label.

    A variety of stakeholders from academia and industry, as well as consumers, have also requested that FDA update additional nutrition labeling regulations for nutrient content and health claims, including the implied nutrient content claim “healthy”. Some stakeholders have provided specific recommendations on how they believe we should approach such an update. For example, in a citizen petition dated December 1, 2015 (Docket Number FDA-2015-P-4564) (“Kind Citizen Petition”), KIND LLC requested that we make certain changes to existing nutrition claim regulations. A number of these changes specifically related to the nutrient content claim “healthy”. With regards to “healthy”, the petition requested that we:

    • Amend § 101.65(d)(2) so that the term “healthy” or related terms may be used if the food “meets the following conditions for fat, saturated fat, and cholesterol exclusive of the fat and saturated fat contributed to the food product by the following foods, provided that such foods are used in their whole form or have been processed in such a way that did not materially degrade their nutritional value: Fruits, vegetables, nuts, seeds, legumes, whole grains, and seafood; and the food meets the following conditions for other nutrients;”

    • Amend § 101.65(d) (pertaining to general nutritional claims) to “clarify that a labeling claim that a food is useful in maintaining healthy dietary practices is an implied nutrient content claim only if the claim is immediately adjacent to an implicit claim or statement about a nutrient”;

    • Amend § 101.65(b) (pertaining to label statements that are not implied claims) to “clarify that a statement that claims that a food is useful in maintaining healthy dietary practices and that does not appear immediately adjacent to an explicit or implicit claim or statement about a nutrient is generally not an implied nutrient content claim, but is instead a dietary guidance statement”; and

    • While the rulemakings to amend § 101.65 are pending, issue a guidance document to “clarify that a statement about the usefulness of a food, or a category of foods, in maintaining healthy dietary practices is a dietary guidance statement that is not subject to the requirements in FDA's nutrient content claim regulations unless it is an implied nutrient content claim because it is immediately adjacent to an explicit or implicit claim or statement about a nutrient”.

    See Kind Citizen Petition at pgs. 2-5. The petitioner stated that our existing regulatory scheme “limits the ability of food producers to tell consumers that products containing certain foods—such as nuts, whole grains, seafood, fruits, and vegetables—are healthy, even though they are currently recommended as key components of a healthful diet” (Kind Citizen Petition at pg. 5). The petitioner said that its request would “make FDA's regulatory regime consistent with current federal dietary recommendations (as is required by law), consistent with current scientific evidence about the health benefits of certain foods, and would significantly benefit the public health by ensuring that consumers fully understand the dietary value of foods available for purchase” (id.).

    The petitioner asserted that current federal dietary recommendations encourage dietary patterns that are rich in nuts, whole grains, legumes, seeds, fruits, vegetables, and seafood (id. at pgs. 10-14) and that current science also recognizes the health benefits of consuming nutrient-dense foods (id. at pgs. 14-18). The petitioner also asserted that dietary recommendations and scientific evidence now focus on the quality or types of dietary fat consumed instead of reducing total fat consumption (id. at pgs. 18-19).

    Thus, the petitioner described its requested changes and actions as being necessary to “ensure that FDA's requirements are consistent with current federal dietary recommendations and with the most recent scientific evidence, which is essential in providing uniform federal dietary guidance to consumers” (id. at page 20).

    II. Other Issues for Consideration

    We invite interested persons to comment on the petitioner's requests, including the use of the term “healthy” as a nutrient content claim in the labeling of human food products; and when, if ever, the use of the term “healthy” may be false or misleading. We are particularly interested in responses to the following questions:

    • Is the term “healthy” most appropriately categorized as a claim based only on nutrient content? If not, what other criteria (e.g., inclusion of foods from specific food categories) would be appropriate to consider in defining the term “healthy” for use in food labeling?

    • If criteria other than nutrient content (e.g., amount of whole grain) are to be included in the definition of the term “healthy,” how might we determine whether foods labeled “healthy” comply with such other criteria for bearing the claim?

    • What types of food, if any, should be allowed to bear the term “healthy?” Should all food categories be subject to the same criteria? Please provide details of your reasoning.

    • Is “healthy” the best term to characterize foods that should be encouraged to build healthy dietary practices or patterns? What other words or terms might be more appropriate (e.g., “nutritious”)? We encourage submission of any studies or data related to descriptors used to communicate the overall healthfulness of a food product.

    • What nutrient criteria should be considered for the definition of the term “healthy?” Should nutrients for which intake is recommended to be limited be included? Should nutrients for which intake is encouraged continue to be included?

    • If nutrients for which intake is encouraged are included in the definition, should these nutrients be restricted to those nutrients whose recommended intakes are not met by the general population, or should they include those nutrients that contribute to general overall health? Should the nutrients be intrinsic to the foods, or could they be provided in part—or in total—via fortification? Please provide details of your reasoning and provide any supportive data or information.

    • Are there current dietary recommendations (e.g., the Dietary Guidelines for Americans) or nutrient intake requirements, such as those described in the final rule updating the Nutrition Facts label (see 81 FR 33742; May 27, 2016) or those provided by the Institute of Medicine (IOM) in the form of Dietary Reference Intakes (DRI) (http://www.nationalacademies.org/hmd/Activities/Nutrition/SummaryDRIs/DRI-Tables.aspx), that should be reflected in criteria for use of the term “healthy?”

    • What are the public health benefits, if any, of defining the term “healthy” or other similar terms in food labeling? Please include any data or research related to public health benefits in your reasoning.

    • What is consumers' understanding of the meaning of the term “healthy” as it relates to food? What are consumers' expectations of foods that carry a “healthy” claim? We are especially interested in any data or other information that evaluates whether or not consumers associate, confuse, or compare the term “healthy” with other descriptive terms and claims.

    • Would this change in the term “healthy” cause a shift in consumer behavior in terms of dietary choices? For example, would it cause a shift away from purchasing or consuming fruits and vegetables that do not contain a “healthy” claim and towards purchasing or consuming processed foods that bear this new “healthy” claim?

    • How will the food industry and consumers regard a change in the definition of “healthy?”

    • What would be the costs to industry of the change?

    Please provide supporting data, consumer research, and other information to support your comments and responses to these questions. III. References

    The following reference is on display in the Division of Dockets Management (see ADDRESSES) and is available for viewing by interested persons between 9 a.m. and 4 p.m., Monday through Friday; it is also available electronically at http://www.regulations.gov. (FDA has verified the Web site address, as of the date this document publishes in the Federal Register, but Web sites are subject to change over time.)

    1. U.S. Department of Health and Human Services and U.S. Department of Agriculture. 2015-2020 Dietary Guidelines for Americans, 8th Edition, December 2015, available at http://health.gov/dietaryguidelines/2015/guidelines/. Dated: September 23, 2016. Leslie Kux, Associate Commissioner for Policy.
    [FR Doc. 2016-23365 Filed 9-27-16; 8:45 am] BILLING CODE 4164-01-P
    DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 24 CFR Parts 203 and 234 [Docket No. FR-5715-P-01] RIN 2502-AJ30 Project Approval for Single-Family Condominiums AGENCY:

    Office of the Assistant Secretary for Housing—Federal Housing Commissioner, HUD.

    ACTION:

    Proposed rule.

    SUMMARY:

    This proposed rule would implement HUD's authority under the single-family mortgage insurance provisions of the National Housing Act to insure one-family units in a multifamily project, including a project in which the dwelling units are attached, or are manufactured housing units, semi-detached, or detached, and an undivided interest in the common areas and facilities which serve the project. The rule would codify requirements for Direct Endorsement lenders to meet in order to be approved for the Direct Endorsement Lender Review and Approval Process (DELRAP) authority for condominiums, and basic standards that projects must meet to be approved as condominiums in which individual units would be eligible for mortgage insurance, as well as particular cases such as Single-Unit Approvals and site condominiums. The rule provides a method by which certain approval standards could be varied efficiently to meet market needs while providing for public comment where appropriate. Currently, single-family condominium project approval is provided under HUD's Condominium Project Approval and Processing Guide and related Mortgagee Letters.

    Condominiums under this rule are distinct from condominiums in which the project has a blanket mortgage insured by HUD.

    DATES:

    Comment due date: November 28, 2016.

    ADDRESSES:

    Interested persons are invited to submit comments regarding this proposed rule to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500. Communications must refer to the above docket number and title. There are two methods for submitting public comments. All submissions must refer to the above docket number and title.

    1. Submission of Comments by Mail. Comments may be submitted by mail to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500.

    2. Electronic Submission of Comments. Interested persons may submit comments electronically through the Federal eRulemaking Portal at www.regulations.gov. HUD strongly encourages commenters to submit comments electronically. Electronic submission of comments allows the commenter maximum time to prepare and submit a comment, ensures timely receipt by HUD, and enables HUD to make them immediately available to the public. Comments submitted electronically through the www.regulations.gov Web site can be viewed by other commenters and interested members of the public. Commenters should follow the instructions provided on that site to submit comments electronically.

    Note:

    To receive consideration as public comments, comments must be submitted through one of the two methods specified above. Again, all submissions must refer to the docket number and title of the rule.

    No Facsimile Comments. Facsimile (fax) comments are not acceptable.

    Public Inspection of Public Comments. HUD will make all properly submitted comments and communications available for public inspection and copying between 8 a.m. and 5 p.m. weekdays at the above address. Due to security measures at the HUD Headquarters building, you must schedule an appointment in advance to review the public comments by calling the Regulations Division at 202-708-3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the toll-free Federal Relay Service at 800-877-8339. Copies of all comments submitted are available for inspection and downloading at www.regulations.gov.

    FOR FURTHER INFORMATION CONTACT:

    Elissa Saunders, Director, Office of Single Family Program Development, Office of Housing, Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410-8000; telephone number 202-708-2121 (this is not a toll-free number). Hearing- and speech-impaired persons may access this number through TTY by calling the Federal Relay Service at 800-877-8339 (this is a toll-free number).

    SUPPLEMENTARY INFORMATION:

    I. Background A. Prior Authority—Section 234 of the National Housing Act

    Prior to 2008, HUD's statutory authority to insure mortgages on condominium units came from section 234 of the National Housing Act (12 U.S.C. 1715y) (the Act). Section 234 required that: The structure is or has been covered by a mortgage insured under another section of the Act; the mortgagor is acquiring or has acquired a family unit covered by a section 234 insured mortgage for his own use and occupancy; and the mortgagor will not own more than four one-family units covered by section 234 insured mortgages (Pub. L. 87-70, June 30, 1961, 75 Stat. 161). Subsequent amendments allowed for a variety of project configurations in addition to vertical buildings (Pub. L. 97-35, August 13, 1981, 95 Stat. 416); added an 80 percent mortgagor occupancy requirement; and removed the 4-unit limitation on ownership (Pub. L. 98-181, November 30, 1983, 97 Stat. 1209).

    The Housing and Economic Recovery Act of 2008, Public Law 110-289, July 30, 2008 122 Stat. 2654 (HERA) was enacted July 30, 2008 and added a requirement to section 234(c) that the project have a blanket mortgage insured by the Secretary under section 234(d). HUD does not currently insure new mortgages on condominium units in projects with blanket mortgages. Although, there are existing mortgages that were previously insured under section 234, most condominium projects are not structured in this manner.

    B. HERA of 2008 and Section 203 of the National Housing Act

    Section 2117 of Division B, Title I, Subtitle A of HERA, the FHA Modernization Act of 2008, amended the National Housing Act to provide authority for HUD to insure condominium units under the single-family program authorized by section 203 of the National Housing Act, 12 U.S.C. 1709. Specifically, section 2117 amended the definition of “mortgage” in section 201 of the Act (12 U.S.C. 1707), which definition also applies to section 203 of the Act (12 U.S.C. 1709), to include a mortgages on a one-family unit in a multifamily project, and an undivided interest in the common areas and facilities which serve the project. The HERA changes placed all authority for mortgage insurance of projects with blanket mortgages in section 234 of the Act, and units in other condominium projects under section 203 of the Act.

    C. Current Regulations and Guidance

    Project approval for projects with FHA-insured blanket loans are governed according to the requirements of section 234 of the Act, 24 CFR part 234, and other applicable policy guidance, including the Condominium Project Approval and Processing Guide (the Guide).

    II. This Proposed Rule

    This proposed rule would codify basic regulatory requirements for condominium project approval, in addition to the current requirements under 24 CFR part 203. These requirements would be more flexible, less prescriptive, and more reflective of the current market than the requirements in the current section 234 program. The intent of this rule is to regulate where necessary to ensure financial soundness and project viability, but to be flexible where possible, and retain the ability to be responsive to the market.

    The rule proposes a new 24 CFR 203.8 that would codify DELRAP for condominiums. While a similar process is currently outlined in chapter 1.2 of the Guide, this rule is proposing some changes based on HUD's experience. As now proposed, in order to participate in condominium project approval, a mortgagee would have to be granted DELRAP authority, and in order to be granted DELRAP authority, a mortgagee would have to be unconditionally approved for the Direct Endorsement program as provided in § 203.3, and additionally have the following indicia of capability in underwriting condominium mortgages specifically: Staff with at least one year experience in underwriting mortgages on condominiums and/or condominium project approval; having originated not less than 10 condominium loans in HUD-approved projects; having an acceptable quality control plan that includes provisions specific to DELRAP; and ensuring that only staff members with the required experience participate in condominium project approval using DELRAP (proposed § 203.8(b)).

    Under proposed § 203.8(b)(2) and (b)(3), mortgagees would initially be granted conditional DELRAP authority upon providing a notice of their intent to participate in DELRAP. While conditionally approved, a mortgagee must submit all recommended Condominium Project approvals and denials to FHA for review, and may only proceed upon notification of HUD's agreement with the recommendation. Once the mortgagee has completed at least 5 DELRAP reviews to HUD's satisfaction, the mortgagee will be granted unconditional DELRAP authority and may approve condominium projects in accordance with HUD's requirements.

    Section 203.8(c) would provide for HUD's review of a DELRAP mortgagee's performance. HUD will monitor the performance on an ongoing basis, and, if there are no material deficiencies found, HUD will select a sample of project approvals, denials, or recertifications for post-action review. If the review shows deficiencies and the mortgagee has unconditional DELRAP authority, the mortgagee may be returned to conditional status. If additional reviews continue to show deficiencies, the mortgagee authority to participate in DELRAP may be terminated, or other action taken against the staff reviewer, under proposed § 203.8(d), which includes any action available under 24 CFR 203.3(d).

    Sections 203.8(d) and (e) provide for termination of DELRAP authority and requests for reinstatement of terminated authority. HUD may immediately terminate DELRAP authority or take actions under § 203.3(d) if the mortgagee violates any of the requirements and procedures established by the Secretary for mortgagees approved to participate in DELRAP, the Direct Endorsement program, or the Title II Single Family mortgage insurance program; or if other good cause exists; or for unacceptable performance. Actions under 24 CFR 203.3(d) include probation of Direct Endorsement lenders subject to conditions including additional training and changes to the mortgagee's quality control plan, or termination of Direct Endorsement approval. Termination of DELRAP authority would be effective upon the mortgagee's receipt of HUD's notice advising of the termination. Any termination of DELRAP authority is a separate action from an action for withdrawal of mortgagee approval by the Mortgagee Review Board, which could also be initiated by HUD.

    Under proposed § 203.8(e), a mortgagee whose DELRAP authority is terminated under this section may request reinstatement if the mortgagee's DELRAP authority has been terminated for at least 6 months. The request must address the eligibility criteria for participation in DELRAP under this rule as well as a corrective action plan, along with evidence that the mortgagee has implemented the corrective action plan. Following the request, HUD would be able to grant Conditional DELRAP authority if the mortgagee's application is complete and the Commissioner determines that the underlying causes for the termination have been satisfactorily remedied. The mortgagee would be required to complete successfully at least 5 test cases in accordance with § 203.8(b)(3) in order to receive unconditional DELRAP authority.

    The rule proposes a minor change to current § 203.17(a)(1), which section defines “mortgage” in accordance with section 201 of the National Housing Act (12 U.S.C. 1707), but has not been updated to account for the addition of mortgages on one-family units in multifamily projects and an undivided interest in the common areas and facilities. Nor does the current regulatory definition include detached and semi-attached units. By revising this section to cross-reference section 201 of the National Housing Act rather than attempting to summarize it, HUD avoids the need to update this definition each time the statutory definition is revised, and eliminates confusion that may be caused by differences between the statutory language and HUD's regulation.

    This rule proposes to revise currently reserved § 203.43b to include the regulations pertaining to the eligibility of projects for approval and for condominium units in approved projects for mortgage insurance.

    Section 203.43b(a) would provide definitions of the terms Condominium Project, Condominium Unit, Rental for Transient or Hotel Purposes, Condominium Association, Single-Unit Approval, and Site Condominium under part 203. While Condominium Unit refers to a one-family unit in a multifamily project, including a project in which the dwelling units are attached, or are manufactured housing units, semi-detached, or detached, and an undivided interest in the common areas and facilities that serve the project, the term Condominium Project refers to the project as a whole in which such units are located. The term Rental for Transient or Hotel Purposes cross-references to section 513(e) of the Act (12 U.S.C. 1731b(e)). Single-Unit Approval means approval of a loan on a single unit in a project that is not approved as a condominium. The term Site Condominium means a single family totally detached dwelling (which does not have a shared garage or any other attached building, including such improvements as archways, or breezeways), which is encumbered by a declaration of condominium covenants or condominium form of ownership, and which consists of the entire structure as well as the site and air space and is not considered to be a common area or limited common area.

    Section 203.43b(b) would state that a mortgage on a Condominium Unit shall be eligible for insurance under section 203 of the National Housing Act if it meets the requirements of 24 CFR part 203, subpart A, except as provided for in § 203.43b. Section 203.43b(c) would further specify that the unit, to be eligible for insurance under § 203.43b, must be located in a Condominium Project approved by HUD or DELRAP mortgagee approved under 24 CFR 203.8, or meet the additional requirements for approval as a Site Condominium or Single-Unit Approval.

    Under this rule, HUD and DELRAP lenders will not approve proposed or under construction projects; however, HUD or DELRAP lenders may approve legal phases of projects or completed projects. The condominiums that may be approved under this rule would be those where the work on the project or legal phase, including buildings and infrastructure of the project or legal phase, is fully complete. HUD would expect that all the requirements of local law would be met, including review and approval of the project or legal phase by the local jurisdiction and recordation in the property records of the condominium plat or development plan, as applicable (see §§ 203.43b(d)(4) and (d)(5)).

    Section 203.43b(d) would state the basic condominium project approval eligibility requirements. The project or legal phase must be complete as to construction of the buildings and infrastructure. In addition, any legal phases must be contiguous (in a vertical building) or must consist of adjoining or contiguous homes (in a development of detached or semi-detached homes), and the units or buildings and infrastructure in each phase must be constructed and be complete. The project or legal phase must also be primarily residential in nature (although a certain amount of floor space may be set aside for commercial activities, as stated at § 203.43b(d)(6)(vii)) and not intended for transient or hotel purposes; must consist solely of one-family units, which is a statutory requirement under 12 U.S.C. 1707(a); and must be in full compliance with all Federal, State, and local laws with respect to zoning, Fair Housing, and accessibility for persons with disabilities, including but not limited to the Fair Housing Act, 42 U.S.C. 3601 et seq., Section 504 of the Rehabilitation Act, 29 U.S.C. 794, and the Americans with Disabilities Act, 42 U.S.C. 12101 et seq., where relevant. Infrastructure includes the project's streets, storm water management, water and sewage systems, and utilities, along with the project's common elements and amenities, such as parking lots, community buildings, swimming pools, golf courses, playgrounds, and any similar items, called for in the project or legal phase.

    In addition to these general requirements, condominiums must meet further approval requirements as provided by HUD. Some of these requirements are underwriting matters or existing legal requirements such as the nature of the real estate title or leasehold; unit owner control of the Condominium Association; insurance coverage; and statements regarding financial condition, special assessments, property conditions, and pending legal actions. These are the types of matters that HUD routinely considers when determining eligibility for FHA programs.

    In addition, the rule would implement some regulatory standards specific to condominiums, but seeks to do so in a way that is flexible and responsive to the market while continuing to involve the public in the rulemaking process. Section 203.43b(d)(6)(vii) would provide for HUD to set a standard for the maximum commercial/nonresidential space within a range from 25 percent to 60 percent of the total floor area. Mixed-use developments are a way to integrate housing, land-use, economic and workforce development, as well as transportation and infrastructure development. However, the agency believes that allowing greater than 50 percent commercial/nonresidential space may have a negative impact on the residential character of the project; therefore, HUD would not expect in the near future to allow greater than 50 percent commercial/nonresidential space. HUD may want to allow less based on the experience it gains with this program.

    Under 12 U.S.C. 1709(y)(2),1 either HUD or the DELRAP lender, at the option of the requester, may grant an exception to the standard regarding the maximum percentage of commercial/nonresidential space set by HUD. In determining whether to grant such an exception, factors relating to the economy for the locality in which the condominium project is located, or specific to the project, including the total number of family units in the project, shall be considered. A DELRAP lender, in determining whether to grant a requested exception, shall follow any procedures that HUD may establish.

    1 As amended by the Housing Opportunity Through Modernization Act of 2016, Public Law 114-201 (approved July 29, 2016).

    Within this range, in order to remain flexible and responsive to the market, HUD would be able to vary by notice the percentage of commercial/nonresidential space allowed or required. If HUD decides to vary the upper and lower limits of the range itself, the rule provides a procedure that includes notice and an opportunity for public comment. This notice and comment procedure is stated at § 203.43b(e) of this proposed rule.

    Sections 203.43b(d)(6)(viii) and (d)(6)(ix) would treat acceptable maximum percentages of units with FHA-insured mortgages and acceptable minimum levels of owner occupancy, respectively, in a similar manner, with overall ranges between 25 and 75 percent, within which HUD would be able to vary the amount by notice. The owner occupancy percentage includes both principal and secondary residences (or units that have been sold to purchasers who intend to occupy them as primary or secondary residences). Secondary residences are defined at § 203.18(f)(2), mean dwellings (i) Where the mortgagor maintains or will maintain a part-time place of abode and typically spends (or will spend) less than a majority of the calendar year; (ii) which is not a vacation home; and (iii) which the Commissioner has determined to be eligible for insurance in order to avoid undue hardship to the mortgagor. A person may have only one secondary residence at a time.

    While having too few owner occupants can detract from the viability of a project, requiring too many can harm its marketability. HUD's current standard of 50 percent has worked in the recent market; however, HUD specifically invites comment on this issue. For these elements as well, the procedure to change the upper and lower limits of the range itself by notice with an opportunity to comment would apply.

    Section 203.43b(d)(6)(x) addresses phasing of a project. While HUD understands that developing projects in phases as funding is secured may be necessary in some cases, HUD is concerned about the risk of approving phases in cases where failure to complete a phase could result in the failure of the project as a whole. Therefore, only legal phasing will be allowed. All phases must be contiguous and constructed so that they are separately sustainable, meet the requirements of § 203.43b(d), and be capable of being occupied even if a subsequent phase were to be delayed or even fail to be completed.

    Section 203.43b(d)(6)(xi) addresses reserve accounts. Per HUD's usual practice, this rule would require that the reserve account is funded with at least 10 percent of the monthly unit assessments, unless a lower amount is deemed acceptable by HUD based on a reserve study completed not more than 24 months before a request for a lower amount is received.

    Section 203.43b(d)(6)(xii) permits HUD to set requirements regarding such other matters that may affect the viability or marketability of the project or its units. Additionally, under proposed § 203.43b(f), the Secretary may grant case by case exceptions to the regulatory requirements under § 203.43b(d)(6). This is in accordance with the discretionary nature of the Secretary's authority to insure mortgages under 12 U.S.C. 1709(a).

    Proposed 203.43b(g) provides the basic mechanism for condominium approval. Condominiums would be submitted to either HUD or a DELRAP lender, and, if all eligibility criteria are met, would be approved and placed on the list of HUD-approved condominium projects. Under § 203.43b(g)(3), unless otherwise specified in writing by HUD, approval would be for a period of 3 years from the date of placement on the approved list; HUD may rescind approval at any time if the project fails to comply with any requirement for approval.

    Proposed 203.43b(g)(4) provides for renewal of a project approval. The condominium could request renewal, by submitting a request for recertification no earlier than 6 months before, and no later than 6 months after, expiration of the approval. As long as the request is timely, it may be supported by updating previously submitted information, rather than by resubmitting new information. However, if the request is not submitted by the end of 6 months after the expiration of approval, a complete, new approval application would be required. HUD will specify the format for the request.

    Proposed 203.43b(h) would provide overall parameters for Single-Unit Approval, that is, approvals of individual units in projects that are not otherwise approved to participate. A mortgage secured by a Single-Unit Approval may be acceptable if the percentage of such mortgages insured in a project is within an amount determined by the Secretary to be necessary for the viability and marketability of the project, which percentage, within the range established in this rule, will be specified by HUD by notice. In addition, the unit may only be eligible for approval on a Single-Unit Approval basis if it is not located in a Condominium Project that is approved under this section or has been subject to a negative determination for significant issues that affect the viability of the project. The project must be complete (i.e., not proposed, under construction, or subject to further phasing or annexation), including all common elements and those of the master association. The project must have a percentage of units sold within a range stated in the rule, with the specific percentage to be established by HUD through notice. Finally, the Single-Unit Approval must be in a project in which no single entity owns more than the percentage of units in the project that is within the range stated in rule, with the specific percentage to be established by HUD through notice. If HUD determines it is necessary to change the upper and lower limits of the ranges, it will issue a notice for comment.

    Proposed § 203.43b(i) would govern site condominiums. Insurance and maintenance costs must be the sole responsibility of the owner, and any common assessments collected must be restricted to use solely for amenities outside of the footprint of the individual site.

    Condominium units that meet the statutory requirements of section 203(k) of the Act, 12 U.S.C. 1709(k), are eligible for rehabilitation loans. Section 203(k) and the implementing HUD regulation at 24 CFR 203.50(a)(1)(i) provides for rehabilitation loans for 1-4 unit structures that are primarily residential. A rehabilitation loan for an individual condominium unit under 203(k) necessarily excludes the building exterior and common elements, which are the responsibility of the Association, so that the 203(k) loan would be for the portion of the structure that is inside the unit including the installation of firewalls in the attic of a unit (proposed 24 CFR 203.50(a)(1)(iv)).

    In accordance with HUD's longstanding policy for 203(k) rehabilitation loans secured by condominium units, this proposed rule would add a provision stating that the maximum loan amount is 100 percent of the after-improvement value of the unit for any Condominium Unit. (proposed 24 CFR 203.50(f)(3)).

    Finally, the proposed rule would address the continued applicability of 24 CFR part 234, which now applies, along with section 234 of the Act (12 U.S.C. 1715y) and other HUD issuances specific to part 234, only in cases where projects have blanket mortgages insured by HUD. This proposed rule adds a new § 234.2, entitled “Savings clause,” which clarifies that part 203 and this section apply in all cases except where the project has a blanket mortgage insured under section 234(d) of the Act, in which case section 234 of the Act, 24 CFR part 234, and other HUD issuances (including HUD Handbook 4265.1, Home Mortgage Insurance Condominiums; Chapter 11 of HUD Handbook 4150.1, Valuation Analysis for Home Mortgage Insurance and any Mortgagee Letters that discuss section 234 requirements) apply.

    Requests for Public Comment

    (1) HUD seeks public comment specifically on the proposed requirement in § 203.43b(d)(4) that the project or legal phase be “complete and ready for occupancy, including completion of the infrastructure of the project or legal phase, and not subject to further rehabilitation, construction, phasing, or annexation, except to the extent that approval is sought for legal phasing in compliance with the requirements of paragraph (d)(6)(x) of this section.” Given that HUD approval of a fully completed project would not require an environmental review, while continuing the current practice of approving proposed or under construction projects could require environmental review, HUD seeks comments on how this rule would affect industry participation in the program.

    (2) HUD seeks public comment specifically on whether there is some other indicia of appropriate experience that could be used rather than, or in addition to, experience in underwriting condominium mortgages and/or condominium approval, or the number of loans originated; for instance, is there another type of experience that could provide an indication of competency in condominium project approval, and how would it provide such indication?

    (3) HUD seeks public comment specifically on the ranges this rule proposes to establish, within which HUD may set the specific requirements for percentages of Single-Unit Approvals, commercial space, FHA insured units, and owner-occupied units. HUD seeks comment on whether this range approach is the best approach, and whether the ranges proposed are appropriate. The agency would be interested in any data or evidence that could be provided either that the ranges, as proposed, are appropriate, or that a different set of ranges would be more appropriate or would yield additional benefits.

    (4) HUD seeks public comment specifically on the proposed revision of the period of project approval from 2 to 3 years, including whether there are any costs and benefits that would be associated with a shorter or longer timeframe.

    III. Findings and Certifications Paperwork Reduction Act

    The information collection requirements contained in this rule have been submitted to the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). In accordance with the Paperwork Reduction Act, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection displays a currently valid OMB control number.

    The burden of the information collections in this rule is estimated as follows:

    Information collection Number of
  • respondents
  • Frequency
  • of response
  • Total
  • annual
  • responses
  • Hours per
  • response
  • Total
  • burden
  • hours
  • Package Preparation 15,000 1 15,000 2 30,000 Package Review 15,000 1 15,000 1 15,000 Quality Assurance 15,000 .2 3,000 1 3,000 Totals 45,000 2.2 33,000 4 48,000

    In accordance with 5 CFR 1320.8(d)(1), HUD is soliciting comments from members of the public and affected agencies concerning this collection of information to:

    (1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;

    (2) Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information;

    (3) Enhance the quality, utility, and clarity of the information to be collected; and

    (4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.

    Interested persons are invited to submit comments regarding the information collection requirements in this rule. Comments must refer to the proposal by name and docket number (FR-5563) and must be sent to:

    HUD Desk Officer, Office of Management and Budget, New Executive Office Building, Washington, DC 20503, Fax: (202) 395-6947; and Reports Liaison Officer, Office of Public and Indian Housing, Department of Housing and Urban Development, Room, 451 7th Street SW., Washington, DC 20410. Interested persons may submit comments regarding the information collection requirements electronically through the Federal eRulemaking Portal at http://www.regulations.gov. HUD strongly encourages commenters to submit comments electronically. Electronic submission of comments allows the commenter maximum time to prepare and submit a comment, ensures timely receipt by HUD, and enables HUD to make them immediately available to the public. Comments submitted electronically through the http://www.regulations.gov Web site can be viewed by other commenters and interested members of the public. Commenters should follow the instructions provided on that site to submit comments electronically. Regulatory Planning and Review

    OMB reviewed this proposed rule under Executive Order 12866 (entitled “Regulatory Planning and Review”). This rule was determined to be a “significant regulatory action,” as defined in 3(f) of the order (although not an economically significant regulatory action, as provided under section 3(f)(1) of the order). The docket file is available for public inspection between the hours of 8 a.m. and 5 p.m. weekdays in the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500.

    The proposed rule establishes regulations concerning three aspects of the Direct Endorsement Lender Review and Approval Process (DELRAP) for single family condominiums. First, the rule establishes parameters regarding which kind of condominium projects are eligible for approval for the purpose of single unit mortgage insurance through the Department of Housing and Urban Development. Flexible approval standard requirements, will allow for projects to efficiently meet market needs. Second, the rule changes the frequency with which approved projects need to be reapproved from two years to three years. Third, the rule changes the standards for condominium DELRAP mortgagees in order to require minimum experience and quality control levels.

    The rule could result in multiple transfers: Among lenders, among condominium projects; and to FHA. The benefit of the proposed rule is to provide flexibility in implementation providing competent lenders a role in project approval. Costs arise from any administrative burden imposed upon the private sector or lost opportunities resulting from condominium project requirements. Many provisions of the rule (Single-Unit Approval, flexible standards, a longer interval for condo approvals, and exceptions for environmental review) will reduce or eliminate the compliance costs of the rule. The Regulatory Impact Analysis discusses but does not monetize many of the difficult to evaluate impacts. Monetized annual impacts of the rule include the estimated paperwork burden of $2.1 million. HUD finds that increasing the periodicity of approval from 2 to 3 years reduces the costs of approval by $1 million annually.

    Greater detail and analysis than this brief summary can provide is available in the full initial Regulatory Impact Analysis (RIA) prepared for this rule, which is available for public inspection in the Regulations Division and may be viewed online at www.regulations.gov, under the docket number above. Due to security measures at the HUD Headquarters building, an advance appointment to review the public comments must be scheduled by calling the Regulations Division at (202) 708-3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the Federal Relay Service at (800) 877-8339.

    Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) (UMRA) establishes requirements for Federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments and the private sector. This rule does not impose any Federal mandate on any state, local, or tribal government or the private sector within the meaning of UMRA.

    Environmental Review

    A Finding of No Significant Impact with respect to the environment has been made in accordance with HUD regulations in 24 CFR part 50 that implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The Finding is available for public inspection during regular business hours in the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500. Due to security measures at the HUD Headquarters building, please schedule an appointment to review the Finding by calling the Regulations Division at (202) 402-3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the Federal Relay Service at (800) 877-8339.

    Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. This proposed rule establishes regulations for single-family mortgage insurance of condominium units pursuant to 12 U.S.C. 1707 and 1709. However, HUD has been providing mortgage insurance for this purpose pursuant to statute and the Condominium Approval and Processing Guide published in 2011. While this rule makes some adjustments to the provisions on eligibility for DELRAP participation, and many DELRAP lenders are small entities, this rule is not so different as to create a significant economic impact.

    A. Industry Sector Data Analysis

    Industries involved in mortgage origination and lending. Mortgage originators (reverse, purchase, refinance) include both brokers and lenders. The firms that participate in lending are divided among five primary groups: Banks, thrifts, mortgage banks, credit unions, and mortgage brokers. A precise description of these individual industries is as follows:

    Commercial Banking (NAICS 522110)

    Entities primarily engaged in accepting demand and other deposits and making commercial, industrial, and consumer loans. Commercial banks and branches of foreign banks are included.

    Savings Institutions (NAICS 522120)

    Entities primarily engaged in accepting time deposits, making mortgage and real estate loans, and investing in high-grade securities. Savings and loan associations and savings banks are included in this industry.

    Credit Unions (NAICS 522130)

    Entities primarily engaged in accepting members' share deposits in cooperatives that are organized to offer consumer loans to their members.

    Real Estate Credit (NAICS 522292)

    Entities primarily engaged in lending funds with real estate as collateral. This includes: Construction lending, farm mortgage lending, Federal Land Banks, home equity credit lending, loan correspondents (i.e., lending funds with real estate as collateral), mortgage banking (i.e., nondepository mortgage lending), and mortgage companies.

    Mortgage and Nonmortgage Loan Brokers (NAICS 522310)

    Entities primarily engaged in arranging loans by bringing borrowers and lenders together on a commission or fee basis.

    During the 1980s and 1990s, mortgage lending evolved from the traditional portfolio lender model where single companies (bank and thrift depositories) performed all steps in the mortgage process—making, closing, funding, servicing, and holding the loan—to a more specialized industry of originators, funding lenders, warehouse lenders, separate secondary market buyers of loans, and servicers.2 A major driving force behind the unbundling of the mortgage functions, as well as the rise of mortgage brokers, has been the rise and eventual dominance of mortgage securitization, which separated the provision of capital from loan origination and servicing. Brokers originate loans mainly for wholesale lenders.

    2 Michael G. Jacobides, “Mortgage Banking Unbundling: Structure, Automation, and Profit,” Mortgage Banking, January 2001, pages 28-40.

    Studies of the mortgage brokerage industry do not find there to be high fixed costs for firms. There is little evidence of economies of scale in mortgage origination but there is some evidence that brokers are more efficient originators than mid-size and large lenders. Olson (2002) reports that his surveys find no economies of scale in mortgage production—a one-person firm produced as many loans per employee as a larger firm. Olson regards brokers as low-cost, highly-competitive firms, vigorously competing with one another and with little opportunity to earn above-normal profits.3

    3 Olson, David. 2002. “Report of David Olson.” Report submitted to U.S. District Court, Court of Minnesota in Civil Case No. 97-2068 DWF/SRN: Lonnie and Danny Glover (Plantiffs) vs. Standard Federal Bank, ABN AMRO Mortgage Group, Inc. and Heartland Mortgage Corporation (Defendants).

    B. Current State of the Market

    In 2014, 7,062 institutions reported data on nearly 10 million home mortgage applications, resulted in 6 million originations. This is down from 8.7 million originations in 2013. There was an historically high share of loans originated outside the federally insured banking system by institutions such as independent mortgage companies and credit unions, not subject to Community Reinvestment Act (Federal Reserve, 2015).4

    4http://www.federalreserve.gov/pubs/bulletin/2015/pdf/2014_HMDA.pdf.

    The share of mortgages originated by non-depository, independent mortgage companies has increased sharply in recent years. Small banks and credit unions have also increased market shares over the past decade. The fraction of originations attributable to large banks and their nonbank subsidiaries diminished. Banks and thrifts accounted for 45 percent of all reported mortgage originations; independent mortgage companies 40 percent, credit unions over 9 percent, affiliates, remainder (Federal Reserve, 2015).

    In 2014, 7,062 reporting institutions, 4,118 banks and thrifts, 3,367 were small (assets less than $1 billion), 1,984 credit unions, 139 mortgage companies affiliated with depositories (banks and credit unions), 821 independent mortgage companies. In 2014, small banks and credit unions were much more likely to originate conventional higher-priced loans than large banks and mortgage companies. Small banks and credit unions originated about 18 percent of conventional home-purchase loans, but accounted for 59 percent of higher-priced conventional home-purchase loans (Federal Reserve, 2015).

    C. Size Standards

    SBA's size standards (2016) define whether a business entity is small and, thus, eligible for Government programs and preferences reserved for “small business” concerns. Size standards have been established for types of economic activity, or industry, generally under the North American Industry Classification System (NAICS). For most industries considered, a “small” business is defined by revenue. Size standards are based on another criterion if revenue is not suitable, either because prices are volatile or there are more appropriate measures.

    According to the U.S. Census Bureau, revenue for Finance, Insurance and Real Estate includes commissions and fees from all sources, rents, net investment income, interest, dividends, royalties, and net insurance premiums earned. SBA considers a real estate credit small if its annual revenue is no greater than $38.5 million. A mortgage broker is defined as small if its revenue is no greater than $7.5 million.

    For three of the industries considered in this analysis (Commercial Banks, Savings Institutions, and Credit Unions), the SBA definition of small is by the dollar amount of assets ($550 million). Assets include: Cash, interest-earning loans, leases, securities, real estate, letters of credit, loans to other banks, any other financial assets, and intangible assets.

    The diversity of size standards makes it difficult to perform a precise analysis of the ubiquity small firms. This difficulty is compounded when sources of business statistics do not report their data by SBA's size standards and that industry definition may not be equivalent. When an exact correspondence is not possible, HUD will, by necessity, use an alternative size standard. For example, asset data is collected by the Federal Deposit Insurance Corporation (FDIC) for Commercial Banks and Savings Institutions. FDIC uses $1 billion as a means to categorize banks and thrifts, which is more inclusive than SBA's definition.

    D. Prevalence of Small Firms

    Estimating the prevalence of small firms in making FHA-insured condominium loans requires combining statistics from different sources.

    FHA Insured Condominium Loans by Lender Type * Type of lender Firms
  • (% of number)
  • Forward condo loans
  • (% of number of loans)
  • All condo loans ***
  • (% of number of loans)
  • All condo loans
  • (% of dollar volume)
  • Bank (Total) 30 20 19 7 Small Bank ** 13 3 3 1 Large Bank 17 17 16 6 Mortgage Company 66 79 79 93 Affiliated 1 0 0 0 Independent 65 79 79 93 Credit Union 3 1 1 0 Total **** 100 100 100 100 * Source: Single Family Data Warehouse 6/1/14-5/31/16. ** Defined as having assets no greater than $1 Billion. *** All = forward + HECM. **** Percentages by lender type are rounded and so may not sum to 100.

    The table provides us with some insight concerning the types of firms that are involved in making FHA-condo loans. The predominant originators by any measure are mortgage companies. Independent mortgage companies make 79 percent of the loans and 93 percent of the dollar volume. The largest independent mortgage company, Quicken Loans, accounts for over 5.5 percent of all condo loans. In this table, “banks” are equivalent to commercial banks and savings institutions. Small banks (assets of no greater than $1 billion) represent a small proportion of firms (13 percent) and an even smaller percentage of condo loans (3 percent).

    Given the dominance of mortgage companies, an estimate of the small companies originating mortgage loans is essential to a good economic analysis. HUD has data concerning the total FHA-insured loans made by the firms also involved in the condo business. An estimate of the total loans can be arrived at by dividing FHA loans by FHA's market share. Doing so will lead to estimates that are inaccurately high for some and too low for others. On average the estimate will be correct. In the last three years (2013-2015), FHA's share of the dollar value of home purchases as varied around 15 percent.

    The estimated value of loans can be converted to an estimated revenue by multiplying by an appropriate percentage. Estimates of broker income vary between 1 and 3 percent. We use the lower to arrive for a more expansive count of small business. Of all condo lenders, 31 percent of the firms are small mortgage companies (earning less than $7.5 million). These small mortgage companies make 5 percent of all condo loans and 2 percent of the dollar volume.

    We counted a total of only 39 credit unions over a two-year period. Credit Unions are not active in making condo loans. The proportion of loans and dollar value made by credit unions is very close to 0 percent. Thus, accuracy in estimating the small/large percentage is not as important as for other types of lenders. We will assume that all credit unions are small because the average asset amount is significantly below $1 billion (Monthly Credit Union Estimates, May 2016).

    Small firms constitute 47 percent of originators of FHA-insured condo loans, 9 percent of all condo loans, and 3 percent of the dollar volume.

    Estimates of Prevalence of Small Loan Originators Involved in FHA Condo Lending Small firms
  • (%)
  • Number of condo loans
  • (%)
  • Dollar volume of condo loans
  • (%)
  • Banks 13 3 1 Mortgage Companies 31 5 2 Credit Unions 3 1 0 Total 47 9 3
    E. Economic Impact

    Approximately half of the firms engaged in making FHA-insured condominium loans are estimated to be small. This share of small firms could change depending upon the regulatory impact of the rule and whether that impact is disproportionate. Although small business constitutes 47 percent of all firms, they originate only 9 percent of all loans, making it more difficult to pass on any costs of origination to borrowers. Reducing (raising) fixed costs benefits (harms) small firms disproportionately more than large ones.

    One aspect of the rule that could have a negative and disproportionate impact on small firms are any requirements to participate in the DELRAP program. While many of the requirements will be met with little difficulty by already-approved lenders, requirements that are related to the level of business activity would place a relatively higher burden on small firms. To be qualified for Direct Endorsement authority, a mortgagee must satisfy the following characteristics: Possess at least one of year experience in condo loans; have made at least 10 FHA approved condo loans; possess a quality control plan; and participating staff is limited to those with prior experience. All of these requirements would be easier to meet by larger firms with greater capacity. Nonetheless, small firms that have at least occasional experience should be able to satisfy the requirements without undue burden.

    Other elements of the rule lift regulatory burdens. First, allowing Single-Unit Approval enables small lenders business opportunities without the cost of seeking approval for an entire condominium project.5 Second, by providing that only completed projects may be approved, this rule eliminates the need for HUD to require an environmental review from lenders as a condition of approval. This change will benefit small firms that are less likely to retain specialists. Although some components of the rule raise the cost of compliance for small firms, other elements will expand their opportunities and allow them to spread the compliance costs over a greater number of loans. Also, participation in condominium insurance, like HUD's other mortgage insurance programs, is purely voluntary.

    5 As noted in the accompanying Regulatory Impact Analysis, the average cost of a project DELRAP approval would be $1,250. Extending the approval period to 3 years reduces this cost by approximately one-third for all lenders.

    Therefore, the undersigned certifies that this rule will not have a significant impact on a substantial number of small entities.

    Notwithstanding HUD's view that this rule will not have a significant effect on a substantial number of small entities, HUD specifically invites comments regarding any less burdensome alternatives to this rule that will meet HUD's objectives as described in this preamble.

    Executive Order 13132, Federalism

    Executive Order 13132 (entitled “Federalism”) prohibits, to the extent practicable and permitted by law, an agency from promulgating a regulation that has federalism implications and either imposes substantial direct compliance costs on state and local governments and is not required by statute or preempts state law, unless the relevant requirements of section 6 of the Executive Order are met. This rule does not have federalism implications and does not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the Executive Order.

    Catalog of Federal Domestic Assistance Number

    The Catalog of Federal Domestic Assistance number for 24 CFR parts 203 and 234 is 14.117.

    List of Subjects 24 CFR Part 203

    Hawaiian Natives, Home improvement, Indians-lands, Loan programs-housing and community development, Mortgage insurance, Reporting and recordkeeping requirements, Solar energy.

    24 CFR Part 234

    Condominiums, Mortgage insurance, Reporting and recordkeeping requirements.

    For the reasons stated in the foregoing preamble, HUD proposes to amend 24 CFR parts 203 and 234 as follows:

    PART 203—SINGLE FAMILY MORTGAGE INSURANCE 1. The authority citation for part 203 is revised to read as follows: Authority:

    12 U.S.C. 1707, 1709, 1710, 1715b, 1715z-16, 1715u, and 1715z-21; 15 U.S.C. 1639c; 42 U.S.C. 3535(d).

    Subpart A—Eligibility Requirements and Underwriting Procedures 2. Add § 203.8 to read as follows:
    § 203.8 Approval of mortgagees for Direct Endorsement Lender Review and Approval Process (DELRAP).

    (a) General. Each mortgagee that chooses to participate in the review and approval of Condominium Projects, as set forth in § 203.43b, must be granted authority to participate in the Direct Endorsement Lender Review and Approval Process (DELRAP).

    (b) DELRAP Authority—(1) Eligibility. To be granted DELRAP authority, as described in § 203.43b, a mortgagee must be unconditionally approved for the Direct Endorsement program as provided in § 203.3 and meet the following requirements:

    (i) Have staff with at least one year of experience in underwriting mortgages on condominiums and/or condominium project approval;

    (ii) Have originated not less than 10 condominium loans in projects approved by the Commissioner;

    (iii) Have an acceptable quality control plan that includes specific provisions related to DELRAP; and

    (iv) Ensure that only staff members meeting the above experience requirements participate in the approval of a Condominium Project using DELRAP authority.

    (2) Conditional DELRAP Authority. Mortgagees will be granted Conditional DELRAP authority upon provision of notice to the Commissioner of the intent to use DELRAP. Mortgagees with Conditional DELRAP authority must submit all recommended Condominium Project approvals, denials and recertifications to FHA for review. If FHA agrees with the mortgagee's recommendation, it will advise the mortgagee that it may proceed with the recommended decision on the Condominium Project.

    (3) Unconditional DELRAP Authority. Mortgagees will be granted unconditional DELRAP authority after completing at least five (5) DELRAP reviews to the satisfaction of the Commissioner and may then exercise DELRAP authority to approve projects in accordance with requirements of the Commissioner.

    (c) Reviews. HUD will monitor a mortgagee's performance in DELRAP on an ongoing basis.

    (1) If the review shows that there are no material deficiencies, subsequent project approvals, denials or recertifications may be selected for post-action review based on a percentage as determined by the Commissioner.

    (2) If the review shows that there are deficiencies in the mortgagee's DELRAP performance, the mortgagee may be returned to Conditional DELRAP status.

    (3) If additional reviews continue to show deficiencies in the mortgagee's DELRAP performance, the mortgagee's authority to participate in DELRAP may be terminated or other action taken against the mortgagee or responsible staff reviewer.

    (d) Termination of DELRAP Authority. (1) HUD may immediately terminate the mortgagee's authority to participate in DELRAP or take any action listed in 24 CFR 203.3(d) if the mortgagee:

    (i) Violates any of the requirements and procedures established by the Secretary for mortgagees approved to participate in DELRAP, the Direct Endorsement program, or the Title II Single Family mortgage insurance program; or

    (ii) If HUD determines that other good cause exists.

    (2) Such termination will be effective upon receipt of HUD's notice advising of the termination.

    (3) Notwithstanding any provisions of this section, the Commissioner reserves the right to take administrative action, including revocation of DELRAP authority, against any mortgagee and staff reviewer because of unacceptable performance. Any termination instituted under this section is distinct from withdrawal of mortgagee approval by the Mortgagee Review Board under 24 CFR part 25.

    (e) Reinstatement. A mortgagee whose DELRAP authority is terminated under this section may request reinstatement if the mortgagee's DELRAP authority has been terminated for at least 6 months. In addition to addressing the eligibility criteria specified in paragraph (b)(1) of this section, the application for reinstatement must be accompanied by a corrective action plan addressing the issues that led to the termination of the mortgagee's DELRAP authority, along with evidence that the mortgagee has implemented the corrective action plan. The Commissioner may grant Conditional DELRAP authority if the mortgagee's application is complete and the Commissioner determines that the underlying causes for the termination have been satisfactorily remedied. The mortgagee will be required to complete successfully at least five (5) test cases in accordance with paragraph (b)(2) in order to receive unconditional DELRAP authority as provided in paragraph (b)(3) above.

    3. Revise § 203.17(a)(1) to read as follows:
    § 203.17 Mortgage provisions.

    (a) Mortgage form. (1) The term “mortgage” as used in this part, except § 203.43c, shall have the meaning given in Section 201 of the National Housing Act, as amended (12 U.S.C. 1707).

    4. Add 203.43b to read as follows:
    § 203.43b Eligibility of mortgages on single-family condominium units.

    (a) Definitions. As used in this part:

    (1) Condominium Association (Association) means the organization, regardless of its formal legal name that consists of homeowners within a condominium project for the purpose of managing the financial and common-area assets.

    (2) Condominium Project shall mean the project in which one-family dwelling units are attached, semi-detached, or detached, or are manufactured housing units, and in which owners hold an undivided interest in the common areas and facilities that serve the project.

    (3) Condominium Unit shall mean real estate consisting of a one-family unit in a multifamily project, including a project in which the dwelling units are attached, or are manufactured housing units, semi-detached, or detached, and an undivided interest in the common areas and facilities that serve the project.

    (4) Infrastructure means the condominium project's streets, storm water management, water and sewage systems, and utilities, along with the project's common elements and amenities, such as parking lots, community buildings, swimming pools, golf courses, playgrounds, and any similar items, called for in the project or legal phase.

    (5) Rental for Transient or Hotel Purposes shall have the meaning given in section 513(e) of the National Housing Act (12 U.S.C. 1731b(e)).

    (6) Single-Unit Approval means approval of one unit in an unapproved condominium project under paragraph (h) of this section.

    (7) Site Condominium means a single family detached dwelling (which does not have a shared garage or any other attached building, including such improvements as archways, or breezeways), which is encumbered by a declaration of condominium covenants or condominium form of ownership, and which consists of the entire structure as well as the site and air space and is not considered to be a common area or limited common area.

    (b) Eligibility. A mortgage secured by a Condominium Unit shall be eligible for insurance under section 203 of the National Housing Act if it meets the requirements of this subpart, except as modified by this section.

    (c) Approval required. To be eligible for insurance under this section, a Condominium Unit must be located in a Condominium Project approved by HUD or a DELRAP mortgagee approved under § 203.8, or meet the additional requirements for approval as a Site Condominium or Single-Unit Approval.

    (d) Condominium Project Approval: Eligibility Requirements. To be eligible for Condominium Project approval, the Condominium Project must:

    (1) Be primarily residential in nature and not be intended for rental for Transient or Hotel Purposes;

    (2) Consist of units that are solely one-family units;

    (3) Be in full compliance with all applicable Federal, State, and local laws with respect to zoning, Fair Housing, and accessibility for persons with disabilities, including but not limited to the Fair Housing Act, 42 U.S.C. 3601 et seq., Section 504 of the Rehabilitation Act, 29 U.S.C. 794, and the Americans with Disabilities Act, 42 U.S.C. 12101 et seq., where relevant;

    (4) Be complete and ready for occupancy, including completion of all the infrastructure of the project or legal phase, and not subject to further rehabilitation, construction, phasing, or annexation, except to the extent that approval is sought for legal phasing in compliance with the requirements of paragraph (d)(6)(x) of this section;

    (5) Be reviewed and approved by the local jurisdiction with respect to the condominium plat or similar development plan and any phases; if applicable, the approved plat or development plan must have been recorded in the land records of the jurisdiction; and

    (6) Meet such further approval requirements as provided by the Commissioner through notices with respect to:

    (i) Nature of title to realty or leasehold interests;

    (ii) Control over, and organization of, the Condominium Association;

    (iii) Minimum insurance coverage for the Condominium Project;

    (iv) Planned or actual special assessments;

    (v) Financial condition of the Condominium Project;

    (vi) Existence of any pending legal action, or physical property condition;

    (vii) Commercial/non-residential space, which must be within a range between 25 and 60 percent of the total floor area (which range may be changed following the procedures in paragraph (d)(6) of this section), with the specific maximum and minimum percentages within that range to be established by HUD through notice, provided that such commercial/non-residential space does not negatively impact the residential use of the project or create adverse conditions to the occupants of individual condominium units.

    (viii) Acceptable maximum percentages of units with FHA-insured mortgages, which must be within a range between 25 and 75 percent of the total number of units in the project (which range may be changed following the procedures in paragraph (d)(6) of this section), with the specific maximum percentage of units with FHA-insured mortgages within that range to be established by HUD through notice.

    (ix) Acceptable minimum levels of owner occupancy, including units under a bona fide contract to purchase by a purchaser who occupies or will occupy the unit as their principal residence as well as a purchaser who occupies or intends to occupy the unit as a secondary residence, as defined in § 203.18(f)(2), within a range between 25 and 75 percent of the total number of units in the project (which may be changed following the procedures in paragraph (d)(6) of this section), with a specific minimum percentage to be established by HUD through notice.

    (x) Phasing, provided that only legal phasing is permitted and individual phases must contain sufficient numbers of units to be separately sustainable as required by HUD, so that the insurance fund is not put at undue risk. In determining whether to accept legal phasing, HUD will assess the potential risk to the insurance fund and other factors that HUD may publish in notices. Phases must meet HUD's requirements for approval in paragraph (d) of this section and must at a minimum be:

    (A) In a vertical building, contiguous, with all units built out and having a certificate of occupancy; or

    (B) In a detached or semi-detached development, consisting of groups of adjoining or contiguous homes (which may include, at HUD's discretion, easements for utilities and roads serving the homes), where all homes in a phase are built out and have a certificate of occupancy;

    (xi) Reserve requirements, provided the reserve account is funded with at least 10 percent of the monthly unit assessments, unless a lower amount is deemed acceptable by HUD based on a reserve study completed not more than 24 months before a request for a lower amount is received.

    (xii) Such other matters that may affect the viability or marketability of the project or its units.

    (e) The Secretary will publish any generally applicable change in the upper and lower limits of the ranges of percentages in paragraphs (d)(6)(vii) through (ix) of this section in a notice published for 30 days of public comment. After considering the comments, the Department will publish a final notice announcing the new overall upper and lower limits of the range of percentages being implemented, and the date on which the new standard becomes effective.

    (f) The Secretary may grant an exception to any specifically prescribed requirements within paragraph (d)(6) of this section on a case-by-case basis in HUD's discretion, provided that:

    (1) In the case of an exception to the approval requirements for the commercial/nonresidential space percentage that HUD establishes under paragraph (d)(6)(vii) of this section, any request for such an exception and the determination of the disposition of such request may be made, at the option of the requester, under the direct endorsement lender review and approval process or under the HUD review and approval process through the applicable field office of the Department; and

    (2) In determining whether to allow such an exception, factors relating to the economy for the locality in which the project is located or specific to the project, including the total number of family units in the project, shall be considered. A DELRAP lender, in determining whether to grant a requested exception, shall follow any procedures that HUD may establish.

    (g) Application for Condominium Project approval and Renewal of Approval. (1) In order to become approved, an application for Condominium Project approval, in accordance with the requirements of the Commissioner, must be submitted to either HUD or a DELRAP mortgagee, if consistent with the mortgagee's DELRAP approval.

    (2) The application will be reviewed and if all eligibility criteria have been met, the Condominium Project will be approved and placed on the list of HUD-approved Condominium Projects.

    (3) Unless otherwise specified in writing by HUD, Condominium Projects are approved for a period of three (3) years from the date of placement on the list of approved condominiums. HUD may rescind a Condominium Project's approval at any time if the project fails to comply with any requirement for approval.

    (4) Eligible parties may request renewal of the approval of an approved Condominium Project by submitting a request for recertification no earlier than 6 months prior to expiration of the approval or no later than 6 months after expiration of the approval. HUD shall specify the format for the recertification request, which shall allow the request to be supported by updating previously submitted information, rather than resubmission of all information. However, if the request for recertification is not submitted within 6 months after the expiration of the Condominium Project's approval, a complete, new approval application is required.

    (h) Single-Unit Approval. (1) Limit on Single-Unit Approvals. HUD will not insure mortgages in an unapproved project if the percentage of such mortgages exceeds an amount determined by the Commissioner to be necessary for the protection of the insurance fund, which percentage will be specified by the Commissioner by notice.

    (2) Single-Unit Approvals. Mortgagees must ensure that the Condominium Unit is located in a Condominium Project that either meets the eligibility requirements for approval as set forth in paragraph (d) of this section as modified by this paragraph, except that HUD may provide that Single-Unit Approvals may be approved by meeting a subset of these standards, or less stringent standards, as stated by notice. In addition, a unit may be eligible for Single-Unit Approval if it:

    (i) Is not in a Condominium Project that is on the list of FHA-approved Condominium Projects, or in a project that has been subject to adverse determination for significant issues that affect the viability of the project;

    (ii) Is in a project that is complete under paragraph (d)(4) of this section;

    (iii) Is not a manufactured housing condominium project or 2-4 unit project;

    (iv) Is not a manufactured home and is in a project that has at least 5 dwelling units; and

    (v) Is in a project in which the amount of Single-Unit Approvals is limited to a percentage of the total number of units in the project that is within a range of 0 to 20 percent, with the exact percentage within that range to be determined by HUD through notice.

    (3) HUD will publish any generally applicable change in the overall upper and lower limits of the range stated in paragraph (h)(2)(v) of this section by notice published for 30 days of public comment. After considering the comments, HUD will publish a final notice announcing the new upper and lower limit of the range of percentages being implemented, and the date on which the new standard becomes effective.

    (i) Site Condominium. Site condominiums are as defined in § 203.43b. Site Condominiums must meet all of the requirements of paragraph (d)(1) of this section for approval, except that:

    (1) Insurance and maintenance costs must be the sole responsibility of the unit owner; and

    (2) Any common assessments collected must be restricted to use solely for amenities outside of the footprint of the individual site.

    5. Amend § 203.50 to revise paragraphs (a)(1) and (f) to read as follows:
    § 203.50 Eligibility of rehabilitation loans.

    (a) * * *

    (1) The term rehabilitation loan means a loan, advance of credit, or purchase of an obligation representing a loan or advancement of credit, made for the purpose of financing:

    (i) The rehabilitation of an existing one-to-four unit structure which will be used primarily for residential purposes;

    (ii) The rehabilitation of such a structure and refinancing of the outstanding indebtedness on such structure and the real property on which the structure is located;

    (iii) The rehabilitation of such a structure and the purchase of the structure and the real property on which it is located; or

    (iv) The rehabilitation of the interior space or the installation of firewalls in the attic of a condominium unit, as defined in § 203.43b, excluding any exteriors or areas that are the responsibility of the Association; and

    (f) The loan may not exceed an amount which, when added to any outstanding indebtedness of the borrower that is secured by the property, creates an outstanding indebtedness in excess of the lesser of:

    (1)(i) The limits prescribed in § 203.18(a)(1) and (3) (in the case of a dwelling to be occupied as a principal residence, as defined in § 203.18(f)(1));

    (ii) The limits prescribed in § 203.18(a)(1) and (4) (in the case of a dwelling to be occupied as a secondary residence, as defined in § 203.18(f)(2));

    (iii) Eighty-five (85) percent of the limits prescribed in § 203.18(c), or such higher limit, not to exceed the limits set forth in § 203.18(a)(1) and (3), as the Secretary may prescribe (in the case of an eligible non-occupant mortgagor as defined in § 203.18(f)(3));

    (iv) The limits prescribed in § 203.18a, based upon the sum of the estimated cost of rehabilitation and the Commissioner's estimate of the value of the property before rehabilitation;

    (2) The limits prescribed in the authorities listed in this paragraph (f), based upon 110 percent of the Commissioner's estimate of the value of the property after rehabilitation; or

    (3) For any Condominium Unit that is not a detached dwelling, attached townhouse dwelling, manufactured home (as defined in 24 CFR 3280.2), or site condominium (as defined in § 203.43b), 100 percent of the after-improvement value of the Condominium Unit.

    PART 234—CONDOMINIUM OWNERSHIP MORTGAGE INSURANCE 6. The authority citation for part 234 continues to read as follows: Authority:

    12 U.S.C. 1715b and 1715y; 42 U.S.C. 3535(d).

    Subpart A—Eligibility Requirements—Individually Owned Units 7. Add § 234.2 to read as follows:
    § 234.2 Savings clause.

    Effective [date that is 30 days after the date of publication of the final rule], HUD's regulations at § 203.43b of this chapter govern approval of real estate consisting of a one-family unit in a multifamily project, and an undivided interest in the common areas and facilities which serve the project, except where the project has a blanket mortgage insured under section 234(d) of the National Housing Act, 12 U.S.C. 1715y(d) (section 234(d)). Where the project has a blanket mortgage insured by HUD under section 234(d), this 24 CFR part 234 applies to the approval of a one-family unit in such project.

    Dated: September 21, 2016. Edward L. Golding, Principal Deputy Assistant Secretary for Housing.
    [FR Doc. 2016-23258 Filed 9-27-16; 8:45 am] BILLING CODE 4210-67-P
    DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [REG-123600-16] RIN 1545-BN55 Guidance under Section 851 Relating to Investments in Stock and Securities AGENCY:

    Internal Revenue Service (IRS), Treasury.

    ACTION:

    Notice of proposed rulemaking.

    SUMMARY:

    This document provides guidance relating to the income test and the asset diversification requirements that are used to determine whether a corporation may qualify as a regulated investment company (RIC) for federal income tax purposes. These proposed regulations provide guidance to corporations that intend to qualify as RICs.

    DATES:

    Written or electronic comments and requests for a public hearing must be received by December 27, 2016.

    ADDRESSES:

    Send submissions to: CC:PA:LPD:PR (REG-123600-16), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-123600-16), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW., Washington, DC 20224, or sent electronically via the Federal eRulemaking Portal at www.regulations.gov (IRS REG-123600-16).

    FOR FURTHER INFORMATION CONTACT:

    Concerning the proposed regulations, Matthew Howard of the Office of Associate Chief Counsel (Financial Institutions and Products) at (202) 317-7053; concerning submissions of comments and requests for a public hearing, Regina Johnson (202) 317-6901 (not toll-free numbers).

    SUPPLEMENTARY INFORMATION:

    Background and Explanation of Provisions

    This document contains amendments to the Income Tax Regulations (26 CFR part 1) relating to RICs. Section 851 of the Internal Revenue Code (Code) sets forth requirements for qualifying as a RIC.

    Section 851(a) provides that a RIC is any domestic corporation that (1) at all times during the taxable year is registered under the Investment Company Act of 1940, Public Law 76-768, 54 Stat. 789 (codified as amended at 15 U.S.C. 80a-1—80a-64 (2016)) (the 1940 Act), as a management company or unit investment trust or has in effect an election under the 1940 Act to be treated as a business development company; or (2) is a common trust fund or other similar fund excluded by section 3(c)(3) of the 1940 Act from the definition of “investment company” and is not included in the definition of “common trust fund” by section 584(a).

    To be treated as a RIC for a taxable year, a corporation must satisfy the income test set forth in section 851(b). The income test under section 851(b)(2) requires that at least 90 percent of the corporation's gross income for the taxable year be derived from:

    (A) dividends, interest, payments with respect to securities loans (as defined in section 512(a)(5)), and gains from the sale or other disposition of stock or securities (as defined in section 2(a)(36) of the [1940 Act]) or foreign currencies, or other income (including but not limited to gains from options, futures or forward contracts) derived with respect to its business of investing in such stock, securities, or currencies, and (B) net income derived from an interest in a qualified publicly traded partnership (as defined in [section 851(h)]).

    Section 851(b)(3) provides that to be treated as a RIC a corporation also must satisfy the following asset diversification requirements at the close of each quarter of the corporation's taxable year:

    (A) at least 50 percent of the value of its total assets is represented by—

    (i) cash and cash items (including receivables), Government securities and securities of other [RICs], and

    (ii) other securities for purposes of this calculation limited, except and to the extent provided in [section 851(e)], in respect of any one issuer to an amount not greater in value than 5 percent of the value of the total assets of the taxpayer and to not more than 10 percent of the outstanding voting securities of such issuer, and

    (B) not more than 25 percent of the value of its total assets is invested in—

    (i) the securities (other than Government securities or the securities of other [RICs]) of any one issuer,

    (ii) the securities (other than the securities of other [RICs]) of two or more issuers which the taxpayer controls and which are determined, under regulations prescribed by the Secretary, to be engaged in the same or similar trades or businesses or related trades or businesses, or

    (iii) the securities of one or more qualified publicly traded partnerships (as defined in [section 851(h)]).

    These proposed regulations relate to the RIC income test and asset diversification requirements. Section A. of this preamble concerns the meaning of security. Section B. of this preamble addresses inclusions under sections 951(a)(1)(A)(i) and 1293(a). These proposed regulations also revise § 1.851-2(b)(1) of the existing final regulations to merely incorporate changes to section 851(b)(2) since the existing final regulations were published in the Federal Register on November 26, 1960, in TD 6500 (25 FR 11910).

    A. Defining Securities

    The income test and asset diversification requirements both use the term “securities.” For purposes of the income test, a security is defined by reference to section 2(a)(36) of the 1940 Act, while section 851(c) provides rules and definitions that apply for purposes of the asset diversification requirements of section 851(b)(3) but does not specifically define “security.” Section 851(c)(6), however, provides that the terms used in section 851(b)(3) and (c) have the same meaning as when used in the 1940 Act. An asset is therefore a security for purposes of the income test and the asset diversification requirements if it is a security under the 1940 Act.

    The Treasury Department and the IRS have in the past addressed whether certain instruments or positions are securities for purposes of section 851. In particular, Rev. Rul. 2006-1 (2006-1 CB 261) concludes that a derivative contract with respect to a commodity index is not a security for purposes of section 851(b)(2). The ruling also holds that income from such a contract is not qualifying other income for purposes of section 851(b)(2) because that income is not derived with respect to the RIC's business of investing in stocks, securities, or currencies. Rev. Rul. 2006-1 was modified and clarified by Rev. Rul. 2006-31 (2006-1 CB 1133), which states that Rev. Rul. 2006-1 was not intended to preclude a conclusion that income from certain instruments (such as certain structured notes) that create commodity exposure for the holder is qualifying income under section 851(b)(2).

    After the issuance of Rev. Rul. 2006-31, the IRS received a number of private letter ruling requests concerning whether certain instruments that provide RICs with commodity exposure were securities for purposes of the income test and the asset diversification requirements. By 2010, the IRS was devoting substantial resources to these private letter ruling requests. Moreover, it is not clear whether Congress intended to allow RICs to invest in securities that provided commodity exposure. Consequently, in July 2011, the IRS notified taxpayers that the IRS would not issue further private letter rulings addressing specific proposed RIC commodity-related investments while the IRS reviewed the issues and considered guidance of broader applicability.

    Finally, determining whether certain investments that provide RICs with commodity exposure are securities for purposes of the income test and the asset diversification requirements requires the IRS implicitly to determine what is a security within the meaning of section 2(a)(36) of the 1940 Act. Section 38 of the 1940 Act, however, grants exclusive rulemaking authority under the 1940 Act to the Securities and Exchange Commission (SEC), including “defining accounting, technical, and trade terms” used in the 1940 Act. Any future guidance regarding whether particular financial instruments, including investments that provide RICs with commodity exposure, are securities for purposes of the 1940 Act is therefore within the jurisdiction of the SEC.

    Section 2.01 of Rev. Proc. 2016-3 (2016-1 IRB 126) provides that the IRS may decline to issue a letter ruling or a determination letter when appropriate in the interest of sound tax administration (including due to resource constraints) or on other grounds whenever warranted by the facts or circumstances of a particular case. If the IRS determines that it is not in the interest of sound tax administration to issue a letter ruling or determination letter due to resource constraints, the IRS will adopt a consistent approach with respect to taxpayers that request a ruling on the same issue. The IRS will also consider adding the issue to the no rule list at the first opportunity.

    The Treasury Department and the IRS have reviewed the issues, considered the concerns expressed, considered resource constraints, and determined that the IRS should no longer issue letter rulings on questions relating to the treatment of a corporation as a RIC that require a determination of whether a financial instrument or position is a security under the 1940 Act. Contemporaneously with the publication of these proposed regulations, the Treasury Department and the IRS are issuing Rev. Proc. 2016-50 (2016-43 IRB __), which provides that the IRS ordinarily will not issue rulings or determination letters on any issue relating to the treatment of a corporation as a RIC that requires a determination of whether a financial instrument or position is a security under the 1940 Act. Thus, for example, the IRS ordinarily will not issue a ruling on whether income is of a type described in the income test of section 851(b)(2) if that ruling depends on whether an instrument is a security under the 1940 Act.

    The Treasury Department and the IRS request comments as to whether Rev. Rul. 2006-1, Rev. Rul. 2006-31, and other previously issued guidance that involves determinations of whether a financial instrument or position held by a RIC is a security under the 1940 Act should be withdrawn effective as of the date of publication in the Federal Register of a Treasury decision adopting these proposed regulations as final regulations.

    B. Inclusions Under Section 951(a)(1)(A)(i) or 1293(a)

    In certain circumstances, a U.S. person may be required under section 951(a)(1)(A)(i) or 1293(a) to include in taxable income certain earnings of a foreign corporation in which the U.S. person holds an interest, without regard to whether the foreign corporation makes a corresponding distribution of cash or property to the U.S. person. Section 851(b) was amended by the Tax Reduction Act of 1975, Public Law 94-12, section 602, 89 Stat. 26, 58 (the “1975 Act”) (for inclusions under section 951(a)(1)(A)(i)), and by the Tax Reform Act of 1986, Public Law 99-514, section 1235, 100 Stat. 2085, 2575 (the “1986 Act”) (for inclusions under section 1293(a)), to specify how a RIC treats amounts included in income under section 951(a)(1)(A)(i) or 1293(a) for purposes of the income test of section 851(b)(2). The language added in those amendments provides:

    For purposes of [section 851(b)(2)], there shall be treated as dividends amounts included in gross income under section 951(a)(1)(A)(i) or 1293(a) for the taxable year to the extent that, under section 959(a)(1) or 1293(c) (as the case may be), there is a distribution out of the earnings and profits of the taxable year which are attributable to the amounts so included.

    The significance of treating an inclusion as a dividend under section 851 is that a dividend is qualifying income under section 851(b)(2). The amendments to section 851(b) made by the 1975 Act and the 1986 Act unambiguously condition dividend treatment of an inclusion under section 951(a)(1)(A)(i) or 1293(a) on a distribution from the foreign corporation's earnings and profits attributable to the amount included. Absent a distribution, there is no support in the Code for treating an inclusion under section 951(a)(1)(A)(i) or 1293(a) as a dividend under section 851.

    Notwithstanding the distribution required by section 851(b), in certain circumstances the IRS has previously issued letter rulings under section 851(b)(2) that permit an inclusion under section 951(a)(1)(A)(i) or 1293(a) to qualify as “other income” derived with respect to a RIC's business of investing in currencies or 1940 Act stock or securities even in the absence of a distribution. Reading section 851(b)(2) in this manner ignores the requirement in section 851(b) that amounts be distributed in order to treat these inclusions as dividends. This distribution requirement is a more specific provision than the other income clause. In addition, it cannot be suggested that the distribution requirement was superseded by the other income clause because the other income clause and the distribution requirement for inclusions under section 1293(a) were both added by the 1986 Act. Therefore, these proposed regulations specify that an inclusion under section 951(a)(1)(A)(i) or 1293(a) is treated as a dividend for purposes of section 851(b)(2) only to the extent that the distribution requirement in section 851(b) is met. These proposed regulations further provide that, for purposes of section 851(b)(2), an inclusion under section 951(a)(1) or 1293(a) does not qualify as other income derived with respect to a RIC's business of investing in stock, securities, or currencies.

    Proposed Effective/Applicability Date

    The rule in § 1.851-2(b)(2)(iii) of the proposed regulations applies to taxable years that begin on or after the date that is 90 days after the date of publication in the Federal Register of a Treasury decision adopting these proposed regulations as final regulations.

    Special Analyses

    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 also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because the regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Internal Revenue Code, this notice of proposed rulemaking will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

    Comments and Requests for a Public Hearing

    Before these proposed regulations are adopted as final regulations, consideration will be given to any comments that are submitted timely to the IRS as prescribed in this preamble under the “Addresses” heading. The Treasury Department and the IRS specifically request comments on the clarity of the proposed regulations and how they can be made easier to understand. All comments will be made available for public inspection at www.regulations.gov or upon request. A public hearing will be scheduled if requested in writing by any person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the public hearing will be published in the Federal Register.

    Drafting Information

    The principal author of these proposed regulations is Matthew Howard, Office of Associate Chief Council (Financial Institutions and Products). However, other personnel from the Treasury Department and the IRS participated in their development.

    Statement of Availability of IRS Documents

    The IRS revenue rulings and revenue procedure cited in this preamble are published in the Internal Revenue Bulletin (or Cumulative Bulletin) and are available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS Web site at www.irs.gov.

    List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

    Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 1 is proposed to be amended as follows:

    PART 1—INCOME TAXES Paragraph 1. The authority citation for part 1 continues to read in part as follows: Authority:

    26 U.S.C. 7805 * * *

    Par. 2. Section 1.851-2 is amended by: 1. Revising paragraphs (b)(1) and (b)(2)(i). 2. Adding paragraph (b)(2)(iii).

    The addition and revisions read as follows:

    § 1.851-2 Limitations.

    (b) Gross income requirement—(1) General rule. A corporation will not be a regulated investment company for a taxable year unless 90 percent of its gross income for that year is income described in paragraph (b)(1)(i) of this section or in paragraph (b)(1)(ii) of this section. Any loss from the sale or other disposition of stock or securities is not taken into account in the gross income computation.

    (i) Gross income amounts. Income is described in this paragraph (b)(1)(i) if it is gross income derived from:

    (A) Dividends;

    (B) Interest;

    (C) Payments with respect to securities loans (as defined in section 512(a)(5));

    (D) Gains from the sale or other disposition of stocks or securities (as defined in section 2(a)(36) of the Investment Company Act of 1940, as amended);

    (E) Gains from the sale or other disposition of foreign currencies; or

    (F) Other income (including but not limited to gains from options, futures, or forward contracts) derived with respect to a regulated investment company's business of investing in such stock, securities, or currencies.

    (ii) Income from a publicly traded partnership. Income is described in this paragraph (b)(1)(ii) if it is net income derived from an interest in a qualified publicly traded partnership (as defined in section 851(h)).

    (2) Special rules—(i) For purposes of section 851(b)(2)(A) and paragraph (b)(1)(i)(A) of this section, amounts included in gross income for the taxable year under section 951(a)(1)(A)(i) or 1293(a) are treated as dividends only to the extent that, under section 959(a)(1) or 1293(c) (as the case may be), there is a distribution out of the earnings and profits of the taxable year that are attributable to the amounts included in gross income for the taxable year under section 951(a)(1)(A)(i) or 1293(a). For allocation of distributions to earnings and profits of foreign corporations, see § 1.959-3.

    (iii) For purposes of section 851(b)(2)(A) and paragraph (b)(1)(i)(F) of this section, amounts included in gross income under section 951(a)(1) or 1293(a) are not treated as other income derived with respect to a corporation's business of investing in stock, securities, or currencies. The rule in this paragraph (b)(2)(iii) applies to taxable years that begin on or after the date that is 90 days after the date of publication in the Federal Register of a Treasury decision adopting these proposed regulations as final regulations.

    John Dalrymple, Deputy Commissioner for Services and Enforcement.
    [FR Doc. 2016-23408 Filed 9-27-16; 8:45 am] BILLING CODE 4830-01-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 52 and 81 [EPA-R05-OAR-2016-0372; FRL-9953-15-Region 5] Air Plan Approval; Ohio; Redesignation of the Columbus, Ohio Area to Attainment of the 2008 Ozone Standard AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is proposing to find that the Columbus, Ohio area is attaining the 2008 8-hour ozone National Ambient Air Quality Standard (NAAQS or standard) and to approve a request from the Ohio Environmental Protection Agency (Ohio EPA) to redesignate the area to attainment for the 2008 ozone NAAQS because the request meets the statutory requirements for redesignation under the Clean Air Act (CAA or Act). The Columbus area includes Delaware, Fairfield, Knox, Licking, and Mason Counties. Ohio EPA submitted this request on June 16, 2016. EPA is also proposing to approve, as a revision to the Ohio State Implementation Plan (SIP), the state's plan for maintaining the 2008 8-hour ozone standard through 2030 in the Columbus area. Finally, EPA finds adequate and is proposing to approve the state's 2020 and 2030 volatile organic compound (VOC) and oxides of nitrogen (NOX) Motor Vehicle Emission Budgets (MVEBs) for the Columbus area.

    DATES:

    Comments must be received on or before October 28, 2016.

    ADDRESSES:

    Submit your comments, identified by Docket ID No. EPA-R05-OAR-2016-0372 at http://www.regulations.gov or via email to [email protected] For comments submitted at Regulations.gov, follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. For either manner of submission, EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. EPA will generally not consider comments or comment contents located outside of the primary submission (i.e. on the web, cloud, or other file sharing system). For additional submission methods, please contact the person identified in the For Further Information Contact section. For the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

    FOR FURTHER INFORMATION CONTACT:

    Kathleen D'Agostino, Environmental Scientist, Attainment Planning and Maintenance Section, Air Programs Branch (AR-18J), Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604, (312) 886-1767, [email protected]

    SUPPLEMENTARY INFORMATION:

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

    I. What are the actions EPA is proposing? II. What is the background for these actions? III. What are the criteria for redesignation? IV. What is EPA's analysis of Ohio's redesignation request? A. Has the Columbus area attained the 2008 8-hour ozone NAAQS? B. Has Ohio met all applicable requirements of section 110 and part D of the CAA for the Columbus area, and does Ohio have a fully approved SIP for the area under section 110(k) of the CAA? 1. Ohio Has Met All Applicable Requirements of Section 110 and Part D of the CAA Applicable to the Columbus Area for Purposes of Redesignation 2. The Columbus Area Has a Fully Approved SIP for Purposes of Redesignation Under Section 110(k) of the CAA C. Are the air quality improvements in the Columbus area due to permanent and enforceable emission reductions? 1. Permanent and Enforceable Emission Controls Implemented 2. Emission Reductions 3. Meteorology D. Does Ohio have a fully approvable ozone maintenance plan for the Columbus area? 1. Attainment Inventory 2. Has the state documented maintenance of the ozone standard in the Columbus area? 3. Continued Air Quality Monitoring 4. Verification of Continued Attainment 5. What is the contingency plan for the Columbus area? V. Has the state adopted approvable motor vehicle emission budgets? A. Motor Vehicle Emission Budgets B. What is the status of EPA's adequacy determination for the proposed VOC and NOX MVEBs for the Columbus area? C. What is a safety margin? VI. Proposed Actions VII. Statutory and Executive Order Reviews I. What are the actions EPA is proposing?

    EPA is proposing to take several related actions. EPA is proposing to determine that the Columbus nonattainment area is attaining the 2008 ozone standard, based on quality-assured and certified monitoring data for 2013-2015 and that this area has met the requirements for redesignation under section 107(d)(3)(E) of the CAA. EPA is thus proposing to approve Ohio EPA's request to change the legal designation of the Columbus area from nonattainment to attainment for the 2008 ozone standard. EPA is also proposing to approve, as a revision to the Ohio SIP, the state's maintenance plan (such approval being one of the CAA criteria for redesignation to attainment status) for the area. The maintenance plan is designed to keep the Columbus area in attainment of the 2008 ozone NAAQS through 2030. Finally, EPA finds adequate and is proposing to approve the newly-established 2020 and 2030 MVEBs for the Columbus area. The adequacy comment period for the MVEBs began on July 22, 2016, with EPA's posting of the availability of the submittal on EPA's Adequacy Web site (at http://www.epa.gov/otaq/stateresources/transconf/adequacy.htm). The adequacy comment period for these MVEBs ended on August 22, 2016. EPA did not receive any requests for this submittal, or adverse comments on this submittal during the adequacy comment period. In a letter dated August 23, 2016, EPA informed Ohio EPA that we found the 2020 and 2030 MVEBs to be adequate for use in transportation conformity analyses. Please see section V.B. of this rulemaking, “What is the status of EPA's adequacy determination for the proposed VOC and NOX MVEBs for the Columbus area,” for further explanation of this process. Therefore, we find adequate, and are proposing to approve, the State's 2020 and 2030 MVEBs for transportation conformity purposes.

    II. What is the background for these actions?

    EPA has determined that ground-level ozone is detrimental to human health. On March 12, 2008, EPA promulgated a revised 8-hour ozone NAAQS of 0.075 parts per million (ppm). See 73 FR 16436 (March 27, 2008). Under EPA's regulations at 40 CFR part 50, the 2008 8-hour ozone NAAQS is attained in an area when the 3-year average of the annual fourth highest daily maximum 8-hour average concentration is equal to or less than 0.075 ppm, when truncated after the thousandth decimal place, at all of the ozone monitoring sites in the area. See 40 CFR 50.15 and appendix P to 40 CFR part 50.

    Upon promulgation of a new or revised NAAQS, section 107(d)(1)(B) of the CAA requires EPA to designate as nonattainment any areas that are violating the NAAQS, based on the most recent three years of quality assured ozone monitoring data. The Columbus area was designated as a marginal nonattainment area for the 2008 ozone NAAQS on May 21, 2012 (77 FR 30088) (effective July 20, 2012).

    In a final implementation rule for the 2008 ozone NAAQS (SIP Requirements Rule),1 EPA established ozone standard attainment dates based on table 1 of section 181(a) of the CAA. This established an attainment date three years after the July 20, 2012, effective designation date for areas classified as marginal nonattainment for the 2008 ozone NAAQS. Therefore, the attainment date for the Columbus area was July 20, 2015. On May 4, 2016 (81 FR 26697), in accordance with section 181(b)(2)(A) of the CAA and the provisions of the SIP Requirements Rule (40 CFR 51.1103), EPA made a determination that the Columbus area attained the standard by its July 20, 2015, attainment date for the 2008 ozone NAAQS. EPA's determination was based upon 3 years of complete, quality-assured and certified data for the 2012-2014 time period.

    1 This rule, titled “Implementation of the 2008 National Ambient Air Quality Standards for Ozone: State Implementation Plan Requirements” and published at 80 FR 12264 (March 6, 2015), addresses nonattainment area SIP requirements for the 2008 ozone NAAQS, including requirements pertaining to attainment demonstrations, reasonable further progress (RFP), reasonably available control technology (RACT), reasonably available control measures (RACM), new source review (NSR), emission inventories, and the timing requirements for SIP submissions and compliance with emission control measures in the SIP. This rule also addresses the revocation of the 1997 ozone NAAQS and the anti-backsliding requirements that apply when the 1997 ozone NAAQS is revoked.

    III. What are the criteria for redesignation?

    Section 107(d)(3)(E) of the CAA allows redesignation of an area to attainment of the NAAQS provided that: (1) The Administrator (EPA) determines that the area has attained the NAAQS; (2) the Administrator has fully approved the applicable implementation plan for the area under section 110(k) of the CAA; (3) the Administrator determines that the improvement in air quality is due to permanent and enforceable reductions in emissions resulting from implementation of the applicable SIP, applicable Federal air pollutant control regulations, and other permanent and enforceable emission reductions; (4) the Administrator has fully approved a maintenance plan for the area as meeting the requirements of section 175A of the CAA; and (5) the state containing the area has met all requirements applicable to the area for the purposes of redesignation under section 110 and part D of the CAA.

    On April 16, 1992, EPA provided guidance on redesignations in the General Preamble for the Implementation of Title I of the CAA Amendments of 1990 (57 FR 13498) and supplemented this guidance on April 28, 1992 (57 FR 18070). EPA has provided further guidance on processing redesignation requests in the following documents:

    1. “Ozone and Carbon Monoxide Design Value Calculations,” Memorandum from Bill Laxton. Director, Technical Support Division, June 18, 1990;

    2. “Maintenance Plans for Redesignation of Ozone and Carbon Monoxide Nonattainment Areas,” Memorandum from G.T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, April 30, 1992;

    3. “Contingency Measures for Ozone and Carbon Monoxide (CO) Redesignations,” Memorandum from G.T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, June 1, 1992;

    4. “Procedures for Processing Requests to Redesignate Areas to Attainment,” Memorandum from John Calcagni, Director, Air Quality Management Division, September 4, 1992 (the “Calcagni Memorandum”);

    5. “State Implementation Plan (SIP) Actions Submitted in Response to Clean Air Act (CAA) Deadlines,” Memorandum from John Calcagni, Director, Air Quality Management Division, October 28, 1992;

    6. “Technical Support Documents (TSDs) for Redesignation of Ozone and Carbon Monoxide (CO) Nonattainment Areas,” Memorandum from G.T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, August 17, 1993;

    7. “State Implementation Plan (SIP) Requirements for Areas Submitting Requests for Redesignation to Attainment of the Ozone and Carbon Monoxide (CO) National Ambient Air Quality Standards (NAAQS) On or After November 15, 1992,” Memorandum from Michael H. Shapiro, Acting Assistant Administrator for Air and Radiation, September 17, 1993;

    8. “Use of Actual Emissions in Maintenance Demonstrations for Ozone and CO Nonattainment Areas,” Memorandum from D. Kent Berry, Acting Director, Air Quality Management Division, November 30, 1993;

    9. “Part D New Source Review (Part D NSR) Requirements for Areas Requesting Redesignation to Attainment,” Memorandum from Mary D. Nichols, Assistant Administrator for Air and Radiation, October 14, 1994; and

    10. “Reasonable Further Progress, Attainment Demonstration, and Related Requirements for Ozone Nonattainment Areas Meeting the Ozone National Ambient Air Quality Standard,” Memorandum from John S. Seitz, Director, Office of Air Quality Planning and Standards, May 10, 1995.

    IV. What is EPA's analysis of Ohio's redesignation request? A. Has the Columbus area attained the 2008 8-hour ozone NAAQS?

    For redesignation of a nonattainment area to attainment, the CAA requires EPA to determine that the area has attained the applicable NAAQS (CAA section 107(d)(3)(E)(i)). An area is attaining the 2008 ozone NAAQS if it meets the 2008 ozone NAAQS, as determined in accordance with 40 CFR 50.15 and appendix P of part 50, based on three complete, consecutive calendar years of quality-assured air quality data for all monitoring sites in the area. To attain the NAAQS, the three-year average of the annual fourth-highest daily maximum 8-hour average ozone concentrations (ozone design values) at each monitor must not exceed 0.075 ppm. The air quality data must be collected and quality-assured in accordance with 40 CFR part 58 and recorded in EPA's Air Quality System (AQS). Ambient air quality monitoring data for the 3-year period must also meet data completeness requirements. An ozone design value is valid if daily maximum 8-hour average concentrations are available for at least 90 percent of the days within the ozone monitoring seasons,2 on average, for the three-year period, with a minimum data completeness of 75 percent during the ozone monitoring season of any year during the three-year period. See section 2.3 of appendix P to 40 CFR part 50.

    2 The ozone season is defined by state in 40 CFR 58 appendix D. For the 2012-2014 and 2013-2015 time periods, the ozone season for Ohio was April-October. Beginning in 2016, the ozone season for Ohio is March-October. See, 80 FR 65292, 65466-67 (October 26, 2015).

    On May 4, 2016, in accordance with section 181(b)(2)(A) of the CAA and the provisions of the SIP Requirements Rule (40 CFR 51.1103), EPA made a determination that the Columbus area attained the standard by its July 20, 2015 attainment date for the 2008 ozone NAAQS. This determination was based upon 3 years of complete, quality-assured and certified data for the 2012-2014 time period. In addition, EPA has reviewed the available ozone monitoring data from monitoring sites in the Columbus area for the 2013-2015 time period. These data have been quality assured, are recorded in the AQS, and have been certified. These data demonstrate that the Columbus area is attaining the 2008 ozone NAAQS. The annual fourth-highest 8-hour ozone concentrations and the 3-year average of these concentrations (monitoring site ozone design values) for each monitoring site are summarized in Table 1.

    Table 1—Annual 4th High Daily Maximum 8-Hour Ozone Concentrations and 3-Year Average of the 4th High Daily Maximum 8-Hour Ozone Concentrations for the Columbus Area County Monitor 2013
  • 4th high
  • (ppm)
  • 2014
  • 4th high
  • (ppm)
  • 2015
  • 4th high
  • (ppm)
  • 2013-2015
  • Average
  • (ppm)
  • Delaware 39-041-0002 0.070 0.066 0.068 0.068 Franklin 39-049-0029 0.073 0.070 0.071 0.071 39-049-0037 0.070 0.069 0.064 0.067 39-049-0081 0.070 0.069 0.063 0.065 Knox 39-083-0002 0.067 0.066 0.071 0.068 Licking 39-089-0005 0.065 0.066 0.068 0.066 Madison 39-097-0007 0.066 0.069 0.069 0.068

    The 3-year ozone design value for 2013-2015 is 0.071 ppm,3 which meets the 2008 ozone NAAQS. Therefore, in today's action, EPA proposes to determine that the Columbus area is attaining the 2008 ozone NAAQS.

    3 The monitor ozone design value for the monitor with the highest 3-year averaged concentration.

    EPA will not take final action to determine that the Columbus area is attaining the NAAQS nor to approve the redesignation of this area if the design value of a monitoring site in the area exceeds the NAAQS after proposal but prior to final approval of the redesignation. Preliminary 2016 data indicate that this area continues to attain the 2008 ozone NAAQS. As discussed in section IV.D.3. below, Ohio EPA has committed to continue monitoring ozone in this area to verify maintenance of the ozone standard.

    B. Has Ohio met all applicable requirements of section 110 and part D of the CAA for the Columbus area, and does Ohio have a fully approved SIP for the area under section 110(k) of the CAA?

    As criteria for redesignation of an area from nonattainment to attainment of a NAAQS, the CAA requires EPA to determine that the state has met all applicable requirements under section 110 and part D of title I of the CAA (see section 107(d)(3)(E)(v) of the CAA) and that the state has a fully approved SIP under section 110(k) of the CAA (see section 107(d)(3)(E)(ii) of the CAA). EPA proposes to find that Ohio has a fully approved SIP under section 110(k) of the CAA. Additionally, EPA proposes to find that the Ohio SIP satisfies the criterion that it meet applicable SIP requirements, for purposes of redesignation, under section 110 and part D of title I of the CAA (requirements specific to nonattainment areas for the 2008 ozone NAAQS). In making these proposed determinations, EPA ascertained which CAA requirements are applicable to the Columbus area and the Ohio SIP and, if applicable, whether the required Ohio SIP elements are fully approved under section 110(k) and part D of the CAA. As discussed more fully below, SIPs must be fully approved only with respect to currently applicable requirements of the CAA.

    The September 4, 1992 Calcagni memorandum (see “Procedures for Processing Requests to Redesignate Areas to Attainment,” Memorandum from John Calcagni, Director, Air Quality Management Division, September 4, 1992) describes EPA's interpretation of section 107(d)(3)(E) of the CAA. Under this interpretation, a state and the area it wishes to redesignate must meet the relevant CAA requirements that are due prior to the state's submittal of a complete redesignation request for the area. See also the September 17, 1993, Michael Shapiro memorandum and 60 FR 12459, 12465-66 (March 7, 1995) (redesignation of Detroit-Ann Arbor, Michigan to attainment of the 1-hour ozone NAAQS). Applicable requirements of the CAA that come due subsequent to the state's submittal of a complete request remain applicable until a redesignation to attainment is approved, but are not required as a prerequisite to redesignation. See section 175A(c) of the CAA. Sierra Club v. EPA, 375 F.3d 537 (7th Cir. 2004). See also 68 FR 25424, 25427 (May 12, 2003) (redesignation of the St. Louis/East St. Louis area to attainment of the 1-hour ozone NAAQS).

    1. Ohio Has Met All Applicable Requirements of Section 110 and Part D of the CAA Applicable to the Columbus Area for Purposes of Redesignation a. Section 110 General Requirements for Implementation Plans

    Section 110(a)(2) of the CAA delineates the general requirements for a SIP. Section 110(a)(2) provides that the SIP must have been adopted by the state after reasonable public notice and hearing, and that, among other things, it must: (1) Include enforceable emission limitations and other control measures, means or techniques necessary to meet the requirements of the CAA; (2) provide for establishment and operation of appropriate devices, methods, systems and procedures necessary to monitor ambient air quality; (3) provide for implementation of a source permit program to regulate the modification and construction of stationary sources within the areas covered by the plan; (4) include provisions for the implementation of part C prevention of significant deterioration (PSD) and part D new source review (NSR) permit programs; (5) include provisions for stationary source emission control measures, monitoring, and reporting; (6) include provisions for air quality modeling; and, (7) provide for public and local agency participation in planning and emission control rule development.

    Section 110(a)(2)(D) of the CAA requires SIPs to contain measures to prevent sources in a state from significantly contributing to air quality problems in another state. To implement this provision, EPA has required certain states to establish programs to address transport of certain air pollutants, e.g., NOX SIP call.4 However, like many of the 110(a)(2) requirements, the section 110(a)(2)(D) SIP requirements are not linked with a particular area's ozone designation and classification. EPA concludes that the SIP requirements linked with the area's ozone designation and classification are the relevant measures to evaluate when reviewing a redesignation request for the area. The section 110(a)(2)(D) requirements, where applicable, continue to apply to a state regardless of the designation of any one particular area within the state. Thus, we believe these requirements are not applicable requirements for purposes of redesignation. See 65 FR 37890 (June 15, 2000), 66 FR 50399 (October 19, 2001), 68 FR 25418, 25426-27 (May 13, 2003).

    4 On October 27, 1992 (63 FR 57356), EPA issued a NOX SIP call requiring the District of Columbia and 22 states to reduce emissions of NOX in order to reduce the transport of ozone and ozone precursors. In compliance with EPA's NOX SIP call, Ohio developed rules governing the control of NOX emissions from Electric Generating Units (EGUs), major non-EGU industrial boilers and turbines, and major cement kilns. EPA approved Ohio's rules as fulfilling Phase I of the NOX SIP Call on August 5, 2003 (68 FR 46089) and June 27, 2005 (70 FR 36845), and as meeting Phase II of the NOX SIP Call on February 4, 2008 (73 FR 6427).

    In addition, EPA believes that other section 110 elements that are neither connected with nonattainment plan submissions nor linked with an area's ozone attainment status are not applicable requirements for purposes of redesignation. The area will still be subject to these requirements after the area is redesignated to attainment of the 2008 ozone NAAQS. The section 110 and part D requirements which are linked with a particular area's designation and classification are the relevant measures to evaluate in reviewing a redesignation request. This approach is consistent with EPA's existing policy on applicability (i.e., for redesignations) of conformity and oxygenated fuels requirements, as well as with section 184 ozone transport requirements. See Reading, Pennsylvania proposed and final rulemakings, 61 FR 53174-53176 (October 10, 1996) and 62 FR 24826 (May 7, 1997); Cleveland-Akron-Loraine, Ohio final rulemaking, 61 FR 20458 (May 7, 1996); and Tampa, Florida final rulemaking, 60 FR 62748 (December 7, 1995). See also the discussion of this issue in the Cincinnati, Ohio ozone redesignation (65 FR 37890, June 19, 2000), and the Pittsburgh, Pennsylvania ozone redesignation (66 FR 50399, October 19, 2001).

    We have reviewed Ohio's SIP and have concluded that it meets the general SIP requirements under section 110 of the CAA, to the extent those requirements are applicable for purposes of redesignation. On October 16, 2014 (79 FR 62019), EPA approved elements of the SIP submitted by Ohio to meet the requirements of section 110 for the 2008 ozone standard. The requirements of section 110(a)(2), however, are statewide requirements that are not linked to the 8-hour ozone nonattainment status of the Columbus area. Therefore, EPA concludes that these infrastructure requirements are not applicable requirements for purposes of review of the state's 8-hour ozone redesignation request.

    b. Part D Requirements

    Section 172(c) of the CAA sets forth the basic requirements of air quality plans for states with nonattainment areas that are required to submit them pursuant to section 172(b). Subpart 2 of part D, which includes section 182 of the CAA, establishes specific requirements for ozone nonattainment areas depending on the areas' nonattainment classifications.

    The Columbus area was classified as marginal under subpart 2 for the 2008 ozone NAAQS. As such, the area is subject to the subpart 1 requirements contained in section 172(c) and section 176. Similarly, the area is subject to the subpart 2 requirements contained in section 182(a) (marginal nonattainment area requirements). A thorough discussion of the requirements contained in section 172(c) and 182 can be found in the General Preamble for Implementation of Title I (57 FR 13498).

    i. Subpart 1 Section 172 Requirements

    As provided in subpart 2, for marginal ozone nonattainment areas such as the Columbus area, the specific requirements of section 182(a) apply in lieu of the attainment planning requirements that would otherwise apply under section 172(c), including the attainment demonstration and reasonably available control measures (RACM) under section 172(c)(1), reasonable further progress (RFP) under section 172(c)(2), and contingency measures under section 172(c)(9). 42 U.S.C. 7511a(a).

    Section 172(c)(3) requires submission and approval of a comprehensive, accurate and current inventory of actual emissions. This requirement is superseded by the inventory requirement in section 182(a)(1) discussed below.

    Section 172(c)(4) requires the identification and quantification of allowable emissions for major new and modified stationary sources in an area, and section 172(c)(5) requires source permits for the construction and operation of new and modified major stationary sources anywhere in the nonattainment area. EPA approved Ohio's NSR program on January 10, 2003 (68 FR 1366) and February 25, 2010 (75 FR 8496). Nonetheless, EPA has determined that, since PSD requirements will apply after redesignation, areas being redesignated need not comply with the requirement that a NSR program be approved prior to redesignation, provided that the area demonstrates maintenance of the NAAQS without part D NSR. A more detailed rationale for this view is described in a memorandum from Mary Nichols, Assistant Administrator for Air and Radiation, dated October 14, 1994, entitled, “Part D New Source Review Requirements for Areas Requesting Redesignation to Attainment.” Ohio has demonstrated that the Columbus area will be able to maintain the standard without part D NSR in effect; therefore, EPA concludes that the state need not have a fully approved part D NSR program prior to approval of the redesignation request. See rulemakings for Detroit, Michigan (60 FR 12467-12468, March 7, 1995); Cleveland-Akron-Lorain, Ohio (61 FR 20458, 20469-20470, May 7, 1996); Louisville, Kentucky (66 FR 53665, October 23, 2001); and Grand Rapids, Michigan (61 FR 31834-31837, June 21, 1996). Ohio's PSD program will become effective in the Columbus area upon redesignation to attainment. EPA approved Ohio's PSD program on January 22, 2003 (68 FR 2909) and February 25, 2010 (75 FR 8496).

    Section 172(c)(6) requires the SIP to contain control measures necessary to provide for attainment of the NAAQS. Because attainment has been reached, no additional measures are needed to provide for attainment.

    Section 172(c)(7) requires the SIP to meet the applicable provisions of section 110(a)(2). As noted above, we believe the Ohio SIP meets the requirements of section 110(a)(2) for purposes of redesignation.

    ii. Section 176 Conformity Requirements

    Section 176(c) of the CAA requires states to establish criteria and procedures to ensure that Federally supported or funded projects conform to the air quality planning goals in the applicable SIP. The requirement to determine conformity applies to transportation plans, programs and projects that are developed, funded or approved under title 23 of the United States Code (U.S.C.) and the Federal Transit Act (transportation conformity) as well as to all other Federally supported or funded projects (general conformity). State transportation conformity SIP revisions must be consistent with Federal conformity regulations relating to consultation, enforcement and enforceability that EPA promulgated pursuant to its authority under the CAA.

    EPA interprets the conformity SIP requirements 5 as not applying for purposes of evaluating a redesignation request under section 107(d) because state conformity rules are still required after redesignation and Federal conformity rules apply where state conformity rules have not been approved. See Wall v. EPA, 265 F.3d 426 (6th Cir. 2001) (upholding this interpretation); see also 60 FR 62748 (December 7, 1995) (redesignation of Tampa, Florida). Nonetheless, Ohio has an approved conformity SIP for the Columbus area. See 80 FR 11133 (March 2, 2015).

    5 CAA section 176(c)(4)(E) requires states to submit revisions to their SIPs to reflect certain Federal criteria and procedures for determining transportation conformity. Transportation conformity SIPs are different from SIPs requiring the development of Motor Vehicle Emission Budgets (MVEBs), such as control strategy SIPs and maintenance plans.

    iii. Section 182(a) Requirements

    Section 182(a)(1) requires states to submit a comprehensive, accurate, and current inventory of actual emissions from sources of VOC and NOX emitted within the boundaries of the ozone nonattainment area. Ohio EPA submitted a 2008 base year emissions inventory for the Columbus area on July 18, 2014. EPA approved this emissions inventory as a revision to the Ohio SIP on March 10, 2016 (81 FR 12591).

    Under section 182(a)(2)(A), states with ozone nonattainment areas that were designated prior to the enactment of the 1990 CAA amendments were required to submit, within six months of classification, all rules and corrections to existing VOC reasonably available control technology (RACT) rules that were required under section 172(b)(3) prior to the 1990 CAA amendments. The Columbus area is not subject to the section 182(a)(2) RACT “fix up” requirement for the 2008 ozone NAAQS because it was designated as nonattainment for this standard after the enactment of the 1990 CAA amendments and because Ohio complied with this requirement for the Columbus area under the prior 1-hour ozone NAAQS. See 59 FR 23796 (May 9, 1994) and 60 FR 15235 (March 23, 1995).

    Section 182(a)(2)(B) requires each state with a marginal ozone nonattainment area that implemented or was required to implement a vehicle inspection and maintenance (I/M) program prior to the 1990 CAA amendments to submit a SIP revision for an I/M program no less stringent than that required prior to the 1990 CAA amendments or already in the SIP at the time of the CAA amendments, whichever is more stringent. For the purposes of the 2008 ozone standard and the consideration of Ohio's redesignation request for this standard, the Columbus area is not subject to the section 182(a)(2)(B) requirement because the Columbus area was designated as nonattainment for the 2008 ozone standard after the enactment of the 1990 CAA amendments.

    Regarding the source permitting and offset requirements of section 182(a)(2)(C) and section 182(a)(4), Ohio currently has a fully-approved part D NSR program in place. EPA approved Ohio's PSD program on January 22, 2003 (68 FR 2909) and February 25, 2010 (75 FR 8496). As discussed above, Ohio has demonstrated that the Columbus area will be able to maintain the standard without part D NSR in effect; therefore, EPA concludes that the state need not have a fully approved part D NSR program prior to approval of the redesignation request. The state's PSD program will become effective in the Columbus area upon redesignation to attainment.

    Section 182(a)(3) requires states to submit periodic emission inventories and a revision to the SIP to require the owners or operators of stationary sources to annually submit emission statements documenting actual VOC and NOX emissions. As discussed below in section IV.D.4. of this proposed rule, Ohio will continue to update its emissions inventory at least once every three years. With regard to stationary source emission statements, EPA approved Ohio's emission statement rule on September 27, 2007 (72 FR 54844). On July 18, 2014, Ohio certified that this approved SIP regulation remains in place and remains enforceable for the 2008 ozone standard. EPA approved Ohio's certification on March 10, 2016 (81 FR 12591).

    The Columbus area has satisfied all applicable requirements for purposes of redesignation under section 110 and part D of title I of the CAA.

    2. The Columbus Area Has a Fully Approved SIP for Purposes of Redesignation Under Section 110(k) of the CAA

    Ohio has adopted and submitted and EPA has approved at various times, provisions addressing the various SIP elements applicable for the ozone NAAQS. As discussed above, EPA has fully approved the Ohio SIP for the Columbus area under section 110(k) for all requirements applicable for purposes of redesignation under the 2008 ozone NAAQS. EPA may rely on prior SIP approvals in approving a redesignation request (see the Calcagni memorandum at page 3; Southwestern Pennsylvania Growth Alliance v. Browner, 144 F.3d 984, 989-990 (6th Cir. 1998); Wall v. EPA, 265 F.3d 426), plus any additional measures it may approve in conjunction with a redesignation action (see 68 FR 25426 (May 12, 2003) and citations therein).

    C. Are the air quality improvements in the Columbus area due to permanent and enforceable emission reductions?

    To support the redesignation of an area from nonattainment to attainment, section 107(d)(3)(E)(iii) of the CAA requires EPA to determine that the air quality improvement in the area is due to permanent and enforceable reductions in emissions resulting from the implementation of the SIP and applicable Federal air pollution control regulations and other permanent and other permanent and enforceable emission reductions. EPA has determined that Ohio has demonstrated that that the observed ozone air quality improvement in the Columbus area is due to permanent and enforceable reductions in VOC and NOX emissions resulting from state measures adopted into the SIP and Federal measures.

    In making this demonstration, the state has calculated the change in emissions between 2011 and 2014. The reduction in emissions and the corresponding improvement in air quality over this time period can be attributed to a number of regulatory control measures that the Columbus area and upwind areas have implemented in recent years. In addition, Ohio EPA provided an analysis to demonstrate the improvement in air quality was not due to unusually favorable meteorology. Based on the information summarized below, Ohio has adequately demonstrated that the improvement in air quality is due to permanent and enforceable emissions reductions.

    1. Permanent and Enforceable Emission Controls Implemented a. Regional NOX Controls

    Clean Air Interstate Rule (CAIR)/Cross State Air Pollution Rule (CSAPR). CAIR created regional cap-and-trade programs to reduce sulfur dioxide (SO2) and NOX emissions in 27 eastern states, including Ohio, that contributed to downwind nonattainment and maintenance of the 1997 8-hour ozone NAAQS and the 1997 fine particulate matter (PM2.5) NAAQS. See 70 FR 25162 (May 12, 2005). EPA approved Ohio's CAIR regulations into the Ohio SIP on February 1, 2008 (73 FR 6034), and September 25, 2009 (74 FR 48857). In 2008, the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) initially vacated CAIR, North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008), but ultimately remanded the rule to EPA without vacatur to preserve the environmental benefits provided by CAIR, North Carolina v. EPA, 550 F.3d 1176, 1178 (D.C. Cir. 2008). On August 8, 2011 (76 FR 48208), acting on the D.C. Circuit's remand, EPA promulgated CSAPR to replace CAIR and thus to address the interstate transport of emissions contributing to nonattainment and interfering with maintenance of the two air quality standards covered by CAIR as well as the 2006 PM2.5 NAAQS. CSAPR requires substantial reductions of SO2 and NOX emissions from electric generating units (EGUs) in 28 states in the Eastern United States.

    The D.C. Circuit's initial vacatur of CSAPR 6 was reversed by the United States Supreme Court on April 29, 2014, and the case was remanded to the D.C. Circuit to resolve remaining issues in accordance with the high court's ruling. EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584 (2014). On remand, the D.C. Circuit affirmed CSAPR in most respects, but invalidated without vacating some of the CSAPR budgets as to a number of states. EME Homer City Generation, L.P. v. EPA, 795 F.3d 118 (D.C. Cir. 2015). The remanded budgets include the Phase 2 NOX ozone season emissions budgets for Ohio. This litigation ultimately delayed implementation of CSAPR for three years, from January 1, 2012, when CSAPR's cap-and-trade programs were originally scheduled to replace the CAIR cap-and-trade programs, to January 1, 2015. Thus, the rule's Phase 2 budgets were originally promulgated to begin on January 1, 2014, and are now scheduled to begin on January 1, 2017. CSAPR will continue to operate under the existing emissions budgets until EPA addresses the D.C. Circuit's remand.

    6EME Homer City Generation, L.P. v. EPA, 696 F.3d 7, 38 (D.C. Cir. 2012).

    While the reduction in NOX emissions from the implementation of CSAPR will result in lower concentrations of transported ozone entering the Columbus area throughout the maintenance period, EPA is proposing to approve the redesignation of the Columbus area without relying on those measures within Ohio as having led to attainment of the 2008 ozone NAAQS or contributing to maintenance of that standard. In so doing, we are proposing to determine that the D.C. Circuit's invalidation of the Ohio CSAPR Phase 2 ozone season NOX emissions budget does not bar today's proposed redesignation.

    The improvement in ozone air quality in the Columbus area from 2011 (a year when the design value for the area was above the NAAQS) to 2014 (a year when the design value was below the NAAQS) is not due to CSAPR emissions reductions because, as noted above, CSAPR did not go into effect until January 1, 2015, after the area was already attaining the standard. As a general matter, because CSAPR is CAIR's replacement, emissions reductions associated with CAIR will for most areas be made permanent and enforceable through implementation of CSAPR. In addition, there are no EGU sources in the Columbus area. Furthermore, as laid out in the State's maintenance demonstration, no EGUs are expected to locate in the area throughout the maintenance period.

    Given the particular facts and circumstances associated with the Columbus area, EPA does not believe that the D.C. Circuit's invalidation of Ohio's CSAPR Phase 2 NOX ozone season budget, which replaced CAIR's NOX ozone season budget, is a bar to EPA's redesignation of the Columbus area for the 2008 ozone NAAQS.

    b. Federal Emission Control Measures

    Reductions in VOC and NOX emissions have occurred statewide and in upwind areas as a result of Federal emission control measures, with additional emission reductions expected to occur in the future. Federal emission control measures include the following.

    Tier 2 Emission Standards for Vehicles and Gasoline Sulfur Standards. On February 10, 2000 (65 FR 6698), EPA promulgated Tier 2 motor vehicle emission standards and gasoline sulfur control requirements. These emission control requirements result in lower VOC and NOX emissions from new cars and light duty trucks, including sport utility vehicles. With respect to fuels, this rule required refiners and importers of gasoline to meet lower standards for sulfur in gasoline, which were phased in between 2004 and 2006. By 2006, refiners were required to meet a 30 ppm average sulfur level, with a maximum cap of 80 ppm. This reduction in fuel sulfur content ensures the effectiveness of low emission-control technologies. The Tier 2 tailpipe standards established in this rule were phased in for new vehicles between 2004 and 2009. EPA estimates that, when fully implemented, this rule will cut NOX and VOC emissions from light-duty vehicles and light-duty trucks by approximately 76 and 28 percent, respectively. NOX and VOC reductions from medium-duty passenger vehicles included as part of the Tier 2 vehicle program are estimated to be approximately 37,000 and 9,500 tons per year, respectively, when fully implemented. In addition, EPA estimates that beginning in 2007, a reduction of 30,000 tons per year of NOX will result from the benefits of sulfur control on heavy-duty gasoline vehicles. Some of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period, as older vehicles are replaced with newer, compliant model years.

    Tier 3 Emission Standards for Vehicles and Gasoline Sulfur Standards. On April 28, 2014 (79 FR 23414), EPA promulgated Tier 3 motor vehicle emission and fuel standards to reduces both tailpipe and evaporative emissions and to further reduce the sulfur content in fuels. The rule will be phased in between 2017 and 2025. Tier 3 sets new tailpipe standards for the sum of VOC and NOX and for particulate matter. The VOC and NOX tailpipe standards for light-duty vehicles represent approximately an 80% reduction from today's fleet average and a 70% reduction in per-vehicle particulate matter (PM) standards. Heavy-duty tailpipe standards represent about a 60% reduction in both fleet average VOC and NOX and per-vehicle PM standards. The evaporative emissions requirements in the rule will result in approximately a 50 percent reduction from current standards and apply to all light-duty and onroad gasoline-powered heavy-duty vehicles. Finally, the rule lowers the sulfur content of gasoline to an annual average of 10 ppm by January 2017. While these reductions did not aid the area in attaining the standard, emission reductions will occur during the maintenance period.

    Heavy-Duty Diesel Engine Rules. In July 2000, EPA issued a rule for on-highway heavy-duty diesel engines that includes standards limiting the sulfur content of diesel fuel. Emissions standards for NOX, VOC and PM were phased in between model years 2007 and 2010. In addition, the rule reduced the highway diesel fuel sulfur content to 15 parts per million by 2007, leading to additional reductions in combustion NOX and VOC emissions. EPA has estimated future year emission reductions due to implementation of this rule. Nationally, EPA estimated that 2015 NOX and VOC emissions would decrease by 1,260,000 tons and 54,000 tons, respectively. Nationally, EPA estimated that 2030 NOX and VOC emissions will decrease by 2,570,000 tons and 115,000 tons, respectively. As projected by these estimates and demonstrated in the on-road emission modeling for the Columbus area, some of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period, as older vehicles are replaced with newer, compliant model years.

    Nonroad Diesel Rule. On June 29, 2004 (69 FR 38958), EPA issued a rule adopting emissions standards for nonroad diesel engines and sulfur reductions in nonroad diesel fuel. This rule applies to diesel engines used primarily in construction, agricultural, and industrial applications. Emission standards are phased in for 2008 through 2015 model years based on engine size. The SO2 limits for nonroad diesel fuels were phased in from 2007 through 2012. EPA estimates that when fully implemented, compliance with this rule will cut NOX emissions from these nonroad diesel engines by approximately 90 percent. Some of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period.

    Nonroad Spark-Ignition Engines and Recreational Engine Standards. On November 8, 2002 (67 FR 68242), EPA adopted emission standards for large spark-ignition engines such as those used in forklifts and airport ground-service equipment; recreational vehicles such as off-highway motorcycles, all-terrain vehicles, and snowmobiles; and recreational marine diesel engines. These emission standards are phased in from model year 2004 through 2012. When fully implemented, EPA estimates an overall 72 percent reduction in VOC emissions from these engines and an 80 percent reduction in NOX emissions. Some of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period.

    National Emission Standards for Hazardous Air Pollutants (NESHAP) for Reciprocating Internal Combustion Engines. On March 3, 2010 (75 FR 9648), EPA issued a rule to reduce hazardous air pollutants from existing diesel powered stationary reciprocating internal combustion engines, also known as compression ignition engines. Amendments to this rule were finalized on January 14, 2013 (78 FR 6674). EPA estimated that when this rule is fully implemented in 2013, NOX and VOC emissions from these engines will be reduced by approximately 9,600 and 36,000 tons per year, respectively.

    Category 3 Marine Diesel Engine Standards. On April 30, 2010 (75 FR 22896) EPA issued emission standards for marine compression-ignition engines at or above 30 liters per cylinder. Tier 2 emission standards apply beginning in 2011, and are expected to result in a 15 to 25 percent reduction in NOX emissions from these engines. Final Tier 3 emission standards apply beginning in 2016 and are expected to result in approximately an 80 percent reduction in NOX from these engines. Some of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period.

    Oil and Natural Gas Industry Standards. On August 16, 2012 (77 FR 49490) EPA finalized several rules that apply to the oil and natural gas sector. These rule set standards for natural gas wells that are hydraulically fractured along with several other sources in the oil and natural gas sector. When these rules are fully implemented in 2015, EPA estimates nationally that VOC emissions will be reduced by 190,000 to 290,000 tons annually.

    c. Control Measures Specific to the Columbus Area

    While there are no EGUs in the Columbus area, the Picway Power Plant is located in Pickaway County, approximately 1.25 kilometers from the southern border of Franklin County. This plant permanently shut down in May of 2015. The coal-fired boiler did not operate in 2014 and between 2011 and 2013 NOX emissions dropped from 0.57 tons per summer day (TPSD) in 2011 to 0.45 TPSD in 2013.

    2. Emission Reductions

    Ohio is using a 2011 inventory as the nonattainment base year. Area, nonroad mobile, airport related emissions (AIR), and point source emissions (EGUs and non-EGUs) were collected from the Ozone NAAQS Implementation Modeling platform (2011v6.1). For 2011, this represents actual data Ohio reported to EPA for the 2011 National Emissions inventory (NEI). Because emissions from state inventory databases, the NEI, and the Ozone NAAQS Emissions Modeling platform are annual totals, tons per summer day were derived according to EPA's guidance document “Temporal Allocation of Annual Emissions Using EMCH Temporal Profiles” dated April 29 2002, using the temporal allocation references accompanying the 2011v6.1 modeling inventory files. Onroad mobile source emissions were developed in conjunction with the Ohio EPA, the Ohio Department of Transportation, the Mid-Ohio Regional Planning Commission (MORPC), and the Licking County Area Transportation (LCAT) and were calculated from emission factors produced by EPA's Motor Vehicle Emission Simulator (MOVES) model and data extracted from the region's travel-demand model.

    For the attainment inventory, Ohio is using 2014, one of the years the Columbus area monitored attainment of the 2008 ozone standard. Because the 2014 NEI inventory was not available at the time Ohio EPA was compiling the redesignation request, the state was unable to use the 2014 NEI inventory directly. For area, nonroad mobile, and AIR, 2014 emissions were derived by interpolating between 2011 and 2018 Ozone NAAQS Emissions Modeling platform inventories. The point source sector for the 2014 inventory was developed using actual 2014 point source emissions reported to the state database, which serve as the basis for the point source emissions reported to EPA for the NEI. Summer day inventories were derived for these sectors using the methodology described above. Finally, onroad mobile source emissions were developed using the same methodology described above for the 2011 inventory.

    Using the inventories described above, Ohio's submittal documents changes in VOC and NOX emissions from 2011 to 2014 for the Columbus area. Emissions data are shown in Tables 2 through 6.

    Table 2—Columbus Area NOX Emissions for Nonattainment Year 2011 (TPSD) County Point AIR Nonroad Area Onroad Total Delaware 0.08 0.01 4.39 2.82 16.26 23.56 Fairfield 4.52 0.00 2.79 0.75 9.54 17.60 Franklin 2.65 1.48 16.12 8.76 134.04 163.05 Knox 0.08 0.00 1.36 0.50 2.90 4.84 Licking 1.30 0.00 2.57 0.98 17.45 22.30 Madison 0.01 0.00 1.66 0.62 7.09 9.38 Area Totals 8.64 1.49 28.89 14.43 187.28 240.73 Table 3—Columbus Area VOC Emissions for Nonattainment Year 2011 (TPSD) County Point AIR Nonroad Area Onroad Total Delaware 0.34 0.01 3.31 4.37 7.14 15.17 Fairfield 0.49 0.01 1.25 4.71 4.82 11.28 Franklin 3.06 0.35 11.76 28.36 70.65 114.18 Knox 0.20 0.01 0.97 3.42 1.36 5.96 Licking 0.45 0.01 2.17 6.65 8.03 17.31 Madison 0.06 0.01 0.82 2.50 2.83 6.22 Area Totals 4.60 0.40 20.28 50.01 94.83 170.12 Table 4—Columbus Area NOX Emissions for Attainment Year 2014 (TPSD) County Point AIR Nonroad Area Onroad Total Delaware 0.07 0.01 3.45 2.67 11.76 17.96 Fairfield 3.99 0.00 2.20 0.76 7.19 14.14 Franklin 1.36 1.59 12.49 8.58 98.88 122.90 Knox 0.12 0.00 1.11 0.51 2.18 3.92 Licking 0.93 0.00 2.05 1.00 13.33 17.31 Madison 0.01 0.00 1.38 0.60 5.31 7.30 Area Totals 6.48 1.60 22.68 14.12 138.65 183.53 Table 5—Columbus Area VOC Emissions for Attainment Year 2014 (TPSD) County Point AIR Nonroad Area Onroad Total Delaware 0.36 0.01 2.86 4.27 5.00 12.50 Fairfield 0.42 0.01 1.08 4.65 3.12 9.28 Franklin 2.22 0.37 10.28 27.81 50.81 91.49 Knox 0.19 0.01 0.82 3.39 1.02 5.43 Licking 0.69 0.01 1.85 6.57 6.00 15.12 Madison 0.14 0.01 0.71 2.46 2.11 5.43 Area Totals 4.02 0.42 17.60 49.15 68.06 139.25 Table 6—Change in NOX and VOC Emissions in the Columbus Area Between 2011 and 2014 (TPSD) NOX 2011 2014 Net change
  • (2011-2014)
  • VOC 2011 2014 Net change
  • (2011-2014)
  • Point 8.64 6.48 −2.16 4.60 4.02 −0.58 AIR 1.49 1.60 0.11 0.40 0.42 0.02 Nonroad 28.89 22.68 −6.21 20.28 17.60 −2.68 Area 14.43 14.12 −0.31 50.01 49.15 −0.86 Onroad 187.28 138.65 −48.63 94.83 68.06 −26.77 Total 240.73 183.53 −57.20 170.12 139.25 −30.87

    As shown in Table 6, NOX and VOC emissions in the Columbus area declined by 57.20 TPSD and 30.87 TPSD, respectively, between 2011 and 2014.

    3. Meteorology

    To further support Ohio's demonstration that the improvement in air quality between the year violations occurred and the year attainment was achieved, is due to permanent and enforceable emission reductions and not unusually favorable meteorology, an analysis was performed by Ohio EPA. Ohio analyzed the maximum fourth-high 8-hour ozone value for May, June, July, August, and September, for years 2000 to 2015.

    First, the maximum 8-hour ozone concentration at each monitor in the Columbus area was compared to the number of days where the maximum temperature was greater than or equal to 80 °F. While there is a clear trend in decreasing ozone concentrations at all monitors, there is no such trend in the temperature data.

    Ohio EPA also examined the relationship between the average summer temperature for each year of the 2000-2015 period and the 4th maximum 8-hour ozone concentration. While there is some correlation between average summer temperatures and ozone concentrations, this correlation does not exist over the study period. The linear regression lines for each data set demonstrate that the average summer temperatures have increased, while ozone concentrations have decreased. Because the correlation between temperature and ozone formation is well established, these data suggest that reductions in precursors are responsible for the reductions in ozone concentrations in the Columbus area, and not unusually favorable summer temperatures.

    Finally, Ohio EPA analyzed the relationship between average summertime relative humidity and average 4th maximum 8-hour ozone concentrations. The data did not show a correlation between relative humidity and ozone concentrations.

    Ohio EPA's analyses of meteorological variables associated with ozone formation further support Ohio's demonstration that the improvement in air quality in the Columbus area between the year violations occurred and the year attainment was achieved is due to permanent and enforceable emission reductions and not on unusually favorable meteorology.

    D. Does Ohio have a fully approvable ozone maintenance plan for the Columbus area?

    As one of the criteria for redesignation to attainment section 107(d)(3)(E)(iv) of the CAA requires EPA to determine that the area has a fully approved maintenance plan pursuant to section 175A of the CAA. Section 175A of the CAA sets forth the elements of a maintenance plan for areas seeking redesignation from nonattainment to attainment. Under section 175A, the maintenance plan must demonstrate continued attainment of the NAAQS for at least 10 years after the Administrator approves a redsignation to attainment. Eight years after the redesignation, the state must submit a revised maintenance plan which demonstrates that attainment of the NAAQS will continue for an additional 10 years beyond the initial 10 year maintenance period. To address the possibility of future NAAQS violations, the maintenance plan must contain contingency measures, as EPA deems necessary, to assure prompt correction of the future NAAQS violation.

    The Calcagni Memorandum provides further guidance on the content of a maintenance plan, explaining that a maintenance plan should address five elements: (1) An attainment emission inventory; (2) a maintenance demonstration; (3) a commitment for continued air quality monitoring; (4) a process for verification of continued attainment; and (5) a contingency plan. In conjunction with its request to redesignate the Columbus area to attainment for the 2008 ozone standard, Ohio EPA submitted a SIP revision to provide for maintenance of the 2008 ozone standard through 2030, more than 10 years after the expected effective date of the redesignation to attainment. As is discussed more fully below, EPA proposes to find that Ohio's ozone maintenance plan includes the necessary components and is proposing to approve the maintenance plan as a revision of the Ohio SIP.

    1. Attainment Inventory

    EPA is proposing to determine that the Columbus area has attained the 2008 8-hour ozone NAAQS based on monitoring data for the period of 2013-2015. Ohio EPA selected 2014 as the attainment emissions inventory year to establish attainment emission levels for VOC and NOX. The attainment emissions inventory identifies the levels of emissions in the Columbus area that are sufficient to attain the 2008 ozone NAAQS. The derivation of the attainment year emissions was discussed above in section IV.C.2. of this proposed rule. The attainment level emissions, by source category, are summarized in Tables 4 and 5 above.

    2. Has the state documented maintenance of the ozone standard in the Columbus area?

    Ohio has demonstrated maintenance of the 2008 ozone standard through 2030 by assuring that current and future emissions of VOC and NOX for the Columbus area remain at or below attainment year emission levels. A maintenance demonstration need not be based on modeling. See Wall v. EPA, 265 F.3d 426 (6th Cir. 2001), Sierra Club v. EPA, 375 F.3d 537 (7th Cir. 2004). See also 66 FR 53094, 53099-53100 (October 19, 2001), 68 FR 25413, 25430-25432 (May 12, 2003).

    Ohio is using emissions inventories for the years 2020 and 2030 to demonstrate maintenance. 2030 is more than 10 years after the expected effective date of the redesignation to attainment and 2020 was selected to demonstrate that emissions are not expected to spike in the interim between the attainment year and the final maintenance year. The emissions inventories were developed as described below.

    To develop the 2020 and 2030 inventories, the state collected data from the Ozone NAAQS Emissions Modeling platform (2011v6.1) inventories for years 2011, 2018 and 2025. 2020 emissions for area, nonroad mobile, AIR, and point source sectors were derived by interpolating between 2018 and 2025. 2030 emissions for area, nonroad mobile, AIR, and point source sectors were derived using the TREND function in Excel. If the trend function resulted in a negative value the emissions were assumed not to change. Summer day inventories were derived for these sectors using the methodology described in section IV.C.2. above. Finally, onroad mobile source emissions were developed in using the same methodology described in section IV.C.2. above for the 2011 inventory. Emissions data are shown in Tables 7 through 11 below.

    Table 7—Columbus Area NOX Emissions for Interim Maintenance Year 2020 (TPSD) County Point AIR Nonroad Area Onroad Total Delaware 0.08 0.01 2.16 2.35 7.79 12.39 Fairfield 4.39 0.00 1.38 0.76 4.73 11.26 Franklin 2.44 1.85 7.73 8.20 60.59 80.81 Knox 0.08 0.00 0.73 0.52 1.46 2.79 Licking 1.31 0.00 1.31 1.02 8.57 12.21 Madison 0.01 0.00 0.94 0.56 3.42 4.93 Area Totals 8.31 1.86 14.25 13.41 86.56 124.39 Table 8—Columbus Area VOC Emissions for Interim Maintenance Year 2020 (TPSD) County Point AIR Nonroad Area Onroad Total Delaware 0.32 0.01 2.33 4.14 3.44 10.24 Fairfield 0.48 0.01 0.93 4.52 2.13 8.07 Franklin 1.97 0.41 8.97 27.07 32.30 70.72 Knox 0.20 0.01 0.63 3.34 0.71 4.89 Licking 0.40 0.01 1.47 6.39 4.02 12.29 Madison 0.06 0.01 0.59 2.38 1.45 4.49 Area Totals 3.43 0.46 14.92 47.84 44.05 110.70 Table 9—Columbus Area NOX Emissions for Maintenance Year 2030 (TPSD) County Point AIR Nonroad Area Onroad Total Delaware 0.07 0.01 0.97 1.79 7.15 9.99 Fairfield 5.64 0.00 0.60 0.76 4.08 11.08 Franklin 2.27 2.36 3.96 7.50 50.99 67.08 Knox 0.09 0.00 0.33 0.53 1.33 2.28 Licking 1.33 0.00 0.62 1.04 7.41 10.40 Madison 0.01 0.00 0.41 0.47 3.07 3.96 Area Totals 9.41 2.37 6.89 12.09 74.03 104.79 Table 10—Columbus Area VOC Emissions for Maintenance Year 2030 (TPSD) County Point AIR Nonroad Area Onroad Total Delaware 0.32 0.01 2.09 4.07 3.26 9.75 Fairfield 0.55 0.01 0.94 4.29 1.84 7.63 Franklin 1.94 0.51 9.53 26.39 27.90 66.27 Knox 0.20 0.01 0.50 3.23 0.64 4.58 Licking 0.39 0.01 1.29 6.05 3.56 11.30 Madison 0.06 0.01 0.54 2.24 1.33 4.18 Area Totals 3.46 0.56 14.89 46.27 38.53 103.71 Table 11—Change in NOX and VOC Emissions in the Columbus Area Between 2014 and 2030 (TPSD) NOX 2014 2020 2030 Net change
  • (2014-2030)
  • VOC 2014 2020 2030 Net change
  • (2014-2030)
  • Point 6.48 8.31 9.41 2.93 4.02 3.43 3.46 −0.56 AIR 1.60 1.86 2.37 0.77 0.42 0.46 0.56 0.14 Nonroad 22.68 14.25 6.89 −15.79 17.60 14.92 14.89 −2.71 Area 14.12 13.41 12.09 −2.03 49.15 47.84 46.27 −2.88 Onroad 138.65 86.56 74.03 −64.62 68.06 44.05 38.53 −29.53 Total 183.53 124.39 104.79 −78.74 139.25 110.70 103.71 −35.54

    In summary, the maintenance demonstration for the Columbus area shows maintenance of the 2008 ozone standard by providing emissions information to support the demonstration that future emissions of NOX and VOC will remain at or below 2014 emission levels when taking into account both future source growth and implementation of future controls. Table 11 shows NOX and VOC emissions in the Columbus area are projected to decrease by 78.74 TPSD and 35.54 TPSD, respectively, between 2014 and 2030.

    3. Continued Air Quality Monitoring

    Ohio EPA has committed to continue to operate the ozone monitors listed in Table 1 above. Ohio EPA has committed to consult with EPA prior to making changes to the existing monitoring network should changes become necessary in the future. Ohio remains obligated to meet monitoring requirements and continue to quality assure monitoring data in accordance with 40 CFR part 58, and to enter all data into the Air Quality System (AQS) in accordance with Federal guidelines.

    4. Verification of Continued Attainment

    The State of Ohio, has the legal authority to enforce and implement the requirements of the maintenance plan for the Columbus area. This includes the authority to adopt, implement, and enforce any subsequent emission control measures determined to be necessary to correct future ozone attainment problems.

    Verification of continued attainment is accomplished through operation of the ambient ozone monitoring network and the periodic update of the area's emissions inventory. Ohio EPA will continue to operate the current ozone monitors located in the Columbus area. There are no plans to discontinue operation, relocate, or otherwise change the existing ozone monitoring network other than through revisions in the network approved by the EPA.

    In addition, to track future levels of emissions, Ohio EPA will continue to develop and submit to EPA updated emission inventories for all source categories at least once every three years, consistent with the requirements of 40 CFR part 51, subpart A, and in 40 CFR 51.122. The Consolidated Emissions Reporting Rule (CERR) was promulgated by EPA on June 10, 2002 (67 FR 39602). The CERR was replaced by the Annual Emissions Reporting Requirements (AERR) on December 17, 2008 (73 FR 76539). The most recent triennial inventory for Ohio was compiled for 2014. Point source facilities covered by Ohio's emission statement rule, Ohio Administrative Code Chapter 3745-24, will continue to submit VOC and NOX emissions on an annual basis.

    5. What is the contingency plan for the Columbus area?

    Section 175A of the CAA requires that the state must adopt a maintenance plan, as a SIP revision, that includes such contingency measures as EPA deems necessary to assure that the state will promptly correct a violation of the NAAQS that occurs after redesignation of the area to attainment of the NAAQS. The maintenance plan must identify: The contingency measures to be considered and, if needed for maintenance, adopted and implemented; a schedule and procedure for adoption and implementation; and, a time limit for action by the state. The state should also identify specific indicators to be used to determine when the contingency measures need to be considered, adopted, and implemented. The maintenance plan must include a commitment that the state will implement all measures with respect to the control of the pollutant that were contained in the SIP before redesignation of the area to attainment in accordance with section 175A(d) of the CAA.

    As required by section 175A of the CAA, Ohio has adopted a contingency plan for the Columbus area to address possible future ozone air quality problems. The contingency plan adopted by Ohio has two levels of response, a warning level response and an action level response.

    In Ohio's plan, a warning level response will be triggered when an annual fourth high monitored value of 0.079 ppm or higher is monitored within the maintenance area. A warning level response will consist of Ohio EPA conducting a study to determine whether the ozone value indicates a trend toward higher ozone values or whether emissions appear to be increasing. The studies will evaluate whether the trend, if any, is likely to continue and, if so, the control measures necessary to reverse the trend. The studies will consider ease and timing of implementation as well as economic and social impacts. Implementation of necessary controls in response to a warning level response trigger will take place within 12 months from the conclusion of the most recent ozone season.

    In Ohio's plan, an action level response is triggered when a two-year average fourth high value of 0.076 ppm or greater is monitored within the maintenance area. A violation of the standard within the maintenance area also triggers an action level response. When an action level response is triggered, Ohio EPA, in conjunction with the metropolitan planning organization or regional council of governments, will determine what additional control measures are needed to assure future attainment of the ozone standard. Control measures selected will be adopted and implemented within 18 months from the close of the ozone season that prompted the action level. Ohio EPA may also consider if significant new regulations not currently included as part of the maintenance provisions will be implemented in a timely manner and would thus constitute an adequate contingency measure response.

    Ohio EPA included the following list of potential contingency measures in its maintenance plan:

    1. Adopt VOC RACT on existing sources covered by EPA Control Technique Guidelines issued after the 1990 CAA.

    2. Apply VOC RACT to smaller existing sources.

    3. One or more transportation control measures sufficient to achieve at least half a percent reduction in actual area wide VOC emissions. Transportation measures will be selected from the following, based upon the factors listed above after consultation with affected local governments:

    a. Trip reduction programs, including, but not limited to, employer-based transportation management plans, area wide rideshare programs, work schedule changes, and telecommuting;

    b. traffic flow and transit improvements; and

    c. other new or innovative transportation measures not yet in widespread use that affected local governments deem appropriate.

    4. Alternative fuel and diesel retrofit programs for fleet vehicle operations.

    5. Require VOC or NOX emission offsets for new and modified major sources.

    6. Increase the ratio of emission offsets required for new sources.

    7. Require VOC or NOX controls on new minor sources (less than 100 tons).

    8. Adopt NOX RACT for existing combustion sources.

    9. High volume, low pressure coating application requirements for autobody facilities.

    10. Requirements for cold cleaner degreaser operations (low vapor pressure solvents).

    EPA has concluded that the maintenance plan adequately addresses the five basic components of a maintenance plan: Attainment inventory, maintenance demonstration, monitoring network, verification of continued attainment, and a contingency plan. In addition, as required by section 175A(b) of the CAA, Ohio EPA has committed to submit to EPA an updated ozone maintenance plan eight years after redesignation of the Columbus area to cover an additional ten years beyond the initial 10 year maintenance period. Thus, EPA proposes to find that the maintenance plan SIP revision submitted by Ohio EPA for the Columbus area meets the requirements of section 175A of the CAA.

    V. Has the state adopted approvable motor vehicle emission budgets? A. Motor Vehicle Emission Budgets

    Under section 176(c) of the CAA, new transportation plans, programs, or projects that receive Federal funding or support, such as the construction of new highways, must “conform” to (i.e., be consistent with) the SIP. Conformity to the SIP means that transportation activities will not cause new air quality violations, worsen existing air quality problems, or delay timely attainment of the NAAQS or interim air quality milestones. Regulations at 40 CFR part 93 set forth EPA policy, criteria, and procedures for demonstrating and assuring conformity of transportation activities to a SIP. Transportation conformity is a requirement for nonattainment and maintenance areas. Maintenance areas are areas that were previously nonattainment for a particular NAAQS, but that have been redesignated to attainment with an approved maintenance plan for the NAAQS.

    Under the CAA, states are required to submit, at various times, control strategy SIPs for nonattainment areas and maintenance plans for areas seeking redesignations to attainment of the ozone standard and maintenance areas. See the SIP requirements for the 2008 ozone standard in EPA's March 6, 2015 implementation rule (80 FR 12264). These control strategy SIPs (including reasonable further progress plans and attainment plans) and maintenance plans must include MVEBs for criteria pollutants, including ozone, and their precursor pollutants (VOC and NOX for ozone) to address pollution from onroad transportation sources. The MVEBs are the portion of the total allowable emissions that are allocated to highway and transit vehicle use that, together with emissions from other sources in the area, will provide for attainment or maintenance. See 40 CFR 93.101.

    Under 40 CFR part 93, a MVEB for an area seeking a redesignation to attainment must be established, at minimum, for the last year of the maintenance plan. A state may adopt MVEBs for other years as well. The MVEB serves as a ceiling on emissions from an area's planned transportation system. The MVEB concept is further explained in the preamble to the November 24, 1993, Transportation Conformity Rule (58 FR 62188). The preamble also describes how to establish the MVEB in the SIP and how to revise the MVEB, if needed, subsequent to initially establishing a MVEB in the SIP.

    B. What is the status of EPA's adequacy determination for the proposed VOC and NOX MVEBs for the Columbus area?

    Whan reviewing submitted control strategy SIPs or maintenance plans containing MVEBs, EPA must affirmatively find that the MVEBs contained therein are adequate for use in determining transportation conformity. Once EPA affirmatively finds that the submitted MVEBs are adequate for transportation purposes, the MVEBs must be used by state and Federal agencies in determining whether proposed transportation projects conform to the SIP as required by section 176(c) of the CAA.

    EPA's substantive criteria for determining adequacy of a MVEB are set out in 40 CFR 93.118(e)(4). The process for determining adequacy consists of three basic steps: Public notification of a SIP submission; provision for a public comment period; and EPA's adequacy determination. This process for determining the adequacy of submitted MVEBs for transportation conformity purposes was initially outlined in EPA's May 14, 1999 guidance, “Conformity Guidance on Implementation of March 2, 1999, Conformity Court Decision.” EPA adopted regulations to codify the adequacy process in the Transportation Conformity Rule Amendments for the “New 8-Hour Ozone and PM2.5 National Ambient Air Quality Standards and Miscellaneous Revisions for Existing Areas; Transportation Conformity Rule Amendments—Response to Court Decision and Additional Rule Change,” on July 1, 2004 (69 FR 40004). Additional information on the adequacy process for transportation conformity purposes is available in the proposed rule titled, “Transportation Conformity Rule Amendments: Response to Court Decision and Additional Rule Changes,” 68 FR 38974, 38984 (June 30, 2003).

    As discussed earlier, Ohio's maintenance plan includes NOX and VOC MVEBs for the Columbus area for 2030 and 2020, the last year of the maintenance period and an interim year. EPA reviewed the VOC and NOX MVEBs through the adequacy process. Ohio's April 21, 2016, maintenance plan SIP submission, including the VOC and NOX MVEBs for the Columbus area was open for public comment on EPA's adequacy Web site on July 22, 2016, found at: http://www.epa.gov/otaq/stateresources/transconf/currsips.htm. The EPA public comment period on adequacy of the 2020 and 2030 MVEBs for the Columbus area closed on August 22, 2016. No comments on the submittal were received during the adequacy comment period. The submitted maintenance plan, which included the MVEBs, was endorsed by the Governor (or his or her designee) and was subject to a state public hearing. The MVEBS were developed as part of an interagency consultation process which includes Federal, state, and local agencies. The MVEBS were clearly identified and precisely quantified. These MVEBs, when considered together with all other emissions sources, are consistent with maintenance of the 2008 8-hour ozone standard.

    Table 12—MVEBs for the Columbus Area, TPSD Attainment year 2014 onroad
  • emissions
  • 2020
  • Estimated
  • onroad
  • emissions
  • 2020 Mobile safety margin allocation 2020 MVEBs 2030
  • Estimated
  • onroad
  • emissions
  • 2030 Mobile safety margin allocation 2030 MVEBs
    VOC 68.06 44.05 6.61 50.66 38.53 5.78 44.31 NOX 138.65 86.56 12.98 90.54 74.03 11.10 85.13

    As shown in Table 12, the 2020 and 2030 MVEBs exceed the estimated 2020 and 2030 onroad sector emissions. In an effort to accommodate future variations in travel demand models and vehicle miles traveled forecast, Ohio EPA allocated a portion of the safety margin (described further below) to the mobile sector. Ohio has demonstrated that the Columbus area can maintain the 2008 ozone NAAQS with mobile source emissions in the area of 50.66 TPSD and 44.31 TPSD of VOC and 90.54 TPSD and 85.13 TPSD of NOX in 2020 and 2030, respectively, since despite partial allocation of the safety margin, emissions will remain under attainment year emission levels. EPA, has found adequate and is proposing to approve the MVEBs for use to determine transportation conformity in the Columbus area, because EPA has determined that the area can maintain attainment of the 2008 ozone NAAQS for the relevant maintenance period with mobile source emissions at the levels of the MVEBs.

    C. What is a safety margin?

    A “safety margin” is the difference between the attainment level of emissions (from all sources) and the projected level of emissions (from all sources) in the maintenance plan. As noted in Table 11, the emissions in the Columbus area are projected to have safety margins of 78.74 TPSD for NOX and 35.54 TPSD for VOC in 2030 (the difference between the attainment year, 2014, emissions and the projected 2030 emissions for all sources in the Columbus area). Similarly, there is a safety margin of 59.14 TPSD for NOX and 28.55 TPSD for VOC in 2020. Even if emissions reached the full level of the safety margin, the counties would still demonstrate maintenance since emission levels would equal those in the attainment year.

    As shown in Table 12 above, Ohio is allocating a portion of that safety margin to the mobile source sector. Specifically, in 2020, Ohio is allocating 6.61 TPSD and 12.98 TPSD of the VOC and NOX safety margins, respectively. In 2030, Ohio is allocating 5.78 TPSD and 11.10 TPSD of the VOC and NOX safety margins, respectively. Ohio EPA is not requesting allocation to the MVEBs of the entire available safety margins reflected in the demonstration of maintenance. In fact, the amount allocated to the MVEBs represents only a small portion of the 2020 and 2030 safety margins. Therefore, even though the State is requesting MVEBs that exceed the projected onroad mobile source emissions for 2020 and 2030 contained in the demonstration of maintenance, the increase in onroad mobile source emissions that can be considered for transportation conformity purposes is well within the safety margins of the ozone maintenance demonstration. Further, once allocated to mobile sources, these safety margins will not be available for use by other sources.

    VI. Proposed Actions

    EPA is proposing to determine that the Columbus nonattainment is attaining the 2008 ozone standard, based on quality-assured and certified monitoring data for 2013-2015 and that the Ohio portion of this area has met the requirements for redesignation under section 107(d)(3)(E) of the CAA. EPA is thus proposing to approve Ohio EPA's request to change the legal designation of the Columbus area from nonattainment to attainment for the 2008 ozone standard. EPA is also proposing to approve, as a revision to the Ohio SIP, the state's maintenance plan for the area. The maintenance plan is designed to keep the Columbus area in attainment of the 2008 ozone NAAQS through 2030. Finally, EPA finds adequate and is proposing to approve the newly-established 2020 and 2030 MVEBs for the Columbus area.

    VII. Statutory and Executive Order Reviews

    Under the CAA, redesignation of an area to attainment and the accompanying approval of a maintenance plan under section 107(d)(3)(E) are actions that affect the status of a geographical area and do not impose any additional regulatory requirements on sources beyond those imposed by state law. A redesignation to attainment does not in and of itself create any new requirements, but rather results in the applicability of requirements contained in the CAA for areas that have been redesignated to attainment. Moreover, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

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

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

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

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

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

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

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

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

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

    In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because redesignation is an action that affects the status of a geographical area and does not impose any new regulatory requirements on tribes, impact any existing sources of air pollution on tribal lands, nor impair the maintenance of ozone national ambient air quality standards in tribal lands.

    List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Oxides of nitrogen, Ozone, Volatile organic compounds.

    Dated: September 19, 2016. Robert A. Kaplan, Acting Regional Administrator, Region 5.
    [FR Doc. 2016-23293 Filed 9-27-16; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R04-OAR-2016-0421; FRL-9953-16-Region 4] Air Plan Approval; Mississippi; Interstate Transport (Prongs 1 and 2) for the 2010 1-hour NO2 Standard AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is proposing to approve a revision to the Mississippi State Implementation Plan (SIP), submitted by the Mississippi Department of Environmental Quality (MS DEQ), on May 23, 2016, addressing the Clean Air Act (CAA or Act) interstate transport (prongs 1 and 2) infrastructure SIP requirements for the 2010 1-hour Nitrogen Dioxide (NO2) National Ambient Air Quality Standard (NAAQS). The CAA requires that each state adopt and submit a SIP for the implementation, maintenance, and enforcement of each NAAQS promulgated by EPA, commonly referred to as an “infrastructure SIP.” Specifically, EPA is proposing to approve Mississippi's May 23, 2016, SIP submission addressing prongs 1 and 2, to ensure that air emissions in the State do not significantly contribute to nonattainment or interfere with maintenance of the 2010 1-hour NO2 NAAQS in any other state.

    DATES:

    Comments must be received on or before October 28, 2016.

    ADDRESSES:

    Submit your comments, identified by Docket ID No EPA-R04-OAR-2016-0421 at http://www.regulations.gov. Follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. EPA will generally not consider comments or comment contents located outside of the primary submission (i.e., on the web, cloud, or other file sharing system). For additional submission methods, the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

    FOR FURTHER INFORMATION CONTACT:

    Nacosta C. Ward of the Air Regulatory Management Section, Air Planning and Implementation Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW., Atlanta, Georgia 30303-8960. Ms. Ward can be reached by telephone at (404) 562-9140 or via electronic mail at [email protected]

    SUPPLEMENTARY INFORMATION: I. Background

    By statute, SIPs meeting the requirements of sections 110(a)(1) and (2) of the CAA are to be submitted by states within three years after promulgation of a new or revised NAAQS to provide for the implementation, maintenance, and enforcement of the new or revised NAAQS. EPA has historically referred to these SIP submissions made for the purpose of satisfying the requirements of sections 110(a)(1) and 110(a)(2) as “infrastructure SIP” submissions. Sections 110(a)(1) and (2) require states to address basic SIP elements such as requirements for monitoring, basic program requirements, and legal authority that are designed to assure attainment and maintenance of the newly established or revised NAAQS. More specifically, section 110(a)(1) provides the procedural and timing requirements for infrastructure SIPs. Section 110(a)(2) lists specific elements that states must meet for the infrastructure SIP requirements related to a newly established or revised NAAQS. The contents of an infrastructure SIP submission may vary depending upon the data and analytical tools available to the state, as well as the provisions already contained in the state's implementation plan at the time in which the state develops and submits the submission for a new or revised NAAQS.

    Section 110(a)(2)(D) has two components: 110(a)(2)(D)(i) and 110(a)(2)(D)(ii). Section 110(a)(2)(D)(i) includes four distinct components, commonly referred to as “prongs,” that must be addressed in infrastructure SIP submissions. The first two prongs, which are codified in section 110(a)(2)(D)(i)(I), are provisions that prohibit any source or other type of emissions activity in one state from contributing significantly to nonattainment of the NAAQS in another state (prong 1) and from interfering with maintenance of the NAAQS in another state (prong 2). The third and fourth prongs, which are codified in section 110(a)(2)(D)(i)(II), are provisions that prohibit emissions activity in one state from interfering with measures required to prevent significant deterioration of air quality in another state (prong 3) and from interfering with measures to protect visibility in another state (prong 4). Section 110(a)(2)(D)(ii) requires SIPs to include provisions ensuring compliance with sections 115 and 126 of the Act, relating to interstate and international pollution abatement.

    Through this proposed action, EPA is proposing to approve Mississippi's May 23, 2016, SIP submission addressing prong 1 and prong 2 requirements for the 2010 1-hour NO2 NAAQS. All other applicable infrastructure SIP requirements for Mississippi for the 2010 1-hour NO2 NAAQS have been addressed in separate rulemakings. See 80 FR 14019 (March 18, 2015), 81 FR 32707 (May 24, 2016), and 81 FR 33139 (May 25, 2016). A brief background regarding the 2010 1-hour NO2 NAAQS is provided below.

    On January 22, 2010, EPA established a new 1-hour primary NAAQS for NO2 at a level of 100 parts per billion, based on a 3-year average of the 98th percentile of the yearly distribution of 1-hour daily maximum concentrations. See 75 FR 6474 (February 9, 2010). This NAAQS is designed to protect against exposure to the entire group of nitrogen oxides (NOX). NO2 is the component of greatest concern and is used as the indicator for the larger group of NOX. Emissions that lead to the formation of NO2 generally also lead to the formation of other NOX. Therefore, control measures that reduce NO2 can generally be expected to reduce population exposures to all gaseous NOX which may have the co-benefit of reducing the formation of ozone and fine particles both of which pose significant public health threats.

    States were required to submit infrastructure SIP submissions for the 2010 1-hour NO2 NAAQS to EPA no later than January 22, 2013. For comprehensive information on 2010 1-hour NO2 NAAQS, please refer to the Federal Register notice cited above.

    II. What is EPA's approach to the review of infrastructure SIP submissions?

    The requirement for states to make a SIP submission of this type arises out of section 110(a)(1). Pursuant to section 110(a)(1), states must make SIP submissions “within 3 years (or such shorter period as the Administrator may prescribe) after the promulgation of a national primary ambient air quality standard (or any revision thereof),” and these SIP submissions are to provide for the “implementation, maintenance, and enforcement” of such NAAQS. The statute directly imposes on states the duty to make these SIP submissions, and the requirement to make the submissions is not conditioned upon EPA's taking any action other than promulgating a new or revised NAAQS. Section 110(a)(2) includes a list of specific elements that “each such plan” submission must address.

    EPA has historically referred to these SIP submissions made for the purpose of satisfying the requirements of section 110(a)(1) and (2) as “infrastructure SIP” submissions. Although the term “infrastructure SIP” does not appear in the CAA, EPA uses the term to distinguish this particular type of SIP submission from submissions that are intended to satisfy other SIP requirements under the CAA, such as “nonattainment SIP” or “attainment plan SIP” submissions to address the nonattainment planning requirements of part D of Title I of the CAA, “regional haze SIP” submissions required by EPA rule to address the visibility protection requirements of section 169A of the CAA, and nonattainment new source review permit program submissions to address the permit requirements of CAA, Title I, part D.

    Section 110(a)(1) addresses the timing and general requirements for infrastructure SIP submissions and section 110(a)(2) provides more details concerning the required contents of these submissions. The list of required elements provided in section 110(a)(2) contains a wide variety of disparate provisions, some of which pertain to required legal authority, some of which pertain to required substantive program provisions, and some of which pertain to requirements for both authority and substantive program provisions.1 EPA therefore believes that while the timing requirement in section 110(a)(1) is unambiguous, some of the other statutory provisions are ambiguous. In particular, EPA believes that the list of required elements for infrastructure SIP submissions provided in section 110(a)(2) contains ambiguities concerning what is required for inclusion in an infrastructure SIP submission.

    1 For example: Section 110(a)(2)(E)(i) provides that states must provide assurances that they have adequate legal authority under state and local law to carry out the SIP; Section 110(a)(2)(C) provides that states must have a SIP-approved program to address certain sources as required by part C of Title I of the CAA; and section 110(a)(2)(G) provides that states must have legal authority to address emergencies as well as contingency plans that are triggered in the event of such emergencies.

    The following examples of ambiguities illustrate the need for EPA to interpret some section 110(a)(1) and section 110(a)(2) requirements with respect to infrastructure SIP submissions for a given new or revised NAAQS. One example of ambiguity is that section 110(a)(2) requires that “each” SIP submission must meet the list of requirements therein, while EPA has long noted that this literal reading of the statute is internally inconsistent and would create a conflict with the nonattainment provisions in part D of Title I of the CAA, which specifically address nonattainment SIP requirements.2 Section 110(a)(2)(I) pertains to nonattainment SIP requirements and part D addresses when attainment plan SIP submissions to address nonattainment area requirements are due. For example, section 172(b) requires EPA to establish a schedule for submission of such plans for certain pollutants when the Administrator promulgates the designation of an area as nonattainment, and section 107(d)(1)(B) allows up to two years or in some cases three years, for such designations to be promulgated.3 This ambiguity illustrates that rather than apply all the stated requirements of section 110(a)(2) in a strict literal sense, EPA must determine which provisions of section 110(a)(2) are applicable for a particular infrastructure SIP submission.

    2See, e.g., “Rule To Reduce Interstate Transport of Fine Particulate Matter and Ozone (Clean Air Interstate Rule); Revisions to Acid Rain Program; Revisions to the NOX SIP Call; Final Rule,” 70 FR 25162, at 25163-65 (May 12, 2005) (explaining relationship between timing requirement of section 110(a)(2)(D) versus section 110(a)(2)(I)).

    3 EPA notes that this ambiguity within section 110(a)(2) is heightened by the fact that various subparts of part D set specific dates for submission of certain types of SIP submissions in designated nonattainment areas for various pollutants. Note, e.g., that section 182(a)(1) provides specific dates for submission of emissions inventories for the ozone NAAQS. Some of these specific dates are necessarily later than three years after promulgation of the new or revised NAAQS.

    Another example of ambiguity within section 110(a)(1) and (2) with respect to infrastructure SIPs pertains to whether states must meet all of the infrastructure SIP requirements in a single SIP submission, and whether EPA must act upon such SIP submission in a single action. Although section 110(a)(1) directs states to submit “a plan” to meet these requirements, EPA interprets the CAA to allow states to make multiple SIP submissions separately addressing infrastructure SIP elements for the same NAAQS. If states elect to make such multiple SIP submissions to meet the infrastructure SIP requirements, EPA can elect to act on such submissions either individually or in a larger combined action.4 Similarly, EPA interprets the CAA to allow it to take action on the individual parts of one larger, comprehensive infrastructure SIP submission for a given NAAQS without concurrent action on the entire submission. For example, EPA has sometimes elected to act at different times on various elements and sub-elements of the same infrastructure SIP submission.5

    4See, e.g., “Approval and Promulgation of Implementation Plans; New Mexico; Revisions to the New Source Review (NSR) State Implementation Plan (SIP); Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NNSR) Permitting,” 78 FR 4339 (January 22, 2013) (EPA's final action approving the structural PSD elements of the New Mexico SIP submitted by the State separately to meet the requirements of EPA's 2008 PM2.5 NSR rule), and “Approval and Promulgation of Air Quality Implementation Plans; New Mexico; Infrastructure and Interstate Transport Requirements for the 2006 PM2.5 NAAQS,” 78 FR 4337 (January 22, 2013) (EPA's final action on the infrastructure SIP for the 2006 PM2.5 NAAQS).

    5 On December 14, 2007, the State of Tennessee, through the Tennessee Department of Environment and Conservation, made a SIP revision to EPA demonstrating that the State meets the requirements of sections 110(a)(1) and (2). EPA proposed action for infrastructure SIP elements (C) and (J) on January 23, 2012 (77 FR 3213) and took final action on March 14, 2012 (77 FR 14976). On April 16, 2012 (77 FR 22533) and July 23, 2012 (77 FR 42997), EPA took separate proposed and final actions on all other section 110(a)(2) infrastructure SIP elements of Tennessee's December 14, 2007 submittal.

    Ambiguities within section 110(a)(1) and (2) may also arise with respect to infrastructure SIP submission requirements for different NAAQS. Thus, EPA notes that not every element of section 110(a)(2) would be relevant, or as relevant, or relevant in the same way, for each new or revised NAAQS. The states' attendant infrastructure SIP submissions for each NAAQS therefore could be different. For example, the monitoring requirements that a state might need to meet in its infrastructure SIP submission for purposes of section 110(a)(2)(B) could be very different for different pollutants, because the content and scope of a state's infrastructure SIP submission to meet this element might be very different for an entirely new NAAQS than for a minor revision to an existing NAAQS.6

    6 For example, implementation of the 1997 PM2.5 NAAQS required the deployment of a system of new monitors to measure ambient levels of that new indicator species for the new NAAQS.

    EPA notes that interpretation of section 110(a)(2) is also necessary when EPA reviews other types of SIP submissions required under the CAA. Therefore, as with infrastructure SIP submissions, EPA also has to identify and interpret the relevant elements of section 110(a)(2) that logically apply to these other types of SIP submissions. For example, section 172(c)(7) requires attainment plan SIP submissions required by part D to meet the “applicable requirements” of section 110(a)(2); thus, attainment plan SIP submissions must meet the requirements of section 110(a)(2)(A) regarding enforceable emission limits and control measures and section 110(a)(2)(E)(i) regarding air agency resources and authority. By contrast, it is clear that attainment plan SIP submissions required by part D would not need to meet the portion of section 110(a)(2)(C) that pertains to the Prevention of Significant Deterioration (PSD) program required in part C of Title I of the CAA, because PSD does not apply to a pollutant for which an area is designated nonattainment and thus subject to part D planning requirements. As this example illustrates, each type of SIP submission may implicate some elements of section 110(a)(2) but not others.

    Given the potential for ambiguity in some of the statutory language of section 110(a)(1) and section 110(a)(2), EPA believes that it is appropriate to interpret the ambiguous portions of section 110(a)(1) and section 110(a)(2) in the context of acting on a particular SIP submission. In other words, EPA assumes that Congress could not have intended that each and every SIP submission, regardless of the NAAQS in question or the history of SIP development for the relevant pollutant, would meet each of the requirements, or meet each of them in the same way. Therefore, EPA has adopted an approach under which it reviews infrastructure SIP submissions against the list of elements in section 110(a)(2), but only to the extent each element applies for that particular NAAQS.

    Historically, EPA has elected to use guidance documents to make recommendations to states for infrastructure SIPs, in some cases conveying needed interpretations on newly arising issues and in some cases conveying interpretations that have already been developed and applied to individual SIP submissions for particular elements.7 EPA most recently issued guidance for infrastructure SIPs on September 13, 2013 (2013 Guidance).8 EPA developed this document to provide states with up-to-date guidance for infrastructure SIPs for any new or revised NAAQS. Within this guidance, EPA describes the duty of states to make infrastructure SIP submissions to meet basic structural SIP requirements within three years of promulgation of a new or revised NAAQS. EPA also made recommendations about many specific subsections of section 110(a)(2) that are relevant in the context of infrastructure SIP submissions.9 The guidance also discusses the substantively important issues that are germane to certain subsections of section 110(a)(2). EPA interprets section 110(a)(1) and (2) such that infrastructure SIP submissions need to address certain issues and need not address others. Accordingly, EPA reviews each infrastructure SIP submission for compliance with the applicable statutory provisions of section 110(a)(2), as appropriate.

    7 EPA notes, however, that nothing in the CAA requires EPA to provide guidance or to promulgate regulations for infrastructure SIP submissions. The CAA directly applies to states and requires the submission of infrastructure SIP submissions, regardless of whether or not EPA provides guidance or regulations pertaining to such submissions. EPA elects to issue such guidance in order to assist states, as appropriate.

    8 “Guidance on Infrastructure State Implementation Plan (SIP) Elements under Clean Air Act Sections 110(a)(1) and 110(a)(2),” Memorandum from Stephen D. Page, September 13, 2013.

    9 EPA's September 13, 2013, guidance did not make recommendations with respect to infrastructure SIP submissions to address section 110(a)(2)(D)(i)(I). EPA issued the guidance shortly after the U.S. Supreme Court agreed to review the D.C. Circuit decision in EME Homer City, 696 F.3d 7 (D.C. Cir. 2012) which had interpreted the requirements of section 110(a)(2)(D)(i)(I). In light of the uncertainty created by ongoing litigation, EPA elected not to provide additional guidance on the requirements of section 110(a)(2)(D)(i)(I) at that time. As the guidance is neither binding nor required by statute, whether EPA elects to provide guidance on a particular section has no impact on a state's CAA obligations.

    As an example, section 110(a)(2)(E)(ii) is a required element of section 110(a)(2) for infrastructure SIP submissions. Under this element, a state must meet the substantive requirements of section 128, which pertain to state boards that approve permits or enforcement orders and heads of executive agencies with similar powers. Thus, EPA reviews infrastructure SIP submissions to ensure that the state's implementation plan appropriately addresses the requirements of section 110(a)(2)(E)(ii) and section 128. The 2013 Guidance explains EPA's interpretation that there may be a variety of ways by which states can appropriately address these substantive statutory requirements, depending on the structure of an individual state's permitting or enforcement program (e.g., whether permits and enforcement orders are approved by a multi-member board or by a head of an executive agency). However they are addressed by the state, the substantive requirements of Section 128 are necessarily included in EPA's evaluation of infrastructure SIP submissions because section 110(a)(2)(E)(ii) explicitly requires that the state satisfy the provisions of section 128.

    As another example, EPA's review of infrastructure SIP submissions with respect to the PSD program requirements in section 110(a)(2)(C), (D)(i)(II), and (J) focuses upon the structural PSD program requirements contained in part C and EPA's PSD regulations. Structural PSD program requirements include provisions necessary for the PSD program to address all regulated sources and new source review (NSR) pollutants, including Greenhouse Gases. By contrast, structural PSD program requirements do not include provisions that are not required under EPA's regulations at 40 CFR 51.166 but are merely available as an option for the state, such as the option to provide grandfathering of complete permit applications with respect to the PM2.5 NAAQS. Accordingly, the latter optional provisions are types of provisions EPA considers irrelevant in the context of an infrastructure SIP action.

    For other section 110(a)(2) elements, however, EPA's review of a state's infrastructure SIP submission focuses on assuring that the state's SIP meets basic structural requirements. For example, section 110(a)(2)(C) includes, inter alia, the requirement that states have a program to regulate minor new sources. Thus, EPA evaluates whether the state has an EPA-approved minor new source review program and whether the program addresses the pollutants relevant to that NAAQS. In the context of acting on an infrastructure SIP submission, however, EPA does not think it is necessary to conduct a review of each and every provision of a state's existing minor source program (i.e., already in the existing SIP) for compliance with the requirements of the CAA and EPA's regulations that pertain to such programs.

    With respect to certain other issues, EPA does not believe that an action on a state's infrastructure SIP submission is necessarily the appropriate type of action in which to address possible deficiencies in a state's existing SIP. These issues include: (i) Existing provisions related to excess emissions from sources during periods of startup, shutdown, or malfunction (SSM) that may be contrary to the CAA and EPA's policies addressing such excess emissions; 10 (ii) existing provisions related to “director's variance” or “director's discretion” that may be contrary to the CAA because they purport to allow revisions to SIP-approved emissions limits while limiting public process or not requiring further approval by EPA; and (iii) existing provisions for PSD programs that may be inconsistent with current requirements of EPA's “Final NSR Improvement Rule,” 67 FR 80186 (December 31, 2002), as amended by 72 FR 32526 (June 13, 2007) (NSR Reform). Thus, EPA believes that it may approve an infrastructure SIP submission without scrutinizing the totality of the existing SIP for such potentially deficient provisions and may approve the submission even if it is aware of such existing provisions.11 It is important to note that EPA's approval of a state's infrastructure SIP submission should not be construed as explicit or implicit re-approval of any existing potentially deficient provisions that relate to the three specific issues just described.

    10 Subsequent to issuing the 2013 Guidance, EPA's interpretation of the CAA with respect to the approvability of affirmative defense provisions in SIPs has changed. See “State Implementation Plans: Response to Petition for Rulemaking; Restatement and Update of EPA's SSM Policy Applicable to SIPs; Findings of Substantial Inadequacy; and SIP Calls To Amend Provisions Applying to Excess Emissions During Periods of Startup, Shutdown and Malfunction,” 80 FR 33839 (June 12, 2015). As a result, EPA's 2013 Guidance (p. 21 & n.30) no longer represents the EPA's view concerning the validity of affirmative defense provisions, in light of the requirements of section 113 and section 304.

    11 By contrast, EPA notes that if a state were to include a new provision in an infrastructure SIP submission that contained a legal deficiency, such as a new exemption or affirmative defense for excess emissions during SSM events, then EPA would need to evaluate that provision for compliance against the rubric of applicable CAA requirements in the context of the action on the infrastructure SIP.

    EPA's approach to review of infrastructure SIP submissions is to identify the CAA requirements that are logically applicable to that submission. EPA believes that this approach to the review of a particular infrastructure SIP submission is appropriate, because it would not be reasonable to read the general requirements of section 110(a)(1) and the list of elements in section 110(a)(2) as requiring review of each and every provision of a state's existing SIP against all requirements in the CAA and EPA regulations merely for purposes of assuring that the state in question has the basic structural elements for a functioning SIP for a new or revised NAAQS. Because SIPs have grown by accretion over the decades as statutory and regulatory requirements under the CAA have evolved, they may include some outmoded provisions and historical artifacts. These provisions, while not fully up to date, nevertheless may not pose a significant problem for the purposes of “implementation, maintenance, and enforcement” of a new or revised NAAQS when EPA evaluates adequacy of the infrastructure SIP submission. EPA believes that a better approach is for states and EPA to focus attention on those elements of section 110(a)(2) of the CAA most likely to warrant a specific SIP revision due to the promulgation of a new or revised NAAQS or other factors.

    For example, EPA's 2013 Guidance gives simpler recommendations with respect to carbon monoxide than other NAAQS pollutants to meet the visibility requirements of section 110(a)(2)(D)(i)(II), because carbon monoxide does not affect visibility. As a result, an infrastructure SIP submission for any future new or revised NAAQS for carbon monoxide need only state this fact in order to address the visibility prong of section 110(a)(2)(D)(i)(II).

    Finally, EPA believes that its approach with respect to infrastructure SIP requirements is based on a reasonable reading of section 110(a)(1) and (2) because the CAA provides other avenues and mechanisms to address specific substantive deficiencies in existing SIPs. These other statutory tools allow EPA to take appropriately tailored action, depending upon the nature and severity of the alleged SIP deficiency. Section 110(k)(5) authorizes EPA to issue a “SIP call” whenever the Agency determines that a state's SIP is substantially inadequate to attain or maintain the NAAQS, to mitigate interstate transport, or to otherwise comply with the CAA.12 Section 110(k)(6) authorizes EPA to correct errors in past actions, such as past approvals of SIP submissions.13 Significantly, EPA's determination that an action on a state's infrastructure SIP submission is not the appropriate time and place to address all potential existing SIP deficiencies does not preclude EPA's subsequent reliance on provisions in section 110(a)(2) as part of the basis for action to correct those deficiencies at a later time. For example, although it may not be appropriate to require a state to eliminate all existing inappropriate director's discretion provisions in the course of acting on an infrastructure SIP submission, EPA believes that section 110(a)(2)(A) may be among the statutory bases that EPA relies upon in the course of addressing such deficiency in a subsequent action.14

    12 For example, EPA issued a SIP call to Utah to address specific existing SIP deficiencies related to the treatment of excess emissions during SSM events. See “Finding of Substantial Inadequacy of Implementation Plan; Call for Utah State Implementation Plan Revisions,” 74 FR 21639 (April 18, 2011).

    13 EPA has used this authority to correct errors in past actions on SIP submissions related to PSD programs. See “Limitation of Approval of Prevention of Significant Deterioration Provisions Concerning Greenhouse Gas Emitting-Sources in State Implementation Plans; Final Rule,” 75 FR 82536 (December 30, 2010). EPA has previously used its authority under section 110(k)(6) of the CAA to remove numerous other SIP provisions that the Agency determined it had approved in error. See, e.g., 61 FR 38664 (July 25, 1996) and 62 FR 34641 (June 27, 1997) (corrections to American Samoa, Arizona, California, Hawaii, and Nevada SIPs); 69 FR 67062, November 16, 2004 (corrections to California SIP); and 74 FR 57051 (November 3, 2009) (corrections to Arizona and Nevada SIPs).

    14See, e.g., EPA's disapproval of a SIP submission from Colorado on the grounds that it would have included a director's discretion provision inconsistent with CAA requirements, including section 110(a)(2)(A). See, e.g., 75 FR 42342 at 42344 (July 21, 2010) (proposed disapproval of director's discretion provisions); 76 FR 4540 (January 26, 2011) (final disapproval of such provisions).

    III. What are the prongs 1 and 2 requirements?

    For each new NAAQS, section 110(a)(2)(D)(i)(I) of the CAA requires each state to submit a SIP revision that contains adequate provisions prohibiting emissions activity in the state from contributing significantly to nonattainment, or interfering with maintenance, of the NAAQS in any downwind state. EPA sometimes refers to these requirements as prong 1 (significant contribution to nonattainment) and prong 2 (interference with maintenance), or conjointly as the “good neighbor” provision of the CAA. Section 110(a)(2)(D)(i)(I) requires the elimination of upwind state emissions that significantly contribute to nonattainment or interference with maintenance of the NAAQS in another state.

    IV. What is EPA's analysis of how Mississippi addressed prongs 1 and 2?

    Mississippi has concluded that it does not contribute significantly to nonattainment or interfere with maintenance of the 2010 1-hour NO2 NAAQS in any other state for the following reasons: (1) All areas in Mississippi and in the surrounding states are designated as unclassifiable/attainment for the 2010 1-hour NO2 NAAQS; (2) monitored ambient NO2 concentrations in the State and surrounding states are well below the 2010 1-hour NO2 NAAQS; (3) total NOX emissions in the State and surrounding states are trending downward; and (4) there are SIP-approved state regulations in place to control NOX emissions in the State. EPA preliminarily agrees with the State's conclusion based on the rationale discussed below.

    First, there are no designated nonattainment areas for the 2010 1-hour NO2 NAAQS. On February 17, 2012 (77 FR 9532), EPA designated the entire country as “unclassifiable/attainment” for the 2010 1-hour NO2 NAAQS, stating that “available information does not indicate that the air quality in these areas exceeds the 2010 1-hour NO2 NAAQS.”

    Second, as part of its May 23, 2016, SIP submittal, Mississippi examined NO2 monitoring data from 2009-2014 in the State and surrounding states. According to this data, the design values during this period are well below the 100 ppb standard with Alabama and Tennessee having the highest 2012-2014 design values (51 ppb).

    Third, Mississippi's submittal provides total NOX emissions data reported to the National Emissions Inventory in 2005, 2008, and 2011 for Mississippi and the surrounding states. This data shows that NOX emissions generally decreased over this time period in these states.

    Fourth, in its submittal, Mississippi identifies SIP-approved regulations APC-S-1 (“Air Emission Regulations for the Prevention, Abatement, and Control of Air Contaminants”), APC-S-2 (“Permit Regulation for the Construction and/or Operation of Air Emissions Equipment”), APC-S-3 (“Mississippi Regulations for the Prevention of Air Pollution Emergency Episodes”), and APC-S-5 (“Mississippi Regulations for the Prevention of Significant Deterioration of Air Quality”) as regulations that control NOX emitting sources in the State. APC-S-2, for example, contains permitting requirements that require controls and emission limits for certain NOX emitting sources in the State. These permitting requirements help ensure that no new or modified NOX sources in the State subject to these permitting regulations will significantly contribute to nonattainment or interfere with maintenance of the 2010 1-hour NO2 NAAQS.

    For all the reasons discussed above, EPA has preliminarily determined that Mississippi does not contribute significantly to nonattainment or interfere with maintenance of the 2010 1-hour NO2 NAAQS in any other state and that Mississippi's SIP includes adequate provisions to prevent emissions sources within the State from significantly contributing to nonattainment or interfering with maintenance of this standard in any other state.

    V. Proposed Action

    As described above, EPA is proposing to approve Mississippi's May 23, 2016, SIP revision addressing prongs 1 and 2 of CAA section 110(a)(2)(D)(i) for the 2010 1-hour NO2 NAAQS.

    VI. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. See 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 proposed action merely proposes to approve state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:

    • Is not a “significant regulatory actions” 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 actions based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

    • is not a significant regulatory actions 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 as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.

    List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements.

    Authority:

    42 U.S.C. 7401 et seq.

    Dated: September 15, 2016. Kenneth R. Lapierre, Acting Regional Administrator, Region 4.
    [FR Doc. 2016-23300 Filed 9-27-16; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R04-OAR-2013-0799; FRL-9953-17-Region 4] Air Plan Approval; Tennessee; Regional Haze Progress Report AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is proposing to approve a State Implementation Plan (SIP) revision submitted by the State of Tennessee through the Tennessee Department of Environment and Conservation (TDEC) on April 19, 2013. Tennessee's April 19, 2013, SIP revision (Progress Report) addresses requirements of the Clean Air Act (CAA or Act) and EPA's rules that require each state to submit periodic reports describing progress towards reasonable progress goals (RPGs) established for regional haze and a determination of the adequacy of the state's existing SIP addressing regional haze (regional haze plan). EPA is proposing to approve Tennessee's Progress Report on the basis that it addresses the progress report and adequacy determination requirements for the first implementation period for regional haze.

    DATES:

    Comments must be received on or before October 28, 2016.

    ADDRESSES:

    Submit your comments, identified by Docket ID No. EPA-R04-OAR-2013-0799 at http://www.regulations.gov. Follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. EPA will generally not consider comments or comment contents located outside of the primary submission (i.e., on the web, cloud, or other file sharing system). For additional submission methods, the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

    FOR FURTHER INFORMATION CONTACT:

    Michele Notarianni, Air Regulatory Management Section, Air Planning and Implementation Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW., Atlanta, Georgia 30303-8960. Ms. Notarianni can be reached by phone at (404) 562-9031 and via electronic mail at [email protected].

    SUPPLEMENTARY INFORMATION:

    I. Background

    Under the Regional Haze Rule,1 each state was required to submit its first implementation plan addressing regional haze visibility impairment to EPA no later than December 17, 2007. See 40 CFR 51.308(b). Tennessee submitted its regional haze plan on April 4, 2008, and like many other states subject to the Clean Air Interstate Rule (CAIR), relied on CAIR to satisfy best available retrofit technology (BART) requirements for emissions of sulfur dioxide (SO2) and nitrogen oxides (NOX) from electric generating units (EGUs) in the State. On April 24, 2012, EPA finalized a limited approval of Tennessee's April 4, 2008, regional haze plan as meeting some of the applicable regional haze requirements as set forth in sections 169A and 169B of the CAA and in 40 CFR 51.300-308.2 Also in this April 24, 2012, action, EPA finalized a limited disapproval of Tennessee's regional haze plan because of deficiencies arising from the State's reliance on CAIR to satisfy certain regional haze requirements. See 77 FR 24392. On June 7, 2012, EPA promulgated Federal Implementation Plans (FIPs) to replace reliance on CAIR with reliance on the Cross State Air Pollution Rule (CSAPR) to address deficiencies in CAIR-dependent regional haze plans of several states, including Tennessee's regional haze plan.3 See 77 FR 33642.

    1 Located in 40 CFR part 51, subpart P.

    2 This April 24, 2012, action did not include the BART determination for Eastman Chemical Company (Eastman). On November 27, 2012, EPA finalized approval of the BART requirements for Eastman that were provided in the April 4, 2008, regional haze SIP, as later modified and supplemented on May 14, 2012, and May 25, 2012 (77 FR 70689).

    3 Although a number of parties challenged the legality of CSAPR and the D.C. Circuit initially vacated and remanded CSAPR to EPA in EME Homer City Generation, L.P. v. EPA, 696 F.3d 7 (D.C. Cir. 2012), the United States Supreme Court reversed the D.C. Circuit's decision on April 29, 2014, and remanded the case to the D.C. Circuit to resolve remaining issues in accordance with the high court's ruling. EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584 (2014). On remand, the D.C. Circuit affirmed CSAPR in most respects, and CSAPR is now in effect. EME Homer City Generation, L.P. v. EPA, 795 F.3d 118 (D.C. Cir. 2015).

    Each state is also required to submit a progress report in the form of a SIP revision every five years that evaluates progress towards the RPGs for each mandatory Class I Federal area within the state and for each mandatory Class I Federal area outside the state which may be affected by emissions from within the state. See 40 CFR 51.308(g). Each state is also required to submit, at the same time as the progress report, a determination of the adequacy of its existing regional haze plan. See 40 CFR 51.308(h). The first progress report is due five years after submittal of the initial regional haze plan.

    On April 19, 2013, as required by 40 CFR 51.308(g), TDEC submitted to EPA, in the form of a revision to Tennessee's SIP, a report on progress made towards the RPGs for Class I areas in the State and for Class I areas outside the State that are affected by emissions from sources within the State. This submission also includes a negative declaration pursuant to 40 CFR 51.308(h)(1) that the State's regional haze plan is sufficient in meeting the requirements of the Regional Haze Rule. EPA is proposing to approve Tennessee's Progress Report on the basis that it satisfies the requirements of 40 CFR 51.308(g) and 51.308(h).

    II. Requirements for the Regional Haze Progress Report and Adequacy Determination A. Regional Haze Progress Report

    Under 40 CFR 51.308(g), states must submit a regional haze progress report as a SIP revision every five years and must address, at a minimum, the seven elements found in 40 CFR 51.308(g). As described in further detail in section III below, 40 CFR 51.308(g) requires: (1) A description of the status of measures in the approved regional haze plan; (2) a summary of emissions reductions achieved; (3) an assessment of visibility conditions for each Class I area in the state; (4) an analysis of changes in emissions from sources and activities within the state; (5) an assessment of any significant changes in anthropogenic emissions within or outside the state that have limited or impeded progress in Class I areas impacted by the state's sources; (6) an assessment of the sufficiency of the approved regional haze plan; and (7) a review of the state's visibility monitoring strategy.

    B. Adequacy Determination of the Current Regional Haze Plan

    Under 40 CFR 51.308(h), states are required to submit, at the same time as the progress report, a determination of the adequacy of their existing regional haze plan and to take one of four possible actions based on information in the progress report. As described in further detail in section III below, 40 CFR 51.308(h) requires states to: (1) Submit a negative declaration to EPA that no further substantive revision to the state's existing regional haze plan is needed; (2) provide notification to EPA (and to other state(s) that participated in the regional planning process) if the state determines that its existing regional haze plan is or may be inadequate to ensure reasonable progress at one or more Class I areas due to emissions from sources in other state(s) that participated in the regional planning process, and collaborate with these other state(s) to develop additional strategies to address deficiencies; (3) provide notification with supporting information to EPA if the state determines that its existing regional haze plan is or may be inadequate to ensure reasonable progress at one or more Class I areas due to emissions from sources in another country; or (4) revise its regional haze plan to address deficiencies within one year if the state determines that its existing regional haze plan is or may be inadequate to ensure reasonable progress in one or more Class I areas due to emissions from sources within the state.

    III. What is EPA's Analysis of Tennessee's Regional Haze Progress Report and Adequacy Determination?

    On April 19, 2013, TDEC submitted a revision to Tennessee's regional haze plan to address progress made towards the RPGs for Class I areas in the State and for Class I areas outside the State that are affected by emissions from sources within Tennessee. This submittal also includes a determination of the adequacy of the State's existing regional haze plan. Tennessee has two Class I areas within its borders: Great Smoky Mountains National Park and Joyce Kilmer-Slickrock Wilderness Area. These areas are located partially in North Carolina and Tennessee. In its regional haze plan, the State also identified, through an area of influence modeling analysis based on back trajectories, four Class I areas in three neighboring states potentially impacted by Tennessee sources: Cohutta Wilderness Area in Georgia; Mammoth Cave National Park in Kentucky; and Linville Gorge and Shining Rock Wilderness areas in North Carolina. See 76 FR 33662, 33683 (June 9, 2011).

    A. Regional Haze Progress Report SIPs

    The following sections summarize: (1) Each of the seven elements that must be addressed by a progress report under 40 CFR 51.308(g); (2) how Tennessee's Progress Report addressed each element; and (3) EPA's analysis and proposed determination as to whether the State satisfied each element.

    1. Status of Control Measures

    40 CFR 51.308(g)(1) requires a description of the status of implementation of all measures included in the regional haze plan for achieving RPGs for Class I areas both within and outside the state.

    The State evaluated the status of measures included in its 2008 regional haze plan in accordance with 40 CFR 51.308(g)(1). Specifically, in its Progress Report, Tennessee summarizes the status of the emissions reduction measures that were included in the final iteration of the Visibility Improvement State and Tribal Association of the Southeast (VISTAS) regional haze emissions inventory and RPG modeling used by the State in developing its regional haze plan. The measures include, among other things, applicable federal programs (e.g., mobile source rules, Maximum Achievable Control Technology standards), federal consent agreements, and federal and state control strategies for EGUs.

    The State also discusses the status of several measures that were not included in the final VISTAS emissions inventory and were not relied upon in the initial regional haze plan to meet RPGs, including EPA's Mercury and Air Toxics Rule and a 2011 federal consent agreement with the Tennessee Valley Authority (TVA). The State notes that the emissions reductions from these measures will help ensure that Class I areas impacted by Tennessee sources achieve their RPGs.

    Although Tennessee determined in its regional haze SIP that no additional controls for sources in the State were necessary to obtain reasonable progress during the first implementation period, Tennessee's Progress Report identifies six out-of-state sources located in the area of influence of one or more of Tennessee's Class I areas using the State's methodology for determining sources eligible for a reasonable progress control determination. These six sources were evaluated by their respective states for reasonable progress. The Progress Report summarizes the reasonable progress control determinations made for these six facilities (five facilities consisting of 12 EGUs, one non-EGU facility) in the surrounding States of Alabama, Georgia, North Carolina, and South Carolina and, where applicable, provides a status of the required controls. Of the 12 EGUs at five facilities in these states, nine EGUs already have scrubbers installed and three EGUs located in South Carolina were retired.4

    4 See Tennessee Progress Report narrative, Table 2-5, page 26.

    In addition, the State provides an update on the status of EGUs in Tennessee identified by the states of Maine, New Jersey, New Hampshire and Vermont as contributing to visibility impairment at the following Class I areas located in those states based on 2002 emissions: Acadia National Park (ME), Great Gulf Wilderness Area and Presidential Range—Dry River Wilderness Area (NH), Lye Brook Wilderness Area (VT), and Brigantine Wilderness Area (NJ)). These states are members of the Mid-Atlantic/Northeast Visibility Union (MANE-VU), which identified 167 EGU “stacks,” five of which are in Tennessee, as contributing significantly to visibility impairment at MANE-VU Class I areas in 2002. The five Tennessee EGU stacks identified by MANE-VU are located at TVA's Gallatin, John Sevier, Johnsonville, and Kingston plants. MANE-VU asked Tennessee to control the SO2 emissions from these EGUs with a 90 percent control efficiency and to adopt a control strategy to provide a 28 percent reduction in SO2 emissions from non-EGU emission sources that would be equivalent to MANE-VU's proposed low sulfur residential fuel oil strategy.

    Tennessee summarizes in its Progress Report its February 20, 2008, response to the four MANE-VU states' letters at the time of the State's regional haze SIP development, indicating that the control schedule for the five identified EGU stacks is reasonable and adequately limits the emissions of SO2 for visibility impairment purposes. See Table 1 below.

    Table 1—Tennessee EGU Stacks Identified by MANE-VU States Plant name Tennessee's February 20, 2008, response TVA Gallatin This plant uses low-sulfur fuel at an emission rate of 0.61 lbs SO2/mmBtu. TVA John Sevier TVA has announced plans to install flue gas desulfurization (FGD) by 2012. TVA Johnsonville This plant is burning a low-sulfur fuel (1.5 lbs SO2/mmBtu) with TVA performing testing to determine the viability of lower sulfur coal with the objective of going to 0.9 lbs SO2/mmBtu before 2015. TVA Kingston FGD is being installed on this stack with a construction complete date scheduled for 2010. TVA Kingston FGD is being installed on this stack with a construction complete date scheduled for 2010.

    As part of its Progress Report, Tennessee notes that these EGU stacks are either currently controlled with low sulfur coal or scrubbers with a 95 percent SO2 control efficiency, are shutdown, or are scheduled for shutdown by 2017.5 Tennessee notes that the requested EGU SO2 reductions are exceeded through improved removal efficiencies at these five EGUs, the shutdown of eight EGUs at the four TVA plants as of 2015, and the scheduled shutdown of an additional EGU by 2017, noting that additional reductions are expected for the remainder of the planning period. Tennessee also affirms that its Progress Report shows progress with reducing non-EGU SO2 emissions.

    5 See Table 2-4 on pages 22-24 of Tennessee's Progress Report.

    EPA proposes to find that Tennessee's analysis adequately addresses 40 CFR 51.308(g)(1) for the reasons discussed below. The State documents the implementation status of measures from its regional haze plan in addition to describing additional measures not originally accounted for in the final VISTAS emissions inventory that came into effect since the VISTAS analyses for the regional haze plan were completed. Tennessee reviewed the status of BART requirements for the four BART-subject sources in the State: Alcoa—South Plant, DuPont—Old Hickory, Eastman Chemical Company, and TVA—Cumberland Fossil Plant. The State's Progress Report also provides detailed information on EGU control strategies in its regional haze plan and the status of existing and future expected controls for Tennessee's EGUs because, in its regional haze plan, Tennessee identified SO2 emissions from coal-fired EGUs as the key contributor to regional haze in the VISTAS region. In its regional haze plan, Tennessee determined that no additional controls of sources in the State were reasonable for the first implementation period. Additionally, the State summarizes the emissions controls included in the regional haze plan for Tennessee sources in the area of influence of other states' Class I areas and the status of these controls.

    2. Emissions Reductions and Progress

    40 CFR 51.308(g)(2) requires a summary of the emissions reductions achieved in the state through the measures subject to 40 CFR 51.308(g)(1).

    In its regional haze plan and Progress Report, Tennessee focuses its assessment on SO2 emissions from EGUs because of VISTAS' findings that ammonium sulfate accounted for more than 70 percent of the visibility-impairing pollution in the VISTAS states 6 and that SO2 point source emissions are projected to represent more than 95 percent of the total SO2 emissions in the VISTAS states in 2018.7 As discussed in section III.A.5, below, Tennessee determined that sulfates continue to be the largest contributor to regional haze for Class I areas in the State.

    6 Sulfate levels on the 20 percent worst days account for 60-70 percent of the visibility impairment at both of Tennessee's Class I areas. For additional information, see Tennessee's April 4, 2008, regional haze plan at page 13.

    7 For additional information, see Tennessee's April 4, 2008, regional haze plan at page 81.

    In its Progress Report, Tennessee presents SO2 emissions data for 33 EGUs at seven facilities in the State that were projected to have controls installed, or projected to retire, by 2018 in Tennessee's regional haze SIP. Actual SO2 emissions reductions from 2002 to 2011 for these Tennessee EGUs (199,568 tons per year (tpy)) are already close to the projected SO2 emissions reductions from 2002 to 2018 estimated in Tennessee's regional haze plan for these EGUs (207,540 tpy).8 Tennessee also includes SO2 and NOx emissions data from 2002-2010 for EGUs in Tennessee subject to reporting under the Acid Rain Program. This data shows a decline in these emissions over this time period and that the SO2 reductions are higher than those estimated for these units in the State's regional haze SIP between 2002-2018.

    8 Table 2-4, page 31, and Appendix A of Tennessee's Progress Report.

    EPA proposes to conclude that Tennessee has adequately addressed 40 CFR 51.308(g)(2). As discussed above, the State provides estimates, and where available, actual emissions reductions of SO2 and NOX at EGUs in the State resulting from the measures relied upon in its regional haze plan. The State appropriately focused on SO2 emissions from its EGUs in its Progress Report because the State had previously identified these emissions as the most significant contributors to visibility impairment at Tennessee's Class I areas and those areas that Tennessee sources impact.

    3. Visibility Progress

    40 CFR 51.308(g)(3) requires that states with Class I areas provide the following information for the most impaired and least impaired days for each area, with values expressed in terms of five-year averages of these annual values: 9 (i) Current visibility conditions; (ii) the difference between current visibility conditions and baseline visibility conditions; and (iii) the change in visibility impairment over the past five years.

    9 The “most impaired days” and “least impaired days” in the regional haze rule refers to the average visibility impairment (measured in deciviews) for the 20 percent of monitored days in a calendar year with the highest and lowest amount of visibility impairment, respectively, averaged over a five-year period. 40 CFR 51.301.

    Tennessee provides figures with visibility monitoring data that address the three requirements of 40 CFR 51.308(g)(3) for the State's two Class I areas. Tennessee reported current conditions as the 2006-2010 five-year time period and used the 2000-2004 baseline period for its Class I areas.10 Table 2, below, shows the current visibility conditions and the difference between current visibility conditions and baseline visibility conditions. Table 3 shows the changes in visibility from 2006-2010 in terms of five-year averages.

    10 For the first regional haze plans, “baseline” conditions were represented by the 2000-2004 time period. See 64 FR 35730 (July 1, 1999). Joyce Kilmer-Slickrock Wilderness Area does not have a visibility monitor; therefore, visibility data from Great Smoky Mountains National Park is used for both areas given their proximity. For more information see 76 FR 33669.

    Table 2—Baseline Visibility, Current Visibility, and Visibility Changes in Class I Areas in Tennessee Class I area Baseline
  • (2000-2004)
  • Current
  • (2006-2010)
  • Difference RPG
  • (2018)
  • 20% Worst Days: Great Smoky Mountains National Park 30.3 26.6 −3.7 23.5 Joyce Kilmer-Slickrock 30.3 26.6 −3.7 23.5 20% Best Days: Great Smoky Mountains National Park 13.6 12.3 −1.3 12.1 Joyce Kilmer-Slickrock 13.6 12.3 −1.3 12.1
    Table 3—Changes in 5-year Visibility Averages from 2006-2010 Class I area 2006 2007 2008 2009 2010 20% Worst Days: Great Smoky Mountains National Park 30.4 30.6 29.8 28.5 26.6 Joyce Kilmer-Slickrock 30.4 30.6 29.8 28.5 26.6 20% Best Days: Great Smoky Mountains National Park 13.3 13.2 13.1 12.4 12.3 Joyce Kilmer-Slickrock 13.3 13.2 13.1 12.4 12.3 All Tennessee Class I areas saw an improvement in visibility between baseline and 2006-2010 conditions and an overall decline in the five-year average visibility averages from 2006-2010.

    EPA proposes to conclude that Tennessee has adequately addressed 40 CFR 51.308(g)(3) because the State provides the information regarding visibility conditions and visibility changes necessary to meet the requirements of the regulation. The Progress Report includes current conditions based on the Interagency Monitoring of Protected Visual Environments (IMPROVE) monitoring data for the years 2006-2010, the difference between current visibility conditions and baseline visibility conditions, and the change in visibility impairment over the five-year period 2006-2010.

    4. Emissions Tracking

    40 CFR 51.308(g)(4) requires an analysis tracking emission changes of visibility-impairing pollutants from the state's sources by type or category over the past five years based on the most recent updated emissions inventory.

    In its Progress Report, Tennessee presents data from a statewide actual emissions inventory for 2008 and compares this data to the baseline emissions inventory for 2002 (actual and typical emissions) from its regional haze plan. For the typical 2002 stationary point source emissions inventory, Tennessee adjusted the EGU emissions for a typical year so that if sources were shut down or operating above or below normal, the emissions are normalized to a typical emissions inventory year. The typical year data is used to develop projected typical future year emissions inventories. The pollutants inventoried include volatile organic compounds (VOC), ammonia (NH3) NOX, coarse particulate matter (PM10), fine particulate matter (PM2.5), and SO2. The emissions inventories include the following source classifications: Point, area, biogenics, non-road mobile, and on-road mobile sources.

    Tennessee includes the actual and typical emissions inventories from its regional haze plan for 2002, and summarizes emissions data from EPA's 2008 National Emissions Inventory (NEI).11 Tennessee's analysis shows that 2008 emissions are lower than both the actual and typical 2002 emissions.

    11 The 2008 NEI data was the most recent NEI data available at the time that Tennessee submitted its Progress Report.

    Tennessee estimated on-road mobile source emissions in the 2008 inventory using the MOVES model. This model tends to estimate higher emissions for NOX and PM than its previous counterpart, the MOBILE6.2 model, used by the State to estimate on-road mobile source emissions for the 2002 inventories. Despite the change in methodology, a declining trend in all pollutants can be seen between 2002 and 2008 when comparing Tables 4 and 5 to Table 6.

    Table 4—2002 Actual Emissions Inventory Summary for Tennessee (tpy) Source category VOC NOX PM2.5 PM10 NH3 SO2 Point 85,254 221,651 39,973 49,814 1,817 413,755 Area 153,509 17,936 42,925 212,972 34,412 29,942 On-Road Mobile 179,807 238,577 3,949 5,371 6,625 9,226 Non-Road Mobile 66,450 96,827 6,458 6,819 43 10,441 Biogenics 894,214 18,081 0 0 0 0 Total 1,379,234 593,072 93,305 274,976 42,897 463,364 Table 5—2002 Typical Emissions Inventory Summary for Tennessee (tpy) Source category VOC NOX PM2.5 PM10 NH3 SO2 Point 85,218 216,481 39,298 49,040 1,810 399,750 Area 153,783 18,061 43,410 213,538 34,439 29,977 On-Road Mobile 179,807 238,577 3,949 5,371 6,625 9,226 Non-Road Mobile 66,450 96,827 6,458 6,819 43 10,441 Biogenics 894,214 18,081 0 0 0 0 Total 1,379,472 588,027 93,115 274,768 42,917 449,394 Table 6—2008 Actual Emissions Inventory Summary for Tennessee (tpy) Source category VOC NOX PM2.5 PM10 NH3 SO2 Point 38,155 134,162 15,551 20,734 1,193 258,033 Area 104,305 43,388 46,672 194,631 34,898 65,026 On-Road Mobile 80,476 213,973 8,441 10,445 3,167 3,903 Non-Road Mobile 50,525 35,593 3,305 3,470 38 591 Biogenics 786,087 13,682 0 0 0 0 Total 1,059,548 440,798 73,969 229,280 39,296 327,553

    EPA proposes to conclude that Tennessee has adequately addressed 40 CFR 51.308(g)(4). Tennessee tracked changes in emissions of visibility-impairing pollutants from 2002-2008 for all source categories and analyzed trends in emissions from 2002-2008, the most current quality-assured data available for these units at the time of progress report development. While ideally the five-year period to be analyzed for emissions inventory changes is the time period since the current regional haze plan was submitted, there is an inevitable time lag in developing and reporting complete emissions inventories once quality-assured emissions data becomes available. Therefore, EPA believes that there is some flexibility in the five-year time period that states can select.

    5. Assessment of Changes Impeding Visibility Progress

    40 CFR 51.308(g)(5) requires an assessment of any significant changes in anthropogenic emissions within or outside the state that have occurred over the past five years that have limited or impeded progress in reducing pollutant emissions and improving visibility in Class I areas impacted by the state's sources.

    In its Progress Report, Tennessee documented that sulfates, which are formed from SO2 emissions, continue to be the biggest single contributor to regional haze for Class I areas in the State and therefore focused its analysis on large SO2 emissions from point sources. In addressing the requirements at 40 CFR 51.308(g)(5), Tennessee demonstrates that sulfate contributions to visibility impairment have decreased from 2006 to 2010 along with an improvement in visibility at Class I areas in Tennessee, and examines other potential pollutants of concern affecting visibility at these areas. The State presents data for the 20 percent worst days showing that ammonium sulfate is responsible for 74 percent of the regional haze at Tennessee's two Class I areas for the period 2006-2010, with primary organic matter as the next largest contributor at 12 percent. The State notes that there are no significant changes in anthropogenic emissions that have impeded progress in reducing emissions and improving visibility in Class I areas impacted by Tennessee sources. Furthermore, the Progress Report shows that the State is on track to meeting its 2018 RPGs for Class I areas in Tennessee. For these reasons, EPA proposes to conclude that Tennessee's Progress Report has adequately addressed 40 CFR 51.308(g)(5).

    6. Assessment of Current Strategy

    40 CFR 51.308(g)(6) requires an assessment of whether the current regional haze plan is sufficient to enable the state, or other states, to meet the RPGs for Class I areas affected by emissions from the state.

    The State believes that it is on track to meet the 2018 RPGs for the Tennessee Class I areas and will not impede Class I areas outside of Tennessee from meeting their RPGs based on the trends in visibility and emissions presented in its Progress Report. In its Progress Report, Tennessee provided reconstructed light extinction figures for the 20 percent worst days for Great Smoky Mountains National Park for 2006 through 2010, noting similar results at Joyce Kilmer Class I area. The 20 percent worst days extinction clearly demonstrates that sulfates continue to be the largest contributor to visibility impairment at these Class I areas, with stationary point sources being the largest source of SO2 emissions in Tennessee. As identified in Tables 3-1 and 3-2 and Appendix A of the Progress Report, SO2 emissions from EGUs in Tennessee have decreased from 2002 to 2011. Also, the emissions data provided in Table 3-1 of the Progress Report show a declining trend in NOX emissions from 2002 to 2010 for EGUs in Tennessee. Tennessee also provides visibility data for the State's two Class I areas (Great Smoky Mountains National Park and Joyce Kilmer-Slickrock Wilderness Area) and the Class I areas potentially impacted by the State's sources (Cohutta Wilderness Area (Cohutta) in Georgia, Mammoth Cave National Park (Mammoth Cave) in Kentucky, and Linville Gorge and Shining Rock Wilderness Areas in North Carolina)) and notes that this data shows that these areas are on track to achieve their RPGs by 2018.12

    12 See pages 35-37 and 48-55 of Tennessee's Progress Report.

    EPA proposes to conclude that Tennessee has adequately addressed 40 CFR 51.308(g)(6). EPA views this requirement as a qualitative assessment that should evaluate emissions and visibility trends and other readily available information, including expected emissions reductions associated with measures with compliance dates that have not yet become effective. In its assessment, the State references the improving visibility trends and the downward emissions trends in the State, with a focus on SO2 emissions from Tennessee EGUs. These trends support the State's determination that the State's regional haze plan is sufficient to meet RPGs for Class I areas within and outside the State impacted by Tennessee sources.

    7. Review of Current Monitoring Strategy

    40 CFR 51.308(g)(7) requires a review of the state's visibility monitoring strategy and an assessment of whether any modifications to the monitoring strategy are necessary.

    Tennessee's Progress Report summarizes the existing monitoring network in the State to monitor visibility in Tennessee's Class I areas and concludes that no modifications to the existing visibility monitoring strategy are necessary. The primary monitoring network for regional haze, both nationwide and in Tennessee, is the IMPROVE network. There is currently one IMPROVE site in Tennessee which serves as the monitoring site for both the Great Smoky Mountains National Park and Joyce Kilmer-Slickrock Wilderness Area.

    The State also explains the importance of the IMPROVE monitoring network for tracking visibility trends at Class I areas in Tennessee. Tennessee states that data produced by the IMPROVE monitoring network will be used nearly continuously for preparing the 5-year progress reports and the 10-year SIP revisions, each of which relies on analysis of the preceding five years of data, and thus, the State notes that the monitoring data from the IMPROVE sites needs to be readily accessible and to be kept up to date. The Visibility Information Exchange Web System Web site has been maintained by VISTAS and the other Regional Planning Organizations to provide ready access to the IMPROVE data and data analysis tools.

    In addition to the IMPROVE measurements, some ongoing long-term limited monitoring supported by Federal Land Managers provides additional insight into progress toward regional haze goals. Tennessee benefits from the data from these measurements, but is not responsible for associated funding decisions to maintain these measurements into the future.

    In addition, TDEC and the local air agencies in the State operate a comprehensive PM2.5 network of the filter-based federal reference method monitors, continuous mass monitors, and filter-based speciated monitors. These PM2.5 measurements help the TDEC characterize air pollution levels in areas across the State, and therefore aid in the analysis of visibility improvement in and near the Class I areas in Tennessee.

    EPA proposes to conclude that Tennessee has adequately addressed the sufficiency of its monitoring strategy as required by 40 CFR 51.308(g)(7). The State reaffirmed its continued reliance upon the IMPROVE monitoring network; assessed its entire visibility monitoring network, including additional continuous sulfate and PM2.5 monitors, used to further understand visibility trends in the State; and determined that no changes to its monitoring strategy are necessary.

    B. Determination of Adequacy of Existing Regional Haze Plan

    Under 40 CFR 51.308(h), states are required to take one of four possible actions based on the information gathered and conclusions made in the progress report. The following section summarizes: (1) The action taken by Tennessee under 40 CFR 51.308(h); (2) Tennessee's rationale for the selected action; and (3) EPA's analysis and proposed determination regarding the State's action.

    In its Progress Report, Tennessee took the action provided for by 40 CFR 51.308(h)(1), which allows a state to submit a negative declaration to EPA if the state determines that the existing regional haze plan requires no further substantive revision at this time to achieve the RPGs for Class I areas affected by the state's sources. The basis for the State's negative declaration is the findings from the Progress Report, including the findings that: Visibility has improved at Class I areas in Tennessee and at Class I areas impacted by sources in Tennessee; overall emissions of visibility-impairing pollutants from the State's sources have decreased from 2002 to 2008 by approximately 25 percent 13 and emissions of SO2 from certain EGUs in Tennessee have decreased by approximately 200,000 tons from 2002-2010; 14 and additional EGU control measures not relied upon in the State's regional haze plan have occurred or will occur in the implementation period and are expected to continue to trend downward. EPA proposes to conclude that Tennessee has adequately addressed 40 CFR 51.308(h) because the visibility trends at the Class I areas impacted by the State's sources and the emissions trends of the State's largest emitters of visibility-impairing pollutants indicate that the RPGs for Class I areas impacted by source in Tennessee will be met.

    13 See page 42 of Tennessee's Progress Report.

    14 As discussed earlier, these EGUs were projected to have controls installed, or projected to retire, by 2018 in Tennessee's regional haze SIP.

    IV. What action is EPA proposing to take?

    EPA is proposing to approve Tennessee's Regional Haze Progress Report SIP revision, submitted by the State on April 19, 2013, as meeting the applicable regional haze requirements set forth in 40 CFR 51.308(g) and 51.308(h).

    V. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. See 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 proposed action merely proposes to approve state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:

    • Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive 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 as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.

    List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen oxides, Particulate matter, Reporting and recordkeeping requirements, Sulfur dioxide, Volatile organic compounds.

    Authority:

    42 U.S.C. 7401 et seq.

    Dated: September 15, 2016. Kenneth R. Lapierre, Acting Regional Administrator, Region 4.
    [FR Doc. 2016-23291 Filed 9-27-16; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 52 and 81 [EPA-R05-OAR-2016-0269; FRL-9953-12-Region 5] Air Plan Approval; Ohio; Redesignation of the Ohio Portion of the Cincinnati-Hamilton, Ohio-Kentucky-Indiana Area to Attainment of the 2008 Ozone Standard AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is proposing to find that the Cincinnati-Hamilton, Ohio-Kentucky-Indiana area is attaining the 2008 8-hour ozone National Ambient Air Quality Standard (NAAQS or standard) and to approve a request from the Ohio Environmental Protection Agency (Ohio EPA) to redesignate the Ohio portion of the Cincinnati-Hamilton area to attainment for the 2008 ozone NAAQS because the request meets the statutory requirements for redesignation under the Clean Air Act (CAA or Act). The Cincinnati-Hamilton area includes Butler, Clermont, Clinton, Hamilton, and Warren Counties in Ohio; Lawrenceburg Township in Dearborn County, Indiana; and, Boone, Campbell, and Kenton Counties in Kentucky. Ohio EPA submitted this request on April 21, 2016. EPA is also proposing to approve, as a revision to the Ohio State Implementation Plan (SIP), the state's plan for maintaining the 2008 8-hour ozone standard through 2030 in the Cincinnati-Hamilton area. Finally, EPA finds adequate and is proposing to approve the state's 2020 and 2030 volatile organic compound (VOC) and oxides of nitrogen (NOX) Motor Vehicle Emission Budgets (MVEBs) for the Ohio and Indiana portion of the Cincinnati-Hamilton area.

    DATES:

    Comments must be received on or before October 28, 2016.

    ADDRESSES:

    Submit your comments, identified by Docket ID No. EPA-R05-OAR-2016-0269 at http://www.regulations.gov or via email to [email protected] For comments submitted at Regulations.gov, follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. For either manner of submission, EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. EPA will generally not consider comments or comment contents located outside of the primary submission (i.e. on the Web, cloud, or other file sharing system). For additional submission methods, please contact the person identified in the For Further Information Contact section. For the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

    FOR FURTHER INFORMATION CONTACT:

    Kathleen D'Agostino, Environmental Scientist, Attainment Planning and Maintenance Section, Air Programs Branch (AR-18J), Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604, (312) 886-1767, [email protected]

    SUPPLEMENTARY INFORMATION:

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

    I. What are the actions EPA is proposing? II. What is the background for these actions? III. What are the criteria for redesignation? IV. What is EPA's analysis of Ohio's redesignation request? A. Has the Cincinnati-Hamilton area attained the 2008 8-hour ozone NAAQS? B. Has Ohio met all applicable requirements of section 110 and part D of the CAA for the Cincinnati-Hamilton area, and does the Ohio portion of the area have a fully approved SIP under section 110(k) of the CAA? 1. Ohio Has Met All Applicable Requirements of Section 110 and Part D of the CAA Applicable to the Ohio Portion of the Cincinnati-Hamilton Area for Purposes of Redesignation 2. The Ohio Portion of the Cincinnati-Hamilton Area Has a Fully Approved SIP for Purposes of Redesignation Under Section 110(k) of the CAA C. Are the air quality improvements in the Cincinnati-Hamilton area due to permanent and enforceable emission reductions? 1. Permanent and Enforceable Emission Controls Implemented 2. Emission Reductions 3. Meteorology D. Does Ohio have a fully approvable ozone maintenance plan for the Cincinnati-Hamilton area? 1. Attainment Inventory 2. Has the state documented maintenance of the ozone standard in the Cincinnati-Hamilton area? 3. Continued Air Quality Monitoring 4. Verification of Continued Attainment 5. What is the contingency plan for the Cincinnati-Hamilton area? V. Has the state adopted approvable motor vehicle emission budgets? A. Motor Vehicle Emission Budgets B. What is the status of EPA's adequacy determination for the proposed VOC and NOX MVEBs for the Cincinnati-Hamilton area? C. What is a safety margin? VI. Proposed Actions VII. Statutory and Executive Order Reviews I. What are the actions EPA is proposing?

    EPA is proposing to take several related actions. EPA is proposing to determine that the Cincinnati-Hamilton nonattainment area is attaining the 2008 ozone standard, based on quality-assured and certified monitoring data for 2013-2015 and that the Ohio portion of this area has met the requirements for redesignation under section 107(d)(3)(E) of the CAA. EPA is thus proposing to approve Ohio EPA's request to change the legal designation of the Ohio portion of the Cincinnati-Hamilton area from nonattainment to attainment for the 2008 ozone standard. EPA is also proposing to approve, as a revision to the Ohio SIP, the state's maintenance plan (such approval being one of the CAA criteria for redesignation to attainment status) for the area. The maintenance plan is designed to keep the Cincinnati-Hamilton area in attainment of the 2008 ozone NAAQS through 2030. Finally, EPA finds adequate and is proposing to approve the newly-established 2020 and 2030 MVEBs for the Indiana and Ohio portion of the Cincinnati-Hamilton area. The adequacy comment period for the MVEBs began on July 22, 2016, with EPA's posting of the availability of the submittal on EPA's Adequacy Web site (at http://www.epa.gov/otaq/stateresources/transconf/adequacy.htm). The adequacy comment period for these MVEBs ended on August 22, 2016. EPA did not receive any requests for this submittal, or adverse comments on this submittal during the adequacy comment period. In a letter dated August 23, 2016, EPA informed Ohio EPA that we found the 2020 and 2030 MVEBs to be adequate for use in transportation conformity analyses. Please see section V.B. of this rulemaking, “What is the status of EPA's adequacy determination for the proposed VOC and NOX MVEBs for the Ohio portion of the Cincinnati-Hamilton area,” for further explanation of this process. Therefore, we find adequate, and are proposing to approve, the States' 2020 and 2030 MVEBs for transportation conformity purposes.

    II. What is the background for these actions?

    EPA has determined that ground-level ozone is detrimental to human health. On March 12, 2008, EPA promulgated a revised 8-hour ozone NAAQS of 0.075 parts per million (ppm). See 73 FR 16436 (March 27, 2008). Under EPA's regulations at 40 CFR part 50, the 2008 8-hour ozone NAAQS is attained in an area when the 3-year average of the annual fourth highest daily maximum 8-hour average concentration is equal to or less than 0.075 ppm, when truncated after the thousandth decimal place, at all of the ozone monitoring sites in the area. See 40 CFR 50.15 and appendix P to 40 CFR part 50.

    Upon promulgation of a new or revised NAAQS, section 107(d)(1)(B) of the CAA requires EPA to designate as nonattainment any areas that are violating the NAAQS, based on the most recent three years of quality assured ozone monitoring data. The Cincinnati-Hamilton area was designated as a marginal nonattainment area for the 2008 ozone NAAQS on May 21, 2012 (77 FR 30088) (effective July 20, 2012).

    In a final implementation rule for the 2008 ozone NAAQS (SIP Requirements Rule),1 EPA established ozone standard attainment dates based on table 1 of section 181(a) of the CAA. This established an attainment date three years after the July 20, 2012, effective designation date for areas classified as marginal nonattainment for the 2008 ozone NAAQS. Therefore, the attainment date for the Cincinnati-Hamilton area was July 20, 2015. On May 4, 2016 (81 FR 26697), in accordance with section 181(b)(2)(A) of the CAA and the provisions of the SIP Requirements Rule (40 CFR 51.1103), EPA made a determination that the Cincinnati-Hamilton area attained the standard by its July 20, 2015, attainment date for the 2008 ozone NAAQS. EPA's determination was based upon 3 years of complete, quality-assured and certified data for the 2012-2014 time period.

    1 This rule, titled “Implementation of the 2008 National Ambient Air Quality Standards for Ozone: State Implementation Plan Requirements” and published at 80 FR 12264 (March 6, 2015), addresses nonattainment area SIP requirements for the 2008 ozone NAAQS, including requirements pertaining to attainment demonstrations, reasonable further progress (RFP), reasonably available control technology (RACT), reasonably available control measures (RACM), new source review (NSR), emission inventories, and the timing requirements for SIP submissions and compliance with emission control measures in the SIP. This rule also addresses the revocation of the 1997 ozone NAAQS and the anti-backsliding requirements that apply when the 1997 ozone NAAQS is revoked.

    III. What are the criteria for redesignation?

    Section 107(d)(3)(E) of the CAA allows redesignation of an area to attainment of the NAAQS provided that: (1) The Administrator (EPA) determines that the area has attained the NAAQS; (2) the Administrator has fully approved the applicable implementation plan for the area under section 110(k) of the CAA; (3) the Administrator determines that the improvement in air quality is due to permanent and enforceable reductions in emissions resulting from implementation of the applicable SIP, applicable Federal air pollutant control regulations, and other permanent and enforceable emission reductions; (4) the Administrator has fully approved a maintenance plan for the area as meeting the requirements of section 175A of the CAA; and (5) the state containing the area has met all requirements applicable to the area for the purposes of redesignation under section 110 and part D of the CAA.

    On April 16, 1992, EPA provided guidance on redesignations in the General Preamble for the Implementation of Title I of the CAA Amendments of 1990 (57 FR 13498) and supplemented this guidance on April 28, 1992 (57 FR 18070). EPA has provided further guidance on processing redesignation requests in the following documents:

    1. “Ozone and Carbon Monoxide Design Value Calculations,” Memorandum from Bill Laxton. Director, Technical Support Division, June 18, 1990;

    2. “Maintenance Plans for Redesignation of Ozone and Carbon Monoxide Nonattainment Areas,” Memorandum from G.T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, April 30, 1992;

    3. “Contingency Measures for Ozone and Carbon Monoxide (CO) Redesignations,” Memorandum from G.T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, June 1, 1992;

    4. “Procedures for Processing Requests to Redesignate Areas to Attainment,” Memorandum from John Calcagni, Director, Air Quality Management Division, September 4, 1992 (the “Calcagni Memorandum”);

    5. “State Implementation Plan (SIP) Actions Submitted in Response to Clean Air Act (CAA) Deadlines,” Memorandum from John Calcagni, Director, Air Quality Management Division, October 28, 1992;

    6. “Technical Support Documents (TSDs) for Redesignation of Ozone and Carbon Monoxide (CO) Nonattainment Areas,” Memorandum from G.T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, August 17, 1993;

    7. “State Implementation Plan (SIP) Requirements for Areas Submitting Requests for Redesignation to Attainment of the Ozone and Carbon Monoxide (CO) National Ambient Air Quality Standards (NAAQS) On or After November 15, 1992,” Memorandum from Michael H. Shapiro, Acting Assistant Administrator for Air and Radiation, September 17, 1993;

    8. “Use of Actual Emissions in Maintenance Demonstrations for Ozone and CO Nonattainment Areas,” Memorandum from D. Kent Berry, Acting Director, Air Quality Management Division, November 30, 1993;

    9. “Part D New Source Review (Part D NSR) Requirements for Areas Requesting Redesignation to Attainment,” Memorandum from Mary D. Nichols, Assistant Administrator for Air and Radiation, October 14, 1994; and

    10. “Reasonable Further Progress, Attainment Demonstration, and Related Requirements for Ozone Nonattainment Areas Meeting the Ozone National Ambient Air Quality Standard,” Memorandum from John S. Seitz, Director, Office of Air Quality Planning and Standards, May 10, 1995.

    IV. What is EPA's analysis of Ohio's redesignation request? A. Has the Cincinnati-Hamilton area attained the 2008 8-hour ozone NAAQS?

    For redesignation of a nonattainment area to attainment, the CAA requires EPA to determine that the area has attained the applicable NAAQS (CAA section 107(d)(3)(E)(i)). An area is attaining the 2008 ozone NAAQS if it meets the 2008 ozone NAAQS, as determined in accordance with 40 CFR 50.15 and appendix P of part 50, based on three complete, consecutive calendar years of quality-assured air quality data for all monitoring sites in the area. To attain the NAAQS, the three-year average of the annual fourth-highest daily maximum 8-hour average ozone concentrations (ozone design values) at each monitor must not exceed 0.075 ppm. The air quality data must be collected and quality-assured in accordance with 40 CFR part 58 and recorded in EPA's Air Quality System (AQS). Ambient air quality monitoring data for the 3-year period must also meet data completeness requirements. An ozone design value is valid if daily maximum 8-hour average concentrations are available for at least 90 percent of the days within the ozone monitoring seasons,2 on average, for the three-year period, with a minimum data completeness of 75 percent during the ozone monitoring season of any year during the three-year period. See section 2.3 of appendix P to 40 CFR part 50.

    2 The ozone season is defined by state in 40 CFR 58 appendix D. For the 2012-2014 and 2013-2015 time periods, the ozone seasons for Ohio, Indiana, and Kentucky were April-October, April-September, and March-October, respectively. Beginning in 2016, the ozone seasons for Ohio, Indiana and Kentucky are March-October. See, 80 FR 65292, 65466-67 (October 26, 2015).

    On May 4, 2016, in accordance with section 181(b)(2)(A) of the CAA and the provisions of the SIP Requirements Rule (40 CFR 51.1103), EPA made a determination that the Cincinnati-Hamilton area attained the standard by its July 20, 2015 attainment date for the 2008 ozone NAAQS. This determination was based upon 3 years of complete, quality-assured and certified data for the 2012-2014 time period. In addition, EPA has reviewed the available ozone monitoring data from monitoring sites in the Cincinnati-Hamilton area for the 2013-2015 time period. These data have been quality assured, are recorded in the AQS, and have been certified. These data demonstrate that the Cincinnati-Hamilton area is attaining the 2008 ozone NAAQS. The annual fourth-highest 8-hour ozone concentrations and the 3-year average of these concentrations (monitoring site ozone design values) for each monitoring site are summarized in Table 1.

    Table 1—Annual 4th High Daily Maximum 8-Hour Ozone Concentrations and 3-Year Average of the 4th High Daily Maximum 8-Hour Ozone Concentrations for the Cincinnati-Hamilton Area State County Monitor 2013
  • 4th high
  • (ppm)
  • 2014
  • 4th high
  • (ppm)
  • 2015
  • 4th high
  • (ppm)
  • 2013-2015
  • Average
  • (ppm)
  • Ohio Butler 39-017-0004 0.068 0.070 0.070 0.069 39-017-0018 0.068 0.069 0.070 0.069 39-017-9991 0.069 0.069 0.068 0.068 Clermont 39-025-0022 0.066 0.068 0.070 0.068 Clinton 39-027-1002 0.064 0.070 0.070 0.068 Hamilton 39-061-0006 0.069 0.070 0.072 0.070 39-061-0010 0.064 0.073 0.070 0.069 39-061-0040 0.069 0.069 0.071 0.069 Warren 39-165-0007 0.067 0.071 0.071 0.069 Kentucky Boone 21-015-0003 0.059 0.062 0.062 0.061 Campbell 21-037-3002 0.072 0.071 0.071 0.071

    The 3-year ozone design value for 2013-2015 is 0.071 ppm,3 which meets the 2008 ozone NAAQS. Therefore, in today's action, EPA proposes to determine that the Cincinnati-Hamilton area is attaining the 2008 ozone NAAQS.

    3 The monitor ozone design value for the monitor with the highest 3-year averaged concentration.

    EPA will not take final action to determine that the Cincinnati-Hamilton area is attaining the NAAQS nor to approve the redesignation of this area if the design value of a monitoring site in the area exceeds the NAAQS after proposal but prior to final approval of the redesignation. Preliminary 2016 data indicate that this area continues to attain the 2008 ozone NAAQS. As discussed in section IV.D.3. below, Ohio EPA has committed to continue monitoring ozone in this area to verify maintenance of the ozone standard.

    B. Has Ohio met all applicable requirements of section 110 and part D of the CAA for the Cincinnati-Hamilton area, and does the Ohio portion of the area have a fully approved SIP under section 110(k) of the CAA?

    As criteria for redesignation of an area from nonattainment to attainment of a NAAQS, the CAA requires EPA to determine that the state has met all applicable requirements under section 110 and part D of title I of the CAA (see section 107(d)(3)(E)(v) of the CAA) and that the state has a fully approved SIP under section 110(k) of the CAA (see section 107(d)(3)(E)(ii) of the CAA). EPA proposes to find that Ohio has a fully approved SIP under section 110(k) of the CAA. Additionally, EPA proposes to find that the Ohio SIP satisfies the criterion that it meet applicable SIP requirements, for purposes of redesignation, under section 110 and part D of title I of the CAA (requirements specific to nonattainment areas for the 2008 ozone NAAQS). In making these proposed determinations, EPA ascertained which CAA requirements are applicable to the Cincinnati-Hamilton area and the Ohio SIP and, if applicable, whether the required Ohio SIP elements are fully approved under section 110(k) and part D of the CAA. As discussed more fully below, SIPs must be fully approved only with respect to currently applicable requirements of the CAA.

    The September 4, 1992 Calcagni memorandum (see “Procedures for Processing Requests to Redesignate Areas to Attainment,” Memorandum from John Calcagni, Director, Air Quality Management Division, September 4, 1992) describes EPA's interpretation of section 107(d)(3)(E) of the CAA. Under this interpretation, a state and the area it wishes to redesignate must meet the relevant CAA requirements that are due prior to the state's submittal of a complete redesignation request for the area. See also the September 17, 1993, Michael Shapiro memorandum and 60 FR 12459, 12465-66 (March 7, 1995) (redesignation of Detroit-Ann Arbor, Michigan to attainment of the 1-hour ozone NAAQS). Applicable requirements of the CAA that come due subsequent to the state's submittal of a complete request remain applicable until a redesignation to attainment is approved, but are not required as a prerequisite to redesignation. See section 175A(c) of the CAA. Sierra Club v. EPA, 375 F.3d 537 (7th Cir. 2004). See also 68 FR 25424, 25427 (May 12, 2003) (redesignation of the St. Louis/East St. Louis area to attainment of the 1-hour ozone NAAQS).

    1. Ohio Has Met All Applicable Requirements of Section 110 and Part D of the CAA Applicable to the Ohio Portion of the Cincinnati-Hamilton Area for Purposes of Redesignation a. Section 110 General Requirements for Implementation Plans

    Section 110(a)(2) of the CAA delineates the general requirements for a SIP. Section 110(a)(2) provides that the SIP must have been adopted by the state after reasonable public notice and hearing, and that, among other things, it must: (1) Include enforceable emission limitations and other control measures, means or techniques necessary to meet the requirements of the CAA; (2) provide for establishment and operation of appropriate devices, methods, systems and procedures necessary to monitor ambient air quality; (3) provide for implementation of a source permit program to regulate the modification and construction of stationary sources within the areas covered by the plan; (4) include provisions for the implementation of part C prevention of significant deterioration (PSD) and part D new source review (NSR) permit programs; (5) include provisions for stationary source emission control measures, monitoring, and reporting; (6) include provisions for air quality modeling; and, (7) provide for public and local agency participation in planning and emission control rule development.

    Section 110(a)(2)(D) of the CAA requires SIPs to contain measures to prevent sources in a state from significantly contributing to air quality problems in another state. To implement this provision, EPA has required certain states to establish programs to address transport of certain air pollutants, e.g., NOX SIP call.4 However, like many of the 110(a)(2) requirements, the section 110(a)(2)(D) SIP requirements are not linked with a particular area's ozone designation and classification. EPA concludes that the SIP requirements linked with the area's ozone designation and classification are the relevant measures to evaluate when reviewing a redesignation request for the area. The section 110(a)(2)(D) requirements, where applicable, continue to apply to a state regardless of the designation of any one particular area within the state. Thus, we believe these requirements are not applicable requirements for purposes of redesignation. See 65 FR 37890 (June 15, 2000), 66 FR 50399 (October 19, 2001), 68 FR 25418, 25426-27 (May 13, 2003).

    4 On October 27, 1992 (63 FR 57356), EPA issued a NOX SIP call requiring the District of Columbia and 22 states to reduce emissions of NOX in order to reduce the transport of ozone and ozone precursors. In compliance with EPA's NOX SIP call, Ohio developed rules governing the control of NOX emissions from Electric Generating Units (EGUs), major non-EGU industrial boilers and turbines, and major cement kilns. EPA approved Ohio's rules as fulfilling Phase I of the NOX SIP Call on August 5, 2003 (68 FR 46089) and June 27, 2005 (70 FR 36845), and as meeting Phase II of the NOX SIP Call on February 4, 2008 (73 FR 6427).

    In addition, EPA believes that other section 110 elements that are neither connected with nonattainment plan submissions nor linked with an area's ozone attainment status are not applicable requirements for purposes of redesignation. The area will still be subject to these requirements after the area is redesignated to attainment of the 2008 ozone NAAQS. The section 110 and part D requirements which are linked with a particular area's designation and classification are the relevant measures to evaluate in reviewing a redesignation request. This approach is consistent with EPA's existing policy on applicability (i.e., for redesignations) of conformity and oxygenated fuels requirements, as well as with section 184 ozone transport requirements. See Reading, Pennsylvania proposed and final rulemakings, 61 FR 53174-53176 (October 10, 1996) and 62 FR 24826 (May 7, 1997); Cleveland-Akron-Loraine, Ohio final rulemaking, 61 FR 20458 (May 7, 1996); and Tampa, Florida final rulemaking, 60 FR 62748 (December 7, 1995). See also the discussion of this issue in the Cincinnati, Ohio ozone redesignation (65 FR 37890, June 19, 2000), and the Pittsburgh, Pennsylvania ozone redesignation (66 FR 50399, October 19, 2001).

    We have reviewed Ohio's SIP and have concluded that it meets the general SIP requirements under section 110 of the CAA, to the extent those requirements are applicable for purposes of redesignation. On October 16, 2014 (79 FR 62019), EPA approved elements of the SIP submitted by Ohio to meet the requirements of section 110 for the 2008 ozone standard. The requirements of section 110(a)(2), however, are statewide requirements that are not linked to the 8-hour ozone nonattainment status of the Cincinnati-Hamilton area. Therefore, EPA concludes that these infrastructure requirements are not applicable requirements for purposes of review of the state's 8-hour ozone redesignation request.

    b. Part D Requirements

    Section 172(c) of the CAA sets forth the basic requirements of air quality plans for states with nonattainment areas that are required to submit them pursuant to section 172(b). Subpart 2 of part D, which includes section 182 of the CAA, establishes specific requirements for ozone nonattainment areas depending on the areas' nonattainment classifications.

    The Cincinnati-Hamilton area was classified as marginal under subpart 2 for the 2008 ozone NAAQS. As such, the area is subject to the subpart 1 requirements contained in section 172(c) and section 176. Similarly, the area is subject to the subpart 2 requirements contained in section 182(a) (marginal nonattainment area requirements). A thorough discussion of the requirements contained in section 172(c) and 182 can be found in the General Preamble for Implementation of Title I (57 FR 13498).

    i. Subpart 1 Section 172 Requirements

    As provided in subpart 2, for marginal ozone nonattainment areas such as the Cincinnati-Hamilton area, the specific requirements of section 182(a) apply in lieu of the attainment planning requirements that would otherwise apply under section 172(c), including the attainment demonstration and reasonably available control measures (RACM) under section 172(c)(1), reasonable further progress (RFP) under section 172(c)(2), and contingency measures under section 172(c)(9). 42 U.S.C. 7511a(a).

    Section 172(c)(3) requires submission and approval of a comprehensive, accurate and current inventory of actual emissions. This requirement is superseded by the inventory requirement in section 182(a)(1) discussed below.

    Section 172(c)(4) requires the identification and quantification of allowable emissions for major new and modified stationary sources in an area, and section 172(c)(5) requires source permits for the construction and operation of new and modified major stationary sources anywhere in the nonattainment area. EPA approved Ohio's NSR program on January 10, 2003 (68 FR 1366) and February 25, 2010 (75 FR 8496). Nonetheless, EPA has determined that, since PSD requirements will apply after redesignation, areas being redesignated need not comply with the requirement that a NSR program be approved prior to redesignation, provided that the area demonstrates maintenance of the NAAQS without part D NSR. A more detailed rationale for this view is described in a memorandum from Mary Nichols, Assistant Administrator for Air and Radiation, dated October 14, 1994, entitled, “Part D New Source Review Requirements for Areas Requesting Redesignation to Attainment.” Ohio has demonstrated that the Cincinnati-Hamilton area will be able to maintain the standard without part D NSR in effect; therefore, EPA concludes that the state need not have a fully approved part D NSR program prior to approval of the redesignation request. See rulemakings for Detroit, Michigan (60 FR 12467-12468, March 7, 1995); Cleveland-Akron-Lorain, Ohio (61 FR 20458, 20469-20470, May 7, 1996); Louisville, Kentucky (66 FR 53665, October 23, 2001); and Grand Rapids, Michigan (61 FR 31834-31837, June 21, 1996). Ohio's PSD program will become effective in the Cincinnati-Hamilton area upon redesignation to attainment. EPA approved Ohio's PSD program on January 22, 2003 (68 FR 2909) and February 25, 2010 (75 FR 8496).

    Section 172(c)(6) requires the SIP to contain control measures necessary to provide for attainment of the NAAQS. Because attainment has been reached, no additional measures are needed to provide for attainment.

    Section 172(c)(7) requires the SIP to meet the applicable provisions of section 110(a)(2). As noted above, we believe the Ohio SIP meets the requirements of section 110(a)(2) for purposes of redesignation.

    ii. Section 176 Conformity Requirements

    Section 176(c) of the CAA requires states to establish criteria and procedures to ensure that Federally supported or funded projects conform to the air quality planning goals in the applicable SIP. The requirement to determine conformity applies to transportation plans, programs and projects that are developed, funded or approved under title 23 of the United States Code (U.S.C.) and the Federal Transit Act (transportation conformity) as well as to all other Federally supported or funded projects (general conformity). State transportation conformity SIP revisions must be consistent with Federal conformity regulations relating to consultation, enforcement and enforceability that EPA promulgated pursuant to its authority under the CAA.

    EPA interprets the conformity SIP requirements 5 as not applying for purposes of evaluating a redesignation request under section 107(d) because state conformity rules are still required after redesignation and Federal conformity rules apply where state conformity rules have not been approved. See Wall v. EPA, 265 F.3d 426 (6th Cir. 2001) (upholding this interpretation); see also 60 FR 62748 (December 7, 1995) (redesignation of Tampa, Florida). Nonetheless, Ohio has an approved conformity SIP for the Cincinnati-Hamilton area. See 80 FR 11133 (March 2, 2015).

    5 CAA section 176(c)(4)(E) requires states to submit revisions to their SIPs to reflect certain Federal criteria and procedures for determining transportation conformity. Transportation conformity SIPs are different from SIPs requiring the development of Motor Vehicle Emission Budgets (MVEBs), such as control strategy SIPs and maintenance plans.

    iii. Section 182(a) Requirements

    Section 182(a)(1) requires states to submit a comprehensive, accurate, and current inventory of actual emissions from sources of VOC and NOX emitted within the boundaries of the ozone nonattainment area. Ohio EPA submitted a 2008 base year emissions inventory for the Cincinnati-Hamilton area on July 18, 2014. EPA approved this emissions inventory as a revision to the Ohio SIP on March 10, 2016 (81 FR 12591).

    Under section 182(a)(2)(A), states with ozone nonattainment areas that were designated prior to the enactment of the 1990 CAA amendments were required to submit, within six months of classification, all rules and corrections to existing VOC reasonably available control technology (RACT) rules that were required under section 172(b)(3) prior to the 1990 CAA amendments. The Cincinnati-Hamilton area is not subject to the section 182(a)(2) RACT “fix up” requirement for the 2008 ozone NAAQS because it was designated as nonattainment for this standard after the enactment of the 1990 CAA amendments and because Ohio complied with this requirement for the Cincinnati-Hamilton area under the prior 1-hour ozone NAAQS. See 59 FR 23796 (May 9, 1994) and 60 FR 15235 (March 23, 1995).

    Section 182(a)(2)(B) requires each state with a marginal ozone nonattainment area that implemented or was required to implement a vehicle inspection and maintenance (I/M) program prior to the 1990 CAA amendments to submit a SIP revision for an I/M program no less stringent than that required prior to the 1990 CAA amendments or already in the SIP at the time of the CAA amendments, whichever is more stringent. For the purposes of the 2008 ozone standard and the consideration of Ohio's redesignation request for this standard, the Cincinnati-Hamilton area is not subject to the section 182(a)(2)(B) requirement because the Cincinnati-Hamilton area was designated as nonattainment for the 2008 ozone standard after the enactment of the 1990 CAA amendments.

    Regarding the source permitting and offset requirements of section 182(a)(2)(C) and section 182(a)(4), Ohio currently has a fully-approved part D NSR program in place. EPA approved Ohio's PSD program on January 22, 2003 (68 FR 2909) and February 25, 2010 (75 FR 8496). As discussed above, Ohio has demonstrated that the Cincinnati-Hamilton area will be able to maintain the standard without part D NSR in effect; therefore, EPA concludes that the state need not have a fully approved part D NSR program prior to approval of the redesignation request. The state's PSD program will become effective in the Cincinnati-Hamilton area upon redesignation to attainment.

    Section 182(a)(3) requires states to submit periodic emission inventories and a revision to the SIP to require the owners or operators of stationary sources to annually submit emission statements documenting actual VOC and NOX emissions. As discussed below in section IV.D.4. of this proposed rule, Ohio will continue to update its emissions inventory at least once every three years. With regard to stationary source emission statements, EPA approved Ohio's emission statement rule on September 27, 2007 (72 FR 54844). On July 18, 2014, Ohio certified that this approved SIP regulation remains in place and remains enforceable for the 2008 ozone standard. EPA approved Ohio's certification on March 10, 2016 (81 FR 12591).

    The Ohio portion of the Cincinnati-Hamilton area has satisfied all applicable requirements for purposes of redesignation under section 110 and part D of title I of the CAA.

    2. The Ohio Portion of the Cincinnati-Hamilton Area Has a Fully Approved SIP for Purposes of Redesignation Under Section 110(k) of the CAA

    Ohio has adopted and submitted and EPA has approved at various times, provisions addressing the various SIP elements applicable for the ozone NAAQS. As discussed above, EPA has fully approved the Ohio SIP for the Cincinnati-Hamilton area under section 110(k) for all requirements applicable for purposes of redesignation under the 2008 ozone NAAQS. EPA may rely on prior SIP approvals in approving a redesignation request (see the Calcagni memorandum at page 3; Southwestern Pennsylvania Growth Alliance v. Browner, 144 F.3d 984, 989-990 (6th Cir. 1998); Wall v. EPA, 265 F.3d 426), plus any additional measures it may approve in conjunction with a redesignation action (see 68 FR 25426 (May 12, 2003) and citations therein).

    C. Are the air quality improvements in the Cincinnati-Hamilton area due to permanent and enforceable emission reductions?

    To support the redesignation of an area from nonattainment to attainment, section 107(d)(3)(E)(iii) of the CAA requires EPA to determine that the air quality improvement in the area is due to permanent and enforceable reductions in emissions resulting from the implementation of the SIP and applicable Federal air pollution control regulations and other permanent and other permanent and enforceable emission reductions. EPA has determined that Ohio has demonstrated that that the observed ozone air quality improvement in the Cincinnati-Hamilton area is due to permanent and enforceable reductions in VOC and NOX emissions resulting from state measures adopted into the SIP and Federal measures.

    In making this demonstration, the state has calculated the change in emissions between 2011 and 2014. The reduction in emissions and the corresponding improvement in air quality over this time period can be attributed to a number of regulatory control measures that the Cincinnati-Hamilton area and upwind areas have implemented in recent years. In addition, Ohio EPA provided an analysis to demonstrate the improvement in air quality was not due to unusually favorable meteorology. Based on the information summarized below, Ohio has adequately demonstrated that the improvement in air quality is due to permanent and enforceable emissions reductions.

    1. Permanent and Enforceable Emission Controls Implemented a. Regional NOX Controls

    Clean Air Interstate Rule (CAIR)/Cross State Air Pollution Rule (CSAPR). CAIR created regional cap-and-trade programs to reduce sulfur dioxide (SO2) and NOX emissions in 27 eastern states, including Ohio, that contributed to downwind nonattainment and maintenance of the 1997 8-hour ozone NAAQS and the 1997 fine particulate matter (PM2.5) NAAQS. See 70 FR 25162 (May 12, 2005). EPA approved Ohio's CAIR regulations into the Ohio SIP on February 1, 2008 (73 FR 6034), and September 25, 2009 (74 FR 48857). In 2008, the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) initially vacated CAIR, North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008), but ultimately remanded the rule to EPA without vacatur to preserve the environmental benefits provided by CAIR, North Carolina v. EPA, 550 F.3d 1176, 1178 (D.C. Cir. 2008). On August 8, 2011 (76 FR 48208), acting on the D.C. Circuit's remand, EPA promulgated CSAPR to replace CAIR and thus to address the interstate transport of emissions contributing to nonattainment and interfering with maintenance of the two air quality standards covered by CAIR as well as the 2006 PM2.5 NAAQS. CSAPR requires substantial reductions of SO2 and NOX emissions from electric generating units (EGUs) in 28 states in the Eastern United States.

    The D.C. Circuit's initial vacatur of CSAPR 6 was reversed by the United States Supreme Court on April 29, 2014, and the case was remanded to the D.C. Circuit to resolve remaining issues in accordance with the high court's ruling. EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584 (2014). On remand, the D.C. Circuit affirmed CSAPR in most respects, but invalidated without vacating some of the CSAPR budgets as to a number of states. EME Homer City Generation, L.P. v. EPA, 795 F.3d 118 (D.C. Cir. 2015). The remanded budgets include the Phase 2 NOX ozone season emissions budgets for Ohio. This litigation ultimately delayed implementation of CSAPR for three years, from January 1, 2012, when CSAPR's cap-and-trade programs were originally scheduled to replace the CAIR cap-and-trade programs, to January 1, 2015. Thus, the rule's Phase 2 budgets were originally promulgated to begin on January 1, 2014, and are now scheduled to begin on January 1, 2017. CSAPR will continue to operate under the existing emissions budgets until EPA addresses the D.C. Circuit's remand.

    6EME Homer City Generation, L.P. v. EPA, 696 F.3d 7, 38 (D.C. Cir. 2012).

    While the reduction in NOX emissions from the implementation of CSAPR will result in lower concentrations of transported ozone entering the Cincinnati-Hamilton area throughout the maintenance period, EPA is proposing to approve the redesignation of the Ohio portion of the Cincinnati-Hamilton area without relying on those measures within Ohio as having led to attainment of the 2008 ozone NAAQS or contributing to maintenance of that standard. In so doing, we are proposing to determine that the D.C. Circuit's invalidation of the Ohio CSAPR Phase 2 ozone season NOX emissions budget does not bar today's proposed redesignation.

    The improvement in ozone air quality in the Cincinnati-Hamilton area from 2011 (a year when the design value for the area was above the NAAQS) to 2014 (a year when the design value was below the NAAQS) is not due to CSAPR emissions reductions because, as noted above, CSAPR did not go into effect until January 1, 2015, after the area was already attaining the standard. As a general matter, because CSAPR is CAIR's replacement, emissions reductions associated with CAIR will for most areas be made permanent and enforceable through implementation of CSAPR. In addition, EPA has preliminarily determined that the vast majority of reductions in emissions in the Ohio portion of the Cincinnati-Hamilton area from 2011-2014 were due to permanent and enforceable reductions in mobile source VOC and NOX emissions.

    EPA found that from 2011 to 2014, onroad and nonroad mobile source emission reductions accounted for 80 percent of the total NOX reductions and 98 percent of the total VOC reductions in the Ohio portion of the Cincinnati-Hamilton area. As laid out in the State's maintenance demonstration, NOX and VOC emissions in the Ohio portion of the area are projected to continue their downward trend throughout the maintenance period, driven primarily by mobile source measures. From 2014 to 2030, Ohio projected that 75 percent of the NOX emission reductions and 96 percent of the VOC reductions in the Ohio portion of the area would be due to mobile source measures based on EPA-approved mobile source modeling. Even if no NOX reductions are assumed from point sources within the Ohio portion of the Cincinnati-Hamilton area, NOX emissions in 2030 are projected to be 30 percent less than in attainment year 2014.

    Given the particular facts and circumstances associated with the Cincinnati-Hamilton area, EPA does not believe that the D.C. Circuit's invalidation of Ohio's CSAPR Phase 2 NOX ozone season budget, which replaced CAIR's NOX ozone season budget, is a bar to EPA's redesignation of the Ohio portion of the Cincinnati-Hamilton area for the 2008 ozone NAAQS.

    b. Federal Emission Control Measures

    Reductions in VOC and NOX emissions have occurred statewide and in upwind areas as a result of Federal emission control measures, with additional emission reductions expected to occur in the future. Federal emission control measures include the following.

    Tier 2 Emission Standards for Vehicles and Gasoline Sulfur Standards. On February 10, 2000 (65 FR 6698), EPA promulgated Tier 2 motor vehicle emission standards and gasoline sulfur control requirements. These emission control requirements result in lower VOC and NOX emissions from new cars and light duty trucks, including sport utility vehicles. With respect to fuels, this rule required refiners and importers of gasoline to meet lower standards for sulfur in gasoline, which were phased in between 2004 and 2006. By 2006, refiners were required to meet a 30 ppm average sulfur level, with a maximum cap of 80 ppm. This reduction in fuel sulfur content ensures the effectiveness of low emission-control technologies. The Tier 2 tailpipe standards established in this rule were phased in for new vehicles between 2004 and 2009. EPA estimates that, when fully implemented, this rule will cut NOX and VOC emissions from light-duty vehicles and light-duty trucks by approximately 76 and 28 percent, respectively. NOX and VOC reductions from medium-duty passenger vehicles included as part of the Tier 2 vehicle program are estimated to be approximately 37,000 and 9,500 tons per year, respectively, when fully implemented. In addition, EPA estimates that beginning in 2007, a reduction of 30,000 tons per year of NOX will result from the benefits of sulfur control on heavy-duty gasoline vehicles. Some of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period, as older vehicles are replaced with newer, compliant model years.

    Tier 3 Emission Standards for Vehicles and Gasoline Sulfur Standards. On April 28, 2014 (79 FR 23414), EPA promulgated Tier 3 motor vehicle emission and fuel standards to reduces both tailpipe and evaporative emissions and to further reduce the sulfur content in fuels. The rule will be phased in between 2017 and 2025. Tier 3 sets new tailpipe standards for the sum of VOC and NOX and for particulate matter. The VOC and NOX tailpipe standards for light-duty vehicles represent approximately an 80% reduction from today's fleet average and a 70% reduction in per-vehicle particulate matter (PM) standards. Heavy-duty tailpipe standards represent about a 60% reduction in both fleet average VOC and NOX and per-vehicle PM standards. The evaporative emissions requirements in the rule will result in approximately a 50 percent reduction from current standards and apply to all light-duty and onroad gasoline-powered heavy-duty vehicles. Finally, the rule lowers the sulfur content of gasoline to an annual average of 10 ppm by January 2017. While these reductions did not aid the area in attaining the standard, emission reductions will occur during the maintenance period.

    Heavy-Duty Diesel Engine Rules. In July 2000, EPA issued a rule for on-highway heavy-duty diesel engines that includes standards limiting the sulfur content of diesel fuel. Emissions standards for NOX, VOC and PM were phased in between model years 2007 and 2010. In addition, the rule reduced the highway diesel fuel sulfur content to 15 parts per million by 2007, leading to additional reductions in combustion NOX and VOC emissions. EPA has estimated future year emission reductions due to implementation of this rule. Nationally, EPA estimated that 2015 NOX and VOC emissions would decrease by 1,260,000 tons and 54,000 tons, respectively. Nationally, EPA estimated that 2030 NOX and VOC emissions will decrease by 2,570,000 tons and 115,000 tons, respectively. As projected by these estimates and demonstrated in the on-road emission modeling for the Cincinnati-Hamilton area, some of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period, as older vehicles are replaced with newer, compliant model years.

    Nonroad Diesel Rule. On June 29, 2004 (69 FR 38958), EPA issued a rule adopting emissions standards for nonroad diesel engines and sulfur reductions in nonroad diesel fuel. This rule applies to diesel engines used primarily in construction, agricultural, and industrial applications. Emission standards are phased in for 2008 through 2015 model years based on engine size. The SO2 limits for nonroad diesel fuels were phased in from 2007 through 2012. EPA estimates that when fully implemented, compliance with this rule will cut NOX emissions from these nonroad diesel engines by approximately 90 percent. Some of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period.

    Nonroad Spark-Ignition Engines and Recreational Engine Standards. On November 8, 2002 (67 FR 68242), EPA adopted emission standards for large spark-ignition engines such as those used in forklifts and airport ground-service equipment; recreational vehicles such as off-highway motorcycles, all-terrain vehicles, and snowmobiles; and recreational marine diesel engines. These emission standards are phased in from model year 2004 through 2012. When fully implemented, EPA estimates an overall 72 percent reduction in VOC emissions from these engines and an 80 percent reduction in NOX emissions. Some of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period.

    National Emission Standards for Hazardous Air Pollutants (NESHAP) for Reciprocating Internal Combustion Engines. On March 3, 2010 (75 FR 9648), EPA issued a rule to reduce hazardous air pollutants from existing diesel powered stationary reciprocating internal combustion engines, also known as compression ignition engines. Amendments to this rule were finalized on January 14, 2013 (78 FR 6674). EPA estimated that when this rule is fully implemented in 2013, NOX and VOC emissions from these engines will be reduced by approximately 9,600 and 36,000 tons per year, respectively.

    Category 3 Marine Diesel Engine Standards. On April 30, 2010 (75 FR 22896) EPA issued emission standards for marine compression-ignition engines at or above 30 liters per cylinder. Tier 2 emission standards apply beginning in 2011, and are expected to result in a 15 to 25 percent reduction in NOX emissions from these engines. Final Tier 3 emission standards apply beginning in 2016 and are expected to result in approximately an 80 percent reduction in NOX from these engines. Some of these emission reductions occurred by the attainment years and additional emission reductions will occur throughout the maintenance period.

    c. Control Measures Specific to the Cincinnati-Hamilton Area

    Changes at several EGUs have resulted in reductions in NOX emissions. Tanner's Creek Generating Station in Dearborn County, Indiana permanently shut down in May 2015. Prior to the shutdown, NOX emissions had dropped from 15.08 tons per summer day (TPSD) in 2011 to 10.6 TPSD in 2014. The Walter C. Beckjord facility in Clermont County, Ohio permanently shut down in October of 2014. Prior to the shutdown, NOX emissions from EGUs in Clermont County dropped from 43.41 TPSD in 2011 to 41.17 TPSD in 2014, partly attributable to the Walter C. Beckjord facility. Finally, Unit 3 (163 megawatts) of the Miami Fort facility in Hamilton County, Ohio permanently shut down in June of 2015. Prior to shutdown, NOX emissions from EGUs in Hamilton County dropped from 17.72 TPSD in 2011 to 17.46 TPSD in 2014, partly attributable to reductions at unit 3 at Miami Fort.

    2. Emission Reductions

    Ohio is using a 2011 inventory as the nonattainment base year. Area, nonroad mobile, airport related emissions (AIR), and point source emissions (EGUs and non-EGUs) were collected from the Ozone NAAQS Implementation Modeling platform (2011v6.1). For 2011, this represents actual data reported to EPA by the states for the 2011 National Emissions inventory (NEI). Because emissions from state inventory databases, the NEI, and the Ozone NAAQS Emissions Modeling platform are annual totals, tons per summer day were derived according to EPA's guidance document “Temporal Allocation of Annual Emissions Using EMCH Temporal Profiles” dated April 29 2002, using the temporal allocation references accompanying the 2011v6.1 modeling inventory files. Onroad mobile source emissions were developed in conjunction with the Ohio-Kentucky-Indiana Regional Council of Governments (OKI) and were calculated from emission factors produced by EPA's 2014 Motor Vehicle Emission Simulator (MOVES) model and data extracted from the region's travel-demand model.

    For the attainment inventory, Ohio is using 2014, one of the years the Cincinnati-Hamilton area monitored attainment of the 2008 ozone standard. Because the 2014 NEI inventory was not available at the time Ohio EPA was compiling the redesignation request, the state was unable to use the 2014 NEI inventory directly. For area, nonroad mobile, and AIR, 2014 emissions were derived by interpolating between 2011 and 2018 Ozone NAAQS Emissions Modeling platform inventories. The point source sector for the 2014 inventory was developed using actual 2014 point source emissions reported to the state databases, which serve as the basis for the point source emissions reported to EPA for the NEI. Summer day inventories were derived for these sectors using the methodology described above. Finally, onroad mobile source emissions were developed in conjunction with OKI using the same methodology described above for the 2011 inventory.

    Using the inventories described above, Ohio's submittal documents changes in VOC and NOX emissions from 2011 to 2014 for the Cincinnati-Hamilton area. Emissions data are shown in Tables 2 through 7.

    Table 2—Cincinnati-Hamilton Area NOX Emissions for Nonattainment Year 2011 (TPSD) County Point AIR Nonroad Area Onroad Total Ohio: Butler 10.67 0.02 4.27 4.78 12.24 31.98 Clermont 43.55 0.00 2.27 1.14 7.52 54.48 Clinton 0.00 0.00 1.15 0.52 4.53 6.20 Hamilton 26.29 0.02 8.56 10.09 33.69 78.65 Warren 1.55 0.00 3.24 1.66 9.84 16.29 Indiana: Dearborn 17.79 0.00 0.53 0.47 1.03 19.82 Kentucky: Boone 7.19 2.03 1.06 0.43 6.90 17.61 Campbell 0.17 0.00 0.38 0.49 4.30 5.34 Kenton 0.01 0.00 0.77 1.02 6.53 8.33 Ohio Totals 82.06 0.04 19.49 18.19 67.82 187.60 Area Totals 107.22 2.07 22.23 20.60 86.58 238.70 Table 3—Cincinnati-Hamilton Area VOC Emissions for Nonattainment Year 2011 (TPSD) County Point AIR Nonroad Area Onroad Total Ohio: Butler 3.09 0.03 2.93 9.59 10.21 25.85 Clermont 0.49 0.01 1.95 5.41 6.27 14.13 Clinton 0.00 0.01 0.84 2.49 2.27 5.61 Hamilton 2.62 0.04 7.44 21.88 28.09 60.07 Warren 0.62 0.01 2.12 5.71 8.21 16.67 Indiana: Dearborn 4.28 0.00 0.42 1.75 0.86 7.31 Kentucky: Boone 1.73 0.42 1.49 2.66 3.30 9.60 Campbell 0.22 0.00 0.40 1.29 2.05 3.96 Kenton 0.51 0.00 0.62 2.51 3.12 6.76 Ohio Totals 6.82 0.10 15.28 45.08 55.05 122.33 Area Totals 13.56 0.52 18.21 53.29 64.38 149.96 Table 4—Cincinnati-Hamilton Area NOX Emissions for Attainment Year 2014 (TPSD) County Point AIR Nonroad Area Onroad Total Ohio: Butler 12.70 0.02 3.39 4.78 8.85 29.74 Clermont 41.20 0.00 1.81 1.14 5.44 49.59 Clinton 0.00 0.00 0.96 0.52 3.51 4.99 Hamilton 21.65 0.02 6.76 10.08 24.37 62.88 Warren 0.96 0.00 2.55 1.66 7.12 12.29 Indiana: Dearborn 11.74 0.00 0.44 0.47 0.74 13.39 Kentucky: Boone 7.37 2.07 0.88 0.43 5.46 16.21 Campbell 0.17 0.00 0.32 0.49 3.41 4.39 Kenton 0.01 0.00 0.64 1.02 5.17 6.84 Ohio Totals 76.51 0.04 15.47 18.18 49.29 159.49 Area Totals 95.80 2.11 17.75 20.59 64.07 200.32 Table 5—Cincinnati-Hamilton Area VOC Emissions for Attainment Year 2014 (TPSD) County Point AIR Nonroad Area Onroad Total Ohio: Butler 2.96 0.03 2.61 9.51 7.59 22.70 Clermont 0.63 0.01 1.73 5.36 4.66 12.39 Clinton 0.01 0.01 0.71 2.51 1.53 4.77 Hamilton 2.73 0.04 6.54 21.66 20.88 51.85 Warren 0.51 0.01 1.93 5.66 6.10 14.21 Indiana: Dearborn 5.54 0.00 0.36 1.75 0.64 8.29 Kentucky: Boone 1.73 0.42 1.30 2.56 2.53 8.54 Campbell 0.22 0.00 0.34 1.26 1.58 3.40 Kenton 0.51 0.00 0.55 2.43 2.39 5.88 Ohio Totals 6.84 0.10 13.52 44.70 40.76 105.92 Area Totals 14.84 0.52 16.07 52.70 47.90 132.03 Table 6—Change in NOX and VOC Emissions Between 2011 and 2014 for the Ohio Portion of the Cincinnati-Hamilton Area (TPSD) NOX 2011 2014 Net change
  • (2011-2014)
  • VOC 2011 2014 Net change
  • (2011-2014)
  • Point 82.06 76.51 −5.55 6.82 6.84 0.02 AIR 0.04 0.04 0.00 0.10 0.10 0.00 Nonroad 19.49 15.47 −4.02 15.28 13.52 −1.76 Area 18.19 18.18 −0.01 45.08 44.70 −0.38 Onroad 67.82 49.29 −18.53 55.05 40.76 −14.29 Total 187.60 159.49 −28.11 122.33 105.92 −16.41
    Table 7—Change in NOX and VOC Emissions Between 2011 and 2014 for the Entire Cincinnati-Hamilton Area (TPSD) NOX 2011 2014 Net change
  • (2011-2014)
  • VOC 2011 2014 Net change
  • (2011-2014)
  • Point 107.22 95.80 −11.42 13.56 14.84 1.28 AIR 2.07 2.11 0.04 0.52 0.52 0.00 Nonroad 22.23 17.75 −4.48 18.21 16.07 −2.14 Area 20.60 20.59 −0.01 53.29 52.70 −0.59 Onroad 86.58 64.07 −22.51 64.38 47.90 −16.48 Total 238.70 200.32 −38.38 149.96 132.03 −17.93

    Table 7 shows that the Cincinnati-Hamilton area reduced NOX and VOC emissions by 38.38 TPSD and 17.93 TPSD, respectively, between 2011 and 2014. As shown in Table 6, the Ohio portion of the Cincinnati-Hamilton area alone reduced NOX and VOC emissions by 28.11 TPSD and 16.41 TPSD, respectively, between 2011 and 2014.

    3. Meteorology

    To further support Ohio EPA's demonstration that the improvement in air quality between the year violations occurred and the year attainment was achieved, is due to permanent and enforceable emission reductions and not on favorable meteorology, an analysis was performed by the Lake Michigan Air Directors Consortium (LADCO). A classification and regression tree (CART) analysis was conducted with 2000 through 2014 data from three Cincinnati-Hamilton area ozone sites. The goal of the analysis was to determine the meteorological and air quality conditions associated with ozone episodes, and construct trends for the days identified as sharing similar meteorological conditions.

    Regression trees were developed for the three monitors to classify each summer day by its ozone concentration and associated meteorological conditions. By grouping days with similar meteorology, the influence of meteorological variability on the underlying trend in ozone concentrations is partially removed and the remaining trend is presumed to be due to trends in precursor emissions or other non-meteorological influences. The CART analysis showed the resulting trends in ozone concentrations declining over the period examined, supporting the conclusion that the improvement in air quality was not due to unusually favorable meteorology.

    D. Does Ohio have a fully approvable ozone maintenance plan for the Cincinnati-Hamilton area?

    As one of the criteria for redesignation to attainment section 107(d)(3)(E)(iv) of the CAA requires EPA to determine that the area has a fully approved maintenance plan pursuant to section 175A of the CAA. Section 175A of the CAA sets forth the elements of a maintenance plan for areas seeking redesignation from nonattainment to attainment. Under section 175A, the maintenance plan must demonstrate continued attainment of the NAAQS for at least 10 years after the Administrator approves a redesignation to attainment. Eight years after the redesignation, the state must submit a revised maintenance plan which demonstrates that attainment of the NAAQS will continue for an additional 10 years beyond the initial 10 year maintenance period. To address the possibility of future NAAQS violations, the maintenance plan must contain contingency measures, as EPA deems necessary, to assure prompt correction of the future NAAQS violation.

    The Calcagni Memorandum provides further guidance on the content of a maintenance plan, explaining that a maintenance plan should address five elements: (1) An attainment emission inventory; (2) a maintenance demonstration; (3) a commitment for continued air quality monitoring; (4) a process for verification of continued attainment; and (5) a contingency plan. In conjunction with its request to redesignate the Ohio portion of the Cincinnati-Hamilton area to attainment for the 2008 ozone standard, Ohio EPA submitted a SIP revision to provide for maintenance of the 2008 ozone standard through 2030, more than 10 years after the expected effective date of the redesignation to attainment. As is discussed more fully below, EPA proposes to find that Ohio's ozone maintenance plan includes the necessary components and is proposing to approve the maintenance plan as a revision of the Ohio SIP.

    1. Attainment Inventory

    EPA is proposing to determine that the Cincinnati-Hamilton area has attained the 2008 8-hour ozone NAAQS based on monitoring data for the period of 2013-2015. Ohio EPA selected 2014 as the attainment emissions inventory year to establish attainment emission levels for VOC and NOX. The attainment emissions inventory identifies the levels of emissions in the Cincinnati-Hamilton area that are sufficient to attain the 2008 ozone NAAQS. The derivation of the attainment year emissions was discussed above in section IV.C.2. of this proposed rule. The attainment level emissions, by source category, are summarized in Tables 4 and 5 above.

    2. Has the state documented maintenance of the ozone standard in the Cincinnati-Hamilton area?

    Ohio has demonstrated maintenance of the 2008 ozone standard through 2030 by assuring that current and future emissions of VOC and NOX for the Cincinnati-Hamilton area remain at or below attainment year emission levels. A maintenance demonstration need not be based on modeling. See Wall v. EPA, 265 F.3d 426 (6th Cir. 2001), Sierra Club v. EPA, 375 F.3d 537 (7th Cir. 2004). See also 66 FR 53094, 53099-53100 (October 19, 2001), 68 FR 25413, 25430-25432 (May 12, 2003).

    Ohio is using emissions inventories for the years 2020 and 2030 to demonstrate maintenance. 2030 is more than 10 years after the expected effective date of the redesignation to attainment and 2020 was selected to demonstrate that emissions are not expected to spike in the interim between the attainment year and the final maintenance year. The emissions inventories were developed as described below.

    To develop the 2020 and 2030 inventories, the state collected data from the Ozone NAAQS Emissions Modeling platform (2011v6.1) inventories for years 2011, 2018 and 2025. 2020 emissions for area, nonroad mobile, AIR, and point source sectors were derived by interpolating between 2018 and 2025. 2030 emissions for area, nonroad mobile, AIR, and point source sectors were derived using the TREND function in Excel. If the trend function resulted in a negative value the emissions were assumed not to change. Summer day inventories were derived for these sectors using the methodology described in section IV.C.2. above. Finally, onroad mobile source emissions were developed in conjunction with OKI using the same methodology described in section IV.C.2. above for the 2011 inventory. Emissions data are shown in Tables 8 through 13 below.

    Table 8—Cincinnati-Hamilton Area NOX Emissions for Interim Maintenance Year 2020 (TPSD) County Point AIR Nonroad Area Onroad Total Ohio: Butler 9.77 0.02 2.03 4.78 4.74 21.34 Clermont 31.32 0.00 1.11 1.14 2.91 36.48 Clinton 0.00 0.00 0.64 0.52 1.86 3.02 Hamilton 18.73 0.02 4.06 10.08 13.05 45.94 Warren 1.54 0.00 1.50 1.66 3.81 8.51 Indiana: Dearborn 2.96 0.00 0.30 0.48 0.40 4.14 Kentucky: Boone 7.86 2.29 0.60 0.43 2.41 13.59 Campbell 0.17 0.00 0.23 0.49 1.50 2.39 Kenton 0.01 0.00 0.43 1.02 2.28 3.74 Ohio Totals 61.36 0.04 9.34 18.18 26.37 115.29 Area Totals 72.36 2.33 10.90 20.60 32.96 139.15 Table 9—Cincinnati-Hamilton Area VOC Emissions for Interim Maintenance Year 2020 (TPSD) County Point AIR Nonroad Area Onroad Total Ohio: Butler 2.98 0.03 2.23 9.38 4.79 19.41 Clermont 0.51 0.01 1.43 5.28 2.94 10.17 Clinton 0.00 0.01 0.51 2.54 0.93 3.99 Hamilton 2.54 0.04 5.42 21.30 13.18 42.48 Warren 0.60 0.01 1.54 5.59 3.85 11.59 Indiana: Dearborn 4.06 0.00 0.29 1.77 0.40 6.52 Kentucky: Boone 1.73 0.45 1.03 2.41 1.38 7.00 Campbell 0.22 0.00 0.25 1.22 0.86 2.55 Kenton 0.49 0.00 0.47 2.31 1.30 4.57 Ohio Totals 6.63 0.10 11.13 44.09 25.69 87.64 Area Totals 13.13 0.55 13.17 51.80 29.63 108.28 Table 10—Cincinnati-Hamilton Area NOX Emissions for Maintenance Year 2030 (TPSD) County Point AIR Nonroad Area Onroad Total Ohio: Butler 9.83 0.00 1.16 4.79 2.44 18.22 Clermont 31.32 0.00 0.63 1.15 1.50 34.60 Clinton 0.00 0.00 0.29 0.53 1.28 2.10 Hamilton 18.75 0.00 2.59 10.10 6.71 38.15 Warren 1.54 0.00 0.78 1.67 1.96 5.95 Indiana: Dearborn 2.96 0.00 0.18 0.48 0.21 3.83 Kentucky: Boone 8.51 0.29 0.38 0.44 1.05 10.67 Campbell 0.17 0.00 0.15 0.49 0.65 1.46 Kenton 0.01 0.00 0.27 1.02 0.99 2.29 Ohio Totals 61.44 0.00 5.45 18.24 13.89 99.02 Area Totals 73.09 0.29 6.43 20.67 16.79 117.27 Table 11—Cincinnati-Hamilton Area VOC Emissions for Maintenance Year 2030 (TPSD) County Point AIR Nonroad Area Onroad Total Ohio: Butler 3.00 0.01 2.43 9.31 2.88 17.63 Clermont 0.64 0.00 1.46 5.20 1.77 9.07 Clinton 0.01 0.00 0.42 2.61 0.71 3.75 Hamilton 2.62 0.00 5.87 21.01 7.92 37.42 Warren 0.58 0.00 1.51 5.52 2.32 9.93 Indiana: Dearborn 4.06 0.00 0.27 1.85 0.24 6.42 Kentucky: Boone 1.73 0.06 0.92 2.36 0.77 5.84 Campbell 0.21 0.00 0.22 1.19 0.48 2.10 Kenton 0.47 0.00 0.50 2.25 0.73 3.95 Ohio Totals 6.85 0.01 11.69 43.65 15.60 77.80 Area Totals 13.32 0.07 13.60 51.30 17.82 96.11 Table 12—Change in NOX and VOC Emissions Between 2014 and 2030 for the Ohio Portion of the Cincinnati-Hamilton Area (TPSD) NOX 2014 2020 2030 Net Change
  • (2014-2030)
  • VOC 2014 2020 2030 Net Change
  • (2014-2030)
  • Point 76.51 61.36 61.44 −15.07 6.84 6.63 6.85 0.01 AIR 0.04 0.04 0.00 −0.04 0.10 0.10 0.01 −0.09 Nonroad 15.47 9.34 5.45 −10.02 13.52 11.13 11.69 −1.83 Area 18.18 18.18 18.24 0.06 44.70 44.09 43.65 −1.05 Onroad 49.29 26.37 13.89 −35.40 40.76 25.69 15.60 −25.16 Total 159.49 115.29 99.02 −60.47 105.92 87.64 77.80 −28.12
    Table 13—Change in NOX and VOC Emissions Between 2014 and 2030 for the Entire Cincinnati-Hamilton Area (TPSD) NOX 2014 2020 2030 Net Change
  • (2014-2030)
  • VOC 2014 2020 2030 Net Change
  • (2014-2030)
  • Point 95.80 72.36 73.09 −22.71 14.84 13.13 13.32 −1.52 AIR 2.11 2.33 0.29 −1.82 0.52 0.55 0.07 −0.45 Nonroad 17.75 10.90 6.43 −11.32 16.07 13.17 13.60 −2.47 Area 20.59 20.60 20.67 0.08 52.70 51.80 51.30 −1.40 Onroad 64.07 32.96 16.79 −47.28 47.90 29.63 17.82 −30.08 Total 200.32 139.15 117.27 −83.05 132.03 108.28 96.11 −35.92

    In summary, the maintenance demonstration for the Cincinnati-Hamilton area shows maintenance of the 2008 ozone standard by providing emissions information to support the demonstration that future emissions of NOX and VOC will remain at or below 2014 emission levels when taking into account both future source growth and implementation of future controls. Table 13 shows NOX and VOC emissions in the Cincinnati-Hamilton area are projected to decrease by 83.05 TPSD and 35.92 TPSD, respectively, between 2014 and 2030. As shown in Table 12, NOX and VOC emissions in the Ohio portion of the Cincinnati-Hamilton area alone are projected to decrease by 60.47 TPSD and 28.12 TPSD, respectively, between 2014 and 2030.

    3. Continued Air Quality Monitoring

    Ohio EPA has committed to continue to operate the ozone monitors listed in Table 1 above. Ohio EPA has committed to consult with EPA prior to making changes to the existing monitoring network should changes become necessary in the future. Ohio remains obligated to meet monitoring requirements and continue to quality assure monitoring data in accordance with 40 CFR part 58, and to enter all data into the Air Quality System (AQS) in accordance with Federal guidelines.

    4. Verification of Continued Attainment

    The State of Ohio, has the legal authority to enforce and implement the requirements of the maintenance plan for the Ohio portion of the Cincinnati-Hamilton area. This includes the authority to adopt, implement, and enforce any subsequent emission control measures determined to be necessary to correct future ozone attainment problems.

    Verification of continued attainment is accomplished through operation of the ambient ozone monitoring network and the periodic update of the area's emissions inventory. Ohio EPA will continue to operate the current ozone monitors located in the Ohio portion of the Cincinnati-Hamilton area. There are no plans to discontinue operation, relocate, or otherwise change the existing ozone monitoring network other than through revisions in the network approved by the EPA.

    In addition, to track future levels of emissions, Ohio EPA will continue to develop and submit to EPA updated emission inventories for all source categories at least once every three years, consistent with the requirements of 40 CFR part 51, subpart A, and in 40 CFR 51.122. The Consolidated Emissions Reporting Rule (CERR) was promulgated by EPA on June 10, 2002 (67 FR 39602). The CERR was replaced by the Annual Emissions Reporting Requirements (AERR) on December 17, 2008 (73 FR 76539). The most recent triennial inventory for Ohio was compiled for 2014. Point source facilities covered by Ohio's emission statement rule, Ohio Administrative Code Chapter 3745-24, will continue to submit VOC and NOX emissions on an annual basis.

    5. What is the contingency plan for the Cincinnati-Hamilton area?

    Section 175A of the CAA requires that the state must adopt a maintenance plan, as a SIP revision, that includes such contingency measures as EPA deems necessary to assure that the state will promptly correct a violation of the NAAQS that occurs after redesignation of the area to attainment of the NAAQS. The maintenance plan must identify: The contingency measures to be considered and, if needed for maintenance, adopted and implemented; a schedule and procedure for adoption and implementation; and, a time limit for action by the state. The state should also identify specific indicators to be used to determine when the contingency measures need to be considered, adopted, and implemented. The maintenance plan must include a commitment that the state will implement all measures with respect to the control of the pollutant that were contained in the SIP before redesignation of the area to attainment in accordance with section 175A(d) of the CAA.

    As required by section 175A of the CAA, Ohio has adopted a contingency plan for the Cincinnati-Hamilton area to address possible future ozone air quality problems. The contingency plan adopted by Ohio has two levels of response, a warning level response and an action level response.

    In Ohio's plan, a warning level response will be triggered when an annual fourth high monitored value of 0.079 ppm or higher is monitored within the maintenance area. A warning level response will consist of Ohio EPA conducting a study to determine whether the ozone value indicates a trend toward higher ozone values or whether emissions appear to be increasing. The studies will evaluate whether the trend, if any, is likely to continue and, if so, the control measures necessary to reverse the trend. The studies will consider ease and timing of implementation as well as economic and social impacts. Implementation of necessary controls in response to a warning level response trigger will take place within 12 months from the conclusion of the most recent ozone season.

    In Ohio's plan, an action level response is triggered when a two-year average fourth high value of 0.076 ppm or greater is monitored within the maintenance area. A violation of the standard within the maintenance area also triggers an action level response. When an action level response is triggered, Ohio EPA, in conjunction with the metropolitan planning organization or regional council of governments, will determine what additional control measures are needed to assure future attainment of the ozone standard. Control measures selected will be adopted and implemented within 18 months from the close of the ozone season that prompted the action level. Ohio EPA may also consider if significant new regulations not currently included as part of the maintenance provisions will be implemented in a timely manner and would thus constitute an adequate contingency measure response.

    Ohio EPA included the following list of potential contingency measures in its maintenance plan:

    1. Implementation of an enhanced I/M program (E-Check) in Butler, Clermont, Hamilton and Warren Counties.

    2. Tighten or adopt VOC RACT on existing sources covered by EPA Control Technique Guidelines issued after the 1990 CAA.

    3. Apply VOC RACT to smaller existing sources.

    4. One or more transportation control measures sufficient to achieve at least half a percent reduction in actual area wide VOC emissions. Transportation measures will be selected from the following, based upon the factors listed above after consultation with affected local governments:

    a. Trip reduction programs, including, but not limited to, employer-based transportation management plans, area wide rideshare programs, work schedule changes, and telecommuting;

    b. traffic flow and transit improvements; and

    c. other new or innovative transportation measures not yet in widespread use that affected local governments deem appropriate.

    5. Alternative fuel and diesel retrofit programs for fleet vehicle operations.

    6. Require VOC or NOX emission offsets for new and modified major sources.

    7. Increase the ratio of emission offsets required for new sources.

    8. Require VOC or NOX controls on new minor sources (less than 100 tons).

    9. Adopt NOX RACT for existing combustion sources.

    EPA has concluded that the maintenance plan adequately addresses the five basic components of a maintenance plan: Attainment inventory, maintenance demonstration, monitoring network, verification of continued attainment, and a contingency plan. In addition, as required by section 175A(b) of the CAA, Ohio EPA has committed to submit to EPA an updated ozone maintenance plan eight years after redesignation of the Ohio portion of the Cincinnati-Hamilton area to cover an additional ten years beyond the initial 10 year maintenance period. Thus, EPA proposes to find that the maintenance plan SIP revision submitted by Ohio EPA for the Ohio portion of the Cincinnati-Hamilton area meets the requirements of section 175A of the CAA.

    V. Has the state adopted approvable motor vehicle emission budgets? A. Motor Vehicle Emission Budgets

    Under section 176(c) of the CAA, new transportation plans, programs, or projects that receive Federal funding or support, such as the construction of new highways, must “conform” to (i.e., be consistent with) the SIP. Conformity to the SIP means that transportation activities will not cause new air quality violations, worsen existing air quality problems, or delay timely attainment of the NAAQS or interim air quality milestones. Regulations at 40 CFR part 93 set forth EPA policy, criteria, and procedures for demonstrating and assuring conformity of transportation activities to a SIP. Transportation conformity is a requirement for nonattainment and maintenance areas. Maintenance areas are areas that were previously nonattainment for a particular NAAQS, but that have been redesignated to attainment with an approved maintenance plan for the NAAQS.

    Under the CAA, states are required to submit, at various times, control strategy SIPs for nonattainment areas and maintenance plans for areas seeking redesignations to attainment of the ozone standard and maintenance areas. See the SIP requirements for the 2008 ozone standard in EPA's March 6, 2015 implementation rule (80 FR 12264). These control strategy SIPs (including reasonable further progress plans and attainment plans) and maintenance plans must include MVEBs for criteria pollutants, including ozone, and their precursor pollutants (VOC and NOX for ozone) to address pollution from onroad transportation sources. The MVEBs are the portion of the total allowable emissions that are allocated to highway and transit vehicle use that, together with emissions from other sources in the area, will provide for attainment or maintenance. See 40 CFR 93.101.

    Under 40 CFR part 93, a MVEB for an area seeking a redesignation to attainment must be established, at minimum, for the last year of the maintenance plan. A state may adopt MVEBs for other years as well. The MVEB serves as a ceiling on emissions from an area's planned transportation system. The MVEB concept is further explained in the preamble to the November 24, 1993, Transportation Conformity Rule (58 FR 62188). The preamble also describes how to establish the MVEB in the SIP and how to revise the MVEB, if needed, subsequent to initially establishing a MVEB in the SIP.

    B. What is the status of EPA's adequacy determination for the proposed VOC and NOX MVEBs for the Cincinnati-Hamilton area?

    Whan reviewing submitted control strategy SIPs or maintenance plans containing MVEBs, EPA must affirmatively find that the MVEBs contained therein are adequate for use in determining transportation conformity. Once EPA affirmatively finds that the submitted MVEBs are adequate for transportation purposes, the MVEBs must be used by state and Federal agencies in determining whether proposed transportation projects conform to the SIP as required by section 176(c) of the CAA.

    EPA's substantive criteria for determining adequacy of a MVEB are set out in 40 CFR 93.118(e)(4). The process for determining adequacy consists of three basic steps: Public notification of a SIP submission; provision for a public comment period; and EPA's adequacy determination. This process for determining the adequacy of submitted MVEBs for transportation conformity purposes was initially outlined in EPA's May 14, 1999 guidance, “Conformity Guidance on Implementation of March 2, 1999, Conformity Court Decision.” EPA adopted regulations to codify the adequacy process in the Transportation Conformity Rule Amendments for the “New 8-Hour Ozone and PM2.5 National Ambient Air Quality Standards and Miscellaneous Revisions for Existing Areas; Transportation Conformity Rule Amendments—Response to Court Decision and Additional Rule Change,” on July 1, 2004 (69 FR 40004). Additional information on the adequacy process for transportation conformity purposes is available in the proposed rule titled, “Transportation Conformity Rule Amendments: Response to Court Decision and Additional Rule Changes,” 68 FR 38974, 38984 (June 30, 2003).

    As discussed earlier, Ohio's maintenance plan includes NOX and VOC MVEBs for the Cincinnati-Hamilton area for 2030 and 2020, the last year of the maintenance period and an interim year. EPA reviewed the VOC and NOX MVEBs through the adequacy process. Ohio's April 21, 2016, maintenance plan SIP submission, including the VOC and NOX MVEBs for the Ohio and Indiana portion of the Cincinnati-Hamilton area was open for public comment on EPA's adequacy Web site on July 22, 2016, found at: http://www.epa.gov/otaq/stateresources/transconf/currsips.htm. The EPA public comment period on adequacy of the 2020 and 2030 MVEBs for the Ohio and Indiana portion of the Cincinnati-Hamilton area closed on August 22, 2016. No comments on the submittal were received during the adequacy comment period. The submitted maintenance plan, which included the MVEBs, was endorsed by the Governor (or his or her designee) and was subject to a state public hearing. The MVEBS were developed as part of an interagency consultation process which includes Federal, state, and local agencies. The MVEBS were clearly identified and precisely quantified. These MVEBs, when considered together with all other emissions sources, are consistent with maintenance of the 2008 8-hour ozone standard.

    Table 14—MVEBs for the Ohio and Indiana Portion of the Cincinnati-Hamilton Area, TPSD Attainment year 2014 onroad
  • emissions
  • 2020
  • Estimated
  • onroad
  • emissions
  • 2020 Mobile safety margin allocation 2020 MVEBs 2030
  • Estimated
  • onroad
  • emissions
  • 2030 Mobile safety margin allocation 2030 MVEBs
    VOC 41.40 26.09 3.91 30.00 15.84 2.38 18.22 NOX 50.03 26.77 4.02 30.79 14.10 2.12 16.22

    As shown in Table 14, the 2020 and 2030 MVEBs exceed the estimated 2020 and 2030 onroad sector emissions. In an effort to accommodate future variations in travel demand models and vehicle miles traveled forecast, Ohio EPA allocated a portion of the safety margin (described further below) to the mobile sector. Ohio has demonstrated that the Cincinnati-Hamilton area can maintain the 2008 ozone NAAQS with mobile source emissions in the Ohio and Indiana portion of the area of 30.00 TPSD and 18.22 TPSD of VOC and 26.77 TPSD and 16.22 TPSD of NOX in 2020 and 2030, respectively, since despite partial allocation of the safety margin, emissions will remain under attainment year emission levels. EPA, has found adequate and is proposing to approve the MVEBs for use to determine transportation conformity in the Ohio and Indiana portion of the Cincinnati-Hamilton area, because EPA has determined that the area can maintain attainment of the 2008 ozone NAAQS for the relevant maintenance period with mobile source emissions at the levels of the MVEBs.

    C. What is a safety margin?

    A “safety margin” is the difference between the attainment level of emissions (from all sources) and the projected level of emissions (from all sources) in the maintenance plan. As noted in Table 12, the emissions in the Ohio portion of the Cincinnati-Hamilton area are projected to have safety margins of 60.47 TPSD for NOX and 28.12 TPSD for VOC in 2030 (the difference between the attainment year, 2014, emissions and the projected 2030 emissions for all sources in the Ohio portion of the Cincinnati-Hamilton area). Similarly, there is a safety margin of 44.20 TPSD for NOX and 18.28 TPSD for VOC in 2020. Even if emissions reached the full level of the safety margin, the counties would still demonstrate maintenance since emission levels would equal those in the attainment year.

    As shown in Table 14 above, Ohio is allocating a portion of that safety margin to the mobile source sector. Specifically, in 2020, Ohio is allocating 3.91 TPSD and 4.02 TPSD of the VOC and NOX safety margins, respectively. In 2030, Ohio is allocating 2.38 TPSD and 2.12 TPSD of the VOC and NOX safety margins, respectively. Ohio EPA is not requesting allocation to the MVEBs of the entire available safety margins reflected in the demonstration of maintenance. In fact, the amount allocated to the MVEBs represents only a small portion of the 2020 and 2030 safety margins. Therefore, even though the State is requesting MVEBs that exceed the projected onroad mobile source emissions for 2020 and 2030 contained in the demonstration of maintenance, the increase in onroad mobile source emissions that can be considered for transportation conformity purposes is well within the safety margins of the ozone maintenance demonstration. Further, once allocated to mobile sources, these safety margins will not be available for use by other sources.

    VI. Proposed Actions

    EPA is proposing to determine that the Cincinnati-Hamilton nonattainment is attaining the 2008 ozone standard, based on quality-assured and certified monitoring data for 2013-2015 and that the Ohio portion of this area has met the requirements for redesignation under section 107(d)(3)(E) of the CAA. EPA is thus proposing to approve Ohio EPA's request to change the legal designation of the Ohio portion of the Cincinnati-Hamilton area from nonattainment to attainment for the 2008 ozone standard. EPA is also proposing to approve, as a revision to the Ohio SIP, the state's maintenance plan for the area. The maintenance plan is designed to keep the Cincinnati-Hamilton area in attainment of the 2008 ozone NAAQS through 2030. Finally, EPA finds adequate and is proposing to approve the newly-established 2020 and 2030 MVEBs for the Indiana and Ohio portion of the Cincinnati-Hamilton area.

    VII. Statutory and Executive Order Reviews

    Under the CAA, redesignation of an area to attainment and the accompanying approval of a maintenance plan under section 107(d)(3)(E) are actions that affect the status of a geographical area and do not impose any additional regulatory requirements on sources beyond those imposed by state law. A redesignation to attainment does not in and of itself create any new requirements, but rather results in the applicability of requirements contained in the CAA for areas that have been redesignated to attainment. Moreover, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

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

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

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

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

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

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

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

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

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

    In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because redesignation is an action that affects the status of a geographical area and does not impose any new regulatory requirements on tribes, impact any existing sources of air pollution on tribal lands, nor impair the maintenance of ozone national ambient air quality standards in tribal lands.

    List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Oxides of nitrogen, Ozone, Volatile organic compounds.

    Dated: September 19, 2016. Robert A. Kaplan, Acting Regional Administrator, Region 5.
    [FR Doc. 2016-23301 Filed 9-27-16; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 81 [EPA-R05-OAR-2016-0277; FRL-9953-09-Region 5] Reclassification of the Sheboygan, Wisconsin Area To Moderate Nonattainment for the 2008 Ozone NAAQS AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is proposing to determine that the Sheboygan, Wisconsin area (Sheboygan County) has failed to attain the 2008 ozone National Ambient Air Quality Standards (NAAQS) by the applicable attainment date of July