Federal Register Vol. 82, No.66,

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

We will consider all comments we receive on or before the closing date for comments. We may change these special conditions based on the comments we receive.

On May 30, 2012, Bombardier applied for an amendment to type certificate no. T00003NY to include the new Model BD-700-2A12 and BD-700-2A13 airplanes. These airplanes are derivatives of the Model BD-700 series of airplanes and are marketed as the Bombardier Global 7000 (Model BD-700-2A12) and Global 8000 (Model BD-700-2A13). These airplanes are twin-engine, transport-category, executive-interior business jets. The maximum passenger capacity is 19 and the maximum takeoff weights are 106,250 lb. (Model BD-700-2A12) and 104,800 lb. (Model BD-700-2A13).

Under the provisions of Title 14, Code of Federal Regulations (14 CFR) 21.101, Bombardier must show that the Model BD-700-2A12 and BD-700-2A13 airplanes meet the applicable provisions of the regulations listed in type certificate no. T00003NY, or the applicable regulations in effect on the date of application for the change, except for earlier amendments as agreed upon by the FAA.

If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR part 25) do not contain adequate or appropriate safety standards for the BD-700-2A12 and BD-700-2A13 airplanes because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, or should any other model already included on the same type certificate be modified to incorporate the same novel or unusual design feature, these special conditions would also apply to the other model under § 21.101.

In addition to the applicable airworthiness regulations and special conditions, the Model BD-700-2A12 and BD-700-2A13 airplanes must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34, and the noise certification requirements of 14 CFR part 36.

The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type-certification basis under § 21.101.

The Bombardier Model BD-700-2A12 and BD-700-2A13 airplanes will incorporate novel or unusual design features associated with electrical and electronic flight-control systems that perform critical functions, the loss of which may result in loss of flight controls and other critical systems, and that may be catastrophic to the airplane if not appropriately protected.

The applicable airworthiness regulations do not contain adequate or appropriate safety standards for these design features. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.

The Model BD-700-2A12 and BD-700-2A13 airplanes have a fly-by-wire flight-control system that requires a continuous source of electrical power to maintain an operable flight-control system. Section 25.1351(d), “Operation without normal electrical power,” requires safe operation in visual flight rule (VFR) conditions for at least five minutes after loss of normal electrical power, excluding the battery. This rule was structured around a traditional design using mechanical control cables and linkages for flight control. These manual controls allow the crew to maintain aerodynamic control of the airplane for an indefinite time after loss of all electrical power. Under these conditions, a mechanical flight-control system provided the crew with the ability to fly the airplane while attempting to identify the cause of the electrical failure, restart engine(s) if necessary, and attempt to re-establish some of the electrical-power generation capability.

A critical assumption in § 25.1351(d) is that the airplane is in VFR conditions at the time of the failure. This is not a valid assumption in today's airline operating environment where airplanes fly much of the time in instrument meteorological conditions on air-traffic-control-defined flight paths. Another assumption in the existing rule is that the loss of all normal electrical power is the result of the loss of all engines. The five-minute period in the rule is to allow at least one engine to be restarted, following an all-engine power loss, to continue the flight to a safe landing. However, service experience on airplanes with similar electrical power-system architecture as the Bombardier Global 7000/8000 airplanes has shown that at least the temporary loss of all electrical power for causes other than all-engine failure is not extremely improbable. To maintain the same level of safety, envisioned by the existing rule, with traditional mechanical flight controls, the Global 7000/8000 design must not be time-limited in its operation under all reasonably foreseeable conditions, including loss of all normal sources of engine or auxiliary-power-unit (APU)-generated electrical power. Unless Bombardier can show that the non-restorable loss of the engine and APU power sources is extremely improbable, Bombardier must demonstrate that the airplanes can maintain safe flight and landing (including steering and braking on the ground for airplanes using steer- and brake-by-wire, and fly-by-wire speed-brake panels) with the use of emergency or alternate electrical power systems. These electrical power systems, or the minimum restorable electrical power sources, must be able to power loads that are essential for continued safe flight and landing.

As discussed above, these special conditions are applicable to the Model BD-700-2A12 and BD-700-2A13 airplanes. Should Bombardier apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design features, these special conditions would apply to the other model as well.

This action affects only certain novel or unusual design features on two models of airplanes. It is not a rule of general applicability.

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

In lieu of 14 CFR 25.1351(d), the following special conditions apply:

1. Bombardier must show, by test or a combination of test and analysis, that the airplane is capable of continued safe flight and landing with all normal electrical power sources inoperative, as prescribed by paragraphs 1.a. and 1.b., below. For purposes of these special conditions, normal sources of electrical-power generation do not include alternate power sources such as the battery, ram-air turbine, or independent power systems such as the flight-control permanent-magnet generating system. In showing capability for continued safe flight and landing, Bombardier must account for systems capability, effects on crew workload and operating conditions, and the physiological needs of the flightcrew and passengers for the longest diversion time for which Bombardier is seeking approval.

a. In showing compliance with this requirement, Bombardier must account for common-cause failures, cascading failures, and zonal physical threats.

b. Bombardier may consider the ability to restore operation of portions of the electrical power generation and distribution system if it can be shown that unrecoverable loss of those portions of the system is extremely improbable. The design must provide an alternative source of electrical power for the time required to restore the minimum electrical-power generation capability required for safe flight and landing. Bombardier may exclude unrecoverable loss of all engines when showing compliance with this requirement.

2. Regardless of electrical-power generation and distribution system recovery capability shown under special condition 1, above, sufficient electrical-system capability must be provided to:

a. Allow time to descend, with all engines inoperative, at the speed that provides the best glide distance, from the maximum operating altitude to the top of the engine-restart envelope, and

b. Subsequently allow multiple start attempts of the engines and auxiliary power unit (APU). The design must provide this capability in addition to the electrical capability required by existing part 25 requirements related to operation with all engines inoperative.

3. The airplane emergency electrical power system must be designed to supply:

a. Electrical power required for immediate safety, which must continue to operate without the need for crew action following the loss of the normal electrical power, for a duration sufficient to allow reconfiguration to provide a non-time-limited source of electrical power.

b. Electrical power required for continued safe flight and landing for the maximum diversion time.

4. If Bombardier uses APU-generated electrical power to satisfy the requirements of these special conditions, and if reaching a suitable runway for landing is beyond the capacity of the battery systems, then the APU must be able to be started under any foreseeable flight condition prior to the depletion of the battery, or the restoration of normal electrical power, whichever occurs first. Flight test must demonstrate this capability at the most critical condition.

a. Bombardier must show that the APU will provide adequate electrical power for continued safe flight and landing.

b. The airplane flight manual (AFM) must incorporate non-normal procedures that direct the pilot to take appropriate actions to activate the APU after loss of normal engine-driven generated electrical power.

5. As part of showing compliance with these special conditions, the tests to demonstrate loss of all normal electrical power must also take into account the following:

a. The assumption that the failure condition occurs during night instrument meteorological conditions (IMC) at the most critical phase of the flight, relative to the worst possible electrical-power distribution and equipment-loads-demand condition.

b. After the un-restorable loss of normal engine-generator power, the airplane engine restart capability is provided and operations continued in IMC.

c. The airplane is demonstrated to be capable of continued safe flight and landing. The length of time must be computed based on the maximum diversion time capability for which the airplane is being certified. Bombardier must account for airspeed reductions resulting from the associated failure or failures.

d. The airplane must provide adequate indication of loss of normal electrical power to direct the pilot to the non-normal procedures, and the AFM must incorporate non-normal procedures that will direct the pilot to take appropriate actions.

The FAA has determined that notice of, and opportunity for prior public comment on, these special conditions is impracticable because these procedures would significantly delay issuance of the design approval and thus delivery of the affected airplanes.

In addition, the substance of these special conditions has been subject to the public-comment process in several prior instances with no substantive comments received. The FAA therefore finds that good cause exists for making these special conditions effective upon publication in the Federal Register.

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

We will consider all comments we receive by the closing date for comments. We may change these special conditions based on the comments we receive.

On July 10, 2015, VT DRB applied for a supplemental type certificate to install an airbag system in shoulder belts on Boeing Model 777-200 airplanes. The Boeing Model 777-200 airplane, as modified by VT DRB, is a very-important-person (VIP) interior-design derivative of the Boeing Model 777 airplanes currently approved under Type Certificate No. T00001SE. The modified airplane will have seating for 52 passengers and 7 crewmembers.

Under the provisions of Title 14, Code of Federal Regulations (14 CFR) 21.101, VT DRB must show that the Boeing Model 777-200 airplane, as changed, continues to meet the applicable provisions of the regulations listed in Type Certificate No. T00001SE or the applicable regulations in effect on the date of application for the change, except for earlier amendments as agreed upon by the FAA.

If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR part 25) do not contain adequate or appropriate safety standards for the Boeing Model 777-200 airplane because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

Special conditions are initially applicable to the model for which they are issued. Should the applicant apply for a supplemental type certificate to modify any other model included on the same type certificate to incorporate the same novel or unusual design feature, these special conditions would also apply to the other model under § 21.101.

In addition to the applicable airworthiness regulations and special conditions, the Boeing Model 777-200 airplane, as changed, must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34, and the noise-certification requirements of 14 CFR part 36.

The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type certification basis under § 21.101.

The Boeing Model 777-200 airplane will incorporate the following novel or unusual design feature: An airbag system in shoulder belts of multiple-place side-facing seats. Inflatable airbag devices are designed to limit occupant forward excursion in the event of an accident. While their use is now standard in the automotive industry, their use is novel or unusual for commercial aviation.

The applicant is installing, as a voluntary safety measure in the VT DRB interior, airbags (inflatable restraints) in the shoulder belts of multiple-place side-facing seats. The applicable airworthiness regulations have no regulations for this particular feature. Therefore, special conditions are necessary.

The certification basis of this modification includes Special Federal Aviation Regulation (SFAR) 109, section 4(b), which specifies the injury criteria for this seating orientation. These special conditions, like special conditions previously issued on airplanes with side-facing seats incorporating airbag systems, address the safety issues inherent in this seating orientation when using airbag systems to meet the injury criteria.

SFAR 109, section 4(b) incorporates by reference the requirements of § 25.562(c)(1) through (c)(6). Section 25.562(c) requires that the restraints remain on the shoulders and pelvises of the occupants during impact. Advisory Circular (AC) 25.562-1B, “Dynamic Evaluation of Seat Restraint Systems and Occupant Protection on Transport Airplanes,” dated January 10, 2006, clarifies this requirement by stating that restraints must remain on the shoulders and pelvises when loaded by the occupants. This criterion is necessary to protect the occupants from serious injuries that could be caused by lap-belt contact forces applied to soft tissue, or by ineffectively restraining the upper torsos in the event the upper-torso restraints slide off the shoulders. In forward-facing seats (the type specifically addressed in that AC), occupant motion during rebound, and any subsequent re-loading of the belts, is limited by interaction with the seat backs. However, in side-facing seats subjected to a forward impact, the restraint systems may be the only means of limiting the occupants' rearward (rebound) motion.

Also as discussed by the FAA in previous special conditions, the installation of airbag systems in shoulder belts have two additional safety concerns: That the systems perform properly under foreseeable operating conditions, and that the systems do not perform in a manner or at such times as would constitute a hazard to the occupants. These special conditions address those concerns.

These special conditions are derived not only from similar previously-issued special conditions, but also from special conditions the FAA has issued for airbag systems on lap belts, with some changes to address the issues specific to side-facing seats.

The special conditions are not an installation approval. Therefore, while the special conditions relate to each such system installed, the overall installation approval is a separate finding and must consider the combined effects of all such systems installed.

These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.

As discussed above, these special conditions are applicable to the Boeing Model 777-200 airplane as modified by VT DRB. Should VT DRB apply at a later date for a supplemental type certificate to modify any other model included on Type Certificate No. T00001SE to incorporate the same novel or unusual design feature, these special conditions would apply to that model as well.

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

The substance of these special conditions has been subject to the notice and comment period in several prior instances, and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. Therefore, because a delay would significantly affect the certification of the airplane, which is imminent, the FAA has determined that prior public notice and comment are unnecessary and impracticable, and good cause exists for adopting these special conditions upon publication in the Federal Register. The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment described above.

1. For seats with an airbag system in the shoulder belts, show that the airbag system in the shoulder belt will deploy and provide protection under crash conditions where it is necessary to prevent serious injury. The means of protection must take into consideration a range of stature from a 2-year-old child to a 95th percentile male. The airbag system in the shoulder belt must provide a consistent approach to energy absorption throughout that range of occupants. When the seat system includes an airbag system, that system must be included in each of the certification tests as it would be installed in the airplane. In addition, the following situations must be considered:

a. The seat occupant is holding an infant.

b. The seat occupant is a pregnant woman.

2. The airbag system in the shoulder belt must provide adequate protection for each occupant regardless of the number of occupants of the seat assembly, considering that unoccupied seats may have an active airbag system in the shoulder belt.

3. The design must prevent the airbag system in the shoulder belt from being either incorrectly buckled or incorrectly installed, such that the airbag system in the shoulder belt would not properly deploy. Alternatively, it must be shown that such deployment is not hazardous to the occupant, and will provide the required injury protection.

4. It must be shown that the airbag system in the shoulder belt is not susceptible to inadvertent deployment as a result of wear and tear, or inertial loads resulting from in-flight or ground maneuvers (including gusts and hard landings), and other operating and environmental conditions (vibrations, moisture, etc.) likely to occur in service.

5. Deployment of the airbag system in the shoulder belt must not injure the seated occupant, including injuries that could impede rapid egress. This assessment should include an occupant whose belt is loosely fastened.

6. It must be shown that inadvertent deployment of the airbag system in the shoulder belt, during the most critical part of the flight, will either meet the requirement of § 25.1309(b) or not cause a hazard to the airplane or its occupants.

7. It must be shown that the airbag system in the shoulder belt will not impede rapid egress of occupants 10 seconds after airbag deployment.

8. The airbag system must be protected from lightning and high-intensity radiated fields (HIRF). The threats to the airplane specified in existing regulations regarding lighting, § 25.1316, and HIRF, § 25.1317, are incorporated by reference for the purpose of measuring lightning and HIRF protection.

9. The airbag system in the shoulder belt must function properly after loss of normal aircraft electrical power, and after a transverse separation of the fuselage at the most critical location. A separation at the location of the airbag system in the shoulder belt does not have to be considered.

10. It must be shown that the airbag system in the shoulder belt will not release hazardous quantities of gas or particulate matter into the cabin.

11. The airbag system in the shoulder-belt installation must be protected from the effects of in-flight fire such that no hazard to occupants will result.

12. A means must be available for a crewmember to verify the integrity of the airbag system in the shoulder-belt activation system prior to each flight, or it must be demonstrated to reliably operate between inspection intervals. The FAA considers that the loss of the airbag-system deployment function alone (i.e., independent of the conditional event that requires the airbag-system deployment) is a major-failure condition.

13. The inflatable material may not have an average burn rate of greater than 2.5 inches/minute when tested using the horizontal flammability test defined in part 25, appendix F, part I, paragraph (b)(5).

14. The airbag system in the shoulder belt, once deployed, must not adversely affect the emergency-lighting system (i.e., block floor proximity lights to the extent that the lights no longer meet their intended function).

Discussion

On November 21, 2016, at 81 FR 83182, the Federal Register published our notice of proposed rulemaking (NPRM), which proposed to amend 14 CFR part 39 by adding an AD that would apply to Airbus Helicopters Model MBB-BK 117 D-2 helicopters with a bushing part number 105-60386 installed. The NPRM proposed to require repetitively inspecting the bushings of the inner and outer forward trusses of both engines and repairing or replacing the bushings, depending on the outcome of the inspections. The proposed requirements were intended to detect delaminated engine mount bushings, which can lead to excessive vibration, cracking, failure of the engine mount front support pins, and loss of helicopter control.

The NPRM was prompted by AD No. 2015-0198, dated September 30, 2015, issued by EASA, which is the Technical Agent for the Member States of the European Union. EASA advises of delaminated engine mount bushings. According to EASA, this condition could lead to cracks and eventually failure of the engine mount front support pins, possibly resulting in loss of helicopter control.

The EASA AD consequently requires repetitive inspections of the engine mount bushings and depending of the findings, repairing or replacing the bushings.

We gave the public the opportunity to participate in developing this AD. We received one comment. However, the comment addressed neither the proposed actions nor the determination of the cost to the public. Therefore, we have made no changes to this AD.

These helicopters have been approved by the aviation authority of Germany and are approved for operation in the United States. Pursuant to our bilateral agreement with Germany, EASA, its technical representative, has notified us of the unsafe condition described in the EASA AD. 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 helicopters of these same type designs and that air safety and the public interest require adopting the AD requirements as proposed.

The EASA AD allows for a 10 hour time-in-service, non-cumulative tolerance for its required compliance times. This AD does not.

We reviewed Airbus Helicopters Alert Service Bulletin (ASB) MBB-BK117 D-2-71A-002, Revision 0, dated September 28, 2015, for Model MBB-BK 117 D-2 helicopters. The ASB introduces repetitive visual inspections of the engine mount bushings for defects, deformation, separation of the rubber, and missing rubber after reports of delaminated engine mount bushings and bushings with damage to the metal inner sleeve. If there is any deformation or separation of the rubber, the ASB specifies performing a detailed inspection of the bushing in accordance with the aircraft maintenance manual.

We estimate that this AD affects 5 helicopters of U.S. Registry and that labor costs average $85 per work hour. Based on these estimates, we expect the following costs:

• Inspecting the bushings requires 1 work hour. No parts are needed, for a total cost of $85 per helicopter and $425 for the U.S. fleet.

• Replacing a bushing requires 1 work hour and $373 for parts, for a total cost of $458 per bushing.

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 to the extent that it justifies making a regulatory distinction; 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.

We prepared an economic evaluation of the estimated costs to comply with this AD and placed it in the AD docket.

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

Discussion

On August 30, 2016, at 81 FR 59526, the Federal Register published our notice of proposed rulemaking (NPRM), which proposed to amend 14 CFR part 39 by adding an AD that would apply to Sikorsky Model S-92A helicopters with a housing part number (P/N) 92358-06107-043 installed. The NPRM proposed to require removing from service any housing with 12,200 or more hours TIS. The NPRM was prompted by fatigue analysis conducted by Sikorsky that determined the housing required a retirement life. The proposed actions were intended to prevent a crack in the housing, which could lead to loss of tail rotor drive and loss of helicopter control.

After our NPRM was published, we received a comment from Sikorsky.

Sikorsky requested a minimum 45-day extension of the comment period. In support of this request, Sikorsky stated it is re-evaluating the housing's 12,200-hour life limit due to an error in the measured flight test loads used in the structural fatigue substantiation. When asked for additional information, Sikorsky advised that it had completed its re-evaluation and determined that the 12,200-hour life limit was, in fact, correct.

We have reviewed the relevant information and determined that an unsafe condition exists and is likely to exist or develop on other products of these same type designs and that air safety and the public interest require adopting the AD requirements as proposed.

We reviewed Sikorsky S-92 Maintenance Manual 4-00-00, Temporary Revision No. 4-49, dated April 10, 2015, which establishes a replacement interval of 12,200 hours for housing, P/N 92358-06107-043.

We estimate that this AD affects 80 helicopters of U.S. Registry and that labor costs average $85 per work hour. Based on these estimates, we expect the following costs.

Replacing the housing requires 24 work-hours, and parts cost $58,000 for a total cost of $60,040 per helicopter.

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 to the extent that it justifies making a regulatory distinction; 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.

We prepared an economic evaluation of the estimated costs to comply with this AD and placed it in the AD docket.

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

Authority for This Rulemaking

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 amends Class E airspace at Rostraver Airport, Monongahela, PA, due to the decommissioning of the Allegheny VOR.

On November 4, 2016, the FAA published in the Federal Register (81 FR 76888) Docket No. FAA-2016-9102, a notice of proposed rulemaking (NPRM) to amend Class E airspace extending upward from 700 feet above the surface at Rostraver Airport, Monongahela, PA, as Allegheny VOR has been decommissioned, requiring airspace redesign. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

Class E airspace designations are published in paragraph 6005 of FAA Order 7400.11A dated August 3, 2016, and effective September 15, 2016, which is incorporated by reference in 14 CFR part 71.1. The 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 amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 amends Class E airspace extending upward from 700 feet above the surface to within a 6.5-mile (from a 6.4-mile radius) radius of Rostraver Airport, Monongahela, PA, due to the decommissioning of the Allegheny VOR and cancellation of the VOR approaches.

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. 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:

Authority for This Rulemaking

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 establishes Class E airspace at Louisville Municipal Airport, Louisville, GA.

On December 12, 2016, the FAA published in the Federal Register a notice of proposed rulemaking (NPRM) to establish Class E airspace extending upward from 700 feet above the surface at Louisville, GA, (81 FR 89401) Docket No. FAA-2015-0581, providing the controlled airspace required to support the new RNAV (GPS) standard instrument approach procedures for Louisville Municipal Airport. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

Class E airspace designations are published in Paragraph 6005 of FAA Order 7400.11A dated August 3, 2016, and effective September 15, 2016, which is incorporated by reference in 14 CFR part 71.1. The 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 amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 establishes Class E Airspace at Louisville Municipal Airport, Louisville, GA. Controlled airspace extending upward from 700 feet above the surface within a 6.8-mile radius of the airport is established for IFR operations.

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. 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:

Authority for This Rulemaking

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 amends Class D and Class E airspace in the Savannah, GA, area.

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 adjusting the geographic coordinates of Hunter Army Airfield, and recognizing the name change of Savannah/Hilton Head International Airport (formerly Savannah International Airport) to be in concert with the FAA's aeronautical database.

This is an administrative change and does not affect the boundaries, or operating requirements of the airspace, therefore, notice and public procedure under 5 U.S.C. 553(b) are 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. Therefore, this regulation: (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.

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

A. Background

On April 8, 2016, the Department of Labor (Department) published a final regulation (Fiduciary Rule or Rule) defining who is a “fiduciary” of an employee benefit plan under section 3(21)(A)(ii) of the Employee Retirement Income Security Act of 1974 (ERISA or the Act) as a result of giving investment advice to a plan or its participants or beneficiaries. 29 CFR 2510.3-21. The Fiduciary Rule also applies to the definition of a “fiduciary” of a plan (including an individual retirement account (IRA)) under section 4975(e)(3)(B) of the Internal Revenue Code of 1986 (Code). The Fiduciary Rule treats persons who provide investment advice or recommendations for a fee or other compensation with respect to assets of a plan or IRA as fiduciaries in a wider array of advice relationships than was true of the prior regulatory definition (1975 Regulation).1

On this same date, the Department published two new administrative class exemptions from the prohibited transaction provisions of ERISA (29 U.S.C. 1106) and the Code (26 U.S.C. 4975(c)(1)): The Best Interest Contract Exemption (BIC Exemption) and the Class Exemption for Principal Transactions in Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs (Principal Transactions Exemption), as well as amendments to previously granted exemptions. The new exemptions are designed to promote the provision of investment advice that is in the best interest of retirement investors.

The new exemptions and certain previously granted exemptions that were amended on April 8, 2016 (collectively Prohibited Transaction Exemptions or PTEs) would allow, subject to appropriate safeguards, certain broker-dealers, insurance agents, and others that act as investment advice fiduciaries, as defined under the Fiduciary Rule, to continue to receive compensation that would otherwise violate prohibited transaction rules, triggering excise taxes and civil liability. Rather than flatly prohibit compensation structures that could be beneficial in the right circumstances, the exemptions are designed to permit investment advice fiduciaries to receive commissions and other common forms of compensation.

Among other conditions, the new exemptions and amendments to previously granted exemptions are generally conditioned on adherence to certain Impartial Conduct Standards: Providing advice in retirement investors' best interest; charging no more than reasonable compensation; and avoiding misleading statements (Impartial Conduct Standards).2 The Department determined that adherence to these fundamental fiduciary norms helps ensure that investment recommendations are not driven by adviser conflicts, but by the best interest of the retirement investor.

By Memorandum dated February 3, 2017, the President directed the Department to conduct an examination of the Fiduciary Rule to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice. As part of this examination, the Department was directed to prepare an updated economic and legal analysis concerning the likely impact of the Fiduciary Rule and PTEs, which shall consider, among other things:

• Whether the anticipated applicability of the Fiduciary Rule and PTEs has harmed or is likely to harm investors due to a reduction of Americans' access to certain retirement savings offerings, retirement product structures, retirement savings information, or related financial advice;

• Whether the anticipated applicability of the Fiduciary Rule and PTEs has resulted in dislocations or disruptions within the retirement services industry that may adversely affect investors or retirees; and

• Whether the Fiduciary Rule and PTEs is likely to cause an increase in litigation, and an increase in the prices that investors and retirees must pay to gain access to retirement services.

The President directed that if the Department makes an affirmative determination as to any of the above three considerations, or the Department concludes for any other reason, after appropriate review, that the Fiduciary Rule, PTEs, or both are inconsistent with the priority of the Administration “to empower Americans to make their own financial decisions, to facilitate their ability to save for retirement and build the individual wealth necessary to afford typical lifetime expenses, such as buying a home and paying for college, and to withstand unexpected financial emergencies,” then the Department shall publish for notice and comment a proposed rule rescinding or revising the Fiduciary Rule, as appropriate and as consistent with law. The President's Memorandum was published in the Federal Register on February 7, 2017, at 82 FR 9675.

In accordance with that memorandum, the Department published in the Federal Register on March 2, 2017, at 82 FR 12319, a document seeking comment on a proposed 60-day extension of the applicability dates of the Fiduciary Rule and PTEs until June 9, 2017 (NPRM). The comment period on the proposed extension ended on March 17, 2017. In that same document, the Department sought comments regarding the examination described in the President's Memorandum and on more general questions concerning the Fiduciary Rule and PTEs. This comment period ends on April 17, 2017.

As of the close of the first comment period on March 17, 2017, the Department had received approximately 193,000 comment and petition letters expressing a wide range of views on whether the Department should grant a delay and the duration of any delay. Approximately 15,000 commenters and petitioners support a delay of 60 days or longer, with some requesting at least 180 days and some up to 240 days or a year or longer (including an indefinite delay or repeal); and, by contrast, 178,000 commenters and petitioners oppose any delay whatsoever.3 The Department continues to receive a very high volume of comment and petition letters on a daily basis, both on the delay and on the more general questions that the Department set forth in its NPRM. EBSA intends to continue to post comment and petition letters for public inspection on EBSA's Web site as quickly as practicable after receipt.

One of the main reasons offered by commenters and petitioners in support of a delay of the applicability date of the Fiduciary Rule and PTEs is that the Department needs time to properly conduct the analysis required by the President's Memorandum. Although many commenters supported a 60-day delay for this purpose, others argued that a much longer period is needed (e.g., a 1-year delay or an indefinite extension terminating 60 or more days after completion of the examination required by the President's Memorandum). These commenters asserted that unless the Department took such an approach, it could be forced to grant a series of short extensions, which would produce serious frictional costs, protracted uncertainty (for advisers, financial institutions, and retirement investors), wasted expenses on interim and conditional compliance efforts, and unnecessary market disruption. Many commenters also requested that any delay of the applicability date, regardless of its length, be accompanied by a commensurate adjustment in the periods of transition relief available under the BIC Exemption and the Principal Transactions Exemption.

Many supporters of delay also argued that the President's Memorandum has rendered the ultimate fate of the Fiduciary Rule and PTEs uncertain and that proceeding with the April 10, 2017 applicability date in the face of this uncertainty would impose unnecessary costs and burdens on the financial services industry and result in unnecessary confusion to investors inasmuch as products, services, and advisory practices could change after completion of the examination. Some expressed particular concern about the risk of a chaotic transition process, as firms try to communicate with millions of clients to describe options that could become applicable in April, but subsequently change if parts of the Fiduciary Rule or PTEs are later reconsidered and changed after the examination required by the President.

Another theme of commenters and petitioners supporting delay is that, even without regard to the President's Memorandum, the Department initially erred in adopting April 10, 2017, as the applicability date of the Fiduciary Rule and PTEs. These commenters assert that although financial institutions have worked to put in place the policies and procedures necessary to make the business structure and practice shifts required by the new rules,4 there is still considerable work left to be done to implement the new rules in a proper and responsible manner and without causing further confusion and disruption to retirement investors. Some of these commenters and petitioners also asserted that individual retirement investors—those most impacted by the Fiduciary Rule and PTEs—have not themselves focused on how investment products, related services, and costs may change and need more time to understand, process, and make decisions regarding their accounts and services.

Many commenters also based support for delay on opposition to the substance of the Fiduciary Rule and PTEs, as written, and disagreement with the conclusions reached in the final rulemaking and associated Regulatory Impact Analysis. In general, these comments reiterated arguments made as part of the notice and comment process for the Rule and PTEs.5 For example, commenters asserted that the Fiduciary Rule and PTEs would unduly increase costs and adversely affect access to products, services, and advice. Industry commenters, in particular, asserted that unintended consequences of the rulemaking could include the reduced availability of advice to participants with small account balances, such as young savers; inappropriate increases in fee-based accounts and passive investments; reduced competition among investment products and providers; less innovation; and a harmful exit of advisers from the marketplace. Similarly, commenters expressed concern about the costs imposed by the Rule and PTEs on the financial services industry, the likelihood that those costs would be passed on to plan and IRA investors, and the risk of extensive class action litigation. Commenters asserted that the costs of the Fiduciary Rule and PTEs would further increase if they become applicable but are subsequently revised or rescinded due to the examination required by the President. Additionally, commenters argued that the complexities, ambiguities, and uncertainties associated with the Fiduciary Rule and PTEs require additional time for implementation. A number of commenters also asserted that the rulemaking exceeded the Department's authority or would be better left to other regulators, such as the Securities and Exchange Commission or state insurance commissioners. To these commenters and petitioners, delay is necessary in order to review and address these claims.

Other commenters and petitioners expressed broad support for the Rule and PTEs and opposition to any delay in their implementation. Many of these commenters stressed the Department's determination in the final rulemaking that, under the current regulatory structure, investors lose billions of dollars each year as a result of conflicts of interest, and argued that delay would compound these losses. Commenters argued that the Department already has studied this topic, as well as the issues presented in the President's Memorandum, at great length as part of an extensive regulatory process, its original analysis was not flawed, and nothing has changed since then that would warrant a reexamination. Commenters noted that the rulemaking had been upheld by three federal district courts to date, and that two of those courts had concluded that the previous regulatory definition of fiduciary investment advice may be difficult to reconcile with the statutory text of ERISA's definition of fiduciary.

Opponents of a delay also argued that the Fiduciary Rule and PTEs have already contributed to positive changes in the marketplace, and that further delay could slow or reverse this progress. Commenters also challenged assertions that firms would be unable to comply with their obligations as of April 10, 2017, or that aspects of the Rule or PTEs were unworkable; noted that a number of firms have advertised that they already are prepared for full compliance with the Rule and PTEs; asserted that concerns about class actions were exaggerated and neglected the values served by such litigation; and argued that further delay would have the effect of penalizing firms that took regulatory deadlines seriously while rewarding those that failed to take appropriate actions to ensure compliance. Similarly, commenters opposing delay expressed support for the substance of the Fiduciary Rule and the PTEs, arguing that the Fiduciary Rule would protect retirement investors from abuse; appropriately strengthen the standards applicable to advisers; create a level playing field for all advisers by requiring adherence to a best interest standard regardless of title or product; align advisers' standards with investors' reasonable expectations that recommendations will be based on their best interests (also, thereby avoid investor confusion about the significance of different adviser designations); and ensure that investment recommendations and choices are based on the investor's interests rather than advisers' conflicts of interest. Finally, a commenter argued that the proposed delay is inconsistent with the Congressional Review Act, Executive Order 12866, Executive Order 13563 and Executive Order 13771, among other things.6

In response to the Department's request for comments as to whether it should delay only certain aspects of the Rule and PTEs, but not others, the commenters and petitioners had very different views.7 A substantial number of commenters that generally believe no delay is warranted nevertheless stated that, if the Department were to proceed with a delay, the delay should only partially apply: the Fiduciary Rule and Impartial Conduct Standards of the PTEs should be immediately applicable even if other conditions and obligations are postponed. These commenters generally noted that many of the nation's largest financial institutions publicly state their current adherence to and support for a best interest standard, and stated the merits of this approach should be beyond dispute. Other commenters, however, caution the Department against permitting any part of the Rule or PTEs to become applicable before completion of the examination required by the President's Memorandum. These commenters essentially maintain that all issues identified by the Presidential Memorandum must be resolved before any aspect of the Rule or PTEs become applicable to avoid the possibility of investor confusion and needless or excessive expense as firms build systems and compliance structures that may ultimately be unnecessary or mismatched with the Department's final decisions on the issues raised by the Presidential Memorandum.

Based on its review and evaluation of the public comments, the Department has concluded that some delay in full implementation of the Fiduciary Rule and PTEs is necessary to conduct a careful and thoughtful process pursuant to the Presidential Memorandum, and that any such review is likely to take more time to complete than a 60-day extension would afford, as many commenters suggested. The Department is also concerned that many firms may have reasonably assumed that the Department is likely to delay implementation as proposed and may, accordingly, have slowed their compliance efforts. As a result, rigid adherence to the April 10 applicability date could result in an unduly chaotic transition to the new standards as firms rush to prepare required disclosure documents and finalize compliance structures that are not yet ready, resulting in investor confusion, excessive costs, and needlessly restricted or reduced advisory services.

At the same time, however, the Department has concluded that it would be inappropriate to broadly delay application of the fiduciary definition and Impartial Conduct Standards for an extended period in disregard of its previous findings of ongoing injury to retirement investors. The Fiduciary Rule and PTEs followed an extensive public rulemaking process in which the Department evaluated a large body of academic and empirical work on conflicts of interest, and determined that conflicted advice was causing harm to retirement investors.8 For all the reasons detailed in the preambles for the Fiduciary Rule and PTEs and in the associated Regulatory Impact Analysis, the Department concluded that much of this harm could be avoided through the imposition of fiduciary status and adherence to basic fiduciary norms, particularly including the Impartial Conduct Standards.

The Department concludes that it can best protect the interests of retirement investors in receiving sound advice, provide greater certainty to the public and regulated parties, and minimize the risk of unnecessary disruption by taking a more balanced approach than simply granting a flat delay of fiduciary status and all associated obligations for a protracted period. Specifically, the Department extends the applicability date for the Fiduciary Rule and the BIC Exemption and Principal Transactions Exemption (including their transition relief) for 60 days, as proposed. The applicability date of the Impartial Conduct Standards in these exemptions is extended for the same 60 days, while compliance with other conditions for transactions covered by these exemptions, such as requirements to make specific disclosures and representations of fiduciary compliance in written communications with investors, is not required until January 1, 2018, by which time the Department intends to complete the examination and analysis directed by the Presidential Memorandum. In this way, the Fiduciary Rule (i.e., the new fiduciary definition itself) will become applicable after the 60-day delay, and the BIC Exemption and the Principal Transactions Exemption will be available as of that date but these exemptions will only require fiduciaries to adhere to the Impartial Conduct Standards for covered transactions until January 1, 2018, when the remaining conditions will apply unless revised or withdrawn. The other requirements of these PTEs, including representations of fiduciary compliance, contracts, warranties about firm's policies and procedures, etc., will not become applicable during the period in which the Department performs the mandated examination of the Rule and PTEs. In addition, the Department has delayed the applicability of the amendments to PTE 84-24 until January 1, 2018, except that the Impartial Conduct Standards will become applicable on June 9, 2017, and the Department has extended for 60 days the applicability dates of the 2016 amendments to other previously granted exemptions.

This approach has a number of significant advantages:

• Since there is fairly widespread, although not universal, agreement about the basic Impartial Conduct Standards, which require advisers to make recommendations that are in the customer's best interest (i.e., advice that is prudent and loyal), avoid misleading statements, and charge no more than reasonable compensation for services (which is already an obligation under ERISA and the Code, irrespective of this rulemaking), this approach provides retirement investors with the protection of basic fiduciary norms and standards of fair dealing, while at the same time honoring the President's directive to take a hard look at any potential undue burdens.9 After the passage of a year since the Rule and PTEs were published, and based on public comment, the Department finds little basis for concluding that advisers need more time to give advice that is in the retirement investor's best interest and free from misrepresentations in exchange for reasonable compensation. Indeed, financial institutions and advisers routinely hold themselves out as providing just such advice.

• Because the provisions requiring written representations and commitments about fiduciary compliance, execution of a contract, warranties about policies and procedures, and the prohibition on imposing arbitration requirements on class claims, would not go into effect during this period, this approach eliminates or minimizes the risk of litigation, including class-action litigation, in the IRA marketplace, one of the chief concerns expressed by the financial services industry in connection with the Fiduciary Rule and PTEs.

• This approach is consistent with the Department's compliance-first posture toward implementation as reflected in EBSA Field Assistance Bulletin 2017-01 (March 10, 2017) (announcing a temporary non-enforcement safe harbor for DOL litigation for advisers and financial institutions) 10 and its Conflict of Interest FAQs (Part I—Exemptions) (Oct. 27, 2016) (“The Department's general approach to implementation will be marked by an emphasis on assisting (rather than citing violations and imposing penalties on) plans, plan fiduciaries, financial institutions and others who are working diligently and in good faith to understand and come into compliance with the new rule and exemptions.”).11 Although ERISA provides a cause of action for violations by fiduciary advisers to ERISA-covered plans and plan participants, including violations with respect to rollovers and distributions of plan assets, the Department's focus will be on compliance assistance, both in the period before January 1, 2018, and for some time after.

• This approach addresses financial services industry concerns about uncertainty over whether they need to immediately comply with all of the requirements of the PTEs, particularly including the notice and disclosure provisions that would otherwise have become applicable on April 10, 2017, without giving short shrift to the competing interest of retirement investors in receiving advice that adheres to basic fiduciary norms. Because the Impartial Conduct Standards apply after 60 days, retirement investors will benefit from higher advice standards, while the Department takes the additional time necessary to perform the examination required by the President's Memorandum.

• If, after receiving comments on the issues raised by the President's Memorandum, the Department concludes that significant changes are necessary or that it needs more time to complete its review, it retains the ability to further extend the January 1, 2018 applicability dates or to grant additional interim relief, such as more streamlined PTEs, as it finalizes its review and decides whether to make more general changes to the Rule or PTEs.

In the Department's view, this approach gives the Department an appropriate amount of time to reconsider the regulatory burdens and costs of the Fiduciary Rule and PTEs, calls for advisers and financial institutions to comply with basic standards for fair conduct during that time, and does not foreclose the Department from considering and making changes with respect to the Rule and PTEs based on new evidence or analyses developed pursuant to the President's Memorandum.

Accordingly, based on its review of the comments, the Department has decided to extend for 60 days the applicability date of all provisions of the Fiduciary Rule. In addition, the applicability dates of the BIC Exemption and the Principal Transactions Exemption are extended for 60 days, and these exemptions require fiduciaries engaging in transactions covered by the exemptions to comply only with the Impartial Conduct Standards, during the transition period from June 9, 2017 through January 1, 2018. This document further delays the applicability of the amendments to PTE 84-24 until January 1, 2018, except that the Impartial Conduct Standards will become applicable on June 9, 2017, and extends for 60 days the applicability dates of amendments to other previously granted exemptions. The Impartial Conduct Standards generally require that advisers and financial institutions provide investment advice that is in the investors' best interest, receive no more than reasonable compensation, and avoid misleading statements to investors about recommended transactions. As detailed in the Regulatory Impact Analysis below, a longer delay of the Rule and Impartial Conduct Standards cannot be justified based on the public record to date. In the absence of the Impartial Conduct Standards, retirement investors are likely to continue incurring new losses from advisory conflicts. Losses arising from a delay of longer than 60 days would quickly overshadow any additional compliance cost savings.

The predicted cost savings and investor losses associated with this extension may increase or decrease depending on the information and data received in response to the comment solicitation contained in the March 2017 NPRM. Between now and April 17, 2017, the Department will continue to receive and review these additional public comments, and between now and January 1, 2018, the Department will perform the examination required by the President. Following the completion of the examination, some or all of the Rule and PTEs may be revised or rescinded, including the provisions scheduled to become applicable on June 9, 2017. This document's delay of the applicability dates as described above should not be viewed as prejudging the outcome of the examination.

The approach adopted in this document seeks to address the major concerns of the commenters and petitioners in an equitable and cost efficient manner. There was no consensus among commenters and petitioners regarding whether, and how long, to delay the applicability date of the Rule and PTEs, or even whether to retain or rescind the Rule and PTEs in whole or in part. Applying the Rule and the Impartial Conduct Standards after a 60-day delay, however, means that much of the potential investor gains predicted in the Rule's regulatory impact analysis published on April 8, 2016, will commence on June 9, 2017, and accrue prospectively while the Department performs the examination mandated by the President and considers potential changes to the Rule and PTEs.

As compared to the contract, disclosure, and warranty requirements of the BIC Exemption and Principal Transactions Exemption, the Fiduciary Rule and the Impartial Conduct Standards are among the least controversial aspects of the rulemaking project (although not free from controversy or unchallenged in litigation). Indeed, even among many of the commenters and petitioners that support a delay of the applicability date, there are varying degrees of support for the Rule and the Impartial Conduct Standards. In the Department's judgment, Plan and IRA investors, firms, and advisers all will benefit from the balanced approach set forth above. Firms and advisers will be given additional time for an orderly transition and will not be required to immediately provide the notices, disclosures, and written commitments of fiduciary compliance that would otherwise be immediately required under the BIC Exemption and Principal Transactions Exemption. Also, more controversial provisions—such as requirements to execute enforceable written contracts under the Best Interest Contract and Principal Transactions Exemption, and changes to PTE 84-24 (other than the addition of the Impartial Conduct Standards)—are not applicable until January 1, 2018, while the Department is honoring the President's directive to take a hard look at any potential undue burdens and decides whether to make significant revisions. As indicated above, if, after receiving comments on the issues raised by the President's Memorandum, the Department concludes that significant changes are necessary or that it needs more time to complete its review, it retains the ability to further extend the January 1, 2018 applicability dates or to grant additional interim relief, such as more streamlined PTEs, as it finalizes its review and decides whether to make more general changes to the Rule or PTEs.

On March 2, 2017, the Department published the NPRM seeking comment on a proposed 60-day delay of the applicability date of the Fiduciary Rule and PTEs until June 9, 2017.12 The comment period for the proposed extension closed on March 17, 2017. After careful review and consideration of the comments, the Department is issuing this final rule that will (1) extend the applicability date of the Fiduciary Rule, the BIC Exemption, and the Principal Transactions Exemption for 60 days until June 9, 2017, and (2) require that fiduciaries relying on these exemptions for covered transactions adhere only to the “best interest” standard and the other Impartial Conduct Standards of these PTEs during a transition period from June 9, 2017, through January 1, 2018. As a result, the Fiduciary Rule and the Impartial Conduct Standards in these PTEs will become applicable beginning on June 9, 2017, while other conditions in these PTEs, such as requirements to make specific written disclosures and representations of fiduciary compliance in investor communications, are not required until January 1, 2018. In addition, the Department also delays the applicability of amendments to PTE 84-24 until January 1, 2018, except that the Impartial Conduct Standards will become applicable on June 9, 2017, and extends the applicability dates of the amendments to other previously granted PTEs for 60 days until June 9, 2017.

As fully discussed above in Section B, the Department received many comments supporting and opposing the applicability date delay. In general, commenters opposing the delay expressed concern regarding the harm investors would suffer if their advisers continue providing conflicted advice to them while the applicability date for the Fiduciary Rule and PTEs is delayed. On the other hand, commenters supporting the proposed 60-day delay or a longer or indefinite delay argued that such delay would be appropriate, because it would provide sufficient time for the Department to complete its review of the Rule and PTEs in conformance with the President's Memorandum without issuing a series of extensions that could create market frictions due to uncertainty regarding whether the Department would ultimately leave the Rule in place, revise it, or rescind it.

The Department's decision to delay the applicability date of the Fiduciary Rule for 60 days and make the Impartial Conduct Standards in the new PTEs and amendments to previously granted PTEs applicable on June 9, 2017, is expected to produce benefits that justify associated costs. On the benefits side, the 60-day delay of the April 10 applicability date will avert the possibility of a costly and disorderly transition to the Impartial Conduct Standards on April 10. In the face of uncertainty and widespread questions about the Fiduciary Rule's future or possible repeal, many financial firms slowed or halted their efforts to prepare for full compliance on April 10. Consequently, failure to delay that applicability date could jeopardize such firms' near-term ability and/or propensity to serve classes of customers, and both such firms and their investor customers could suffer. Investors whose cost to select and change to a different firm are high would be more adversely affected by such disruption. Also on the benefits side, both the 60-day delay and the subsequent transition period will generate cost savings for firms. Today's final rule will produce more cost savings for firms than a 60-day delay of the PTEs' applicability date would alone, because many exemption conditions would not have to be met until January 1, 2018. The Department notes, however, that the benefits of avoiding disruption and compliance cost savings generally will be proportionately larger for those firms that currently are less prepared to comply with the Fiduciary Rule and PTEs.

On the cost side, the NPRM RIA predicted that a 60-day delay alone would inflict some losses on investors, because advisory conflicts would continue to affect some advice rendered during those 60 days. However, the Department now believes that investor losses from the 60-day extension provided here will be relatively small. Because many firms have already taken steps toward honoring fiduciary standards, some investor gains from the Fiduciary Rule are already being realized and are likely to continue. On the other hand, because many other firms are not immediately prepared to satisfy new requirements beginning April 10, and need additional time to comply, the 60-day delay is unlikely to deprive investors of additional gains.13

Finally, because the Impartial Conduct Standards will become applicable on June 9, 2017, the Department believes that firms will make efforts to adhere to those standards, motivated both by their applicability and by the prospect of their likely continuation, as well as by the impending applicability of complementary consumer protections and/or enforcement mechanisms beginning on January 1, 2018, depending on the results of the Department's review of the Fiduciary Rule pursuant to the President's Memorandum. Because of Firms' anticipated efforts to satisfy the Impartial Conduct Standards during that review, the Department believes that most, but not all, of the investor gains predicted in the 2016 RIA for the transition period will remain intact. The fraction of these gains that will be lost during the transition period (and future returns not realized because of those losses), however, will represent a cost of this final rule.

Several recent media articles reported that industry and market observers anticipate multiple extensions because they believe 60 days would not be sufficient for the Department to conclude its re-examination.14 Several commenters were also skeptical that the Department can complete its thorough re-evaluation within the 60 day period as proposed. Thus, those commenters supported much longer-term extensions such as a one-year or indefinite extension. Under this final rule extending the applicability dates, stakeholders can plan on and prepare for compliance with the Fiduciary Rule and the PTEs' Impartial Conduct Standards beginning June 9, 2017. At the same time, stakeholders will be assured that they will not be subject to the other exemption conditions in the BIC Exemption and the Principal Transactions Exemption until at least January 1, 2018. The Department will aim to complete its review pursuant to the President's Memorandum as soon as possible before that date and announce its intention on whether to propose changes to the Rule or PTEs, provide additional transitional relief, or to allow all the conditions of the PTEs to become applicable as scheduled on January 1, 2018.

The Department has concluded that the benefits of this final rule, which include the estimated cost savings, the potential reduction in transition costs, the reduction of uncertainties, and the avoidance of major and costly market disruptions, justify its costs.

This final rule is an economically significant regulatory action within the meaning of section 3(f)(1) of Executive Order 12866, because it would likely have an effect on the economy of $100 million in at least one year. Accordingly, the Department has considered the costs and benefits of the final rule, and it has been reviewed by the Office of Management and Budget (OMB).

Some commenters suggested that the Department underestimated the harms to investors from NPRM's proposed delay, because the illustrative losses of investor gains did not include all types of conflicts nor all types of investment in addition to excluding the harms associated with rollover recommendations and small plans. One commenter offered its own estimates of investor losses, significantly larger than the Department's, due to this delay. Other commenters argued that the Department's estimated investor losses from the proposed 60-day delay were overstated because they were derived from the 2016 RIA, which these commenters contend overestimated net investor gains.

The Department's regulatory impact analysis of the Fiduciary Rule and related PTEs (2016 RIA) predicted that resultant gains for retirement investors would justify the compliance costs. The analysis estimated a portion of the potential gains for IRA investors at between $33 billion and $36 billion over the first 10 years for one segment of the market and category of conflicts of interest. It predicted, but did not quantify, additional gains for both IRA and ERISA plan investors.

In considering the benefits and costs of this final rule, the Department considered both the effects of the 60-day delay (until June 9) in the applicability of the Fiduciary Rule and PTEs and Impartial Conduct Standards conditions, and the longer delay (until January 1, 2018) in the applicability of the other exemption conditions in the BIC Exemption and the Principal Transactions Exemption.

The NPRM's RIA illustrated a possible effect of a 60-day delay in the commencement of the potential investor gains estimated in the 2016 RIA. The illustration indicated that such a delay could result in a reduction in those estimated gains of $147 million in the first year and $890 million over 10 years using a three percent discount rate.15 The illustration used the same methodology that the 2016 RIA used to estimate potential investor gains from the Rule. Both made use of empirical evidence that front-end-load mutual funds that share more of the load with distributing brokers attract more flows but perform worse.16

To the extent that investment advisers comply with the Fiduciary Rule and PTEs only when the Fiduciary Rule and PTEs are applicable on their original terms and schedule, this estimate represents a reasonable adjustment of the 2016 estimate to reflect the impact of the 60-day delay. On the other hand, if some advisers would comply with or without a delay or would fail to comply with or without a delay, then the estimate overstates the delay's impact. Public comments that have implications for these possibilities will be discussed below.

A number of comments on the NPRM indicate that some firms are not prepared to comply with the Fiduciary Rule beginning on April 10, 2017. Based on these comments, it appears that, even before the President issued his Memorandum, at least some firms were not on course to achieve full compliance with the Impartial Conduct Standards by that date. In addition, over the nearly sixty days since the President's Memorandum, many firms have assumed that the Department is likely to grant a delay or even repeal the rulemaking, and stepped back their compliance efforts accordingly. As a result, the Department is concerned that a significant portion of the industry is not in a position to issue millions of notices, finalize and fully stand-up transition compliance structures, and perform all the other work necessary to comply with their obligations under the transition provisions of the BIC Exemption and Principal Transaction Exemption by the April 10, 2017 deadline.

As a result, notwithstanding the Department's efforts to issue transitional enforcement relief, absent an additional sixty days' extension, there is a significant risk of a confused and disorderly transition process, rushed business decisions, excessive expenses because of deadlines that are now too tight, and poor or inaccurate communications to consumers. This could also lead to reduced services and increased costs for consumers in the short term. While the Department cannot readily quantify the impact of these considerations, there is substantial reason to believe that they could substantially offset the benefits portion of the investor gains originally posited by (but not quantified in) the 2016 RIA in the sixty days immediately following the original applicability date. The calculated investor gains above were based on the assumption that firms would be in a position to comply with their transitional obligations by April 10, 2017. As noted previously, to the extent that assumption is incorrect, the calculations overstate the likely injury caused by delay.

The 60-day extension permits an orderly transition to the Impartial Conduct Standards to once again occur, so that investors can gain from firms' adherence to these basic standards. Additionally, the approach taken by this document gives the Department the time necessary to implement the President's Memorandum, while avoiding the risk that firms will engage in costly compliance activities to meet requirements that the Department may ultimately decide to revise. It has been close to a year since the Department finalized the Fiduciary Rule and PTEs, and now with the additional extension of the applicability date contained in this final rule, there is little basis for concluding that advisers need still more time before they will be ready to give advice that is in the best interest of retirement investors and free from material misrepresentations in exchange for reasonable compensation. In addition, some comments indicate that some firms have already adopted and intend to maintain fiduciary standards of conduct. For this reason too, investor losses from the 60-day delay are likely to be smaller than would otherwise be the case.

At the same time, the Department notes that the NPRM RIA's illustration of potential investor losses was incomplete because it represented only one negative effect of one source of conflict in one market segment. Accordingly, some commenters suggested that the Department underestimated the harms to investors from NPRM's proposed delay, because the illustrative losses of investor gains did not include all types of conflicts nor all types of investment in addition to excluding the harms associated with rollover recommendations and small plans.17 One commenter offered its own estimates of investor losses, significantly larger than the Department's, due to this delay. For example, the comment letter submitted by Economic Policy Institute (EPI) estimates that retirement savers who received conflicted advice during the 60-day delay would receive $3.7 billion less when their savings are drawn down over 30 years compared to those savers that did not receive conflicted advice. EPI derived its estimate using the methodology the White House Council of Economic Advisors (CEA) used in its 2015 report, which estimated that the aggregate annual cost of conflicted advice is about $17 billion each year).18 The Department notes that the EPI estimate covers broad range of investments including variable annuities and other types of mutual funds, while the Department's estimates in the 2016 final RIA are based solely on front-end load mutual funds.

Other commenters argued that the Department's estimated investor losses from the proposed 60-day delay were overstated because they were derived from the 2016 RIA, which these commenters contend overestimated net investor gains. These commenters generally contend the 2016 RIA wrongly applied published research to estimate investor gains and/or failed to properly account for social costs such as potential loss of access to financial advice.19 These comments largely echo comments made in response to the Fiduciary Rule when it was proposed in 2015, and that were addressed in considerable detail in the 2016 RIA. In the 2016 RIA, the Department concluded that published research supports its estimates of investor gains and that the Fiduciary Rule and PTEs were not likely to impose additional social costs as a result of the loss of access to financial advice.20 The Department notes that its conclusion that investor losses from this delay will be small has no immediate bearing on the conclusions of its 2016 RIA. However, the Department will review the 2016 RIA's conclusions as part of its review of the Fiduciary Rule and PTEs directed by the Presidential Memorandum.

With respect to this final rule's delay in the applicability of exemption conditions other than the Impartial Conduct Standards in the BIC Exemption and the Principal Transactions Exemption until January 1, 2018, the Department considered whether investor losses might result. Under this final rule, beginning on June 9, 2017, advisers will be subject to the prohibited transaction rules and will generally be required to (1) make recommendations that are in their client's best interest (i.e., IRA recommendations that are prudent and loyal), (2) avoid misleading statements, and (3) charge no more than reasonable compensation for their services. If advisers fully adhere to these requirements, affected investors will generally receive the full gains due to the fiduciary rulemaking. However, the temporary absence (until January 1, 2018) of exemption conditions intended to support and provide accountability mechanisms for such adherence (e.g., conditions requiring advisers to provide a written acknowledgement of their fiduciary status and adherence to the Impartial Conduct Standards) obliges the Department to consider the possibility that some lapses in compliance may result in associated investor losses.

Advisers who presently are fiduciaries may be especially likely to fully satisfy the PTEs' Impartial Conduct Standards before January 1, 2018, in the ERISA-plan context, because advisers who make recommendations to plans and plan participants regarding plan assets, including recommendations on rollovers or distributions of plan assets, are already subject to standards of prudence and loyalty under ERISA and a violation of the Impartial Conduct Standards would be subject to claims for civil liability under ERISA. Moreover, financial institutions and advisers who do not provide impartial advice as required by the Rule and PTEs would violate the prohibited transaction rules of the Code.

In addition, the temporary absence of the transitional disclosure conditions in the BIC Exemption and Principal Transactions Exemption is likely to have a smaller impact than would be true if the Impartial Conduct Standards were removed. Advisers would be expected to exercise care to fairly and accurately describe recommended transactions and compensation practices pursuant to the Impartial Conduct Standards which require advisers to make recommendations that are prudent and loyal (i.e., in the customer's best interest), free from misrepresentations, and consistent with the reasonable compensation standard.21 In addition, even though advisers would not be specifically required by the terms of these PTEs to notify retirement investors of the Impartial Conduct Standards and to acknowledge their fiduciary status before January 1, 2018, many investors are likely to know they are entitled to advice that adheres to a fiduciary standard because this final rule will receive publicity from the Department and media, and many advisers will likely notify consumers voluntarily about the imposition of the standard and their adherence to that standard as a best practice.

Comments received by the Department and media reports also indicate that many financial institutions already had completed or largely completed work to establish policies and procedures necessary to make the business structure and practice shifts required by the Impartial Conduct Standards earlier this year (e.g., drafting and implementing training for staff, drafting client correspondence and explanations of revised product and service offerings, negotiating changes to agreements with product manufacturers as part of their approach to compliance with the PTEs, changing employee and agent compensation structures, and designing conflict-free product offerings), and the Department believes that financial institutions may use this compliance infrastructure to ensure that they meet the Impartial Conduct Standards after taking the additional sixty days for an orderly transition between June 9, 2017, and January 1, 2018.

For these reasons, the Department expects that advisers' compliance with the Impartial Conduct Standards during the period between June 9, 2017 and January 1, 2018, will be substantial, even if there is some reduction in compliance relative to the baseline. The Department is uncertain about the magnitude of this reduction and will consider this question as part of its review of the Fiduciary Rule and PTEs pursuant to the President's Memorandum.

In the 2016 RIA, the Department estimated that Financial Institutions would incur $16 billion in compliance costs over the first 10 years, $5 billion of which are first-year costs. Delaying the applicability date of the Rule and PTEs would result in cost savings due to foregone costs of complying for 60 days with the new PTE conditions. Additionally, after June 9, 2017 until at least January 1, 2018, financial institutions and advisers relying on the BIC Exemption and Principal Transactions Exemption to engage in covered transactions would have to satisfy only the Impartial Conduct Standards of those exemptions. They would not be specifically required to meet other transition period requirements of these PTEs, such as to make specific written disclosures and representations of fiduciary status and of compliance with fiduciary standards in investor communications, designate a person or persons responsible for addressing material conflicts of interest and monitoring advisers' adherence to the Impartial Conduct Standards, and comply with new recordkeeping obligations.

Therefore, due to both the 60-day delay of the Fiduciary Rule and PTEs and the reduced transition period requirements, the Department estimates cost savings of $78 million until January 1, 2018. The Department estimates that the ten-year cost savings, which also include returns on the cost savings that occur in the April 10, 2017, to January 1, 2018 time period, are $123 million using a three percent discount rate, and $114 million using a seven percent discount rate. The equivalent annualized values are $14.4 million using a three percent discount rate and $16.2 million using a seven percent discount rate.22

Figure 1 shows the sources of the cost-savings. Please note that numbers in the table do not equal the ten-year total costs-saving, because they are not discounted. The cost savings to firms due to the delay remain unchanged relative to what was estimated for the NPRM, while the cost-savings from the complete elimination of the transition notice has increased. Also note that even though the applicability date of the exemption conditions have been delayed during the transition period, it is nevertheless anticipated that firms that are fiduciaries will implement procedures to ensure that they are meeting their fiduciary obligations, such as changing their compensation structures and monitoring the sales practices of their advisers to ensure that conflicts in interest do not cause violations of the Impartial Conduct Standards, and maintaining sufficient records to corroborate that they are adhering to Impartial Conduct Standards. However, these firms have considerably more flexibility to choose precisely how they will comply during the transition period. Therefore, there could be additional cost savings not included in these estimates if, for example, firms develop more efficient methods to adhere to the Impartial Conduct Standards. The Department does not have sufficient data to estimate these cost savings, therefore, they are not quantified.

The delay of applicability dates described in this final rule could defer or reduce start-up compliance costs, particularly in circumstances where more gradual steps toward preparing for compliance are less expensive. However, due to lack of systematic evidence on the portion of compliance activities that have already been undertaken, thus rendering the associated costs sunk, the Department is unable to quantify the potential change in start-up costs that would result from a delay in the applicability date and elimination of the transition disclosure requirement.

Commenters addressed the issue of start-up costs that have not yet been incurred suggesting that a delay could yield substantial savings, particularly if subsequent changes to the Fiduciary Rule and PTEs or subsequent market developments make it possible to avoid or reduce such costs. One commenter provided as an example of start-up costs that might be avoided the cost of developing “T” shares—a cost that has not yet been incurred by some affected firms. T shares, a class of mutual fund shares, generally would pay advisers a uniform commission, thereby mitigating advisory conflicts otherwise associated with variation in commission levels across different mutual funds. Some investment companies had been rushing to develop T shares in order to comply with the Fiduciary Rule and PTEs' originally scheduled applicability dates. However, some investment companies are now pursuing an alternative approach, sometimes referred to as “clean” shares, as a potentially better solution. Clean shares would have no commission attached. Instead, distributing brokers would set their own commission levels, and generally would set the levels uniformly across different funds they recommend, thereby mitigating potential conflicts from variation in commission levels. The clean share approach recently became more viable, owing to new SEC staff guidance clarifying its permissibility under applicable law. It now seems likely that the T-share approach will yield to clean shares. Consequently, this final rule's delay in the applicability of the Fiduciary Rule and PTEs might make it possible to avoid some of the cost of continuing to develop and implement T-shares, in favor of moving more directly to what might be the preferred long-term solution, namely, clean shares.

More generally, however, it is unclear what proportion of start-up costs might be avoided as a result of this final rule's delay of applicability dates. Absent additional changes to the Fiduciary Rule or PTEs, firms are likely to incur most of these costs eventually. The Department generally believes that start-up costs not yet incurred for requirements scheduled to become applicable January 1, 2018, should not be included as a cost savings associated with this final rule, because it remains to be determined whether those requirements will be revised or eliminated.

Some comments generally argued that the compliance cost estimates presented in the 2016 RIA were understated, and that therefore the cost savings from a delay in the applicability of all or some of the requirements of the Fiduciary Rule and PTEs would be larger than estimated above.

Some comments reported expected costs savings if the Fiduciary Rule is rescinded or modified; however, that information is not useful for calculating the cost savings associated with this final rule, because the appropriate base-line for this analysis assumes full implementation of the Fiduciary Rule and PTEs by January 1, 2018. Those start-up costs that have not been incurred only would have an impact if the Department decides in the future to delay the January 1, 2018 implementation date or to revise or repeal the obligations of firms and advisers. The Department does not have any basis for predicting such changes at this time, before it has received substantial new data or evidence in response to the President's Memorandum.

A commenter also asserted that the Department significantly understated the cost savings that would result from a 60-day delay. This assertion had three components: (1) The commenter estimated the cost over 60 days to be $250 million based on the on-going cost from the final 2016 RIA of $1.5 billion per year, (2) that cost savings over a 10-year period were not provided to allow comparison to the negative effects on investors that would occur over the ten year period, (3) that industry cost savings were not projected out over 10 years using returns on capital in a similar manner to investors' lost earnings. The Department stands behind its estimate, however, because the commenter misapplied the estimates from the 2016 final RIA when developing its cost-saving estimate. The $1.5 billion on-going costs are the costs of compliance for all components of the Fiduciary Rule and PTEs; however, the delay affects only the costs related to the transition period requirements which are a subset of the costs included in the $1.5 billion estimate. Also, when estimating the costs for the Fiduciary Rule and PTEs a decision was made, for simplification of estimation, to over-estimate costs for the transition period by using the same costs for the transition period as was used for the period with full compliance during that time period.

The comment's assertions in items (2) and (3) above also are incorrect. Instead of a ten-year total cost number, an annualized number for the ten-year period was provided in the NPRM for both the cost savings ($8 million using a three percent discount rate and $9 million using a seven percent discount rate) and for the negative investor impacts ($104 million using a three percent discount rate and $87 million using a seven percent discount rate). Annualized numbers use the same inputs as those used to estimate a ten-year discounted total number, thereby allowing a comparison of expected impacts across the ten-year period. Also, the cost savings to firms from the delay were projected out for ten years and included in the annualized numbers to account for the fact that due to the delayed applicability date, financial institutions will have additional resources to reinvest in their firms. This parallels the methodology the Department used to estimate the ten-year reduction in investor gains that will result from the delay. Contrary to the concerns expressed by another commenter, the reported annualized number does not mean that costs are spread equally across the ten years.

Another commenter agreed that a delay “could delay or reduce start-up compliance costs, particularly in circumstances where more gradual steps towards preparing for compliance are less expensive.” However, the commenter failed to provide any estimates or data that would help the Department quantify such cost savings.

In conformance with Executive Order 12866, the Department considered several alternatives in finalizing this final rule that were informed by public comments. As discussed below, the Department believes the approach adopted in this final rule likely yields the most desirable outcomes including avoidance of costly market disruptions, more compliance cost savings than other alternatives, and reduced investor losses. In weighing different options, the Department took numerous factors into account. The Department's objective was to avoid unnecessary confusion and uncertainty in the investment advice market, facilitate continued marketplace innovation, and minimize investor losses while maximizing compliance cost savings.

Compared with the alternative offered in the NPRM, this final rule provides more benefits. It provides more certainty during the period between June 9, 2017 and January 1, 2018. The Department will aim to complete its review of the Fiduciary Rule and PTEs pursuant to the President's Memorandum in advance of January 1, 2018, and to thereby afford firms continued certainty and enough time to prepare for whatever action is prompted by the review. On the cost side, as noted above, the Department now believes that investor losses associated with either the NPRM approach (a 60-day delay alone) or this final rule delaying applicability dates would be relatively small. As opposed to a full delay of all conditions until January 1, 2018, this final rule's application of the Impartial Conduct Standards beginning on June 9, 2017, helps ensure that retirement investors will experience gains from a higher conduct standard and minimizes the potential for an undue reduction in those gains as compared to the full protections of all the PTEs' conditions.

The Department also considered the possible impact of a 90-day or longer delay in the application of the fiduciary standards and all conditions set forth in the Fiduciary Rule and PTEs. Such a longer delay likely would result in too little additional cost saving to justify the additional investor losses, which could be quite large. Under this final rule, the Department expects that over time investors will come to realize much of the gains due to the Impartial Conduct Standards. A longer delay in the application of the Fiduciary Rule and PTEs and those standards would deprive investors of important fiduciary protections for a longer time, resulting in larger investor losses.

The Department also considered a scenario where the fiduciary definition in the Rule and Impartial Conduct Standards in the PTEs take effect on April 10, 2017 as originally planned, while the remaining conditions in the PTEs become applicable on January 1, 2018. This approach was suggested by several commenters claiming that the delay is not necessary to conduct the examination required by the Presidential Memorandum.23 This approach arguably might minimize any reduction to investor gains. The Department did not adopt this alternative, however, because it would not provide the regulated community with sufficient notice and time to comply, and the resultant disruptions attributable to the short time frame could overshadow any benefits.

The Paperwork Reduction Act (PRA) (44 U.S.C. 3501, et seq.) prohibits federal agencies from conducting or sponsoring a collection of information from the public without first obtaining approval from the Office of Management and Budget (OMB). See 44 U.S.C. 3507. Additionally, members of the public are not required to respond to a collection of information, nor be subject to a penalty for failing to respond, unless such collection displays a valid OMB control number. See 44 U.S.C. 3512.

The Department has sent a request to OMB to modify the information collections contained in the Fiduciary Rule and PTEs. The Department will notify the public regarding OMB's response to its request in a separate Federal Register Notice. The information collection requirements contained in the Rule and PTEs are as follows.

Final Rule: The information collections in the Rule are approved under OMB Control Number 1210-0155. Paragraph (b)(2)(i) requires that certain “platform providers” provide disclosure to a plan fiduciary. Paragraphs (b)(2)(iv)(C) and (D) require asset allocation models to contain specific information if they furnish and provide certain specified investment educational information. Paragraph (c)(1) requires a disclosure to be provided by a person to an independent plan fiduciary in certain circumstances for them to be deemed not to be an investment advice fiduciary. Finally, paragraph (c)(2) requires certain counterparties, clearing members and clearing organizations to make a representation to certain parties so they will not be deemed to be investment advice fiduciaries regarding certain swap transactions required to be cleared under provisions of the Dodd-Frank Act.

For a more detailed discussion of the information collections and associated burden, see the Department's PRA analysis at 81 FR 20946, 20994.

PTE 2016-01, the Best Interest Contract Exemption: The information collections in PTE 2016-01, the BIC Exemption, are approved under OMB Control Number 1210-0156. The exemption requires disclosure of material conflicts of interest and basic information relating to those conflicts and the advisory relationship (Sections II and III), contract disclosures, contracts and written policies and procedures (Section II), pre-transaction (or point of sale) disclosures (Section III(a)), web-based disclosures (Section III(b)), documentation regarding recommendations restricted to proprietary products or products that generate third party payments (Section (IV), notice to the Department of a Financial Institution's intent to rely on the PTE, and maintenance of records necessary to prove that the conditions of the PTE have been met (Section V).

Section IX provides a transition period under which relief from these prohibitions is available for Financial Institutions and advisers during the period between the applicability date and January 1, 2018 (the “Transition Period”). As a condition of relief during the Transition Period, Financial Institutions were required to provide a disclosure with a written statement of fiduciary status and certain other information to all retirement investors (in ERISA plans, IRAs, and non-ERISA plans) prior to or at the same time as the execution of recommended transactions (the “Transition Disclosure”). The final rule eliminates and removes the burden from the ICR for the Transition Disclosure requirement for which the Department estimated that 31 million Transition Disclosures would be sent at a cost of $42.8 million during the transition period. This final rule therefore removes this burden.

For a more detailed discussion of the information collections and associated burden, see the Department's PRA analysis at 81 FR 21002, 21071.

PTE 2016-02, the Prohibited Transaction Exemption for Principal Transactions in Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs (Principal Transactions Exemption): The information collections in PTE 2016-02, the Principal Transactions Exemption, are approved under OMB Control Number 1210-0157. The exemption requires Financial Institutions to provide contract disclosures and contracts to Retirement Investors (Section II), adopt written policies and procedures (Section IV), make disclosures to Retirement Investors and on a publicly available Web site (Section IV), maintain records necessary to prove they have met the PTE conditions (Section V).).

Section VII provides a transition period under which relief from these prohibitions is available for Financial Institutions and advisers during the period between the applicability date and January 1, 2018 (the “Transition Period”). As a condition of relief during the Transition Period, Financial Institutions were required to provide a disclosure with a written statement of fiduciary status and certain other information to all retirement investors (in ERISA plans, IRAs, and non-ERISA plans) prior to or at the same time as the execution of recommended transactions (the “Transition Disclosure”). This final rule eliminates and removes the burden from the ICR for the Transition Disclosure requirement for which the Department estimated that 2.5 million Transition Disclosures would be sent at a cost of $2.9 million during the Transition Period. This final rule therefore removes this burden.

For a more detailed discussion of the information collections and associated burden, see the Department's PRA analysis at 81 FR 21089, 21129.

Amended PTE 75-1: The information collections in Amended PTE 75-1 are approved under OMB Control Number 1210-0092. Part V, as amended, requires that prior to an extension of credit, the plan must receive from the fiduciary written disclosure of (i) the rate of interest (or other fees) that will apply and (ii) the method of determining the balance upon which interest will be charged in the event that the fiduciary extends credit to avoid a failed purchase or sale of securities, as well as prior written disclosure of any changes to these terms. It also requires broker-dealers engaging in the transactions to maintain records demonstrating compliance with the conditions of the PTE.

For a more detailed discussion of the information collections and associated burden, see the Department's PRA analysis at 81 FR 21139, 21145. The Department concluded that the ICRs contained in the amendments to Part V impose no additional burden on respondents.

Amended PTE 86-128: The information collections in Amended PTE 86-128 are approved under OMB Control Number 1210-0059. As amended, Section III of the PTE requires Financial Institutions to make certain disclosures to plan fiduciaries and owners of managed IRAs in order to receive relief from ERISA's and the Code's prohibited transaction rules for the receipt of commissions and to engage in transactions involving mutual fund shares. Financial Institutions relying on either PTE 86-128 or PTE 75-1, as amended, are required to maintain records necessary to demonstrate that the conditions of these PTEs have been met.

For a more detailed discussion of the information collections and associated burden, see the Department's PRA analysis at 81 FR 21181, 21199.

Amended PTE 84-24: The information collections in Amended PTE 84-24 are approved under OMB Control Number 1210-0158. As amended, Section IV(b) of PTE 84-24 requires Financial Institutions to obtain advance written authorization from an independent plan fiduciary or IRA holder and furnish the independent fiduciary or IRA holder with a written disclosure in order to receive commissions in conjunction with the purchase of insurance and annuity contracts. Section IV(c) of PTE 84-24 requires investment company Principal Underwriters to obtain approval from an independent fiduciary and furnish the independent fiduciary with a written disclosure in order to receive commissions in conjunction with the purchase by a plan of securities issued by an investment company Principal Underwriter. Section V of PTE 84-24, as amended, requires Financial Institutions to maintain records necessary to demonstrate that the conditions of the PTE have been met.

The final rule delays the applicability of amendments to PTE 84-24 until January 1, 2018, except that the Impartial Conduct Standards will become applicable on June 9, 2017. The Department does not have sufficient data to estimate that number of respondents that will use PTE-84-24 with the inclusion of Impartial Conduct Standards but delayed applicability date of amendments. Therefore, the Department has not revised its estimate from the proposed rule.

For a more detailed discussion of the information collections and associated burden, see the Department's PRA analysis at 81 FR 21147, 21171.

These paperwork burden estimates, which are substantially derived from compliance with conditions that will apply after January 1, 2018, over the three-year ICR approval period, are summarized as follows:

Agency: Employee Benefits Security Administration, Department of Labor.

Titles: (1) Best Interest Contract Exemption and (2) Final Investment Advice Regulation.

OMB Control Number: 1210-0156.

Affected Public: Businesses or other for-profits; not for profit institutions.

Estimated Number of Respondents: 19,890.

Estimated Number of Annual Responses: 34,095,501 during the first year and 72,282,441 during subsequent years.

Frequency of Response: When engaging in exempted transaction.

Estimated Total Annual Burden Hours: 2,701,270 during the first year and 2,832,369 in subsequent years.

Estimated Total Annual Burden Cost: $2,436,741,143 during the first year and $574,302,408 during subsequent years.

Agency: Employee Benefits Security Administration, Department of Labor.

Titles: (1) Prohibited Transaction Exemption for Principal Transactions in Certain Assets between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs and (2) Final Investment Advice Regulation.

OMB Control Number: 1210-0157.

Affected Public: Businesses or other for-profits; not for profit institutions.

Estimated Number of Respondents: 6,075.

Estimated Number of Annual Responses: 2,463,803 during the first year and 3,018,574 during subsequent years.

Frequency of Response: When engaging in exempted transaction; Annually.

Estimated Total Annual Burden Hours: 85,457 hours during the first year and 56,197 hours in subsequent years.

Estimated Total Annual Burden Cost: $1,953,184,167 during the first year and $431,468,619 in subsequent years.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes certain requirements with respect to Federal Rules that are subject to the notice and comment requirements of section 553(b) of the Administrative Procedure Act (5 U.S.C. 551 et seq.) or any other laws. Unless the head of an agency certifies that a proposed Rule is not likely to have a significant economic impact on a substantial number of small entities, section 604 of the RFA requires that the agency present a final regulatory flexibility analysis (FRFA) describing the Rule's impact on small entities and explaining how the agency made its decisions with respect to the application of the Rule to small entities. Small entities include small businesses, organizations and governmental jurisdictions.

The Department has determined that this final rule will have a significant economic impact on a substantial number of small entities, and hereby provides this FRFA. As noted above, the Department is taking regulatory action to delay the applicability date of the fiduciary definition in the Rule and Impartial Conduct Standards in the PTEs until June 9, 2017, and remaining conditions for covered transactions in the BIC Exemption and Principal Transactions Exemption until January 1, 2018. In addition, the Department is delaying the applicability of amendments to Prohibited Transaction Exemption 84-24 until January 1, 2018, other than the Impartial Conduct Standards, which will become applicable on June 9, 2017. This final rule is intended to reduce any unnecessary disruption that could occur in the marketplace if the applicability date of the Rule and PTEs occurs while the Department examines the Rule and PTEs as directed in the Presidential Memorandum. In the face of uncertainty and widespread questions about the Fiduciary Rule's future or possible repeal, many financial firms slowed or halted their efforts to prepare for full compliance on April 10. Consequently, failure to delay that applicability date could jeopardize firms' near-term ability and/or propensity to serve classes of customers, and both firms and investors could suffer.

The Small Business Administration (SBA) defines a small business in the Financial Investments and Related Activities Sector as a business with up to $38.5 million in annual receipts. The Department examined the dataset obtained from SBA which contains data on the number of firms by NAICS codes, including the number of firms in given revenue categories. This dataset allowed the Department to estimate the number of firms with a given NAICS code that falls below the $38.5 million threshold to be considered a small entity by the SBA. However, this dataset alone does not provide a sufficient basis for the Department to estimate the number of small entities affected by the rule. Not all firms within a given NAICS code would be affected by this rule, because being an ERISA fiduciary relies on a functional test and is not based on industry status as defined by a NAICS code. Further, not all firms within a given NAICS code work with ERISA-covered plans and IRAs.

Over 90 percent of broker-dealers (BDs), registered investment advisers, insurance companies, agents, and consultants are small businesses according to the SBA size standards (13 CFR 121.201). Applying the ratio of entities that meet the SBA size standards to the number of affected entities, based on the methodology described at greater length in the RIA of the Fiduciary Rule, the Department estimates that the number of small entities affected by this final rule is 2,438 BDs, 16,521 Registered Investment Advisors, 496 insurers, and 3,358 other ERISA service providers. For purposes of the RFA, the Department continues to consider an employee benefit plan with fewer than 100 participants to be a small entity. The 2013 Form 5500 filings show nearly 595,000 ERISA covered retirement plans with less than 100 participants.

Based on the foregoing, the Department estimates that small entities would save approximately $74.1 million in compliance costs due to the delays of the applicability dates described in this document.24 This estimate is a subset of the cost savings discussed in the RIA, but is an estimate of cost savings only for small entities. As highlighted in the Final Regulatory Flexibility Act Analysis for the Fiduciary Rule, 96.2, 97.3, and 99.3 percent of BDs, Registered Investment Advisors, and Insurers respectively are estimated to meet the SBAs definition of small business. These cost savings are substantially derived from foregone on-going compliance requirements related to the transition notice requirements for the BIC Exemption and the Principal Transactions Exemption, data collection to demonstrate satisfaction of fiduciary requirements, and retention of data to demonstrate the satisfaction of conditions of the exemption during the Transition Period.

As discussed above, most firms affected by this final rule meet the SBA's definition of a small business. Therefore, the discussion of the comments received on the proposed rule in Section B. and alternatives in Section C.1.c, is relevant and cross-referred to for purpose of this Regulatory Flexibility Act analysis.

The final rule extending the applicability date is subject to the Congressional Review Act (CRA) provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq.) and will be transmitted to Congress and the Comptroller General for review. The final rule is a “major rule” as that term is defined in 5 U.S.C. 804, because it is likely to result in an annual effect on the economy of $100 million or more. Although the CRA generally requires that major rules become effective no sooner than 60 days after Congress receives the required report, the CRA allows the issuing agency to make a rule effective sooner, if the agency makes a good cause finding that such public procedure is impracticable, unnecessary, or contrary to the public interest. The Department has made such a good cause finding for this rule (as discussed in further detail below in Section C.6 of this document), including the basis for that finding. The Presidential Memorandum, directing the Department to conduct an updated legal and economic analysis, was issued on February 3, 2017, only 67 days before the Rule and PTEs were scheduled to become applicable. The Department has determined it would be impracticable for it to conclude any delay of this rulemaking more than 60 days before the April 10, 2017 applicability date.

Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (adjusted annually for inflation with the base year 1995) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector. For purposes of the Unfunded Mandates Reform Act, as well as Executive Order 12875, the final rule extending the applicability date does not include any federal mandate that we expect would result in such expenditures by State, local, or tribal governments, or the private sector. The Department also does not expect that the delay will have any material economic impacts on State, local or tribal governments, or on health, safety, or the natural environment.

The extension of the applicability date of the Rule and PTEs is effective immediately upon publication of the final rule in the Federal Register. Under 5 U.S.C. 553(d) (Administrative Procedure Act), an agency may determine that its rulemaking should become effective more quickly than the 30 days after publication that is otherwise required. This is appropriate if the rule relieves a restriction, or if the agency finds, and publishes, good cause to accelerate the effective date. The Department has determined that a delay of the applicability date of the Rule and PTEs relieves a restriction and therefore may appropriately become effective immediately. Additionally, for all of the reasons set forth in Sections B and C, the Department has determined that there is good cause for making the rule effective immediately. The APA provision is intended to ensure that affected parties have a reasonable amount of time to adjust their behavior to comply with new regulatory requirements. This final rule, which delays for 60 days regulatory requirements that would otherwise apply as of April 10, 2017, fulfills that purpose. Moreover, if the final rule's 60-day delay were not immediately effective, significant provisions of the Rule and PTEs could become applicable on April 10 before the delay takes effect, resulting in a period in which the Rule, fiduciary obligations, and notice and disclosure requirements would become applicable before becoming inapplicable again. Such a gap period would result in a chaotic transition to fiduciary standards that would create additional confusion, uncertainty, and expense, thereby defeating the purposes of the delay. The resulting disorder would be contrary to principles of fundamental fairness and could increase costs, not only for firms and advisers, but for the retirement investors that they serve. The Department also believes that making the rule immediately effective will provide plans, plan fiduciaries, plan participants and beneficiaries, IRAs, IRA owners, financial services providers and other affected service providers the level of certainty that the rule is final and not subject to further modification without additional public notice and comment that will allow them to immediately resume and/or complete preparations for the provisions of the Rule and PTEs that will become applicable on June 9, 2017. Accordingly, the Department has concluded that providing certainty, by making the delay effective immediately, would be a more reasonable and fair path forward. In addition, the Presidential Memorandum ordering the Department to reconsider its legal and economic analysis was issued only 67 days before the applicability date and generated a high volume of comments; it would have been impracticable for the Department to finish any public rulemaking process quickly enough to provide an effective date 30 days after publication.

Executive Order 13771, titled Reducing Regulation and Controlling Regulatory Costs, was issued on January 30, 2017. Section 2(a) of Executive Order 13771 requires an agency, unless prohibited by law, to identify at least two existing regulations to be repealed when the agency publicly proposes for notice and comment, or otherwise promulgates, a new regulation. In furtherance of this requirement, section 2(c) of Executive Order 13771 requires that the new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least two prior regulations. OMB's interim guidance, issued on February 2, 2017, explains that for Fiscal Year 2017 the above requirements only apply to each new “significant regulatory action that imposes costs,” and that “costs should be measured as the opportunity cost to society.” The impacts of today's final rule are categorized consistently with the analysis of the original Fiduciary Rule, and the Department has also concluded that the impacts identified in the Regulatory Impact Analysis accompanying the 2016 final rule may still be used as a basis for estimating the potential impacts of that final rule, were it not being modified today. It has been determined that, for purposes of E.O. 13771, the impacts of the Fiduciary Rule that were identified in the 2016 analysis as costs, and are reduced by today's final rule, are presently categorized as cost savings (or negative costs), and impacts of the Fiduciary Rule that were identified in the 2016 analysis as a combination of transfers and positive benefits, and that are reduced by today's final rule, are categorized as a combination of (opposite-direction) transfers and negative benefits. Accordingly, OMB has determined that this final rule extending the applicability date does not impose costs that would trigger the above requirements of Executive Order 13771.

When it adopted the Fiduciary Rule in 2016, the Department also granted the new BIC Exemption 25 and Principal Transactions Exemption,26 to facilitate the provision of investment advice in retirement investors' best interest. In the absence of an exemption, investment advice fiduciaries would be statutorily prohibited under ERISA and the Code from receiving compensation as a result of their investment advice, and from engaging in certain other transactions, involving plan and IRA customers. These new exemptions provided broad relief from the prohibited transaction provisions for investment advice fiduciaries operating in the retail marketplace. The Department also expanded an existing exemption to permit investment advice fiduciaries to receive compensation for extending credit to avoid failed securities transactions. See PTE 75-1, Part V.27

At the same time that it granted the new exemptions, the Department amended a number of previously granted exemptions to incorporate the Impartial Conduct Standards as conditions. In some cases, previously granted exemptions were revoked or were narrowed in scope, with the aim that investment advice fiduciaries would rely primarily on the BIC Exemption and Principal Transactions Exemption when they provided advice to retirement investors in the retail marketplace. These amendments were, as a whole, intended to ensure that retirement investors would consistently be protected by Impartial Conduct Standards, regardless of the particular exemption upon which an investment advice fiduciary relies.

As discussed in Sections B and C above, the Department has determined that the Impartial Conduct Standards in the new exemptions and amendments to previously granted exemptions should become applicable on June 9, 2017, so that retirement investors will be protected during the period in which the Department conducts its examination of the Fiduciary Rule. Accordingly, this document extends for 60 days the applicability dates of the BIC Exemption and the Principal Transactions Exemption and requires adherence to the Impartial Conduct Standards (including the “best interest” standard) only, as conditions of the transition period through January 1, 2018. Thus, the fiduciary definition in the Rule published on April 8, 2016, and Impartial Conduct Standards in these exemptions, are applicable on June 9, 2017, while compliance with other conditions for covered transactions, such as the contract requirement, in these exemptions is not required until January 1, 2018. This document also delays the applicability of amendments to Prohibited Transaction Exemption 84-24 until January 1, 2018, other than the Impartial Conduct Standards, which will become applicable on June 9, 2017. Finally, this document extends the applicability dates of amendments to other previously granted exemptions to June 9, 2017. Taken together, these exemptions provide broad relief to fiduciary advisers, all of whom will be subject to the Impartial Conduct Standards under the exemptions' terms. A brief description of the exemptions, and their applicability dates, follows.

Both the BIC Exemption and the Principal Transactions Exemption will become applicable on June 9, 2017. The periods of transition relief (Section IX of the BIC Exemption and Section VII of the Principal Transactions Exemption) are amended to extend from June 9, 2017, through January 1, 2018. The Impartial Conduct Standards set forth in the transition relief are applicable June 9, 2017. In addition, Section II(h) of the BIC Exemption is amended to delay conditions for robo-advice providers that are Level Fee Fiduciaries other than the Impartial Conduct Standards, which are applicable on June 9, 2017; these entities are excluded from relief in Section IX but the Department determined that the transition relief should apply to them as well. The preambles to the BIC Exemption (81 FR 21026-32) and the Principal Transactions Exemption (81 FR 21105-09) provide an extensive discussion of the Impartial Conduct Standards of each exemption.

The remaining conditions of Section IX of the BIC Exemption and Section VII of the Principal Transactions Exemption, other than the Impartial Conduct Standards, will not be applicable during the Transition Period.28 These conditions would have required a written statement of fiduciary status, specified disclosures, and a written commitment to adhere to the Impartial Conduct Standards; designation of a person or persons responsible for addressing material conflicts of interest and monitoring advisers' adherence to the Impartial Conduct Standards; and compliance with the recordkeeping requirements of the exemptions. Absent additional changes to the Exemptions, these conditions (and others) will first become applicable on January 1, 2018, after the Transition Period closed. See BIC Exemption Sections II(b), II(c), II(d)(2), II(e) and V; Principal Transactions Exemption Sections II(b), II(c), II(d)(2), II(e) and V.

PTE 84-24 29 is a previously granted exemption for transactions involving insurance and annuity contracts, which was amended in April 2016 to include the Impartial Conduct Standards as conditions and to revoke relief for annuity contracts other than “fixed rate annuity contracts.” 30 By the amendment's terms, the exemption would no longer apply to transactions involving fixed indexed annuity contracts and variable annuity contracts as of April 10, 2017.

The Department is now delaying the applicability date of the April 2016 Amendments to PTE 84-24 until January 1, 2018, except for the Section II. Impartial Conduct Standards and the related definitions of “Best Interest” and “Material Conflict of Interest,” which will become applicable on June 9, 2017.31 Therefore, from June 9, 2017, until January 1, 2018, insurance agents, insurance brokers, pension consultants and insurance companies will be able to continue to rely on PTE 84-24, as previously written,32 for the recommendation and sale of fixed indexed, variable, and other annuity contracts to plans and IRAs,33 subject to the addition of the Impartial Conduct Standards.34

The purpose of this partial delay of the amendment's applicability date is to minimize any concerns about potential disruptions in the insurance industry during the transition period and consideration of the Presidential Memorandum. While the Department believes that most parties receiving compensation in connection with annuity recommendations can readily rely on the broad transition exemption in the BIC Exemption, discussed above, some parties have expressed a preference to continue to rely on PTE 84-24, as amended in 2006, which has historically been available to the insurance industry for all types of annuity products. The Department notes that it is considering, but has not yet finalized, additional exemptive relief that is relevant to the insurance industry in determining its approach to complying with the Fiduciary Rule. See Proposed BIC Exemption for Insurance Intermediaries.35

In April 2016, the Department also amended PTE 86-128, which permits fiduciaries to receive compensation in connection with certain securities transactions, to require fiduciaries relying on the exemption to comply with the Impartial Conduct Standards, and revoked relief for investment advice fiduciaries to IRAs who would now rely on the BIC Exemption, rather than PTE 86-128. In addition, the Department revoked PTE 75-1, Part II(2), which had granted relief for certain mutual fund purchases between fiduciaries and plans, and amended PTE 86-128 to provide similar relief, subject to the additional conditions of PTE 86-128, including the Impartial Conduct Standards. Rather than becoming applicable on April 10, 2017, as provided by the April 2016 rulemaking, these amendments will now become applicable on June 9, 2017, reflecting a sixty day extension. In addition, the transition exemption in the BIC Exemption will be broadly available to investment advice fiduciaries engaging in the transactions permitted by PTE 86-128.

The April 2016 amendments also provided for the revocation of PTE 75-1, Part I, which provides an exemption for non-fiduciaries to perform certain services in connection with securities transactions. As discussed in the preamble to the amendments, the relief provided by PTE 75-1, Part I was duplicative of the statutory exemptions for service providers set forth in ERISA section 408(b)(2) and Code section 4975(d)(2).36 Rather than becoming applicable on April 10, 2017, as provided in the April 2016 rulemaking, these amendments will now become applicable in their entirety on June 9, 2017, reflecting a sixty day extension. For a full discussion of the 2016 amendments to PTE 86-128 and 75-1, Parts I and II, see 81 FR 21181.

The Department amended the following previously granted exemptions to require fiduciaries relying on the exemptions to comply with the Impartial Conduct Standards.37 Because consistent application of the Impartial Conduct Standards is the Department's objective, these amendments will be delayed 60 days and become applicable June 9, 2017.

• PTE 75-1, Part III and IV, Exemptions from Prohibitions Respecting Certain Classes of Transactions Involving Employee Benefit Plans and Certain Broker-Dealers, Reporting Dealers and Banks.

• PTE 77-4, Class Exemption for Certain Transactions Between Investment Companies and Employee Benefit Plans.

• PTE 80-83, Class Exemption for Certain Transactions Involving Purchase of Securities Where Issuer May Use Proceeds to Reduce or Retire Indebtedness to Parties in Interest.

• PTE 83-1 Class Exemption for Certain Transactions Involving Mortgage Pool Investment Trusts.

For a full discussion of these amendments, see 81 FR 21208.

In April 2016, the Department amended PTE 75-1, Part V, to permit investment advice fiduciaries to receive compensation for extending credit to a plan or IRA to avoid a failed securities transaction. Thus, the amendment expanded the scope of the existing exemption and allowed investment advice fiduciaries to receive compensation for such transactions, provided they make certain disclosures in advance regarding the interest that will be charged. The amendment will be useful to fiduciaries that are newly-covered under the Rule, which will become applicable on June 9, 2017, after a sixty day extension. Accordingly, this amendment too will become applicable on June 9, 2017. For a full discussion of the amendment, see 81 FR 21139.

Following are amendments to the applicability dates of the BIC Exemption and other PTEs adopted and amended in connection with the Fiduciary Rule defining who is a fiduciary for purposes of ERISA and the Code. The amendments are effective as of April 10, 2017. For the convenience of users, the text of the BIC Exemption, the Principal Transactions Exemption, and PTE84-24, as amended on this date, appear restated in full on EBSA's Web site. The Department finds that the exemptions with the amended applicability dates are administratively feasible, in the interests of plans, their participants and beneficiaries and IRA owners, and protective of the rights of plan participants and beneficiaries and IRA owners.

1. The BIC Exemption (PTE 2016-01) is amended as follows:

A. The date “April 10, 2017” is deleted and “June 9, 2017” is inserted in its place as the Applicability date in the introductory DATES section of the exemption.

B. Section II(h)—Level Fee Fiduciaries provides streamlined conditions for “Level Fee Fiduciaries.” In accordance with the exemption's Applicability Date, these conditions—including the Impartial Conduct Standards set forth in Section II(h)(2)—are applicable on June 9, 2017, but they are not required for parties that can comply with Section IX. For Level Fee Fiduciaries that are robo-advice providers, and therefore not eligible for Section IX, the Impartial Conduct Standards in Section II(h)(2) are applicable June 9, 2017 but the remaining conditions of Section II(h) are applicable January 1, 2018. The amended applicability dates are reflected in new Section II(h)(4).

C. Section IX—Transition Period for Exemption provides an exemption for the Transition Period, subject to conditions set forth in Section IX(d). The Transition Period identified in Section IX(a) is amended to extend from June 9, 2017, to January 1, 2018, rather than April 10, 2017, to January 1, 2018. Section IX(d)(1), which sets forth Impartial Conduct Standards, is applicable June 9, 2017. The remaining conditions of Section IX(d) are not applicable in the Transition Period. These conditions are also required in Sections II and V of the exemption, which will apply after the Transition Period.

2. The Class Exemption for Principal Transactions in Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs (PTE 2016-02), is amended as follows:

A. The date “April 10, 2017” is deleted and “June 9, 2017” is inserted in its place as the Applicability date in the introductory DATES section,

B. Section VII—Transition Period for Exemption sets forth an exemption for the Transition Period subject to conditions set forth in Section VII(d). The Transition Period identified in Section VII(a) is amended to extend from June 9, 2017, to January 1, 2018, rather than April 10, 2017, to January 1, 2018. Section VII(d)(1), which sets forth Impartial Conduct Standards, is applicable June 9, 2017. The remaining conditions of Section VII(d) are not applicable in the Transition Period. These conditions are also required in Sections II and V of the exemption, which will apply after the Transition Period.

3. Prohibited Transaction Exemption 84-24 for Certain Transactions Involving Insurance Agents and Brokers, Pension Consultants, Insurance Companies, and Investment Company Principal Underwriters, is amended as follows:

A. The date “April 10, 2017” is replaced with “January 1, 2018” as the Applicability date in the introductory DATES section of the amendment, except as it applies to Section II. Impartial Conduct Standards, and Sections VI(b) and (h), which define “Best Interest,” and “Material Conflicts of Interest,” all of which are applicable June 9, 2017.

B. Section II—Impartial Conduct Standards, is redesignated as Section VII. The introductory clause is amended to reflect the June 9, 2017 applicability date of that section, as follows: “On or after June 9, 2017, if the insurance agent or broker, pension consultant, insurance company or investment company Principal Underwriter is a fiduciary within the meaning of ERISA section 3(21)(A)(ii) or Code section 4975(e)(3)(B) with respect to the assets involved in the transaction, the following conditions must be satisfied, with respect to the transaction to the extent they are applicable to the fiduciary's actions[.]”

C. The definition of “Best Interest,” is redesignated as Section VI(h) and the definition of “Material Conflict of Interest” is redesignated as Section VI(i).

4. The following exemptions are amended by deleting the date “April 10, 2017” and replacing it with “June 9, 2017,” as the Applicability date in the introductory DATES section:

A. Prohibited Transaction Exemption 86-128 for Securities Transactions Involving Employee Benefit Plans and Broker-Dealers and Prohibited Transaction Exemption 75-1, Exemptions from Prohibitions Respecting Certain Classes of Transactions Involving Employee Benefit Plans and Certain Broker-Dealers, Reporting Dealers and Banks, Parts I and II;

B. Prohibited Transaction Exemption 75-1, Exemptions from Prohibitions Respecting Certain Classes of Transactions Involving Employee Benefit Plans and Certain Broker-Dealers, Reporting Dealers and Banks, Parts III and IV;

C. Prohibited Transaction Exemption 77-4, Class Exemption for Certain Transactions Between Investment Companies and Employee Benefit Plans;

D. Prohibited Transaction Exemption 80-83, Class Exemption for Certain Transactions Involving Purchase of Securities Where Issuer May Use Proceeds to Reduce or Retire Indebtedness to Parties in Interest; and

E. Prohibited Transaction Exemption 83-1 Class Exemption for Certain Transactions Involving Mortgage Pool Investment Trusts.

F. Prohibited Transaction Exemption 75-1, Exemptions from Prohibitions Respecting Certain Classes of Transactions Involving Employee Benefit Plans and Certain Broker-Dealers, Reporting Dealers and Banks, Part V.

For the reasons set forth above, the Department amends part 2510 of subchapter B of chapter XXV of title 29 of the Code of Federal Regulations as follows:

The Port of Los Angeles has requested a temporary change to the operation of the Henry Ford Avenue railroad bridge, mile 4.8, over Cerritos Channel, at Long Beach, CA. The drawbridge navigation span provides a vertical clearance of 6 feet above Mean High Water in the closed-to-navigation position. The draw operates as required by 33 CFR 117.147(b). Navigation on the waterway is commercial, search and rescue, law enforcement, and recreational.

The drawspan will be secured in the closed-to-navigation position from 6 a.m. on April 24, 2017 to 6:30 p.m. on May 27, 2017, to allow the bridge owner to replace the operating machinery. This temporary deviation has been coordinated with the waterway users. No objections to the proposed temporary deviation 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 between 4 to 24 hours advance notice. Los Angeles Harbor can be used as an alternate route for vessels. 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.

EPA published a direct final rule document on December 19, 2016, (81 FR 91839) approving revisions to Michigan rules in Chapter 336, Part 9, submitted by the State on December 21, 2015. In this approval EPA identified in the amendatory instructions that we were revising the entries for R 336.1906, R 336.1911, and R 336.1912. However, in the CFR the entries are listed as R 339.1906, R 339.1911, and R 336.1912. Therefore, the amendatory instruction is being corrected to reflect the correct CFR reference.

In the direct final rule published in the Federal Register on December 19, 2016, (81 FR 91839), on page 91840, third column, in amendatory instruction 2, in the third line, and in the table at the top of page 91841, the entries for “R 336.1906” and “R 336.1911” are corrected to read: “R 339.1906” and “R 339.1911” respectively.

40 CFR part 52 is amended as follows:

I. Background and Overview

On December 14, 2012, EPA promulgated a revised primary annual PM2.5 NAAQS. The standard was strengthened from 15.0 micrograms per cubic meter (μg/m3) to 12.0 μg/m3. See 78 FR 3086 (January 15, 2013). Pursuant to section 110(a)(1) of the CAA, states are required to submit SIPs meeting the applicable requirements of section 110(a)(2) within three years after promulgation of a new or revised NAAQS or within such shorter period as EPA may prescribe. Section 110(a)(2) requires states to address basic SIP elements such as requirements for monitoring, basic program requirements and legal authority that are designed to assure attainment and maintenance of the NAAQS. States were required to submit such SIPs for the 2012 Annual PM2.5 NAAQS to EPA no later than December 14, 2015.1

In a proposed rulemaking published on August 1, 2016 (81 FR 50416), EPA proposed to approve portions of Florida's December 14, 2015, SIP submission for the 2012 Annual PM2.5 NAAQS. The details of Florida's submission and the rationale for EPA's actions for this final rule are explained in the August 1, 2016, proposed rulemaking. Comments on the proposed rulemaking were due on or before August 31, 2016. EPA received no adverse comments.

EPA is taking final action to approve Florida's infrastructure submissions submitted on December 14, 2015, for the 2012 Annual PM2.5 NAAQS for the infrastructure SIP requirements, with the exception of the interstate transport requirements of section 110(a)(2)(D)(i)(I) (prongs 1 and 2). EPA notes that the Agency is not approving any specific rule, but rather approving that Florida's already approved SIP meets certain CAA requirements. With respect to the interstate transport requirements of section 110(a)(2)(D)(i)(I) (prongs 1 and 2), EPA will consider these requirements in relation to Florida's 2012 Annual PM2.5 NAAQS infrastructure submission in a separate rulemaking. EPA is taking final action to approve all other elements of Florida's infrastructure SIP submissions for the 2012 Annual PM2.5 NAAQS because the submission is consistent with section 110 of the CAA.

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

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

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

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

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

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

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

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

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

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

In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications 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 June 6, 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 part 52 is amended as follows:

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

Saint Paul Park operates a petroleum refinery in Washington County, Minnesota. The refinery processes crude oil into various products such as gasoline, diesel fuel, distillate oils, asphalt, and sulfur. Saint Paul Park is in the Minneapolis-Saint Paul, Minnesota sulfur dioxide (SO2) maintenance area. This area was designated as nonattainment for the SO2 National Ambient Air Quality Standard (NAAQS) on March 3,1978 (43 FR 8962). EPA redesignated the area in 1997 to attainment of the SO2 NAAQS, making it a maintenance area (May 13, 1997, 62 FR 26230).

EPA previously approved the joint Title I/Title V document (permit number 16300003-016) as a SIP revision on December 28, 2010 (75 FR 81471)

On December 17, 2015, Minnesota submitted to EPA the joint Title I/Title V document (permit number 16300003-021), effective on November 25, 2015, as a revision to its SIP.

On January 13, 2017, Minnesota submitted a revised air dispersion modeling analysis for Saint Paul Park. The modeling analysis provides insight into the expected air quality impacts that result from the revisions at this facility.

The SIP modifications for Saint Paul Park consist of: (1) An update to the facility ownership and name, (2) restricting five combustion units to burning only natural gas or refinery gas by removing their ability to burn refinery oil, (3) an update of the modeling parameters for the facility, and (4) the addition of a new unit, the solvent deasphalting unit (EQUI 323).

First, the facility was previously listed in the Minnesota SIP as Marathon Petroleum Company, LLC, and has since changed its name to Saint Paul Park Refining Co. LLC. The facility is an indirect, wholly-owned subsidiary of Northern Tier Energy, LP.

Second, EPA is approving the removal of Saint Paul Park's ability to combust refinery oil. The five units that previously could use refinery oil are now restricted to using refinery gas or natural gas. Specifically, this applies to the numbered equipment (EQUI) 1, EQUI 3, EQUI 6, EQUI 13, and EQUI 15 units. The SO2 emission limits in the SIP for the five units were reduced to reflect the potential to emit when using refinery gas. The revised SO2 limits in pounds per hour (lb/hr), as a 3-hour rolling average, are as follows:

• Alkylation Isostripper Reboiler (EQUI 1) reduced from 64.08 lb/hr to 1.44 lb/hr.

• No. 2 Crude Vacuum Heater (EQUI 3) from 48.60 lb/hr to 2.62 lb/hr.

• No. 1 Crude Charge Heater (EQUI 6) from 52.20 lb/hr to 2.83 lb/hr.

• Hot Oil Heater (EQUI 13) from 76.50 lb/hr to 2.62 lb/hr.

• SGP Dehexanizer Reboiler (EQUI 15) from 36.0 lb/hr to 1.60 lb/hr.

Revisions to the SO2 limits also removed the pounds SO2 per million British thermal units (lbs-SO2/MMBTU) limitations for all applicable Saint Paul Park units because they were redundant. The lbs-SO2/MMBTU emission limits came from its potential to emit SO2 from the hydrogen sulfide (H2S) in the fuel. Thus, the existing H2S concentration limit caps emissions making a revised lbs-SO2/MMBTU limit unnecessary.

Third, EPA is approving updated modeling parameters for Saint Paul Park because removing the ability to burn refinery oil changes plume dispersion characteristics. Also, Boilers 7 and 8 (EQUI 42 and EQUI 43) are more efficient than presumed in the modeled design, meaning there is less waste heat resulting in lower stack gas temperatures than expected. Thus, the modeling parameters for Saint Paul Park have been revised.

Finally, the SIP request for permit number 16300003-021 allows for the installation of a solvent deasphalting unit, which includes a heater (EQUI 323) fired by refinery gas or natural gas. This unit is the only new SO2 source, which has a potential to emit of 0.80 lb SO2/hr.

The SO2 emission limitations being approved result in a decrease of 1699.59 tons per year, which includes the installation of a solvent deasphalting unit. That is a more than 25 percent reduction in SO2 emission limitations from 5697.59 to 3998.00 tons per year (permit number 16300003-016 to 16300003-021).

The modeling analysis Minnesota provided shows the area expects to continue to meet the SO2 NAAQS with the revisions being approved. The modeling analysis shows the Minneapolis-Saint Paul maintenance area expects to continue to meet the SO2 NAAQS. That result is logical, given the net emissions reduction of the revisions being approved at Saint Paul Park.

The updated modeling parameters in the permit were also revised to better reflect the current operating conditions at Saint Paul Park. Minnesota will use the updated modeling parameters to improve the accuracy of future modeling.

EPA is approving revisions to the SO2 limitations at Saint Paul Park in Washington County, Minnesota, because they meet CAA section 110(l) requirements. EPA is approving into the Minnesota SIP the portions of the joint Title I/Title V document (permit number 16300003-021), cited as “Title I Condition: 40 CFR 50.4(SO2 SIP), Title I Condition: 40 CFR pt. 52, subp. Y.” This approval replaces the conditions of Permit Number 16300003-016 as approved on December 28, 2010 into the Minnesota SIP. 75 FR 81471.

The revisions include changes to the ownership and facility name, removal of the ability to burn refinery oil, addition of a new unit, and updates to the modeling parameters for the facility. These revisions are expected to reduce potential SO2 emissions from Saint Paul Park by more than 25 percent.

We are publishing this action without prior proposal because we view this as a noncontroversial amendment and anticipate no adverse comments. However, in the proposed rules section of this Federal Register publication, we are publishing a separate document that will serve as the proposal to approve the state plan if relevant adverse written comments are filed. This rule will be effective June 6, 2017 without further notice unless we receive relevant adverse written comments by May 8, 2017. If we receive such comments, we will withdraw this action before the effective date by publishing a subsequent document that will withdraw the final action. All public comments received will then be addressed in a subsequent final rule based on the proposed action. EPA will not institute a second comment period. Any parties interested in commenting on this action should do so at this time. Please note that if EPA receives adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment. If we do not receive any comments, this action will be effective June 6, 2017.

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

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

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

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 6, 2017. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. Parties with objections to this direct final rule are encouraged to file a comment in response to the parallel notice of proposed rulemaking for this action published in the proposed rules section of today's Federal Register, rather than file an immediate petition for judicial review of this direct final rule, so that EPA can withdraw this direct final rule and address the comment in the proposed rulemaking. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2)).

40 CFR part 52 is amended as follows:

On December 14, 2012, EPA promulgated a revised primary annual PM2.5 NAAQS. The standard was strengthened from 15.0 micrograms per cubic meter (μg/m3) to 12.0 μg/m3. See 78 FR 3086 (January 15, 2013). Pursuant to section 110(a)(1) of the CAA, states are required to submit SIPs meeting the applicable requirements of section 110(a)(2) within three years after promulgation of a new or revised NAAQS or within such shorter period as EPA may prescribe. Section 110(a)(2) requires states to address basic SIP elements such as requirements for monitoring, basic program requirements and legal authority that are designed to assure attainment and maintenance of the NAAQS. States were required to submit such SIPs for the 2012 Annual PM2.5 NAAQS to EPA no later than December 14, 2015.

In a proposed rulemaking published on July 21, 2016 (81 FR 47314), EPA proposed to approve portions of North Carolina's December 4, 2015, SIP submission for the 2012 Annual PM2.5 NAAQS with the exception of the interstate transport requirements of section 110(a)(2)(D)(i)(I) and (II) (prongs 1 through 4) and preconstruction prevention of significant deterioration (PSD) permitting requirements for major sources of section 110(a)(2)(C) and (J). On September 14, 2016 (81 FR 63107), EPA finalized approval in part and disapproval in part of North Carolina's December 4, 2015, infrastructure SIP submission regarding the PSD permitting requirements for major sources of sections 110(a)(2)(C), prong 3 of D(i), and (J) for the 2012 Annual PM2.5 NAAQS. Additionally, on June 3, 2016, EPA finalized a rule related to the prong 4 element of North Carolina's December 4, 2015, SIP submission for the 2012 Annual PM2.5 NAAQS. See 81 FR 35634. Therefore, EPA is not taking final action pertaining to sections 110(a)(2)(C), prongs 3 and 4 of D(i) and (J) for North Carolina for the 2012 Annual PM2.5 NAAQS in this action. With respect to the interstate transport requirements of section 110(a)(2)(D)(i)(I) (prongs 1 and 2), EPA will consider these requirements in relation to North Carolina's 2012 Annual PM2.5 NAAQS infrastructure submission in a separate rulemaking. The details of North Carolina's submission and the rationale for EPA's actions for this final rule are explained in the July 21, 2016, proposed rulemaking. Comments on the proposed rulemaking were due on or before August 22, 2016. EPA received no comments, adverse or otherwise.

EPA is taking final action to approve North Carolina's infrastructure submission submitted on December 4, 2015, for the 2012 Annual PM2.5 NAAQS for the infrastructure SIP requirements, with the exception of the interstate transport requirements of section 110(a)(2)(D)(i)(I) and (II) (prongs 1 through 4) and preconstruction PSD permitting requirements for major sources of section 110(a)(2)(C) and (J). EPA is taking final action to approve all other elements of North Carolina's infrastructure SIP submission for the 2012 Annual PM2.5 NAAQS because the submission is consistent with section 110 of the CAA. EPA notes that the Agency is not approving any specific rule, but rather approving that North Carolina's already approved SIP meets certain CAA requirements.

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

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

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

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

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

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

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

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

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

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

In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications 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 June 6, 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 part 52 is amended as follows:

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

In this rule, EPA takes final action on the submission from IDEM, dated November 18, 2016, requesting that EPA approve revisions to 326 IAC 2-6 (“Emission Reporting”) into Indiana's SIP. Specifically, IDEM has requested that EPA approve into the SIP a change to the applicability section at 326 IAC 2-6-1 that extends the emissions statements rule to Lawrenceburg Township, Dearborn County. The revised rule also contains minor formatting changes that clarify references to related rules.

IDEM made this submission to satisfy requirements under Section 182(a)(3)(B) of the CAA, which mandates that each state submit a revision to its SIP to require that the owners or operators of applicable stationary sources of nitrogen oxides (NOX) or volatile organic compounds (VOCs) in ozone nonattainment areas provide annual emissions statements. This requirement applies in all ozone nonattainment areas to any source emitting at least 25 tons per year of VOCs or NOX. On May 21, 2012, EPA designated the portion of Dearborn County that is within Lawrenceburg Township as a nonattainment area for the 2008 ozone NAAQS (77 FR 30088). IDEM's submission addresses Indiana's obligation under Section 182(a)(3)(B) of the CAA to submit a SIP revision applying emissions statements requirements to Lawrenceburg Township. The background for today's action is discussed in more detail in EPA's proposal, dated December 27, 2016 (81 FR 95080).

EPA provided a 30-day review and comment period for the December 27, 2016, proposed rule. The comment period ended on January 26, 2017. We received one comment on the proposed rule, which expressed support for these revisions. The commenter wrote that this rule ”strengthens policy that seeks to protect and maintain air quality under standards that are stringent and necessary for [maintaining] the health of the citizenry.”

EPA is approving into Indiana's SIP the revisions to 326 IAC 2-6-1 submitted to EPA on November 18, 2016.

In this rule, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of the Indiana Regulations described in the amendments to 40 CFR part 52 set forth below. Therefore, these materials have been approved by EPA for inclusion in the State implementation plan, have been incorporated by reference by EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of EPA's approval, and will be incorporated by reference by the Director of the Federal Register in the next update to the SIP compilation.1 EPA has made, and will continue to make, these documents generally available through www.regulations.gov, and/or at the EPA Region 5 Office (please contact the person identified in the For Further Information Contact section of this preamble for more information).

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

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

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 6, 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 part 52 is amended as follows:

On March 25, 1999, TDEC submitted a change to the Tennessee rules to EPA for approval and incorporation into the Tennessee SIP. Specifically, the submittal includes a change to remove a portion of text from Tennessee Air Pollution Control Regulation (TAPCR) Rule 1200-3-20-.02, “Reasonable Measures Required,” at paragraph (1). Existing paragraph (1) covers measures that air contaminant sources must take during periods of startup and shutdown and the treatment of equipment failures that are not considered to be malfunctions. This provision was originally submitted by TDEC as part of Chapter 1200-3-20, “Limits on Emissions Due to Malfunctions, Start-ups, and Shutdowns” on February 13, 1979, and approved by EPA on February 6, 1980 (45 FR 8004).1

The current SIP-approved version of TAPCR 1200-3-20-.02 provides, in part, that for sources that are in or are significantly affecting a nonattainment area, “failures that are caused by poor maintenance, careless operation or any other preventable upset condition or preventable equipment breakdown shall not be considered malfunctions, and shall be considered in violation of the emission standard exceeded and this rule.” The March 25, 1999, submittal modifies the treatment of those equipment failures that are not considered malfunctions by removing the statement that such failures “shall be considered in violation of the emission standard exceeded and this rule.” 2 This rule change simply eliminates language indicating that a source which experiences an equipment failure is automatically in violation of applicable emission standards and the Tennessee rule. EPA believes this change is appropriate because an instance of equipment failure does not always result in an exceedance of an emission standard. In addition, EPA notes that, in accordance with TAPCR 1200-3-13-.01, any preventable failure to properly operate control equipment may still be in violation of emission control requirements contained in specific emission standards of the Tennessee SIP.

This SIP revision does not provide an exemption for any applicable emission standards, nor does it modify any applicable requirements for air contaminant sources. With this change, all applicable emission standards will continue to apply during all times. EPA is approving this revision because it is consistent with the CAA.

In this action, EPA is not approving or disapproving revisions to any existing pollutant emission limitations that apply during periods of startup, shutdown and malfunction. EPA notes that on June 12, 2015, the Agency published a formal finding that a number of states, including Tennessee, have SIPs with SSM provisions that are contrary to the CAA and existing EPA guidance. See 80 FR 33840. Accordingly, EPA issued a formal “SIP call” requiring the affected states to make a SIP submission to correct the SSM regulations identified by EPA as being deficient. Id. In that final action, EPA determined that TAPCR Chapters 1200-3-20 and 1200-3-5 have provisions that are contrary to the CAA, specifically TAPCR 1200-3-20-.07(1), 1200-3-20-.07(3) and 1200-3-5-.02(1). This direct final action only removes language from 1200-3-20-.02(1) indicating that an equipment failure that does not qualify as a malfunction is an automatic violation. Therefore, this final action does not impact the provisions of the Tennessee regulations implicated in the SSM SIP call and has no effect on EPA's June 12, 2015, finding of inadequacy regarding Tennessee's SIP.

In this rule, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of TAPCR 1200-3-20-.02(1), entitled “Reasonable Measures Required,” effective November 11, 1997, which removed a statement that preventable failures of process or control equipment were presumptively in violation of applicable emission standards and the rule. Therefore, these materials have been approved by EPA for inclusion in the SIP, have been incorporated by reference by EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of EPA's approval, and will be incorporated by reference by the Director of the Federal Register in the next update to the SIP compilation.3 EPA has made, and will continue to make, these materials generally available through www.regulations.gov and/or at the EPA Region 4 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

EPA is approving a change to the Tennessee SIP at TAPCR 1200-3-20-.02, submitted March 25, 1999, because it is consistent with the CAA and federal regulations. EPA is publishing this rule without prior proposal because the Agency views this as a noncontroversial submittal and anticipates no adverse comments. However, in the proposed rules section of this Federal Register publication, EPA is publishing a separate document that will serve as the proposal to approve the SIP revision should adverse comments be filed. This rule will be effective June 6, 2017 without further notice unless the Agency receives adverse comments by May 8, 2017.

If EPA receives such comments, then EPA will publish a document withdrawing the final rule and informing the public that the rule will not take effect. All public comments received will then be addressed in a subsequent final rule based on the proposed rule. EPA will not institute a second comment period. Parties interested in commenting should do so at this time. If no such comments are received, the public is advised that this rule will be effective on June 6, 2017 and no further action will be taken on the proposed rule.

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

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

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

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

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

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

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

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

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

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

The SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications 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 June 6, 2017. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. Parties with objections to this direct final rule are encouraged to file a comment in response to the parallel notice of proposed rulemaking for this action published in the proposed rules section of today's Federal Register, rather than file an immediate petition for judicial review of this direct final rule, so that EPA can withdraw this direct final rule and address the comment in the proposed rulemaking. This action may not be challenged later in proceedings to enforce its requirements. See section 307(b)(2).

40 CFR part 52 is amended as follows:

On December 14, 2012 (78 FR 3086, January 15, 2013), EPA promulgated a revised primary annual PM2.5 NAAQS. The standard was strengthened from 15.0 micrograms per cubic meter (μg/m3) to 12.0 μg/m3. Pursuant to section 110(a)(1) of the CAA, States are required to submit SIPs meeting the applicable requirements of section 110(a)(2) within three years after promulgation of a new or revised NAAQS or within such shorter period as EPA may prescribe. Section 110(a)(2) requires states to address basic SIP elements such as requirements for monitoring, basic program requirements and legal authority that are designed to assure attainment and maintenance of the NAAQS. States were required to submit such SIPs for the 2012 Annual PM2.5 NAAQS to EPA no later than December 14, 2015.

In a proposed rulemaking published August 23, 2016 (81 FR 57509), EPA proposed to approve portions of South Carolina's December 18, 2015, SIP submission for the 2012 Annual PM2.5 NAAQS, with the exception of the interstate transport requirements of section 110(a)(2)(D)(i)(I) and (II) (prongs 1, 2, and 4), for which EPA did not propose any action. On August 22, 2016 (81 FR 56512) EPA conditionally approved South Carolina's December 18, 2015, infrastructure SIP submission regarding prong 4 of D(i) for the 2012 Annual PM2.5 NAAQS. Therefore, EPA is not taking any action today pertaining to prong 4. With respect to the interstate transport requirements of section 110(a)(2)(D)(i)(I) (prongs 1 and 2), EPA will consider these requirements in relation to South Carolina's 2012 Annual PM2.5 NAAQS infrastructure submission in a separate rulemaking. The details of South Carolina submission and the rationale for EPA's actions for this final rule are explained in the August 23, 2016, proposed rulemaking. Comments on the proposed rulemaking were due on or before September 22, 2016. EPA did not receive any comments, adverse or otherwise.

With the exception of the interstate transport requirements of section 110(a)(2)(D)(i)(I) and (II) (prongs 1, 2, and 4), EPA is taking final action to approve South Carolina's infrastructure submission for the 2012 Annual PM2.5 NAAQS. EPA notes that the Agency is not approving any specific rule, but rather approving that South Carolina's already approved SIP meets certain CAA requirements. EPA is taking final action to approve portions of South Carolina's infrastructure SIP submission for the 2012 Annual PM2.5 NAAQS because it is consistent with section 110 of the CAA.

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

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

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

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

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

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

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

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

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

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

In addition, this proposed action for the state of South Carolina does not have Tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). The Catawba Indian Nation Reservation is located within the State of South Carolina. Pursuant to the Catawba Indian Claims Settlement Act, South Carolina statute 27-16-120, “all state and local environmental laws and regulations apply to the [Catawba Indian Nation] and Reservation and are fully enforceable by all relevant state and local agencies and authorities.” However, EPA has determined that this rule does not have substantial direct effects on an Indian Tribe because this action is not approving any specific rule, but rather approving that South Carolina's already approved SIP meets certain CAA requirements. EPA notes this action will not impose substantial direct costs on Tribal governments or preempt Tribal law.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this 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 June 6, 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 part 52 is amended as follows:

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA.

On February 15, 2017, at 82 FR 10727, EPA proposed to approve the removal of the 7.8 psi RVP fuel requirements under OAC 3745-72-1 to 8 from the Ohio ozone SIP before the beginning of the 2017 ozone control period. The 7.8 psi RVP fuel requirements specifically apply to gasoline distributed in the Cincinnati and Dayton areas in Ohio.

To support the removal of the 7.8 psi RVP fuel program requirements from the SIP, the revision included amendments of OAC 3745-72-01 (Applicability), as effective on August 1, 2016; a summary of the Ohio-specific analyses using EPA's Motor Vehicle Emissions Simulator (MOVES) model to quantify the emissions impact associated with removing the 7.8 psi RVP fuel program in Cincinnati and Dayton; and a section 110(l) demonstration that includes offset emissions documentation.

Our February 15, 2017, proposed rule provided a 30-day review and comment period. The comment period closed on March 17, 2017. EPA received comments from three parties during the public comment period. One comment was fully supportive of this action. A second comment received was completely outside of the scope of this action and therefore is not being addressed as part of this final action. We are responding to the remaining comments received.

Comment: The commenter asks how the proposed standards compare to the standards of other states. The commenter further asks whether there are other states who have undergone similar changes, and if so what was the long-term effect of such changes.

Response: Information on areas where EPA has approved requests to remove the requirement to use low RVP gasoline from a state SIP, such as the states of Georgia and Illinois, can be found on EPA's Web site at the following location: (https://www.epa.gov/gasoline-standards/gasoline-reid-vapor-pressure). It also contains a state-by-state RVP table that lists and compares all current federally required volatility programs, as well as all EPA-approved SIP fuel programs.

Regarding the long-term effect of such changes, any SIP revision submitted to EPA for consideration needs to include a demonstration of non-interference with the National Ambient Air Quality Standards (NAAQS) under section 110(l) of the CAA to ensure that impacts on the NAAQS are considered. Individual rulemakings on each action are published in the Federal Register and would contain specific emissions impacts for each of the situations.

Comment: The commenter is seeking EPA's concurrence that the unused emission reduction credits outlined in our action and generated in the greater Cincinnati, Ohio area can be used to satisfy the emission reductions that must be shown to demonstrate noninterference as part of a future SIP revision removing Reformulated Gasoline requirements in northern Kentucky.

Response: EPA is not taking a position on the use of credits in a future action since such issue is outside the scope of this action. Any subsequent use of emission reduction credits outlined in our action should be coordinated between Ohio and Kentucky when a request to adjust requirements is made.

EPA is approving a SIP revision submitted by Ohio EPA on December 19, 2016, removing the state's 7.8 psi RVP fuel requirement for gasoline distributed in the Cincinnati and Dayton areas. The SIP revision also includes a section 110(l) demonstration that uses emissions credits from industrial facilities that have shut down or permanently reduced emissions in Dayton and Cincinnati to offset potential increases in emissions resulting from removing the state's 7.8 psi RVP fuel requirements. Upon approval of this SIP revision, 3.51 tons per year (tpy) of volatile organic compound (VOC) emissions credits from the Miami Valley Publishing Company facility, 4.86 tpy of VOC from the National Oilwell Varco facility, 40.50 tpy of oxides of nitrogen (NOX) from the MillerCoors LLC facility and 21.72 tpy of NOX from the Wright-Patterson Air Force Base facility will be permanently retired. This action is effective on April 7, 2017. EPA is approving Ohio's removal of the 7.8 psi RVP fuel requirement as a component of the Ohio ozone SIP because EPA has found that that removal of the 7.8 psi RVP fuel requirements would not interfere with attainment or maintenance of any of the National Ambient Air Quality Standards in the Cincinnati and Dayton areas and would not interfere with any other applicable requirement of the CAA, and thus, are approvable under CAA section 110(l). EPA also finds that there is good cause for this action to become effective immediately upon publication. The immediate effective date for this action is authorized under 5 U.S.C. 553(d)(3) which 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.” The purpose of the 30-day waiting period prescribed in 553(d) is to give affected parties a reasonable time to adjust their behavior and prepare before the final rule takes effect. RVP control requirements are summer control programs that are generally implemented during the summer ozone season beginning on June 1 at retail gasoline stations. In order to meet the June 1st requirement at retail gasoline stations, upstream fuel distributers need to be able to have compliant RVP fuel available starting on May 1st. Making this rule effective before the beginning of the summer ozone season, will allow the regulated industry to avoid having to address multiple RVP requirements during the 2017 ozone season. For this reason, EPA finds good cause under 5 U.S.C. 553(d)(3) for this action to become effective on the date of publication of this action.

As explained at proposal, EPA is required to remove a fuel type from the Boutique Fuels List if it ceases to be included in a SIP. (CAA section 211(c)(4)(C)(v)(III). Ohio's 7.8 psi RVP fuel program that is the subject of this final rule is one of the fuel types on the Boutique Fuels List. EPA has also approved the 7.8 psi RVP fuel type into several states SIPs. On the effective date of this rule, Ohio's 7.8 psi RVP fuel rule will be removed from the approved SIP and we will also remove the entry for Ohio's RVP rule from the boutique fuel list which is available at: https://www.epa.gov/gasoline-standards/state-fuels. However, the 7.8 psi RVP fuel type will remain on the boutique fuel list because it continues to be included in several other states SIPs. We will also update the Gasoline Reid Vapor Pressure Web page (https://www.epa.gov/gasoline-standards/gasoline-reid-vapor-pressure) on the effective date of this final rule to remove the counties in the Cincinnati and Dayton ozone areas from the list of areas where lower RVP gasoline is required.

As previously explained, EPA is required to remove a fuel type from the Boutique Fuels List when it ceases to be included in a SIP. The 7.2 psi RVP fuel type is included on the Boutique Fuels List. (See 71 FR 78199). On October 6, 2014, EPA published a direct final rule to remove Illinois' 7.2 psi low RVP regulation from the State's SIP for its portion of the St. Louis, MO-IL ozone area. (See 79 FR 60065.) The removal became effective on December 5, 2014.

Illinois was the only state with such a fuel type in its approved SIP. EPA intends to publish a separate notice to remove the 7.2 psi RVP fuel type from the list of boutique fuels.2 Removal of this fuel type from the list creates room that could allow for a new fuel type to be approved and added to the list. Approval of a new fuel type into a SIP would be subject to certain restrictions as described in the December 28, 2006, Federal Register notice that established the list of boutique fuels. (See 71 FR 78193).

In this rule, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of the Ohio Regulations described in the proposed amendments to 40 CFR part 52 set forth below. Therefore, these materials have been approved by EPA for inclusion in the SIP, have been incorporated by reference by EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of EPA's approval, and will be incorporated by reference by the Director of the Federal Register in the next update to the SIP compilation.3 EPA has made, and will continue to make, these materials generally available through www.regulations.gov and/or at the EPA Region 5 Office (please contact the person identified in the For Further Information Contact section of this preamble for more information).

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

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

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 6, 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 part 52 is amended as follows:

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

On March 12, 2008, EPA promulgated a revised 8-hour ozone NAAQS of 0.075 parts per million (ppm). See 73 FR 16436 (March 27, 2008). On July 20, 2012, EPA designated nonattainment areas for the 2008 ozone NAAQS (77 FR 30088, May 21, 2012, and 77 FR 34221, June 11, 2012). The Chicago-Naperville, IL-IN-WI area was designated as a marginal nonattainment area for the 2008 ozone NAAQS. The Indiana portion of this ozone nonattainment area consists of Lake and Porter Counties.

CAA sections 172(c)(3) and 182(a)(1), 42 U.S.C. 7502(c)(3) and 7511a(a)(1), require states to develop and submit, as SIP revisions, comprehensive, accurate, and complete emissions inventories for all areas designated as nonattainment for the ozone NAAQS. An emissions inventory for ozone is an estimation of actual emissions of air pollutants that contribute to the formation of ozone in an area. Ozone is a gas that is formed by the reaction of Volatile Organic Compounds (VOC) and Oxides of Nitrogen (NOX) in the atmosphere in the presence of sunlight (VOC and NOX are referred to as ozone precursors). Therefore, an emissions inventory for ozone covers the emissions of VOC and NOX within an ozone nonattainment area. VOC is emitted by many types of pollution sources, including power plants, industrial sources, on-road and off-road mobile sources, smaller stationary sources, collectively referred to as area sources, and biogenic sources.1 NOX is primarily emitted by combustion sources, both stationary and mobile.

The emissions inventory provides emissions data for a variety of air quality planning tasks, including establishing baseline emission levels for calculating emission reduction targets needed to attain the NAAQS and for calculating emission reduction targets needed to meet Reasonable Further Progress (RFP) requirements, determining emission inputs for ozone air quality modeling analyses, and tracking emissions over time to determine progress toward achieving air quality and emission reduction goals. As stated above, the CAA requires the states to submit emissions inventories for areas designated as nonattainment for ozone.

For the 2008 ozone NAAQS, EPA has recommended that states use 2011 as a base year for the emissions estimates (78 FR 34178, 34190, June 6, 2013). However, EPA also allows states to submit base year emissions for other years during a recent ozone standard violation period. States are required to submit estimates of VOC and NOX emissions for four general classes of anthropogenic sources in their emissions inventories: Stationary point sources; area sources; on-road mobile sources; and off-road mobile sources.

Section 182(a)(3)(B) of the CAA requires states with ozone nonattainment areas to submit revisions to their SIP to require the owner or operator of each major stationary source of NOX or VOC to provide the state with an annual statement documenting the actual emissions of NOX and VOC from their source. Under section 182(a)(3)(B)(ii), a state may waive the emissions statement requirement for any class or category of stationary sources which emits less than 25 tons per year of VOC or NOX if the state, in its base year emissions inventory, provides an inventory of emissions from such class or category of sources. States and EPA have generally interpreted this waiver provision to apply to sources (without specification of a specific source class or source category) emitting less than 25 tons per year of VOC or NOX.

Many states adopted these emissions statement rules for the 1-hour ozone NAAQS. For these states, EPA is accepting certifications that their previously adopted emissions statement rules remain in place and are adequate to meet the emissions statement rule requirement under the 2008 ozone standard.

On June 15, 2016, IDEM submitted an ozone redesignation request for Lake and Porter Counties for the 2008 ozone NAAQS. Included in this request was documentation of a 2011 VOC and NOX base year emissions inventory for Lake and Porter Counties intended to meet the emissions inventory requirement of CAA section 182(a)(1). Preliminary monitoring data for 2016 indicates that the Chicago-Naperville, IL-IN-WI area is violating the 2008 ozone standard with 2014-2016 data. Therefore, EPA is not taking action on the ozone redesignation request portion of this June 15, 2016, submittal at this time. We are, however, proceeding with rulemaking on the base year VOC and NOX emissions inventory portion of the submittal.

Table 1 summarizes the 2011 VOC and NOX emissions for Lake and Porter Counties in units of tons of emissions per ozone season 2 day documented in Indiana's submittal.

Indiana estimated emissions for all source categories, except on-road mobile sources, using annual emissions data contained in EPA's 2011 National Emissions Inventory (NEI) database. To document the derivation of these emissions data, IDEM included EPA's “Technical Support Document (TSD) Preparation of Emissions Inventories for the Version 6.2 2011 Emissions Modeling Platform” (August 2015) in the June 15, 2016, submittal. The Ozone NAAQS Emissions Modeling Platform (2011v6.2) was used by EPA to collect or estimate emissions data for the 2011 NEI.

For point sources (EGUs and non-EGUs), IDEM calculates and stores emissions data annually in the state's Emissions Inventory Tracking System (EMITS) and annually collects such data through Indiana's Emissions Statement program. The point source data for 2011 were submitted through the Emissions Inventory System (EIS) gateway to the 2011 NEI. The EPA has supplemented the point source data in the 2011 NEI using emissions data from other databases, such as the Clean Air Markets emissions database.

The area source emissions in the 2011 NEI were developed by the EPA, with comments provided by the states.

Non-road mobile source emissions data were developed by the EPA using the National Mobile Inventory Model (NMIM).

On-road mobile source emissions were supplied by the Northwest Indiana Regional Planning Commission (NIRPC) and were developed using EPA's Motor Vehicle Emission Simulator, version 2014 (MOVES2014), emissions model and traffic data provided by the Indiana Department of Transportation (INDOT).

All annual emissions data were temporally allocated to ozone season days using temporal files found in EPA's Modeling Clearinghouse, http://www3.eap.gov/ttn/chief/emch/index.html.

It is noted that, in addition to documenting county emissions totals, IDEM has also listed VOC and NOX emissions by Source Classification Code (SCC) and emissions from specific major source facilities (point sources).

On June 15, 2016, through a separate submittal, IDEM submitted a certification letter confirming that Indiana's existing Emissions Reporting Rule is currently being implemented and is adequate to meet the CAA section 182(a)(3)(B) emissions reporting requirement. IDEM noted that the Emissions Reporting Rule, 326 Indiana Administrative Code (IAC) 2-6, was adopted by Indiana's Air Pollution Control Board (APCB) on December 3, 2003. This rule is part of Indiana's SIP. The rule requires sources located in Lake and Porter Counties that emit either NOX or VOC equal to or greater than 25 tons per year to annually report their actual emissions to IDEM.

IDEM has certified in its June 15, 2016, letter that 326 IAC 2-6 satisfies CAA section 182(a)(3)(B) emissions reporting requirements for Lake and Porter Counties for the 2008 ozone NAAQS. Included with the certification letter is a copy of rule 326 IAC 2-6.

In accordance with sections 172(c)(3) and 182(a)(1) of the CAA, Indiana's submittal contains a comprehensive, accurate, and current inventory of actual VOC and NOX emissions for all relevant sources in Lake and Porter Counties. The state documented the general procedures used to estimate the ozone season day emissions for each of the major source categories and for SCCs and point source facilities. IDEM provided detailed model input data used to derive on-road emissions. The documentation of the emissions estimation procedures and data sources has been determined to be adequate.

IDEM has submitted evidence that it provided the public with an opportunity to request a public hearing and to comment on the material contained in the June 15, 2016, submittal. A public hearing was not requested and IDEM received no comments on the submission. Therefore, the state has complied with public notice and review requirements of the CAA.

Based on the adequacy of the emissions inventories documentation and on the evidence that the public has been given an opportunity to comment on the emissions inventories, the base year emissions inventories are approvable.

EPA approved Indiana's emissions statement rule, 326 IAC 2-6, into the Indiana SIP on March 27, 2007 (72 FR 14678), and it is currently being implemented. The rule requires sources of VOC and NOX in Lake and Porter Counties to annually report these emissions to the state if the sources emit VOC or NOX equaling or exceeding 25 tons per year. In addition, it is noted that Indiana typically reports point source emissions to the NEI with source cutoffs well below 25 tons per year, covering VOC and NOX emissions from sources that are not required to submit annual emissions statements. Therefore, Indiana's rule 326 IAC 2-6 meets the requirements of CAA section 182(a)(3)(B) and is approvable.

EPA is approving the emissions inventory submitted by Indiana and specified in Table 1 above as meeting the requirements of sections 172(c)(3) and 182(a)(1) of the CAA for Lake and Porter Counties for the 2008 ozone NAAQS. We are also approving Indiana's certification that the state has an emissions statement rule in its SIP for VOC and NOX stationary sources in Lake and Porter Counties, in accordance with the CAA section 182(a)(3)(B).

We are publishing this action without prior proposal because we view this as a noncontroversial amendment and anticipate no adverse comments. However, in the proposed rules section of this Federal Register publication, we are publishing a separate document that will serve as the proposal to approve the state plan if relevant adverse written comments are filed. This rule will be effective June 6, 2017 without further notice unless we receive relevant adverse written comments by May 8, 2017. If we receive such comments, we will withdraw this action before the effective date by publishing a subsequent document that will withdraw the final action. All public comments received will then be addressed in a subsequent final rule based on the proposed action. EPA will not institute a second comment period. Any parties interested in commenting on this action should do so at this time. Please note that, if EPA receives adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment. If we do not receive any comments, this action will be effective June 6, 2017.

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

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

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 6, 2017. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. Parties with objections to this direct final rule are encouraged to file a comment in response to the parallel notice of proposed rulemaking for this action published in the proposed rules section of today's Federal Register, rather than file an immediate petition for judicial review of this direct final rule, so that EPA can withdraw this direct final rule and address the comment in the proposed rulemaking. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

40 CFR part 52 is amended as follows:

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

On July 22, 2016, Ohio EPA submitted a request to EPA to redesignate the Cincinnati-Hamilton area to attainment for the 1997 PM2.5 annual standard, and to approve updates to the maintenance plan for the area. In a notice published on January 4, 2017 (82 FR 792), EPA proposed to redesignate the area and approve several actions related to the redesignation (82 FR 792). Additional background and details regarding this final action can be found in the January 4, 2017, proposed rule.

Comment: EPA received one comment on the proposed redesignation. The commenter supported EPA's proposal to redesignate the Ohio portion of the Cincinnati-Hamilton area.

Response: EPA agrees with the comment, and no changes were made to the final action based on this comment.

EPA is taking several actions related to redesignation of the Cincinnati-Hamilton area to attainment for the 1997 annual PM2.5 NAAQS.

EPA has previously approved Ohio's PM2.5 maintenance plan and motor vehicle emission budgets for the Cincinnati-Hamilton area. EPA has determined that this plan and budgets are still applicable.

EPA has previously approved the 2005 primary PM2.5, NOX, and SO2 base year emissions inventory. EPA is approving Ohio's updated emissions inventory which includes emissions inventories for VOCs and ammonia from 2007. EPA has determined that Ohio meets the emissions inventory requirement under section 107(d)(3)(E)(iii).

EPA is approving the RACM/RACT portion of Ohio's prior Cincinnati-Hamilton area attainment plan SIP revision as providing adequate RACM/RACT consistent with the provisions of 40 CFR 51.1010(b), because Ohio has demonstrated with a RACM/RACT analysis that no further control measures would advance the attainment date in the area.

In The Fine Particulate Matter National Ambient Air Quality Standards: State Implementation Plan Requirements final rule (final PM2.5 SIP requirements rule), EPA revoked the 1997 primary annual PM2.5 NAAQS in areas that had always been attainment for that NAAQS, and in areas that had been designated as nonattainment but that were redesignated to attainment before October 24, 2016, the rule's effective date. (See 81 FR 58010, August 24, 2016.) EPA also finalized a provision that revokes the 1997 primary annual PM2.5 NAAQS in areas that are redesignated to attainment for that NAAQS after October 24, 2016, effective on the effective date of the redesignation of the area to attainment for that NAAQS. (See 40 CFR 50.13(d).)

EPA is redesignating the Ohio portion of the Cincinnati-Hamilton area to attainment for the 1997 annual PM2.5 NAAQS and approving the CAA section 175A maintenance plan for the 1997 primary annual PM2.5 NAAQS for the reasons described elsewhere in the January 4, 2017, proposed action.1 The 1997 primary annual PM2.5 NAAQS will be revoked in the area on the effective date of this redesignation. Beginning on that date, the area will no longer be subject to transportation or general conformity requirements for the 1997 annual PM2.5 NAAQS due to the revocation of the primary NAAQS. (See 81 FR 58125, August 24, 2016.) The area will be required to implement the CAA section 175A maintenance plan for the 1997 primary annual PM2.5 NAAQS and the PSD program for the 1997 annual PM2.5 NAAQS. Once approved, the maintenance plan could only be revised if the revision meets the requirements of CAA section 110(l) and, if applicable, CAA section 193. The area would not be required to submit a second 10-year maintenance plan for the 1997 primary annual PM2.5 NAAQS. (See 81 FR 58144, August 24, 2016.)

In accordance with 5 U.S.C. 553(d), EPA finds there is good cause for these actions to become effective immediately upon publication. This is because a delayed effective date is unnecessary due to the nature of a redesignation to attainment, which relieves the area from certain CAA requirements that would otherwise apply to it. The immediate effective date for this action is authorized under both 5 U.S.C. 553(d)(1), which provides that rulemaking actions may become effective less than 30 days after publication if the rule “grants or recognizes an exemption or relieves a restriction,” and section 553(d)(3), which 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.” 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. Today's rule, however, does not create any new regulatory requirements such that affected parties would need time to prepare before the rule takes effect. Rather, today's rule relieves the state of planning requirements for this ozone nonattainment area. For these reasons, EPA finds good cause under 5 U.S.C. 553(d)(3) for these actions to become effective on the date of publication of these actions.

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

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

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

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

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

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

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

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

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

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

In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because redesignation is an action that affects the status of a geographical area and does not impose any new regulatory requirements on tribes, impact any existing sources of air pollution on tribal lands, nor impair the maintenance of ozone national ambient air quality standards in tribal lands.

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 June 6, 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 part 52 and 81 are amended as follows:

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

This rule takes action on the submission from IDEM, dated February 23, 2016, and supplemented on May 4, 2016, requesting redesignation of the Indiana portion of the Cincinnati area to attainment for the 2008 ozone standard. The background for today's action is discussed in detail in EPA's proposal, dated December 27, 2016 (81 FR 95081). In that rulemaking, we noted that, under EPA regulations at 40 CFR part 50, the 2008 ozone NAAQS is attained in an area when the 3-year average of the annual fourth highest daily maximum 8-hour average concentration is equal to or less than 0.075 parts per million (ppm), when truncated after the thousandth decimal place, at all of the ozone monitoring sites in the area. (See 40 CFR 50.15 and appendix P to 40 CFR part 50.) Under the CAA, EPA may redesignate nonattainment areas to attainment if sufficient complete, quality-assured data are available to determine that the area has attained the standard and if it meets the other CAA redesignation requirements in section 107(d)(3)(E). The proposed rule at 81 FR 95081 provides a detailed discussion of how Indiana has met these CAA requirements.

As discussed in the proposal at 81 FR 95081, quality-assured and certified monitoring data for 2013-2015 and preliminary data for 2016 show that the Cincinnati area has attained and continues to attain the 2008 ozone standard. In the maintenance plan submitted for the area, Indiana has demonstrated that the ozone standard will be maintained in the area through 2030. Finally, Indiana and Ohio have adopted 2020 and 2030 VOC and NOX MVEBs for the Indiana and Ohio portion of the Cincinnati area that are supported by Indiana's maintenance demonstration.

On June 1, 2016, Indiana submitted a separate SIP revision to address emissions statements rules required by CAA section 182(a)(3)(B). EPA proposed approval of that June 1, 2016, submission in a separate proposed rule also published on December 27, 2016 (81 FR 95080). As discussed in the redesignation proposal at 81 FR 95081, emissions statements rules must be SIP-approved on or before the date EPA completes final rulemaking approving redesignation requests. Today, in a separate rule, EPA is finalizing approval of the emissions statements rulemaking. That approval allows EPA to proceed with this redesignation approval.

EPA provided a 30-day review and comment period for the December 27, 2016, proposed rule. The comment period ended on January 26, 2017. We received no comments on the proposed rule.

EPA is determining that the Cincinnati nonattainment area is attaining the 2008 ozone standard, based on quality-assured and certified monitoring data for 2013-2015 and that the Indiana portion of this area has met the requirements for redesignation under section 107(d)(3)(E) of the CAA. EPA is thus changing the legal designation of the Indiana portion of the Cincinnati area from nonattainment to attainment for the 2008 ozone standard. EPA is also approving, as a revision to the Indiana SIP, the state's maintenance plan for the area. The maintenance plan is designed to keep the Cincinnati area in attainment of the 2008 ozone NAAQS through 2030. Finally, EPA finds adequate and is approving the newly-established 2020 and 2030 MVEBs for the Indiana and Ohio portion of the Cincinnati area.

In accordance with 5 U.S.C. 553(d), EPA finds there is good cause for these actions to become effective immediately upon publication. This is because a delayed effective date is unnecessary due to the nature of a redesignation to attainment, which relieves the area from certain CAA requirements that would otherwise apply to it. The immediate effective date for this action is authorized under both 5 U.S.C. 553(d)(1), which provides that rulemaking actions may become effective less than 30 days after publication if the rule “grants or recognizes an exemption or relieves a restriction,” and section 553(d)(3), which 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.” 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. Today's rule, however, does not create any new regulatory requirements such that affected parties would need time to prepare before the rule takes effect. Rather, today's rule relieves the state of planning requirements for this ozone nonattainment area. For these reasons, EPA finds good cause under 5 U.S.C. 553(d)(3) for these actions to become effective on the date of publication of these actions.

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

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

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

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

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

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

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

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

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

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

In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because redesignation is an action that affects the status of a geographical area and does not impose any new regulatory requirements on tribes, impact any existing sources of air pollution on tribal lands, nor impair the maintenance of ozone national ambient air quality standards in tribal lands.

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 June 6, 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)).

Parts 52 and 81, chapter I, title 40 of the Code of Federal Regulations are amended as follows:

On July 18, 1997, EPA promulgated the first air quality standards for PM2.5. EPA promulgated an annual standard at a level of 15.0 micrograms per cubic meter (μg/m3), based on a 3-year average of annual mean PM2.5 concentrations. In the same rulemaking, EPA promulgated a 24-hour standard of 65 μg/m3, based on a 3-year average of the 98th percentile of 24-hour concentrations. On October 17, 2006 (71 FR 61144), EPA retained the annual average NAAQS at 15.0 μg/m3 but revised the 24-hour NAAQS to 35 μg/m3, based again on the 3-year average of the 98th percentile of 24-hour concentrations.

On January 5, 2005 (70 FR 944), and supplemented on April 14, 2005 (70 FR 19844), EPA designated the bi-state Louisville Area as nonattainment for the Annual 1997 PM2.5 NAAQS. The bi-state Louisville Area consists of Bullitt and Jefferson Counties in Kentucky as well as Clark and Floyd Counties and a portion of Jefferson County (Madison Township) in Indiana.1 On November 13, 2009 (74 FR 58688), EPA promulgated designations for the 24-hour PM2.5 standard established in 2006, designating the bi-state Louisville Area as attainment for that NAAQS. That action clarified that the bi-state Louisville Area was classified unclassifiable/attainment for the 24-hour NAAQS promulgated in 1997. EPA did not promulgate designations for the 2006 Annual PM2.5 NAAQS since that NAAQS was essentially identical to the 1997 Annual PM2.5 NAAQS.

On March 5, 2012, Kentucky submitted a request to EPA for redesignation of the Kentucky portion of the bi-state Louisville Area to attainment for the 1997 Annual PM2.5 NAAQS and a related SIP revision containing a maintenance plan for the Area. In a notice of proposed rulemaking (NPRM) published on January 11, 2017 (82 FR 3234), EPA proposed to approve the Commonwealth's 1997 Annual PM2.5 NAAQS maintenance plan, including the 2025 MVEBs for NOx and direct PM2.5, for the Kentucky portion of the bi-state Louisville Area and incorporate the maintenance plan into the SIP, and to redesignate the Kentucky portion of the bi-state Louisville Area to attainment for the 1997 Annual PM2.5 NAAQS. In that notice, EPA also notified the public of the status of the Agency's adequacy determination for the NOx and direct PM2.5 MVEBs for the Area. No adverse comments were received on the January 11, 2017, proposed rulemaking. The details of Kentucky's submittal and the rationale for EPA's actions are further explained in the NPRM.

Approval of the redesignation request changes the legal designation of the counties in the Kentucky portion of the bi-state Louisville Area, found at 40 CFR 81.318, from nonattainment to attainment for the 1997 Annual PM2.5 NAAQS. Approval of Kentucky's associated SIP revision also incorporates a plan into the SIP for maintaining the 1997 Annual PM2.5 NAAQS in the Kentucky portion of the bi-state Louisville Area as described in the NPRM. The maintenance plan also establishes NOx and direct PM2.5 MVEBs for 2025 for the Area and includes contingency measures to remedy any future violations of the 1997 Annual PM2.5 NAAQS and procedures for evaluation of potential violations. The 2025 NOX and PM2.5 MVEBs are 9,311.76 tons per year (tpy) and 324.04 tpy, respectively, for the Area.

In the Fine Particulate Matter National Ambient Air Quality Standards: State Implementation Plan Requirements final rule (final PM2.5 SIP requirements rule), EPA revoked the 1997 primary annual PM2.5 NAAQS in areas that had always been attainment for that NAAQS, and in areas that had been designated as nonattainment but that were redesignated to attainment before October 24, 2016, the rule's effective date. See 81 FR 58010 (August 24, 2016). EPA also finalized a provision that revokes the 1997 primary annual PM2.5 NAAQS in areas that are redesignated to attainment for that NAAQS after October 24, 2016, effective on the effective date of the redesignation of the area to attainment for that NAAQS. See 40 CFR 50.13(d).

EPA is finalizing the redesignation of the Kentucky portion of the bi-state Louisville Area to attainment for the 1997 annual PM2.5 NAAQS and finalizing the approval of the CAA section 175A maintenance plan for the 1997 primary annual PM2.5 NAAQS.2 The 1997 primary annual PM2.5 NAAQS will be revoked in the bi-state Louisville Area on the effective date of this redesignation, April 7, 2017. Beginning on that date, the Area will no longer be subject to transportation or general conformity requirements for the 1997 annual PM2.5 NAAQS due to the revocation of the primary NAAQS. See 81 FR 58125 (August 24, 2016). The Area is required to implement the CAA section 175A maintenance plan for the 1997 primary annual PM2.5 NAAQS that is being approved in today's action and the prevention of significant deterioration program for the 1997 annual PM2.5 NAAQS. The approved maintenance plan can only be revised if the revision meets the requirements of CAA section 110(l) and, if applicable, CAA section 193. The Area is not required to submit a second 10-year maintenance plan for the 1997 primary annual PM2.5 NAAQS. See 81 FR 58144 (August 24, 2016).

EPA is taking two separate, but related, final actions regarding Kentucky's request to redesignate the Kentucky portion of the bi-state Louisville Area to attainment for the 1997 PM2.5 NAAQS and associated SIP revision. First, EPA is approving the maintenance plan for the bi-state Louisville Area, including the NOX and direct PM2.5 MVEBs for 2025, and incorporating the maintenance plan into the Kentucky SIP. Second, EPA is approving Kentucky's redesignation request and redesignating the Kentucky portion of the Area from nonattainment to attainment for the 1997 Annual PM2.5 NAAQS. As mentioned above, approval of the redesignation request changes the official designation of the counties in the Kentucky portion of the bi-state Louisville Area for the 1997 Annual PM2.5 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 direct PM2.5 MVEBs for the bi-state Louisville Area adequate for the purpose of transportation conformity.

As mentioned above, EPA's most recently promulgated PM2.5 implementation rule provides that the 1997 PM2.5 NAAQS will be revoked for any area that is redesignated for the NAAQS upon the effective date of the redesignation. Therefore, the 1997 primary annual PM2.5 NAAQS is revoked for the Kentucky portion of the bi-state Louisville Area on the effective date of this redesignation.

In accordance with 5 U.S.C. 553(d), EPA finds that there is good cause for this action to become effective immediately upon publication. This is because a delayed effective date is unnecessary due to the nature of a redesignation to attainment, which relieves the Area from certain CAA requirements that would otherwise apply to it. The immediate effective date for this action is authorized under both 5 U.S.C. 553(d)(1), which provides that rulemaking action may become effective less than 30 days after publication if the rule grants or recognizes an exemption or relieves a restriction, and section 553(d)(3), which 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. 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. This rule, however, does not create any new regulatory requirements such that affected parties would need time to prepare before the rule takes effect. Rather, this rule will serve as a basis for a subsequent action to relieve the Area from certain CAA requirements. For these reasons, EPA finds good cause under 5 U.S.C. 553(d) for this action to become effective on the date of publication of this action.

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 June 6, 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:

NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679. Regulations governing sideboard protections for GOA groundfish fisheries appear at subpart B of 50 CFR part 680.

NMFS closed directed fishing for Pacific cod by vessels using pot gear in the Central Regulatory Area of the GOA under § 679.20(d)(1)(iii) on February 23, 2017 (82 FR 11852, February 27, 2017).

NMFS has determined that as of April 3, 2017, approximately 1,260 metric tons of Pacific cod remain in the A season allowance of the 2017 total allowable catch (TAC) apportioned to vessels using pot gear in the Central Regulatory Area of the GOA. Therefore, in accordance with § 679.25(a)(1)(i), (a)(2)(i)(C), and (a)(2)(iii)(D), and to fully use the 2017 TAC of Pacific cod in the Central Regulatory Area of the GOA, NMFS is terminating the previous closure and is opening directed fishing for Pacific cod by vessels using pot gear in the Central Regulatory Area of the GOA. The Administrator, Alaska Region, NMFS, (Regional Administrator) considered the following factors in reaching this decision: (1) The current catch of Pacific cod by vessels using pot gear in the Central Regulatory Area of the GOA and, (2) the harvest capacity and stated intent on future harvesting patterns of vessels in participating in this fishery.

This action responds to the best available information recently obtained from the fishery. The Acting Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the opening of directed fishing for Pacific cod by vessels using pot gear in the Central Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of April 3, 2017.

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

Without this inseason adjustment, NMFS could not allow the fishery for Pacific cod by vessels using pot gear in the Central Regulatory Area of the GOA to be harvested in an expedient manner and in accordance with the regulatory schedule. Under § 679.25(c)(2), interested persons are invited to submit written comments on this action to the above address until April 24, 2017.

This action is required by § 679.25 and is exempt from review under Executive Order 12866.

NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679. Regulations governing sideboard protections for GOA groundfish fisheries appear at subpart B of 50 CFR part 680.

The A season allowance of the 2017 Pacific cod total allowable catch (TAC) apportioned to catcher/processors using hook-and-line gear in the Western Regulatory Area of the GOA is 2,700 metric tons (mt), as established by the final 2017 and 2018 harvest specifications for groundfish of the GOA (82 FR 12032, February 27, 2017).

In accordance with § 679.20(d)(1)(i), the Administrator, Alaska Region, NMFS (Regional Administrator) has determined that the A season allowance of the 2017 Pacific cod TAC apportioned to catcher/processors using hook-and-line gear in the Western Regulatory Area of the GOA will soon be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 2,690 mt and is setting aside the remaining 10 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific cod by catcher/processors using hook-and-line gear in the Western Regulatory Area of the GOA. After the effective date of this closure, the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.

This action responds to the best available information recently obtained from the fishery. The Acting Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the directed fishing closure of Pacific cod by catcher/processors using hook-and-line gear in the Western Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of April 3, 2017.

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

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