Federal Register Vol. 82, No.102,

Executive Orders 12866 and 13771, and Regulatory Flexibility Act

This rule does not meet the definition of a significant regulatory action contained in section 3(f) of Executive Order 12866, and is not subject to review by the Office of Management and Budget (OMB). Additionally, because this rule does not meet the definition of a significant regulatory action it does not trigger the requirements contained in Executive Order 13771. See OMB's Memorandum titled “Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017, titled `Reducing Regulation and Controlling Regulatory Costs' ” (February 2, 2017). Pursuant to the requirements set forth in the Regulatory Flexibility Act (RFA) [5 U.S.C. 601 et seq.], the Acting Administrator of AMS has considered the economic effect of this action on small entities and has determined that this final rule does not have a significant economic impact on a substantial number of small business entities. The effect of the Order upon small entities was discussed in the July 18, 1986, Federal Register [51 FR 26132]. The purpose of RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly burdened.

Based on conversations with importing companies, AMS estimates that approximately 270 importers import beef and beef products and veal and veal products into the U.S. and about 198 importers import live cattle into the U.S. The majority of these operations subject to the Order are considered small businesses under the criteria established by the Small Business Administration (SBA) [13 CFR 121.201]. SBA defines small agricultural service firms as those having annual receipts of $7.5 million or less.

This final rule imposes no significant burden on the industry. Importers are already required to pay assessments. It merely adds six HTS codes for imported veal and veal products and updates assessment rates for imported veal and veal products based on revised determinations of live animal equivalencies. The addition of HTS codes reflects an increase of imported veal and veal products into the U.S. Accordingly, the Acting Administrator of AMS has determined that this action does not have a significant impact on a substantial number of small entities.

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have a retroactive effect.

Section 11 of the Act [7 U.S.C. 2910] provides that nothing in the Act may be construed to preempt or supersede any other program relating to beef promotion organized and operated under the laws of the U.S. or any state. There are no administrative proceedings that must be exhausted prior to any judicial challenge to the provisions of this rule.

In accordance with OMB regulations [5 CFR 1320] that implement the Paperwork Reduction Act of 1995 [44 U.S.C. Chapter 35], the information collection and recordkeeping requirements contained in the Order and accompanying Rules and Regulations have previously been approved by OMB under OMB control number 0581-0093.

The Act authorized the establishment of a national beef promotion and research program. The final Order was published in the Federal Register on July 18, 1986 [51 FR 21632], and the collection of assessments began on October 1, 1986. The program is administered by the Cattlemen's Beef Promotion and Research Board (Board), appointed by the Secretary of Agriculture (Secretary) from industry nominations, and composed of 100 cattle producers and importers. The program is funded by a $1-per-head assessment on producers selling cattle in the U.S. as well as an equivalent assessment on importers of cattle, beef, and beef products.

Importers pay assessments on imported cattle, beef, and beef products. U.S. Customs and Border Protection collects and remits the assessment on imported cattle, beef, and beef products. The term “importer” is defined as “any person who imports cattle, beef, or beef products from outside the United States” [7 CFR 1260.117]. Imported beef or beef products is defined as “products which are imported into the United States which the Secretary determines contain a substantial amount of beef including those products which have been assigned one or more of the following numbers in the Tariff Schedule of the United States” [7 CFR 1260.121].

On March 16, 2016, AMS published a proposed rule in the Federal Register [81 FR 14022] amending 7 CFR 1260.172 of the Order to add six HTS codes for imported veal and veal products. On May 6, 2016, AMS announced in a Notice to Trade that it was withdrawing the proposed rule because an error was discovered in the imported veal carcass weight. AMS also announced at that time that it intended to publish another proposed rule with the correct carcass weight and to include the formula and an explanation of how the new assessment rates are calculated. On June 30, 2016, AMS published the withdrawal notice in the Federal Register [81 FR 42576] and on August 23, 2016, published the corrected proposed rule in the Federal Register [81 FR 57495].

The Act requires that assessments on imported beef and beef products and veal and veal products be determined by converting such imports into live animal equivalents to ascertain the corresponding number of head of cattle. Carcass weight is the principle factor in calculating live animal equivalents.

Prior to publishing the March 16, 2016, proposed rule, the U.S. Department of Agriculture (USDA) received information from the Board regarding assessments on imported veal. The Board requested expanding the number of HTS codes for imported veal and veal products in order to capture product that is not currently being assessed and to update the live animal equivalency rate on imported veal to reflect the same assessment as domestic veal and veal products. The Board also suggested that AMS update the dressed veal weight to better reflect current dressed veal weights. The Board recommended using an average dressed veal weight from 2010 to the most current data. The Board stated that establishing an average over this period of time takes into account short-term highs and lows due to the cattle cycle, weather effects, and feed prices. In this final rule, the average dressed weight used to determine the assessment on imported veal and veal products is 154 pounds.

In order to convert carcasses and cuts back to a live animal equivalency, conversion factors are used. The conversion factor takes into account what is lost (feet, head, tail, hide, internal organs, and bone for boneless product) as the veal is processed into carcasses, bone-in cuts, and boneless cuts.

For bone-in carcasses and cuts, a one-to-one ratio is used to convert product weight to a live animal equivalent. For boneless veal cuts, the conversion factor “adds back” the weight of the bones removed from the product.

While the regulatory text in the proposed rule [81 FR 57495] includes two brief tables containing only the specific changes and additions, the regulatory text in this final rule includes comprehensive tables incorporating the changes and additions within previously existing tables that were never intended to be deleted.

Finally, upon further review of this final rule and the Order, AMS discovered that the seven digit HTS codes listed under section 1260.121, which defines the term “Imported beef or beef products,” are no longer in use and obsolete. Those codes were replaced by 10 digit HTS codes currently found in section 7 CFR 1262.172(b)(2) of the Order. As a result, AMS is amending the definition by removing those obsolete HTS code references. No other changes are made to the definition.

On August 23, 2016, AMS published a proposed rule with a request for public comment. AMS received four timely comments. Three comments were received from the Board and national veal and beef industry organizations that were relevant to the proposed rule. One comment was outside the scope of the rulemaking.

Three commenters discussed the conversion factor for bone-in and boneless veal cuts. The commenters agreed with USDA's conversion factor for bone-in veal cuts. However, the commenters disagreed with USDA's conversion factor used for boneless imported veal cuts.

In the proposed rule, AMS used the conversion factor of 1.32 based on Table 7 (Factors used to convert pounds of carcass weight to retail and trimmed, boneless equivalent weights for red meats) of the “Economic Research Service Agricultural Handbook Number 697, Weights, Measures, and Conversion Factors for Agricultural Commodities and Their Products (June 1992)” (Handbook). However, the three commenters suggested that AMS should use the conversion factor of 1.46 for veal grading choice and good from Table 10 (Factors for converting pounds of boneless meat to untrimmed bone-in equivalent) of the Handbook because the conversion factor of 1.32 converts the boneless veal back to 0.904 pounds of bone-in veal rather than one pound. The conversion factor of 1.46 (proposed by the commenters) converts 0.685 pounds of boneless veal back to one pound of bone-in veal based on the equation: 0.685(1.46) = 1.0.

AMS believes the comments have merit. Accordingly, the new assessment rates for veal and veal products will be:

For the reasons set forth in the preamble, AMS amends 7 CFR part 1260 as follows:

On March 24, 2017 (82 FR 14987), the NRC published a direct final rule amending § 72.214 of title 10 of the Code of Federal Regulations by revising the “List of approved spent fuel storage casks” to add the TN Americas NUHOMS® EOS Dry Spent Fuel Storage System as CoC No. 1042. The NUHOMS® EOS System provides horizontal storage of high burnup spent pressurized water reactor (PWR) and boiling water reactor (BWR) fuel assemblies in dry shielded canisters (DSCs). The new PWR and BWR DSCs are the EOS-37PTH DSC and the EOS-89BTH DSC, respectively.

In the direct final rule, the NRC stated that if no significant adverse comments were received, the direct final rule would become effective on June 7, 2017. As described more fully in the direct final rule, a significant adverse comment is a comment where the commenter explains why the rule would be inappropriate, including challenges to the rule's underlying premise or approach, or would be ineffective or unacceptable without a change. Because no significant adverse comments were received, the direct final rule will become effective as scheduled.

The final CoC, technical specifications, and the final Safety Evaluation Report for CoC No. 1042 are available in ADAMS under Package Accession No. ML17116A277.

Reason for No Prior Notice and Comment Before Adoption

The substance of these special conditions has been subjected to the notice and comment period previously and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. Therefore, the FAA has determined that prior public notice and comment are unnecessary, impracticable, and contrary to the public interest, and finds good cause exists for adopting these special conditions upon issuance. The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment.

We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.

We will consider all comments we receive by the closing date for comments. We will consider comments filed late if it is possible to do so without incurring additional expense or delay. We may change these special conditions based on the comments we receive.

On March 20, 2015, Bell applied for a supplemental type certificate (STC) for installation of an optional SAR AFCS in certain Model 412EP helicopters. The Model 412EP helicopter, approved under Type Certificate No. H4SW, is a 14 CFR part 29 transport category helicopter certificated in both Category A and Category B and for operation under instrument flight rules under the requirements of Appendix B to Part 29. Bell designated certain serial-numbered Model 412EP helicopters for a specific configuration commercially identified as “412EPI.” The 412 EPI configuration includes the following changes from the 412EP: Installation of the Pratt & Whitney Canada Model PT6T-9 Twin Power Section Turboshaft Engine with Electronic Engine Control, and cockpit instruments and avionics replacement with the Bell BasiX-Pro® Integrated Avionics System. This rotorcraft has a maximum take-off weight of 12,200 pounds. It carries up to 13 passengers with maximum external load of almost 6,614 lbs. and a range up to 609 miles.

The use of dedicated AFCS upper modes, in which a fully coupled autopilot provides operational SAR profiles, is needed for SAR operations conducted over water in offshore areas clear of obstructions. The SAR modes enable the helicopter pilot to fly fully coupled maneuvers, to include predefined search patterns during cruise flight, and to transition from cruise flight to a stabilized hover and departure (transition from hover to cruise flight). The SAR AFCS also includes an auxiliary crew control that allows another crewmember (such as a hoist operator) to have limited authority to control the helicopter's longitudinal and lateral position during hover operations.

Flight operations conducted over water at night may have an extremely limited visual horizon with little visual reference to the surface even when conducted under Visual Meteorological Conditions. Consequently, the certification requirements for SAR modes must meet the criteria in Appendix B to Part 29. While Appendix B to Part 29 prescribes airworthiness criteria for instrument flight, it does not consider operations below instrument flight minimum speed (VMINI), whereas the SAR modes allow for coupled operations at low speed, all-azimuth flight to zero airspeed (hover).

The regulations as currently promulgated did not envision instrument flight below the Appendix B envelope, including hover using AFCS modes. This necessitates the development of a special condition to address the gap in 14 CFR part 29 regulations and the lack of adequate airworthiness standards for AFCS SAR mode certification to include flight characteristics, performance, and installed equipment and systems. Also, the requirements of the Bell 412EP Special Conditions No. 29-ASW-5 are not adequate to address the safety objectives for this SAR AFCS design feature. Special Conditions No. 29-ASW-5 only requires provisions for mitigating hazards to required equipment from high intensity radio frequency transmission sources.

The 412EPI configuration SAR operations necessitate safety critical navigation and control functions. These functions allow the rotorcraft to operate under instrument flight rules (IFR) then transition to stabilized visual flight rules hover below required minimum obstacle distances. To safely accomplish this specialized operation, the equipment must possess minimum functional reliability and availability under potentially adverse environmental conditions. The 412EPI configuration SAR equipment operates as an integrated system to accomplish the functions mentioned above.

Under the provisions of 14 CFR 21.101, Bell must show that the 412EP model helicopter in the 412EPI configuration, as changed, continues to meet either the applicable provisions of the regulations incorporated by reference in type certificate (TC) No. H4SW or the applicable regulations in effect on the date of application for the change, depending on the significance of the change as defined by 14 CFR 21.101. The regulations incorporated by reference in the TC are commonly referred to as the “original type certification basis.” The regulations incorporated by reference in H4SW are as follows:

(a) 14 CFR part 29, dated February 1, 1965, including Amendments 29-1 through 29-51.

(b) 14 CFR 29.141, 29.143, 29.251, 29.301, 29.303, 29.305, 29.307(a), 29.561(c), 29.601(a), 29.603, 29.605, 29.609(a), 29.625, 29.777, 29.831(b)(c)(d), 29.907, 29.993, 29.1023(a), 29.1049, 29.1093. 29.1203(a)(b)(d), 29.1301, 29.1327, 29.1381, 29.1385, 29.1389, 29.1391, 29.1393, 29.1395, 29.1431, 29.1435, 29.1523(a)(b), 29.1541, 29.1543(b), 29.1547, 29.1551, 29.1553, at Amdt. 29-0.

(c) 14 CFR 29.955(a)(1) at Amdt. 29-2.

(d) 14 CFR 29.773(a), 29.901, 29.1191(a)(c)(d)(e)(f), at Amdt. 29-3.

(e) 14 CFR 29.1397 at Amdt. 29-7.

(f) 14 CFR 29.1387 at Amdt 29-9.

(g) 14 CFR part 29.1401 at Amdt. 29-11.

(h) 14 CFR 29.63, 29.939, 29.1165, 29.1322 at Amdt. 29-12.

(i) 14 CFR 29.1145 at Amdt. 29-13.

(j) 14 CFR 29.1335 at Amdt. 29-14.

(k) 14 CFR 29.29, 29.33(a)(1), 29.1353(a)(b), 29.1501, 29.1527, 29.1581(a)(b)(d) at Amdt. 29-15.

(l) 14 CFR 29.1413(a), at Amdt. 29-16.

(m) 14 CFR 29.1091(a)(b), 29.1545 at Amdt. 29-17.

(n) 14 CFR 29.571, 29.1529, 14 CFR part 29 Appendix A at Amdt. 29-20.

(o) 14 CFR 29.1321, 14 CFR part 29 Appendix B I and IX (a)(b) at Amdt. 29-21.

(p) 14 CFR 29.853(a)(2)(c) at Amdt. 29-23.

(q) 14 CFR 29.21, 29.45(a)(b)(c)(e)(f), 29.151, 29.672(a), 29.771(a)(b)(c), 29.1303, 29.1325, 29.1331, 29.1333, 29.1355, 29.1357(a)(c)(d)(e)(g), 29.1517, 29.1555(a)(b)(c)(d), 29.1559, 29.1583, 29.1585 at Amdt. 29-24.

(r) 14 CFR 29.1011(d), 29.1041, 29.1043, 29.1045, 29.1047, 29.1141(a)(b)(c)(d)(f)(2), 29.1337(a)(b)(1)(2)(c)(d)(e), 29.1557(c)(2) at Amdt. 29-26.

(s) 14 CFR 29.337(a), 29.613(d), at Amdt. 29-30.

(t) 14 CFR 29.783(e), 29.903(a)(b)(c)(3)(d)(e) at Amdt. 29-31

(u) 14CFR 29.1143(a)(b)(c)(e)(f), 29.1549 at Amdt. 29-34.

(v) 14 CFR 29.49(a)(b)(c), 29.51, 29.53, 29.55, 29.60, 29.61, 29.64, 29.65(a), 29.75, 29.79, 29.83(a)(b), 29.87(a), at Amdt. 29-39.

(w) 14 CFR 29.1305(a)(3)(4)(6-19)(21-23)(25)(26)(b)(c), 29.1309(a)(b)(2)(c)(d)(e)(f)(g)(h), 14 CFR part 29 Appendix B VIII (a)(b)(3)(4)(5)(6)(c), at Amdt. 29-40.

(x) 14 CFR 29.1521(a)(b)(1)(3)(4)(5)(6)(7)(ii)(c)(4)(d)(e)(f)(g)(h)(i)(j) at Amdt. 29-41.

(y) 14 CFR 29.1329(f), 29.1351(a)(b)(3)(4)(6)(d), 29.1359 at Amdt. 29-42.

(z) 14 CFR 29.865(c)(6) at Amdt. 29-43.

(aa) 14 CFR 29.59, 29.62, 29.67, 29.77, 29.81, 29.85, 29.1323(a)(b)(c)(d)(e) at Amdt. 29-44.

(bb) 14 CFR 29.1317(a)(b)(c), 14 CFR part 29 Appendix E at Amdt. 29-49.

(cc) 14 CFR 29.1587 at Amdt. 29-51.

(dd) Equivalent Level of Safety Findings:

(1) 14 CFR 29.1305(a)(11-16) and 29.1549(a)(b)(c)(e) for the Power Situation Indicator (documented in ELOS Memo No. ST0025RC-RD/P-1) dated January 16, 2013.

(2) 14 CFR 29.1545(b)(2) for Airspeed Indicator (documented in ELOS Memo No. ST0025RC-RD/F-2) dated September 27, 2012.

(3) 14 CFR 29.1333(a) and 14 CFR part 29 Appendix B VIII(b)(5)(i) and (ii) for Electronically Integrated Flight Instrument Systems (documented in ELOS Memo No. ST0025RC-RD/S-2) dated January 25, 2013.

(4) 14 CFR 29.1555(c)(1) for the Useable Fuel Capacity Marking (documented in ELOS Memo No. ST0025RC-RD/P-2) dated December 18, 2012.

(ee) If BHT Kit 412-706-140, Increased Gross Weight, is installed then compliance has also been shown to 14 CFR 29.25(a)(1)(3)(4) Amend 29-51, 14 CFR part 29 Appendix B III, IV(a)(b)(1)(3)(c)(1)(d)(1)(e)(f), V, VI, VII at Amend 29-21 and 14 CFR 36.1(c) at Amend 36-14.

If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR part 29) do not contain adequate or appropriate safety standards for the Bell Model 412EP helicopter in the 412EPI configuration because of a novel or unusual design feature, special conditions are prescribed under § 21.16.

The FAA issues special conditions, as defined in § 11.19, under § 11.38, and they become part of the type certification basis under § 21.101.

Special conditions are initially applicable to the model for which they are issued. Should the TC for that model be amended later to include any other model that incorporates the same novel or unusual design feature, or should any other model already included on the same TC be modified to incorporate the same novel or unusual design feature, the special conditions would also apply to the other model.

The Bell Model 412EP helicopter in the 412EPI configuration will incorporate the following novel or unusual design features.

The SAR system is composed of a navigation computer with SAR modes, an AFCS that provides coupled SAR functions, hoist operator control, a hover speed reference system, and two radio altimeters. The AFCS coupled SAR functions include:

(a) Hover hold at selected height above the surface.

(b) Ground speed hold.

(c) Transition down and hover to a waypoint under guidance from the navigation computer.

(d) SAR pattern, transition down, and hover near a target over which the helicopter has flown.

(e) Transition up, climb, and capture a cruise height.

(f) Capture and track SAR search patterns generated by the navigation computer.

(g) Monitor the preselected hover height with automatic increase in collective if the aircraft height drops below the safe minimum height.

These SAR modes are intended to be used over large bodies of water in areas clear of obstructions. Further, use of the modes that transition down from cruise to hover will include operation at airspeeds below VMINI.

The SAR system only entails navigation, flight control, and coupled AFCS operation of the helicopter. The system does not include additional equipment that may be required for over water flight or external loads to meet other operational requirements.

These special conditions apply to the Bell Model 412EP helicopter in the 412EPI configuration. Should Bell apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, the special conditions would apply to that model as well under the provisions of § 21.101(d).

This action affects only certain novel or unusual design features on one model of helicopter. It is not a rule of general applicability and affects only the applicant who applied to the FAA for approval of these features on the helicopter.

The authority citation for these special conditions is as follows:

Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for Bell Helicopter Textron Inc. (Bell) Model 412EP helicopters in the 412EPI configuration when modified by Bell by installing an optional Search and Rescue (SAR) Automatic Flight Control System (AFCS).

In addition to the 14 CFR part 29 certification requirements for Category A and helicopter instrument flight (Appendix B), the following additional requirements must be met for certification of the SAR AFCS:

(a) SAR Flight Modes. The coupled SAR flight modes must provide:

(1) Safe and controlled flight in the three axes at all airspeeds (lateral position and speed, longitudinal position and speed, and height and vertical speed) from the previous VMINI to a hover (within the maximum demonstrated wind envelope).

(2) Automatic transition to the helicopter instrument flight (Appendix B) envelope as part of the normal SAR mode sequencing.

(3) A pilot-selectable Go-Around mode that safely interrupts any other coupled mode and automatically transitions the helicopter to the instrument flight (Appendix B) envelope.

(4) A means to prevent unintended flight below a safe minimum height. Pilot-commanded descent below the safe minimum height is acceptable provided the alerting requirements in paragraph (b)(8)(i) of these Special Conditions alert the pilot of this descent below safe minimum height.

(b) SAR Mode System Architecture. To support the integrity of the SAR modes, the following system architecture is required:

(1) Ground mapping radar function that presents real-time information to the pilots.

(2) A system for limiting the engine power demanded by the AFCS when any of the automatic piloting modes are engaged, so full authority digital engine control power limitations, such as torque and temperature, are not exceeded.

(3) A system providing the aircraft height above the surface and final pilot-selected height at a location on the instrument panel in a position acceptable to the FAA that will make it plainly visible to and usable by any pilot at their station.

(4) A system providing the aircraft heading and the ability to automatically hold a pilot-selected heading set by either setting the reference to the current heading or adjusting the reference left or right. If the reference setting can change faster than the aircraft ability to follow, a display of reference heading is required at a location on the instrument panel in a position acceptable to the FAA that will make it plainly visible to and usable by any pilot at their station.

(5) A system providing the aircraft longitudinal and lateral hover velocities and the pilot-selected longitudinal and lateral velocities when used by the AFCS in the flight envelope where airspeed indications become unreliable. This information must be presented at a location on the instrument panel in a position acceptable to the FAA that is plainly visible to and usable by any pilot at their station.

(6) A system providing wind speed and wind direction when automatic piloting modes are engaged or transitioning from one mode to another.

(7) A means to monitor for flight guidance deviations and failures with alerting that enables the flight crew take appropriate corrective action.

(8) An alerting system that provides visual or aural alerts, or both, to the flight crew under any of the following conditions:

(i) When the stored or pilot-selected safe minimum height is reached.

(ii) When a SAR mode system malfunction occurs.

(iii) When the AFCS changes modes automatically from one SAR mode to another. For normal transitions from one SAR mode to another, a single visual or aural alert may suffice. For a SAR mode malfunction or a mode having a time-critical component, the flight crew alerting system must activate early enough to allow the flight crew to take timely and appropriate action. The alerting system means must be designed to alert the flight crew in order to minimize crew errors that could create an additional hazard.

(9) The SAR system hoist operator control is considered a flight control with limited authority and must comply with the following:

(i) The hoist operator control must be designed and located to provide for convenient operation and to prevent confusion and inadvertent operation.

(ii) The helicopter must be safely controllable by the hoist operator control throughout the range of that control.

(iii) The hoist operator control may not interfere with the safe operation of the helicopter.

(iv) Pilot and copilot flight controls must be able to smoothly override the control authority of the hoist operator control, without exceptional piloting skill, alertness, or strength, and without the danger of exceeding any other limitation because of the override.

(10) The reliability of the AFCS must be related to the effects of its failure. The occurrence of any failure condition that would prevent continued safe flight and landing must be extremely improbable. For any failure condition of the AFCS which is shown to not be extremely improbable:

(i) The helicopter must be safely controllable and capable of continued safe flight without exceptional piloting skill, alertness, or strength. Additional unrelated probable failures affecting the control system must be evaluated.

(ii) The AFCS must be designed so that it cannot create a hazardous deviation in the flight path or produce hazardous loads on the helicopter during normal operation or in the event of a malfunction or failure, assuming corrective action begins within an appropriate period of time. Where multiple systems are installed, subsequent malfunction conditions must be evaluated in sequence unless their occurrence is shown to be improbable.

(11) A functional hazard assessment and a system safety assessment must address the failure conditions associated with SAR operations:

(i) For SAR catastrophic failure conditions, changes may be required to the following:

(A) System architecture.

(B) Software and complex electronic hardware design assurance levels.

(C) High Intensity Radiated Field (HIRF) test levels.

(D) Instructions for continued airworthiness.

(ii) The assessments must consider all the systems required for SAR operations, including the AFCS, all associated AFCS sensors (for example, radio altimeter), and primary flight displays. Electrical and electronic systems with SAR catastrophic failure conditions for both visual flight rules and IFR must comply with the 14 CFR 29.1317(a)(4) HIRF requirements.

(c) SAR Mode Performance Requirements.

(1) The SAR modes must be demonstrated for the requested flight envelope, including the following minimum sea-state and wind conditions:

(i) Sea State: Wave height of 2.5 meters (8.2 feet), considering both short and long swells.

(ii) Wind: 25 knots headwind; 17 knots for all other azimuths.

(2) The selected hover height and hover velocity must be captured (including the transition from one captured mode to another captured mode) accurately and smoothly and not exhibit any significant overshoot or oscillation.

(3) The minimum use height (MUH) for the SAR modes must be no less than the maximum loss of height following any single failure or any combination of failures not shown to be extremely improbable, plus an additional margin of 15 feet above the surface. MUH is the minimum height at which any SAR AFCS mode may be engaged.

(4) The SAR mode system must be usable up to the maximum certified gross weight of the aircraft or to the lower of the following weights:

(i) Maximum emergency flotation weight.

(ii) Maximum hover Out-of-Ground Effect (OGE) weight.

(iii) Maximum demonstrated weight.

(d) Flight Characteristics.

(1) For SAR mode coupled flight below VMINI, at the maximum demonstrated winds, the helicopter must be able to maintain any required flight condition and make a smooth transition from any flight condition to any other flight condition without requiring exceptional piloting skill, alertness, or strength, and without exceeding the limit load factor. This requirement also includes aircraft control through the hoist operator's control.

(2) For coupled flight below the previously established VMINI, the following stability requirements replace the stability requirements of paragraph IV, V, and VI of Appendix B to Part 29:

(i) Static Longitudinal Stability: The requirements of Appendix B to part 29, paragraph IV are not applicable.

(ii) Static Lateral-Directional Stability: The requirements of Appendix B to part 29, paragraph V are not applicable.

(iii) Dynamic Stability, paragraph VI:

(A) Any oscillation must be damped and any aperiodic response must not double in amplitude in less than 10 seconds. This requirement must also be met with degraded upper mode(s) of the AFCS.

(B) After any upset, such as a wind gust, the AFCS must return the aircraft to the last commanded flight condition within 10 seconds or less.

(3) With any of the upper modes of the AFCS engaged, the pilot must be able to manually recover the aircraft and transition to the normal (Appendix B) IFR flight profile envelope without exceptional skill, alertness, or strength.

(e) One-Engine Inoperative (OEI) Performance Information.

(1) The following performance information must be provided in the Rotorcraft Flight Manual Supplement (RFMS):

(i) OEI performance information and emergency procedures, providing the maximum weight that will provide a minimum clearance of 15 feet above the surface, following failure of the critical engine in a hover. The maximum weight must be presented as a function of the hover height for the temperature and pressure altitude range requested for certification. The effects of wind must be reflected in the hover performance information.

(ii) Hover OGE performance with the critical engine inoperative for OEI continuous and time-limited power ratings for those weights, altitudes, and temperatures for which certification is requested.

(2) These OEI performance requirements do not replace performance requirements that may be needed to comply with the airworthiness or operational standards (14 CFR 29.865 or 14 CFR part 133) for external loads or human external cargo.

(f) RFMS.

(1) The RFMS must contain, at a minimum:

(i) Limitations necessary for safe operation of the SAR system, including:

(A) Minimum crew requirements.

(B) Maximum SAR weight.

(C) Engagement criteria for each of the SAR modes to include MUH, as determined in paragraph (c)(3) of these Special Conditions.

(ii) Normal and emergency procedures for operation of the SAR system (including operation of the hoist operator control) with AFCS failure modes, AFCS degraded modes, and engine failures.

(iii) Performance information:

(A) OEI performance and height-loss.

(B) Hover OGE performance information, utilizing OEI continuous and time-limited power ratings.

(C) The maximum wind envelope demonstrated in flight test.

(D) Information and/or advisory information concerning operations in a heavy salt spray environment, including any airframe or power effects as a result of salt encrustation.

(g) Flight Demonstration.

(1) Before approval of the SAR system, an acceptable flight demonstration of all coupled SAR modes is required.

(2) The AFCS must provide fail-safe operations during coupled maneuvers. The demonstration of fail-safe operations must include a pilot workload assessment associated with manually flying the aircraft to an altitude greater than 200 feet above the surface and an airspeed of at least the best rate of climb airspeed (Vy).

(3) For any failure condition of the SAR system shown to not be extremely improbable, the pilot must be able to make a smooth transition from one flight mode to another without exceptional piloting skill, alertness, or strength.

(4) Failure conditions that are shown to not be extremely improbable must be demonstrated by analysis, ground testing, or flight testing. For failures demonstrated in flight, the following normal pilot recovery times are acceptable:

(i) Transition modes (Cruise-to-Hover/Hover-to-Cruise) and Hover modes: Normal pilot recognition plus 1 second.

(ii) Cruise modes: Normal pilot recognition plus 3 seconds.

(5) All AFCS malfunctions must include evaluation at the low-speed and high-power flight conditions typical of SAR operations. Additionally, AFCS hard-over, slow-over, and oscillatory malfunctions, particularly in yaw, require evaluation. AFCS malfunction testing must include a single or a combination of failures (such as, erroneous data from and loss of the radio altimeter, attitude, heading, and altitude sensors) that are shown to not be extremely improbable.

(6) The flight demonstration must include the following environmental conditions:

(i) Swell into wind.

(ii) Swell and wind from different directions.

(iii) Cross swell.

(iv) Swell of different lengths (short and long swell).

On April 7, 2017, we issued AD 2017-08-07, Amendment 39-18856 (82 FR 18084, April 17, 2017) (“AD 2017-08-07”), for Learjet, Inc., Model 60 airplanes, serial numbers 60-002 through 60-430 inclusive. AD 2017-08-07 required a one-time inspection of the fuselage skin for corrosion, and related investigative and corrective actions if necessary. AD 2017-08-07 resulted from an evaluation by the design approval holder (DAH) indicating that the upper fuselage skin under the aft oxygen line fairing is subject to multi-site damage (MSD). We issued AD 2017-08-07 to detect and correct corrosion of the fuselage skin, which could result in reduced structural integrity of the airplane.

Since we issued AD 2017-08-07, we determined that only certain airplanes identified in the applicability of AD 2017-08-07 are affected by the unsafe condition. For Learjet, Inc., Model 60 airplanes, serial numbers 60-002 through 60-430 inclusive, the unsafe condition affects only airplanes with a dorsal-mounted oxygen bottle and airplanes that have had the dorsal-mounted oxygen bottle removed but have retained the oxygen line fairing installed on top of the fuselage. These airplanes are identified in the effectivity of Learjet 60 Service Bulletin 60-53-19, Revision 3, dated August 29, 2016, which is the appropriate source of service information for accomplishing the actions required by AD 2017-08-07. Therefore, we have revised paragraph (c) of this AD to identify only those airplanes affected by the unsafe condition.

We reviewed Learjet 60 Service Bulletin 60-53-19, Revision 3, dated August 29, 2016. The service information describes procedures for inspections of the fuselage crown skin for corrosion, and related investigative and corrective actions if necessary. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

We are issuing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This AD requires a one-time inspection of the fuselage skin for corrosion, and related investigative and corrective actions if necessary. This AD also requires sending the inspection results to the FAA.

Learjet 60 Service Bulletin 60-53-19, Revision 3, dated August 29, 2016, specifies to contact the manufacturer for instructions on how to repair certain conditions, but this AD requires repairing those conditions in one of the following ways:

• In accordance with a method that we approve; or

• Using data that meet the certification basis of the airplane, and that have been approved by a Delegated Engineering Representative (DER) for Learjet Inc., or a Unit Member (UM) of the Learjet Organization Designation Authorization (ODA), whom we have authorized to make those findings.

We consider this AD interim action. Because the cause of the corrosion is not known, the inspection reports will help determine the extent of the corrosion in the affected fleet. Based on the results of these reports, we might determine that further corrective action is warranted. Once further corrective action has been identified, we might consider further rulemaking.

We determined that unaffected airplanes were inadvertently included in the applicability of AD 2017-08-07, which applied to Learjet, Inc., Model 60 airplanes, serial numbers 60-002 through 60-430 inclusive. However, only airplanes identified in Learjet 60 Service Bulletin 60-53-19, Revision 3, dated August 29, 2016, are subject to the identified unsafe condition. The actions required by this AD are not required to be done on airplanes that are not identified in Learjet 60 Service Bulletin 60-53-19, Revision 3, dated August 29, 2016. Therefore, we are superseding AD 2017-08-07 to correct the applicability. We find that notice and opportunity for prior public comment are unnecessary and that good cause exists for making this amendment effective in less than 30 days.

This AD is a final rule that involves requirements affecting flight safety and was not preceded by notice and an opportunity for public comment. However, we invite you to send any written data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include the docket number FAA-2017-0501 and Directorate Identifier 2017-NM-053-AD at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments.

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

We estimate that this AD affects 284 airplanes of U.S. registry. We estimate the following costs to comply with this AD:

This AD adds no additional economic burden.

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

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

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

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

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

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

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

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

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

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

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

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

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to British Aerospace Regional Aircraft Model HP 137 Jetstream MK1, Jetstream Series 200, and Jetstream Series 3101 airplanes. That NPRM was published in the Federal Register on February 17, 2017 (82 FR 10973), and proposed to supersede AD 2014-07-07, Amendment 39-17821 (79 FR 23897; April 29, 2014) (“2014-07-07”).

The NPRM proposed to correct an unsafe condition for the specified products and was based on mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country. The MCAI states that:

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

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

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

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

We reviewed British Aerospace Jetstream Series 3100 & 3200 Service Bulletin 32-A-JA851226, Revision 7, dated May 25, 2015. The service information describes procedures for nondestructive testing (NDT) and visual inspections of the main landing gear spigot housing for cracks and repair if necessary. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section of the final rule.

We estimate that this AD will affect 26 products of U.S. registry. We also estimate that it would take about 14 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour.

Based on these figures, we estimate this cost of the AD on U.S. operators to be $30,940, or $1,190 per product.

In addition, we estimate that any necessary follow-on actions would take about 2 work-hours and require parts costing $5,000, for a cost of $5,170 per product. We have no way of determining the number of products that may need these actions.

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

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

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

For the reasons discussed above, I certify this AD:

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

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

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

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

You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2017-0053; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2009-21-01, Amendment 39-16038 (74 FR 52395, October 13, 2009) (“AD 2009-21-01”). AD 2009-21-01 applied to certain the Boeing Company Model 737-300 and 737-400 series airplanes. The NPRM published in the Federal Register on May 13, 2016 (81 FR 29802). The NPRM was prompted by an evaluation by the DAH indicating that the aft fuselage skin is subject to WFD, and by reports of aft fuselage cracking. The NPRM proposed to continue to require repetitive inspections to detect cracking of the aft fuselage skin, and related investigative and corrective actions if necessary. The NPRM also proposed to add new aft fuselage skin inspections for cracking, inspections to detect missing or loose fasteners and any disbonding or cracking of bonded doublers, permanent repairs of time-limited repairs, related investigative and corrective actions if necessary, and skin panel replacement. The NPRM also proposed to remove Model 737-400 series airplanes from the applicability. We are issuing this AD to detect and correct cracking in the aft fuselage skin along the longitudinal edges of the chem-milled pockets in the bonded skin doubler, which could result in possible rapid decompression and reduced structural integrity of the airplane.

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

Boeing requested that we revise the precipitating event statement by including that there have been reports of aft fuselage cracking. Boeing stated that this revision would be consistent with wording of other related rulemaking.

We agree with Boeing's request because it provides additional clarity to the precipitating event statement. We have revised the SUMMARY and Discussion sections, and paragraph (e) of this AD accordingly.

Jet2.com Limited (Jet2) requested that we revise the NPRM to require reinstalling the lap joint modification previously installed in accordance with AD 2015-21-06, Amendment 39-18298 (80 FR 69839, November 12, 2015) (“AD 2015-21-06”), which requires the S-14 lap joint to be trimmed out prior to 50,000 total flight cycles. Jet2 stated that Boeing Special Attention Service Bulletin 737-53-1168, Revision 4, dated June 3, 2015 (“SASB 737-53-1168, Revision 4”) specifies reinstalling the lap joint modification.

We do not agree with the commenter's request. The modification required in AD 2015-21-06 consists of trimming out the lap splice, such that if this modification were installed, it would be impossible to install a new skin without reinstalling the lap modification. If the instructions in SASB 737-53-1168, Revision 4, to reinstall the lap splice modification were accidently overlooked, it would become clear to the installer that the reinstallation would be required. We have not changed this AD in this regard.

Boeing requested that we add a paragraph to the proposed AD to address repairs that are installed on the airplane for reasons other than chem-mill cracking. Boeing submitted suggested language and pointed out that the additional language is similar to that in other rulemaking.

We disagree with Boeing's request. Part 1 of the Accomplishment Instructions of SASB 737-53-1168, Revision 4, does not make a distinction regarding why an existing repair was installed. Therefore, repairs installed for damage other than a chem-mill crack are already addressed. We have not changed this AD in this regard.

Boeing requested that we revise paragraph (h)(4) of the proposed AD to do the actions at an initial compliance time obtained through the alternative method of compliance (AMOC) process specified in paragraph (n)(1) of the proposed AD. Boeing stated that the repetitive inspections would still be done at the times specified in the service information. Boeing also requested that we include in the paragraph revision the terminating action of skin panel replacement at the time approved through an AMOC. Boeing stated that its request would provide a reset on the compliance times if the skin panel was replaced prior to 53,000 total airplane cycles. Boeing explained that its authorized representative under the Boeing Commercial Airplanes Organization Designation Authorization (ODA) cannot approve extensions to the compliance times.

We partially agree with Boeing's request. We agree that, for airplanes with skin panels replaced prior to 53,000 total flight cycles, in order to reset the inspection threshold on the replaced skin panels, approval must come from the FAA. Under the provisions of paragraph (n) of this AD, we may consider requests for a reset of the compliance times if the skin panel was replaced prior to 53,000 total airplane cycles if data are submitted to substantiate that such an adjustment would provide an acceptable level of safety. We have not changed this AD in this regard.

Boeing requested that we add the specific part of the accomplishment instructions in paragraphs (i)(1)(ii), (i)(2)(ii), and (j) of the proposed AD. Boeing stated that paragraph (g) of the proposed AD specifies the specific part number, and that this change would make these paragraphs consistent with the wording in paragraph (g) of the proposed AD.

We agree with Boeing's request. We agree that specifying the specific part of the Accomplishment Instructions of SASB 737-53-1168, Revision 4, will add clarity to the AD. We have revised paragraphs (i)(1)(ii), (i)(2)(ii), and (j) of this AD accordingly.

Boeing requested that we revise paragraph (l) of the proposed AD to specify that skin panel replacements using the kit identified in SASB 737-53-1168, Revision 4, do not have the lower flight cycle limit restriction that the production skin panel replacements have.

We agree with Boeing's request because the skin panel replacements using the kit identified in SASB 737-53-1168, Revision 4, is an improved design compared to the production skin panels, and therefore, do not need the lower flight cycle limit restriction. We have added paragraph (l)(3) to this AD, which states, in part, that if the skin panel is replaced with a kit skin panel as specified in SASB 737-53-1168, Revision 4, the 53,000 total flight cycle limit does not apply.

Boeing requested that we revise paragraphs (m)(2), (m)(3), and (n)(5) of the proposed AD to remove the flight cycle restriction for certain previously accomplished actions using certain service information. Boeing stated that the only skin panel replacements specified in previous revisions of SASB 737-53-1168 are those using the kit panels, and that those panels do not have the flight-cycle limit specified in paragraphs (m)(2), (m)(3), and (n)(5) of the proposed AD.

We agree with the commenter's request because the skin panel replacements using the kit identified in SASB 737-53-1168, Revision 4, are an improved design compared to the production skin panels, and therefore, do not need the lower flight cycle limit restriction. We have revised paragraphs (m)(2), (m)(3), and (n)(5) of this AD accordingly.

Qantas Airways Limited (Qantas) requested that we revise paragraphs (g) and (l) of the proposed AD to specify terminating action. Qantas pointed out that replacing the skin panels with kit panels instead of production panels, as specified in SASB 737-53-1168, terminates the repetitive inspections identified in paragraphs (g), (i), and (j) of the proposed AD. Additionally, Qantas pointed out that replacement with kit skin panels using any revision of SASB 737-53-1168 before the effective date of the AD should also terminate the repetitive inspections identified in paragraphs (g), (i), and (j) of the proposed AD.

We agree with the commenter's request because the skin panel replacements using the kit identified in SASB 737-53-1168, Revision 4, are an improved design compared to the production skin panels and therefore, should terminate the repetitive inspections. We have revised paragraphs (m)(2), (m)(3), and (n)(5) of this AD accordingly.

Aviation Partners Boeing stated that accomplishing Supplemental Type Certificate (STC) ST01219SE does not affect the actions specified in the NPRM.

We concur with the commenter. We have redesignated paragraph (c) of the proposed AD as paragraph (c)(1) of this AD and added paragraph (c)(2) to this AD to state that installation of STC ST01219SE does not affect the ability to accomplish the actions required by this final rule. Therefore, for airplanes on which STC ST01219SE is installed, a “change in product” AMOC approval request is not necessary to comply with the requirements of 14 CFR 39.17.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously, and minor editorial changes. We have determined that these minor changes:

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

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

We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.

We reviewed SASB 737-53-1168, Revision 4. The service information describes procedures for doing inspections of the fuselage skin, repairs, and skin panel replacement. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

We estimate that this AD affects 168 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

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

We estimate the following costs to do any necessary post-repair inspections that would be required. We have no way of determining the number of aircraft that might need these inspections:

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

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

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

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

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

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

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

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

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

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to ZLIN AIRCRAFT a.s. Model Z-242L airplanes (type certificate previously held by MORAVAN a.s.). That NPRM was published in the Federal Register on March 2, 2017 (82 FR 12305), and proposed to supersede AD 2003-11-12, Amendment 39-13171 (68 FR 32629, June 2, 2003) (“AD 2003-11-12”).

Since we issued AD 2003-11-12, a revision to the airworthiness limitations chapter of the aircraft maintenance manual has been issued, and the State of Design airworthiness authority took AD action, as identified below.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued AD No.: 2017-0005, dated January 10, 2017 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:

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

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

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

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

We reviewed Chapter 9, Airworthiness Limitations, Revision No. 22, dated March 15, 2016, of ZLIN AIRCRAFT a.s. Z 242 L DOC. No. 003.22.1 Maintenance Manual-Vol. I., and Moravan-Aeroplanes a.s. Mandatory Service Bulletin Z 142C/17a, Z 242L/37a—Rev. 1, dated October 31, 2000. The revision to the Limitations sections introduces new and/or more restrictive safe life limits for the Model Z 242 airplane. The mandatory service bulletin describes procedures for annotating acrobatic and utility category operational time in the logbook. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section of this AD.

We estimate that this AD will affect 30 products of U.S. registry. We also estimate that it will take about 1 work-hour per product to comply with the requirement to incorporate the new revision into the Limitations section of the FAA-approved maintenance program (e.g., maintenance manual). The average labor rate is $85 per work-hour.

Based on these figures, we estimate the cost of this portion of this AD on U.S. operators to be $2,550, or $85 per product.

The above costs only account for the time to incorporate the document into the Limitations section of the FAA-approved maintenance program. These limitations will impose more restrictive life limits on some parts and provide new life limits for others. While the cost of these replacements could be expensive, they will only be required to operate the airplane past the established times. Ultimately, the estimated cost of replacing all life-limited parts could come close to the cost of the airplane. These life limits are necessary to continue to operate the airplane in an airworthy manner.

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

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

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

For the reasons discussed above, I certify this AD:

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

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

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

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

You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2017-0156; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

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

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Boeing Model 737-400 series airplanes. The NPRM published in the Federal Register on May 13, 2016 (81 FR 29809) (“the NPRM”). The NPRM was prompted by an evaluation by the DAH, which indicates that the aft fuselage skin is subject to WFD, and reports of aft fuselage skin cracking. The NPRM proposed to require repetitive inspections to detect cracking of the aft fuselage skin, inspections to detect missing or loose fasteners and any disbonding or cracking of bonded doublers, permanent repairs of time-limited repairs, related investigative and corrective actions if necessary, and skin panel replacement. We are issuing this AD to prevent cracking in the aft fuselage skin along the longitudinal edges of the bonded skin doubler, which could result in possible rapid decompression and reduced structural integrity of the airplane.

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

Boeing requested that we revise the proposed AD to address repairs that are installed on the airplane for reasons other than chem-mill cracking. Boeing provided suggested language for the AD.

We do not agree with Boeing's request. Paragraph 3.B.1 in the Accomplishment Instructions of Boeing Special Attention Service Bulletin 737-53-1187, Revision 3, dated July 10, 2015 (“SASB 737-53-1187 R3”), which is the referenced source of service information in this AD, already addresses the issue raised by Boeing. SASB 737-53-1187 R3 does not make a distinction between repairs installed for chem-mill cracking and repairs installed for other reasons. Therefore, repairs that are installed for any reason, provided they meet the service information criteria, are already addressed. We have not changed this AD in this regard.

Boeing requested that we revise the compliance time in paragraph (h)(4) of the proposed AD from the time specified in SASB 737-53-1187 R3, to a time approved by the FAA through the alternative method of compliance (AMOC) process.

Boeing provided examples of how replacing skin panels at certain compliance times would require further skin panel replacement before reaching the airplane limit of validity. Boeing explained that the NPRM proposed skin panel replacement at 60,000 total flight cycles; therefore, an FAA approval to adjust the compliance time from total flight cycles to cycles after skin panel replacement would be required.

We partially agree with Boeing's request. Airplanes that have had a skin replacement with a production skin panel, as distinguished from an improved-design kit skin panel, prior to 53,000 total flight cycles may be eligible for an adjustment of the inspection threshold. Currently, such an adjustment of the AD compliance time is not delegated to Boeing's authorized representatives, and the change must be approved by the FAA. However, we consider the number of airplanes affected by this scenario to be quite small. Therefore, we have decided to approve such changes to the compliance times on a case-by-case basis using the procedures specified in paragraph (n)(1) of this AD. Although we agree with the comment, we have not changed this AD in this regard.

Boeing requested that we revise paragraphs (i)(1)(ii), (i)(2)(ii), and (j) of the proposed AD by specifying doing part 6 of the service information. Boeing stated that specifying the service information part reference would make the language consistent with paragraph (g) of the proposed AD, which specifies the service information part reference.

We agree with Boeing's request. These changes will increase the paragraphs' clarity. We have revised paragraphs (i)(1)(ii), (i)(2)(ii), and (j) of this AD accordingly.

Boeing requested that we revise the provision of paragraph (l) of the proposed AD, which would provide for terminating action if the skin panel was replaced with a production skin panel. Boeing indicated that terminating action should also apply to airplanes with the skin panel replacement kit (S-20 to S-25 (left and right)) specified in Boeing Service Bulletin 737-53-1187. Boeing stated that the skin panel replacement using the kit specified in Boeing Service Bulletin 737-53-1187 does not have the lower flight cycle limit restriction of the production panel replacement. Boeing explained that once the kit skin panel is replaced, the inspections specified in SASB 737-53-1187 R3, are terminated.

We agree with Boeing's request. The kit skin panels are an improved design compared with the original production skin panels, have different inspection requirements, and provide terminating action. We have revised paragraph (l) of this AD accordingly.

Boeing requested that we revise paragraphs (m)(2), (m)(3), and (n)(5) of the proposed AD by removing the flight-cycle restriction for credit for the skin panel replacement. Boeing explained that the only skin panel replacement specified in the service information referenced in paragraphs (m)(2) and (m)(3) of the proposed AD is the skin panel replacement kit, which can be accomplished at any time.

Boeing stated that it assumed that only the kit skin panel replacements, and not the original production skin panels, are approved as AMOCs for AD 2009-21-01, Amendment 39-16038 (74 FR 52395, October 13, 2009) (“AD 2009-21-01”). Boeing asserted that, therefore, paragraph (n)(5) of the proposed AD should approve previous modifications done as optional terminating action for AD 2009-21-01 as AMOCs for the modification required by paragraph (l) of this AD without the flight-cycle restriction.

We partially agree with Boeing's request. The kit skin panels are an improved design compared with the original production skin panels and have different inspection requirements. We have revised paragraphs (m)(2) and (m)(3) of this AD by removing the flight-cycle restriction.

However, in order to address airplanes that have had production skin panels replaced through AMOCs for AD 2009-21-01, paragraph (n)(5) of this AD retains the flight-cycle restriction.

We agree to approve AMOCs for AD 2009-21-01 that require using the skin panel kit specified in Boeing Service Bulletin 737-53-1187 as AMOCs for the modification required by paragraph (l) of this AD without the flight-cycle restriction. We have added paragraph (n)(6) to this AD, which states that AMOCs approved for previous modifications done as optional terminating action for AD 2009-21-01 are approved as AMOCs for the modification required by paragraph (l) of this AD provided the skin modification replacement was done using the skin panel kit specified in Boeing Service Bulletin 737-53-1187.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:

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

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

We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.

We reviewed SASB 737-53-1187 R3. The service information describes procedures for doing inspections of the fuselage skin, repairs, and skin panel replacement. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

We estimate that this AD affects 84 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

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

We estimate the following costs to do any necessary post-repair inspections that would be required. We have no way of determining the number of aircraft that might need these inspections:

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

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

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

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

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

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

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

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

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

I. Background

In response to petitions for rulemaking from various industry groups requesting amendments to § 1.31, the Commission published in the Federal Register on January 19, 2017 a proposal (“Proposal”) to amend the recordkeeping obligations applicable to all persons required to keep records pursuant to the Act and Commission regulations promulgated thereunder (referred to in the Proposal as “records entities”).1 Regulation 1.31 sets forth the form and manner in which all regulatory records must be kept by records entities. Regulation 1.31 does not specify the types of regulatory records that must be kept, rather it specifies the form and manner in which regulatory records required by other Commission regulations are maintained and produced to the Commission. The proposed amendments to § 1.31, and related technical amendments to §§ 1.35 and 23.203, would modernize and make technology neutral the form and manner in which regulatory records must be kept, as well as rationalize the current rule text for ease of understanding. Under the proposed amendments, records entities would have greater flexibility regarding the retention and production of all regulatory records under a less-prescriptive, principles-based approach.

Among other proposed changes requested in the petitions for rulemaking, the Commission proposed to eliminate the requirement for a records entity to: (1) Keep electronic regulatory records in their native file format (i.e., in the format in which it was originally created); (2) retain any electronic record in a non-rewritable, non-erasable format (i.e., the “write once, read many” or “WORM” requirement); and (3) engage a third-party technical consultant and for the consultant to file certain representations with the Commission regarding access to the records entity's electronic regulatory records. These proposed changes would be universal to all records entities, including intermediaries registered or required to be registered with the Commission; registered entities such as designated contract markets, swap execution facilities, and derivatives clearing organizations; and any other persons required to produce certain regulatory records as set forth in other Commission regulations.

The Commission received sixteen comment letters on the Proposal from a wide range of records entities, including registrants, registered entities and other persons subject to the Commission's recordkeeping obligations set forth in § 1.31.2 All commenters generally supported the Commission's efforts to modernize and make technology neutral the existing recordkeeping obligations. One commenter requested that the Commission limit changes to § 1.31 to the elimination of the native file format, WORM, and third-party technical consultant requirements, and withdraw the remainder of the proposal.3 As outlined below, several commenters also suggested modifications to the proposed rule text, including the requirement for records entities to establish, maintain, and implement written policies and procedures reasonably designed to ensure that the records entity complies with its recordkeeping obligations. For reasons provided below, the Commission has accepted certain of these recommendations in the amendments being adopted today, but has declined to accept certain other recommendations, including recommendations beyond the scope of the Proposal.

The Commission has considered the comments it received in response to the Proposal and is adopting the rule amendments as proposed, with the following exceptions: (1) Revising the definition of “regulatory records” in § 1.31(a); (2) deleting proposed § 1.31(b) regarding the requirement for a records entity to establish, maintain, and implement written policies and procedures designed to ensure compliance with all obligations under § 1.31; (3) amending § 1.31(c) to limit the retention period for pre- trade communications required by § 23.202(a)(1) and § 23.202(b)(1)-(3) to five years from the date the communication was created; (4) deleting from § 1.31(d)(2)(i) the requirement that a records entity retain systems that maintain the “chain of custody elements” of any electronic regulatory record; and (5) re-lettering § 1.31(c)-(f) to account for the deletion of proposed § 1.31(b). Specific provisions of the final rules are addressed below.

The Commission proposed to define in § 1.31(a) the terms “electronic regulatory records,” “records entity,” and “regulatory records” as used elsewhere in the section.

The Commission received several comments regarding the proposed definition of “records entity” to be any person required by the Act or Commission regulations to keep regulatory records. A few commenters requested that the Commission exclude from the definition of “records entity” those persons that are neither registrants nor registered entities.4 One commenter 5 further suggested that compliance with the proposed changes would impose greater costs on records entities that are neither registrants nor registered entities.6 In light of these comments, the Commission notes that the final rule as adopted by this release does not impose any new recordkeeping requirements on any records entity, including those that are neither registrants nor registered entities, such as commercial end-users. Rather, the final rule merely modernizes and makes technology neutral the form and manner in which regulatory records must be kept. Further, the final rule is clear that it does not override other methods of maintaining records that may be specified elsewhere in the Act or other Commission regulations.7 Thus, commercial end-users that are records entities, for example, may continue to maintain records in accordance with their current practices if such are permitted by the Act, Commission regulations, or existing relief or guidance.8 Further, as stated above, the final rule removes several obligations regarding the form and manner in which regulatory records must be kept that should lessen the compliance costs associated with the recordkeeping requirements set forth in § 1.31. Given the foregoing, the Commission has determined not to exclude any persons required to keep regulatory records from the definition of “records entity.”

Regarding the definition of “regulatory records,” the Commission specifically requested comment whether the term “metadata”—or data about data—should be defined. The Commission recognized in the Proposal that the term metadata may be generally understood by practitioners notwithstanding a lack of universal agreement on an exact definition. A majority of commenters on the issue agreed that metadata need not be defined at this time as that would be inconsistent with the Commission's stated goal to provide for less-prescriptive recordkeeping obligations.9 Further, one commenter asserted that including metadata within the definition of a “regulatory record” would greatly increase the amount and associated costs of data to be stored and potentially subject to production requests.10 Another commenter stated that records entities would be required to pursue, develop, and purchase additional technological solutions to ensure compliance if metadata were defined.11

The Commission notes that it and other federal agencies, including the Securities and Exchange Commission (“SEC”), have been requesting metadata in conjunction with information requests to industry for more than five years through standardized data delivery standards.12 The Commission believes that the § 1.31(a) definition of “regulatory record,” i.e., all data produced and stored electronically describing how and when such books and records were created, formatted, or modified, is sufficient to support its statutory inspection and investigative functions. Thus, the Commission has determined that there is no need to define metadata at this time.

The Commission further noted in the Proposal that the proposed definition of “regulatory records” would more clearly state the existing requirement for each records entity to maintain a regulatory record and any subsequent versions of such record. Multiple commenters questioned whether the revised language was, in fact, imposing a new requirement to maintain versions of a regulatory record before it becomes in fact a regulatory record (i.e., drafts of an agreement created during a negotiation but prior to execution).13 To clarify that the Commission did not intend to require versions of a regulatory record prior to its becoming a regulatory record, the Commission is modifying the definition of “regulatory records” to indicate that the term means all books and records required to be kept by the Act or Commission regulations, including any record of any correction or other amendment to such books and records, provided that, with respect to such books and records stored electronically, regulatory records shall also include: (i) Any data necessary to access, search, or display any such books and records; and (ii) all data produced and stored electronically describing how and when such books and records were created, formatted, or modified. The Commission believes the definition as revised makes clear that a records entity only has the obligation to maintain data about a regulatory record after it is created and not about the record before it becomes a regulatory record.

As noted in the Proposal this is the existing standard in § 1.31. Under existing § 1.31(b)(1)(ii)(A) electronic records are required to be preserved exclusively in a non-rewritable, non-erasable format. This provision was designed to ensure the “trustworthiness of documents that may be relied upon by the Commission in conducting investigations and entered into evidence in administrative and judicial proceedings.” 14 It therefore follows that each version of an electronic record and all subsequent versions would have to be maintained under the existing rule. This requirement provides for a comprehensive audit trail, which the Commission believes is vital to both the supervision and enforcement of the Act and Commission regulations.

Finally, another commenter also asserted that retaining all versions of a regulatory record is redundant and creates additional opportunities for data theft or loss.15 The commenter did not provide any detail regarding how maintaining subsequent versions of a regulatory record, which is an existing requirement under § 1.31, raises new concerns about data theft or loss. Thus, the Commission is unable to address any such concern at this time.

The Commission proposed to amend § 1.31(b) to require each records entity to establish, maintain, and implement written policies and procedures reasonably designed to ensure that the records entity complies with its obligations under Regulation 1.31. As proposed, the written policies and procedures would provide for, without limitation, appropriate training of officers and personnel of the records entity regarding their responsibility for ensuring compliance with the obligations of the records entity under § 1.31, and regular monitoring of such compliance.

Without an explanation of the differences, several commenters disagreed with the Commission that the proposed requirement for written policies and procedures is consistent with the existing § 1.31(b)(3) requirement for anyone using electronic storage media to develop and maintain written operational procedures and controls (i.e., an “audit system”) designed to provide accountability over both the initial entry of required records and the entry of each change made to any original or duplicate record.16 Again without providing any explanation of the differences between the existing “audit system” requirement and the proposed requirement for written policies and procedures or any specific cost estimates, commenters also argued that the application of the proposed written policies and procedures requirement would create new regulatory obligations for records entities which are neither registrants nor registered entities, some of whom are commercial end-users.17 As a result, commenters argued that this additional requirement could deter certain market participants from trading swaps and other derivatives products in order to avoid having to comply with burdensome recordkeeping requirements.18 A few commenters argued that the specific reference to training is not consistent with the Commission's emphasis on a less-prescriptive, principles-based recordkeeping requirement.19 Other commenters requested that the Commission provide a phase-in period for establishing, maintaining and implementing written policies and procedures.20

Having considered these comments, the Commission has determined not to adopt the written policies and procedures requirement for records entities set forth in proposed § 1.31(b). The final rule, as adopted, sets forth the form and manner in which regulatory records must be kept, the retention period for various types of regulatory records, and the standards for production of regulatory records to the Commission. Given these clearly defined obligations, the Commission agrees with commenters that the requirement for written policies and procedures is unnecessary. As the Commission noted in the Proposal, the obligation to satisfy the requirements regarding § 1.31 is one that a records entity ignores at its peril. It is ultimately the duty and responsibility of records entities to ensure accurate and reliable records. The Commission also notes that registrants are subject to a duty to diligently supervise all activities relating to its business as a Commission registrant, pursuant to § 166.3. The Commission does not consider the withdrawal of a requirement for written policies and procedures to create an explicit or implicit defense against recordkeeping violations or failure to supervise violations.

The Commission proposed to amend § 1.31(c)(re-lettered as § 1.31(b) in the final rule) to re-state and clarify the existing retention period requirements for categories of regulatory records set forth in existing § 1.31(a), including the requirement that certain records associated with a swap be retained for the duration of the swap plus five years. The Commission also proposed to distinguish between electronic regulatory records and those records exclusively created and maintained on paper by requiring a records entity to keep electronic regulatory records readily accessible for the duration of the required record keeping period, and not just for the first two years. The Commission noted that this standard is consistent with the SEC's standard for certain intermediaries.21 For ease of understanding, the Commission also proposed to amend §§ 1.35(a) and 23.203(b)(1) and (2) to make technical changes regarding regulatory records related to oral communications and swaps-related information maintained by swaps dealers and major swap participants, respectively. The Commission received several comments regarding various aspects of proposed § 1.31(c).

Two commenters 22 requested that the Commission reduce the retention standard for electronic pre-execution communications required by § 23.202 in relation to a swap to five years from the date of creation of the regulatory record rather than the current standard of the duration of the swap plus five years.23 The commenters stated that the longer retention period “places an unnecessary retention burden on firms, which exceeds most statutes of limitations or utility with respect to underlying transactions.” 24 Another commenter stated that increasing retention periods for the storage of sensitive information in electronic form could put records entities, and their third-party service providers, at greater risk in the event of a data breach.25

The Commission recognizes the increased burden and risk of a longer retention period as pointed out by commenters, and, having considered such increased burden and risk in light of the nature of the affected regulatory records, has determined to require retention of electronic communications specified in § 23.202(a)(1) and § 23.202(b)(1)-(3) only for a period of five years from the date of creation of the required record. The Commission notes that these are records of pre-execution communications and, as such, are likely to be useful for regulatory oversight purposes for a shorter length of time than records regarding execution of transactions or records of events that effect transactions following execution.

For the avoidance of doubt, the Commission is not changing the retention period for execution trade information under § 23.202(a)(2), post-execution trade information under § 23.202(a)(3), the ledgers required under § 23.202(a)(4), or the daily trading records for related cash and forward transactions in § 23.202(b)(4)-(7). However, as previously stated, the Commission will continue to monitor changes in information technology and consider whether the recordkeeping regulation should be adjusted to reflect technological developments.

Certain commenters requested clarification whether the requirements as adopted apply to existing records.26 The Commission confirms that the requirements adopted by this release do apply to existing records. However, the Commission notes that existing recordkeeping methods remain valid for compliance with the new rule, and that for many records entities, applying the new regime will reduce regulatory burdens. For example, many records entities will be permitted to maintain existing electronic records in a manner other than in their native file format and will no longer be required to retain a third-party technical consultant with authority to access a records entity's existing electronic records.27

The Commission proposed to adopt § 1.31(d) (re-lettered as § 1.31(c) in final rule) to describe recordkeeping requirements regarding the form and manner in which regulatory records are retained by records entities. Consistent with the Commission's emphasis on a less-prescriptive, principles-based approach, proposed § 1.31(d)(1) would rephrase the existing requirements in the form of a general standard for each records entity to retain all regulatory records in a form and manner necessary to ensure the records' and recordkeeping systems' authenticity and reliability. The Commission proposed to adopt § 1.31(d)(2) to set forth additional controls for records entities retaining electronic regulatory records. The Commission emphasized in the Proposal that the proposed regulatory text does not create new requirements, but rather updates the existing requirements so that they are set out in a way that appropriately reflects technological advancements and changes to recordkeeping methods since the prior amendments of § 1.31 in 1999.

Various commenters proposed technical amendments to proposed § 1.31(d)(2). Multiple commenters 28 requested that the Commission delete the “chain of custody” provision in proposed § 1.31(d)(2)(i) because it is a legal evidentiary standard which does not translate clearly to the technological requirements for recordkeeping. Another commenter similarly noted that the “chain of custody” requirement is redundant and unnecessarily prescriptive given that records entities are required under proposed Regulation 1.31(d)(1) to keep regulatory records in a form and manner that ensures the authenticity and reliability of such records.29 Moreover, one of the commenters noted that the proposed definition of “regulatory records” in proposed § 1.31(a) already includes a chain of custody requirement based on the following language: “data that describes how, when, and, if relevant, by whom such electronically stored information was collected, created, accessed, modified, or formatted.” 30 The Commission has considered the comment that the term “chain of custody” may cause confusion given that it currently exists as a legal evidentiary standard and, given that the Commission is also persuaded that the concept is adequately covered under the definition of “regulatory records” it has determined to delete the “chain of custody elements” from the electronic regulatory records systems requirement in amended § 1.31(c)(2)(i). The Commission notes, however, that the deletion of the term “chain of custody” does not change the practical requirement that records entities maintain a comprehensive audit trail for all electronic regulatory records.

One commenter also requested that the Commission amend proposed § 1.31(d)(2)(ii) to incorporate existing business continuity planning regulations in lieu of the proposed language: “in the event of an emergency or other disruption of the records entity's electronic record retention systems[.]” 31 The Commission is not making this requested change because records entities are not prohibited by the rule from incorporating their obligations to maintain availability of regulatory records into their existing business continuity planning. The Commission does not believe that the general standard in new § 1.31(c)(2)(ii) creates an obligation that would conflict with a records entity's existing business continuity procedures.

The same commenter also requested that the Commission amend the proposed records inventory requirement in new § 1.31(c)(2)(iii) to not require system descriptions and information necessary for accessing or producing electronic regulatory records because introducing concepts related to access and production of records in this section is potentially confusing.32 For clarity, the Commission notes that data necessary to access and produce electronic regulatory records is itself a regulatory record under the definition thereof in § 1.31(a). Thus, the requirement in new § 1.31(c)(2)(iii) is simply a requirement that a records entity keep an up-to-date inventory of the systems where such data is maintained.

Another commenter requested that the Commission delete from proposed § 1.31(d)(2)(i) the language “and to monitor compliance with the Act and Commission regulations in this Chapter” because such an “obligation to comply would not normally be embodied in a recordkeeping system.” 33 The Commission understands this comment to mean that the commenter reads proposed § 1.31(d)(2)(1) (re-lettered as § 1.31(c)(2)(1) in the final rule) as a stand-alone obligation to “monitor compliance with the Act. . . .” To clarify, the Commission notes that the requirement is to establish systems that maintain the security, signature, and data regarding electronic regulatory records to ensure that the records entity can monitor compliance with the Act. Thus the requirement is not a stand-alone obligation to “monitor compliance with the Act and Commission regulations. . . .”

Another commenter objected to the proposed amendments that would impose the requirements of proposed § 1.31(d) (re-lettered as § 1.31(c) in the final rule) on commercial end-users that happen to be records entities, including the requirements that “each records entity maintaining electronic regulatory records shall establish appropriate systems and controls that ensure the authenticity and reliability of electronic regulatory records[.]” 34 The commenter stated that commercial end-users should not be subject to the obligation to establish “systems and controls . . . that ensure the authenticity of the information . . . and . . . monitor compliance with the Act and Commission regulations in this chapter[]” because the expense and burden of that obligation goes beyond the recordkeeping methods allowed in other Commission regulations allowing commercial end-users to retain and maintain their records in the ordinary or normal course of business.35 Moreover, the commenter stated that the creation of an “up-to-date inventory” appears to impose an entirely new regulatory recordkeeping expense that will require a commercial end-user to produce an inventory of its electronic records, and keep that inventory up to date, with respect to the “electronic records” that a commercial end-user is allowed in other Commission regulations to retain and maintain in the ordinary or normal course of business.36

The Commission declines to revise the rule in response to this comment because, as noted previously, § 1.31(d) (re-lettered as § 1.31(c) in the final rule) does not impose any new recordkeeping requirements on any records entity, including those that are commercial end-users. Rather, the final rule merely modernizes and makes technology neutral the form and manner in which regulatory records must be kept. Further, the final rule is clear that it does not override other methods of maintaining records that may be specified elsewhere in the Act or other Commission regulations. Thus, commercial end-users that are records entities, for example, may continue to maintain records in accordance with their current practices if such are permitted by the Act, Commission regulations, or existing relief or guidance. Finally, as described above, the final rule removes several obligations regarding the form and manner in which regulatory records must be kept that should lessen the compliance costs associated with the recordkeeping requirements set forth in § 1.31 generally.

In response to a specific question in the Proposal as to whether the Commission should routinely publish guidelines regarding the technical standards for electronic regulatory records, one commenter argued that publication of such standards likely would result in increased cost and devotion of technical resources to ensure compliance with any changing standards.37 The commenter specifically requested that the Commission avoid publishing guidelines for technical standards of regulatory records and simply monitor records entities to ensure that regulatory records are retained in a “form and manner necessary to ensure the records' and recordkeeping systems' authenticity and reliability.” Given that only one commenter responded to the request for comment, and responded negatively, the Commission is persuaded that publishing guidelines regarding the technical standards for electronic regulatory records would not be helpful at this time.

Regarding the form and manner of retention of electronic regulatory records, one commenter requested confirmation that the specific means of electronic storage that the commenter employs is an acceptable means for storing electronic regulatory records.38 As noted throughout this adopting release the Commission believes that the amendments to § 1.31 are intended to be technology neutral and therefore the Commission is not requiring or endorsing any type of record retention system or technology.

With respect to the effective date of these regulations, a few commenters requested a three- or six-month phase-in period for compliance.39 Although the Commission has noted throughout this adopting release that it believes that the amendments adopted today are not creating any new compliance obligations for any records entities, it is nevertheless persuaded that a three-month phase-in for compliance is a reasonable request. Thus, the Commission has determined that the effective date for the proposed amendments will be 90 days from the date of publication.

The Commission proposed to adopt new § 1.31(e) (re-lettered as § 1.31(d) in the final rule) to re-state and clarify the right of inspection of the Commission and the United States Department of Justice in existing § 1.31(a)(1). One commenter requested that the Commission engage in a dialogue with industry to address challenges presented by the production requirements of § 1.31, including the scope of what is subject to a production request and who may make such a request.40 In particular, the commenter stated that § 1.31 should recognize the long standing protections of attorney-client privilege and expressly exclude such information from the rule's production requirement.

The Commission believes that the proposed amendment to § 1.31(e) does not alter the existing right of inspection regarding regulatory records and notes that attorney-client protections are addressed elsewhere in federal and state law.41

Although the Commission stated that the Proposal was limited to amendments to § 1.31 and related technical amendments, the Commission received several comments regarding matters outside the scope of the Proposal, as discussed below.

The petitioners for rulemaking restated their request from their original petition that the Commission adopt amendments to Part 4 of the Commission's regulations regarding certain recordkeeping requirements applicable to commodity pool operators and commodity trading advisors.42 The Proposal did not address any such amendments and thus such amendments are outside of the scope of this rulemaking.

Another commenter 43 acknowledged that the Regulation AT rulemaking 44 addresses source code issues outside the scope of the Proposal, but nonetheless requested the Commission provide additional guidance regarding any requests for source code information by the Commission subject to § 1.31. In response to this request, the Commission reiterates that production of source code is outside the scope of this rulemaking.

Finally, another commenter 45 recommended that the SEC amend SEC Rule 17a-4 regarding the recordkeeping obligations of broker-dealers, some of whom are also registered as futures commission merchants with the Commission. The Commission does not have jurisdiction with respect to SEC regulations and thus such recommendation is outside of the scope of this rulemaking.

The Regulatory Flexibility Act (“RFA”) 46 requires Federal agencies, in promulgating regulations, to consider whether the rules they propose will have a significant economic impact on a substantial number of small entities and, if so, to provide a regulatory flexibility analysis regarding the economic impact on those entities. In the Proposal, the Commission certified that the Proposal would not have a significant economic impact on a substantial number of small entities. The Commission received no comments with respect to the RFA.

As discussed above, because the final rule relates to most recordkeeping obligations under the Act and the Commission's regulations, it may affect the full spectrum of Commission registrants, all persons required to register but not registered with the Commission, and certain persons that are neither registered nor required to register with the Commission. The Commission has previously determined that certain registrants are not small entities for purposes of the RFA and, therefore, the requirements of the RFA do not apply to those entities.47 For other registrants, however, the Commission has found it appropriate to consider whether such registrants should be deemed small entities for purposes of the RFA on a case-by-case basis, in the context of the particular Commission regulation at issue.48 As certain persons affected by the final rule, including Commission registrants, may be small entities for purposes of the RFA, the Commission considered whether this rulemaking would have a significant economic impact on any such persons.

As discussed in the Proposal, the final rule generally updates and simplifies existing Commission regulation 1.31 with new provisions that maintain the ability of the Commission to examine and inspect regulatory records. It accomplishes this by deleting outdated terms and revising provisions to reflect advances in information technology, allowing records entities to benefit from evolving technological developments while maintaining necessary safeguards to ensure the reliability of the recordkeeping process. It also reduces the retention period for certain regulatory records related to swaps and related cash and forward transactions, as discussed above.

The Commission believed that the Proposal would impose only limited additional costs on small entities related to the requirement that they establish written recordkeeping policies and procedures. However, for the reasons discussed above, the Commission has been persuaded to not require such written recordkeeping policies and procedures.

As a result, the final rule is not expected to impose any new burdens on market participants. The Commission does not, therefore, expect small entities to incur any additional costs as a result of the final rule. In addition, the Commission does not expect the economic value of the benefit to small entities of the final rule to be significant. Consequently, the Commission finds that no significant economic impact on small entities will result from the final rule.

Accordingly, for the reasons stated above, the Commission believes that the final rule will not have a significant economic impact on a substantial number of small entities. Therefore, the Acting Chairman, on behalf of the Commission, hereby certifies, pursuant to 5 U.S.C. 605(b), that the final rule being published today by this Federal Register release will not have a significant economic impact on a substantial number of small entities.

The Paperwork Reduction Act of 1995 (“PRA”) 49 imposes certain requirements on Federal agencies (including the Commission) in connection with their conducting or sponsoring any collection of information as defined by the PRA. The final rule does not impose any new recordkeeping or information collection requirements, or other collections of information that require approval of the Office of Management and Budget (“OMB”) under the PRA.

As discussed above, the Proposal would have replaced the existing audit system requirements in Commission regulation 1.31 with a requirement that records entities establish written recordkeeping policies and procedures. Such changes would have resulted in revisions to “Adaptation of Regulations to Incorporate Swaps-Records of Transactions, OMB control number 3038-0090”. Because the Commission has been persuaded not to require such written recordkeeping policies and procedures, the Commission will not be modifying this OMB control number to reflect the addition of the proposed recordkeeping policies and procedures requirement. As discussed in the Proposal, however, the Commission will submit to OMB revisions to OMB control number 3038-0090 to reflect the final rule's removal of the audit system requirements in current Commission regulation 1.31.

In the Proposal, the Commission invited the public and other Federal agencies to comment on any aspect of the information collection requirements discussed therein, including that the only collection of information within the meaning of the PRA added or modified by the Proposal would be in respect of the proposed, but not adopted, requirement that records entities establish recordkeeping policies and procedures. The Commission did not receive any such comments.

Section 15(a) of the Act 50 requires the Commission to consider the costs and benefits of its actions before issuing a regulation under the Act. Section 15(a) further specifies that the costs and benefits shall be evaluated in light of the following five broad areas of market and public concern: (i) Protection of market participants and the public; (ii) efficiency, competitiveness and financial integrity of futures markets; (iii) price discovery; (iv) sound risk management practices; and (v) other public interest considerations. The Commission considers the costs and benefits resulting from its discretionary determinations with respect to the Section 15(a) considerations.

As discussed above in relation to the RFA, the Proposal generally updates and simplifies existing Commission regulation 1.31 by deleting outdated terms and revising provisions to reflect advances in information technology while safeguarding the reliability of the recordkeeping process. The Commission believes that the final rule does not impose any additional costs on records entities.

The Commission is committed to reviewing its regulations to ensure they keep pace with technological developments and industry trends, and reduce regulatory burden. The Commission believes that the final rule will allow records entities to benefit from evolving technology while maintaining necessary safeguards to ensure the reliability of the recordkeeping process. By deleting outdated terms and revising provisions to reflect advances in information technology, the final rule will allow records entities to utilize a wider range of currently available technology than previously allowed and remove or modify requirements that the Commission believes are now obsolete (e.g., removing the requirements to have an audit system, to maintain electronic records in limited specified formats, and to retain a Technical Consultant, and reducing the retention period for certain regulatory records of swaps and related cash or forward transactions), allowing records entities to reduce their costs. In addition, the Commission believes that the flexibility provided by the final rule will, without further Commission rulemaking, allow records entities to adopt new technologies as such technologies evolve, allowing such persons to reduce future costs.

Moreover, the Commission expects that the added flexibility provided by the final rule will encourage records entities to utilize electronic storage rather than maintain paper regulatory records. The Commission expects that this conversion will benefit the Commission, the Department of Justice, and the commodity interest industry, generally, by making the universe of regulatory records more accessible and searchable.

Section 15(a) of the CEA requires the Commission to consider the costs and benefits of its actions before promulgating a regulation under the CEA or issuing certain orders. CEA Section 15(a) further specifies that the costs and benefits shall be evaluated in light of five broad areas of market and public concern: (i) Protection of market participants and the public; (ii) efficiency, competitiveness, and financial integrity of futures markets; (iii) price discovery; (iv) sound risk management practices; and (v) other public interest considerations.

Because the final rule does not alter any existing requirements regarding the type of regulatory records to be produced and maintained, but, rather, modernizes and makes technology neutral the form and manner in which certain regulatory records must be kept the Commission believes that the final rule will continue to protect the public by maintaining necessary safeguards to ensure the reliability of the recordkeeping process while allowing records entities to benefit from evolving technology.

As discussed above, the final rule, by providing additional flexibility to records entities to electronically store their regulatory records, may increase resource allocation efficiency by improving the way in which such records are maintained. Apart from that, the Commission anticipates minimal change to the efficiency, competitiveness, and financial integrity of the markets, because this rulemaking only affects recordkeeping and not how these markets otherwise operate.

The Commission believes that the final rule may increase confidence and participation in the markets by lowering costs for records entities and by encouraging the electronic storage of regulatory records, allowing such records to be more easily accessed and searched. Nevertheless, the Commission does not anticipate a significant increase in liquidity or a significant improvement in price discovery as a result of the final rule.

The Commission does not believe that the final rule will have any significant impact on sound financial risk management practices because this rulemaking only affects recordkeeping and not how market participants conduct financial risk management. The Commission believes that the final rule may result in minor improvements to operational risk management because, as noted above, it will provide additional flexibility to records entities to electronically store their regulatory records.

The Commission has not identified any additional public interest considerations.

The Commission invited public comment on its cost-benefit considerations in the Proposal, including the Section 15(a) factors described above. Commenters were invited to submit with their comment letters any data or other information that they had that quantified or qualified the costs and benefits of the Proposal. The Commission received a number of comments on the Proposal as described above; however, none of the persons who commented on the Proposal submitted any data or other information that quantified or qualified the costs and benefits of the Proposal. Nevertheless, in response to certain comments on the Proposal, and to reduce the costs of the final rule on records entities, the Commission has been persuaded not to require in the final rule the written recordkeeping policies and procedures that had been proposed in § 1.31(b) because the alternative suggested by commenters achieves all the recordkeeping objectives of the Commission.

For the reasons set forth in the preamble, the Commodity Futures Trading Commission amends 17 CFR chapter I as follows:

The Commission is amending its rules in §§ 165.1 through 165.19 and appendix A, and adopting new rule § 165.20 and appendix B as well as amending Forms TCR (“Tip, Complaint or Referral”) and WB-APP (“Application for Award for Original Information Provided Pursuant to Section 23 of the Commodity Exchange Act”).

In 2011, the Commission adopted its part 165 regulations, which implement Section 23 of the Commodity Exchange Act (“CEA”), 7 U.S.C. 26, by establishing a regulatory framework for the whistleblower program.1 Part 165 provides for the payment of awards, subject to certain limitations and conditions, to whistleblowers who voluntarily provide the Commission with original information about a violation of the CEA that leads to the successful enforcement of an action brought by the Commission that results in monetary sanctions exceeding $1,000,000 (“Covered Action”), or the successful enforcement of a Related Action, as that term is defined in the rules.

The award amount must be between 10 and 30 percent of the amount of monetary sanctions collected in a Covered Action or a Related Action and is paid from the CFTC Customer Protection Fund. The Commission has discretion regarding the amount of an award based on the significance of the information, the degree of assistance provided by the whistleblower, and other criteria.

Since the whistleblower program was established in 2011, the need for certain improvements has become apparent. In order to address that need the Commission proposed amendments to the part 165 rules (“Proposal”).2 As explained further below, these rules provide for targeted revisions to the claims review process and to the authority of staff to administer the whistleblower program. The Commission also proposed to amend the rules to implement its anti-retaliation authority under Section 23(h)(1) based on a reinterpretation of that authority. Finally, the Commission proposed to amend its rules to permit whistleblowers to receive awards based on both Covered Actions and the successful enforcement of Related Actions, as defined in the rules.

The Commission received seven comment letters in response to the Proposal. Most of the comment letters focused on specific aspects of the proposed rule amendments and made targeted recommendations and suggestions. Three of the comment letters were from private individuals, two were from law firms with whistleblower practices, and two were from whistleblower advocacy groups.3 Most of the comments received were generally supportive of the Commission's whistleblower program and proposed changes to the rules. One comment letter was critical of the current process for handling whistleblower award claims but did not provide specific comments on the proposed rules.4 One of the whistleblower advocacy groups incorporated by reference the comment letter previously submitted by the other group.5

The Commission is adopting the amendments to its part 165 whistleblower rules as set forth in the Proposed Rules with certain changes made in response to public comments. The amendments and the public comments relevant to each amendment are discussed below.6

The Commission proposed targeted changes to the rules relating to consideration of an award. The Commission proposed to revise Rule 165.5 to make clear that a claimant may receive an award in a Covered Action, in a Related Action, or both. Also in Rule 165.5, the Commission proposed to make clear that a claimant may be eligible for an award by providing the Commission original information without being the original source of the information, and the Commission provided the public with notice that the Commission has discretion to waive its procedural rules based upon a showing of extraordinary circumstances.

In addition, the Commission proposed to revise the definition of “original source” in Rule 165.2(l) to extend the timeframe from 120 to 180 days that a whistleblower has to file a Form TCR pursuant to Rule 165.3 after previously providing the same information to Congress, any other federal or state authority, a registered entity, a registered futures association, a self-regulatory organization, or to any of the persons described in Rule 165.2(g)(4) and (5).

The Commission received several comments regarding the proposed changes to the requirements for consideration of an award.

Proposed Rule 165.5(b) removed being the original source of information received by the Commission from the eligibility criteria for an award. The Commission received one comment which endorsed this approach.7

The Commission received two comments regarding the Commission's proposal to amend Rule 165.5(c) to allow the Commission to waive procedural requirements in extraordinary circumstances. Both commenters supported the proposed change to this rule.8 One commenter noted that the proposed change to this rule is consistent with the overall policy goals of the whistleblower program and that whistleblowers have varying levels of sophistication and familiarity with the procedural requirements.9 Another commenter noted that rigid application of the procedural requirements would undermine the spirit of Congress when it created the whistleblower program and that the proposed change would further encourage whistleblowers to provide information even when they may not have followed all of the technical rules to be eligible for an award.10

Proposed Rule 165.2(l) extended the deadline from 120 to 180 days that a whistleblower has to make a submission to the Commission and retain status as the original source of information after first submitting the information to Congress, any other federal or state authority, a registered entity, a registered futures association, a self-regulatory organization, or to any of the persons described in paragraphs (g)(4) and (5) of Rule 165.2 to be eligible for an award. The Commission received two comments supporting this proposed change.11 One commenter stated that many whistleblowers are often at or beyond the 120-day period before considering external reporting because they wait for the outcome of the internal investigation before reporting externally and internal investigations often take some time. This commenter also stated that while 180 days is a substantial improvement, an even longer time frame would help ensure that well-intentioned individuals receive full credit for their information.12

The other commenter agreed that the period of eligibility should be lengthened to 180 days but urged the Commission to state that the 180-day period refers only to the whistleblower's “look back” eligibility to retain original source status and that whistleblowers will not lose that status or eligibility for an award if they perfect their submission to the Commission after 180 days elapse. This commenter also urged the Commission to revise Rule 165.2(l)(2) to include individuals who first provide information to foreign governments or self-regulatory authorities because of the global nature of the commodities markets and the increasing number of international whistleblowers participating in the Dodd-Frank whistleblower programs. This commenter went on to state that there is no persuasive policy reason for excluding such persons from original source status because some of the Commission's recent enforcement cases were brought with the cooperation of foreign authorities and the proposed rules allow for whistleblower awards based on Related Actions by certain foreign authorities. Hence, this commenter argued that if whistleblowers may receive awards based on Related Actions undertaken by foreign authorities, those whistleblowers should be entitled to original source eligibility in instances where they report to a foreign authority prior to reporting to the Commission.13

I. Background A. The June 15, 2016, Interim Rule

The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Act) (Pub. L. 114-74) amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note) requiring all Federal agencies to issue an interim final rule implementing changes to their civil money penalties. On June 15, 2016, pursuant to the requirements of the 2015 Act, HUD published an interim final rule for public comment, entitled “Inflation Catch-Up Adjustment of Civil Monetary Penalty Amounts” (81 FR 38931). The 2015 Act required agencies to make an initial catch-up adjustment by interim final rule, using a new methodology designed to correct inaccuracies in the previous method of computing inflation adjustments. In order to address these inaccuracies, the 2015 Act excluded adjustments made under the law prior to its amendment, and it provided that the initial catch-up adjustment was the percentage by which the Consumer Price Index (CPI) for the month of October 2015 exceeded that of the month of October of the calendar year during which the amount of the CMP was originally established or otherwise adjusted under a provision of law other than the Federal Civil Money Penalties Inflation Adjustment Act of 1990. Increases in the initial catch-up adjustment were capped at 150 percent of the amount of the CMP in effect as of the date of enactment of the 2015 Act.

The interim final rule established the new adjusted penalty amount for each provision under which HUD is authorized to assess a CMP (81 FR 38935-38936); removed the obsolete CMP provisions that were codified at 24 CFR 30.30, 30.55, and 30.69 (81 FR 38935); and made a correction to 24 CFR 28.10 to include liability for causing a false claim or statement to be made, in addition to liability for making a false claim or statement (81 FR 38935).

The public comment period for the interim final rule closed on August 15, 2016. The interim final rule became effective on August 16, 2016. The August 16, 2016, effective date for the amendments made by the interim final rule is unchanged. HUD received one comment in response to the interim final rule, but it was not actually relevant to any issue in the interim final rule.1

After the catch-up adjustment, the 2015 Act requires agencies to make subsequent annual adjustments for inflation “notwithstanding section 553 of title 5, United States Code.” Section 553 refers to the Administrative Procedure Act, which might otherwise require a delay for advance notice and opportunity for public comment on future annual inflation adjustments. The first of these subsequent adjustments is for 2017.

The annual adjustment is based on the percent change between the U.S. Department of Labor's Consumer Price Index for All Urban Consumers (“CPI-U”) for the month of October preceding the date of the adjustment, and the CPI-U for October of the prior year (28 U.S.C. 2461 note, section (5)(b)(1)). Based on that formula, the cost-of-living adjustment multiplier for 2017 is 1.01636.2 Pursuant to the 2015 Act, adjustments are rounded to the nearest dollar.3

This rule makes final the June 15, 2016, interim rule. In addition, this rule makes the required 2017 inflation adjustment. Since HUD is not applying these adjustments retroactively, the 2016 increases being finalized apply to violations occurring prior to the effective date of this final rule (and on and after the effective date of the 2016 interim rule) and the 2017 increases apply to violations occurring on or after this rule's effective date.

Along with the 2017 inflation adjustment in this final rule, HUD also makes conforming and technical amendments to §§ 30.5, 30.10, 30.35, 30.36, and 30.80. Specifically, references to the former mortgage assignment procedures (in § 30.35), Urban Homesteading program (in §§ 30.5 and 30.80), and the Loan Correspondent program (in § 30.36) are removed, as those programs have been ended and are no longer active. In addition, the Helping Families Save Their Homes Act of 2009 (Pub. L. 111-22) amended the HUD Reform Act of 1989 (12 U.S.C. 1735f-14(a)(2)) definition for “knowing or knowingly” as it applies to civil money penalties against mortgagees, lenders, and other participants in FHA programs. This rule amends the definition for “knowing or knowingly” in § 30.10 to include the 2009 statutory definition.

For each component, HUD provides a table showing how the penalties are being adjusted for 2017 pursuant to the 2015 Act. In the first column, HUD provides a description of the penalty. In the second column (“Statutory Citation,”) HUD provides the United States Code statutory citation providing for the penalty. In the third column (“Regulatory citation”), HUD provides the Code of Federal Regulations citation under title 24 for the penalty. In the fourth column (“Previous Amount”), HUD provides the amount of the penalty pursuant to the interim rule implementing the “catch-up” adjustment (81 FR 38931, June 15, 2016). In the fifth column, (“2017 Adjusted Amount”) HUD lists the penalty after applying the 2017 inflation adjustment.

HUD generally publishes regulations for public comment before issuing a rule for effect, in accordance with its own regulations on rulemaking in 24 CFR part 10. However, part 10 provides for exceptions to the general rule if the agency finds good cause to omit advanced notice and public participation. The good cause requirement is satisfied when prior public procedure is “impractical, unnecessary, or contrary to the public interest” (see 24 CFR 10.1). As discussed, this final rule adopts without change the amendments offered for public comment in the June 15, 2106, interim final rule. In addition, this rule makes the required 2017 inflation adjustment, which HUD does not have discretion to change. Moreover, the 2015 Act specifies that a delay in the effective date under the Administrative Procedure Act is not required for subsequent annual adjustments under the 2015 Act. HUD has determined, therefore, that it is unnecessary to delay the effectiveness of the 2017 inflation adjustments to solicit prior public comments.

As discussed in the preamble to the June 15, 2016, interim final rule, section 7(o) of the Department of Housing and Urban Development Act (42 U.S.C. 3535(o)) requires that any HUD regulation implementing any provision of the Department of Housing and Urban Development Reform Act of 1989 that authorizes the imposition of a civil money penalty may not become effective until after the expiration of a public comment period of not less than 60 days. HUD met this separate 60-day delay requirement for implementing civil money penalties when HUD implemented the new 2015 Act penalty calculation in its June 16, 2016, interim final rule.

Moreover, and as noted above, the 2017 inflation adjustments are made in accordance with a statutorily prescribed formula that does not provide for agency discretion. Accordingly, a delay in the effectiveness of the 2017 inflation adjustments in order to provide the public with an opportunity to comment is unnecessary because the 2015 Act exempts the adjustments from the need for delay and, in any event, HUD would not have the discretion to make changes as a result of any comments.

Under Executive Order 12866 (Regulatory Planning and Review), a determination must be made whether a regulatory action is significant and, therefore, subject to review by the Office of Management and Budget (OMB) in accordance with the requirements of the order. Executive Order 13563 (Improving Regulations and Regulatory Review) directs executive agencies to analyze regulations that are “outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned. Executive Order 13563 also directs that, where relevant, feasible, and consistent with regulatory objectives, and to the extent permitted by law, agencies are to identify and consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public. As discussed above in this preamble, this final rule adjusts existing civil monetary penalties for inflation by a statutorily required amount.

As a result of this review, OMB determined that this rule was not significant under Executive Order 12866 and Executive Order 13563.

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Because HUD has determined that good cause exists to issue this rule without prior public comment, this rule is not subject to the requirement to publish an initial or final regulatory flexibility analysis under the RFA as part of such action.

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 4 requires that an agency prepare a budgetary impact statement before promulgating a rule that includes a Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. If a budgetary impact statement is required, section 205 of UMRA also requires an agency to identity and consider a reasonable number of regulatory alternatives before promulgating a rule.5 However, the UMRA applies only to rules for which an agency publishes a general notice of proposed rulemaking. As discussed above, HUD has determined, for good cause, that prior notice and public comment is not required on this rule and, therefore, the UMRA does not apply to this final rule.

Executive Order 13132 (entitled “Federalism”) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial direct compliance costs on State and local governments and is not required by statute, or the rule preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive Order. This rule will not have federalism implications and would not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive order.

This interim final rule does not direct, provide for assistance or loan and mortgage insurance for, or otherwise govern, or regulate, real property acquisition, disposition, leasing, rehabilitation, alteration, demolition, or new construction, or establish, revise, or provide for standards for construction or construction materials, manufactured housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this final rule is categorically excluded from environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321).

Accordingly, for the reasons described in the preamble, HUD adopts as final the interim final rule published on June 15, 2016, at 81 FR 38931, and further amends 24 CFR parts 28, 30, 87, 180, and 3282 as follows:

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because doing so would be impracticable. The final details of this event were not known to the Coast Guard until there was insufficient time remaining before the event to publish an NPRM. Thus, delaying the effective date of this rule to wait for a comment period to run would be impracticable because it would inhibit the Coast Guard's ability to protect mariners and vessels from the hazards associated with a maritime fireworks display. Therefore, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this temporary rule effective less than 30 days after publication in the Federal Register.

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Buffalo (COTP) has determined that a maritime fireworks show presents significant risks to public safety and property. Such hazards include premature and accidental detonations, dangerous projectiles, and falling or burning debris. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone while the fireworks show is taking place.

This rule establishes a safety zone on May 28, 2017 from 8:45 p.m. until 9:45 p.m. The safety zone will encompass all waters of the Buffalo Outer Harbor contained within a 280-foot radius of position 42°52′10.75″ N. and 078°52′56.01″ W. (NAD 83).

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

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

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. Executive Order 13771 (“Reducing Regulation and Controlling Regulatory Costs”), directs agencies to reduce regulation and control regulatory costs and provides that “for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.”

This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, it has not been reviewed by the Office of Management and Budget.

As this rule is not a significant regulatory action, this rule is exempt from the requirements of Executive Order 13771. See OMB's Memorandum titled “Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017 titled `Reducing Regulation and Controlling Regulatory Costs' ” (February 2, 2017).

We conclude that this rule is not a significant regulatory action because we anticipate that it will have minimal impact on the economy, will not interfere with other agencies, will not adversely alter the budget of any grant or loan recipients, and will not raise any novel legal or policy issues. The safety zone created by this rule will be relatively small and enforced for a relatively short time. Also, the safety zone is designed to minimize its impact on navigable waters. Furthermore, the safety zone has been designed to allow vessels to transit around it. Thus, restrictions on vessel movement within that particular area are expected to be minimal. Under certain conditions, moreover, vessels may still transit through the safety zone when permitted by the Captain of the Port.

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

This safety zone will not have a significant economic impact on a substantial number of small entities for the following reasons: This safety zone would be effective, and thus subject to enforcement for only one hour late in the evening. Traffic may be allowed to pass through the zone with the permission of the Captain of the Port. The Captain of the Port can be reached via VHF channel 16. Before the enforcement of the zone, we would issue local Broadcast Notice to Mariners.

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that it is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule creates a temporary safety zone and is categorically excluded under section 2.B.2, figure 2-1, paragraph 34(g) of the Instruction, which pertains to establisnment of safety zones. A Record of Environmental Consideration (REC) supporting this determination is available in the docket where indicated in the ADDRESSES section of this preamble.

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

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

This action corrects an inadvertent error in a rulemaking related to the EPA's approval of the 2008 emissions inventory for the Imperial County NA. On March 13, 2017, the EPA published a direct final rule approving a revision of the California SIP—specifically, we approved the portion of Chapter 3 of CARB's January 9, 2015 submittal that contains the 2008 emissions inventory for the Imperial County NA. This action contained amendatory instructions that added paragraph (484) to 40 CFR 52.220(c). However, in the amendatory instructions the EPA inadvertently failed to exclude Section 3.4.2 (“Determination of Significant Sources of PM2.5”) from the portions of the SIP we intended to approve. This document corrects that error.

In the direct final rule published in the Federal Register on March 13, 2017 (82 FR 13392), on page 13397, third column, in amendatory instruction 2, § 52.220(c)(484)(ii)(A)(1) should have listed Section 3.4.2 (“Determination of Significant Sources of PM2.5”) among the portions of Chapter 3 that the EPA was excluding from its approval.

The EPA has determined that this action falls under the “good cause” exemption in section 553(b)(B) of the Administrative Procedure Act (APA) which, upon finding “good cause,” authorizes agencies to dispense with public participation where public notice and comment procedures are impracticable, unnecessary, or contrary to the public interest. Public notice and comment for this action are unnecessary because the underlying rule for which this correcting amendment has been prepared was already subject to a 30-day comment period. No comments were received. Further, this action, which corrects an inadvertent regulatory text error that was included in the EPA's March 13, 2017 direct final rule, is consistent with the substantive revision to the California SIP as described in the preamble of said action concerning the approval of the 2008 emissions inventory for the Imperial County NA. Because this correction action does not change the EPA's analysis or overall action related to the approval of the 2008 emissions inventory, no purpose would be served by additional public notice and comment. Consequently, additional public notice and comment are unnecessary.

The EPA also finds that there is good cause under APA section 553(d)(3) for the correction in the amendatory instructions and related paragraph designation to become effective on the date of publication. Section 553(d)(3) of the APA allows an effective date less than 30 days after publication “as otherwise provided by the agency for good cause found and published with the rule.” 5 U.S.C. 553(d)(3). This rule does not create any new regulatory requirements such that affected parties would need time to prepare before the rule takes effect. This action merely corrects an inadvertent error in the regulatory text of the EPA's prior rulemaking for the California SIP. For these reasons, the EPA finds good cause under APA section 553(d)(3) for the correction to § 52.220(c)(484)(ii)(A)(1) to become effective on the date of publication of this final rule.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). Because the agency has made a “good cause” finding that this action is not subject to notice-and-comment requirements under the Administrative Procedure Act or any other statute as indicated in the SUPPLEMENTARY INFORMATION section, above, it is not subject to the regulatory flexibility provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) or to sections 202 and 205 of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4). In addition, this action does not significantly or uniquely affect small governments or impose a significant intergovernmental mandate, as described in sections 203 and 204 of UMRA. This rule also does not have a substantial direct effect on one or more Indian tribes, on the relationship between the federal government and Indian tribes, or on the distribution of power and responsibilities between the federal government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified by Executive Order 13132 (64 FR 43255, August 10, 1999). This rule also is not subject to Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant. In addition, this rule does not involve technical standards, thus the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This rule also does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

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. Section 808 allows the issuing agency to make a rule effective sooner than otherwise provided by the CRA if the agency makes a good cause finding that notice and public procedure is impracticable, unnecessary or contrary to the public interest. This determination must be supported by a brief statement. 5 U.S.C. 808(2). As stated previously, the EPA has made such a good cause finding, including the reasons therefore, and established an effective date of May 30, 2017. The 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. 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).

Accordingly, 40 CFR part 52 is corrected by making the following correcting amendment:

I. Background

The SIP is a living document which a state revises as necessary to address its unique air pollution problems. Therefore, EPA, from time to time, must take action on SIP revisions containing new and/or revised regulations as being part of the SIP. On May 22, 1997 (62 FR 27968), EPA revised the procedures for incorporating by reference federally-approved SIPs, as a result of consultations between EPA and the Office of the Federal Register (OFR). The description of the revised SIP document, IBR procedures and “Identification of plan” format are discussed in further detail in the May 22, 1997 Federal Register document. On December 7, 1998 (63 FR 67407), EPA published a document in the Federal Register beginning the new IBR procedure for Delaware. On June 21, 2004 (69 FR 34285), April 3, 2007 (72 FR 15839), April 17, 2009 (74 FR 17771), and May 2, 2011 (76 FR 24372), September 24, 2013 (78 FR 58465), EPA published updates to the IBR material for Delaware. Since the publication of the last IBR update, EPA has approved regulatory changes to the following Delaware revised regulations:

1. 7 DNREC regulation 1103 (Ambient Air Quality Standards), sections 1.0 (General Provisions), 4.0 (Sulfur Dioxide), 6.0 (Ozone), 8.0 (Nitrogen Dioxide), 10.0 (Lead), and 11.0 (PM10 and PM2.5 Particulates).

2. 7 DNREC regulation 1140 (Delaware Low Emission Vehicle Program), sections 1.0 (Purpose), 2.0 (Applicability), 3.0 (Definitions), 4.0 (Emission Certification Standards), 5.0 (New Vehicle Emission Requirements), 6.0 (Manufacturer Fleet Requirements), 7.0 (Warranty), 8.0 (Reporting and Record-Keeping Requirements), 9.0 (Enforcement), 10.0 (Incorporation by Reference), 11.0 (Document Availability), and 12.0 (Severability).

In this action, EPA is announcing the update to the IBR material as of July 1, 2016 and revising the text within 40 CFR 52.420(b). EPA is revising our 40 CFR part 52 “Identification of Plan” for the State of Delaware regarding incorporation by reference, section 52.420(b). EPA is revising section 52.420(b)(1) to clarify that all SIP revisions listed in paragraphs (c) and (d), regardless of inclusion in the most recent “update to the SIP compilation,” are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking in which EPA approved the SIP revision, consistent with following our “Approval and Promulgations of Air Quality Implementation Plans; Revised Format of 40 CFR part 52 for Materials Being Incorporated by Reference,” effective May 22, 1997 (62 FR 27968). EPA is revising section 52.420(b)(2) to clarify references to other portions of paragraph (b) with subparagraph (b)(2). EPA is revising section (b)(3) to update address and contact information.

EPA has determined that this rule falls under the “good cause” exemption in section 553(b)(3)(B) of the Administrative Procedures Act (APA) which, upon finding “good cause,” authorizes agencies to dispense with public participation and section 553(d)(3) which allows an agency to make a rule effective immediately (thereby avoiding the 30-day delayed effective date otherwise provided for in the APA). This rule simply codifies provisions which are already in effect as a matter of law in federal and approved state programs. Under section 553 of the APA, an agency may find good cause where procedures are “impractical, unnecessary, or contrary to the public interest.” Public comment is “unnecessary” and “contrary to the public interest” since the codification only reflects existing law. Immediate notice in the CFR benefits the public by removing outdated citations and incorrect table entries.

In this rule, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of previously EPA approved regulations promulgated by the State of Delaware and federally effective prior to July 1, 2016. Therefore, these materials have been approved by EPA for inclusion in the SIP, have been incorporated by reference by 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 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 EPA has made, and will continue to make, these materials generally available through www.regulations.gov and/or at the EPA Region III Office (please contact the person identified in the “For Further Information Contact” section of this preamble for more information).

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

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

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

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

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

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

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

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

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

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

In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this 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 rule is not a “major rule” as defined by 5 U.S.C. 804(2).

EPA has also determined that the provisions of section 307(b)(1) of the CAA pertaining to petitions for judicial review are not applicable to this action. Prior EPA rulemaking actions for each individual component of the Delaware SIP compilations had previously afforded interested parties the opportunity to file a petition for judicial review in the United States Court of Appeals for the appropriate circuit within 60 days of such rulemaking action. Thus, EPA sees no need in this action to reopen the 60-day period for filing such petitions for judicial review for this “Identification of Plan” update action for Delaware.

40 CFR part 52 is amended as follows:

On March 22, 2017, the EPA proposed to approve revisions to EFSEC's general air quality regulations in the SIP (82 FR 14648). An explanation of the Clean Air Act (CAA) requirements, a detailed analysis of the revisions, and the EPA's reasons for proposing approval were provided in the notice of proposed rulemaking, and will not be restated here. The public comment period for this proposed rule ended on April 21, 2017. The EPA received one comment on the proposal.

Comment: “We need to protect clean air. The regulations that decrease air pollution should be fully funded and enforced.”

Response: The SIP revision package submitted jointly by Ecology and EFSEC discussed the personnel, funding, and authority provided by both agencies in operating the air quality program for sources under EFSEC's jurisdiction. As discussed in our proposal, the EPA has worked cooperatively with Ecology and EFSEC for over twenty years in issuing PSD and visibility permits, as well as meeting other air quality requirements. Therefore, consistent with our proposal, we have determined that EFSEC has adequate personnel, funding, and authority to implement the PSD and visibility protection programs and that the revised EFSEC regulations meet the criteria for approval under CAA section 110.

The EPA is approving, and incorporating by reference, the submitted revisions to Chapter 463-78 Washington Administrative Code (WAC) set forth below as amendments to 40 CFR part 52.

In addition to the regulations approved and incorporated by reference, the EPA reviews and approves state submissions to ensure they provide adequate enforcement authority and other general authority to implement and enforce the SIP. However, regulations describing state enforcement and other general authorities are generally not incorporated by reference, so as to avoid potential conflict with the EPA's independent authorities. The EPA has reviewed and is approving WAC 463-78-135 Criminal Penalties, WAC 463-78-140 Appeals Procedure (except subsections 3 and 4 which deal with permits outside the scope of CAA section 110), WAC 463-78-170 Conflict of Interest, and WAC 463-78-230 Regulatory Actions, as providing EFSEC with adequate enforcement and other general authority for purposes of implementing and enforcing its SIP, but is not incorporating these sections by reference into the SIP codified in 40 CFR 52.2470(c). Instead, the EPA is including these sections in 40 CFR 52.2470(e), EPA Approved Nonregulatory Provisions and Quasi-Regulatory Measures, as approved but not incorporated by reference regulatory provisions.

As discussed in our July 10, 2014 proposed approval of revisions to Chapter 173-400 WAC, Ecology formerly relied on the registration program under WAC 173-400-100 for determining the applicability of the new source review (NSR) permitting program (see 79 FR 39351 at page 39354). By statutory directive, this means of determining NSR applicability was replaced by revisions to WAC 173-400-110 which set inconsequential unit, activity, and emissions thresholds. In our October 3, 2014 final action, we approved WAC 173-400-110 as the means of determining NSR applicability, and at Ecology's request, removed WAC 173-400-100 from the SIP (79 FR 59653). Consistent with our proposed and final approval of revisions to Chapter 173-400 WAC, we are now removing, at EFSEC's request, WAC 463-39-100 Registration (recodified to WAC 463-78-100) from the SIP because it is no longer used as the means of determining NSR applicability.

As discussed in the proposal for this action, EFSEC adopted by reference most of the provisions in Chapter 173-400 WAC, but excluded certain provisions pertaining to authorities or source categories outside EFSEC's jurisdiction. WAC 173-400-151 Retrofit Requirements for Visibility Protection is one such provision. The EPA's May 23, 1996 approval of EFSEC's regulations included the incorporation by reference of WAC 173-400-151 (61 FR 25791). These regulations establish Best Available Retrofit Technology (BART) as part of the visibility protection program for an “existing stationary facility.” Under WAC 173-400-151 an “existing stationary facility” is defined, among other factors, as a facility not in operation prior to August 7, 1962, and also in existence on August 7, 1977. EFSEC advised the EPA that there are no sources under EFSEC's jurisdiction that meet the definition of BART-eligible sources. The EPA is therefore granting EFSEC's request to remove the incorporation by reference of WAC 173-400-151 from the SIP.

As part of the SIP revision package, EFSEC requested approval to exercise its authority to fully administer the PSD program with respect to those sources under EFSEC's permitting jurisdiction that have existing PSD permits issued by the EPA. This includes authority to conduct general administration of these existing permits, authority to process and issue any and all subsequent PSD permit actions relating to such permits (e.g., modifications, amendments, or revisions of any nature), and authority to enforce such permits. Since 1993, EFSEC has had partial delegation of the PSD permitting program under the FIP and the EPA permits subject to transfer were also issued under state authority. EFSEC, in coordination with Ecology, has demonstrated adequate authority to enforce and modify these permits. Concurrent with our final approval of EFSEC's PSD program into the Washington SIP, we are transferring the EPA-issued permits to EFSEC for the Chehalis Generation Facility and Grays Harbor Energy Center facilities.

The EFSEC PSD and visibility permitting programs primarily incorporate Chapter 173-400 by reference and the December 20, 2016 SIP revision package requested that the EPA approve the updated EFSEC regulations consistent with our prior approval of the Ecology regulations. As discussed in our April 29, 2015 approval of Ecology's regulations under Chapter 173-400 WAC, Washington State does not regulate certain carbon dioxide emissions from industrial combustion of biomass under its PSD program. See 80 FR 23721, at page 23722. We are therefore revising the PSD FIP at 40 CFR 52.2497 and the visibility protection FIP at 40 CFR 52.2498 to reflect the approval of EFSEC's PSD and visibility permitting programs, consistent with our prior approval of Chapter 173-400 WAC.

Also as discussed in our prior approval of Ecology's updated Chapter 173-400 WAC regulations, the EPA is excluding from the scope of this approval of EFSEC's PSD and visibility permitting programs all Indian reservations in the State, except for nontrust land within the exterior boundaries of the Puyallup Indian Reservation (also known as the 1873 Survey Area), and any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. See 80 FR 23721, at page 23726. Under the Puyallup Tribe of Indians Settlement Act of 1989, 25 U.S.C. 1773, Congress explicitly provided state and local air agencies in Washington authority over activities on non-trust lands within the 1873 Survey Area and the EPA is therefore approving EFESEC's PSD and visibility permitting programs into the SIP with respect to such lands.

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 as described in the amendments to 40 CFR part 52 set forth below. These materials have been approved by the EPA for inclusion in the SIP, 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 http://www.regulations.gov and/or at the EPA Region 10 Office (please contact the person identified in the “For Further Information Contact” section of this preamble for more information).

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

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

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

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

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

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

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

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

• is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because this action does not involve technical standards; 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, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because it will not impose substantial direct costs on tribal governments or preempt tribal law. The SIP is not approved to apply in Indian country located in the state, except for non-trust land within the exterior boundaries of the Puyallup Indian Reservation (also known as the 1873 Survey Area), or any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. Consistent with EPA policy, the EPA provided a consultation opportunity to the Puyallup Tribe in a letter dated July 1, 2016. The EPA did not receive a request for consultation.

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 CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by July 31, 2017. 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)).

For the reasons set forth in the preamble, 40 CFR part 52 is amended as follows:

The SIP is a living document which a state revises as necessary to address its unique air pollution problems. Therefore, EPA, from time to time, must take action on SIP revisions containing new and/or revised regulations as being part of the SIP. On May 22, 1997 (62 FR 27968), EPA revised the procedures for incorporating by reference federally-approved SIPs, as a result of consultations between EPA and the Office of the Federal Register (OFR). The description of the revised SIP document, IBR procedures and “Identification of plan” format are discussed in further detail in the May 22, 1997 Federal Register document. On April 21, 2000 (65 FR 21315), EPA published a document in the Federal Register beginning the new IBR procedure for Virginia. On September 8, 2004 (69 FR 54216), November 3, 2005 (70 FR 66769), July 16, 2007 (72 FR 38920), July 13, 2009 (74 FR 33332) as corrected on December 18, 2009 (74 FR 67077), and November 21, 2011 (76 FR 71881), EPA published updates to the IBR material for Virginia.

Since the publication of the last IBR update, EPA has approved the following regulatory changes to the following regulations and sections for Virginia.

1. Chapter 30 (Ambient Air Quality Standards), section 5-30-67.

2. Chapter 40 (Existing Stationary Sources), part II (Emission Standards), article 48 (Emission Standards for Mobile Equipment Repair and Refinishing), section 5-40-6975.

3. Chapter 45 (Consumer and Commercial Products) (entire chapter; part I (Special Provisions are added); 7 articles in part II (Emission Standards) are added:

4. Chapter 80 (Permits for Stationary Sources), Article 8 (Permits—Major Stationary Sources and Major Modifications Located in Nonattainment Areas or the Ozone Transport Region)), section 5-80-1915.

5. Chapter 80 (Permits for Stationary Sources), Article 9 (Permits—Major Stationary Sources and Major Modifications Located in Nonattainment Areas or the Ozone Transport Region), section 5-80-2195.

6. Chapter 85 (Permits for Stationary Sources of Pollutants Subject to Regulation), part III (Prevention of Significant Deterioration Permit Actions), section 5-85-55.

7. Chapter 160 (Regulation for General Conformity), part III (Criteria and Procedures for Making Conformity Determinations), sections 5-160-181 through 5-160-185 inclusive.

8. Chapter 170 (Regulations for General Administration), part IX, Conflict of Interest, section 5-170-210.

9. Code of Virginia, section 10-1-1302 (Qualifications of members of Boards).

10. The addition of an operating permit under Source Specific Requirements for GP Big Island, LLC (Registration Number 20232).

11. The addition of an operating permit under Source Specific Requirements for Mead Westvaco Corporation (Registration Number 20328).

12. The addition of an operating permit under Source Specific Requirements for O-N Minerals Facility (Registration Number 80252).

13. The addition of an operating permit under Source Specific Requirements for Mondelez Global LLC, Inc.—Richmond Bakery (Registration Number 50703).

1. Chapter 10 (General Definitions), section 5-10-20 (Terms Defined) and section 5-10-30 (Abbreviations).

2. Chapter 20 (General Provisions), part II, sections 5-20-203 (Air Quality Maintenance Areas) and 5-20-204 (Nonattainment Areas).

3. Chapter 30 (Ambient Air Quality Standards), sections 5-30-15, 5-30-30, and 5-30-55.

4. Chapter 40 (Existing Stationary Sources), part II (Emission Standards), article 4, section name changed to General Process Operations.

5. Chapter 40 (Existing Stationary Sources), part II (Emission Standards), article 43 (Municipal Solid Waste Landfills), sections 5-40-5810, 5-40-5820, 5-40-5850, 5-40-5880, and 5-40-5920.

6. Chapter 40 (Existing Stationary Sources), part II (Emission Standards), article 48 (Emission Standards for Mobile Equipment Repair and Refinishing), sections 5-40-6970 and 5-40-7050.

7. Chapter 45 (Consumer and Commercial Products (applicable to the Northern Virginia and Fredericksburg VOC Emissions Control Areas)), part II (Emission Standards), article 1 (Emission Standards for Portable Fuel Containers and Spouts Manufactured Before August 1, 2010), sections 5-45-70 and 5-45-90.

8. Chapter 45 (Consumer and Commercial Products (applicable to the Northern Virginia and Fredericksburg VOC Emissions Control Areas)), part II (Emission Standards), article 2 (Emission Standards for Portable Fuel Containers and Spouts Manufactured On or After August 1, 2010), sections 5-45-160, 5-45-170 and 5-45-240.

9. Chapter 45 (Consumer and Commercial Products (applicable to the Northern Virginia and Fredericksburg VOC Emissions Control Areas)), part II (Emission Standards), article 3 (Emission Standards for Consumer Products Manufactured Before August 1, 2010), section 5-45-310.

10. Chapter 45 (Consumer and Commercial Products (applicable to the Northern Virginia and Fredericksburg VOC Emissions Control Areas)), part II (Emission Standards), article 4 (Emission Standards for Consumer Products Manufactured On or After August 1, 2010), sections 5-45-400, 5-45-420, 5-45-430 and 5-45-480.

11. Chapter 45 (Consumer and Commercial Products (applicable to the Northern Virginia and Fredericksburg VOC Emissions Control Areas)), part II (Emission Standards), article 5 (Emission Standards for Architectural and Industrial Maintenance Coatings), sections 5-45-520, 5-45-530 and 5-45-580.

12. Chapter 45 (Consumer and Commercial Products (applicable to the Northern Virginia and Fredericksburg VOC Emissions Control Areas)), part II (Emission Standards), article 6 (Emission Standards for Adhesives and Sealants), sections 5-45-620, 5-45-630, 5-45-650 and 5-45-700.

13. In Chapter 80:

a. Article 8 (Permits-Major Stationary Sources and Major Modifications Located in Prevention of Significant Deterioration Areas), sections 5-80-1615, 5-80-1625, 5-80-1635, 5-80-1695, 5-80-1715, 5-80-1765, and 5-80-1925 through 5-80-1965 inclusive.

b. Article 9, sections 5-80-2010, 5-80-2020, 5-80-2120, 5-80-2140, and 5-80-2200 through 5-80-2240 inclusive.

14. Chapter 85 (Permits for Stationary Sources of Pollutants Subject to Regulation), part III (Prevention of Significant Deterioration Permit Actions), section 5-85-50.

15. Chapter 130 (Regulations for Open Burning), part I (General Provisions), sections 5-130-20 and 5-130-40.

16. Chapter 140 (Regulations for Emissions Trading Programs), part I (NOx Budget Trading Program), article 10 (State Trading Program Budget and Compliance Pool), sections 5-140-900, 5-140-920, and 5-140-930.

17. Chapter 151 (Transportation Conformity), part III (Criteria and Procedures for Making Conformity Determinations), sections 5-151-40 and 5-151-70.

18. In Chapter 160:

a. Part I (General Definitions), section 5-160-20.

b. Part II (General Provisions), section 5-160-30.

c. Part III, sections 5-160-110 through 5-160-180 inclusive.

19. Chapter 170 (Regulation for General Administration), part 1 (Definitions), section 5-170-20.

1. The following articles in 9VAC5 Chapter 40 (Existing Stationary Sources), part II (Emission Standards) are removed:

2. Chapter 91 (Regulations for the Control of Motor Vehicle Emissions in the Northern Virginia Area), part II (General Provisions), sections 5-91-40, 5-91-60, 5-91-80, and 5-91-110.

3. Chapter 160 (Regulation for General Conformity), part III (Criteria and Procedures for Making Conformity Determinations), section 5-160-200.

4. Chapter 200 (National Low Emission Vehicle Program), in its entirety.

5. The operating permit for Transcontinental Pipeline Station 175 (Registration No. 40789) in the Source Specific Requirements.

In this action, EPA is announcing the update to the IBR material as of July 1, 2016 and revising the text within 40 CFR 52.2420(b).

EPA is revising our 40 CFR part 52 “Identification of Plan” for the Commonwealth of Virginia regarding incorporation by reference, section 52.2420(b). EPA is revising section 52.2420(b)(1) to clarify that all SIP revisions listed in paragraphs (c) and (d), regardless of inclusion in the most recent “update to the SIP compilation,” are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking in which EPA approved the SIP revision, consistent with following our “Approval and Promulgations of Air Quality Implementation Plans; Revised Format of 40 CFR part 52 for Materials Being Incorporated by Reference,” effective May 22, 1997 (62 FR 27968). EPA is revising section 52.2420(b)(2) to clarify references to other portions of paragraph (b) with subparagraph (b)(2). EPA is revising section (b)(3) to update address and contact information. In the table for paragraph 40 CFR 52.2420(c), EPA is:

1. Reorganizing the entries for section 5-10-20 (Definitions- Terms Defined).

2. Revising the CFR to include previously approved sections for 5-30-80 (Lead) and 5-160-10 (General).

3. Revising the entries for sections 5-40-7410, 5-130-10, 5-170-210 and 5-220-60.

4. Correcting a typographical error in the title of Article 48, Emission Standards for Mobile Equipment Repair and Refinishing (Rule 4-48).

5. Removing duplicate and/or additional outdated entries for sections 5-80-2020 and 5-85-50.

In the table for paragraph 52.2420(d), EPA is correcting incorrect Federal Register page citations in the “EPA approval date” column for the following entries: Philip Morris, Inc.—Blended Leaf Facility; Philip Morris, Inc.—Park 500 Facility; Philip Morris, Inc.—Richmond Manufacturing Center; Virginia Electric and Power Co.—Innsbrook Technical Center Hercules, Inc.—Aqualon Division; City of Hopewell—Regional Wastewater Treatment Facility; Allied Signal, Inc.—Hopewell Plant; Allied Signal, Inc.—Chesterfield Plant; Bear Island Paper Co. L.P.; Stone Container Corp.—Hopewell Mill; E.I. Dupont de Nemours and Co.—Spruance Plant; and ICI Americas Inc.—Films Division—Hopewell Site. EPA is also reinserting a previously approved entry for Kraft Foods Global Inc., April 15, 2008 (73 FR 20175) to this paragraph.

EPA is also splitting the existing § 52.2420(e) table (EPA-approved non-regulatory and quasi-regulatory material) into two tables designated as § 52.2420(e)(1) (Non-regulatory material) and § 52.2420(e)(2) (Documents incorporated by reference in regulation 9VAC5-20-21). While there are format changes in the column titles due to this table organization, the substantive text of the existing entries and any additional entries which have been approved since the last VA IBR update do not change.

EPA has determined that this rule falls under the “good cause” exemption in section 553(b)(3)(B) of the Administrative Procedures Act (APA) which, upon finding “good cause,” authorizes agencies to dispense with public participation and section 553(d)(3) which allows an agency to make a rule effective immediately (thereby avoiding the 30-day delayed effective date otherwise provided for in the APA). This rule simply codifies provisions which are already in effect as a matter of law in federal and approved state programs. Under section 553 of the APA, an agency may find good cause where procedures are “impractical, unnecessary, or contrary to the public interest.” Public comment is “unnecessary” and “contrary to the public interest” since the codification only reflects existing law. Immediate notice in the CFR benefits the public by removing outdated citations and incorrect table entries.

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 previously EPA approved regulations promulgated by the Commonwealth of Virginia and federally effective prior to July 1, 2016. Therefore, these materials have been approved by EPA for inclusion in the SIP, have been incorporated by reference by 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 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 III Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

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

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

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

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

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

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

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

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

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

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

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

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this 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 rule is not a “major rule” as defined by 5 U.S.C. 804(2).

EPA has also determined that the provisions of section 307(b)(1) of the CAA pertaining to petitions for judicial review are not applicable to this action. Prior EPA rulemaking actions for each individual component of the Virginia SIP compilations had previously afforded interested parties the opportunity to file a petition for judicial review in the United States Court of Appeals for the appropriate circuit within 60 days of such rulemaking action. Thus, EPA sees no need in this action to reopen the 60-day period for filing such petitions for judicial review for this “Identification of plan” update action for Virginia.

40 CFR part 52 is amended as follows:

I. Background

On January 11, 2017 (82 FR 3233), EPA published a notice of proposed rulemaking (NPR) for the State of Maryland. In the NPR, EPA proposed approval of a Maryland regulation to control emissions of NOX from coal fired EGUs. The formal SIP revision (#15-06) was submitted by the Maryland Department of the Environment (MDE) on November 20, 2015. On September 8, 2016, MDE provided a letter to EPA to clarify that the November 20, 2015 submission was submitted as a SIP strengthening measure and not as a submission to address reasonably available control technology (RACT) requirements for coal-fired EGUs.

As noted in the NPR, this action pertains only to the changes to COMAR 26.11.38 that were submitted by MDE on November 20, 2015 with a State effective date of August 31, 2015, namely COMAR 26.11.38.01-.05. Subsequent revisions and amendments to this regulation have been made by MDE, but have not yet been submitted to EPA for incorporation into the Maryland SIP.

The revision consists of Maryland regulation COMAR 26.11.38—Control of NOX Emissions from Coal-Fired Electric Generating Units (effective August 31, 2015). The regulation establishes NOX emissions standards for 14 EGUs at 7 coal-fired power plants, and requires an affected EGU to minimize NOX emissions by operating and optimizing the use of all installed pollution controls and combustion controls during all times that the unit is in operation while burning coal. Additional monitoring and recordkeeping are required to demonstrate compliance with these requirements, and the owner or operator is required to submit a plan to MDE and to EPA for approval, which summarizes the data to be collected and make a showing that each affected EGU is operating its installed controls. Other specific requirements of COMAR 26.11.38 and the rationale supporting EPA's proposed rulemaking action are explained in the NPR and Technical Support Document (TSD) supporting EPA's analysis for approval of Maryland's regulation into the SIP and will not be restated here. The NPR and TSD are available in the docket for this rulemaking at https://www.regulations.gov, Docket ID Number EPA-R03-OAR-2016-0238.

EPA received two anonymous comments on the January 11, 2017 proposed approval of COMAR 26.11.38 for the Maryland SIP.

Comment 1: One commenter expressed support for strengthening the NOX emissions limits in Maryland.

Response 1: EPA thanks the commenter for the submitted statement.

Comment 2: Another commenter expressed support for the proposed rulemaking as a SIP strengthening measure needed to reduce pollution and to meet the requirements of the national ambient air quality standards (NAAQS) “to keep the air clean.” However, the commenter also stated, “This regulation was submitted as a SIP strengthening measure which seems to be necessary because of how it does not include nitrogen oxides (NOX) emissions from seven coal-fired electric generating units which is a great amount.” The commenter also stated it is an important measure to regulate clean air in “already polluted skies” and acknowledged this regulation was SIP strengthening and was not submitted to meet RACT requirements.

Response 2: EPA thanks the commenter for supporting our approval of the Maryland regulation into the State's SIP. EPA notes that the commenter is incorrect in stating that COMAR 26.11.38, entitled “Control of Nitrogen Oxides Emissions from Coal Fired Electric Generating Units,” does not apply to NOX emissions from seven coal-fired EGUs. The language of COMAR 26.11.38 specifically contains NOX limitations for these EGUs as well as other control measures related to NOX emissions ass discussed in the NPR and TSD. As EPA discussed in the NPR, because NOX is a precursor to ozone formation, the NOX limitations and measures for these EGUs identified in COMAR 26.11.38 will reduce NOX emissions and ozone formation in Maryland which should assist Maryland with attaining and maintaining the ozone NAAQS. Finally, the commenter correctly acknowledged that Maryland had not submitted COMAR 26.11.38 for SIP inclusion to address any RACT requirements which Maryland confirmed with its September 8, 2016 letter to EPA. The September 8, 2016 letter is available in the docket for this rulemaking. EPA expects subsequent rulemaking action on Maryland's obligations for RACT under the 2008 ozone NAAQS.

EPA is approving Maryland regulation COMAR 26.11.38, submitted in the November 20, 2015 SIP submission, which has a state effective date of August 31, 2015, as a revision to the Maryland SIP as a SIP strengthening measure in accordance with section 110 of the CAA. COMAR 26.11.38.01-.05 imposes NOX emissions limits on coal fired EGUs subject to the regulation, and EPA expects the regulation will lower NOX emissions within the State which should reduce ozone formation. The NOX emissions limits plus the operation and optimization of the existing NOX controls whenever the units are in operation strengthens the Maryland SIP and will help the State's attainment and maintenance of the ozone NAAQS.

In this rule, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of Maryland regulation COMAR 26.11.38.01-.05 described in the amendments to 40 CFR part 52 set forth below. Therefore, these materials have been approved by EPA for inclusion in the SIP, have been incorporated by reference by 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 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 EPA has made, and will continue to make, these materials generally available through http://www.regulations.gov and/or at the EPA Region III Office (please contact the person identified in the “For Further Information Contact” section of this preamble for more information).

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

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by July 31, 2017. 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 approving Maryland regulation COMAR 26.11.38 into the Maryland SIP may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

40 CFR part 52 is amended as follows:

I. Background

The SIP is a living document which a state revises as necessary to address its unique air pollution problems. Therefore, EPA, from time to time, must take action on SIP revisions containing new and/or revised regulations as being part of the SIP. On May 22, 1997 (62 FR 27968), EPA revised the procedures for incorporating by reference federally-approved SIPs, as a result of consultations between EPA and the Office of the Federal Register (OFR). The description of the revised SIP document, IBR procedures and “Identification of plan” format are discussed in further detail in the May 22, 1997 Federal Register document. On November 29, 2004 (69 FR 69304), EPA published a document in the Federal Register beginning the new IBR procedure for Maryland. On February 2, 2006 (71 FR 5607), May 18, 2007 (72 FR 27957), March 11, 2008 (73 FR 12895), March 19, 2009 (74 FR 11647), and August 22, 2011 (76 FR 52278), EPA published updates to the IBR material for Maryland.

Since the publication of the last IBR update, EPA has approved the following regulatory changes to the following regulations, statutes, and source-specific actions for Maryland:

1. COMAR 26.11.09.10 (Requirements to Burn Used Oil and Waste Combustible Fluid as Fuel).

2. COMAR 26.11.09.12 (Standards for Biomass Fuel-Burning Equipment Equal to or Greater Than 350,000 Btu/hr).

3. COMAR 26.11.17.06 through .09 (Requirements for New Sources and Modifications).

4. COMAR 26.11.19.07-2 (Plastic Parts and Business Machines Coating).

5. COMAR 26.11.19.27-1 (Control of Volatile Organic Compounds from Pleasure Craft Coating Operations).

6. COMAR 26.11.26.01, 26.11.26.04 through .09 (Conformity).

7. COMAR 26.11.34.01 through .14 (Low Emissions Vehicle Program).

8. COMAR 26.11.35.01 through .07 (Volatile Organic Compounds from Adhesives and Sealants).

9. COMAR 20.79.01.01 (part), .02 (part), and .06 (Applications Concerning the Construction or Modification of Generating Stations and Overhead Transmission Lines—General).

10. COMAR 20.79.02.01 through 20.79.02.03 (Applications Concerning the Construction or Modification of Generating Stations and Overhead Transmission Lines—Administrative Provisions).

11. COMAR 20.79.03.01 and 20.79.03.02 (part) (Applications Concerning the Construction or Modification of Generating Stations and Overhead Transmission Lines—Details of Filing Requirements—Generating Stations).

12. Public Utility Companies Article of the Annotated Code of Maryland, sections 7-205, 7-207 (part), 7-207.1 (part), and 7-208.

13. Annotated Code of Maryland, title 15 (Public Ethics) which was also removed and replaced (see section C of this rulemaking).

14. Annotated Code of Maryland, section 5-101 (a),(e),(f), (g)(1) and (2), (h), (i), (j), (m), (n), (p), (s), (t), (bb), (ff), (gg), (ll) (Definitions), section 5-103(a) through (c) (Designation of Individuals as Public Officials, section 5-208(a) (Determination of Public Official in Executive agency), section 5-501(a) and (c) (Restrictions on Participation), section 5-601(a) (Individuals Required to File Statement), section 5-602(a) (Financial Disclosure Statement—Filing Requirements), section 5-606(a) (Public Records), section 5-607(a) through (j) (Content of statements), and section 5-608(a) through (c) (Interests Attributable to Individual Filing Statement).

15. In 40 CFR 52.1070(d), a source specific requirement was added for the GenOn Chalk Point Generating Station—2011 Consent Decree for Chalk Point.

1. COMAR 26.11.01.01 (Definitions).

2. COMAR 26.11.01.04 (Testing and Monitoring).

3. COMAR 26.11.02.01 (Definitions), .09 (Sources Subject to Permits to Construct), .10 (Sources Exempt from Permits to Construct and Approvals), and .12 (Procedures for Obtaining Approvals of PSD Sources and NSR Sources, Permits to Construct, Permit to Construct MACT Determinations On a Case-by-Case Basis in Accordance with 40 CFR part 63, subpart B, and Certain 100-Ton Sources).

4. COMAR 26.11.04.02 (Ambient Air Quality Standards, Definitions, Reference Conditions, and Methods of Measurement).

5. COMAR 26.11.06.14 (Control of PSD Sources).

6. COMAR 26.11.09.01 (Definitions), .04 (Prohibition of Certain New Fuel Burning Equipment), .06 (Control of Particulate Matter), .07 (Control of Sulfur Oxides from Fuel Burning Equipment), and .09 (Tables and Diagrams).

7. COMAR 26.11.10.03 (Visible Emissions).

8. COMAR 26.11.13.04 (Loading Operations) and .05 (Gasoline Leaks from Tank Trucks).

9. COMAR 26.11.17.01 (Definitions), .02 (Applicability), .03 (General Conditions), .04 (Creating Emission Reduction Credits (ERCs)), .05 (Information on Emission Reductions and Certification).

10. The following regulations in COMAR 26.11.19 (Volatile Organic Compounds from Specific Processes):

a. COMAR 26.11.19.02 (Applicability, Determining Compliance, Reporting, and General Requirements).

b. COMAR 26.11.19.07 (Paper, Fabric, Film, and Foil Coating).

c. COMAR 26.11.19.08 (Metal Parts and Products Coating).

d. COMAR 26.11.19.11 (Lithographic and Letterpress Printing).

e. COMAR 26.11.19.13 (Drum and Pail Coating).

f. COMAR 26.11.19.15 (Paint, Resin, and Adhesive Manufacturing and Adhesive and Sealant Applications).

g. COMAR 26.11.19.23 (Control of VOC Emissions from Vehicle Refinishing).

h. COMAR 26.11.19.30 (Control of Volatile Organic Compounds from Chemical Production and Flouropolymer Material Installations).

11. COMAR 26.11.26.01 (Purpose), .02 (Definitions) and .03 (Transportation Conformity).

12. COMAR 26.11.34.01 (Purpose), .02 (Incorporation by Reference), .03 (Applicability and Exemptions, .04 (Definitions), .05 (Emission Requirements), .06 (Fleet Average NMOG Credit Account Balances), .07 (Initial NMOG Credit Account Balances), .08 (Fleet Average Greenhouse Gas Requirements), .09 (Zero Emission Vehicle (ZEV) Requirements), .10 (Initial ZEV Credit Account Balances), .11 (Vehicle Testing), .12 (Warranty), .13 (Manufacturer Compliance Demonstration), and .14 (Enforcement).

1. COMAR 26.11.04.03 through .09 (State Ambient Air Quality Standards).

2. Annotated Code of Maryland, title 15 (Public Ethics).

3. Consent orders and/or consent decrees for Potomac Electric Power Company (PEPCO)—Chalk Point Units #1 and #2, Beall Junior/Senior High School, Mt. Saint Mary's College, and Maryland Slag Co.

In this action, EPA is announcing the update to the IBR material as of July 1, 2016 and revising the text within 40 CFR 52.1070(b).

EPA is revising our 40 CFR part 52 “Identification of Plan” for the State of Maryland regarding incorporation by reference, § 52.1070(b). EPA is revising § 52.1070(b)(1) to clarify that all SIP revisions listed in paragraphs (c) and (d), regardless of inclusion in the most recent “update to the SIP compilation,” are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking in which EPA approved the SIP revision, consistent with following our “Approval and Promulgations of Air Quality Implementation Plans; Revised Format of 40 CFR part 52 for Materials Being Incorporated by Reference,” effective May 22, 1997 (62 FR 27968). EPA is revising § 52.1070(b)(2) to clarify references to other portions of paragraph (b) with paragraph (b)(2). EPA is revising paragraph (b)(3) to update address and contact information.

In the table for 40 CFR 52.1070(c):

1. Revising the Federal Register date for COMAR 26.11.10.03.

2. Adding a Federal Register entry for COMAR 26.11.19.09-1 which is currently not shown in the Code of Federal Regulations but was previously approved by EPA on February 22, 2011 at 76 FR 9656.

3. Revising the title of the State Government Article of the Annotated Code of Maryland to read, “General Provisions Article of the Annotated Code of Maryland (formerly cited at Section 15 of State Government Article).”

In the table for 40 CFR 52.1070(d):

1. Restoring an entry for PEPCO—Dickerson which was inadvertently removed from the table during a prior final rulemaking action.

2. Revising an incorrect Federal Register page citation in the “EPA approval date” column for the Northeast Maryland Waste Disposal Authority and Wheelabrator-Frye, Inc. and the Mayor and City Council of Baltimore and BEDCO Development Corp.

3. Reorganizing the table so that the entries appear in the order which EPA's approval actions occurred.

EPA has determined that this rule falls under the “good cause” exemption in section 553(b)(3)(B) of the Administrative Procedures Act (APA) which, upon finding “good cause,” authorizes agencies to dispense with public participation and section 553(d)(3) which allows an agency to make a rule effective immediately (thereby avoiding the 30-day delayed effective date otherwise provided for in the APA). This rule simply codifies provisions which are already in effect as a matter of law in federal and approved state programs. Under section 553 of the APA, an agency may find good cause where procedures are “impractical, unnecessary, or contrary to the public interest.” Public comment is “unnecessary” and “contrary to the public interest” since the codification only reflects existing law. Immediate notice in the CFR benefits the public by removing outdated citations and incorrect table entries.

In this rule, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of previously EPA approved regulations promulgated by the State of Maryland and federally effective prior to July 1, 2016. Therefore, these materials have been approved by EPA for inclusion in the SIP, have been incorporated by reference by 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 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 EPA has made, and will continue to make, these materials generally available through www.regulations.gov and/or at the EPA Region III Office (please contact the person identified in the For Further Information Contact section of this preamble for more information).

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

Lead is a metal found naturally in the environment as well as in manufactured products. However, lead has serious public health effects and depending on the level of exposure can adversely affect the nervous system, kidney function, immune system, reproductive and developmental systems and the cardiovascular system. Today, the highest levels of lead in the air are usually found near lead smelters. In the Muncie area the only source of lead emissions is Exide Technologies, whose facility houses a lead smelter that processes used batteries and other metal waste products.

On November 12, 2008 (73 FR 66964), EPA revised the primary and secondary lead NAAQS from 1.5 micrograms per cubic meter (μg/m3) to 0.15 μg/m3 based on a maximum arithmetic three-month mean concentration for a three-year period. See 40 CFR 50.16. On November 22, 2010 (75 FR 71033), EPA published air quality designations and classifications for the 2008 lead NAAQS based upon air quality monitoring data for calendar years 2007-2009. These designations became effective on December 31, 2010. The Muncie area was designated nonattainment for the 2008 lead NAAQS. See 40 CFR 81.336. IDEM submitted their redesignation request on April 14, 2016.

The CAA sets forth the requirements for redesignating a nonattainment area to attainment. Specifically, section 107(d)(3)(E) of the CAA authorizes EPA to redesignate an area provided that: (1) The Administrator determines that the area has attained the applicable NAAQS based on current air quality data; (2) the Administrator has fully approved an applicable state implementation plan (SIP) for the area under section 110(k) of the CAA; (3) the Administrator determines that the improvement in air quality is due to permanent and enforceable emission reductions resulting from implementation of the applicable SIP, Federal air pollution control regulations, or other permanent and enforceable emission reductions; (4) the Administrator has fully approved a maintenance plan for the area meeting the requirements of section 175A of the CAA; and (5) the state containing the area has met all requirements applicable to the area for purposes of redesignation under section 110 and part D of the CAA.

EPA is approving the redesignation of the Muncie area to attainment of the 2008 lead NAAQS, as well as Indiana's maintenance plan and emissions inventory for the area. The bases for these actions follow.

In accordance with section 107(d)(3)(E)(i) of the CAA, 42 U.S.C. 7407, EPA is determining that the Muncie, Indiana area has attained the 2008 lead NAAQS. EPA has reviewed the ambient air monitoring data for the Muncie area in accordance with the provisions of 40 CFR part 50, appendix R. All data considered are complete, quality-assured, certified, and recorded in EPA's Air Quality System database. This review addresses air quality data collected in the 2013-2015 period, which are the most recent quality-assured data available. Our determination that the Muncie area has attained the 2008 lead NAAQS is based upon data for the 2013-2015 monitoring period that show this area has monitored attainment of the lead NAAQS.

Under EPA regulations at 40 CFR 50.16, the 2008 primary and secondary lead standards are met when the maximum arithmetic three-month mean concentration for a three-year period, as determined in accordance with 40 CFR part 50, appendix R, is less than or equal to 0.15 μg/m3 at all relevant monitoring sites in the subject area. As shown in Table 1, Indiana provided EPA with three years of monitoring data showing that the three-month rolling average design values for the Muncie lead monitor were all below the 2008 lead standard.

The data from 2013-2015 are still the most recent quality-assured and certified data for the Muncie area. Indiana indicated that it will continue to use and maintain the Muncie lead monitor to determine whether the area continues to attain the standard. The 2013-2015 data show that the maximum value for the three-year period was 0.11 μg/m3, with monitored lead values generally at or below 0.05 μg/m3. EPA's review of these data indicates that the Muncie area has attained and continues to attain the 2008 lead NAAQS, with a design value of 0.11 μg/m3 for the period of 2013-2015.

We have determined that Indiana has met all currently applicable SIP requirements for purposes of redesignation for the Muncie area under section 110 of the CAA (general SIP requirements). In addition, with the exception of the emissions inventory under section 172(c)(3), all applicable planning requirements of the Indiana SIP for purposes of redesignation have either been approved or have been suspended by either a clean data determination or determination of attainment. As discussed below, in this action, EPA is approving Indiana's 2013 emissions inventory as meeting the section 172(c)(3) comprehensive emissions inventory requirement. Thus, we are determining that the Indiana submittal meets all SIP requirements currently applicable for purposes of redesignation under part D of title I of the CAA, in accordance with sections 107(d)(3)(E)(ii) and 107(d)(3)(E)(v).

In making these determinations, we have ascertained which SIP requirements are applicable for purposes of redesignation, and concluded that the Indiana SIP includes measures meeting those requirements and that they are fully approved under section 110(k) of the CAA.

Section 110(a) of title I of the CAA contains the general requirements for a SIP. Section 110(a)(2) provides that the implementation plan submitted by a state must have been adopted by the state after reasonable public notice and hearing, and, among other things, must include enforceable emission limitations and other control measures, means or techniques necessary to meet the requirements of the CAA; provide for establishment and operation of appropriate devices, methods, systems, and procedures necessary to monitor ambient air quality; provide for implementation of a source permit program to regulate the modification and construction of any stationary source within the areas covered by the plan; include provisions for the implementation of part C, Prevention of Significant Deterioration (PSD) and part D, New Source Review (NSR) permit programs; include criteria for stationary source emission control measures, monitoring, and reporting; include provisions for air quality modeling; and provide for public and local agency participation in planning and emission control rule development. Section 110(a)(2)(D) of the CAA requires that SIPs contain measures to prevent sources in a state from significantly contributing to air quality problems in another state.

EPA interprets the “applicable” requirements for an area's redesignation to be those requirements linked with a particular area's nonattainment designation. Therefore, we believe that the section 110 elements described above that are not connected with nonattainment plan submissions and not linked with an area's attainment status, such as the “infrastructure SIP” elements of section 110(a)(2), are not applicable requirements for purposes of redesignation. A state remains subject to these requirements after an area is redesignated to attainment, and thus EPA does not interpret such requirements to be relevant applicable requirements to evaluate in a redesignation. For example, the requirement to submit state plans addressing interstate transport obligations under section 110(a)(2)(D)(i)(I) continue to apply to a state regardless of the designation of any one particular area in the state, and thus are not applicable requirements to be evaluated in the redesignation context.

EPA has applied this interpretation consistently in many redesignations for decades. See e.g., 81 FR 44210 (July 7, 2016) (final redesignation for the Sullivan County, Tennessee area); 79 FR 43655 (July 28, 2014) (final redesignation for Bellefontaine, Ohio lead nonattainment area); 61 FR 53174-53176 (October 10, 1996) and 62 FR 24826 (May 7, 1997) (proposed and final redesignation for Reading, Pennsylvania ozone nonattainment area); 61 FR 20458 (May 7, 1996) (final redesignation for Cleveland-Akron-Lorain, Ohio ozone nonattainment area); and 60 FR 62748 (December 7, 1995) (final redesignation of Tampa, Florida ozone nonattainment area). See also 65 FR 37879, 37890 (June 19, 2000) (discussing this issue in final redesignation of Cincinnati, Ohio 1-hour ozone nonattainment area); 66 FR 50399 (October 19, 2001) (final redesignation of Pittsburgh, Pennsylvania 1-hour ozone nonattainment area).

We have reviewed the Indiana SIP and determined that it meets the general SIP requirements under section 110 of the CAA to the extent they are applicable for purposes of redesignation. EPA has previously approved provisions of Indiana's SIP addressing section 110 requirements (including provisions addressing lead), at 40 CFR 52.770.

On December 12, 2011, Indiana submitted a request for EPA to approve “infrastructure SIP” elements for the lead NAAQS required under CAA section 110(a)(2). EPA approved the Indiana lead infrastructure SIP on April 29, 2015 (80 FR 23713).

EPA has determined that upon approval of the base year emissions inventory discussed in this rulemaking, the Indiana SIP will meet the requirements applicable for purposes of redesignation under part D of the CAA for the Muncie lead nonattainment area. Subpart 1 of part D sets forth the general nonattainment requirements applicable to all nonattainment areas.

Section 172(c) sets out general nonattainment plan requirements. A thorough discussion of these requirements can be found in the General Preamble for Implementation of Title I (57 FR 13498, April 16, 1992) (“General Preamble”). EPA's longstanding interpretation of the nonattainment planning requirements of section 172 is that once an area is attaining the NAAQS, those requirements are not “applicable” for purposes of CAA section 107(d)(3)(E)(ii) and therefore need not be approved into the SIP before EPA can redesignate the area. In the General Preamble, EPA set forth its interpretation of applicable requirements for purposes of evaluating redesignation requests when an area is attaining a standard. See 57 FR at 13564. EPA noted that the requirements for reasonable further progress and other measures designed to provide for an area's attainment do not apply in evaluating redesignation requests because those nonattainment planning requirements “have no meaning” for an area that has already attained the standard. Id. This interpretation was also set forth in the Calcagni Memorandum.1

EPA's understanding of section 172 also forms the basis of its Clean Data Policy. Under the Clean Data Policy, EPA promulgates a determination of attainment, published in the Federal Register and subject to notice-and-comment rulemaking, and this determination formally suspends a state's obligation to submit most of the attainment planning requirements that would otherwise apply, including an attainment demonstration and planning SIPs to provide for reasonable further progress (RFP), reasonably available control technology and reasonably available control measures (RACT-RACM), and contingency measures. The Clean Data Policy has been codified in regulations regarding the implementation of the ozone and fine particulate matter NAAQS. See e.g., 70 FR 71612 (November 29, 2005) and 72 FR 20586 (April 25, 2007). The Clean Data Policy has also been specifically applied in a number of lead nonattainment areas where EPA has determined that the area is attaining the lead NAAQS. See, e.g., 79 FR 46212 (August 7, 2014) (proposed determination of attainment of Lyons, Pennsylvania lead nonattainment area); 80 FR 51127 (determination of attainment of Eagan, Minnesota lead nonattainment area). EPA's long-standing interpretation regarding the applicability of section 172(c)'s attainment planning requirements for an area that is attaining a NAAQS applies in this redesignation of the Muncie lead nonattainment area as well. Because we are determining that the Muncie area has reached attainment, Indiana will not need to address these additional measures to provide for attainment, and section 172(c)(1) requirements are no longer considered to be applicable as long as the area continues to attain the standard until redesignation. (40 CFR 51.918). Therefore, Indiana has met its requirements under CAA section 172(c)(1) and section 107(d)(3)(E)(v).

As noted above, additional section 172(c) attainment planning requirements are not applicable for purposes of evaluating the state's redesignation request. The reasonable further progress (RFP) requirement under section 172(c)(2), which is defined as progress that must be made toward attainment, the requirement to submit section 172(c)(9) contingency measures, which are measures to be taken if the area fails to make reasonable further progress to attainment, and section 172(c)(6)'s requirement that the SIP contain control measures necessary to provide for attainment of the standard, are not applicable requirements that Indiana must meet here because the Muncie area has monitored attainment of the 2008 lead NAAQS.

Section 172(c)(3) requires submission and approval of a comprehensive, accurate and current inventory of actual emissions. Indiana submitted a 2013 base year emissions inventory along with their redesignation request on April 14, 2016, and requested that the 2013 inventory be used as the most accurate and current inventory. As discussed below in section III(C), EPA is approving the 2013 attainment year inventory as meeting the section 172(c)(3) emissions inventory requirement for the Muncie area.

Section 172(c)(4) requires the identification and quantification of allowable emissions for major new and modified stationary sources in an area, and section 172(c)(5) requires source permits for the construction and operation of new and modified major stationary sources anywhere in the nonattainment area. EPA approved Indiana's current NSR program on October 7, 1994 (59 FR 51114). In addition, the state's maintenance plan does not rely on nonattainment NSR, therefore having a fully approved NSR program is not an applicable requirement, but that, nonetheless, we have approved the state's program.1

Section 172(c)(7) requires the SIP to meet the applicable provisions of section 110(a)(2). As noted above, we find that the Indiana SIP meets the section 110(a)(2) applicable requirements for purposes of redesignation.

Section 176(c) of the CAA requires states to establish criteria and procedures to ensure that Federally-supported or funded activities, including highway and transit projects, conform to the air quality planning goals in the applicable SIPs. The requirement to determine conformity applies to transportation plans, programs and projects developed, funded or approved under title 23 of the U.S. Code and the Federal Transit Act (transportation conformity) as well as to all other Federally-supported or funded projects (general conformity). In light of the elimination of lead additives in gasoline, transportation conformity does not apply to the lead NAAQS. See 73 FR 66964, 67043 n.120. EPA approved Indiana's general conformity SIP on January 14, 1998 (63 FR 2146).

Upon final approval of Indiana's comprehensive 2013 emissions inventories for the Muncie lead area, EPA will have fully approved the Indiana SIP for the Muncie area under section 110(k) of the CAA for all requirements applicable for purposes of redesignation, in accordance with section 107(d)(3)(E)(ii). EPA may rely on prior SIP approvals in approving a redesignation request. See Calcagni Memorandum at (3); Southwestern Pennsylvania Growth Alliance v. Browner, 144 F.3d 984, 989-990 (6th Cir. 1998); Wall v. EPA, 265 F.3d 426 (6th Cir. 2001). EPA also relies on measures approved in conjunction with a redesignation action. See, e.g., 68 FR 25413 (May 12, 2003) (approving I/M program for St. Louis) and 68 FR 25426 (May 12, 2003) (approving redesignation relying in part on I/M program approval). As discussed in the prior section, Indiana has adopted and submitted, and EPA has fully approved, a number of required SIP provisions addressing the 2008 lead standards. As part of its redesignation request and maintenance plan submittal, Indiana submitted a demonstration to EPA that the Muncie nonattainment area has attained the 2008 lead NAAQS. Pursuant to 40 CFR 51.1004(c), EPA's determination that the area has attained the 2008 lead standards will suspend the requirement to submit certain planning SIPs related to attainment, including attainment demonstration requirements, the RACT-RACM requirement of section 172(c)(1) of the CAA, the RFP and attainment demonstration requirements of sections 172(c)(2) and (6) and 182(b)(1) of the CAA, and the requirement for contingency measures of section 172(c)(9) of the CAA. As noted above, the area has continued to attain the standard. Of the CAA requirements applicable to this redesignation request, only the emissions inventory requirement of section 172(c)(3) remains.

In today's action, EPA is approving Indiana's 2013 emissions inventories for the Muncie area as meeting the requirement of section 172(c)(3) of the CAA. No Muncie area SIP provisions are currently disapproved, conditionally approved, or partially approved. Therefore, the Administrator has fully approved the applicable requirements for the Muncie area under section 110(k) in accordance with section 107(d)(3)(E)(ii).

EPA believes that Indiana has demonstrated that the observed air quality improvement in the Muncie area is due to permanent and enforceable reductions in emissions. The only stationary source of lead in the Muncie area is the Exide Technologies facility. According to Indiana this source complies with EPA's January 5, 2012 National Emissions Standards for Hazardous Air Pollutants (NESHAP) for secondary lead smelting at 40 CFR part 63, subpart X. According to Indiana, Exide Technologies complied with this NESHAP through the installation of control technologies and adoption of recordkeeping and reporting requirements that are also located in Title 326, Articles 15 and 20 of the Indiana Administrative Code (80 FR 42393).

In conjunction with Indiana's request to redesignate the Muncie nonattainment area to attainment status, Indiana has submitted a SIP revision to provide for maintenance of the 2008 lead NAAQS in the area through 2030.

Section 175A of the CAA sets forth the required elements of a maintenance plan for areas seeking redesignation from nonattainment to attainment. Under section 175A, the plan must demonstrate continued attainment of the applicable NAAQS for at least 10 years after EPA approves a redesignation to attainment. Eight years after redesignation, the state must submit a revised maintenance plan which demonstrates that attainment will continue to be maintained for 10 years following the initial ten-year maintenance period. To address the possibility of future NAAQS violations, the maintenance plan must contain contingency measures with a schedule for implementation as EPA deems necessary to assure prompt correction of any future lead violations.

The September 4, 1992, Calcagni memorandum provides additional guidance on the content of a maintenance plan. The memorandum states that a maintenance plan should address the following items: The attainment emissions inventory, a maintenance demonstration showing maintenance for the 10 years of the maintenance period, a commitment to maintain the existing monitoring network, factors and procedures to be used for verification of continued attainment of the NAAQS, and a contingency plan to prevent or correct future violations of the NAAQS.

Section 175A of the CAA requires a state seeking redesignation to attainment to submit a SIP revision to provide for the maintenance of the NAAQS in the area “for at least 10 years after the redesignation.” EPA has interpreted this as a showing of maintenance “for a period of 10 years following redesignation.” Calcagni memorandum at 9. Where the emissions inventory method of showing maintenance is used, its purpose is to show that emissions during the maintenance period will not increase over the attainment year inventory. Calcagni memorandum at 9-10.

As discussed in detail in the section below, the state's maintenance plan submission expressly documents that the area's emissions inventories will remain below the attainment year inventories through 2030, more than 10 years after redesignation.

Indiana developed an emissions inventory for lead for 2013, one of the years in the period during which the Muncie area monitored attainment of the 2008 lead standard. The attainment level of emissions is summarized in Table 2 below along with future maintenance projections.

Along with the redesignation request, Indiana submitted a revision to its lead SIP to include a maintenance plan for the Muncie area, as required by section 175A of the CAA. Indiana's plan demonstrates maintenance of the 2008 lead standard through 2030 by showing that current and future emissions of lead in the area remain at or below attainment year emission levels. Section 175A requires a state seeking redesignation to attainment to submit a SIP revision to provide for the maintenance of the NAAQS in the area “for at least 10 years after the redesignation.” EPA has interpreted this as a showing of maintenance “for a period of 10 years following redesignation.” Calcagni memorandum at 9. Where the emissions inventory method of showing maintenance is used, its purpose is to show that emissions during the maintenance period will not increase over the attainment year inventory. Calcagni memorandum at 9-10.

Indiana's plan demonstrates maintenance of the 2008 lead NAAQS through 2030 by showing that current and future emissions of lead for the area will not cause an exceedance of the standard. For the baseline and attainment year inventories, Indiana used Exide Technologies' actual emissions instead of allowable emissions under Indiana Administrative Code. As shown in Table 2, Indiana's submittal indicates that the 2010 and 2013 inventories are based on actual emissions from the Exide Technologies facility (which were 0.82 tons per year (tpy) in 2010 and 0.63 tpy in 2013), and not the allowable emissions set forth in Exide Technologies' operating permit (which were 3.48 tpy in 2010 and 1.73 tpy in 2013). Indiana submitted computer-modeled data indicating that the 2030 maintenance inventory, which is based on the facility's allowable emissions with controls implemented to meet the NESHAP for secondary lead smelting, will ensure that the Muncie area continues to maintain the standard through 2030. To meet the NESHAP for secondary lead smelters, Exide Technologies facility's main building serves as a total enclosure that maintains negative air pressure at all times and is vented to control devices designed to capture lead particulate emissions. This ensures fugitive dust generated inside the facility is not released outside the enclosure and into the ambient air. Since these controls have been installed at the facility, the monitored design value concentrations at the site have been and should remain below the 2008 lead NAAQS. Indiana expects that these permanent and enforceable controls installed at Exide Technologies will ensure that there will be no exceedances of the lead NAAQS in the future. With no other significant sources of lead, the Muncie area is predicted to stay below the standard.

Indiana's maintenance plan includes a commitment to continue to operate its EPA-approved monitoring network, as necessary to demonstrate ongoing compliance with the NAAQS. Indiana currently operates one lead monitor in the Muncie, Indiana area.

Indiana remains obligated to continue to quality-assure monitoring data and enter all data into the Air Quality System (AQS) in accordance with Federal guidelines. Indiana will use these data, supplemented with additional information as necessary, to assure that the area continues to attain the standard. Indiana will also continue to develop and submit periodic emission inventories as required by the Federal Consolidated Emissions Reporting Rule (67 FR 39602, June 10, 2002) to track future levels of emissions. Both of these actions will help to verify continued attainment in accordance with 40 CFR part 58.

The contingency plan provisions are designed to promptly correct or prevent a violation of the NAAQS that might occur after redesignation of an area to attainment. Section 175A of the CAA requires that a maintenance plan include such contingency measures as EPA deems necessary to assure that the state will promptly correct a violation of the NAAQS that occurs after redesignation. The maintenance plan should identify the contingency measures to be adopted, a schedule and procedure for adoption and implementation of the contingency measures, and a time limit for action by the state. The state should also identify specific indicators to be used to determine when the contingency measures need to be adopted and implemented. The maintenance plan must include a requirement that the state will implement all pollution control measures that were contained in the SIP before redesignation of the area to attainment. See section 175A(d) of the CAA.

Indiana's contingency plan defines a warning level and action level response. The warning level response will trigger when a lead monitor three-month rolling average exceeds 0.143 μg/m3 in the maintenance area. If a warning level response is triggered, Indiana will conduct a study to determine whether the lead values indicate a trend toward exceeding the standard and what control measure would be necessary to reverse the trend within twelve months of the conclusion of the calendar year. The action level response will be prompted by the determination of the warning level study that a reverse of the trend is needed, or by the three-month rolling average exceeding 0.15 μg/m3. The action level response will require Indiana to work with the culpable entity to evaluate and implement the needed control measures to bring the area into attainment within 18 months of the conclusion of the calendar year that triggered the response.

Currently, no new sources of lead are projected for the Muncie area, so all control measures would be determined after an analysis of the situation but could include further controls on fugitive lead emissions, reduction of operating hours, or improved housekeeping and maintenance. Indiana commits to continue implementing SIP requirements upon and after redesignation.

EPA believes that Indiana's contingency measures, as well as the commitment to continue implementing any SIP requirements, satisfy the pertinent requirements of section 175A(d).

As required by section 175A(b) of the CAA, Indiana commits to submit to the EPA an updated lead maintenance plan eight years after redesignation of the Muncie area to cover an additional 10-year period beyond the initial 10-year maintenance period.

For all of the reasons set forth above, EPA is approving Indiana's 2008 lead maintenance plan for the Muncie area as meeting the requirements of CAA section 175A.

As discussed above, section 172(c)(3) of the CAA requires areas to submit a comprehensive emissions inventory including all lead sources in the nonattainment area. In its April 14, 2016 submittal, Indiana submitted comprehensive emissions inventories for its 2010 base year, 2013 attainment year, and 2030 maintenance year.

EPA believes that the 2010, 2013, and 2030 emissions inventories are complete and accurate, and meet the requirement of CAA section 172(c)(3). The inventories are shown in Table 3.

EPA is taking several actions related to the redesignation of the Muncie area to attainment for the 2008 lead NAAQS. First, EPA is finding that Indiana meets the requirements for redesignation under section 107(d)(3)(E) of the CAA for the Muncie area to attainment of the 2008 lead NAAQS. EPA is thus approving Indiana's request to change the designation of the Muncie area from nonattainment to attainment for the 2008 lead NAAQS.

In addition, EPA is approving Indiana's lead maintenance plan for the Muncie area as a revision to the Indiana SIP. Finally, EPA is approving the 2013 lead attainment year emission inventory which satisfies the requirement in section 172(c)(3) for a current, accurate and comprehensive emission inventory.

We are publishing these actions without prior proposal because we view this as a noncontroversial amendment and anticipate no adverse comments. However, in the proposed rules section of this Federal Register publication, we are publishing a separate document that will serve as the proposal to approve the state plan if relevant adverse written comments are filed. This rule will be effective July 31, 2017 without further notice unless we receive relevant adverse written comments by June 29, 2017. If we receive such comments, we will withdraw this action before the effective date by publishing a subsequent document that will withdraw the final action. All public comments received will then be addressed in a subsequent final rule based on the proposed action. EPA will not institute a second comment period. Any parties interested in commenting on this action should do so at this time. Please note that if EPA receives adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment. If we do not receive any comments, this action will be effective July 31, 2017.

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

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

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by July 31, 2017. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. Parties with objections to this direct final rule are encouraged to file a comment in response to the parallel notice of proposed rulemaking for this action published in the proposed rules section of today's Federal Register, rather than file an immediate petition for judicial review of this direct final rule, so that EPA can withdraw this direct final rule and address the comment in the proposed rulemaking. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)