Federal Register Vol. 82, No.127,

On August 4, 2016, the Bureau issued the 2016 Mortgage Servicing Final Rule amending certain of the Bureau's mortgage servicing rules.1 The amendments cover nine major topics and focus primarily on clarifying, revising, or amending provisions regarding force-placed insurance notices, policies and procedures, early intervention, and loss mitigation requirements under Regulation X's servicing provisions; and prompt crediting and periodic statement requirements under Regulation Z's servicing provisions. The amendments also address proper compliance regarding certain servicing requirements when a person is a potential or confirmed successor in interest, is a debtor in bankruptcy, or sends a cease communication request under the Fair Debt Collection Practices Act. The Bureau makes the following corrections to the 2016 Mortgage Servicing Final Rule.

Model clause MS-4(D) in the 2016 Mortgage Servicing Final Rule contains a typographical error. It provides, in part, “We have a right to invoke foreclosure based on the terms of your mortgage contact.” The Bureau intended the sentence to read, “We have a right to invoke foreclosure based on the terms of your mortgage contract.” The Bureau is correcting this typographical error.

Regulation X comment 39(d)(2)-1 in the 2016 Mortgage Servicing Final Rule discuses a servicer's obligations relating to the written early intervention notice, generally required under § 1024.39(b), when the borrower has provided a notice under section 805(c) of the Fair Debt Collection Practices Act and while any borrower on the mortgage loan is a debtor in bankruptcy under title 11 of the U.S. Bankruptcy Code. The comment refers to an example in comment 39(c)(1)(ii)-1.ii but should have referenced comment 39(c)(1)(ii)-2.ii. The relevant example is set forth in comment 39(c)(1)(ii)-2.ii. The Bureau is correcting this typographical error.

The Bureau is correcting the amendatory instruction for comment 41(c)-5 in Regulation Z. Comment 41(c)-5 relates to servicers' ability to remove language from sample periodic statement forms that could suggest liability under the mortgage loan agreement if such language is not applicable, for example, in the case of a confirmed successor in interest who is not liable on the mortgage loan obligation.2 Although the Bureau specified an effective date for this comment of April 19, 2018, in the DATES section of the 2016 Mortgage Servicing Rule, it did not do so in the relevant amendatory instruction. The Bureau corrects this error and applies an effective date of April 19, 2018, to comment 41(c)-5.

The Bureau is correcting the effective date of the (1) sample periodic statement forms that servicers may use for consumers in bankruptcy to ensure compliance with Regulation Z § 1026.41, and (2) commentary to Regulation Z § 1026.41(e) and (f) relating to the bankruptcy periodic statement exemption and modified statements. In the 2016 Mortgage Servicing Final Rule, the Bureau finalized rules relating to a servicer's obligation to provide a periodic statement to certain consumers in bankruptcy. First, it amended § 1026.41(e)(5) and associated commentary generally to limit the circumstances in which a servicer is exempt from periodic statement requirements with respect to a consumer who is a debtor in bankruptcy or has discharged personal liability for a mortgage loan through bankruptcy.3 Second, it amended § 1026.41(f) and associated commentary generally to allow servicers to make various clarifications and modifications to the periodic statement requirements with respect to consumers in bankruptcy or who have discharged personal liability for a mortgage through bankruptcy.4 Third, it issued sample forms for periodic statements for certain consumers in bankruptcy.5

The Bureau intended all of these amendments relating to the bankruptcy periodic statement exemptions and modified statements to take effect on April 19, 2018, 18 months after publication in the Federal Register.6 Although the Bureau specified an 18-month implementation period for the regulatory text of § 1026.41(e)(5) and (f), it specified only a 12-month implementation period for the commentary to those provisions and the bankruptcy periodic statement sample forms in appendices H-30(E) and H-30(F). The Bureau corrects this error and applies an effective date of April 19, 2018, to the commentary to § 1026.41(e)(5) and (f) and the sample forms in appendices H-30(E) and H-30(F).

The Bureau is correcting an omission in the authority citation in the 2016 Mortgage Servicing Final Rule. The Bureau did not include 12 U.S.C. 3353 in the authority citation for amendments to Regulation Z. The Bureau is correcting the authority citation to part 1026 to include the citation to 12 U.S.C. 3353.

The Bureau finds that there is good cause to publish these corrections without seeking public comment.7 Public comment is unnecessary because the Bureau is correcting inadvertent, technical errors about which there is minimal, if any, basis for substantive disagreement. Because no notice of proposed rulemaking is required, the Regulatory Flexibility Act does not require an initial or final regulatory flexibility analysis.8 The Bureau has determined that these corrections do not impose any new or revise any existing recordkeeping, reporting, or disclosure requirements on covered entities or members of the public that would be collections of information requiring OMB approval under the Paperwork Reduction Act, 44 U.S.C. 3501, et seq.

For the reasons set forth above, the Bureau makes the following corrections to the final rule FR Doc. No. 2016-18901, published on October 19, 2016, at 81 FR 72160:

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Airbus Model A318 and A319 series airplanes; Model A320-211, -212, -214, -231, -232, and -233 airplanes; and Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes. The NPRM published in the Federal Register on September 8, 2016 (81 FR 62035). The NPRM was prompted by an evaluation by the DAH which indicates that the MLG does not comply with certification specifications, which could result in a locking failure of the MLG side stay. The NPRM proposed to require modification or replacement of certain MLG side stay assemblies. We are issuing this AD to prevent possible collapse of the MLG during takeoff and landing.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2016-0018R1, dated September 14, 2016 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus Model A318 and A319 series airplanes; Model A320-211, -212, -214, -231, -232, and -233 airplanes; and Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes. The MCAI states:

You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-9071.

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.

Air Line Pilots Association, International (ALPA), American Airlines (AAL), and Allegiant Air (Allegiant) expressed support for the NPRM.

Air France, AAL, Delta Airlines (DAL), and Virgin America (Virgin) commented that EASA has released EASA AD 2016-0018R1, dated September 14, 2016 (“EASA AD 2016-0018R1”). The commenters pointed out that EASA AD 2016-0018R1 extends the compliance time for the modification or replacement from 66 months to 120 months following a new engineering evaluation. Air France and Virgin America (Virgin) requested that the FAA refer to EASA AD 2016-0018R1. DAL also asserts that the extension would enable operators to accomplish the modification during MLG overhauls with no impact on airline operations.

We agree with the commenters' requests to extend the compliance time for the modification or replacement. We have determined that, based on the new engineering evaluation, extending the compliance time will not adversely affect safety, and will provide operators more flexibility regarding where and when they accomplish the required actions. We have revised paragraph (g) of this AD to specify a compliance time of within 120 months after the effective date of this AD.

Allegiant and DAL requested that we revise the NPRM to refer to Airbus Service Bulletin A320-32-1429, Revision 01, dated February 29, 2016 (“Airbus Service Bulletin A320-32-1429, Revision 01”). The commenters explained that Airbus Service Bulletin A320-32-1429, Revision 01, contains corrected part numbers for certain MLG side stay assemblies.

We agree with the commenters for the reasons provided. We have revised this AD to refer to Airbus Service Bulletin A320-32-1429, Revision 01. We have also revised this AD to provide credit for actions done before the effective date of this AD, if those actions were done using Airbus Service Bulletin A320-32-1429, dated September 10, 2015.

AAL requested that we revise the NPRM to require the manufacturer to change its method of adding a modification strike to track accomplishment of the proposed modification. AAL suggested that the manufacturer develop a new part number for easier tracking of a completed modification.

We disagree with the commenter's request. We have determined that the actions required by this AD, as specified in the service information, adequately address the unsafe condition. We have not revised this AD in this regard. However, if the manufacturer revises the service information in the future, operators may request approval of an alternative method of compliance (AMOC), provided adequate data are provided to substantiate that the AMOC provides an acceptable level of safety.

Allegiant requested that this AD be postponed until Airbus Service Bulletin A320-32-1429, Revision 02, is published. Allegiant stated that Revision 02 will incorporate updated information described in Airbus Operators Information Transmission (OIT) 16-0028, Revision 01, dated May 26, 2016. Allegiant pointed out that the Airbus OIT explains that there could be difficulties with accomplishing the required actions “on-wing,” and that Airbus recommends postponing accomplishment of the required actions. Allegiant asserts that Airbus Service Bulletin A320-32-1429, Revision 02, is intended to provide an airplane jacking procedure that could allow modification of the MLG while it is attached to the airplane.

We partially agree with the commenter's request. We do not agree to delay issuance of this final rule. We have coordinated this issue with Airbus, and Airbus does not recommend postponing accomplishment of Airbus Service Bulletin A320-32-1429, Revision 01, altogether. Airbus does recommend that operators planning to do the modification/replacement “on wing” postpone accomplishment until the jacking procedure is provided. Airbus also recommends that the modification/replacement be accomplished when the airplane is “in shop” for scheduled MLG overhaul.

Operators are not required to accomplish the required modification “on wing.” We have revised paragraph (g)(1) of this AD to clarify that the modification may be done “off wing,” provided the modified MLG is reinstalled on the airplane. Additionally, as previously explained, we have extended the compliance time in this AD, effectively doubling the time in which operators have to accomplish the required actions.

DAL requested that we revise the proposed applicability to apply to the MLG side stays instead of the airplane model. DAL pointed out that the MLG side stays are tracked independently from the airframe because of the 10-year overhaul requirement for the landing gear. DAL reasons that compliance could then be tracked at the component level, simplifying compliance.

We disagree with the commenter's request. Not all U.S. operators may track the MLG parts using a method similar to that used by DAL. Therefore, while the requested change might simplify compliance tracking for DAL, it might complicate compliance tracking for other operators. We have not revised this AD in this regard.

DAL requested that we revise the proposed AD to remove the statement regarding the method of replacement specified in paragraph (g)(2) of the proposed AD. Instead, DAL recommended allowing operators to replace the MLG side stays using normal airplane maintenance manual (AMM) procedures. DAL explains that the AMM procedures include both pre- and post-modification procedures as specified in Airbus Service Bulletin A320-32-1429, Revision 01. However, DAL pointed out that, as of the effective date of this AD, paragraph (i) of the proposed AD states that only post-modification MLG side stays may be installed, so only the post-modification AMM procedures will apply. The pre-modification procedures will be removed from the AMM, and there will be no risk of de-modifying the MLG side stay.

We disagree with the commenter's request. AMMs are customizable documents that may be used for compliance with paragraph (g)(2) of this AD only with an approved method of compliance. Operators may request that their AMM be revised to show only the post-modification MLG configuration for installing new MLG side stays, or request an AMOC to use another acceptable method for installing the MLG side stays. We have not changed this AD in this regard.

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 have reviewed the following service information.

• Airbus Service Bulletin A320-32-1429, Revision 01, dated February 29, 2016.

• Messier-Bugatti-Dowty Service Bulletin 200-32-315, dated April 24, 2015.

• Messier-Bugatti-Dowty Service Bulletin 201-32-63, dated April 24, 2015.

The service information describes procedures for modifying the MLG side stay assembly. The Messier-Bugatti-Dowty documents are distinct since they apply to different airplane models. 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 959 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

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

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

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

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

1. Is not a “significant regulatory action” under Executive Order 12866;

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

3. Will not affect intrastate aviation in Alaska; and

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

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

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain The Boeing Company Model 777-300ER series airplanes. The NPRM published in the Federal Register on November 17, 2016 (81 FR 81021) (“the NPRM”). The NPRM was prompted by a report that the T53 and T52 tie rods to the tripod mount assembly in the A2 and A3 galleys were found unattached during a routine production inspection of certain airplanes before delivery. The NPRM proposed to require an inspection of A2 and A3 galleys for the presence of the hardware that connects the tripod mount assembly to the tie rods in the overhead support structure, and corrective actions if necessary. We are issuing this AD to detect and correct an unconnected galley tripod mount assembly to the tie rods in the overhead support structure, which can cause a galley to come loose under a high dynamic load, causing a risk of serious injury to passengers and the blocking of evacuation routes.

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, Air New-Zealand (ANZ), and American Airlines (AA) requested that we clarify whether the required inspection type is general visual or detailed. The commenters noted that Boeing Alert Service Bulletin 777-25A0677, dated April 25, 2016, requires a general visual inspection, while the proposed AD would require a detailed inspection. ANZ inquired whether the detailed inspection was an additional requirement or a terminology correction. Boeing requested that we remove the detailed inspection description in paragraph (h) of the proposed AD and replace it with a description of a general visual inspection.

We agree to clarify the inspection type required by this AD. A general visual inspection is intended to detect obvious irregularities; in this case, the irregularity to be detected—a missing pin or bolt assembly that connects the tripod mount assembly to the applicable tie rod—may not be obvious. A detailed inspection is therefore most appropriate for this situation. We have not changed this AD in this regard.

AA requested that the proposed AD allow the use of a specific alternative washer. AA provided no justification for this request.

We infer that AA considers the use of alternative parts prohibited. To clarify, substitutions are allowed under paragraph 3.A., Note 4., of the Accomplishment Instructions of Boeing Alert Service Bulletin 777-25A0677, dated April 25, 2016. Therefore, we have not changed this AD in this regard.

AA requested that Boeing update Boeing Alert Service Bulletin 777-25A0677, dated April 25, 2016, to add a corrective action if the hardware is missing. AA stated that the service information specifies to confirm the presence or absence of hardware, but gives no corrective action if the hardware is missing.

We do not control service bulletin changes, and we also disagree with AA's characterization of the required actions. The service information specifies inspecting to “make sure the hardware (i.e., pin assembly or bolt assembly) that connects the tripod mount assembly to the T53 tie rod is installed.” While investigating this issue, Boeing found that the hardware was present, but not installed. Boeing has confirmed that the service information does not need to include corrective actions to address missing hardware. The hardware should be present. If it is not, operators should install the correct hardware. We have not changed this AD in this regard.

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

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

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

We reviewed Boeing Alert Service Bulletin 777-25A0677, dated April 25, 2016. The service information describes procedures for doing an inspection of the area above the A2 and A3 galleys to make sure the hardware (i.e., pin assembly or bolt assembly) that connects the tripod mount assembly to the applicable T53 and T52 tie rods is installed, and corrective actions. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

We estimate that this AD affects 4 airplanes of U.S. registry. We estimate the following costs to comply with this AD:

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 available costs in our cost estimate.

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:

Comments Invited

This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2017-0187; Directorate Identifier 2017-NE-08-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 with FAA personnel concerning this AD.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA AD 2017-0017, dated February 1, 2017 (referred to hereinafter as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:

You may obtain further information by examining the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2017-0187.

RR has issued Alert Non-Modification Service Bulletin (NMSB) Trent 1000 72-AJ467, Revision 1, dated February 13, 2017; and NMSB Trent 1000 72-J353, Revision 1, dated November 24, 2016. The Alert NMSB describes procedures for initial and repetitive inspections of affected IPC rotor seal. The NMSB describes procedures for in-shop inspections of affected IPC rotor seals. 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.

This product has been approved by EASA, and is approved for operation in the United States. Pursuant to our bilateral agreement with the European Community, EASA has notified us of the unsafe condition described in the MCAI and service information referenced above. We are issuing this AD because we evaluated all information provided by EASA and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design. This AD requires initial and repetitive inspections of affected IPC rotor seal for cracks.

No domestic operators use this product. Therefore, we find that notice and opportunity for prior public comment are impracticable and that good cause exists for making this amendment effective in less than 30 days.

We estimate that this AD affects 0 engines installed on airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

Discussion

We issued a supplemental notice of proposed rulemaking (SNPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Airbus Model A319, A320, and A321 series airplanes. The SNPRM published in the Federal Register on April 7, 2017 (82 FR 16948) (“the SNPRM”). We preceded the SNPRM with a notice of proposed rulemaking (NPRM) that published in the Federal Register on January 28, 2016 (81 FR 4901) (“the NPRM”). The NPRM proposed to require repetitive inspections for cracking of the MLG door actuator fitting and its components, and corrective actions if necessary. The NPRM also proposed to require eventual replacement of all affected MLG door actuator fittings with new monoblock fittings, which would terminate the repetitive inspections. The NPRM was prompted by a report that an MLG door could not be closed due to rupture of the actuator fitting. The SNPRM proposed to revise the NPRM by reducing the compliance time for replacing the MLG actuator fitting and removing an inspection requirement for certain airplanes. We are issuing this AD to prevent rupture of the door actuator fittings, which could result in detachment of an MLG door and subsequent exterior damage and consequent reduced structural integrity of the airplane.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2016-0182, dated September 13, 2016 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus Model A319, A320, and A321 series airplanes. The MCAI states:

You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-0461.

We gave the public the opportunity to participate in developing this AD. We considered the comments received. United Airlines and commenter Lisa Stamps supported the SNPRM.

In paragraph (l)(1) of the proposed AD (in the SNPRM), we inadvertently omitted wording related to the prohibition on installing certain MLG door actuator fittings on modified airplanes, which is identified in step 10 of the EASA AD. We have added that provision to paragraph (l)(1) of this AD.

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

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

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

Airbus has issued the following service information:

• Airbus Service Bulletin A320-52-1073, Revision 04, dated August 10, 1999.

• Airbus Service Bulletin A320-52-1073, Revision 05, dated September 28, 2006.

This service information describes procedures for replacement of MLG door actuator fittings with new monoblock fittings. These documents are distinct due to editorial revisions.

Airbus has also issued the following service information:

• Airbus Service Bulletin A320-52A1086, Revision 01, dated September 10, 1999. This service information describes procedures for high frequency eddy current (HFEC) inspections for cracking of the MLG door fittings, and low frequency eddy current (LFEC) inspections to determine grain direction of raw material of each actuator fitting.

• Airbus Service Bulletin A320-52-1096, Revision 02, dated July 12, 2006. This service information describes procedures for HFEC inspections of both hinge and nerve areas of the MLG doors for cracking.

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 71 airplanes of U.S. registry.

We also estimate that it takes about 136 work-hours per product to comply with the requirements of this AD. The average labor rate is $85 per work-hour. Required parts will cost about $6,258 per product. Based on these figures, we estimate the cost for the actions required by this AD on U.S. operators to be $1,265,078, or $17,818 per product.

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

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

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

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

1. Is not a “significant regulatory action” under Executive Order 12866;

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

3. Will not affect intrastate aviation in Alaska; and

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

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

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain The Boeing Company Model 737-100, -200, -200C, -300, -400, and -500 series airplanes. The NPRM published in the Federal Register on March 2, 2017 (82 FR 12303) (“the NPRM”). The NPRM was prompted by reports of frame web cracking at the station (STA) 344 system penetration holes between stringer S-22L and stringer S-24L. The NPRM proposed to require repetitive inspections in certain locations of the frame web, and corrective action if necessary. We are issuing this AD to detect and correct frame web cracking, which could grow in size until frames sever. Multiple adjacent severed frames, or a severed frame near cracks in the chem-milled fuselage skin, could result in uncontrolled decompression 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 change the language in paragraph (g) of the proposed AD to remove a reference to Parts 2 and 3 of the Accomplishment Instructions of Boeing Alert Service Bulletin 737-53A1354, dated December 2, 2016. Boeing noted that Group 1 airplanes are those that have exceeded their limit of validity, and that the inspections are not applicable to those airplanes. Boeing stated that it believes the intent of paragraph (g) of the proposed AD is for the operator to obtain maintenance actions in accordance with a method approved by the FAA. Boeing further pointed out that the language in paragraph (g) of the proposed AD allows operators to perform inspections in accordance with Boeing Alert Service Bulletin 737-53A1354, dated December 2, 2016, rather than in accordance with paragraph (j) of the proposed AD (obtaining an alternative method of compliance).

We agree with the commenter's request for the reasons provided. We have revised paragraph (g) of this AD to clarify the appropriate actions for Group 1 airplanes.

Boeing requested that we change two sentences in paragraph (h) of the proposed AD that refer to “Boeing Alert Service Bulletin 757-53A1354.” Boeing noted that the correct service bulletin number is “737-53A1354.”

We agree with the commenter's request and have revised paragraph (h) of this AD accordingly.

Boeing requested that we add a paragraph to the proposed AD to provide credit for previous actions to remove the 1-inch diameter hole at STA 336 or STA 344. Boeing noted that Boeing Alert Service Bulletin 737-53A1354, dated December 2, 2016, provides an exception for the Part 2 high frequency eddy current (HFEC) inspections of repaired locations, provided the repair is the corrective action for the crack condition, is approved by the Boeing Organization Designation Authorization (ODA), and does not re-install any open hole. Boeing added that the proposed AD does not include such language.

We disagree with the request to revise this AD because it is not necessary. Paragraph (h) of this AD specifies to do the applicable inspections and related investigated and corrective actions in accordance with Boeing Alert Service Bulletin 737-53A1354, dated December 2, 2016. The service information already contains the criteria and language proposed by Boeing within the required for compliance (RC) steps in the Accomplishment Instructions of the service information. Therefore, this language does not need to be repeated in this AD. We have not changed this AD in this regard.

Boeing requested that we add a paragraph to the proposed AD to provide credit for previous actions to repair any cracks at STA 328. Boeing noted that Boeing Alert Service Bulletin 737-53A1354, dated December 2, 2016, states that Part 3 HFEC inspections are not required for the STA 328 frame if STA 328 was repaired in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin 737-53A1323. Boeing added that the proposed AD does not include such language.

We disagree with the request to revise this AD because it is not necessary. Paragraph (h) of this AD specifies to do the applicable inspections and related investigated and corrective actions in accordance with Boeing Alert Service Bulletin 737-53A1354, dated December 2, 2016. The service information already contains the criteria and language proposed by Boeing within the RC steps in the Accomplishment Instructions of the service information. Therefore, this language does not need to be repeated in this AD. We have not changed this AD in this regard.

Boeing requested that we add a paragraph to the proposed AD to provide credit for previous actions to plug or remove any open hole between stringers S-20R and S-22R in the STA 328 frame web. Boeing noted that Boeing Alert Service Bulletin 737-53A1354, dated December 2, 2016, states that Part 3 HFEC inspections are not required at an open hole in the STA 328 frame web if there is an installed repair that plugs or removes the open hole between stringers S-20R and S-22R, and the repair was approved by the Boeing ODA. Boeing added that the proposed AD does not include such language.

We disagree with the request to revise this AD because it is not necessary. Paragraph (h) of the proposed AD specifies to do the applicable inspections and related investigated and corrective actions in accordance with Boeing Alert Service Bulletin 737-53A1354, dated December 2, 2016. The service information already contains the criteria and language proposed by Boeing within the RC steps in the Accomplishment Instructions of the service information. Therefore, this language does not need to be repeated in this AD. We have not changed this AD in this regard.

The European Aviation Safety Agency (EASA) requested that we change the compliance times for the initial HFEC inspections required by paragraph (h) of the proposed AD (i.e., before 35,000 total flight cycles or within 4,500 flight cycles) to match the compliance times specified in Boeing Alert Service Bulletin 737-53A1323, dated December 6, 2013, (i.e., for Group 2-5 airplanes with less than 28,300 total flight cycles, before the accumulation of 20,000 total flight cycles or within 2,200 flight cycles). EASA claimed that it would be desirable to match the compliance times, as they are both addressing the same root problem in the same area, using the same inspection type. EASA noted that Boeing Alert Service Bulletin 737-53A1323, dated December 6, 2013, is referenced in an FAA NPRM, Docket No. FAA-2014-0346 (we note that the final rule has been published: AD 2015-23-08, Amendment 39-18324 (80 FR 73949, November 27, 2015)).

We disagree with the commenter's request. The HFEC inspections for the right side frames included in Boeing Alert Service Bulletin 737-53A1354, dated December 2, 2016, were added based on analysis, not reported cracking. Boeing Alert Service Bulletin 737-53A1354, dated December 2, 2016 covers specific areas not included in Boeing Alert Service Bulletin 737-53A1323, dated December 6, 2013. Since there have been no reports of cracking in the applicable inspection areas on the right side of the airplane, there is no technical justification to lower the initial inspection times in this AD. We have not changed this AD in this regard.

Aviation Partners Boeing stated that accomplishing the 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 AD. Therefore, for airplanes on which STC ST01219SE is installed, a “change in product” alternative method of compliance (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 final rule 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 final rule.

We reviewed Boeing Alert Service Bulletin 737-53A1354, dated December 2, 2016. The service information describes procedures for repetitive HFEC, detailed, and general visual inspections in certain locations of the frame web. 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 82 airplanes of U.S. registry. We estimate the following costs to comply with this AD:

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

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:

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. 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. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it removes NOTAM part-time information for Class E airspace designated as an extension, and amends the geographic coordinates in the associated Class D and E airspace for Ryan Field, Tucson, AZ.

The FAA Aeronautical Information Services branch found the Class E airspace designated as an extension, for Ryan Field, Tucson, AZ, as published in FAA Order 7400.11A, Airspace Designations and Reporting Points, does not require part time status. Also, after a review, the FAA found the geographic coordinates referenced in the airspace legal descriptions under Class D and Class E airspace for Ryan Field, Tucson, AZ, do not match the FAA's current aeronautical database. This action makes these updates.

Additionally, an editorial change is made to the Class D and Class E airspace legal descriptions replacing Airport/Facility Directory with the term Chart Supplement.

Class D and Class E airspace designations are published in paragraph 5000, 6002, 6004, and 6005, respectively, of FAA Order 7400.11A dated August 3, 2016, and effective September 15, 2016, which is incorporated by reference in 14 CFR 71.1. The Class D and Class E airspace designations listed in this document will be published subsequently in the Order.

This document amends FAA Order 7400.11A, Airspace Designations and Reporting Points, dated August 3, 2016, and effective September 15, 2016. FAA Order 7400.11A is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11A lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This action amends Title 14, Code of Federal Regulations (14 CFR) part 71 by eliminating the following language from the legal description of Class E airspace designated as an extension to a Class D at Ryan Field, Tucson, AZ, “This Class E airspace is effective during the specific dates and times established in advance by a Notice to Airmen. The effective date and time will thereafter be continuously published in the Airport/Facility Directory”. Also, this action updates the geographic coordinates of Ryan Field airport in the associated Class D and Class E airspace areas for the airport to match the FAA's current aeronautical database. Lastly, this action replaces the outdated term Airport/Facility Directory with the term Chart Supplement in the Class D and E airspace legal descriptions.

This action is an administrative change and does not affect the boundaries, altitudes, or operating requirements of the airspace, therefore, notice and public procedure under 5 U.S.C. 553(b) is unnecessary.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (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); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:

Presently, the FTC does not have a policy to indemnify its employees who are sued in their individual capacities and who suffer an adverse judgment as a result of conduct taken within the scope of their employment; nor does the FTC have a policy to settle these claims with agency funds. Lawsuits against federal employees in their personal capacities have proliferated since the Supreme Court's decision in Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971). This decision held that personal damage awards against a federal employee are permitted when, in the course of his or her employment, the federal employee is found to have violated an individual's constitutional rights. Although the Federal Liability Reform and Tort Compensation Act of 1988, Public Law 100-694, prohibits personal actions against Federal employees for common law torts committed while acting within the scope of their employment, that Act does not apply to suits against federal employees for violation of the Constitution or federal statutes.

The FTC believes that actions against its employees in their personal capacities and the potential for a judgment against agency employees hinder the agency's effectiveness as a law enforcement agency. The FTC's ability to effectively protect consumers and promote competition depends upon the willingness of its employees to pursue investigations and litigation. Uncertainty regarding what conduct may lead to a personal liability claim resulting in a monetary judgment tends to intimidate employees, stifle creativity and initiative, and limit decisive action. Thus, the threat of personal liability against an employee for a decision made or action taken as part of official duties can adversely affect the FTC's achievement of its mission. The adoption of a policy to permit indemnification would help alleviate these problems and afford FTC employees the same protection now given to other federal employees in several other government agencies, including the Agency for International Development, Commodity Futures Trading Commission, Department of Commerce, Department of Education, Department of Health and Human Services, Department of the Interior, and the Department of Justice.

The FTC's policy permits, but does not require, the agency to indemnify a FTC employee who suffers an adverse verdict, judgment, or other monetary award, provided that the actions giving rise to the judgment were taken within the scope of employment, and that such indemnification is in the interest of the FTC, as determined by the Commission or the Commission's designee. The policy also allows the agency to settle a claim brought against an employee in his or her individual capacity by the payment of funds, upon a similar determination by the Commission or the Commission's designee. Generally, the FTC will not entertain a request either to indemnify or to pay to settle a personal damage claim against an employee before entry of an adverse verdict, judgment, or monetary award. However, in certain cases, the Commission or its designee, may determine that exceptional circumstances justify the earlier indemnification or payment of a settlement amount. This policy is applicable to actions pending against FTC employees as of its effective date, as well as to actions commenced after that date.

The Commission certifies that these new regulations, which deal solely with internal policies governing FTC personnel, do not require an initial or final regulatory analysis under the Regulatory Flexibility Act because they will not have a significant economic impact on a substantial number of small entities. See 5 U.S.C. 605(b).

The regulations adopted herein do not contain information collection requirements within the meaning of the Paperwork Reduction Act, 44 U.S.C. 3501-3520.

The indemnification policy is published in final form without the opportunity for public notice and comment because it is a general statement of policy relating to FTC management and personnel. See 5 U.S.C. 553(a)(2),(b).

For the reasons set forth in the preamble, the Federal Trade Commission amends part 1, title 16, of the Code of Federal Regulations, as follows:

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

This amendment provides notice that the DAJAG (Admiralty and Maritime Law), under authority delegated by the Secretary of the Navy, has certified that USS RALPH JOHNSON (DDG 114) is a vessel of the Navy which, due to its special construction and purpose, cannot fully comply with the following specific provisions of 72 COLREGS without interfering with its special function as a naval ship: Annex I, paragraph 3(a), pertaining to the location of the forward masthead light in the forward quarter of the ship, and the horizontal distance between the forward and after masthead lights; Annex I, paragraph 3(c), pertaining to placement of task lights not less than two meters from the fore and aft centerline of the ship in the athwartship direction; Annex I, paragraph 2(f)(i), pertaining to the placement of the masthead light or lights above and clear of all other lights and obstructions; and Annex I, paragraph 2(f)(ii), pertaining to the vertical placement of task lights. The DAJAG (Admiralty and Maritime Law) has also certified that the lights involved are located in closest possible compliance with the applicable 72 COLREGS requirements.

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

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

On June 15, 2017, the Coast Guard published a temporary deviation entitled “Drawbridge Operation Regulation; Sacramento River, Rio Vista, California” in the Federal Register (82 FR 27423). That temporary deviation, from 7 p.m. on June 16, 2017 to 4 a.m. on July 1, 2017, allows the drawspan to open on one hour advance notice at three specified time periods. The bridge owner, California Department of Transportation, has requested a modification of the currently published deviation to extend from 4 a.m. on July 1, 2017 to 4 a.m. on July 15, 2017 in order to complete the necessary repairs to the bridge deck.

The Rio Vista Drawbridge, mile 12.8, across the Sacramento River, has a vertical clearance of 18 feet above Mean High Water in the closed-to-navigation position. In accordance with 33 CFR 117.5, the draw opens on signal. Navigation on the waterway is commercial, search and rescue, law enforcement, and recreational.

The drawspan will require a one hour advance notice at one specified period: From 6 p.m. on July 14, 2017 to 4 a.m. on July 15, 2017. A one hour advance notice will give enough time for the contractor to clear away equipment and workers before the drawspan can safely open for transiting vessels. Scaffolding will be installed below the bridge deck from July 1, 2017 through July 15, 2017, reducing the vertical clearance by 4 feet, and will extend from the west tower 48 feet into the navigational channel. This temporary deviation modification has been coordinated with the waterway users. No objections to the proposed temporary deviation modification were raised.

Vessels able to pass through the bridge in the closed position may do so at anytime. The bridge will be able to open for emergencies with one hour advance notice. There is no immediate alternate route for vessels to pass. The Coast Guard will also inform the users of the waterway through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so vessel operators can arrange their transits to minimize any impact caused by the temporary deviation.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.

The Coast Guard will enforce the Safety Zones; Annual Fireworks Events in the Captain of the Port Buffalo Zone listed in 33 CFR 165.939 for the following event:

Sheffield Lake Fireworks, Sheffield Lake, OH: The safety zone listed in 33 CFR 165.939(a)(27) will be enforced from 9:30 p.m. through 11 p.m. on July 14, 2017. The safety zone will encompass all navigable waters of Lake Erie and Sheffield Lake Boat ramp within a 350 foot radius of land position 41°29′27.65″ N., 082°6′47.71″ W. (NAD 83) at Sheffield Lake Boat Ramp in Sheffield Lake, OH. This action is necessary to provide for the safety of life and property on navigable waters during this event. Pursuant to 33 CFR 165.23, entry into, transiting, or anchoring within these safety zones during an enforcement period is prohibited unless authorized by the Captain of the Port Buffalo or his designated representative. Those seeking permission to enter one of these safety zones may request permission from the Captain of Port Buffalo via channel 16, VHF-FM. Vessels and persons granted permission to enter this safety zone shall obey the directions of the Captain of the Port Buffalo or his designated representative. While within the safety zone, all vessels shall operate at the minimum speed necessary to maintain a safe course.

This notice is issued under authority of 33 CFR 165.939 and 5 U.S.C. 552(a). In addition to this notice in the Federal Register, the Coast Guard will provide the maritime community with advance notification of these enforcement periods via Broadcast Notice to Mariners and Local Notice to Mariners. If the Captain of the Port Buffalo determines that this safety zone need not be enforced for the full duration stated in this notice, he or she may use a Broadcast Notice to Mariners to grant general permission to enter the respective safety zone.

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

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to 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 it is impracticable and contrary to the public interest. It is impracticable to publish an NPRM because we must establish this safety zone by July 4, 2017 and we lack sufficient time to provide a reasonable comment period and then consider those comments before issuing the rule. It is also contrary to the public interest as it would delay the safety measures necessary to protect life and property from the possible hazards associated with the fireworks display launched from the waterway. The impacts on navigation are expected to be minimal as the safety zone will only be in effect for a short duration of one hour. The Coast Guard will notify the public and maritime community that the safety zone will be in effect and of its enforcement periods via Broadcast Notice to Mariners (BNM) and Marine Safety Information Bulletin (MSIB).

We are issuing this rule, and under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register. Delaying the effective date to provide a full 30 days' notice is contrary to public interest because immediate action is needed to protect persons and vessels from safety hazards associated with the fireworks display over this navigable waterway.

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port New Orleans (COTP) has determined that potential hazards, associated with a fireworks display from 8 p.m. to 9 p.m. on July 4, 2017, will be a safety concern for persons and vessels within a one-half mile radius of the launch point barge at approximately 30°24′11.63″ N., 090°09′17.39″ W. This rule is needed to protect persons, vessels, and the marine environment in the navigable waters within the safety zone while the display takes place.

This rule establishes a safety zone from 8 p.m. to 9 p.m. on July 4, 2017. The safety zone will cover all navigable waters within a one-half mile radius of a fireworks barge anchored in the river at approximately 30°24′11.63″ N., 090°09′17.39″ W. The duration of the safety zone is intended to protect persons, vessels, and the marine environment from the hazards associated with a fireworks display. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.

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

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

This regulatory action determination is based on the size, location, duration, and time-of-year of the safety zone. This safety zone will impact a small designated area of the Tchefuncte River for one hour. Moreover, the Coast Guard will issue Broadcast Notice to Mariners via VHF-FM Channel 16 about the zone, and the rule allows vessels to seek permission to enter the zone.

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.

While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.

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 this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves establishing a temporary safety zone lasting one hour that will prohibit entry within a one-half mile radius of a fireworks barge on the Tchefuncte River at approximately 30°24′11.63″ N. 090°09′17.39″ W. It is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. A Record of Environmental Considerations (REC) is available in the docket where indicated under ADDRESSES.

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:

The Coast Guard is establishing four temporary safety zones within the COTP New Orleans Zone (COTP Zone) for the following planned fireworks displays.

1. Mandeville City 4th of July Celebration Fireworks are scheduled from 8:45 p.m. through 9:45 p.m. on July 1, 2017. The fireworks barge will be positioned on Lake Pontchartrain, in vicinity of 30°21′12.0″ N. and 090°04′28.9″ W.

2. L'Auberge Casino 4th of July Celebration Fireworks are scheduled from 8:45 p.m. through 9:45 p.m. on July 2, 2017. The fireworks barge will be positioned in the Lower Mississippi River at Mile Marker 217.0 above Head of Passes.

3. St. John the Baptist Parish 4th of July Celebration Fireworks are scheduled from 8:00 p.m. through 9:00 p.m. on July 3, 2017. The fireworks barge will be positioned in the Lower Mississippi River at Mile Marker 138.0 above Head of Passes.

4. BBC Beach Body special event fireworks are scheduled from 10:30 p.m. through 11:15 p.m. on July 14, 2017. The fireworks barge will be positioned in the Lower Mississippi River at Mile Marker 96.2 above Head of Passes.

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 publishing an NPRM would be impracticable and against public interest. We must establish this safety zone by July 1, 2017 and lack sufficient time to provide a reasonable comment period and then consider those comments before issuing the rule. The NPRM process would delay the establishment of these safety zones until after the scheduled dates of the fireworks displays and jeopardize public safety.

We are issuing this rule, and under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making it effective less than 30 days after publication in the Federal Register. Delaying the effective date of this rule would be contrary to public interest because the rule would not be effective until after the scheduled displays occur.

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port New Orleans (COPT) has determined that these safety zones are necessary to provide for the safety of life and to protect property due to the potential hazards associated with barge-based fireworks displays taking place on these navigable waterways. The Coast Guard will notify the public and maritime community of the proposed safety zones and their respective enforcement periods via Broadcast Notice to Mariners (BNM).

This rule establishes four temporary safety zones within the COTP Zone on several dates and in different locations. Each safety zone will be enforced on the respective dates listed above and in the regulatory text provided at the end of this document. Each safety zone is limited to a duration of one hour, and will occur during the evening on the dates of July 1, July 2, July 3, and July 14, 2017. Entry into these safety zones is prohibited unless permission has been granted by the COTP or a designated representative.

The COTP will inform the public through Broadcast Notice to Mariners (BNM) of the enforcement period for each safety zone as well as any changes in the planned schedule. Inquiries may be made with the Coast Guard Sector New Orleans Command Center regarding the status of the safety zone by telephone at 504-365-2200.

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

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

This regulatory action determination is based on the size, location, duration, and time-of-year of the safety zone. Three of the safety zones will be no greater than 1 mile in length and will restrict navigation on the Lower Mississippi River for no longer than one hour each. The remaining safety zones will be established on Lake Pontchartrain, extending a 600 foot radius from position 30°21′12.0″ N. and 090°04′28.9″ W. and will restrict navigation for no longer than one hour. Due to the limited scope and short duration of each safety zone, the impact on routine navigation is expected to be minimal. Additionally, notice of the safety zones or any changes in the planned schedule will be made via Broadcast Notice to Mariners. Entry into the safety zones may be requested from the COTP or a designated representative and will be considered on a case-by-case basis.

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.

While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A. above, this rule will not have a significant economic impact on any vessel owner or operator.

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 this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves four temporary safety zones within the COTP Zone on four separate days. It is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of Commandant Instruction M16475.1D. A Record of Environmental Consideration (REC) supporting this determination is available in the docket where indicated under ADDRESSES.

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:

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 the event sponsor did not submit notice to the Coast Guard with sufficient 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 contrary to the public interest by inhibiting the Coast Guard's ability to protect spectators and vessels from the hazards associated with a maritime fireworks display.

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Buffalo, NY (COTP) has determined that potential hazards associated with vessels in the vicinity of firework displays on July 22, 2017 will be a safety concern for vessels and spectators within a 700 foot radius of the launch point of the fireworks. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone while the fireworks display is happening.

This rule establishes a safety zone from 9:25 p.m. through 10:25 p.m. on July 22, 2017. The safety zone will cover all navigable waters within 700 feet of the launch point of the fireworks display. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative. 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 orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.

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.

While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.

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 this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone lasting one hour that will prohibit entry within 700 feet of the launch area for the fireworks display. It is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. 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:

On January 6 and January 19, 2017, the Department announced dates by which institutions subject to the Department's GE regulations must comply with certain provisions of the GE regulations relating to the submission of alternate earnings appeals and disclosure requirements. On March 6, 2017, the Department announced that it was allowing additional time, until July 1, 2017, to comply with those provisions. On June 16, 2017, the Department announced its intention to negotiate issues related to gainful employment.

Consistent with the Department's March 6, 2017 announcement, by July 1, 2017, institutions must comply with the requirement in 34 CFR 668.412(c) to provide a completed disclosure template, or a link thereto, on its GE program Web pages. The revised template is available for use at https://www2.ed.gov/policy/highered/reg/hearulemaking/2009/negreg-summerfall.html. The Department believes that it should evaluate the utility of these disclosures to students and the implementation of this requirement prior to requiring institutions to include the disclosure template, or a link thereto, in their GE program promotional materials and to directly distribute the disclosure template to prospective students under 34 CFR 668.412(d) and (e). Moreover, the Department expects to further review these requirements as part of its review of the GE regulations and their implementation, including through negotiated rulemaking. Accordingly, the Department is allowing institutions additional time—until July 1, 2018—to comply with the provisions in 34 CFR 668.412(d) and (e).

The Department also extends the deadline for all programs to file alternate earnings appeals in light of the Court Order. We will issue a Federal Register notice to specifically implement the Court Order, including establishing new deadlines, and anticipate doing so within 30 days from the publication date of this notice.

We are inviting your comments on this action. We will consider these comments in determining whether to take any future action in connection with the implementation of the disclosure requirements.

Accessible Format: Individuals with disabilities can obtain this document in an accessible format (e.g., braille, large print, audiotape, or compact disc) on request to the program contact person listed under FOR FURTHER INFORMATION CONTACT.

Electronic Access to This Document: The official version of this document is the document published in the Federal Register. Free internet access to the official edition of the Federal Register and the Code of Federal Regulations is available via the Federal Digital System at: www.thefederalregister.org/fdsys. At this site you can view this document, as well as all other documents of this Department published in the Federal Register, in text or Portable Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, which is available free at this site.

You may also access documents of the Department published in the Federal Register by using the article search feature at: www.federalregister.gov. Specifically, through the advanced search feature of this site, you can limit your search to documents published by the Department.

I. What is the background for EPA's proposed actions?

Effective July 20, 2012, EPA designated areas as unclassifiable/attainment or nonattainment for the 2008 8-hour ozone NAAQS that was promulgated on March 27, 2008. See 77 FR 30088 (May 21, 2012). The Cincinnati-Hamilton, OH-KY-IN Area was designated as nonattainment for the 2008 8-hour ozone NAAQS and classified as a marginal nonattainment area.1 On May 4, 2016 (81 FR 26697), EPA issued a determination that the Area had attained the 2008 8-hour ozone NAAQS. On August 26, 2016, Kentucky requested that EPA redesignate the Area to attainment for the 2008 8-hour ozone NAAQS and submitted a SIP revision containing the Commonwealth's plan for maintaining attainment of the 2008 8-hour ozone standard in the Area through 2030, including 2020 and 2030 MVEBs for NOX and VOC for the Cincinnati-Hamilton, OH-KY-IN Area. In addition, the Commonwealth requested approval of the base year emissions inventory for the 2008 8-hour ozone NAAQS pursuant to CAA section 182(a)(1).

In a notice of proposed rulemaking (NPRM) published on May 1, 2017 (82 FR 20297), EPA proposed to approve the base year emissions inventory; to approve the maintenance plan, including the 2020 and 2030 MVEBs for NOX and VOC, and incorporate the plan into the Kentucky SIP; and to redesignate the Area to attainment for the 2008 8-hour ozone NAAQS. In that notice, EPA also notified the public of the status of the Agency's adequacy determination for the NOX and VOC MVEBs for the Cincinnati-Hamilton, OH-KY-IN Area. No adverse comments were received on the May 1, 2017, proposed rulemaking. The details of Kentucky's submittal and the rationale for EPA's actions are further explained in the NPRM.

EPA is taking three separate, but related, final actions. First, EPA is approving the 2008 8-hour ozone NAAQS base year emissions inventory for the Kentucky portion of the Cincinnati-Hamilton, OH-KY-IN Area as meeting the requirements of CAA section 182(a)(1) and incorporating it into the SIP. Approval of the base year emissions inventory is a prerequisite to redesignating an ozone nonattainment area to attainment.

Second, EPA is approving the maintenance plan for the Cincinnati-Hamilton, OH-KY-IN Area, including the NOX and VOC MVEBs for 2020 and 2030, as meeting the requirements of CAA section 175A and incorporating it into the Kentucky SIP. The maintenance plan demonstrates that the Area will continue to maintain the 2008 8-hour ozone NAAQS through 2030, and the MVEBs meet all of the adequacy criteria contained in 40 CFR 93.118(e)(4) and (5).

Third, EPA is approving Kentucky's redesignation request for the 2008 8-hour ozone NAAQS for the Cincinnati-Hamilton, OH-KY-IN Area pursuant to CAA section 107(d)(3)(E). Approval of the redesignation request changes the official designation of the portions of Boone County, Campbell County, and Kenton County in the Cincinnati-Hamilton, OH-KY-IN Area for the 2008 8-hour ozone NAAQS from nonattainment to attainment, as found at 40 CFR part 81.

EPA is also notifying the public that EPA finds the newly-established NOX and VOC MVEBs for the Cincinnati-Hamilton, OH-KY-IN Area adequate for the purpose of transportation conformity. Within 24 months from this final rule, the transportation partners will need to demonstrate conformity to the new NOX and VOC MVEBs pursuant to 40 CFR 93.104(e).

EPA has determined that these actions are effective immediately upon publication under the authority of 5 U.S.C. 553(d)(1) and (d)(3). The purpose of the 30-day waiting period prescribed in section 553(d) is to give affected parties a reasonable time to adjust their behavior and prepare before the final rule takes effect. Section 553(d)(1) allows an effective date less than 30 days after publication if a substantive rule “relieves a restriction.” These actions qualify for the exception under section 553(d)(1) because they relieve the State of various requirements for the Area. Furthermore, section 553(d)(3) allows an effective date less than 30 days after publication “as otherwise provided by the agency for good cause found and published with the rule.” EPA finds good cause to make these actions effective immediately pursuant to section 553(d)(3) because they do not create any new regulatory requirements such that affected parties would need time to prepare before the actions take effect.

Under the CAA, redesignation of an area to attainment and the accompanying approval of a maintenance plan under section 107(d)(3)(E) are actions that affect the status of a geographical area and do not impose any additional regulatory requirements on sources beyond those imposed by state law. A redesignation to attainment does not in and of itself create any new requirements, but rather results in the applicability of requirements contained in the CAA for areas that have been redesignated to attainment. Moreover, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, these actions merely approve state law as meeting federal requirements and do not impose additional requirements beyond those imposed by state law. For this reason, these actions:

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

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

• are 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.);

• do 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);

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

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

• are not significant regulatory actions subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• are 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

• will not have disproportionate human health or environmental effects under Executive Order 12898 (59 FR 7629, February 16, 1994).

The SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.

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 September 5, 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).

40 CFR parts 52 and 81 are amended as follows:

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

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

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

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2007-0099 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before September 5, 2017. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2007-0099, by one of the following methods:

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

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

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.html. Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at http://www.epa.gov/dockets.

In the Federal Register of August 12, 2016 (81 FR 53379) (FRL-9949-53), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announced the filing of a pesticide petition (PP 6E8463) by Nichino America, Inc., 4550 New Linden Hill Road, Suite 501, Wilmington, DE 19808-2951. This petition requested that 40 CFR 180.639 be amended by establishing an import tolerance for residues of flubendiamide, N2-[1,1-dimethyl-2-(methylsulfonyl)ethyl-3-iodo-N1-[2-methyl-4-[1,2,2,2-tetrafluoro-1-(trifluoromethyl)ethyl]phenyl]-1,2-benzenedicarboxamide, in or on the processed commodity of dried tea at 60 parts per million (ppm). This document referenced a summary of a petition prepared by Nichino America, Inc., the registrant, which is available in the docket, http://www.regulations.gov. This tolerance was requested to cover residues of flubendiamide in or on tea resulting from uses of this pesticide on tea outside the United States; there is no current U.S. registration for use of flubendiamide on tea. In order to harmonize with Codex, EPA is establishing a tolerance for residues of flubendiamide in or on tea at 50 ppm. The available residue data supports this tolerance level. A revised Section F was submitted by Nichino America, Inc. to support this change to the petitioned-for tolerance. There were no comments received in response to the notice of filing.

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

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

In the Federal Register of December 12, 2012 (77 FR 73940) (FRL-9373-3), EPA amended tolerances for residues of flubendiamide in or on apple, wet pomace and fruit, pome, group 11. EPA is relying upon significant portions of those risk assessments and the corresponding findings made in the December 12, 2012 Federal Register document in support of this action for the following reasons. The toxicity profile of flubendiamide has not changed. Much of the exposure profiled remains the same as well because there is no U.S. registration associated with the tea use (i.e., the estimated drinking water exposures reported in 2012 are not expected to change nor is there any need to conduct a residential exposure assessment due to the lack of proposed or existing residential uses for flubendiamide). The Agency did take into consideration the potential additional dietary exposure to flubendiamide as a result of residues in or on imported tea. Aggregating that exposure with the dietary exposure estimated in the December 2012 tolerance assessment resulted in no change to the acute dietary exposure (3.1% of the aPAD for the general U.S. population and 5.5% of the aPAD for children 1-2 years old, the most highly exposed population subgroup) and only a 1% change in the chronic dietary risk (21% of the cPAD) for the general U.S. population and an increase of 9% in the chronic dietary risk (67% of the cPAD) for children 1-2 years old, the most highly exposed population subgroup. The Agency's findings concerning cumulative effects and the children's safety factor as reflected in the December 2012 tolerance rulemaking are also relied upon in this action.

Based upon the risk assessments supporting the December 12, 2012 Federal Register document, the findings therein, and the updated risk assessment accounting for the residues of flubendiamide on imported tea, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to flubendiamide residues.

For a detailed discussion of the aggregate risk assessments and determination of safety for these tolerances, please refer to the December 12, 2012, Federal Register document and its supporting documents, available at http://www.regulations.gov in docket ID number EPA-HQ-OPP-2007-0099. Further information about EPA's determination that an updated risk assessment was not necessary may be found in the document, “Flubendiamide: Human Health Risk Assessment for the Petition for a Tolerance Without U.S. Registration for Residues in/on Tea.” in docket ID number EPA-HQ-OPP-2007-0099.

An independently validated liquid chromatography/tandem mass spectrometry (LC/MS/MS) method, Method 00816/M002, was previously submitted for the determination of residues of in/on samples of plant commodities. The validated limit of quantitation (LOQ) is 0.01 ppm for each analyte in each matrix.

In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level. There is currently a Codex MRL for tea established at 50 ppm; therefore, the U.S. EPA is establishing a tolerance on tea at the same level to harmonize with Codex.

If only dried tea data are submitted for imported tea (data in/on the RAC are not required for imported tea) and the tolerance level based on these data is also meant to cover for detectable residues in instant tea (may be demonstrated by data depicting detectable residues in brewed tea), then the correct commodity definition for tolerance setting should be “tea” to cover incurred residues in or on all tea commodities and eliminate any regulatory ambiguity. In order to harmonize with Codex, EPA is establishing a tolerance for residues of flubendiamide in or on tea at 50 ppm. The available residue data supports this tolerance level. A revised Section F was submitted by Nichino America, Inc. to support this change to the petitioned-for tolerance.

Therefore, a tolerance is established for residues of flubendiamide, N2-[1,1-dimethyl-2-(methylsulfonyl)ethyl-3-iodo-N1-[2-methyl-4-[1,2,2,2-tetrafluoro-1-(trifluoromethyl)ethyl]phenyl]-1,2-benzenedicarboxamide, in or on tea at 50 ppm. At this time, there is no U.S. registration for use of flubendiamide on tea.

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

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

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

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

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

Therefore, 40 CFR chapter I is amended as follows:

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

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

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2016-0166 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before September 5, 2017. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2016-0166, by one of the following methods:

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

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

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

Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at http://www.epa.gov/dockets.

In the Federal Register of May 19, 2016 (81 FR 31581) (FRL-9946-02), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 6E8452) by IR-4, Rutgers University, 500 College Rd. East, Suite 201 W, Princeton, NJ 08540. The petition requested that 40 CFR 180.653 be amended by establishing tolerances for residues of the herbicide indaziflam (N-[(1R,2S)-2,3-dihydro-2,6-dimethyl-1H-inden-1-yl]-6-(1-fluoroethyl)-1,3,5-triazine-2,4-diamine) in or on bushberry, subgroup 13-07B at 0.01 parts per million (ppm); caneberry, subgroup 13-07A at 0.01 ppm; coffee, green bean at 0.01 ppm; fruit, small, vine climbing, except fuzzy kiwifruit, subgroup 13-07F at 0.01 ppm; hop, dried cones at 0.03 ppm; fruit, stone, group 12-12 at 0.01 ppm; and nut, tree, group 14-12 at 0.01 ppm. Additionally, the petition requested that tolerances be established for the crops in the proposed crop subgroup 23A (small fruit, edible peel subgroup) at 0.01 ppm, including acerola; African plum; agritos, almondette; appleberry; arbutus berry; bayberry, red; bignay; breadnut; cabeluda; carandas-plum; Ceylon iron wood; Ceylon olive; cherry-of-the-Rio-Grande; Chinese olive, black; Chinese olive, white; chirauli-nut; cocoplum; desert-date; false sandalwood; fragrant manjack; gooseberry, Abyssinian; gooseberry, Ceylon; gooseberry, otaheite; governor's plum; grumichama; guabiroba; guava berry; guava, Brazilian; guava, Costa Rican; guayabillo; illawarra plum; Indian-plum; Jamaica-cherry; jambolan; kaffir-plum; kakadu plum; kapundung; karnada; lemon aspen; mombin, yellow; monos plum; mountain cherry; olive; persimmon, black; pitomba; plum-of-Martinique; rukam; rumberry; sea grape; sete-capotes; silver aspen; water apple; water pear; water berry; and wax jambu.

Upon establishment of the tolerances referenced above, IR-4 requested to remove existing tolerances in 40 CFR 180.653 for residues of the herbicide indaziflam (N-[(1R,2S)-2,3-dihydro-2,6-dimethyl-1H-inden-1-yl]-6-(1-fluoroethyl)-1,3,5-triazine-2,4-diamine) in or on fruit, stone, group 12 at 0.01 ppm; nut, tree, group 14 at 0.01 ppm; grape at 0.01 ppm; and pistachio at 0.01 ppm. That May 19, 2016 document referenced a summary of the petition prepared by Bayer CropScience, the registrant, which is available in the docket, http://www.regulations.gov. Comments were received on the notice of filing. EPA's response to these comments is discussed in Unit IV.C.

Based upon review of the data supporting the petition, EPA has modified the level at which the tolerance is being established for hops. Other tolerances being established vary from the petition requests in minor ways. These differences and the reasons for these changes are explained in Unit IV.D.

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

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

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

The nervous system is the major target for toxicity in rats and dogs. Evidence of neurotoxicity (e.g., decreased motor activity, clinical signs, and/or neuropathology) was observed in both species throughout the database, which included the dog subchronic and chronic toxicity studies; the rat acute, subchronic, and developmental neurotoxicity studies; the rat two-generation reproduction study; the rat chronic toxicity study; and the rat combined carcinogenicity/chronic toxicity study. In repeated-dose studies, the dog was the more sensitive species, showing the lowest no-observed-adverse-effect-levels (NOAELs) and lowest-observed-adverse-effect-levels (LOAELs) among all available studies, based on neuropathology (degenerative nerve fibers in the brain, spinal cord, and sciatic nerve). At higher doses, three dogs in the subchronic study were prematurely terminated due to excessive clinical signs including ataxia, tremors, decreased pupil response, seizures, and other findings.

In the rat, a marginal decrease in motor/locomotor activity was observed in females in the acute neurotoxicity study. Decreases in motor/locomotor activity were also seen in the subchronic neurotoxicity study in females and in the developmental neurotoxicity study in male offspring at post-natal day (PND) 21. Clinical signs of neurotoxicity were observed in the acute, subchronic, and developmental neurotoxicity studies and consisted primarily of tremors, changes in activity and reactivity, repetitive chewing, dilated pupils, and oral, perianal, and nasal staining. Similar clinical signs of neurotoxicity were observed in the 2-generation reproduction study, the rat chronic toxicity study, and the combined rat carcinogenicity/chronic toxicity study. Neuropathology findings were also observed in the rat manifested as focal/multifocal vacuolation of the median eminence of the brain and the pituitary pars nervosa and degenerative nerve fibers in the gasserian ganglion, sciatic nerve, and tibial nerve. Evidence of neurotoxicity was not seen in the mouse.

Other organs affected by indaziflam in mice and rats included the kidney, liver, thyroid, stomach, seminal vesicles, and ovaries. Effects on the kidney were observed following chronic exposure in rats and mice while effects on the liver were observed following chronic exposure in the rat. Effects on the thyroid were only observed in multiple dose rat studies and usually in the male only. Increased thyroid stimulating hormone (TSH) measured at 3 and 14 weeks in the 90-day and 1-year studies showed an increase in males at week 3. Histopathological alterations (thyroid follicular cell hypertrophy at 90 days and 1 year, as well as colloid alterations at chronic exposure times) were observed, but no increases in thyroid weight were noted. Thyroid histopathology was observed at a lower dose in the two-year study, compared to the 90-day and 1-year studies. Chronic exposures also led to atrophied or small seminal vesicles in male rats and glandular erosion/necrosis in the stomach and blood-filled ovarian cysts/follicles in female mice. However, these effects occurred at higher doses than those at which neurotoxicity was observed in the dog. In rats, effects observed on the liver, thyroid, kidney, and seminal vesicles occurred at doses that were similar to or higher than those that produced neurotoxicity. Decreased body weight gain was also observed in most studies following exposure to indaziflam. There was no evidence of immunotoxicity in the available studies, which included a guideline immunotoxicity study in the rat. No systemic effects were observed in the rat following a 28-day dermal exposure period.

No evidence of increased quantitative or qualitative susceptibility was seen in developmental toxicity studies in rats and rabbits, a developmental neurotoxicity study in rats, or in a reproduction study in rats. In the rat developmental toxicity study, decreased fetal weight was observed in the presence of maternal effects that included decreased body weight gain and food consumption. No developmental effects were observed in rabbits up to maternally toxic dose levels. Decreased pup weight and delays in sexual maturation (preputial separation in males and vaginal patency in females) were observed in offspring in the rat two-generation reproductive toxicity study, along with clinical signs of toxicity, at a dose causing parental toxicity that included coarse tremors, renal toxicity and decreased weight gain. In the rat developmental neurotoxicity study, transiently decreased motor activity (PND 21 only) in male offspring was observed and was considered a potential neurotoxic effect. It was observed at a dose that also caused clinical signs of neurotoxicity along with decreased body weight in maternal animals.

Indaziflam showed no evidence of carcinogenicity in the two-year dietary rat and mouse bioassays. All genotoxicity studies that were conducted on indaziflam were negative.

Specific information on the studies received and the nature of the adverse effects caused by indaziflam as well as the NOAEL and the LOAEL from the toxicity studies can be found at http://www.regulations.gov in the document titled “Indaziflam—Aggregate Human Health Risk Assessment of Proposed New Uses, Crop Group Conversions, and Expansions from Representative Commodities to Crop Groups” on page 28 in docket ID number EPA-HQ-OPP-2016-0466.

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

A summary of the toxicological endpoints for indaziflam used for human risk assessment is discussed in Unit III.B. of the final rule published in the Federal Register of January 29, 2014 (79 FR 4624) (FRL-9903-88).

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to indaziflam, EPA considered exposure under the petitioned-for tolerances as well as all existing indaziflam tolerances in 40 CFR 180.653. EPA assessed dietary exposures from indaziflam in food as follows:

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

Such effects were identified for indaziflam. In estimating acute dietary exposure, EPA used food consumption information from the U.S. Department of Agriculture's 2003-2008 National Health and Nutrition Examination Survey, What We Eat in America, (NHANES/WWEIA). As to residue levels in food, the acute dietary risk assessment was based on tolerance-level residues and 100 percent crop treated (PCT).

ii. Chronic exposure. In conducting the chronic dietary exposure assessment EPA used the food consumption data from the USDA's 2003-2008 NHANES/WWEIA. As to residue levels in food, the chronic dietary risk assessment was based on tolerance-level residues and 100 PCT.

iii. Cancer. Based on the data summarized in Unit III.A., EPA has concluded that indaziflam does not pose a cancer risk to humans. Therefore, a dietary exposure assessment for the purpose of assessing cancer risk is unnecessary.

iv. Anticipated residue and PCT information. EPA did not use anticipated residue or PCT information in the dietary assessment for indaziflam. Tolerance-level residues and 100 PCT were assumed for all food commodities.

2. Dietary exposure from drinking water. The Agency used screening-level water exposure models in the dietary exposure analysis and risk assessment for indaziflam in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of indaziflam. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/about-water-exposure-models-used-pesticide.

Based on the Pesticide in Water Calculator (PWC) and the Tier 1 Rice model, the estimated drinking water concentrations (EDWCs) of indaziflam for acute exposures are estimated to be 84 parts per billion (ppb) for surface water and 3.7 ppb for ground water, and for chronic exposures are estimated to be 26 ppb for surface water and 3.7 ppb for ground water.

Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For the acute dietary risk assessment, the water concentration value of 84 ppb was used to assess the contribution to drinking water. For the chronic dietary risk assessment, the water concentration of value 26 ppb was used to assess the contribution to drinking water.

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets).\

Indaziflam is currently registered for the following uses that could result in residential exposures: Turf, gardens, and trees. EPA assessed residential exposure using the following assumptions: Short-term dermal and inhalation handler exposure is expected for adults as a result of applying products containing indaziflam to lawns/turf and gardens/trees using a variety of application equipment. Short-term post-application dermal exposure is expected for adults, children 11<16, and children 6<11 years old as a result of playing, mowing and/or golfing on treated turf. Short-term dermal and incidental oral exposure (hand to mouth, object to mouth, incidental soil ingestion) is expected for children 1<2 years old as a result from playing on treated turf/lawns. Lastly, short-term post-application dermal exposure is expected for adults and children 6<11 years old as result of application to gardens and trees. The Agency selected only the most conservative, or worst case, residential adult and child scenarios to be included in the aggregate estimates, based on the lowest overall MOE (i.e., highest risk estimates). The worst case residential exposure scenario for both adults and children resulted from short-term dermal and incidental oral (for children only) post-application exposure to treated turf. Further information regarding EPA standard assumptions and generic inputs for residential exposures may be found at http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/standard-operating-procedures-residential-pesticide.

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

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

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

2. Prenatal and postnatal sensitivity. No evidence of increased quantitative or qualitative susceptibility was seen in developmental toxicity studies in rats and rabbits, a developmental neurotoxicity study in rats, or in a reproduction study in rats. In the rat developmental toxicity study, decreased fetal weight was observed in the presence of maternal effects that included decreased body weight gain and food consumption. No developmental effects were observed in rabbits up to maternally toxic dose levels. Decreased pup weight and delays in sexual maturation (preputial separation in males and vaginal patency in females) were observed in offspring in the rat two-generation reproductive toxicity study, along with clinical signs of toxicity, at a dose causing parental toxicity that included coarse tremors, renal toxicity and decreased weight gain. In the developmental neurotoxicity study, transiently decreased motor activity (PND 21 only) in male offspring was observed and was considered a potential neurotoxic effect. It was observed at a dose that also caused clinical signs of neurotoxicity along with decreased body weight in maternal animals.

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

i. The toxicity database for indaziflam is complete.

ii. Evidence of neurotoxicity was observed in dogs and rats throughout the database, which included the dog subchronic toxicity study, the rat subchronic toxicity, the rat acute, subchronic, and developmental neurotoxicity screening batteries, the rat two-generation reproduction study, the rat chronic toxicity study, and the rat combined carcinogenicity/chronic toxicity study. Evidence of neurotoxicity was manifested as neuropathology in dogs and as decreased motor activity and clinical signs (e.g., tremors) in rats. Evidence of neurotoxicity was the most consistent effect (seen in dogs and rats), the most sensitive toxicological finding (based on neuropathology in dogs), and the basis for the risk assessment. The endpoints selected for risk assessment are based on and protective of the neurotoxic effects seen in the guideline studies.

iii. No developmental effects were observed in rabbits up to maternally toxic dose levels. Offspring effects in the developmental neurotoxicity study in rats and multi-generation toxicity studies only occurred in the presence of maternal toxicity and were not considered more severe than the parental effects. In addition, clear NOAELs/LOAELs were identified for these studies. Therefore, EPA concluded that there is no evidence of increased quantitative or qualitative susceptibility to rat or rabbit fetuses exposed in utero and/or postnatally to indaziflam.

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

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

1. Acute risk. Using the exposure assumptions discussed in this unit for acute exposure, the acute dietary exposure from food and water to indaziflam will occupy 19% of the aPAD for all infants <1-year-old, the population group receiving the greatest exposure.

2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that chronic exposure to indaziflam from food and water will utilize 8% of the cPAD for all infants <1-year-old, the population group receiving the greatest exposure. Based on the explanation in Unit III.C.3., regarding residential use patterns, chronic residential exposure to residues of indaziflam is not expected.

3. Short-term risk. Short-term aggregate exposure takes into account short-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

Indaziflam is currently registered for uses that could result in short-term residential exposure, and the Agency has determined that it is appropriate to aggregate chronic exposure through food and water with short-term residential exposures to indaziflam.

Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded the combined short-term food, water, and residential exposures result in aggregate MOEs of 1400 for adults and 580 for children. Because EPA's level of concern for indaziflam is a MOE of 100 or below, these MOEs are not of concern.

4. Intermediate-term risk. Intermediate-term aggregate exposure takes into account intermediate-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

An intermediate-term adverse effect was identified; however, indaziflam is not registered for any use patterns that would result in intermediate-term residential exposure. Intermediate-term risk is assessed based on intermediate-term residential exposure plus chronic dietary exposure. Because there is no intermediate-term residential exposure and chronic dietary exposure has already been assessed under the appropriately protective cPAD (which is at least as protective as the POD used to assess intermediate-term risk), no further assessment of intermediate-term risk is necessary, and EPA relies on the chronic dietary risk assessment for evaluating intermediate-term risk for indaziflam.

5. Aggregate cancer risk for U.S. population. Based on the lack of evidence of carcinogenicity in two adequate rodent carcinogenicity studies, indaziflam is not expected to pose a cancer risk to humans.

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

Adequate enforcement methodology (liquid chromatography with tandem mass spectrometry detection [LC/MS/MS] method (DH-003-P07-02) for fruit and nut tree matrices for indaziflam and FDAT) is available to enforce the tolerance expression. The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address: [email protected].

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

The Codex has not established any MRLs for indaziflam.

Two comments were received in response to the Notice of Filing. The first comment was in support of the petition. The second comment was against the petition and stated in part that “this product should not get approval” and that “no residue should be permitted on any food or other plant.” The Agency recognizes that some individuals believe that pesticides should be banned on agricultural crops; however, the existing legal framework provided by section 408 of the Federal Food, Drug and Cosmetic Act (FFDCA) states that tolerances may be set when persons seeking such tolerances or exemptions have demonstrated that the pesticide meets the safety standard imposed by that statute. EPA has assessed the effects of this chemical on human health and determined that aggregate exposure to it will be safe. The comment provides no information to support a different conclusion.

For hops, the proposed tolerance level of 0.03 ppm was based on residues from 4 field trials at levels below the level of quantitation (LOQ) (<0.01), and a residue of 0.02 ppm from one trial (13-QC06), being entered into the Organization for Economic Cooperation and Development (OECD) tolerance calculation procedure. However, the FDAT (metabolite) portion of the residue from Trial 13-QC06 was not converted to parent equivalents by the petitioner. When this is converted, the combined residue is 0.033 ppm, and the result of the OECD tolerance calculation procedure is 0.06 ppm. Therefore, the tolerance level being established in/on hops, dried cones is 0.06 ppm.

The petition requested that a tolerance be established for “coffee, green bean”. Since a tolerance already exists for that commodity at the level requested but with a notation that there are no U.S. registrations for use of indaziflam on coffee, the Agency is simply removing the footnote in 40 CFR 180.653 that states there are no U.S. registrations for coffee.

Lastly, the petition sought the establishment of tolerances covering all the crops listed in the proposed crop group 23A. Since the crop group has been established for tropical and subtropical, small fruit, edible peel subgroup 23A, EPA is establishing the crop subgroup tolerance rather than individual tolerances for each of the named commodities.

Although not requested, EPA is also removing the existing tolerance for “olive” because it is superseded by the new crop subgroup 23A tolerance.

Therefore, tolerances are established for residues of indaziflam, N-[(1R,2S)-2,3-dihydro-2,6-dimethyl-1H-inden-1-yl]-6-(1-fluoroethyl)-1,3,5-triazine-2,4-diamine, including its metabolites and degradates, in or on the following: Bushberry subgroup 13-07B at 0.01 ppm; caneberry subgroup 13-07A at 0.01 ppm; fruit, small, vine climbing, except fuzzy kiwifruit, subgroup 13-07F at 0.01 ppm; fruit, stone, group 12-12 at 0.01 ppm; fruit, tropical and subtropical, small fruit, edible peel, subgroup 23A at 0.01 ppm; hop, dried cones at 0.06 ppm; and nut, tree, group 14-12 at 0.01 ppm.

Additionally, the footnote is removed from the existing tolerance for “coffee, green bean” and the following existing tolerances are removed as unnecessary since they are superseded by the newly established tolerances: Fruit, stone, group 12; grape; nut, tree, group 14; olive; and pistachio.

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

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

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

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

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

Therefore, 40 CFR chapter I is amended as follows:

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

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

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

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2016-0066 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before September 5, 2017. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2016-0066, by one of the following methods:

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

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

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

In the Federal Register of March 16, 2016 (81 FR 14030) (FRL-9942-86), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 5E8439) by Dow AgroSciences LLC, 9330 Zionsville Road, Indianapolis, IN 46268. The petition requested that 40 CFR 180.638 be amended by establishing tolerances for residues of the herbicide pyroxsulam, N-(5,7-dimethoxy[1,2,4]triazolo[1,5-a]pyrimidin-2-yl)-2-methoxy-4-(trifluoromethyl)-3-pyridinesulfonamide, in or on teff, grain at 0.01 parts per million (ppm); teff, forage 0.06 ppm; teff, hay 0.01 ppm; and teff, straw 0.03 ppm. The published notice of filing (NOF) mistakenly listed the following incorrect tolerances for residues of pyroxsulam in or on the cereal crops: teff at 0.06 parts per million (ppm); teff, forage at 0.01 ppm; teff, grain at 0.03 ppm; teff, hay at 0.01 ppm; and teff, straw at 0.01 ppm. That document referenced a summary of the petition containing the correct tolerance amounts prepared by Dow AgroSciences LLC, the registrant, which is available in the docket, http://www.regulations.gov. Comments were received on the notice of filing. EPA's response to these comments is discussed in Unit IV.C.

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

Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure, consistent with FFDCA section 408(b)(2).

In the Federal Register of February 27, 2008 (73 FR 10402) (FRL-8349-9), EPA established tolerances for residues of pyroxsulam in or on wheat, forage; wheat, grain; wheat, hay; and wheat, straw at the same levels as those requested for residues in or on corresponding teff commodities. Since these wheat tolerances were established in 2008, the toxicological profile and the endpoints for assessment have not changed. Moreover, as explained below, EPA has concluded that the new tolerances for teff commodities does not alter the previous conclusions about the potential aggregate exposure to pyroxsulam residues.

Although teff residue data were not submitted with this petition, EPA concluded that the level of pyroxsulam residues on teff commodities would be the same or similar to the level of pyroxsulam residues on wheat commodities, based on the similarity in application rates. Furthermore, EPA concluded that because teff is a likely substitute for wheat products, there would be no additional exposure to pyroxsulam residues beyond what was previously assessed to support the wheat tolerances. Finally, because there is no corresponding request for a U.S. registration allowing use of pyroxsulam on teff, there are no additional drinking water or residential exposures beyond previous assessments.

Based on this assessment of potential exposure from use of pyroxsulam on teff and the findings supporting the February 27, 2008 tolerances established for wheat commodities, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to pyroxsulam residues.

For a detailed discussion of the aggregate risk assessments and determination of safety for the proposed tolerances, please refer to the February 27, 2008 Federal Register document and its supporting documents as well as Human Health Risk Assessments D431295, D. Dotson, 3/25/2016 and D439358, D. Dotson, 4/21/2017 available at http://www.regulations.gov in docket ID number EPA-HQ-OPP-2006-0785.

An adequate enforcement methodology, Method GRM 04.17, an Liquid chromatography with tandem mass spectrometry (LC/MS/MS) method, is available to enforce the tolerance expression.

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

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

The Codex has not established a MRL for pyroxsulam.

EPA received two comments to the published Notice of Filing. Both comments stated, in part and without any supporting information, that EPA should deny this petition because it is a harmful and toxic chemical with no benefits. The Agency recognizes that some individuals believe that pesticides should be banned on agricultural crops. The existing legal framework provided by section 408 of the Federal Food, Drug, and Cosmetic Act (FFDCA), however, states that tolerances may be set when persons seeking such tolerances or exemptions have demonstrated that the pesticide meets the safety standard imposed by that statute. EPA has assessed the effects of this chemical on human health and determined that aggregate exposure to it will be safe. These comments provide no information to support an alternative conclusion.

EPA is revising the tolerance expression to clarify (1) that, as provided in FFDCA section 408(a)(3), the tolerance covers metabolites and degradates of pyroxsulam not specifically mentioned; and (2) that compliance with the specified tolerance levels is to be determined by measuring only the specific compounds mentioned in the tolerance expression.

Therefore, tolerances are established for residues of pyroxsulam, N-(5,7-dimethoxy[1,2,4]triazolo[1,5-a]pyrimidin-2-yl)-2-methoxy-4-(trifluoromethyl)-3-pyridinesulfonamide, in or on teff, forage 0.06 ppm; teff, grain at 0.01 ppm; teff, hay 0.01 ppm; and teff, straw at 0.03 ppm.

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

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

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

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

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

Therefore, 40 CFR chapter I is amended as follows:

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

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

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2016-0780 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before September 5, 2017. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2016-0780, by one of the following methods.

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

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

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

Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at http://www.epa.gov/dockets.

In the Federal Register of April 10, 2017 (82 FR 17175) (FRL-9959-61), EPA issued a document pursuant to FFDCA section 408, 21 U.S.C. 346a, announcing the receipt of a pesticide petition (PP IN-11004) filed by Clariant Corporation, 4000 Monroe Road, Charlotte NC 28205. The petition requested that 40 CFR 180.960 be amended by establishing an exemption from the requirement of a tolerance for residues of oxirane, 2-methyl, polymer with oxirane, hydrogen sulfate, ammonium salt and oxirane, 2-methyl, polymer with oxirane, hydrogen sulfate, potassium salt; CAS Nos. 57608-14-7 and 1838191-48-2, respectively. That document included a summary of the petition prepared by the petitioner and solicited comments on the petitioner's request. The Agency did not receive any comments.

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

EPA establishes exemptions from the requirement of a tolerance only in those cases where it can be shown that the risks from aggregate exposure to pesticide chemical residues under reasonably foreseeable circumstances will pose no appreciable risks to human health. In order to determine the risks from aggregate exposure to pesticide inert ingredients, the Agency considers the toxicity of the inert in conjunction with possible exposure to residues of the inert ingredient through food, drinking water, and through other exposures that occur as a result of pesticide use in residential settings. If EPA is able to determine that a finite tolerance is not necessary to ensure that there is a reasonable certainty that no harm will result from aggregate exposure to the inert ingredient, an exemption from the requirement of a tolerance may be established.

Consistent with FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action and considered its validity, completeness and reliability and the relationship of this information to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. In the case of certain chemical substances that are defined as polymers, the Agency has established a set of criteria to identify categories of polymers expected to present minimal or no risk. The definition of a polymer is given in 40 CFR 723.250(b) and the exclusion criteria for identifying these low-risk polymers are described in 40 CFR 723.250(d). Oxirane, 2-methyl, polymer with oxirane, hydrogen sulfate, ammonium salt and potassium salt conforms to the definition of a polymer given in 40 CFR 723.250(b) and meets the following criteria that are used to identify low-risk polymers.

1. The polymers are not a cationic polymer nor is it reasonably anticipated to become a cationic polymer in a natural aquatic environment.

2. The polymers do contain as an integral part of its composition the atomic elements carbon, hydrogen, and oxygen.

3. The polymers do not contain as an integral part of their composition, except as impurities, any element other than those listed in 40 CFR 723.250(d)(2)(ii).

4. The polymers are neither designed nor can it be reasonably anticipated to substantially degrade, decompose, or depolymerize.

5. The polymers are manufactured or imported from monomers and/or reactants that are already included on the TSCA Chemical Substance Inventory or manufactured under an applicable TSCA section 5 exemption.

6. The polymers are not a water absorbing polymer with a number average molecular weight (MW) greater than or equal to 10,000 daltons.

7. The polymers do not contain certain perfluoroalkyl moieties consisting of a CF3- or longer chain length as specified in 40 CFR 723.250(d)(6).

Additionally, the polymers also meet as required the following exemption criteria specified in 40 CFR 723.250(e).

8. The polymers', oxirane, 2-methyl, polymer with oxirane, hydrogen sulfate, ammonium salt and potassium salt, number average MW of 1800 and 2100, respectively, are greater than 1,000 and less than 10,000 daltons. The polymers contain less than 10% oligomeric material below MW 500 and less than 25% oligomeric material below MW 1,000, and the polymers do not contain any reactive functional groups.

Thus, oxirane, 2-methyl, polymer with oxirane, hydrogen sulfate, ammonium salt and potassium salt meet the criteria for a polymer to be considered low risk under 40 CFR 723.250. Based on its conformance to the criteria in this unit, no mammalian toxicity is anticipated from dietary, inhalation, or dermal exposure to oxirane, 2-methyl, polymer with oxirane, hydrogen sulfate, ammonium salt and potassium salt.

For the purposes of assessing potential exposure under this exemption, EPA considered that oxirane, 2-methyl, polymer with oxirane, hydrogen sulfate, ammonium salt and potassium salt could be present in all raw and processed agricultural commodities and drinking water, and that non-occupational non-dietary exposure was possible. The number average MW of oxirane, 2-methyl, polymer with oxirane, hydrogen sulfate, ammonium salt and potassium salt are 1800 and 2100 daltons, respectively. Generally, a polymer of this size would be poorly absorbed through the intact gastrointestinal tract or through intact human skin. Since oxirane, 2-methyl, polymer with oxirane, hydrogen sulfate, ammonium salt and potassium salt conform to the criteria that identify a low-risk polymer, there are no concerns for risks associated with any potential exposure scenarios that are reasonably foreseeable. The Agency has determined that tolerances are not necessary to protect the public health.

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

EPA has not found oxirane, 2-methyl, polymer with oxirane, hydrogen sulfate, ammonium salt and potassium salt to share a common mechanism of toxicity with any other substances, and oxirane, 2-methyl, polymer with oxirane, hydrogen sulfate, ammonium salt and potassium salt do not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that oxirane, 2-methyl, polymer with oxirane, hydrogen sulfate, ammonium salt and potassium salt do not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's Web site at http://www.epa.gov/pesticides/cumulative.

Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the data base unless EPA concludes that a different margin of safety will be safe for infants and children. Due to the expected low toxicity of oxirane, 2-methyl, polymer with oxirane, hydrogen sulfate, ammonium salt and potassium salt, EPA has not used a safety factor analysis to assess the risk. For the same reasons the additional tenfold safety factor is unnecessary.

Based on the conformance to the criteria used to identify a low-risk polymer, EPA concludes that there is a reasonable certainty of no harm to the U.S. population, including infants and children, from aggregate exposure to residues of oxirane, 2-methyl, polymer with oxirane, hydrogen sulfate, ammonium salt and potassium salt.

There are no existing tolerances for oxirane, 2-methyl, polymer with oxirane, hydrogen sulfate, ammonium salt and potassium salt.

An analytical method is not required for enforcement purposes since the Agency is establishing an exemption from the requirement of a tolerance without any numerical limitation.

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

The Codex has not established a MRL for oxirane, 2-methyl, polymer with oxirane, hydrogen sulfate, ammonium salt and potassium salt.

Accordingly, EPA finds that exempting residues of oxirane, 2-methyl, polymer with oxirane, hydrogen sulfate, ammonium salt and potassium salt from the requirement of a tolerance will be safe.

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

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

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

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

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

Therefore, 40 CFR chapter I is amended as follows:

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

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

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

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2016-0252 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before September 5, 2017. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2016-0252, by one of the following methods:

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

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

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

Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at http://www.epa.gov/dockets.

In the Federal Register of July 20, 2016 (81 FR 47150) (FRL-9948-45), EPA issued a document pursuant to FFDCA section 408, 21 U.S.C. 346a, announcing the filing of a pesticide petition (PP IN-10888) by Technology Sciences Group Inc., on behalf of Bayer HealthCare, LLC, P.O. Box 390, Shawnee Mission, KS 66201. The petition requested that 40 CFR 180.910 be amended by establishing an exemption from the requirement of a tolerance for residues of titanium dioxide (CAS Reg. No. 13463-67-7) in honey when used as an inert ingredient (colorant) at a concentration not more than 0.1% by weight in pesticide formulations intended for varroa mite control around bee hives. That document referenced a summary of the petition prepared by Technology Sciences Group Inc., the petitioner, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing.

Based upon review of the data supporting the petition, EPA is establishing an exemption from the requirement of a tolerance in 40 CFR 180.1195, instead of 40 CFR 180.910 as requested. Exemptions under section 180.910 cover residues applied to growing crops and raw agricultural crops after harvest. Because the petitioner requested an exemption to cover residues only in honey resulting specifically from the use in hives, the Agency has determined that the broader exemption in section 180.910 is not appropriate. For ease of reference, the Agency is establishing this exemption in section 180.1195, which contains other limited exemptions for residues of titanium dioxide.

Inert ingredients are all ingredients that are not active ingredients as defined in 40 CFR 153.125 and include, but are not limited to, the following types of ingredients (except when they have a pesticidal efficacy of their own): Solvents such as alcohols and hydrocarbons; surfactants such as polyoxyethylene polymers and fatty acids; carriers such as clay and diatomaceous earth; thickeners such as carrageenan and modified cellulose; wetting, spreading, and dispersing agents; propellants in aerosol dispensers; microencapsulating agents; and emulsifiers. The term “inert” is not intended to imply nontoxicity; the ingredient may or may not be chemically active. Generally, EPA has exempted inert ingredients from the requirement of a tolerance based on the low toxicity of the individual inert ingredients.

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

EPA establishes exemptions from the requirement of a tolerance only in those cases where it can be clearly demonstrated that the risks from aggregate exposure to pesticide chemical residues under reasonably foreseeable circumstances will pose no appreciable risks to human health. In order to determine the risks from aggregate exposure to pesticide inert ingredients, the Agency considers the toxicity of the inert in conjunction with possible exposure to residues of the inert ingredient through food, drinking water, and through other exposures that occur as a result of pesticide use in residential settings. If EPA is able to determine that a finite tolerance is not necessary to ensure that there is a reasonable certainty that no harm will result from aggregate exposure to the inert ingredient, an exemption from the requirement of a tolerance may be established.

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

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

The available toxicity studies on titanium dioxide via the oral route of exposure clearly demonstrate a lack of toxicity. The several studies in mice, rats, dogs, cats, rabbits and other species of varying durations do not indicate toxicity, even at very high doses (e.g. 50,000 ppm or 2,500 mg/kg/day dietary exposure for two years in rats). There are no studies on the dermal toxicity of titanium dioxide and there is no expected toxicity via the dermal route of exposure because as an insoluble solid material, titanium dioxide is not absorbed via the skin.

The available inhalation studies indicate that the primary toxicity of titanium dioxide is due to deposition of the inhaled particles. Although these studies suggest equivocal evidence of carcinogenicity due to prolonged exposure to titanium dioxide particles, EPA has determined that carcinogenicity is not a concern from exposure to titanium dioxide when used as an inert ingredient in pesticide formulations based on the following: First, tumors were only observed in two of the available studies and only in one species. In one study, those tumors were only observed in rats continually exposed to ultrafine particles of titanium dioxide. In the second study, tumors were only observed from exposure to fine particles of titanium dioxide at extremely high concentrations (250 mg/m3), in which the animals experienced overloading of lung clearance, with chronic inflammation resulting in lung tumors. All but one of the tumors in the second study were subsequently reclassified as non-neoplastic or non-cancerous in nature. No tumors were observed in studies involving mice.

The titanium dioxide used in pesticide formulations is considered pigmentary grade, not ultrafine or nanoscale. Consequently, the tumors observed from exposure to ultrafine particles of titanium dioxide are not relevant for assessing exposure to the type of titanium dioxide used in pesticide formulations. Following the reclassification of the tumors observed in the second inhalation study, EPA does not consider these effects to be strong evidence of carcinogenicity from exposure to fine-particle-size titanium dioxide. Even assuming the study indicates the potential for carcinogenicity, EPA does not expect any reasonably foreseeable uses of titanium dioxide in pesticide formulations that might result in residential exposures to approach the levels of exposure necessary to elicit the effects seen in the available inhalation study. The levels at which effects were observed in that study greatly exceed any reasonable dose for toxicity testing and any likely residential exposure levels. Moreover, when used as an inert in pesticide formulations, titanium dioxide will be bound to other materials, which means there will not be significant inhalation exposure to titanium dioxide particles themselves.

This position is consistent with the National Institute of Occupational Health and Safety's (NIOSH) recent assessment that ultrafine but not fine titanium dioxide would be considered a “potential occupational carcinogen”. The NIOSH Current Intelligence Bulletin “Occupational Exposure to Titanium Dioxide” concludes that “[t]he lung tumors observed in rats after exposure to 250 mg/m3 of fine TiO 2 [titanium dioxide] were the basis for the original NIOSH designation of TiO 2 [titanium dioxide] as a “potential occupational carcinogen.” However, because this dose is considered to be significantly higher than currently accepted inhalation toxicology practice, NIOSH concluded that the response at such a high dose should not be used in making its hazard identification.” NIOSH concluded that the data is insufficient to classify fine titanium dioxide as a potential occupational carcinogen.

Because the predominant form of titanium dioxide used commercially, and the form used as an inert ingredient in pesticide formulations is pigment grade, which is not in the ultrafine or nanoscale particle size range but rather in the fine particle size range, EPA concludes that carcinogenicity is not a concern from exposure to titanium dioxide resulting from its use as an inert ingredient in pesticides.

Specific information on the studies received and the nature of the adverse effects caused by titanium dioxide as well as the no-observed-adverse-effect level (NOAEL) and the lowest-observed-adverse-effect level (LOAEL) from the toxicity studies are discussed in the final rule published in the Federal Register of July 27, 2012 (77 FR 44151) (FRL-9354-6) and in the Agency's risk assessment which can be found at http://www.regulations.gov in document Titanium Dioxide; Human Health Risk Assessment and Ecological Effects Assessment to Support Proposed Exemption from the Requirement of a Tolerance When used as an Inert Ingredient in Pesticide Formulations in docket ID number EPA-HQ-OPP-2016-0252.

Because the available data indicate no toxicity via the oral route of exposure, no endpoint of concern for that route of exposure has been identified in the available database. This conclusion is in agreement with the conclusion of the World Health Organization (WHO) Committee on Food Coloring Materials that no Acceptable Daily Intake (ADI) need be set for the use of titanium dioxide based on the range of acute, sub-acute, and chronic toxicity assays, all showing low mammalian toxicity. Similarly, no significant toxicity of titanium dioxide is expected via the dermal route of exposure, so no endpoint was identified.

Because the effects seen in inhalation studies occurred at doses above the levels at which pesticide exposure is expected and for particle sizes that are different from the size of titanium dioxide used in pesticide formulations, the Agency has concluded that those risks are not relevant for assessing risk from pesticide exposure and therefore, did not identify an endpoint for assessing inhalation exposure risk.

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to titanium dioxide, EPA considered exposure under the proposed exemption from the requirement of a tolerance and all other existing exemptions from the requirement of a tolerance for residues of titanium dioxide. EPA assessed dietary exposures from titanium dioxide in food as follows:

Residues of titanium dioxide are exempt from the requirement of a tolerance when used as an inert ingredient in many different circumstances: When used in pesticide formulations applied to growing crops (40 CFR 180.920); when used in pesticide formulations applied to animals (40 CFR 180.930); when used as a ultraviolet (UV) protectant in microencapsulated formulations of the insecticide lambda-cyhalothrin at no more than 3.0% by weight (40 CFR 180.1195); and when used as a UV stabilizer in pesticide formulations of napropamide at no more than 5% of the product formulation (40 CFR 180.1195). Titanium dioxide is also approved for use as a colorant in food (21 CFR 73.575); in drugs (21 CFR 73.1575); and in cosmetics (21 CFR 73.2575 and 73.3126).

Although dietary exposure may be expected from use of titanium dioxide in pesticide formulations applied to bee hives and on other crops (as well as from other non-pesticidal sources), a quantitative exposure assessment for titanium dioxide was not conducted because no endpoint of concern was identified in the database.

2. Dietary exposure from drinking water. Since a hazard endpoint of concern was not identified for the acute and chronic dietary assessment, a quantitative dietary exposure risk assessment for drinking water was not conducted, although exposures from drinking water may be expected from use on food crops.

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., textiles (clothing and diapers), carpets, swimming pools, and hard surface disinfection on walls, floors, tables).

Titanium dioxide may be used in non-pesticide products such as paints, printing inks, paper and plastic products around the home. Additionally titanium dioxide may be used as an inert ingredient in pesticides that include residential uses, however based on the discussion in Unit IV.B., a quantitative residential exposure assessment for titanium dioxide was not conducted.

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

Because titanium dioxide does not have a toxic mode of action or a mechanism of toxicity, this provision does not apply.

Due to titanium dioxide's low potential hazard and the lack of a hazard endpoint, it was determined that a quantitative risk assessment using safety factors applied to a point of departure protective of an identified hazard endpoint is not appropriate for titanium dioxide. For the same reasons that a quantitative risk assessment based on a safety factor approach is not appropriate for titanium dioxide, an FQPA SF is not needed to protect the safety of infants and children.

Taking into consideration all available information on titanium dioxide, EPA has determined that there is a reasonable certainty that no harm to any population subgroup will result from aggregate exposure to titanium dioxide under reasonable foreseeable circumstances. Therefore, the establishment of an exemption from tolerance under 40 CFR 180.1195 for residues in honey of titanium dioxide, when used as an inert ingredient (colorant) in pesticide formulations intended for varroa mite control around bee hives at a maximum concentration of 0.1% by weight, is safe under FFDCA section 408.

Although EPA is establishing a limitation on the amount of titanium dioxide that may be used in pesticide formulations, an analytical enforcement methodology is not necessary for this exemption from the requirement of tolerance. The limitation will be enforced through the pesticide registration process under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C. 136 et seq. EPA will not register any pesticide for sale or distribution for use in beehives with concentrations of titanium dioxide exceeding 0.1% by weight of the formulation.

Therefore, an exemption from the requirement of a tolerance is established under 40 CFR 180.1195 for titanium dioxide (CAS Reg. No. 13463-67-7) when used as an inert ingredient (colorant) in pesticide formulations intended for varroa mite control around bee hives at a maximum concentration of 0.1% by weight in the pesticide formulation.

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

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

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

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

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

Therefore, 40 CFR chapter I is amended as follows:

In the ICC Termination Act of 1995, Public Law 104-88, 109 Stat. 803 (1995) (ICCTA), Congress revised the process for filing Offers of Financial Assistance (OFAs) for continued rail service, codified at 49 U.S.C. 10904. Under the OFA process, as implemented in the Board's regulations at 49 CFR 1152.27, financially responsible parties may offer to temporarily subsidize continued rail service over a line on which a carrier seeks to abandon or discontinue service, or offer to purchase a line and provide continued rail service on a line that a carrier seeks to abandon.

Upon request, the abandoning or discontinuing carrier must provide certain information required under 49 U.S.C. 10904(b) and 49 CFR 1152.27(a) to a party that is considering making an OFA. A party that decides to make an OFA (the offeror) must submit the OFA to the Board, including the information specified in 49 CFR 1152.27(c)(1)(ii). If the Board determines that the OFA is made by a “financially responsible” person, the abandonment or discontinuance authority is postponed to allow the parties to negotiate a sale or subsidy arrangement. 49 U.S.C. 10904(d)(2); 49 CFR 1152.27(e). If the parties cannot agree to the terms of a sale or subsidy, they may request that the Board set binding terms under 49 U.S.C. 10904(f)(1). After the Board has set the terms, the offeror can accept the terms or withdraw the OFA. When the operation of a line is subsidized to prevent abandonment or discontinuance of service, it may only be subsidized for up to one year, unless the parties mutually agree otherwise. 49 U.S.C. 10904(f)(4)(b). When a line is purchased pursuant to an OFA, the buyer must provide common carrier service over the line for a minimum of two years and may not resell the line (except to the carrier from which the line was purchased) for five years after the purchase. 49 U.S.C. 10904(f)(4)(A); 49 CFR 1152.27(i)(2).

On May 26, 2015, Norfolk Southern Railway Company (NSR) filed a petition to institute a rulemaking proceeding to address abuses of Board processes. In particular, NSR sought to have the Board establish new rules regarding the OFA process. NSR proposed that the Board establish new rules creating: A pre-approval process for filings submitted by parties deemed abusive filers; financial responsibility presumptions; and additional financial responsibility certifications. In a decision served on September 23, 2015, the Board denied NSR's petition, stating that the Board would instead seek to address the concerns raised in the petition through increased enforcement of existing rules and by instituting an Advance Notice of Proposed Rulemaking (ANPRM) to consider possible changes to the OFA process. Pet. of Norfolk S. Ry. to Institute a Rulemaking Proceeding to Address Abuses of Board Processes (NSR Petition), EP 727, slip op. at 4 (STB served Sept. 23, 2015).

The Board issued an ANPRM on December 14, 2015. In that ANPRM, the Board explained that its experiences have shown that there are areas where clarifications and revisions could enhance the OFA process and protect it against abuse. Accordingly, the Board requested public comments on whether and how to improve any aspect of the OFA process, including enhancing its transparency and ensuring that it is invoked only to further its statutory purpose of preserving lines for continued rail service. The Board also specifically requested comments on: Ensuring offerors are financially responsible; addressing issues related to the continuation of rail service; and clarifying the identities of potential offerors.

On September 30, 2016, the Board issued a Notice of Proposed Rulemaking (NPRM), addressing the comments on the ANPRM and proposing specific amendments to its regulations at 49 CFR 1152.27 based on those comments. The Board proposed four amendments intended to clarify the requirement that OFA offerors be financially responsible and to require offerors to provide additional evidence of financial responsibility to the Board; one amendment intended to require that potential offerors demonstrate the continued need for rail service over the line sought to be acquired; and three amendments intended to clarify the identity of offerors in OFAs.

The Board sought comments on the proposed regulations by December 5, 2016, and replies by January 3, 2017. The Board received comments from six parties: The Association of American Railroads (AAR); the Army's Military Surface Deployment and Distribution Command (Army); the City of Jersey City, New Jersey (Jersey City); 212 Marin Boulevard, LLC, 247 Manila Avenue, LLC, 280 Erie Street, LLC, 317 Jersey Avenue, LLC, 354 Cole Street, LLC, 389 Monmouth Street, LLC, 415 Brunswick Street, LLC, and 446 Newark Avenue, LLC (filing collectively as the LLCs); NSR; and Mr. James Riffin (Riffin). AAR, the LLCs, and Jersey City also filed reply comments.

Below the Board addresses the comments and suggestions submitted by parties in response to the NPRM, including discussion of clarifications and modifications being adopted in the final rule based on the comments. Even if not specifically discussed here, the Board has carefully reviewed all comments on the NPRM and has taken each comment into account in developing the final rule. The text of the final rule is below.

Most parties commenting on the NPRM were supportive of the Board's proposals, suggesting certain modifications to and clarifications of the Board's proposals. (See Army NPRM Comments 1; Riffin NPRM Comments 1; NSR NPRM Comments 9; AAR NPRM Comments 12; LLCs NPRM Comments 2.) One commenter suggested the changes proposed in the NPRM were insufficient to deter abuse of the OFA process and were “misfocused.” (See Jersey City NPRM Comments 2, 7-9.)

Financial Responsibility. As noted, the Board made four proposals in the NPRM intended to clarify the requirement that OFA offerors be financially responsible and to require offerors to provide additional evidence of financial responsibility to the Board. First, the Board proposed to further define financial responsibility in its regulations by including examples of the kinds of evidence the Board would and would not accept to demonstrate financial responsibility. Second, the Board proposed to require notices of intent to file an OFA (NOIs) in all abandonment or discontinuance proceedings. Third, the Board proposed to require a showing of preliminary financial responsibility with the filing of an NOI, based on a calculation using the information contained in the carrier's filing and other publicly-available information. And fourth, the Board proposed to require an offeror to demonstrate in its OFA that the offeror has placed in escrow 10% of the preliminary financial responsibility amount calculated at the NOI stage.

Examples of evidence of financial responsibility. In the NPRM, the Board proposed as examples of documentation that it would accept as evidence of financial responsibility at 49 CFR 1152.27(c)(1)(iv)(B) to include income statements, balance sheets, letters of credit, profit and loss statements, account statements, financing commitments, and evidence of adequate insurance or ability to obtain adequate insurance. Offers of Financial Assistance (NPRM), EP 729, slip op. at 14 (STB served Sept. 30, 2016). In response, Riffin commented that the Board should clarify that “account statements” means “financial institution account statements,” and that the Board should revise the proposed regulations to allow as evidence of financial responsibility lines of credit that provide “access to cash upon demand,” verified statements of the dollar value of cash, stocks and bonds, and “substantial quantities of precious metals.” (Riffin NPRM Comments 1-2.)

The Board finds Riffin's suggested clarification of “financial institution account statements” is overly restrictive, as it is possible that potential offerors, particularly governmental offerors, may have funds in accounts other than financial institution accounts. Additionally, as stated in response to Riffin's comments on the ANPRM, the Board does not believe that some of the examples of the types of assets Riffin proposes to include in the regulations would sufficiently show an offeror's financial ability to purchase and operate, or subsidize, a railroad, which is the purpose of an OFA. See NPRM, EP 729, slip op. at 3. Specifically, non-liquid assets (such as precious metals) and lines of credit that provide “access to cash upon demand” like credit cards are problematic as evidence of an offeror's continuing financial ability to actually operate or subsidize a rail line as the OFA process requires. Credit card lines of credit tend to be temporary and are for relatively limited amounts, while non-liquid assets are not easily accessible by an offeror and may fluctuate in value. By contrast, the examples of assets the Board is including in the regulations, such as income statements and letters of credit,1 do not suffer from these problems and provide evidence of an offeror's long-term and ongoing ability to finance the actual operation or subsidy of a rail line. The Board therefore declines to adopt Riffin's proposed changes.

As for stocks and bonds, which are relatively liquid assets, we find that these may be presented by an offeror in conjunction with other evidence of financial responsibility, and will be considered by the Board on a case-by-case basis, as will evidence of cash on hand. Because these will be considered on a case-by-case basis the Board does not find it necessary to include these examples in the regulations.

Notice of Intent filing. The Board proposed to require NOIs as a preliminary step in all OFA cases, with potential offerors being presumed preliminarily financially responsible if the Board does not issue a decision within 10 days of receiving an NOI. In response, AAR commented that the Board should require that a decision be issued on all NOIs, not just when the Board is rejecting an NOI or seeking more information. (AAR NPRM Comments 5.) AAR proposes that the Board could delegate the authority for issuing this decision to the Director of the Office of Proceedings and argues that a decision should be issued in all cases because “the proposed rule would inappropriately create legal obligations on railroads [to provide valuation information] as a result of government inaction.” (AAR NPRM Comments 5.) The LLCs commented in support of AAR's proposal. (LLCs NPRM Reply Comments 2.)

The Board disagrees with AAR's characterization of this proposal as creating legal obligations on railroads because of government inaction. In fact, no additional obligation is created for carriers by this proposed change. Under 49 CFR 1152.27(a), carriers are currently required to provide certain valuation information “promptly upon request” to any party considering filing an OFA. The only requirement potential offerors must currently meet to obtain this information is to request it. The changes proposed in the NPRM that would apply to potential offerors would give the Board a basis on which to relieve railroads of their legal obligations to provide valuation information to potential offerors in certain cases. But the failure of the Board to issue a decision on the filing of an NOI would not impose on a railroad any burden it would not already have under the rules as they currently exist.

The Board proposed those changes, which would require a potential offeror to make an initial showing of preliminary financial responsibility before the carrier's obligation to turn over the valuation information outlined in section 1152.27(a) upon request is triggered, because the current approach requiring carriers to provide this information to any interested party upon request, is vulnerable to abuse and has led to significant delay in the past. Carriers receiving requests they do not believe to be legitimate have refused to respond, or only belatedly responded, to interested parties with the required information, delaying the OFA process. Those interested parties have then at times had to ask the Board to issue a decision requiring the carrier to provide the information, which requires the Board to adjudicate disputes about the legitimacy of a party's interest in an OFA at an early stage of the process. The new proposal should make this process more efficient and effective by requiring some initial information from potential offerors before carriers must provide them with valuation information, which in turn will encourage carriers to respond more promptly to requests for that information. Setting a defined time period after the filing of an NOI when the potential offeror is considered preliminarily financially responsible, rather than requiring the Board to issue a decision to that effect, is part of that efficiency. The Board does not agree that it is necessary for a decision to be issued in these instances, even if that authority were delegated, and therefore declines to impose such a requirement.

Regarding the Board's proposed changes to the NOI process, Riffin suggested that the failure to file an NOI should not bar a timely OFA, arguing that restricting OFAs to entities that have filed timely NOIs would contravene the language of 49 U.S.C. 10904. Instead, Riffin suggested that NOIs should be optional in all cases, though he suggests that if a NOI is late-filed, the OFA filing deadline not be tolled. (Riffin NPRM Comments 2-3.) In response to this suggestion, AAR commented that Riffin's proposal would ignore the stated intent of the rulemaking and that the Board has authority to issue regulations consistent with the rail transportation policy (RTP) at 49 U.S.C. 10101. (AAR NPRM Reply Comments 2-3.) Similarly, the LLCs commented that Riffin's approach would “run directly counter to the purpose of avoiding abuse.” (LLCs NPRM Reply Comments 7.)

The Board does not believe Riffin's proposed changes to the NOI process are necessary, but instead agrees with AAR and the LLCs that adopting Riffin's proposed changes would be contrary to the purpose of this rulemaking. As discussed in the NPRM, the purpose of requiring NOIs in all cases is to make the OFA process more efficient by providing carriers with earlier notice that parties may be interested in purchasing or subsidizing service over rail lines that may otherwise be abandoned or discontinued and providing identifying information about those parties. See NPRM, EP 729, slip op at 15. Additionally, as AAR states, these new requirements would not contravene the language of 49 U.S.C. 10904—nothing in that provision bars NOIs. In fact, the new requirements are consistent with the RTP. See, e.g., 49 U.S.C. 10101(2) (minimizing the need for federal regulatory control over the rail transportation system); 10101(3) (promoting a safe and efficient rail transportation system); 10101(4) (ensuring the development and continuation of a sound rail transportation system); 10101(9) (encouraging honest and efficient management of railroads).

Preliminary showing of financial responsibility. In the NPRM, the Board proposed that a potential offeror be required to make a preliminary financial responsibility showing as part of the NOI, based on a calculation using information contained in the carrier's filing and publicly-available information. For a potential OFA to subsidize service, the Board proposed this calculation be a standard per-mile per-year maintenance cost, set by the Board at $4,000, multiplied by the length of the rail line in miles. For a potential OFA to purchase a line, the Board proposed this calculation be the sum of (a) the current rail steel scrap price per ton, multiplied by an assumed track weight of 132 tons-per-track-mile, multiplied by the total track length in miles, plus (b) the $4,000 minimum maintenance cost per mile described above, multiplied by the total track length in miles, multiplied by two, because an OFA purchaser is responsible for operating the acquired line for at least two years. Commenters generally supported the proposal to require this preliminary showing, while also suggesting some changes to the proposed calculations.

Criticisms of, and suggested changes to, the formula. Riffin suggested several minor clarifications to the calculations. He suggested that the Board specify whether the Board intended long tons, short tons, or metric tons be used in the regulations. (Riffin NPRM Comments 3.) The calculation in the NPRM used a 2,000 pound per ton weight to convert 264,000 pounds to 132 tons, and thus the Board intended short tons to be used in the calculation. NPRM, EP 729, slip op at 17 n.8. However, the Board will clarify the regulations by modifying the language in 49 CFR 1152.27(c)(1)(ii), as shown below, to include a weight of rail in both short tons and long tons. This will allow a potential offeror to use either measurement in its calculation, depending on whether the scrap rail cost it uses, discussed further below, is in short tons or long tons.

Riffin also commented that the final rule should address situations where there is no track left on a line subject to an OFA, suggesting that in such cases potential offerors should either calculate the track value at zero or show themselves financially responsible for 132 tons of track (i.e., that offerors show themselves financially responsible to acquire one mile of track). (Riffin NPRM Comments 3-4.) Riffin suggested the Board adopt the latter option, as he argues this would at least show that a potential offeror has sufficient funds to re-install some of the track infrastructure. (Riffin NPRM Comments 4.) Jersey City commented that, because the Board's formula assumes track exists, it is “wholly arbitrary” in cases where railroads “have engaged in illegal de facto abandonments.” (Jersey City NPRM Comments 12.)

The Board will clarify 49 CFR 1152.27(c)(1)(ii) to provide that the length of the line listed in the carrier's abandonment or discontinuance filing (or the length the potential offeror seeks to purchase, as discussed further below) should be used in the calculation in place of the actual length of track. This language is reflected in below. Because this preliminary calculation is intended to identify an estimated theoretical base cost to the potential offeror to subsidize or purchase and operate a rail line, using the length of the line is an appropriate and non-arbitrary way to address situations even where there is no track left on the line, because the purpose of an OFA is to enable the provision of rail service. A party that cannot make the preliminary financial responsibility showing discussed here would not be able to replace the missing track needed to provide rail service, thus defeating the purpose of an OFA. Moreover, the preliminary financial responsibility calculation is intended to be a conservative estimate of what financial resources may be necessary for an OFA, not a valuation of the line.

Riffin further commented that the rule should address when a potential offeror does not want to subsidize or acquire the entire line. He suggests that, in such cases, offerors should calculate the track length that they wish to subsidize or acquire. (Riffin NPRM Comments 4.) This is already allowed under the Board's regulations, and the changes to 49 CFR 1152.27(c)(1)(ii) proposed in the NPRM included a requirement that potential offerors demonstrate that they are financially responsible “for the calculated preliminary financial responsibility amount of the rail line they seek to subsidize or purchase.” However, as noted, the Board will further clarify here that when a potential offeror seeks to subsidize or acquire only a portion of the line (which the Board's regulations already permit), the offeror should use the length of line it seeks to acquire or subsidize in its preliminary financial responsibility calculation, rather than the length of the entire line subject to the proceeding. To further clarify this in the regulations, the Board will remove the word “total” from the description of the calculation contained in 49 CFR 1152.27(c)(1)(ii).

Riffin also suggested that more clarity is needed regarding the steel prices to be used in the preliminary financial responsibility calculation, suggesting that the Board identify the specific Web sites the Board has in mind as sources of scrap steel prices, and that the Board indicate specifically the type of steel being priced, as there are multiple categories of scrap steel. (Riffin NPRM Comments 4.) Jersey City commented that its counsel is “unaware of any reliable generally available sites on the web to price rail steel,” and that, if the Board is going to adopt a requirement related to rail steel prices, it should publish its own steel price for purposes of this calculation, or identify acceptable Web sites and receive public comment on those Web sites. (Jersey City NPRM Comments 11.)

The Board declines to publish its own steel price for purposes of this calculation, as this step is not necessary. A quote from a scrap dealer or a verified statement of a quote received telephonically, dated within 30 days of the submission of the notice of intent as required by this rule, would be acceptable sources for a scrap steel price for purposes of the preliminary calculation. If submitted as a verified statement, the potential offeror should describe the source of the quote, the price quoted, and the date of the conversation. In addition, though the Board does not endorse any specific Web site or source for scrap prices, there are both paid subscription services and free internet services that may also provide such prices.

Regarding the type of steel being priced, the Board declines to more specifically identify the category of scrap steel that a potential offeror should use in its calculation beyond what is already in the regulations: Rail steel scrap. While there are multiple categories of scrap steel, different scrap dealers may use different classifications of the sub-categories of rail scrap steel. The Board declines to be more specific in order to allow a potential offeror to use the available sub-category of rail scrap steel it finds most appropriate. As noted, the Board has not devised the formula to be a precise calculation of the value of the track assets. Accordingly, it is not essential that the category of steel that is used in the calculation be any one specific sub-category.

NSR and AAR both commented suggesting that the Board revise its proposed maintenance cost per mile and weight of rail in the preliminary calculation, respectively. NSR suggested that the Board should either evaluate current maintenance costs across the national rail system to determine a system-wide average, or use at least $5,000 per mile, rather than the $4,000 proposed in the NPRM. (NSR NPRM Comments 3-4. See also AAR NPRM Comments 8 n.4 (suggesting that the Board's $4,000 proposed maintenance cost is below averages the Board has relied on in past proceedings).) NSR argues this is necessary “so as not to unintentionally encourage parties that clearly lack the financial capabilities to consummate an OFA.” NSR also commented that the Board should update the maintenance cost number annually for inflation. (NSR NPRM Comments 3-4.) AAR similarly suggested that the Board should modify the weight of the rail used in the calculation to 115 pounds per yard (or 202.4 tons), which “reflect[s] the predominant weight of rail currently in the national rail network and likely to be subject to the OFA process in the future.” (AAR NPRM Comments 8-9.)

The Board declines to adopt these suggestions. Using a system-wide average for either or both of the per-mile per-year maintenance cost or the weight of the rail in the preliminary calculations could result in an overstated preliminary financial responsibility amount in some cases. This is particularly likely for rail lines subject to discontinuance or abandonment, which often have not been regularly used or highly maintained due to low traffic volumes, and may be composed of older rail materials. As the Board stated in the NPRM, the purpose of this calculation is not to attempt to estimate the eventual offer price of the line, but to discourage abuse of the OFA process by requiring a reasonable initial showing of financial capacity and interest. See NPRM, EP 729, slip op. at 18. For similar reasons, the Board finds it unnecessary to update the maintenance cost number annually for inflation. This number is intended to be a simple number for potential offerors to input into the overall calculation to arrive at an intentionally low-end estimate of the financial resources needed to subsidize or acquire the line. Thus, indexing this number for inflation would needlessly complicate this early step of the OFA process. Rather than updating it annually for inflation, the Board will issue a decision updating this number as needed in the future to prevent abuse of this process.

Jersey City asserted that the Board's formula for the preliminary financial responsibility calculation is “totally arbitrary,” arguing that there are many additional factors upon which salvage value depends, like transportation costs and the costs to remove bridges, that the Board has not considered in its proposed calculation, and that these factors also vary widely across the country. (Jersey City NPRM Comments 10.) Jersey City also argues that the proposed formula will “vastly overstate salvage value for any line that has substantial bridges,” as bridges can be costlier to salvage than the value of the steel they contain. (Jersey City NPRM Comments 12.) The LLCs also suggested modifications to the formula, suggesting that the formula should be modified to include the estimated cost of replacing any rail or infrastructure that has been removed from the line, and that would be reasonably required to carry freight on the line. (LLCs NPRM Comments 3-4.)

The Board declines to adopt these suggestions. As stated above, this calculation is not intended to result in an approximation of what an eventual offer will be, and it is not intended to consider every factor that may affect the cost of subsidizing or purchasing a line. Nor is it intended to identify the salvage cost of the line. The purpose of this calculation is to identify a conservative, low-end base number from which to determine a potential offeror's preliminary level of financial responsibility. As such, the Board believes this calculation properly balances the need to consider multiple factors with the need for a calculation simple enough that any potential offeror can participate in this process.

Certification and retroactivity. The LLCs also suggested that the submitted cost calculation should be certified by a licensed professional engineer experienced in railroad construction and that the Board should include language in the regulations requiring the preliminary financial responsibility showing to be made for all OFAs filed after the adoption of the rule, even if an NOI was filed prior to the adoption of the rule. (LLCs NPRM Comments 3, 5, 10-11.) The Board will not adopt either of these suggestions. The purpose of laying out a clear formula in the regulations and requiring a potential offeror to submit evidence supporting its calculation is to enable any potential offeror to use the formula to participate in the OFA process, and to allow the Board to easily assess the resulting calculation. Requiring a potential offeror to have its calculation certified by a licensed professional engineer experienced in railroad construction would unnecessarily complicate the preliminary financial responsibility process, with little benefit to the integrity of the process. Additionally, requiring the preliminary financial responsibility showing to be made for offers filed after the adoption of the rule, even where a NOI was filed before the adoption of the rule, would be inappropriate. The preliminary financial responsibility calculation is a change to the NOI stage of the OFA process, and the Board will not retroactively impose this new requirement on NOIs filed before the effective date of this rule.

Escrow requirement. As noted, the Board proposed to require an offeror to demonstrate in its OFA that the offeror has placed in escrow 10% of the preliminary financial responsibility amount calculated at the NOI stage. The Army commented that federal government entities should be exempt from this proposed requirement. (Army NPRM Comments 1.) The Army argued that this requirement would be inordinately burdensome on government entities due to the appropriations process, and therefore suggests that section 1152.27(c)(iv)(D) apply only to an offeror that is a “non-government entity.” (Army NPRM Comments 3.) The LLCs, in response, argue that only federal government entities and state transportation agencies, not all governmental entities, should be exempt from the escrow requirement, because they are “clearly responsible.” (LLCs NPRM Reply Comments 6.) Jersey City also commented that “it is difficult to understand what purpose [the escrow requirement] serves” because it does not apply at the NOI stage, it is unlikely to deter abuse of the OFA process, and the Board's filing fees for OFAs are a more effective deterrent. (Jersey City NPRM Comments 12-13). Jersey City also argued that state and local governments frequently have hearing and budgeting requirements that would prevent them from being able to comply with the escrow requirement within the required time frame. For these reasons, it argued that the escrow requirement should not apply to these entities. (Jersey City NPRM Comments 12-13. See also Jersey City NPRM Reply Comments 18.) In response, AAR argued that Jersey City's comments mischaracterize the proposed escrow requirement and that the requirement should apply to state and local government entities because many of them obtain waivers of the Board's filing fees, and thus those fees are not acting as deterrents for those entities. (AAR NPRM Reply Comments 4.)

Upon review of the comments on the NPRM, the Board will exempt all governmental entities from the proposed escrow requirement, as reflected in the changes to 49 CFR 1152.27(c)(1)(iv)(D) in below. The Board agrees with the Army that this requirement is likely to be burdensome on the federal government because of the appropriations process, and the similar argument made by Jersey City that the hearing and budgeting requirements of state and local governments may cause this requirement to be unnecessarily burdensome on those entities as well. Additionally, the Board believes there is a low likelihood that this exclusion for governmental entities will lead to abuse because, as discussed in the NPRM, the presumption that governmental entities are financially responsible remains rebuttable, acting as a check on those entities. See NPRM, EP 729, slip op. at 5, 18. See also Ind. Sw. Ry.—Aban. Exemption—in Posey & Vanderburgh Ctys., Ind. (Ind. Sw. Ry. Apr. 2011), AB 1065X, slip op. at 5 (STB served Apr. 8, 2011) (finding government entity was not financially responsible, dismissing its OFA, and stating that the presumption that government entities are financially responsible, “although entitled to significant weight, is not conclusive”). Accordingly, governmental entities will be required under this final rule to submit NOIs, but will not be required to complete the preliminary financial responsibility calculation or make the preliminary financial responsibility showing with an NOI, see NPRM, EP 729, slip op. at 5, 18, or submit evidence with their offer that they have placed 10% of that calculated preliminary financial responsibility amount in escrow.

Additionally, the Board disagrees with Jersey City's statements that the escrow requirement is unlikely to deter abuse of the OFA process overall, and as discussed in the NPRM, the Board believes that this requirement allows an offeror to make a concrete showing that its offer and interest in a line are legitimate. See NPRM, EP 729, slip op. at 18.

In addition to its other comments related to the escrow requirement, Jersey City also asserted that this requirement amounts to an effort to re-impose an arbitrary version of the “bona fide” requirement, a showing that used to be statutorily required but was removed by the passage of ICCTA. (Jersey City NPRM Reply Comments 18.) Under the bona fide requirement, the Board was required to find that an OFA was reasonable in relation to the likely value of the line, in addition to finding the offeror financially responsible. Contrary to Jersey City's assertion, the Board's escrow account proposal is not a re-imposition of that requirement. The Board is simply requiring an offeror to make a minimal showing of financial responsibility before initiating the OFA process. The Board clearly has authority under 49 U.S.C. 1321(a) to issue regulations to administer the OFA process under 49 U.S.C. 10904, including the requirement that an offeror be a “financially responsible person.” As noted, the preliminary financial responsibility amount is likely to be less than the eventual offer. A party that cannot place even 10% of this already conservative amount in escrow at the OFA stage is, in the Board's view, not likely to be found a “financially responsible person.” Accordingly, the escrow requirement, along with the other requirements that will be implemented under this final rule, will ensure that the Board carries out the OFA process effectively and efficiently.

Other Financial Responsibility Comments. In addition to responding to the specific proposals contained in the NPRM, commenters also suggested other changes to the Board's financial responsibility requirements. NSR proposed eliminating the presumption of financial responsibility that currently exists for state and municipal government entities. Instead, NSR proposes requiring those entities to satisfy the preliminary financial responsibility showing. (NSR NPRM Comments 2.) NSR argues that this would be appropriate because many municipalities have filed for bankruptcy since 2010, and that this would be a reasonable burden given that governmental entities would already be required to file NOIs and comply with the escrow requirement under this rule. (NSR NPRM Comments 5.) The LLCs also suggested the elimination of the presumption of financial responsibility for all government entities other than the federal government, state transportation agencies, and other government agencies “specifically created for the purpose of conducting rail freight operations.” (LLCs NPRM Comments 6-7.) The LLCs suggest that these entities, along with providing evidence of financial responsibility, should be required to submit evidence of “legal authorization to acquire the line, assume common carrier obligations, and available public financing for the specific operation and maintenance of any line” sought to be acquired to “weed out OFA abuse motivated by local political considerations and other improper motives.” (LLCs NPRM Comments 7, 9.)

The Board declines to eliminate the presumption of financial responsibility for governmental entities. As discussed above, carriers already have recourse in situations where governmental entities are not financially responsible in that the governmental entities' presumption is rebuttable. See Ind. Sw. Ry. Apr. 2011, AB 1065X, slip op. at 5 (finding government entity was not financially responsible and dismissing its OFA). Moreover, situations such as the one that NSR and the LLCs are concerned about, in which the governmental entity turns out to not be financially responsible, are rare.2 Accordingly, it is appropriate to continue to address governmental entities that may not be financially responsible on a case-by-case basis. This final rule effectively balances the need for information about an offeror with the unique appropriations issues governmental entities may face in the OFA process.

The Board also declines to require governmental entities to provide evidence of the additional authorizations suggested by the LLCs. To the extent a governmental entity's legal authorization to submit an OFA is disputed, a party is free to raise that during the OFA process, at which point the Board would take that into consideration. However, the Board has not been presented on a regular basis with situations where governmental entities have filed OFAs yet lacked the proper authority to do so. The Board therefore does not find it necessary to have regulations specifically requiring these showings from governmental entities.

The LLCs also proposed several changes to the offer stage of the process, including requiring offerors to identify all real property and other assets to be acquired from the carrier and any additional property or assets required to reinstitute rail service on the line. (LLCs NPRM Comments 11.) They also suggested that the Board include in the regulations a statement that the Board “will not approve an offer that is contingent, or dependent for its implementation on the acquisition of property or other assets from anyone other than the applicant for abandonment without a clear showing that all steps necessary to provide rail service as a common carrier can be accomplished within a reasonable time.” (LLCs NPRM Comments 11.) The LLCs argue that these additions are necessary “to address the full scope of the [offeror's] proposal to provide rail service,” and to make clear to offerors that OFA procedures are limited to the property and assets of the applicant for discontinuance or abandonment, and cannot be used “to give an offeror more than can be obtained from the railroad seeking abandonment.” (LLCs NPRM Comments 12.) The LLCs also suggest requiring an offeror (or in the case of a legal entity, an officer of the offeror with authority to bind the entity) to include in its offer a certification under penalty of perjury that the offer is made in good faith for the purpose of operating rail service on the line; that it is not made for any non-rail purpose; that the person certifying the offer is authorized to do so; and that the contents of the offer are true and correct. (LLCs NPRM Comments 12-13.)

The Board does not find it necessary to adopt the LLCs' proposed changes to the offer process. With regard to requiring offerors to identify real property and other assets to be acquired from the applicant for discontinuance or abandonment, or to reinstitute rail service, any acquisition of assets other than the line itself is outside of the OFA purchase process, and thus would not properly be included in the Board's regulations. Additionally, the Board already has the authority to reject an OFA when an offeror fails to demonstrate its ability to provide rail service as part of the Board's determination of financial responsibility at the offer stage.3 Accordingly, the Board finds it unnecessary to include a requirement in these regulations that an offeror make a clear showing of its ability to complete all steps necessary to provide service, as the LLCs have suggested. The LLCs' suggested certifications to be included with an offer are also unnecessary. The Board's existing Rules of Practice direct “all persons appearing in proceedings before it to conform, as nearly as possible, to the standards of ethical conduct required of practice before the courts of the United States.” 49 CFR 1103.11 (emphasis added). By presenting a pleading, written motion, or other paper to a federal court, and by extension, to the Board, “an attorney or unrepresented party is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances,” the document “is not being presented for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation,” and that the factual contentions contained therein “have evidentiary support.” See Fed. R. Civ. P. 11(b)(1), (3). The Board does not believe that requiring a separate certification as proposed by the LLCs would act as any more effective a deterrent for abuse of the OFA process than these existing requirements.

In reply comments to the NPRM, AAR requested that the Board clarify that the preliminary financial responsibility requirement at the NOI stage is separate and distinct from the already existing financial responsibility determination at the offer stage. (AAR NPRM Reply Comments 3.) AAR made this request in response to a statement apparently made by Riffin in a court proceeding not involving the Board that

Based on this alleged quote from a court filing by Riffin, he appears to be conflating the preliminary financial responsibility requirement with the existing requirement in 49 U.S.C. 10904(d) and 49 CFR 1152.27(c)(1)(ii)(B) that an offeror be financially responsible for the full amount of its offer when it files an OFA. The Board clarifies here that the addition of the preliminary financial responsibility requirement to the Board's regulations does not eliminate or change the existing requirement at the OFA stage that an offeror show themselves to be financially responsible for the full amount of its offer, and this final rule does not alter existing Board precedent regarding what constitutes financial responsibility or how the Board will evaluate an OFA after one is submitted.

Continuation of Rail Service. In the NPRM, the Board proposed to codify prior precedent requiring all offerors to demonstrate the need for and feasibility of continued rail service on the line and proposed to list in the regulations the following four examples of how an offeror may demonstrate that need: (1) Evidence of a demonstrable commercial need for service (as reflected by support from shippers or receivers on the line or other evidence of an immediate and significant commercial need); (2) evidence of community support for continued rail service; (3) evidence that acquisition of freight operating rights would not interfere with current and planned transit services; and (4) evidence that continued service is operationally feasible. These criteria were laid out by the Board in Los Angeles County Metropolitan Transportation Authority—Abandonment Exemption—in Los Angeles County, California (LACMTA), AB 409 (Sub-No. 5X), slip op. at 3 (STB served June 16, 2008).

In response to the Board's proposal, commenters expressed differing opinions about whether the Board should require all four elements of the LACMTA criteria to be met for offerors to make the showing of a continued need for rail service, or whether offerors should only be required to meet one element of the criteria. Riffin commented that the offerors should only be required to meet one of the four criteria, suggesting that the Board add language to the regulations “to indicate that no one criteri[on] is dominant” and that “the STB will `balance' the four criteria.” (Riffin NPRM Comments 5.) In response, the LLCs commented that “satisfying only one criterion is a meaningless exercise.” (LLCs NPRM Reply Comments 8.) Similarly, NSR commented that the Board should “require offerors to satisfy the LACMTA criteria in full in order to demonstrate a continued need for rail service,” arguing that the criteria “are not meant to operate in a piecemeal fashion,” and that “it is only the sum of the LACMTA criteria that allows the STB to make a reasoned decision as to whether there is a continued need for rail service.” (NSR NPRM Comments 6.) NSR, with the LLCs' support, also argues that “the LACMTA criteria themselves are broadly worded to provide offerors with some degree of flexibility in what is required to demonstrate a continued need for rail service.” (NSR NPRM Comments 6; LLCs NPRM Reply Comments 5.)

Consistent with prior precedent, the Board's final rule will require that all offerors will be required to show a continued need for rail service. The criteria the Board laid out in LACMTA, AB 409 (Sub-No. 5X), are included in the regulations as examples of the types of evidence that offerors should present to the Board to illustrate a continued need for rail service, not requirements. Offerors will not be strictly required to meet any one of (or all) the criteria to show a continued need for rail service. The LACMTA criteria are intended to provide guidance to offerors as to the types of evidence the Board will examine when considering this element of an OFA. Although the Board agrees with NSR and the LLCs that an OFA proponent must make a strong showing of need, in conducting this evaluation, the Board will look at the totality of the circumstances to determine whether there is a continued need for rail service on the line. Because the regulations the Board proposed in the NPRM already state that the LACMTA criteria are included as examples, NPRM, EP 729, slip op. at 26, additional changes to the regulations are not necessary.

In the NPRM's discussion of this proposed requirement, the Board stated that “where there has been no service for at least two years, an offeror would need to present concrete evidence of a continued need for rail service.” NPRM, EP 729, slip op. at 19. AAR states that it understands this language to mean that there will be “heightened scrutiny on claims that there is continued need for rail service in out-of-service exemption proceedings, not that particular and specific evidence would not be required in other proceedings,” and suggests that the Board clarify that all offerors are required to show specific evidence of a continued need for rail service, not only offerors in two year out-of-service notice of exemption cases. (AAR NPRM Comments 6.) NSR also argued that the Board should clarify this statement by explicitly incorporating a heightened burden in the regulations for two-year out-of-service exemption proceedings. (NSR NPRM Comments 7.) The LLCs commented in support of NSR's proposal. (LLCs NPRM Reply Comments 5.)

The Board declines to adopt NSR's suggestion of a higher standard for notice of exemption proceedings and clarifies that it will not apply a heightened scrutiny standard to the continuation of service element of OFAs in those proceedings. In making the statement that “where there has been no service for at least two years, an offeror would need to present concrete evidence of a continued need for rail service,” the Board did not intend to imply a higher burden for notice of exemption proceedings or a lower burden for other proceedings. See NPRM, EP 729, slip op. at 19 (stating that “the burden on the offeror to show the continued need for rail service would remain the same as in other proceedings.”). Rather, the Board simply intended to point out that an offeror is likely to have a more difficult time showing a continued need for service over a line where there has not been service in at least two years. All offerors in all OFA proceedings will be required to show specific and concrete evidence of a continued need for rail service to make the showing required by this rule, and in all proceedings the Board will consider the totality of circumstances in evaluating the evidence submitted by offerors.

As with the escrow account requirement, Jersey City opposes the proposed requirement that offerors demonstrate a continued need for rail service generally, on the ground that this showing amounts to a requirement that OFAs be bona fide, which conflicts with Congress' intent in removing such a requirement in ICCTA. (Jersey City NPRM Comments 14.) AAR argues that Jersey City is confusing “the requirement that an offer be for continued rail service” with “the requirement, omitted in [ICCTA] that the Board find an OFA to be bona fide before proceeding.” (AAR NPRM Reply Comments 3.) The LLCs commented that Jersey City is incorrect in its assertion that the Board's proposal to require a showing of a continued need for rail service amounts to a bona fide requirement. (LLCs NPRM Reply Comments 12-13.) The LLCs argue that in fact this proposal is consistent with current law and Board precedent. (LLCs NPRM Reply Comments 13-15.)

As discussed above, existing Board precedent requires that an OFA be for continued rail service. See, e.g., LACMTA, AB 409 (Sub-No. 5X), slip op. at 3. The proposal in the NPRM did not create an additional requirement, but simply proposed to formally codify the existing continued-rail-service requirement in the Board's regulations, so that the Board can ensure that it is addressed in all OFAs. See NPRM, EP 729, slip op. at 19. Additionally, although the Board, when it adopted regulations implementing ICCTA, indicated the statute as revised removed the requirement that an offer be “bona fide,” Aban. & Discontinuance of Rail Lines & Rail Transp. Under 49 U.S.C. 10903, EP 537, slip op. at 15 (STB served Dec. 24, 1996), the continued-rail-service requirement is consistent with the statute. Section 10904(b)(1) and (3) of title 49 require a carrier applying for abandonment or discontinuance authority to provide financial information to a potential offeror related to the continued operation of the line, and 49 U.S.C. 10904(d) requires an offeror to prove itself financially responsible for the amount of its offer, which under 49 U.S.C. 10904(c) shall be based on the financial information provided by the carrier or shall explain the basis of any disparity between the offer and the information provided by the carrier. Indeed, after adopting its post-ICCTA regulations, the Board later concluded that an OFA nevertheless must be for continued rail service. Roaring Fork R.R. Holding Auth.—Aban.—in Garfield, Eagle, & Pitkin Ctys., Colo., AB 547X, slip op. at 4 (STB served May 21, 1999) (finding that “[t]he OFA process is designed for the purpose of continuing to provide freight rail service,” and that “an offeror must be able to demonstrate that its OFA is for continued rail freight service.”). That determination has been judicially affirmed. See, e.g., Kulmer v. STB, 236 F.3d 1255, 1256-57 (10th Cir. 2001); Redmond-Issaquah R.R. Pres. Ass'n v. STB, 223 F.3d 1057, 1061-63 (9th Cir. 2000). The Board therefore disagrees with Jersey City's assertion that this continued-rail-service requirement contravenes Congressional intent under ICCTA.

Jersey City further commented that the requirement to show a continued need for rail service should not apply to OFAs filed by governmental entities. In particular, Jersey City argues that governmental entities should not be required to show non-interference with transit projects or community support, because “[w]hen a government files an OFA, the OFA embodies the public project.” (Jersey City NPRM Comments 14.) It also notes that the Board did not specifically identify any instances in which governmental entities have abused the OFA process. (Id.) Jersey City further argues that to apply the LACMTA criteria to governmental entities would also be a departure from previous Board precedent, because applying these criteria to governmental OFAs would “amount to substituting the STB's planning judgments for those of local and state governments,” even though the Board's predecessor, the Interstate Commerce Commission, stated in a 1991 decision that it is not a planning agency. (Jersey City NPRM Comments 15-16.) Jersey City does, however, support “requiring private parties invoking the OFA process to show an overriding freight rail need when their OFA will interfere with a public project of any sort.” (Jersey City NPRM Comments 9.) AAR commented in response that Jersey City's statements that the NPRM amounts to substituting the Board's planning judgments for those of state and local governments are incorrect. (AAR NPRM Reply Comments 4.) Instead, AAR argues, “the NPRM reflects the limited jurisdiction of the STB to impose restrictions on the use of private property by railroads.” (AAR NPRM Reply Comments 4.) The LLCs also commented in response to Jersey City that governmental entities should be required to make the showing of a continued need for service, and that the Board's proposal does not “usurp the function of local governments' control over land use matters.” (LLCs NPRM Reply Comments 17.)

The Board disagrees with Jersey City's suggestion that governmental entities should not be required to show a continued need for rail service because an OFA by a governmental entity “embodies the public project.” Congress did not give the Board unfettered authority in administering abandonments to force the sale of a rail line for any public purpose.5 The purpose of the OFA process is not to preserve rail corridors for any public use or to assist with non-rail public projects, but rather, as explained above, to ensure continued rail service.

Nor is the Board persuaded by Jersey City's argument that to consider the LACMTA criteria when governmental entities file OFAs would be to substitute the Board's planning judgments for those of local governmental entities. The LACMTA criteria are not general planning criteria—they are all rail-oriented. As noted, the requirement that the OFA be for continued rail service already exists and has been judicially affirmed, and the LACMTA criteria are merely a means for the Board to determine if that standard has been met. Moreover, a determination by the Board regarding whether there is a need for continued rail service does not necessarily create a conflict with a local entity's planning; applying the LACMTA criteria when government entities file OFAs leaves the planning authority of state and local governmental entities intact but properly subject to Congress's terms for a forced sale under 49 U.S.C. 10904.

The Board has authority under 49 U.S.C. 1321(a) to issue these regulations to carry out the OFA process. While Jersey City points out that the Board has not identified any instances in which governmental entities have abused the OFA process, it is not necessary for the Board to have done so to make these changes to our regulations. The purpose of this proceeding is not only to protect the OFA process from abuse, but, after 20 years of experience, to identify ways in which the Board can improve the OFA process. The Board believes the continued-rail-service requirement, along with the other changes contained in this final rule, will improve the OFA process overall, including when the potential offeror is a governmental entity.

Finally, Jersey City also commented that “the showings that the agency proposes as a precondition for rail use appear all to deal solely with freight,” which it argues is problematic because the proposed language does not acknowledge that the OFA process may be used for passenger rail purposes. (Jersey City NPRM Comments 17-18.) But as the Board discussed in the NPRM, “ `nothing in section 10904 precludes a line from being acquired under the OFA procedures to provide combined passenger/freight service and indeed there are situations where . . . it is the inclusion of passenger operations that would seem to make it financially viable for an operator to offer continued (or restored) freight service.' ” NPRM, EP 729, slip op. at 13, quoting Trinidad Ry.—Acquis. & Operation Exemption—in Las Animas Cty., Colo., AB 573X et al., slip op. at 8 (STB served Aug. 13, 2001). See also Union Pac. R.R.—Aban. Exemption—in Rio Grande & Mineral Ctys., Colo., AB 33 (Sub-No. 132X), slip op. at 3 (STB served Apr. 22, 1999). Thus, as explained in these prior Board decisions, even if the OFA process is used primarily for passenger rail purposes, the carrier acquiring the line must still be willing to provide freight rail service over the line for two years. Moreover, as discussed above, the LACMTA criteria are included as examples of the types of evidence the Board will look for when considering the totality of the circumstances surrounding the continued need for rail service, not specific requirements; offerors will not be strictly required to meet any one of (or all) the criteria to show a continued need for rail service.

Identity of the Offeror. The Board proposed to require an offeror or an offeror's representative to provide a mailing address and other contact information, and to require an offeror that is a legal entity to provide its full legal name, state of organization or incorporation, and a description of the ownership of the entity. In addition, for multiple parties filing one OFA, the Board proposed requiring that the parties provide clear identification of which entity or individual would assume the common carrier obligation and clear identification of how the parties would allocate financing and, if purchased, the operation of the line.

NSR expressed support for the Board's proposals to require this identifying information, saying that it is important for the Board and carriers receiving OFAs to be able to identify the party or parties involved. (NSR NPRM Comments 7.) The LLCs commented that, in addition to the information proposed in the NPRM, the Board should also require a legal entity to provide a certificate of good standing from its state of incorporation and, where necessary, a certification that it is authorized to do business in the state or states where the rail line subject to an OFA is located. (LLCs NPRM Reply Comments 2-3.) The Board's purpose for requiring the additional information proposed is to assist the Board and carriers in identifying the parties involved in an OFA. However, the Board believes that requiring certifications of good standing or authorizations to do business from an offeror would go beyond that purpose, and thus the Board will not adopt the LLCs' proposal here. To the extent that the LLCs are concerned about potential offerors being in good standing, these concerns should be addressed by the fact that the Board will now require potential offerors to demonstrate preliminary financial responsibility and a continued need for rail service.

Other Comments. Parties also commented on other ways to prevent abuse of the OFA process, and on the OFA process and this proceeding generally. NSR commented that it continues to strongly support increased enforcement of 49 CFR 1104.8, which allows the Board to strike irrelevant or immaterial pleadings. (NSR NPRM Comments 1.) AAR similarly suggested that in addition to adopting the changes proposed in this proceeding the Board “should also vigilantly enforce its existing rules to protect against abuse of the OFA process.” (AAR NPRM Comments 12.) In denying NSR's 2015 petition to institute a rulemaking proceeding to address abuses of Board processes, the Board stated that, in addition to instituting this OFA rulemaking proceeding, it would increase enforcement of 49 CFR 1104.8. NSR Petition, EP 727, slip op. at 4. The Board has done so. See, e.g., Riffin—Pet. for Declaratory Order, FD 36078, slip op. 5 (STB served Apr. 27, 2017); Norfolk S. Ry. Co.—Acquis. & Operation—Certain Rail Lines of the Del. & Hudson Ry., FD 35873, slip op. at 5-6 (STB served Oct. 18, 2016); R. J. Corman R.R./Allentown Lines, Inc.—Aban. Exemption—in Lehigh Cty., Pa., AB 550 (Sub-No. 3X), slip op. at 1-2 (STB served Nov. 25, 2015). The Board restated this commitment in the NPRM. NPRM, EP 729, slip op. at 9. In this decision, the Board again reiterates its commitment to increasing enforcement of 49 CFR 1104.8 to prevent abuse of the OFA process and the Board's processes generally.

Jersey City commented that it believes the chief abuses of the OFA process are delay and the use of OFAs to prevent public projects. (Jersey City NPRM Reply Comments 8, 11.) With regard to delays in the OFA process, Jersey City argues that the proper remedy is “for the agency to adhere to the statutory and regulatory deadlines.” (Jersey City NPRM Comments 8. See also Jersey City NPRM Reply Comments 9.) Where delay is caused by railroads not making financial information promptly available to potential offerors, Jersey City suggests the Board should consider sanctioning such carriers, “including barring the carrier from relying on information it does not promptly provide, or dismissing the proceeding in appropriate cases.” (Jersey City NPRM Reply Comments 11.)

In addition, Jersey City suggests that the Board's focus in addressing abuse of the OFA process should be protecting public projects, even when those public projects are not rail projects. (Jersey City NPRM Comments 9.) Jersey City argues that “the only real `abuse' of the OFA statute that merits examination for possible new regulations is situations in which this Board's OFA remedy is invoked to prevent or to inhibit a public project.” (Jersey City NPRM Reply Comments 15.) Instead of the Board's proposed rule, Jersey City proposes that any offeror filing an OFA “aimed at thwarting public projects” should be required to show “an overriding public need for rail service.” (Jersey City NPRM Reply Comments 19. See also Jersey City NPRM Comments 14, 19.) In response to Jersey City's comments, AAR argues that “states and municipalities have no right to railroad rights of way for public projects, absent a desire and ability to obtain the line for continued rail service.” (AAR NPRM Reply Comments 4.)

The Board is aware that the OFA process has been inefficient in some past cases. The proposals adopted in this final rule and discussed above, however, are geared to address delays associated with the OFA process. For example, requiring all offerors to file NOIs and make a preliminary financial responsibility showing should prompt rail carriers to assemble and provide the required valuation information more quickly for OFAs. The Board notes, however, that the OFA process is intended to promote continued rail service. See Roaring Fork R.R. Holding Auth., AB 547X, slip op. at 4. See also Kulmer, 236 F.3d at 1256-57; Redmond-Issaquah R.R. Preservation Ass'n, 223 F.3d at 1061-63. The Board, therefore, rejects Jersey City's repeated suggestion that the OFA process may be invoked for public projects unrelated to the continuation of rail service.

To the extent that Jersey City is concerned that public projects may be thwarted by abuse of the OFA process, the regulations proposed here should help in that regard, as they will ensure that OFAs are being sought for a legitimate need for continued rail service and by parties that possess the means to acquire the line. However, to the extent Jersey City is arguing that even OFAs that do not abuse the process (i.e., OFAs intended for continued rail service) should not be able to thwart public projects, the Board rejects that argument. The aim of the OFA statute is to preserve rail service where possible, see Redmond-Issaquah R.R. Preservation Ass'n, 223 F.3d at 1061, and as a result, the Board will grant exemptions from the OFA provisions for a valid public purpose only when there is no overriding public need for continued freight rail service. See, e.g., Kessler v. STB, 635 F.3d 1, 5 (D.C. Cir. 2011).6

In addition to its comments discussed above regarding the escrow requirement and the requirement to show a continued need for rail service, Jersey City also generally states throughout its comments that it believes the Board's proposals are “difficult to square with past precedent,” referring to ICCTA's removal of the requirement that an OFA be “bona fide” from 49 U.S.C. 10904. (Jersey City NPRM Comments 5. See also Jersey City NPRM Reply Comments 4-7 (“Some of the proposals . . . appear to be outside the Board's power given Congressional omission of the bona fide requirement.”).) Jersey City argues that “the law has not changed to permit the agency as a general matter to apply new requirements to potential offerants wholesale.” (Jersey City NPRM Comments 6.) As noted elsewhere in this final rule, contrary to Jersey City's assertion, the Board's proposals are not a re-imposition of the bona fide requirement, nor are they in conflict with Congressional intent under ICCTA. The Board has authority under 49 U.S.C. 1321(a) to issue regulations to carry out its statutory obligations, including its obligations to carry out the OFA process under 49 U.S.C. 10904. The requirements under this final rule will ensure that the Board can meet those obligations effectively and efficiently, and will ensure that OFAs are initiated for continued rail service—which is the statutory objective embodied in 49 U.S.C. 10904. Moreover, as discussed throughout this proceeding, the Board does not believe these changes to the regulations will be unnecessarily burdensome on potential participants in the OFA process. Rather, the Board believes that these requirements will benefit participants in the OFA process by improving the efficiency, transparency, and reliability of the OFA process.

The final rule is set forth in full below. This action is categorically excluded from environmental review under 49 CFR 1105.6(c).

Regulatory Flexibility Act. The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, generally requires a description and analysis of new rules that would have a significant economic impact on a substantial number of small entities. In drafting a rule, an agency is required to: (1) Assess the effect that its regulation will have on small entities; (2) analyze effective alternatives that may minimize a regulation's impact; and (3) make the analysis available for public comment. Sections 601-604. In its final rule, the agency must either include a final regulatory flexibility analysis, section 603(a), or certify that the final rule would not have a “significant impact on a substantial number of small entities.” section 605(b). The impact must be a direct impact on small entities “whose conduct is circumscribed or mandated” by the rule. White Eagle Coop. v. Conner, 553 F.3d 467, 480 (7th Cir. 2009).

In the NPRM, the Board stated that it was possible that the proposed rule could have a significant economic impact on certain small entities,7 and issued an initial regulatory flexibility analysis (IRFA) and request for comments in order to explore further the impact, if any, of the proposed rule on small rail carriers. The Board did not receive any comments regarding the IRFA. The Board now publishes this final regulatory flexibility analysis.

Description of the reasons why the action by the agency is being considered.

On May 26, 2015, NSR filed a petition to institute a rulemaking proceeding to address abuses of Board processes. In a decision served on September 23, 2015, the Board denied NSR's petition but stated it would institute a separate rulemaking proceeding to examine the OFA process. On December 14, 2015, the Board instituted this proceeding, issuing an ANPRM requesting comments from the public and stating that, based on NSR's petition and on the Board's experiences with OFAs under 49 U.S.C. 10904 (as revised by ICCTA in 1995), there are areas where clarifications and revisions to the Board's OFA process could enhance the process and protect it against abuse. On September 30, 2016, the Board issued an NPRM proposing specific changes to the OFA process. Those changes proposed in the NPRM, with the modifications discussed above, are adopted in this final rule.

Succinct statement of the objectives of, and legal basis for, the final rule.

The objectives of this rule are to revise the Board's outdated regulations regarding the OFA process and make changes to streamline the OFA process and protect it from abuse. The Board believes the changes detailed in this final rule achieve this by ensuring that parties that seek to acquire lines through the OFA process satisfy the requirement that they be “financially responsible persons” and that OFA sales promote the statutory purpose of preserving rail service. The legal basis for the final rule is 49 U.S.C. 1321.

Description of, and, where feasible, an estimate of the number of small entities to which the final rule will apply.

The rule will apply to all entities making OFAs to subsidize or purchase rail lines subject to abandonment or discontinuance under the Board's regulations. In the past 20 years since ICCTA was enacted, the Board has received approximately 100 OFAs, or an average of five per year. Of those, the Board estimates that about 80, or 80%, were filed by small entities. Over the last six years, the Board has received six OFAs, or an average of one per year. Of those, the Board estimates that about four, or 66%, were filed by small entities. The majority of these small entities have been small businesses, including shippers and Class III railroads, but this has also included small governmental jurisdictions and small nonprofits. The Board therefore estimates that this rule may affect up to four small entities per year.8

Description of the projected reporting, recordkeeping, and other compliance requirements of the final rule, including an estimate of the classes of small entities that will be subject to the requirement and the types of professional skills necessary for preparation of the report or record.

The final rule will require additional information from entities interested in or submitting OFAs at two stages. First, an entity will have to file a notice of intent (NOI) soon after the railroad files for abandonment or discontinuance authority (the NOI stage). Second, entities will have to provide new information when the actual offer is submitted (the offer stage), which occurs soon after the railroad has obtained abandonment or discontinuance authority from the Board. The Board is seeking approval from the Office of Management and Budget (OMB) pursuant to the Paperwork Reduction Act (PRA) for these requirements through a revision to a broader, existing OMB-approved collection.

At the NOI stage, a potential offeror will be required to submit an NOI in all notice of exemption, petition for exemption, and application proceedings, rather than only in notice of exemption proceedings as was previously required. This NOI will be a notice to the Board and the carrier involved in the proceeding that a party is interested in making an OFA to subsidize or purchase the rail line. A potential offeror will also be required to calculate a preliminary financial responsibility amount for the line using information contained in the carrier's filing and other publicly available information, and provide to the Board evidence of its financial responsibility at that level. This calculation will require research on the part of the potential offeror to determine the current scrap price of steel, which is publicly-available at no cost: Under the final rule potential offerors may obtain a quote from a scrap dealer or a recent scrap price from a free internet source, as explained above in the discussion of comments on the Board's proposed formula for determining preliminary financial responsibility. This calculation will not require professional expertise, however, as it is intended to be relatively simple.

At the offer stage, an offeror will be required to provide additional relevant identifying information depending on whether the offeror is an individual, a legal entity, or multiple parties seeking to submit a joint OFA. An offeror will also be required to address the continued need for rail service in its offer, to place 10% of the minimum subsidy or purchase price of the line (taken from the calculation done at the NOI stage) in an escrow account, and to provide evidence with its offer that it has completed the escrow requirement.

All small entities participating in the OFA process will be subject to these requirements, other than small governmental entities, which are exempt from some financial responsibility requirements.9 As discussed above, in the past these small entities have included small businesses, Class III railroads, and small nonprofits. Many, but not all, entities participating in the OFA process are represented by legal counsel, though such representation is not required. These new requirements may take additional time, as detailed in the Paperwork Reduction Act analysis in the NPRM, but the Board does not believe they will require additional professional expertise beyond that already required by the OFA process.

The Board estimates these new requirements will add a total annual hour burden of 42 hours and no total annual “non-hour burden” cost under the Paperwork Reduction Act, as detailed in the NPRM.

Identification, to the extent practicable, of all relevant federal rules that may duplicate, overlap, or conflict with the final rule.

The Board is unaware of any duplicative, overlapping, or conflicting federal rules.

Description of any significant alternatives to the final rule that accomplish the stated objectives of applicable statutes and that minimize any significant economic impact of the rule on small entities, including alternatives considered, such as: (1) Establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities; (3) use of performance rather than design standards; (4) any exemption from coverage of the rule, or any part thereof, for such small entities.

Under the final rule, offerors and potential offerors participating in the OFA process will be required to submit additional information as described above at the NOI stage and at the offer stage of the process. The Board considered alternatives to several of the requirements proposed in the NPRM. One alternative to the NOI requirements that was considered was to exempt small entities from the preliminary financial responsibility showing. An alternative to the escrow requirement that was considered was to require small entities to place a smaller percentage of the of the minimum subsidy or purchase price of the line in escrow, or to exempt small entities from the escrow requirement altogether. But because many of the problems with OFAs have involved parties that could be classified as small entities, selecting these alternatives would have defeated the purpose of the rule.

Indeed, exempting small entities from compliance with the rule would have significantly weakened the effect of the rule because, as discussed above, approximately 66% to 80% of OFAs, depending on sample size, are filed by small entities. The Board also considered taking no action to revise the OFA regulations, but this would not have allowed the Board to meet its objectives of improving the OFA process and protecting it from abuse.

A copy of this decision will be served upon the Chief Counsel for Advocacy, Office of Advocacy, U.S. Small Business Administration, Washington, DC 20416.

Paperwork Reduction Act. In this proceeding, the Board is modifying an existing collection of information that is currently approved by the Office of Management and Budget (OMB) through January 31, 2019, under OMB Control No. 2140-0022. In the NPRM, the Board sought comments pursuant to the Paperwork Reduction Act (PRA), 44 U.S.C. 3501-3521, and OMB regulations at 5 CFR 1320.11 regarding: (1) Whether the collection of information associated with the proposed changes to the OFA regulations is necessary for the proper performance of the functions of the Board, including whether the collection has practical utility; (2) the accuracy of the Board's burden estimates; (3) ways to enhance the quality, utility, and clarity of the information collected; and (4) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology, when appropriate. No comments were received pertaining to the collection of this information under the PRA.

This modification to an existing collection will be submitted to OMB for review as required under the PRA, 44 U.S.C. 3507(d), and 5 CFR 1320.11.

It is ordered:

1. The Board adopts the final rule as set forth in this decision. Notice of the adopted rule will be published in the Federal Register.

2. This decision is effective 30 days after the day of service.

3. A copy of this decision will be served upon the Chief Counsel for Advocacy, Office of Advocacy, U.S. Small Business Administration.

For the reasons set forth in the preamble, the Surface Transportation Board amends title 49, chapter X, subchapter B, part 1152 of the Code of Federal Regulations as follows: