Federal Register Vol. 81, No.202,

I. Background

In January 2013, the Bureau issued several final rules concerning mortgage markets in the United States (2013 Title XIV Final Rules), pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), Public Law 111-203, 124 Stat. 1376 (2010). Two of these rules were (1) the Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act (Regulation X) (2013 RESPA Servicing Final Rule); 1 and (2) the Mortgage Servicing Rules Under the Truth in Lending Act (Regulation Z) (2013 TILA Servicing Final Rule).2

The Bureau clarified and revised those rules through notice and comment rulemaking during the summer and fall of 2013 in the (1) Amendments to the 2013 Mortgage Rules under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z) (July 2013 Mortgage Final Rule) 3 and (2) Amendments to the 2013 Mortgage Rules under the Equal Credit Opportunity Act (Regulation B), Real Estate Settlement Procedures Act (Regulation X), and the Truth in Lending Act (Regulation Z) (September 2013 Mortgage Final Rule).4 In October 2013, the Bureau clarified compliance requirements in relation to successors in interest, early intervention requirements, bankruptcy law, and the Fair Debt Collection Practices Act (FDCPA) 5 through an Interim Final Rule (IFR) 6 and a contemporaneous compliance bulletin (October 2013 Servicing Bulletin).7 Among other things, the IFR provisionally exempted servicers from the early intervention requirements when a borrower has properly invoked the FDCPA's cease communication protections and indicated that the Bureau expected to explore the potential utility and application of such requirements in comparison to the FDCPA protections in a broader debt collection rulemaking.8 In October 2014, the Bureau added an alternative definition of small servicer in the Amendments to the 2013 Mortgage Rules under the Truth in Lending Act (Regulation Z).9 The purpose of each of these updates was to address important questions raised by industry, consumer advocacy groups, and other stakeholders.

On December 15, 2014, the Bureau published for notice and comment a proposed rule to amend Regulations X and Z.10 Among other things, the Bureau proposed three sets of rules relating to successors in interest. First, the Bureau proposed rules to define successors in interest for purposes of Regulation X's subpart C and Regulation Z as those persons who acquired an ownership interest in the property securing a mortgage loan in a transfer protected from due-on-sale enforcement by the Garn-St Germain Depository Institutions Act of 1982. Second, the Bureau proposed rules relating to how a mortgage servicer confirms a successor in interest's identity and ownership interest in the property. Third, the Bureau proposed to apply specified mortgage servicing rules in Regulations X and Z to successors in interest whose identity and ownership interest in the property have been confirmed by the servicer. The Bureau proposed these changes to address the significant problems that successors in interest continue to encounter with respect to the servicing of mortgage loans secured by their property—such as lack of access to information about the mortgage loan—which can lead to unnecessary foreclosures.

The Bureau also proposed to maintain the IFR's exemption from the live contact requirements of § 1024.39(a) with regard to a mortgage loan for which a borrower has invoked the cease communication protections of FDCPA section 805(c), for a servicer subject to the FDCPA with respect to that loan, while partially eliminating the exemption from the written early intervention notice requirements of § 1024.39(b) to require that a servicer provide a modified written notice to the borrower, if loss mitigation options are available. In addition to the information set forth in § 1024.39(b)(2), the proposal would have required that the modified written early intervention notice include a statement that the servicer may or intends to invoke its specified remedy of foreclosure.

Concurrent with issuing this interpretive rule, the Bureau is finalizing the proposed changes described above, with certain adjustments in the Amendments to the 2013 Mortgage Rules under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z) (2016 Servicing Final Rule).11 Among other things, the 2016 Servicing Final Rule includes the proposed three sets of rule changes relating to successors in interest, with modifications to address concerns raised in comments the Bureau received. First, the 2016 Servicing Final Rule adds definitions of successor in interest to Regulations X and Z that are modeled on the categories of transferees that are protected from due-on-sale enforcement by the Garn-St Germain Depository Institutions Act of 1982.12 Consistent with the proposal, successors in interest, as defined in the 2016 Servicing Final Rule, will not necessarily have assumed the mortgage loan obligation (i.e., legal liability for the mortgage debt) under State law or otherwise be legally obligated on the mortgage loan.

Second, the 2016 Servicing Final Rule includes new rules relating to how a mortgage servicer confirms a successor in interest's identity and ownership interest. It also defines confirmed successor in interest under subpart C of Regulation X and under Regulation Z as a successor in interest once a servicer has confirmed the successor in interest's identity and ownership interest in the relevant property.

Third, the 2016 Servicing Final Rule provides that a confirmed successor in interest is considered a borrower for purposes of Regulation X subpart C and § 1024.17 and a consumer for purposes of Regulation Z §§ 1026.20(c) through (e), 1026.36(c), 1026.39, and 1026.41 (collectively referred to herein as the Mortgage Servicing Rules). Under the 2016 Servicing Final Rule, confirmed successors in interest can obtain information about the mortgage loan through requests for information and notice of error procedures.13 Confirmed successors in interest are also generally entitled to receive notices required under the Mortgage Servicing Rules to the extent applicable, if the servicer is not providing the same specific notices to another borrower on the account.14 Applying these protections to confirmed successors in interest will further the purposes of RESPA and TILA by helping to prevent unnecessary foreclosures and other consumer harm by keeping confirmed successors in interest informed of the status of the mortgage loans on their property.

The 2016 Servicing Final Rule also finalizes the proposed partial exemption from the early intervention requirements with regard to a mortgage loan for which any borrower has invoked the cease communication right pursuant to FDCPA section 805(c), for a servicer subject to the FDCPA with respect to that loan, with modifications to address concerns raised in comments the Bureau received. Under the 2016 Servicing Final Rule, if a borrower has invoked the cease communication right pursuant to FDCPA section 805(c), a servicer subject to the FDCPA with respect to that loan is exempt from the live contact requirements with respect to that mortgage loan. If no loss mitigation option is available or while any borrower on the mortgage loan is a debtor in bankruptcy under title 11 of the United States Code, a servicer is also exempt from the written notice requirements with respect to that mortgage loan. If these conditions are not met, the servicer is required to provide a modified written early intervention notice pursuant to § 1024.39(d)(3), as described in more detail below.

While many mortgage servicers are not subject to the FDCPA, mortgage servicers that acquired a mortgage loan at the time that it was in default are subject to the FDCPA with respect to that mortgage loan. The Bureau is issuing this interpretive rule to clarify the interaction between certain provisions of the FDCPA and the Mortgage Servicing Rules. This interpretive rule constitutes an advisory opinion under FDCPA section 813(e) and provides a safe harbor from liability for actions done or omitted in good faith in conformity with the opinion, even if the opinion is rescinded or amended in whole or in part after the act or omission occurs, or is determined invalid by a judicial authority.15 The interpretations contained in this rule are included in relevant commentary to Regulations X and Z.16

In the 2016 Servicing Final Rule, the Bureau is extending certain protections of Regulations X and Z to cover confirmed successors in interest whether or not a successor has assumed the mortgage loan obligation.17 For example, servicers generally will have to comply with Regulation X's requirements for loss mitigation and Regulation Z's requirements for periodic statements with respect to confirmed successors in interest.18 This interpretive rule clarifies the interaction between the requirements in the 2016 Servicing Final Rule applicable to confirmed successors in interest and FDCPA section 805(b)'s general prohibition on communicating with third parties in connection with collection of a debt.

FDCPA section 805(b) generally prohibits debt collectors from communicating with third parties in connection with the collection of a debt in the absence of a court order or prior consumer consent given directly to the debt collector. FDCPA section 805(b) permits debt collectors to communicate with a person who is a consumer for purposes of section 805. FDCPA section 805(d), in turn, states that the term consumer for purposes of section 805 includes the consumer's spouse, parent (if the consumer is a minor), guardian, executor, or administrator.19 The use of the word “includes” indicates that section 805(d) is an exemplary rather than exhaustive list of the categories of individuals that are “consumers” for purposes of FDCPA section 805.

FDCPA section 805 thus recognizes the importance of permitting debt collectors to communicate with a narrow category of other persons who, by virtue of their relationship to the obligor or the debt in question, may need to communicate with the debt collector in connection with the collection of the debt.

In light of its expertise as the agency that Congress has charged with interpreting and implementing the FDCPA, RESPA, and TILA, the Bureau interprets the term consumer for purposes of FDCPA section 805 to include a confirmed successor in interest as that term is defined in Regulation X § 1024.31 and Regulation Z § 1026.2(a)(27)(ii). Given their relationship to the obligor, the mortgage loan, and the property securing the mortgage loan, and given the Bureau's extension of certain protections of Regulations X and Z to them, the Bureau concludes that confirmed successors in interest are—like the narrow categories of persons enumerated in FDCPA section 805(d)—the type of individuals with whom a servicer needs to communicate about the mortgage loan. As the Bureau notes in the 2016 Servicing Final Rule, a servicer's failure to provide information to a successor in interest about the status of a mortgage loan or to evaluate the successor in interest for available loss mitigation options could result in unnecessary foreclosure and loss of the successor in interest's ownership interest. Under this interpretive rule, servicers subject to the FDCPA with respect to a mortgage loan do not violate FDCPA section 805(b)'s prohibition on communicating with third parties by communicating with a confirmed successor in interest about a mortgage loan secured by property in which the confirmed successor in interest has an ownership interest, in compliance with the Mortgage Servicing Rules.20

Because this interpretive rule applies only to the use of the term consumer in section 805, it does not affect the definition of consumer under the remaining FDCPA provisions. Moreover, this interpretive rule applies only to confirmed successors in interest as defined in Regulation X § 1024.31 and Regulation Z § 1026.2(a)(27)(ii) to facilitate their access to information about the mortgage loan encumbering their property. It does not expand the definition of consumer for purposes of FDCPA section 805 beyond confirmed successors in interest as defined in Regulations X and Z. Furthermore, this interpretation does not relieve servicers that are debt collectors of their obligations under the FDCPA, including their obligations under FDCPA sections 806 through 808.21

As explained in the 2016 Servicing Final Rule, the Bureau is, in part, eliminating the exemption from the written early intervention requirements with regard to a mortgage loan for which any borrower has invoked the cease communication right under FDCPA section 805(c), for a servicer subject to the FDCPA with respect to that loan. A servicer that is a debt collector with respect to that loan is exempt from the written notice requirements with regard to that loan if no loss mitigation option is available 22 or while any borrower on the mortgage loan is a debtor in bankruptcy under title 11 of the United States Code. If these conditions are not met, the servicer is required to provide a modified written early intervention notice that, among other things, includes statements encouraging the borrower to contact the servicer, provides a brief description of examples of loss mitigation options that may be available from the servicer, and states that the servicer may or intends to invoke its specified remedy of foreclosure.23 The servicer is legally required to provide a delinquent borrower with the written notice not later than the 45th day of the borrower's delinquency. As a general matter, this written notice must be provided well before the servicer may initiate foreclosure: In most cases, the servicer is legally required to wait until a borrower's mortgage loan obligation is more than 120 days delinquent, after the written notice has been sent, to make the first notice or filing required by applicable law for any judicial or non-judicial foreclosure process. This written notice may not contain a request for or suggestion of payment, other than for purposes of loss mitigation, and the servicer is not required to provide it to the borrower more than once during any 180-day period.24

Section 805(c) of the FDCPA provides that, if a consumer refuses in writing to pay a debt or requests that a debt collector cease communicating with the consumer about the debt, the debt collector must discontinue communicating with the consumer, subject to enumerated exceptions. As relevant here, the prohibition does not apply where a debt collector communicates with a consumer who has invoked the cease communication right to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor 25 or, where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy.26

Because failure to provide the written early intervention notice required by § 1024.39(d)(3) is closely linked to a servicer's ability to invoke its specified remedy of foreclosure, the Bureau concludes that the notice falls within the exceptions in FDCPA sections 805(c)(2) and (3).

This interpretation is limited to the specific situation where a servicer that is a debt collector with respect to a mortgage loan is required by § 1024.39(d)(3) to provide a modified written early intervention notice to a borrower who has invoked the cease communication right under FDCPA section 805(c) with regard to that loan. It is a narrow safe harbor, based only upon the interplay between these two specific federal consumer protections—the early intervention requirements of § 1024.39 of Regulation X and the cease communication provision and statutory exceptions of section 805(c) of the FDCPA. All other provisions of the FDCPA, including the prohibitions contained in FDCPA sections 805 through 808, are unaffected by this interpretation, and a servicer that is a debt collector with respect to the particular mortgage loan remains liable to the extent that anything in the notice violates any other provision of the FDCPA.27

The Bureau concludes that, in the limited circumstances where a servicer is subject to the FDCPA with respect to a borrower's mortgage loan and the borrower has invoked the cease communication right pursuant to FDCPA section 805(c) with regard to that mortgage loan, and where the servicer complies with the requirements of the modified written early intervention notice under § 1024.39(d)(3) of Regulation X, the modified written early intervention notice required under § 1024.39(d)(3) is within the statutory exceptions of FDCPA section 805(c)(2) and (3) and thus does not violate section 805(c) with respect to the mortgage loan.

Even after a borrower has invoked the cease communication right under section 805(c) of the FDCPA, the borrower may contact the servicer to discuss or apply for loss mitigation. For instance, as noted above, § 1024.39(d)(3) requires servicers subject to the FDCPA with respect to a borrower's mortgage loan to provide a written early intervention notice to borrowers who have invoked the FDCPA's cease communication right with regard to that loan if any loss mitigation option is available and no borrower on the mortgage loan is a debtor in bankruptcy under title 11 of the United States Code. The written notice must include a statement encouraging the borrower to contact the servicer.28 The Bureau believes that, when borrowers respond to such a notice by contacting the servicer to discuss available loss mitigation options or otherwise initiate communication with the servicer concerning loss mitigation, such a borrower-initiated communication should not be understood as within the category of communication that borrowers generally preclude by invoking the cease communication right under FDCPA section 805(c). The Bureau therefore concludes that a borrower's invocation of the FDCPA's cease communication right with regard to a mortgage loan does not prevent a servicer that is a debt collector with respect to that mortgage loan from responding to borrower-initiated communications concerning loss mitigation.

As noted above, FDCPA section 805(c) empowers borrowers to direct debt collectors to cease contacting them with respect to a debt and frees borrowers from the burden of being subjected to unwanted communications regarding collection of a debt. Borrower-initiated conversations about loss mitigation options do not give rise to the burden of unwanted communications that FDCPA section 805(c) protects against. Rather, they are sought out by borrowers for this narrow purpose. The Bureau therefore concludes that a borrower's cease communication notification pursuant to FDCPA section 805(c) should ordinarily be understood to exclude borrower-initiated communications with a servicer concerning loss mitigation because the borrower has specifically requested the communication at issue to discuss available loss mitigation options. Accordingly, when a servicer that is a debt collector with respect to a mortgage loan responds to a borrower-initiated communication concerning loss mitigation after the borrower's invocation of FDCPA section 805(c)'s cease communication protection with regard to that loan, the servicer does not violate FDCPA section 805(c) with respect to such communications as long as the servicer's response is limited to a discussion of any potentially available loss mitigation option. For example, a servicer may discuss with a borrower any available loss mitigation option that the owner or assignee of the borrower's mortgage loan offers, instructions on how the borrower can apply for loss mitigation, what documents and information the borrower would need to provide to complete a loss mitigation application, and the potential terms or details of a loan modification program, including the monthly payment and duration of the program. These borrower-initiated communications, although variable, are unlikely to be perceived as within the scope of the cease communication request given the borrower's initiation of communications concerning loss mitigation information.

This is the case even if the borrower provides a cease communication notification during the loss mitigation application and evaluation process under § 1024.41. The borrower usually should be understood to have excluded the loss mitigation application and evaluation process under § 1024.41 from the general request to cease communication, and therefore a servicer should continue to comply with the procedures under § 1024.41. Only if the borrower provides a communication to the servicer specifically withdrawing the request for loss mitigation does the cease communication prohibition apply to communicating about the specific loss mitigation action.29

The Bureau notes that this interpretation provides a safe harbor from FDCPA section 805(c) for servicers that are debt collectors with respect to a particular mortgage loan communicating with the borrower in connection with a borrower's initiation of communications concerning loss mitigation. Preceding a borrower's loss mitigation application and during the evaluation process, a servicer may respond to borrower inquiries about potentially available loss mitigation options and provide information regarding any available option. Similarly, if that borrower submits a loss mitigation application, the servicer's reasonable diligence obligations under § 1024.41(b)(1) require the servicer to request additional information from the borrower, including by contacting the borrower, and these communications by the servicer to complete a loss mitigation application do not fall within the cease communication prohibition. The servicer may also seek information that will be necessary to evaluate the borrower for loss mitigation, though the servicer may not seek a payment unrelated to the purpose of loss mitigation. Once the borrower's loss mitigation application is complete, a servicer's communications with a borrower in accordance with the procedures in § 1024.41 are not subject to liability under FDCPA section 805(c) because they arise from the borrower's application for loss mitigation.

The Bureau recognizes that, in order for a borrower to engage in meaningful loss mitigation discussions with a servicer, the servicer may discuss repayment options, the borrower's ability to make a payment, and how much the borrower can afford to pay as a part of a loss mitigation option for which the servicer is considering the borrower. Furthermore, the Bureau understands that any offer for a loan modification or repayment plan is likely to include a specific payment amount the borrower must pay under the terms of the loss mitigation agreement. Such communications, as long as for the purpose of loss mitigation, are permissible because they should not be understood as within the scope of the cease communication request.

The Bureau emphasizes, however, that the cease communication prohibition continues to apply to a servicer's communications with a borrower about payment of the mortgage loan that are outside the scope of loss mitigation conversations. The Bureau's interpretation does not protect a servicer that is a debt collector with respect to a mortgage loan and is using borrower-initiated communications concerning loss mitigation as a pretext for debt collection in circumvention of a borrower's invoked cease communication right under FDCPA section 805(c) with regard to that loan. Seeking to collect a debt under the guise of a loss mitigation conversation is not exempt from liability under FDCPA section 805(c) under this interpretation. Thus, in subsequently communicating with a borrower concerning loss mitigation, the servicer is strictly prohibited from making a request for payment that is not immediately related to any specific loss mitigation option. Some examples of impermissible communications include initiating conversations with the borrower related to repayment of the debt that are not for the purposes of loss mitigation, demanding that the borrower make a payment, requesting that the borrower bring the account current or make a partial payment on the account, or attempting to collect the outstanding balance or arrearage, unless such communications are immediately related to a specific loss mitigation option.30 Additionally, all other provisions of the FDCPA, including the prohibitions contained in FDCPA sections 805 through 808, continue to apply.31

This rule articulates the Bureau's interpretation of the FDCPA. It is exempt from notice and comment rulemaking requirements under the Administrative Procedure Act pursuant to 5 U.S.C. 553(b). Because no notice of proposed rulemaking is required, the Regulatory Flexibility Act does not require an initial or final regulatory flexibility analysis.32 The Bureau has determined that this rule does not impose any new or revise any existing recordkeeping, reporting, or disclosure requirements on covered entities or members of the public that would be collections of information requiring OMB approval under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.

The final rule published on July 25, 2016, at 81 FR 48557, contained several errors, including inadvertent oversights and omissions that must be corrected in order to ensure consistency within the regulations and to avoid public uncertainty or confusion. First, a correction is needed because the amendment in instruction 5 on page 48579, column one, should have also applied to § 121.702(b)(1)(i), not just paragraph (a)(1). Specifically, the instruction should have read: “Amend §§ 121.702(a)(1)(i) and (b)(1)(i) by adding the words `an Indian tribe, ANC or NHO (or a wholly owned entity of such tribe, ANC or NHO),' before the words `or any combination of these.' ” The final rule amended the requirements for the Small Business Innovation Research (SBIR) Program to specifically recognize that a small business concern owned and controlled by an Indian tribe, Alaska Native Corporation (ANC) or a Native Hawaiian Organization (NHO) may be eligible to participate in the SBIR Program. Historically, the eligibility requirements for the SBIR Program have been consistent with those for SBA's Small Business Technology Transfer (STTR) Program. While the final rule amended the eligibility requirements for the SBIR Program in § 124.702(a)(1)(i), it inadvertently did not make the same corresponding change to the STTR Program. As such, this correction is necessary to add that same clarifying language to the STTR eligibility requirements as that added to the SBIR requirements.

Second, a correction is needed to delete § 124.110(g)(2). After this correction, a corresponding correction to the numbering also needs to occur that would eliminate paragraph (g)(1) as a separate paragraph and move the substance of paragraph (g)(1) to the end of the introductory text of paragraph (g). In response to public comment, SBA changed the way in which SBA requires an applicant concern to demonstrate the economic disadvantage status of a NHO. See § 124.110(c) (81 FR 48580-48581). Section 124.110(g)(2) had meaning only with respect to the way SBA previously required an applicant concern to demonstrate the economic disadvantage status of an NHO. SBA mistakenly did not remove § 124.110(g)(2) when it made the change to § 124.110(c). This correction is needed to remove the paragraph because it is now inconsistent with the July 25, 2016 final rule.

Third, a correction is needed to make a conforming change to § 124.112. The final rule eliminated the requirement from § 124.203 that an applicant must submit IRS Form 4506T in every case, and clarified that SBA may request additional documentation during the 8(a) application process when necessary. However, the final rule did not make the conforming change that the IRS Form 4506T is not needed in every case for an annual review as well, but, rather, may be requested on a case-by-case basis during an annual review by SBA.

Fourth, due to the change made to § 121.103(h), which eliminated the ability of a joint venture to be populated with individuals intended to perform contracts awarded to the joint venture, a conforming correction is needed to § 124.513(c), which references populated joint ventures. Specifically, § 124.513(c)(4) provided that in the case of a populated separate legal entity joint venture, 8(a) Participant(s) must receive profits from the joint venture commensurate with their ownership interests in the joint venture. Because SBA eliminated populated joint ventures, that provision is now superfluous and needs to be deleted.

Fifth, a correction is needed to amend an incorrect cross reference. The final rule revised § 126.615. That revised language referenced an exception contained in § 126.618(d). There is no paragraph (d). Therefore, the cross reference contained in § 126.615 is revised to read § 126.618.

Sixth, a correction is needed to correct a mistaken instruction. Instruction 2 on page 48578 purported to revise the last two sentences of the introductory text of 13 CFR 121.103(h). However, on May 31, 2016, SBA amended paragraph (h) by adding a new final sentence to the introductory text of paragraph (h). 81 FR 34243, 34258, instruction 2.c. Consequently, a sentence that SBA intended to remove remains in paragraph (h), while a sentence that SBA added on May 31, 2016 was revised. Thus, SBA is revising the introductory text of paragraph (h) to read as intended under both rules.

Accordingly, 13 CFR parts 121,124, and 126 are corrected by making the following correcting amendments:

SBA published a final rule in the Federal Register on May 31, 2016 (81 FR 34243). That rule amended § 125.6. On July 25, 2016, SBA published a separate final rule in the Federal Register (81 FR 48557) that purported to amend § 125.6 by removing “§ 125.15” from the introductory text of paragraph (b) and adding in its place “§ 125.18” and by removing “§ 125.15(b)(3)” from paragraph (b)(5) and adding in its place “§ 125.18(b)(3)”. These amendments could not be implemented as instructed because paragraph 125.6 (b) does not contain the text to be removed. These changes inadvertently failed to take into account the amendments made to § 125.6 by the final rule published on May 31, 2016. This correction removes the instruction to amend § 125.6 published on July 25, 2016, in 81 FR 48558.

In the FR Rule Doc. No. 2016-16399 in the issue of July 25, 2016, beginning on page 48557, make the following correction:

The full text of Emergency Restriction/Prohibition Order No. FAA-2016-9288 issued October 14, 2016 is as follows:

This Emergency Restriction/Prohibition Order (Order) is issued by the United States Department of Transportation (DOT) pursuant to 49 U.S.C. 5121(d) and will be effective at 12:00 p.m. (noon) Eastern Daylight Time (EDT), October 15, 2016. This Order is issued to all persons who transport or offer a Samsung Galaxy Note 7 device for air transportation in commerce within the United States. Individuals who own or possess a Samsung Galaxy Note 7 device may not transport the device on their person, in carry-on baggage, in checked baggage, nor offer the device for air cargo shipment. This prohibition includes all Samsung Galaxy Note 7 devices. Samsung Galaxy Note 7 devices are properly classified as lithium ion batteries contained in equipment, UN3481, Class 9 (49 CFR 172.101).

By this Order, DOT is:

* Prohibiting persons from transporting or offering for air transportation a Samsung Galaxy Note 7 device, by either carrying it on their person or in carry-on baggage when boarding an aircraft, placing the Samsung Galaxy Note 7 device in checked baggage, or shipping it via air as cargo;

* requiring air carriers to alert passengers to the prohibition against air transport of a Samsung Galaxy Note 7 device, in particular, immediately prior to boarding and to deny boarding to a passenger in possession of a Samsung Galaxy Note 7 device unless and until the passenger divests themselves and their baggage, including carry-on and checked, of the Samsung Galaxy Note 7 device;

* requiring that persons who inadvertently bring a Samsung Galaxy Note 7 device onto an aircraft immediately power off the device, do not use or charge the device while aboard the aircraft, protect the device from accidental activation, including disabling any features that may turn on the device, such as alarm clocks, and keep the device on their person and not in the overhead compartment, seat back pocket, nor in any carry-on baggage, for the duration of the flight; and

* requiring that if an air carrier flight crew member identifies that a passenger is in possession of a Samsung Galaxy Note 7 device while the aircraft is in flight, the crew member must instruct the passenger to power off the device, do not use or charge the device while aboard the aircraft, protect the device from accidental activation, including disabling any features that may turn on the device, such as alarm clocks, and keep the device on their person and not in the overhead compartment, seat back pocket, nor in any carry-on baggage, for the duration of the flight.

Upon information derived from the Samsung Galaxy Note 7 device recall issued September 15, 2016, recent incidents of a dangerous evolution of heat with Samsung Galaxy Note 7 replacement devices, Samsung's October 11, 2016 decision to stop manufacturing and selling Samsung Galaxy Note 7 devices due to the inability to identify the root cause of the incidents, and the U.S. Consumer Product Safety Commission (CPSC) recall of all Samsung Galaxy Note 7 device issued October 13, 2016, the Secretary of Transportation (Secretary) has found an unsafe condition and that an unsafe practice exists and constitutes an imminent hazard to the safety of air transportation. For more detailed information see “Background/Basis for Order” below.

(1) Shall not transport, nor offer for transportation, via air a Samsung Galaxy Note 7 device. By virtue of this Order and the CPSC recalls, the Samsung Galaxy Note 7 devices are now forbidden for transportation by air. For purposes of this Order, transporting or offering for transportation includes bringing a Samsung Galaxy Note 7 device aboard an aircraft on your person (e.g., in your pocket), bringing a Samsung Galaxy Note 7 device aboard an aircraft in carry-on baggage, offering a Samsung Galaxy Note 7 device in checked baggage, and offering a Samsung Galaxy Note 7 device for air cargo shipment (e.g., Federal Express or United Parcel Service).

(2) Shall ensure that a prohibited Samsung Galaxy Note 7 device inadvertently brought aboard an aircraft is immediately powered off, not used or charged while aboard the aircraft, protected from accidental activation, including disabling any features that may turn on the device, such as alarm clocks, and kept on their person and not in the overhead compartment, seat back pocket, nor in any carry-on baggage, for the duration of the flight.

By virtue of this Order and the CPSC recalls, the Samsung Galaxy Note 7 device is a forbidden hazardous material. In accordance with 49 CFR part 175, air carriers must not accept these devices for air transportation by knowingly permitting a passenger to board an aircraft with a Samsung Galaxy Note 7 device. Damaged or recalled lithium ion batteries, including those contained in equipment, are not permitted to be transported by air, and a Samsung Galaxy Note 7 device is categorized as “forbidden.” 49 CFR 173.21(c). Air carriers are required to make passengers aware of the prohibition against transport of Samsung Galaxy Note 7 devices aboard aircraft on their person, in carry-on or checked baggage, and as air cargo. Air carriers must also alert passengers to this prohibition immediately prior to boarding. If an air carrier representative identifies that a passenger is in possession of a Samsung Galaxy Note 7 device prior to boarding the aircraft, the air carrier must deny boarding to the passenger unless and until the passenger divests themselves, including on their person and in checked and carry-on baggage, of the Samsung Galaxy Note 7 device. If an air carrier flight crew member identifies that a passenger is in possession of a Samsung Galaxy Note 7 device while the aircraft is in flight, the crew member must instruct the passenger to power off the device, not use or charge the device while aboard the aircraft, protect the device from accidental activation, including disabling any features that may turn on the device, such as alarm clocks, and keep the device on their person and not in the overhead compartment, seat back pocket, nor in any carry-on baggage, for the duration of the flight.

This Order applies to all persons who transport Samsung Galaxy Note 7 devices, or offer them for transportation, by air in commerce (as defined by 49 U.S.C. 5102(1)) to, from, and within the United States, and their officers, directors, employees, subcontractors, and agents. This Order is effective at 12 p.m. (noon) Eastern Daylight Time (EDT), October 15, 2016, and remains in effect unless rescinded in writing by the Secretary, or until it otherwise expires by operation of regulation and/or law.

The Secretary has the authority to regulate the transportation of lithium ion batteries contained in equipment in commerce. 49 U.S.C. 5103(b). The Secretary has designated lithium ion batteries contained in equipment, UN 3481, as a hazardous material subject to the requirements of the HMR. 49 U.S.C. 5103(a); 49 CFR 172.101. Persons who offer for transportation, or transport, lithium ion batteries contained in equipment by air in commerce to, from, and within the United States are a “person,” as defined by 49 U.S.C. 5102(9), in addition to being a “person” under 1 U.S.C. 1 and a “person who offers” as defined by 49 CFR 171.8. “Commerce” is as defined by 49 U.S.C. 5102(1) and 49 CFR 171.8, and “transportation” or “transport” are as defined by 49 U.S.C. 5102(13) and 49 CFR 171.8. Accordingly, persons who transport or offer for transportation lithium ion batteries contained in equipment in commerce, including by air, are subject to the authority and jurisdiction of the Secretary including the authority to impose emergency restrictions, prohibitions, recalls, or out-of-service orders, without notice or an opportunity for hearing, to the extent necessary to abate the imminent hazard. 49 U.S.C. 5121(d).

An imminent hazard, as defined by 49 U.S.C. 5102(5), constitutes the existence of a condition relating to hazardous materials that presents a substantial likelihood that death, serious illness, severe personal injury, or a substantial endangerment to health, property, or the environment may occur before the reasonably foreseeable completion date of a formal proceeding begun to lessen the risk that death, illness, injury or endangerment may occur.

A Samsung Galaxy Note 7 device may cause an ignition or a dangerous evolution of heat or become a fuel source for fire. Samsung and CPSC acknowledged this fact with the September 15, 2016 recall, Samsung's October 11, 2016 announcement that it was suspending the manufacture and sale of the Samsung Galaxy Note 7 device, and the October 13, 2016 Samsung and CPSC expanded recall covering all Samsung Galaxy Note 7 devices. Furthermore, persons have experienced incidents of dangerous evolution of heat with the recalled Samsung Galaxy Note 7 devices. Just one fire incident poses a high risk of death, serious illness, severe personal injury, and danger to property and the environment. This risk is magnified when the fire or evolution of heat occurs aboard an aircraft during flight. Therefore, each offering and transportation of a Samsung Galaxy Note 7 device constitutes an imminent hazard.

On September 15, 2016, Samsung and the CPSC recalled certain Samsung Galaxy Note 7 devices sold prior to September 15, 2016. The recall was based on a finding that the lithium ion battery in a Samsung Galaxy Note 7 device “can overheat and catch fire.” Samsung offered either a refund or replacement Samsung Galaxy Note 7 device. Subsequently, there were reported incidents of the replacement Samsung Galaxy Note 7 devices overheating and/or catching fire. In a decision announced on October 11, 2016, Samsung stopped production and sale of Samsung Galaxy Note 7 devices. On October 13, 2016, Samsung and the CPSC expanded the recall to include all Samsung Galaxy Note 7 devices because they “can overheat and catch fire.”

In the wake of Samsung Galaxy Note 7 device incidents, the Federal Aviation Administration (FAA) and Pipeline and Hazardous Materials Safety Administration (PHMSA) have taken a number of steps to mitigate the safety risk of Samsung Galaxy Note 7 devices in air transportation. On September 8, 2016, the FAA issued a statement strongly advising passengers not to turn on or charge a Samsung Galaxy Note 7 device aboard an aircraft, nor stow a Samsung Galaxy Note 7 device in any checked baggage. On September 15, 2016, PHMSA issued a Safety Advisory Notice to inform the public about the risks associated with transporting damaged, defective, or recalled lithium batteries or portable electronic devices, including the Samsung Galaxy Note 7 device recalled by the CPSC. The Safety Advisory Notice required that persons who wish to carry the recalled Samsung Galaxy Note 7 device aboard an aircraft must (1) turn off the device; (2) disconnect the device from charging equipment; (3) disable all applications that could inadvertently activate the phone; protect the power switch to prevent its unintentional activation; and (4) keep the device in carry-on baggage or on your person.

On September 16, 2016, the FAA issued general guidance to airlines about the rules for carrying recalled or defective lithium batteries and lithium battery-powered devices aboard an aircraft. Specifically, the FAA noted that (1) U.S. hazardous materials regulations prohibit air cargo shipments of recalled or defective lithium batteries and lithium battery-powered devices; (2) passengers may not turn on or charge the devices when they carry them aboard the aircraft; (3) passengers must protect the devices from accidental activation; and (4) passengers must not pack them in checked baggage. On September 16, 2016, the FAA issued a Safety Alert for Operators (SAFO), recommending the following action by air operators: (1) Ensure that operator personnel responsible for cargo processing know and understand that damaged or recalled lithium batteries—including those installed in equipment and devices—are forbidden on aircraft as air cargo; and (2) ensure that operator personnel responsible for passenger processing and cabin safety know and understand that damaged or recalled lithium batteries—including those installed in devices—may be restricted from carriage or use on the aircraft. On October 10, 2016, the FAA issued updated guidance on the Samsung Galaxy Note 7 device, urging passengers aboard an aircraft to power down and not use, charge, or stow in checked baggage, any Samsung Galaxy Note 7 device.

Notwithstanding the above DOT actions, and in light of continued risks identified by Samsung and CPSC associated with Samsung Galaxy Note 7 devices, the further action described in this Order is necessary to eliminate unsafe conditions that create an imminent hazard to public health and safety and the environment.

To eliminate or abate the imminent hazard:

(1) Persons covered by this Order shall not transport, nor offer for transportation, via air any Samsung Galaxy Note 7 device.

(2) Air carriers are required to alert passengers to the prohibition against air transport of Samsung Galaxy Note 7 devices, in particular, immediately prior to boarding and to deny boarding to a passenger in possession of a Samsung Galaxy Note 7 device unless and until the passenger divests themselves and carry-on or checked baggage of the Samsung Galaxy Note 7 device.

(3) Persons covered by this Order who inadvertently bring a prohibited Samsung Galaxy Note 7 device aboard an aircraft must immediately power off the device, leave it powered off until no longer aboard the aircraft, not use or charge the device while aboard the aircraft, protect the device from accidental activation, including disabling any features that may turn on the device, such as alarm clocks, and keep the device on their person and not in the overhead compartment, seat back pocket, nor in any carry-on baggage, for the duration of the flight.

(4) When a flight crew member identifies that a passenger is in possession of a Samsung Galaxy Note 7 device while the aircraft is in flight, the crew member must instruct the passenger to power off the device, not use or charge the device while aboard the aircraft, protect the device from accidental activation, including disabling any features that may turn on the device, such as alarm clocks, and keep the device on their person and not in the overhead compartment, seat back pocket, nor in any carry-on baggage, for the duration of the flight.

This Order remains in effect until the Secretary determines that an imminent hazard no longer exists or a change in applicable statute or federal regulation occurs that supersedes the requirements of this Order, in which case the Secretary will issue a Rescission Order.

Any person failing to comply with this Order is subject to civil penalties of up to $179,933 for each violation for each day they are found to be in violation (49 U.S.C. 5123). A person violating this Order may also be subject to criminal prosecution, which may result in fines under title 18, imprisonment of up to ten years, or both (49 U.S.C. 5124).

Pursuant to 49 U.S.C. 5121(d)(3) and in accordance with section 554 of the Administrative Procedure Act (APA), 5 U.S.C. 500 et seq, a review of this action may be filed. Any petition seeking relief must be filed within 20 calendar days of the date of this order (49 U.S.C. 5121(d)(3)), and addressed to U.S. DOT Dockets, U.S. Department of Transportation, 1200 New Jersey Avenue SE., Room W12-140, Washington, DC 20590 (http://Regulations.gov). Furthermore, a petition for review must state the material facts at issue which the petitioner believes dispute the existence of an imminent hazard and must include all evidence and exhibits to be considered. The petition must also state the relief sought. Within 30 days from the date the petition for review is filed, the Secretary must approve or deny the relief in writing; or find that the imminent hazard continues to exist, and extend the original Emergency Order. In response to a petition for review, the Secretary may grant the requested relief in whole or in part; or may order other relief as justice may require (including the immediate assignment the case to the Office of Hearings for a formal hearing on the record).

If you have any questions concerning this Emergency Restriction/Prohibition Order, you should call PHMSA Hazardous Materials Information Center at 1-800-467-4922 or email at [email protected].

I. Statutory and Regulatory Background

The Bank Secrecy Act (“BSA”), Titles I and II of Public Law 91-508, as amended, codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959, and 31 U.S.C. 5311-5314 and 5316-5332, authorizes the Secretary of the Treasury (“Secretary”), among other things, to issue regulations requiring persons to keep records and file reports that are determined to have a high degree of usefulness in criminal, tax, regulatory, and counter-terrorism matters. The regulations implementing the BSA appear at 31 CFR Chapter X. The Secretary's authority to administer the BSA has been delegated to the Director of FinCEN.1

FinCEN has the authority, under 31 U.S.C. 5318(a)(7) and 31 CFR 1010.970, to make exceptions to the requirements of 31 CFR Chapter X. Such exceptions may be conditional or unconditional, may apply to particular persons or to classes of persons, and may apply to particular transactions or classes of transactions. Moreover, an exception is issuable or revocable in the sole discretion of FinCEN, based on the circumstances to which the exception applies.

This document, FinCEN Issuance 2016-1, provides exceptive relief under 31 U.S.C. 5318(a)(7) and 31 CFR 1010.970 to U.S. financial institutions covered by 31 CFR 1010.651 (FinCEN's rule imposing special measures against Burma under Section 311 of the USA PATRIOT Act). The exceptive relief permits such financial institutions to maintain correspondent accounts for Burmese banks under certain conditions. Specifically, FinCEN is providing the following exceptive relief:

The provisions of paragraphs (b)(1) and (2) of 31 CFR 1010.651 shall not apply to a correspondent account that is established, maintained, administered, or managed in the United States by a covered financial institution (as defined in 31 CFR 1010.651(a)(3)) for, or on behalf of, a Burmese banking institution, provided that such covered financial institution subjects the account to the due diligence obligations set forth under Section 312 of the USA PATRIOT Act and its implementing regulation 31 CFR 1010.610.

FinCEN is providing this exceptive relief given (i) FinCEN's assessment of Burma's progress to date in addressing issues identified in FinCEN's 2003 finding that Burma was a jurisdiction of primary money laundering concern; (ii) a high-level commitment by Burma to continue making progress in addressing those issues; and (iii) FinCEN's consideration of the ongoing effect on U.S. national security and foreign policy of U.S. financial institutions' compliance with 31 CFR 1010.651.

On November 18, 2003, FinCEN found Burma to be a jurisdiction of primary money laundering concern pursuant to 31 U.S.C. 5318A, as added by Section 311 of the USA PATRIOT Act of 2001 (Section 311).2 FinCEN based its finding on a number of factors, including (i) Burma's lack of an effective anti-money laundering/countering the financing of terrorism (AML/CFT) regime; (ii) high levels of public corruption in Burma; (iii) a recognition that Burma is a haven for international drug trafficking; and (iv) a lack of cooperation by Burma with U.S. law enforcement agencies in criminal matters. In connection with this finding, on April 12, 2004, FinCEN issued a final rule at 31 CFR 1010.651 prohibiting U.S. financial institutions from maintaining U.S. correspondent accounts for Burmese banking institutions.3

Since FinCEN promulgated the final rule in 2004, Burma has taken steps to improve its AML/CFT regime and to address the issues of corruption, drug trafficking, and law enforcement cooperation.

FinCEN's finding noted that “the Burmese anti-money laundering law is ineffective and unenforceable” and could not be regarded as effectively remedying a number of AML/CFT deficiencies, including that: (i) The Burmese Central Bank had no anti-money laundering regulations for financial institutions; (ii) banks licensed by Burma were not legally required to obtain or maintain identification information about their customers; (iii) such banks were also not required to maintain transaction records of customer accounts; and (iv) Burmese financial institutions were not required to report suspicious transactions.4

Since 2012, Burma has made significant progress in addressing the strategic AML/CFT deficiencies identified by the Financial Action Task Force (FATF),5 which resulted in its removal in June 2016 from the FATF's public list of countries with strategic AML/CFT deficiencies. In 2013, the Burmese Central Bank, which previously had been part of the Ministry of Finance, became independent. Through its 2014 Money Laundering Law and the Burmese Central Bank's 2015 customer due diligence directive, Burma now requires financial institutions to conduct due diligence and know the true identity of their customers including beneficial owners. Burma has criminalized money laundering and terrorist financing, and it has established a legal framework to implement targeted financial sanctions under United Nations Security Council Resolutions (UNSCR) 1267, 1373, and related resolutions. Further, Burma has established a financial intelligence unit and made progress in ensuring that it has operational and budgetary independence.

FinCEN's finding noted that, as of 2003, Transparency International—the leading international non-governmental organization devoted to curbing corruption—ranked Burma as “the fourth most corrupt jurisdiction out of 133 jurisdictions assessed worldwide.” 6 Burma has taken some significant steps to address public corruption. In 2012, Burma ratified the UN Convention against Corruption.7 Burma passed an Anti-Corruption Law in 2013 (and amended it in 2016), improving its ability to receive and investigate allegations of official corruption.

FinCEN's 2003 finding identified Burma as “a haven for international drug trafficking” and noted that Burma had failed to take any regulatory or enforcement action against financial institutions with well-known criminal links.8 Burma is in the process of restructuring and expanding its counternarcotic task forces and Burma has worked regionally on counternarcotics initiatives, including those coordinated through the United Nations Office on Drugs and Crime.

FinCEN noted in its 2003 finding that U.S. law enforcement indicated that they rarely gained access to bank-related information pursuant to investigations, and that they received no cooperation regarding counterfeiting investigations involving Burma.9

U.S. law enforcement indicates that cooperation with Burmese authorities has since improved. For example, in September 2014, the U.S. and Burmese governments signed a Letter of Agreement to enhance cooperation in the fight against illicit drugs and transnational crime, and to support the development of Burma's law enforcement capacity and promote the rule of law.

FinCEN is encouraged by Burma's progress thus far, but believes that Burma has not yet fully addressed the concerns articulated in the 2003 finding.

Although Burma has made a number of technical improvements to its AML/CFT regime, FinCEN remains concerned that Burma has not yet implemented its new reforms and has not displayed adequate effectiveness in mitigating the risks and threats of money laundering and terrorist financing. FinCEN also notes that a significant portion of financial activity in Burma relies upon informal money transfer systems, which remain largely unregulated and unsupervised.

FinCEN is also concerned that Burma has not sufficiently addressed the corruption issues identified in the 2003 finding. Burma's ranking on Transparency International's International Corruption Perceptions Index remains high. The U.S. State Department's 2016 International Narcotics Control Strategy Report on Burma notes that “corruption is endemic in both business and government. . . The rule of law remains weak, and Burma continues to face a significant risk of narcotics proceeds being laundered through commercial ventures.” 10

The United States also continues to recognize Burma as a haven for international drug trafficking. In September 2016, under the Foreign Relations Authorization Act, the President determined Burma to be a major illicit drug producing country or major drug-transit country.11 Further, Burma's cooperation with U.S. law enforcement, while improved since 2003, nonetheless remains nascent and largely untested.

As noted in the final rule, the Section 311 action was designed to encourage Burma to make necessary changes to its AML/CFT regime in order to address FinCEN's concerns. Burma has begun to address those concerns, but significant work remains. FinCEN welcomes Burma's recent commitment to work with FinCEN and other components of the U.S. Department of the Treasury, as well as with the U.S. government more broadly, in advancing its AML/CFT efforts. FinCEN has considered Burma's progress, its remaining deficiencies, and its commitment to address those deficiencies in deciding to issue this exceptive relief.

This exceptive relief also takes into account the effect of FinCEN's action on U.S. national security and foreign policy, as did the final rule.12 FinCEN's final rule contained an exemption at 31 CFR 1010.651(b)(3) that allowed U.S. financial institutions to maintain correspondent accounts for Burmese banks if such activity was licensed under authorities administered by the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC). Since 2012, OFAC has, via general licenses, authorized a broad range of financial activity with respect to Burma that would otherwise have been prohibited under the Section 311 rule. On October 7, 2016, the President terminated the national emergency with respect to Burma and revoked all Burma sanctions Executive orders, lifting the economic and financial sanctions on Burma administered by OFAC. As a result of the termination of the Burma sanctions program, the OFAC general licenses referenced above are no longer in effect. Therefore, the exemption incorporated into FinCEN's final rule at 31 CFR 1010.651(b)(3), which effectively permitted U.S. correspondent account activity with Burmese banks, no longer has any operational effect. FinCEN has taken this into consideration in deciding to issue this exceptive relief.

I. Background

On October 17, 2006 (71 FR 61144), the EPA strengthened the level of the 24-hour PM2.5 National Ambient Air Quality Standards (NAAQS), lowering the primary and secondary standards from 65 micrograms per cubic meter (µg/m3), the 1997 standard, to 35 µg/m3. On November 13, 2009 (74 FR 58688), the EPA designated three nonattainment areas in Utah for the 24-hour PM2.5 NAAQS of 35 µg/m3. These are the Salt Lake City, Utah; Provo, Utah; and Logan, Utah-Idaho nonattainment areas. The State of Utah has made a number of SIP submittals intended to address the requirements under part D of title I of the CAA for these PM2.5 nonattainment areas. Among those requirements are those in sections 172(c)(1) and 189(a)(1)(C) regarding RACM and reasonably available control technology (RACT).

On August 18, 2016 (81 FR 55156), the EPA proposed to approve and conditionally approve a number of RACM components in the PM2.5 Moderate area SIP submitted by the State. Our proposed notice provides details on the EPA's interpretation of the RACM requirements under part D and our evaluation of the State's submittals. The submittals dated May 9, 2013, May 20, 2014, September 8, 2015, and March 8, 2016, contained various revisions to the Utah DAR, Title R307—Environmental Quality, set of rules, most of which are applicable to the Utah SIP for PM2.5 nonattainment areas. The rules we are addressing in this final rule were provided by Utah in the four different submissions listed above, and these rules are R307-101-2, General Requirements: Definitions; R307-302, Solid Fuel Burning Devices in Box Elder, Cache, Davis, Salt Lake, Tooele, Utah, and Weber Counties; R307-312, Aggregate Processing Operations for PM2.5 Nonattainment Areas; and R307-328, Gasoline Transfer and Storage.

The EPA did not receive any comments on the proposed action.

For the reasons stated in our proposed notice, the EPA is finalizing approval of revisions to Administrative Rule R307-101-2, along with revisions in R307-300 Series; Requirements for Specific Locations (Within Nonattainment and Maintenance Areas), R307-312 and R307-328 for incorporation into the Utah SIP as submitted by the State of Utah on March 8, 2016. This final rule completes the February 25, 2016 (81 FR 9343) conditional approval for R307-101-2, R307-312, and R307-328 that had submission dates of February 2, 2012, May 9, 2013, and May 20, 2014. Additionally, we are finalizing approval of Utah's determination that R307-312 constitutes RACM for the Utah PM2.5 SIP that was conditionally approved on February 25, 2016 (81 FR 9343); however, we are not acting at this time to determine that Utah's PM2.5 attainment plan has met all requirements regarding RACM under subparts 1 and 4 of part D, title I of the Act. We intend to act separately on the remainder of Utah's PM2.5 attainment plan.

The EPA is finalizing the conditional approval of revisions for R307-302 found in the May 9, 2013, May 20, 2014, and September 8, 2015 submittals. Additionally, the EPA is finalizing the conditional approval of Utah's determination that R307-302 constitutes RACM for the Utah PM2.5 SIP for solid fuel burning devices. As stated earlier, we are not determining that Utah's PM2.5 attainment plan has met all requirements regarding RACM under subparts 1 and 4 of part D, title I of the Act. Under section 110(k)(4) of the Act, the EPA may approve a SIP revision based on a commitment by the state to adopt specific enforceable measures by a date certain, but not later than one year after the date of approval of the plan revision. On May 19, 2016, Utah submitted a commitment letter to adopt and submit specific revisions within one year of our final action on these submittals; specifically to add continuous controls that extend to startup, shutdown, and malfunction, by establishing a prohibition on fuel types that can't be burned in a solid fuel burning device at any time. Since we are finalizing our conditional approval, Utah must adopt and submit the specific revisions it has committed to within one year of our finalization. If Utah does not submit these revisions within one year, or if we find Utah's revisions to be incomplete, or we disapprove Utah's revisions, this conditional approval will convert to a disapproval. If any of these convert to a disapproval, that will constitute a disapproval of a required plan element under part D of title I of the Act, which starts an 18-month clock for sanctions, see CAA section 179(a)(2), and the two-year clock for a federal implementation plan (FIP) to address the disapproved plan element, see CAA section 110(c)(1)(B).

In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of Utah Division of Administrative Rules described in the amendments set forth to 40 CFR part 52 below. Therefore, these materials have been approved by the EPA for inclusion in the state implementation plan, have been incorporated by reference by the EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of the EPA's approval, and will be incorporated by reference by the Director of the Federal Register in the next update to the SIP compilation.1 The EPA has made, and will continue to make, these materials generally available through www.regulations.gov and/or at the EPA Region 8 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

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 of state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this final action:

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

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

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

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

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

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

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

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

• does not provide the 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 the 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. The 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 December 19, 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).)

40 CFR part 52 is amended as follows:

Throughout this document, “we,” “us” and “our” refer to the EPA.

On March 12, 2008, the EPA strengthened the primary and secondary eight-hour ozone NAAQS to 0.075 parts per million (ppm) (73 FR 16436).1 In accordance with section 107(d) of the CAA, the EPA must designate an area “nonattainment” if it is violating the NAAQS or if it is contributing to a violation of the NAAQS in a nearby area.

The EPA designated 18 areas in California as nonattainment for the 2008 ozone NAAQS on May 21, 2012, effective July 20, 2012 (77 FR 30088, codified at 40 CFR 81.305). The Calaveras County, Chico (Butte County), Imperial County, Kern County (Eastern Kern), Mariposa County, Nevada County (Western part), San Diego County, San Francisco Bay Area, San Luis Obispo (Eastern San Luis Obispo) and Tuscan Buttes NAAs were classified (by operation of law) as “Marginal” nonattainment. The EPA classified the Ventura County NAA as “Serious” nonattainment. The EPA classified the Los Angeles-San Bernardino Counties (West Mojave Desert), Riverside County (Coachella Valley) and Sacramento Metro NAAs as “Severe-15” nonattainment. The EPA classified the Los Angeles-South Coast Air Basin and San Joaquin Valley NAAs as “Extreme” nonattainment. The EPA designated the lands of the Pechanga Band of Luiseño Mission Indians of the Pechanga Reservation and the Morongo Band of Mission Indians in Southern California as separate NAAs and classified them as “Moderate” and Serious nonattainment, respectively.

The EPA proposed the 2008 ozone NAAQS SIP Requirements Rule (SRR) on June 6, 2013 (78 FR 34178) and finalized the SRR on March 6, 2015 (80 FR 12264, codified at 40 CFR part 51, subpart AA), effective April 6, 2015. The SRR established implementation requirements for the 2008 ozone NAAQS, including requirements for “base year” emission inventories under CAA section 182(a)(1).

On July 17, 2014, the California Air Resources Board (CARB) submitted a staff report, titled “8-Hour Ozone State Implementation Plan Emission Inventory Submittal, release date: May 23, 2014” (“submittal”) to the EPA. This submittal addresses base year inventory requirements for 15 of the 18 NAAs in California.2 On September 2, 2016, CARB submitted additional technical information titled “8-Hour Ozone State Implementation Plan Emission Inventory Supplemental Documentation (September 2016)” (herein referred to as “EI Supplemental Documentation”) to support the NAA emission inventories submitted on July 17, 2014.

On May 4, 2016 (81 FR 26697), the EPA issued one of three types of determinations for each NAA that was originally classified as Marginal for the 2008 ozone NAAQS. The EPA determined that four Marginal NAAs in California—Calaveras County, Chico (Butte County), San Francisco Bay Area and Tuscan Buttes—had attained the 2008 ozone NAAQS by the applicable attainment date of July 20, 2015, based on complete, quality-assured and certified ozone monitoring data for 2012-2014. The EPA determined that one NAA in California—San Luis Obispo (Eastern San Luis Obispo) (“Eastern SLO”)—qualified for a 1-year attainment date extension for the 2008 ozone NAAQS even though it did not attain the NAAQS by the applicable deadline. Finally, the EPA reclassified five NAAs in California as Moderate because they did not attain the 2008 ozone NAAQS by the attainment date and did not qualify for a 1-year extension. The EPA “bumped up” the following Marginal NAAs to Moderate: Imperial County, Kern County (Eastern Kern), Mariposa County, Nevada County (Western part) and San Diego County. In addition to the Marginal area requirements, which include submittal of a base year emission inventory (see CAA section 182(a)(1)), these NAAs became subject to additional requirements.3 However, these additional requirements are not the subject of this action.

In this action, we are acting on a portion of CARB's submittal, namely, the base year EIs for the Calaveras County, Chico (Butte County), Eastern SLO and San Francisco Bay Area NAAs. We are deferring action on the base year EIs for NAAs that are required to submit updated base year EIs to support their attainment demonstrations and to meet reasonable further progress requirements because we anticipate that these later submittals will supersede the EIs in the CARB 8-hour EI submittal for these areas.

CAA section 110(a)(1) and 110(l) and 40 CFR 51.102 require states to provide reasonable notice and an opportunity for a public hearing prior to adoption of SIP revisions. Section 110(k)(1)(B) requires the EPA to determine whether a SIP submittal is complete within 60 days of receipt. Any plan that we have not affirmatively determined to be complete or incomplete will become complete six months after the day of submittal by operation of law. A finding of completeness does not approve the submittal as part of the SIP nor does it indicate that the submittal is approvable. It does start a 12-month clock for the EPA to act on the SIP submittal (see CAA section 110(k)(2)).

CAA section 182(a)(1) and 40 CFR 51.1115(a) require states to submit a “base year inventory” for each 2008 ozone nonattainment area within two years of the effective date of designation. This inventory must be “a comprehensive, accurate, current inventory of actual emissions from sources of VOC and NOX emitted within the boundaries of the nonattainment area as required by CAA section 182(a)(1)” (40 CFR 51.1100(bb), see also CAA section 172(c)(3)). In addition, 40 CFR 51.1115(a) requires that the inventory year be selected consistent with the baseline year for the reasonable further progress (RFP) plan, which is usually the most recent calendar year for which a complete triennial inventory is required to be submitted to the EPA under the Air Emissions Reporting Requirements (40 CFR part 51, subpart A) (see 40 CFR 51.1110(b)).

The State submitted base year EIs for areas designated as nonattainment for the 2008 8-hour ozone NAAQS on July 17, 2014.4 CARB's submittal documents the public review process followed prior to its submittal to the EPA as a revision to the SIP. The submittal includes a copy of a CARB notice of public meeting on June 26, 2014 to consider the approval of the submittal, a transcript from the June 26, 2014 meeting,5 and a signed resolution stating that the CARB made the EIs available for public review at least 30 days prior to the board hearing and that the EIs were adopted after notice and public hearing.6 As noted above, on September 2, 2016, CARB provided additional technical information referred to herein as EI Supplemental Documentation to support the NAA EIs submitted on July 17, 2014.

CARB selected 2012 as the base year because it was the most recent year for which comprehensive emissions estimates were available,7 and because CARB wanted a consistent inventory across the state.8 The submitted base year EIs are expressed as 2012 average summer day emissions in tons per day (tpd) and categorized as stationary point sources, area-wide sources, on-road mobile sources and other mobile sources. CARB's EI Supplemental Documentation describes methods used to estimate emissions for each category and subcategory.9 The submittal describes the updates to the 2012 EIs since the last comprehensive EI update, and it also describes how emissions were calculated for “split regions” not defined by CARB's county, air basin, and district boundaries.10

Table 1 summarizes the 2012 EIs for the Calaveras County, Chico (Butte County), Eastern SLO and San Francisco Bay Area NAAs for nitrogen oxides (NOX) and volatile organic compound (VOC) emissions.11

CARB estimates stationary point source emissions based on annual reports submitted by the local air districts. The local air districts are responsible for working with facility operators to compile estimates, using source testing, direct measurement or engineering calculations. CARB estimates emissions from smaller point sources, such as gasoline dispensing facilities and residential water heaters, as a group and reports them in a single source category. CARB groups stationary point source emissions into the following categories: Fuel combustion, waste disposal, cleaning and surface coatings, petroleum production and marketing, and industrial processes.12

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

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Printing Office's e-CFR site at http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2015-0559 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before December 19, 2016. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2015-0559, by one of the following methods:

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

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

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

In the Federal Register of October 21, 2015 (80 FR 63731) (FRL-9935-29), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP# 5E8382) by Interregional Research Project Number 4 (IR-4), 500 College Road East, Princeton, NJ 08540. The petition requested that 40 CFR 180.664 be amended by establishing tolerances for residues of the fungicide penflufen, (1H-Pyrazole-4-carboxamide, N-[2-(1,3-dimethylbutyl)phenyl]-5-fluoro-1,3-dimethyl-), in or on onion, bulb, 3-07A at 0.01 parts per million (ppm); and onion, green, 3-07B at 0.015 ppm. That document referenced a summary of the petition prepared by Bayer CropScience, the registrant, which is available in the docket EPA-HQ-OPP-2015-0559-0002 at http://www.regulations.gov.

In the Federal Register of July 20, 2016 (81 FR 47150) (FRL-9948-45), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP# 5F8379) by Bayer CropScience, 2 T.W. Alexander Drive, Research Triangle Park, NC 27709. The petition requested that 40 CFR 180.664 be amended by establishing tolerances for residues of the fungicide penflufen, (1H-Pyrazole-4-carboxamide, N-[2-(1,3-dimethylbutyl)phenyl]-5-fluoro-1,3-dimethyl-), in or on beet, sugar, roots at 0.01 ppm and beet, sugar, tops at 0.01 ppm. That document referenced a summary of the petition prepared by Bayer CropScience, the registrant, which is available in the docket EPA-HQ-OPP-2015-0559-0006 at http://www.regulations.gov.

Five comments were received in response to the notices of filing. EPA's responses to these comments are discussed in Unit IV.C.

Based upon review of the data supporting the petition, EPA has revised the petitioned-for tolerances for subgroups 3-07A and 3-07B since the Agency has determined that a crop group tolerance for vegetable, bulb, group 3-07 is more appropriate. The reason for these changes are explained in Unit IV.D.

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

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

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

The liver and thyroid are target organs for penflufen. No evidence of quantitative or qualitative susceptibility was seen in developmental toxicity studies (rats and rabbits). Developmental toxicity was not observed in the rat or rabbit studies, although the studies did not test up to the limit dose. However, new studies are not expected to identify developmental endpoints with points of departure (PODs) lower than those determined in the current studies. In the reproductive study, decreased pup weight, delayed vaginal patency, and decreased brain, spleen, and thymus weights were seen in the presence of limited maternal effects (body weight changes), suggesting qualitative sensitivity. However, concern for the sensitivity is low since the effects are well characterized, and there is a clear NOAEL for the effects seen. Decreased motor and locomotor activity were observed in both sexes of rats following acute oral exposure and in female rats following subchronic oral exposure; neuropathological lesions were not observed in either study.

Penflufen is classified as having “suggestive evidence of carcinogenicity.” A statistically significant increase in histiocytic sarcomas with a positive trend in male rats only (but in the absence of a dose response and lack of pre-neoplastic lesions) was seen. A marginal increase in brain astrocytomas was also observed in males at the high dose; however, this effect was not dose-related, did not reach statistical significance, and there was no overall trend. In addition, there were no pre-neoplastic lesions, such as glial proliferations, which are a good indicator of chemical tumor induction (i.e., there will be changes in the cells prior to transformation to a neoplasm). The ovarian adenomas observed at the high dose also showed no dose response, no pair-wise significance, no decrease in latency, and there were no pre-neoplastic lesions such as hyperplasia of the epithelial cells of the endometrium. Additionally, there was no evidence of carcinogenicity in male or female mice (at doses that were judged to be adequate to assess the carcinogenic potential), no concern for mutagenicity (in vivo or in vitro) for the parent molecule or the two metabolites, and there were no other lines of evidence of carcinogenicity (such as structure-activity relationship). Although these three tumors were considered treatment-related, they provided weak evidence of carcinogenicity due to the marginal nature of the tumor responses and the other factors mentioned above. Given the weak evidence indicating any potential for carcinogenicity, EPA has determined that quantification of risk using a non-linear approach (i.e., RfD) will adequately account for all chronic toxicity, including carcinogenicity, which could result from exposure to penflufen. The NOAEL (38 mg/kg/day) used for establishing the chronic RfD is approximately 10-fold lower than the dose (approximately 300 mg/kg/day) that induced a marginal tumor response. The EPA has determined that the chronic population adjusted dose is protective of all long-term effects, including potential carcinogenicity, based on limited evidence for carcinogenicity (histiocytic sarcomas) in male rats. There is no mutagenicity concern for penflufen. The risk assessments conducted for penflufen are based on the most sensitive endpoints in the toxicity database and are protective of all effects observed in the toxicology database.

Specific information on the studies received and the nature of the adverse effects caused by penflufen as well as the NOAEL and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in document “Penflufen. Human Health Risk Assessment to Support New Uses on Bulb Vegetables (Crop Group 3-07) and Sugar Beets.” in pages 8-12 in docket ID number EPA-HQ-OPP-2015-0559.

Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/assessing-human-health-risk-pesticides.

A summary of the toxicological endpoints for penflufen used for human risk assessment is discussed in Unit III.B. of the final rule published in the Federal Register of May 14, 2012 (77 FR 28278) (FRL-9341-8).

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to penflufen, EPA considered exposure under the petitioned-for tolerances as well as all existing penflufen tolerances in 40 CFR 180.664. EPA assessed dietary exposures from penflufen in food as follows:

i. Acute exposure. Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure.

Such effects were identified for penflufen. In estimating acute dietary exposure, EPA used the Dietary Exposure Evaluation Model software with the Food Commodity Intake Database (DEEM-FCID) Version 3.16. This software uses 2003-2008 food consumption data from the U.S. Department of Agriculture's (USDA's) National Health and Nutrition Examination Survey, What We Eat in America, (NHANES/WWEIA). As to residue levels in food, EPA used tolerance-level residues, default processing factors, and 100 percent crop treated (PCT) for all commodities.

ii. Chronic exposure. In conducting the chronic dietary exposure assessment EPA used the DEEM-FCID, Version 3.16 software with 2003-2008 food consumption data from the USDA's NHANES/WWEIA. As to residue levels in food, EPA used tolerance-level residues, default processing factors, and 100 PCT for all commodities.

iii. Cancer. EPA determines whether quantitative cancer exposure and risk assessments are appropriate for a food-use pesticide based on the weight of the evidence from cancer studies and other relevant data. Cancer risk is quantified using a linear or nonlinear approach. If sufficient information on the carcinogenic mode of action is available, a threshold or nonlinear approach is used and a cancer RfD is calculated based on an earlier noncancer key event. If carcinogenic mode of action data are not available, or if the mode of action data determines a mutagenic mode of action, a default linear cancer slope factor approach is utilized. Based on the data summarized in Unit III.A., EPA has determined that quantification of risk using a non-linear approach (i.e., cRfD) will adequately account for all chronic toxicity, including carcinogenicity, which could result from exposure to penflufen. Cancer risk was assessed using the same exposure estimates as discussed in Unit III.C.1.ii., chronic exposure.

iv. Anticipated residue and percent crop treated (PCT) information. EPA did not use anticipated residue or PCT information in the dietary assessment for penflufen. Tolerance level residues and 100 PCT were assumed for all food commodities.

2. Dietary exposure from drinking water.

In drinking water, the residue of concern is penflufen parent and its degradates, penflufen-hydroxybutyl (Pen-3HB) and penflufen-pyrazolyl-AAP (AAP). The Agency used screening level water exposure models in the dietary exposure analysis and risk assessment for penflufen in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of penflufen. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/about-water-exposure-models-used-pesticide.

Based on the Surface Water Concentration Calculator (SWCC) and Pesticide Root Zone Model Ground Water (PRZM GW) models, the estimated drinking water concentrations (EDWCs) of penflufen for acute exposures are estimated to be 5.09 parts per billion (ppb) for surface water and 123 ppb for ground water. The EDWCs of penflufen for chronic exposures for non-cancer assessments are estimated to be 3.95 ppb for surface water and 84.8 ppb for ground water.

Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For acute dietary risk assessment, the water concentration value of 123 ppb was used to assess the contribution to drinking water. For chronic dietary risk assessment, the water concentration of value 84.8 ppb was used to assess the contribution to drinking water.

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets). Penflufen is not registered for any specific use patterns that would result in residential exposure.

4. Cumulative effects from substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

EPA has not found penflufen to share a common mechanism of toxicity with any other substances, and penflufen does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that penflufen does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's Web site at http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/cumulative-assessment-risk-pesticides.

1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the FQPA Safety Factor (SF). In applying this provision, EPA either retains the default value of 10X, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.

2. Prenatal and postnatal sensitivity. No evidence of quantitative or qualitative susceptibility was seen in developmental toxicity studies in rats and rabbits. In the rat and rabbit developmental toxicity studies, maternal findings were limited to decreased body weight gain at the highest doses tested (HDT). No adverse effects were observed in rat or rabbit fetuses. In the rat multi-generation reproduction study, a slight decrease in litter size, delayed sexual maturation, decreased body weight and weight gain, and decreased brain, spleen, and thymus weights were noted in the offspring animals in the presence of less pronounced maternal toxicity (decreased body weight and weight gain, alteration in food consumption, decreased thymus weight, and decreased spleen weights) suggesting qualitative susceptibility.

3. Conclusion. EPA has determined that reliable data show the safety of infants and children would be adequately protected if the FQPA SF were reduced to 1X. That decision is based on the following findings:

i. The toxicity database for penflufen is complete.

ii. There is no concern for neurotoxicity and no need for a developmental neurotoxicity study or additional UFs to account for neurotoxicity. Although clinical signs were observed in acute and subchronic neurotoxicity studies with penflufen, there is a clear NOAEL for the effects seen and the endpoints and PODs selected for risk assessment are protective. The NOAELs used for risk assessment are 2x lower than where clinical signs were observed.

iii. Although there is some evidence of qualitative sensitivity of the young in the reproduction study, the effects are well characterized, and there is a clear NOAEL for effects seen. Also, the current risk assessments are based on the most sensitive endpoints derived from studies with NOAELs 5x lower than the doses at which offspring effects were observed in the reproductive toxicity study. Thus, the PODs selected for risk assessment are protective of potential offspring effects.

iv. There are no residual uncertainties identified in the exposure databases. The dietary food exposure assessments were performed based on 100 PCT and tolerance-level residues. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to penflufen in drinking water. These assessments will not underestimate the exposure and risks posed by penflufen.

EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.

1. Acute risk. Using the exposure assumptions discussed in this unit for acute exposure, the acute dietary exposure from food and water to penflufen will occupy 4.2% of the aPAD for all infants (<1 year old), the population group receiving the greatest exposure.

2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that chronic exposure to penflufen from food and water will utilize 1.2% of the cPAD for all infants (<2 year old) the population group receiving the greatest exposure. There are no residential uses for penflufen.

3. Short- and intermediate-term risk. Short- and intermediate-term adverse effects were not identified; however, penflufen is not registered for any use patterns that would result in short- or intermediate-term residential exposures. Short- and intermediate-term risks are assessed based on short- and intermediate-term residential exposures plus chronic dietary exposure, respectively. Because there are no short- and intermediate-term residential exposures, and chronic dietary exposure has already been assessed under the appropriately protective cPAD (which is at least as protective as the POD used to assess short-term risk), no further assessment of short- or intermediate-term risks are necessary, and EPA relies on the chronic dietary risk assessment for evaluating short- and intermediate-term risks for penflufen.

4. Aggregate cancer risk for U.S. population. EPA assessed cancer risk using a non-linear approach (i.e., RfD) since it adequately accounts for all chronic toxicity, including carcinogenicity, that could result from exposure to penflufen. As the chronic dietary endpoint and dose are protective of potential cancer effects, penflufen is not expected to pose an aggregate cancer risk.

5. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to penflufen residues.

Adequate enforcement methodology (high performance liquid chromatography and triple stage quadrupole mass spectrometry (HPLC/MS/MS)) is available to enforce the tolerance expression.

The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address: [email protected].

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

The Codex has not established a MRL for penflufen.

One comment was received in response to the Notice of Filing for PP# 5E8382. The commenter was opposing the use and sale of penflufen in the United States. The Agency understands the commenter's concerns and recognizes that some individuals believe that pesticides should be banned on agricultural crops. However, the existing legal framework provided by Section 408 of the Federal Food, Drug and Cosmetic Act (FFDCA) states that tolerances may be set when persons seeking such tolerances or exemptions have demonstrated that the pesticide meets the safety standard imposed by that statute. EPA has found that there is a reasonable certainty of no harm to humans after considering the toxicological studies and the exposure levels of humans to penflufen.

Three comments were received in response to the Notice of Filing for PP# 5F8379. One comment was in support of the Proposed Rule, while two comments were opposing any tolerance level above 0.00 ppm for any pesticides used in the U.S. The Agency understands the commenter's concerns and recognizes that some individuals believe that pesticides should be banned on agricultural crops. However, the existing legal framework provided by section 408 of the Federal Food, Drug and Cosmetic Act (FFDCA) states that tolerances may be set when persons seeking such tolerances or exemptions have demonstrated that the pesticide meets the safety standard imposed by that statute. In addition, both commenters indicated that IR-4 and Rutgers University are profiteering. The IR-4 program was created by Congress in 1963 in order to assist minor crop growers in the process of obtaining pesticide registrations. IR-4 National Coordinating Headquarters is located at Rutgers University in New Jersey and receives the majority (90%) of its funding from the USDA. It is the only publicly funded program that conducts research and submits petitions for tolerances. IR-4 operates in collaboration with USDA, the Land Grant University System, the agrochemical industry, commodity associations, and EPA. IR-4 identifies needs, prioritizes accordingly, and conducts research. The majority (over 80%) of IR-4's research is conducted on reduced-risk chemicals. Under the Pesticide Registration Improvement Act (PRIA), IR-4 works in cooperation with the registrant to request an exemption for the registration services. The exemption may be granted if the application is solely associated by simultaneous submission with a tolerance petition in connection with IR-4 and if it is in the public interest. This fee exemption serves as an incentive to pursue registration of minor uses supported by the IR-4 program. In addition to the work done in pesticide registration, IR-4 develops risk mitigation measures for existing registered products. Therefore, IR-4 and Rutgers University are not profiteering from registering pesticides.

A comment was submitted by the Environmental Health Program of the Center for Biological Diversity and was primarily concerned about environmental risks and Agency compliance with any relevant obligations under the Endangered Species Act. This comment is not relevant to the Agency's evaluation of safety of the penflufen tolerances; section 408 of the FFDCA focuses on potential harms to human health and does not permit consideration of effects on the environment.

Based on review of the data supporting the petitions, EPA has revised the petitioned-for tolerance on onion, green, subgroup 3-07B. Both representative commodities for crop group 3-07 were submitted for the new uses, which included different tolerances proposed for crop subgroup 3-07A and 3-07B. Although the petitioner requested separate tolerances (based on the Organization for Economic Cooperation and Development (OECD) calculation procedure), EPA has decided to establish a tolerance for crop group 3-07 at the level of qualification (LOQ) of the enforcement method (0.01 ppm), because maximum residues from crop subgroup 3-07A and subgroup 3-07B representative commodities were within a five-fold difference of each other, and because with residues in the field trials all less than the LOQ, the OECD calculation procedure stipulates that the LOQ is the appropriate tolerance level. Therefore, a single tolerance on the crop group vegetable, bulb, group 3-07 is appropriate.

Therefore, tolerances are established for residues of penflufen, in or on vegetable, bulb, group 3-07 at 0.01 ppm; beet, sugar, roots at 0.01 ppm; and beet, sugar, tops at 0.01 ppm.

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

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

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

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

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

Therefore, 40 CFR chapter I is amended as follows:

Atlantic shark fisheries are managed under the 2006 Consolidated Highly Migratory Species (HMS) Fishery Management Plan (FMP), its amendments, and implementing regulations (50 CFR part 635) issued under authority of the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1801 et seq.).

Under § 635.24(a)(8), NMFS may adjust the commercial retention limit in the shark fisheries during the fishing season. Before making any adjustment, NMFS must consider specified regulatory criteria and other relevant factors. See § 635.24(a)(8)(i)-(vi). After considering these criteria as discussed below, NMFS concluded that reducing the retention limit of the Atlantic aggregated LCS and hammerhead management groups for directed shark limited access permit holders will slow the fishery catch rates to allow the fishery throughout the Atlantic region to remain open for the rest of the year. Since landings are projected to reach 80 percent before the end of the 2016 fishing season, NMFS is reducing the commercial Atlantic aggregated LCS and hammerhead shark retention limit from 45 to 25 LCS other than sandbar per vessel per trip.

NMFS considered the inseason retention limit adjustment criteria listed in § 635.24(a)(8), which says that:

• The amount of remaining shark quota in the Atlantic region based on dealer reports;

Based on dealer reports, 108.6 mt dw or 64 percent of the 168.9 mt dw shark quota for the aggregated LCS management group has already been harvested in the Atlantic region. This means that approximately 36 percent of the quota remains. Unless action is taken to slow harvest, fishermen in the Atlantic region may not have an opportunity to fish in the region for the remainder of the year.

• The catch rates of the aggregated LCS management group in the Atlantic region based on dealer reports;

Based on dealer reports, the current catch rates are too high to maintain an open season for the rest of the year. While fishermen are landing sharks within the per-trip retention limit of 45 LCS other than sandbar per trip per day, they are making multiple trips a day that result in high numbers of aggregated LCS being caught rapidly throughout the fishery. This high daily average catch rate means that aggregated LCS are being harvested too quickly to provide equitable fishing opportunities throughout the season. If the per trip limit is left unchanged, aggregated LCS would likely be harvested at such a high rate that the fishery would close in mid-October.

• Estimated date of the aggregated LCS management group closure based on when the landings are projected to reach 80 percent of the quota;

Once the landings reach 80 percent of the quota, NMFS would close the aggregated LCS management group as well as any other management group with “linked quotas” such as the Atlantic hammerhead shark management group. Current catch rates would likely result in landings reaching this limit by mid-October. A closure would preclude fishing opportunities in the Atlantic region for the remainder of the year. Reducing the trip limit is expected to reduce the catch rates and allow for the fishery to remain open for the remainder of the year.

• Effects of the adjustment on accomplishing the objectives of the 2006 Consolidated HMS FMP and its amendments;

Reducing the retention limit for the aggregated LCS and hammerhead management group from 45 to 25 LCS per trip would allow for fishing opportunities later in the year consistent with the FMP's objectives to provide equitable fishing opportunities throughout the fishing season and to limit bycatch and discards.

• Variations in seasonal distribution or migratory patterns of aggregated LCS based on scientific and fishery-based knowledge; and

The directed shark fisheries in the Atlantic region exhibit a mixed species composition, with a high abundance of aggregated LCS caught in conjunction with hammerhead sharks. As a result, by slowing the harvest and reducing landings on a per-trip basis, both fisheries could remain open for the remainder of the year.

• Effects of catch rates in one part of the Atlantic region precluding vessels in another part from having a reasonable opportunity to harvest a portion of the aggregated LCS management group quota.

Based on dealer reports, and given NMFS' notice to the regulated community (80 FR 74999, December 1, 2015; 81 FR 18541, March 31, 2016; and 81 FR 44798, July 11, 2016) that a goal of this year's fishery was to provide fishing opportunities throughout the fishing season, NMFS has concluded that the aggregated LCS quota is being harvested too quickly to meet conservation and management goals for the fishery. If the harvest of these species is not slowed down, the fishery would likely close in mid-October. Closing the fishery would prevent fishermen from other parts of the Atlantic region from having the same opportunities to harvest the aggregated LCS quota later in the year.

On December 1, 2015 (80 FR 74999), NMFS announced in a final rule that the aggregated LCS and hammerhead shark fisheries management groups for the Atlantic region would open on January 1 with a quota of 168.9 metric tons (mt) dressed weight (dw) (372,552 lb dw) and 27.1 mt dw (59,736 lb dw), respectively. NMFS had published a proposed rule on August 18, 2015 (80 FR 49974) and accepted public comment. In the final rule, NMFS also announced that if it appeared that the quota is being harvested too quickly, thus precluding fishing opportunities throughout the entire region (e.g., if approximately 20 percent of the quota is caught at the beginning of the year), NMFS would consider reducing the commercial retention limit to 3 or fewer LCS other than sandbar sharks and then later consider increasing the retention limit to 45 LCS other than sandbar sharks per vessel per trip around July 15, 2016, after considering the appropriate regulatory adjustment criteria. In March 2016, dealer reports indicated that landings had exceeded 20 percent of the quota, and NMFS therefore reduced the commercial Atlantic aggregated LCS and hammerhead shark retention limit from 36 to 3 LCS other than sandbar per vessel per trip on April 2, 2016 (81 FR 18541; March 31, 2016) after considering the inseason retention limit adjustment criteria listed at § 635.24(a)(8). As NMFS announced in the 2016 shark season final rule (81 FR 44798; July 11, 2016), we increased the commercial Atlantic aggregated LCS and hammerhead shark retention limit from 3 to 45 LCS other than sandbar per vessel per trip after considering the regulatory criteria. Based on dealer reports through September 30, 2016, approximately 34 percent and 54 percent of the aggregated LCS and hammerhead shark quotas remain, respectively. At this point in the season, fishermen in the Atlantic region may not have an opportunity to fish in the region for the remainder of the year if the retention limits are not reduced.

Accordingly, as of 11:30 p.m. local time October 19, 2016, NMFS is reducing the retention limit for the commercial aggregated LCS and hammerhead shark management groups in the Atlantic region for directed shark limited access permit holders from 45 LCS other than sandbar sharks per vessel per trip to 25 LCS other than sandbar sharks per vessel per trip. If the vessel is properly permitted to operate as a charter vessel or headboat for HMS and is engaged in a for-hire trip, in which case the recreational retention limits for sharks and “no sale” provisions apply (§ 635.22(a) and (c)), or if the vessel possesses a valid shark research permit under § 635.32 and a NMFS-approved observer is onboard, then they are exempted from the retention limit adjustment.

All other retention limits and shark fisheries in the Atlantic region remain unchanged. This retention limit will remain at 25 LCS other than sandbar sharks per vessel per trip for the rest of the 2016 fishing season, or until NMFS announces via a notice in the Federal Register a fishery closure, is warranted.

The boundary between the Gulf of Mexico region and the Atlantic region is defined at § 635.27(b)(1) as a line beginning on the East Coast of Florida at the mainland at 25°20.4′ N. lat., proceeding due east. Any water and land to the north and east of that boundary is considered, for the purposes of quota monitoring and setting of quotas, to be within the Atlantic region.

Pursuant to 5 U.S.C. 553(b)(B), the Assistant Administrator for Fisheries, NOAA (AA), finds there is good cause to waive prior notice and an opportunity for public comment on this action, as notice and comment would be impracticable and contrary to the public interest. Providing prior notice and an opportunity for comment is impracticable because the catch and landings that need to be reduced are ongoing and must be reduced immediately to meet conservation and management objectives for the fishery. Continued fishing at those levels during the time that notice and comment would take place would likely result in early closure of the fishery, contrary to the objectives of the existing conservation and management measures in place for these species. These objectives include providing equitable fishing opportunities and ensuring that bycatch and discards are minimized. Allowing fishing to continue at the existing rates even for a limited time is contrary to these objectives and would thus be impracticable. It would also be contrary to the public interest because continued catch at the current rates, even for a limited period, could result in eventual early quota closures and potential overharvests. The AA also finds good cause to waive the 30-day delay in effective date pursuant to 5 U.S.C. 553(d)(3) for the same reasons. This action is required under § 635.28(b)(2) and is exempt from review under Executive Order 12866. NMFS has concluded that reducing the retention limit of the Atlantic aggregated LCS and hammerhead management groups for directed shark limited access permit holders will slow the fishery catch rates to allow the fishery throughout the Atlantic region to remain open for the rest of the year.

Regulations governing the Atlantic herring fishery can be found at 50 CFR part 648, including requirements for setting annual catch allocations. NMFS set the 2016 Area 1A sub-annual catch limit (ACL) at 30,102 mt, based on an initial 2016 sub-ACL allocation of 31,200 mt, minus a deduction of 936 mt for research set-aside catch, plus an increase of 133 mt to account for unharvested 2014 catch. Additionally, NMFS further reduced the Area 1A sub-ACL of 30,102 mt by 295 mt to allow for the fixed gear set-aside, that, if unharvested, will be added back into the Area 1A sub-ACL after November 1. NMFS established these values in the 2013 through 2015 specifications (78 FR 61828, October 1, 2013) and a final rule implementing sub-ACL adjustments for 2016 (81 FR 12420, March 9, 2015). For Area 1A, NMFS restricts herring catch to the seasonal period from June 1 through December 31. NMFS prohibits vessels from catching herring during the seasonal period from January 1 through May 31.

The Administrator, Greater Atlantic Region, NMFS (Regional Administrator), monitors the herring fishery catch in each of the management areas based on vessel and dealer reports, state data, and other available information. The regulations at § 648.201 require that when Regional Administrator projects that herring catch will reach 92 percent of the sub-ACL allocated in the Area 1A seasonal management area designated in the Atlantic Herring Fishery Management Plan (FMP), NMFS must prohibit, through notification in the Federal Register, herring vessel permit holders from fishing for, possessing, transferring, receiving, landing, or selling more than 2,000 lb (907.2 kg) of herring per trip or calendar day in or from the specified management area for the remainder of the fishing year.

The Regional Administrator has determined, based on vessel and dealer reports, state data, and other available information, that the herring fleet will have caught 92 percent of the herring sub-ACL allocated to Area 1A by October 18, 2016. Therefore, effective 00:01 hr local time, October 18, 2016, federally permitted vessels may not fish for, catch, possess, transfer, land, or sell more than 2,000 lb (907.2 kg) of herring per trip or calendar day, in or from Area 1A through December 31, 2016. With one exception, vessels that have entered port before 00:01 hr local time, October 18, 2016, may land and sell more than 2,000 lb (907.2 kg) of herring from Area 1A from that trip. The exception provides that a vessel may transit through Area 1A with more than 2,000 lb (907.2 kg) of herring on board, provided all herring was caught outside of Area 1A and all fishing gear is stowed and not available for immediate use as defined by § 648.2. In addition, all herring vessels must land in accordance with state landing restrictions.

Effective 00:01 hr local time, October 18, 2016, federally permitted dealers may not receive herring from federally permitted herring vessels that harvest more than 2,000 lb (907.2 kg) of herring from Area 1A through 2400 hr local time, December 31, 2016, unless it is from a trip landed by a vessel that entered port before 00:01 hr local time, October 18, 2016, and that catch is landed in accordance with state regulations.

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

NMFS finds good cause pursuant to 5 U.S.C. 553(b)(B) to waive prior notice and the opportunity for public comment because it would be contrary to the public interest and impracticable. This action restricts the catch of herring in Area 1A for the remainder of the fishing year. Data indicating the herring fleet will have landed at least 92 percent of the 2016 sub-ACL allocated to Area 1A have only recently become available. Once these data become available, NMFS is required by Federal regulation to implement a 2,000-lb (907.2-kg) herring possession limit for Area 1A through December 31, 2016. The regulations at § 648.201(a)(1)(i) require such action to ensure that herring vessels do not exceed the 2016 sub-ACL allocated to Area 1A. If implementation of this closure is delayed to solicit prior public comment, the sub-ACL for Area 1A for this fishing year will likely be exceeded, thereby undermining the conservation objectives of the FMP. If sub-ACLs are exceeded, the excess must also be deducted from a future sub-ACL and would reduce future fishing opportunities. NMFS further finds, pursuant to 5 U.S.C. 553(d)(3), good cause to waive the 30-day delayed effectiveness period for the reasons stated above.

NMFS manages the groundfish fishery in the BSAI exclusive economic zone according to the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

The 2016 Pacific cod total allowable catch (TAC) allocated to catcher/processors using pot gear in the BSAI is 4,357 metric tons (mt) as established by the final 2016 and 2017 harvest specifications for groundfish in the BSAI (81 FR 14773, March 18, 2016) and reallocation (81 FR 69445, October 6, 2016).

In accordance with § 679.20(d)(1)(iii), the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that the 2016 Pacific cod TAC allocated as a directed fishing allowance to catcher/processors using pot gear in the BSAI will soon be reached. Consequently, NMFS is prohibiting directed fishing for Pacific cod by pot catcher/processors in the BSAI.

After the effective date of this closure the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.

This action responds to the best available information recently obtained from the fishery. The Acting Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of directed fishing for Pacific cod by pot catcher/processors in the BSAI. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of October 13, 2016.

The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

This action is required by § 679.20 and is exempt from review under Executive Order 12866.