Federal Register Vol. 83, No.112,

This rule proposes revisions to the Department's regulations implementing the FOIA, 5 U.S.C. 552. USDA's current FOIA regulations, were codified at 7 CFR part 1 subpart A and last revised on July 28, 2000. The revisions in this notice are modeled, in part, after the template published by the Department of Justice Office of Information Policy and will streamline USDA's FOIA processing procedures, include current cost figures to be used in calculating fees but, most importantly, incorporate changes brought about by the FOIA Improvement Act of 2016 and the OPEN Government Act of 2007.

This rule has been drafted and reviewed in accordance with Executive Order 12866, 58 FR 51735 (Sept. 30, 1993), section 1(b), Principles of Regulation, and Executive Order 13563, 76 FR 3821 (January 18, 2011), Improving Regulation and Regulatory Review. The rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866. Accordingly, the rulemaking has not been reviewed by the Office of Management and Budget. This rule is not an Executive Order 13771 regulatory action because this rule is not significant under Executive Order 12866.

This rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

USDA, in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this regulation and, by approving it, certifies that this regulation will not have a significant economic impact on a substantial number of small entities. Under the FOIA, agencies may recover only the direct costs of searching for, reviewing, and duplicating the records processed for requesters, and only for certain classes of requesters and when particular conditions are satisfied. Thus, fees assessed by the USDA are nominal.

This rule is not a major rule as defined by section 251 of the Small Business Regulatory Enforcement Fairness Act of 1996 (as amended), 5 U.S.C. 804. This rule will not result in an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.

For the reasons stated in the preamble, USDA proposes to amend 7 CFR part as follows:

I. Background Information

SBA's efforts in the impact investing space began on April 7, 2011 through a policy letter (“Impact Policy”), which was subsequently updated on September 26, 2012 and September 25, 2014. The purpose of the Impact Policy was to license small business investment companies (“SBICs”) focused on generating both a positive and measurable social impact in addition to a financial return as “Impact SBICs.” Licensed Impact SBICs were expected to provide at least 50% of their financings in “impact investments” as defined by the Impact Policy.

SBA published a Proposed Rule on February 3, 2016 (81 FR 5666) (the “Proposed Rule”) to permanently define Impact SBICS and set forth regulations applicable to Impact SBICs with respect to licensing, leverage eligibility, fees, reporting and compliance requirements. The intent of the rule was to encourage qualified private equity fund managers with a focus on social impact to apply to the SBIC program. As part of the Proposed Rule, SBA would have provided the following three key benefits: (1) Impact SBIC applicants would have received a 60% discount on the licensing fee; (2) Impact SBICs would have received a 10% discount on the examination base fee; and (3) Impact SBICs could have simultaneously applied as an Early Stage SBIC not subject to the call and timing provisions identified under 13 CFR 107.300. Given these benefits, the proposed rule also imposed certain penalties if an Impact SBIC did not adhere to its impact strategy or the Impact SBIC rules.

In determining whether to publish a final rule, SBA evaluated the results of the Impact Policy and the comments received in response to the Proposed Rule. In six years under the Impact Policy, few qualified funds applied to be licensed as Impact SBICs, and SBA licensed only nine Impact SBICs. SBA believes that many of these SBICs would have applied to the SBIC program regardless of the existence of the Impact Policy. SBA determined that the cost of the Impact Policy was not commensurate with the benefits. On September 28, 2017, SBA provided notice to program stakeholders that SBA was cancelling the Impact Policy and would no longer accept applications to be licensed as an Impact SBIC on or after November 1, 2017.

Although SBA proposed licensing and examination fee discounts to provide further incentives for Impact SBICs as part of the Proposed Rule, SBA received one comment that all SBICs should be treated similarly in fee structure and no discounts should be offered. Three comments stated that the discounts are too small to provide an incentive sufficient to result in the formation of Impact SBICs, although two of these commenters stated that they nonetheless appreciated the discount.

Because Impact SBICs would have received certain benefits under the Proposed Rule, the Proposed Rule also identified penalties if an Impact SBIC failed to meet the requirements set forth in the rule, including failing to invest at least 50% of its financing dollars in impact investments and, for Impact SBICs using a Fund-Identified Impact Investment Strategy, failing to comply with certain specific measurement and reporting obligations. SBA received four comments stating that the Proposed Rule should not apply to Impact SBICs licensed prior to the effective date of any final rule, two comments stating that SBA should adjust the rules to reflect the policies under which the Impact SBICs were licensed, and one comment that suggested that existing Impact SBICs should be allowed the option to either complete their license under the relevant Impact Policy under which they were licensed or opt in to these new regulations. In reviewing these comments, SBA determined that finalizing the rule would not likely result in an increase in the number of Impact SBICs in the program and would likely result in fewer Impact SBIC applications than SBA received under the Impact Policy. Although SBA licensed two Impact SBICs in each of FY 2015 and FY 2016, after publication of the proposed rule, SBA did not license any Impact SBICs in FY 2017.

SBA also considered costs in determining whether to withdraw the Proposed Rule. As noted in the Proposed Rule, due to the risk associated with this class of SBICs, and based on the amount of leverage SBA expected to allocate to the Impact SBIC program, the Proposed Rule was expected to increase the cost to all SBICs issuing SBA-guaranteed debentures by increasing the annual fee payable by all such SBICs by approximately 6.1 basis points. For an SBIC issuing $100 million in SBA-guaranteed debentures, this would equate to $61,000 per year. SBICs typically issue Debentures over a 4 to 6-year period (using multiple commitments) and begin paying back leverage as the fund harvests its investments. As a result, based on Debenture pools since 1992 that have been fully repaid, the average hold period is approximately 6 years, this would equate to $366,000 in total additional fees for the SBIC. If the SBIC held the leverage outstanding for its full ten-year term, this would equate to $610,000 for a single SBIC. Between FYs 2012 and 2017, SBA approved, on average, $2.28 billion aggregate debenture commitments per year. If an additional 6.1 basis point charge were in effect, SBICs would incur over $1.4 million per year in additional fees, or approximately $8.3 million over the average 6-year average holding period for SBIC debentures. This is capital that SBICs could otherwise deploy to small businesses.

The withdrawal of the Proposed Rule has no effect on currently licensed Impact SBICs. Currently licensed Impact SBICs must continue to operate under the Impact Policy under which they were licensed (i.e., the Impact Policy issued in 2011, 2012 or 2014, as applicable). SBA will continue to follow SBA regulations and credit policies applicable to all SBICs with respect to approving leverage commitments and draws for Impact SBICs licensed with the intent of issuing SBA-guaranteed debentures. It should be noted that SBA allocated debentures for Impact SBICs in both FY 2018 and FY 2019 to accommodate existing Impact SBICs. SBA will determine the allocations of leverage for Impact SBICs for subsequent Fiscal Years after taking into account projected need by Impact SBICs in existence at that time.

The withdrawal of the NPRM qualifies as a deregulatory action under Executive Order 13771. See OMB's Memorandum titled “Guidance Implementing Executive Order 13771, Titled `Reducing Regulation and Controlling Regulatory Costs' ” (April 5, 2017).

Accordingly, for the reasons stated in the preamble, the Proposed Rule published at 81 FR 5666 on February 3, 2016, is withdrawn.

I. Background Information

In the Small Business Investment Act of 1958 (Act), Congress created the Small Business Investment Company (SBIC) program to “stimulate and supplement the flow of private equity capital and long-term loan funds which small-business concerns need for the sound financing of their business operations and for their growth, expansion, and modernization, and which are not available in adequate supply . . . .” 15 U.S.C. 661. Congress intended that the program “be carried out in such manner as to insure the maximum participation of private financing sources.” Id. In accordance with that policy, the U.S. Small Business Administration (SBA) does not invest directly in small businesses. Rather, through the SBIC program, SBA licenses and provides debenture leverage to SBICs. SBICs are privately-owned and professionally managed for-profit investment funds that make loans to, and investments in, qualified small businesses using a combination of privately raised capital and debenture leverage guaranteed by SBA. SBA will guarantee the repayment of debentures issued by an SBIC (Debentures) up to a maximum amount of $150 million per SBIC based on the amount of the SBIC's qualifying private capital, defined in SBA regulations as Regulatory Capital (consisting of paid-in capital contributions from private investors plus binding capital commitments from Institutional Investors, as defined in existing § 107.50). SBA will typically provide an SBIC with up to two “tiers” of leverage (a two-to-one match between leverage and Regulatory Capital).

The standard Debenture requires semi-annual interest payments. Consequently, most SBICs finance later stage small businesses with positive operating cash flow, and most structure their investments as loans or mezzanine debt in an amount that is at least sufficient to cover the SBIC's Debenture interest payments. Early stage companies typically do not have positive operating cash flow and therefore cannot make current interest or dividend payments. As a result, investments in early stage companies do not fit naturally with the structure of debenture leverage.

Early stage businesses without the necessary assets or cash flow for traditional bank funding face difficult challenges accessing capital. As a result of this capital gap, on April 27, 2012, SBA published a final rule (77 FR 25042) to define a new sub-category of SBICs. SBA's intent was to license over a 5-year period (fiscal years 2012 through 2016) venture funds focused on early stage businesses. Because Early Stage SBICs present a higher credit risk than traditional SBICs, that rule authorized SBA to guarantee Debentures in an amount equal to each Early Stage SBIC's Regulatory Capital (one tier of leverage, rather than the two tiers typically available to traditional SBICs), up to a maximum of $50 million. SBA targeted an allocation of $200 million per year ($1 billion total) of its SBIC Debenture authorization over these years to this effort.

In order to determine potential changes needed to attract sufficient interest from qualified early stage fund managers to apply for the Early Stage SBIC program, SBA sought input from the public through an Advance Notice of Proposed Rulemaking (ANPRM) on March 18, 2015 (80 FR 14034). Based on comments on the ANPRM and additional discussions SBA held with industry participants, SBA published a proposed rule (81 FR 64075) on September 19, 2016, to make changes to make the Early Stage SBIC program more attractive and make the program a permanent part of the SBIC program. These changes included: (1) Extending the program past FY 2016; (2) modifying Early Stage licensing procedures to be more consistent with other SBICs by allowing Early Stage SBIC applicants to apply at any time and allowing existing Early Stage SBICs to apply for a subsequent license; (3) allowing Early Stage SBICs to use a line of credit without SBA's prior approval; and (4) increasing the maximum leverage from $50 million to $75 million.

In determining whether to publish a final rule, SBA evaluated the results of the Early Stage SBIC Initiative, the costs of the initiative and the comments received on the proposed rule.

Between 2012 and June 2016, SBA received 62 applications to the Early Stage SBIC program, but licensed only 5 Early Stage SBICs. Those applicants that were not licensed failed to meet SBA's licensing criteria. Many of the applicants had management teams with limited track records and few positive realizations. Although SBA sought to increase the number of applicants to the Early Stage SBIC initiative, at the end of FY 2016, none of the SBIC applicants utilizing an early stage investment strategy in SBA's licensing pipeline sought to issue SBA-guaranteed Debentures or to be licensed as an Early Stage SBIC. SBA has and will continue to license qualifying early stage venture funds that do not intend to issue SBA-guaranteed Debentures. Although venture capital funds pursuing an early stage investment strategy are not prohibited from applying to the program as a leveraged SBIC, SBIC guaranteed Debentures are not well-suited to an early stage investing strategy since many early stage investments do not provide ongoing cash flows needed to pay the current interest and annual charges associated with SBA guaranteed debentures. Based on its evaluation of the Early Stage initiative, SBA concluded that there are insufficient qualified early stage fund management teams that are interested in using SBA-guaranteed leverage under the terms needed to make the Early Stage SBIC initiative a permanent part of the SBIC program.

SBA also considered costs in determining whether to withdraw the proposed rule. As noted in the April 27, 2012, final rule, due to the risk associated with this class of SBICs, SBA increased the annual charge for all SBICs issuing Debenture leverage in order to implement the Early Stage SBIC initiative. The September 2016 Early Stage SBIC proposed rule stated that because Early Stage SBICs invest in early stage investments with higher risk, the rule would continue to apply a higher annual charge payable by all SBICs issuing SBA-guaranteed Debentures. SBA expected to allocate no more than approximately $200 million in leverage commitments to Early Stage SBICs each year after FY 2017, which allocation was expected to increase the cost to all SBICs issuing SBA-guaranteed debentures by increasing the annual fee payable by all such SBICs by approximately 14 basis points. For an SBIC issuing $100 million in SBA-guaranteed Debentures, 14 basis points would equate to $140,000 per year. SBICs typically issue Debenture leverage over 4 to 6 years (using multiple commitments) and begin paying back leverage as the fund harvests its investments after that period. Based on Debenture pools since 1992 that have been fully repaid, the average hold period is approximately 6 years. Therefore the 14 basis points addition for an SBIC issuing $100 million in SBA-guaranteed Debentures would equate to $840,000. If the SBIC held the leverage for the full 10-year term, this would equate to $1,400,000 for a single SBIC over that timeframe. Between FYs 2012 and 2017, SBA approved on average $2.28 billion aggregate debenture commitments per year. If an additional 14 basis point charge were in effect, SBICs would incur over $3.2 million per year in additional fees, or approximately $19 million over the average 6 year holding period for SBIC-guaranteed Debentures. This is capital that SBICs could otherwise deploy to small businesses. Additionally, SBA must expend additional administrative costs to oversee these SBICs and to maintain subsidy formulation and re-estimate models. SBA received four comment letters on the proposed rule. Among other things, these comments requested changes to the payment structure of the Early Stage debenture—partial, as opposed to full prepayments—which structure SBA has determined is not workable. Another comment suggested that the amount of leverage SBA intended to allocate to Early Stage SBICs on an annual basis was perceived as a limit which placed unacceptable risk to management teams that would otherwise be interested in applying to the program. As discussed above, in order to determine the annual charge as required by the Act, if the proposed rule became final, SBA would be required to allocate an amount of leverage to Early Stage SBICs on an annual basis. Other comments suggested concerns or requested clarifications. It was not evident to SBA from these comments that the proposed rule was broadly supported by SBIC program stakeholders.

The withdrawal of the proposed rule does not impact the Early Stage regulations contained in 13 CFR part 107 or the five currently licensed Early Stage SBICs. Such Early Stage SBICs remain subject to the Act, applicable regulations at 13 CFR part 107 and SBA policies.

The withdrawal of the proposed rule qualifies as a deregulatory action under Executive Order 13771. See OMB's Memorandum titled “Guidance Implementing Executive Order 13771, Titled `Reducing Regulation and Controlling Regulatory Costs'” (April 5, 2017).

Accordingly, for the reasons stated in the preamble, the proposed rule published at 81 FR 64075 on September 16, 2016 is withdrawn.

We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2018-0509; Product Identifier 2017-NM-076-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. We will consider all comments received by the closing date and may amend this NPRM based on those comments.

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

Agência Nacional de Aviação Civil (ANAC), which is the aviation authority for Brazil, has issued Brazilian AD 2017-04-01, effective April 25, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Embraer S.A. Model ERJ 190 airplanes. The MCAI states:

You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0509.

Embraer S.A. has issued Embraer Service Bulletin 190-54-0016, Revision 04, dated December 7, 2017; and Embraer Service Bulletin 190LIN-54-0008, Revision 02, dated May 9, 2018. The service information describes procedures for modification of the attaching parts of the LH and RH pylon lower link fittings, inboard and outboard positions. These documents are distinct since they apply to different airplane models. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

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

We estimate that this proposed AD affects 85 airplanes of U.S. registry.

We estimate the following costs to comply with this proposed AD:

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

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

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

This proposed AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes to the Director of the System Oversight Division.

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

For the reasons discussed above, I certify this proposed regulation:

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

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

3. Will not affect intrastate aviation in Alaska; and

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

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

We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2018-0505; Product Identifier 2017-NM-178-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. We will consider all comments received by the closing date and may amend this NPRM based on those comments.

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

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2017-0200, dated October 10, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus Model A350-941 airplanes. The MCAI states:

You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0505.

Airbus has issued Service Bulletin A350-29-P012, dated October 6, 2017. The service information describes procedures for modifying the HMCA software by installing HMCA software S4.2 upgrades. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

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

We estimate that this proposed AD affects 7 airplanes of U.S. registry. We estimate the following costs to comply with this proposed AD:

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

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

This proposed AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes to the Director of the System Oversight Division.

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

For the reasons discussed above, I certify this proposed regulation:

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

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

3. Will not affect intrastate aviation in Alaska; and

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

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

We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2018-0506; Product Identifier 2018-NM-045-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. We will consider all comments received by the closing date and may amend this NPRM based on those comments.

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

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2018-0036, dated February 7, 2018 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus Model A350-941 airplanes. The MCAI states:

Airbus has issued Service Bulletin A350-53-P029, dated November 17, 2017. This service information describes procedures to apply sealant and protective treatment on the affected areas of the rear fuselage cone structure.

Airbus has issued Service Bulletin A350-55-P003, dated November 6, 2017. This service information describes procedures to apply sealant and protective treatment on the affected areas of the horizontal stabilizer, modify the THS torsion box in zone 330 and 340, and re-identify the elevator in zone 335 and 345.

The service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

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

We estimate that this proposed AD affects 6 airplanes of U.S. registry.

We estimate the following costs to comply with this proposed AD:

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

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 proposed AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes to the Director of the System Oversight Division.

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

For the reasons discussed above, I certify this proposed regulation:

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

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

3. Will not affect intrastate aviation in Alaska; and

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

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

Comments Invited

We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2018-0508; Product Identifier 2018-NM-012-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. We will consider all comments received by the closing date and may amend this NPRM based on those comments.

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

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2018-0004, dated January 9, 2018 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus Model A350-941 airplanes. The MCAI states:

You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0508.

Airbus has issued A350 Airworthiness Limitations Section (ALS) Part 3, Certification Maintenance Requirements (CMR), Revision 04, dated December 15, 2017. The service information describes mandatory maintenance tasks that operators must perform at specified intervals. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

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

This AD requires revisions to certain operator maintenance documents to include new actions (e.g., inspections). Compliance with these actions is required by 14 CFR 91.403(c). For airplanes that have been previously modified, altered, or repaired in the areas addressed by this proposed AD, the operator may not be able to accomplish the actions described in the revisions. In this situation, to comply with 14 CFR 91.403(c), the operator must request approval for an alternative method of compliance according to paragraph (i) of this proposed AD. The request should include a description of changes to the required inspections that will ensure the continued operational safety of the airplane.

The MCAI specifies that if there are findings from the airworthiness limitations section (ALS) inspection tasks, corrective actions must be accomplished in accordance with Airbus maintenance documentation. However, this proposed AD does not include that requirement. Operators of U.S.-registered airplanes are required by general airworthiness and operational regulations to perform maintenance using methods that are acceptable to the FAA. We consider those methods to be adequate to address any corrective actions necessitated by the findings of ALS inspections required by this proposed AD.

The FAA recently became aware of an issue related to the applicability of ADs that require incorporation of an ALS revision into an operator's maintenance or inspection program.

Typically, when these types of ADs are issued by civil aviation authorities of other countries, they apply to all airplanes covered under an identified type certificate (TC). The corresponding FAA AD typically retains applicability to all of those airplanes.

In addition, U.S. operators must operate their airplanes in an airworthy condition, in accordance with 14 CFR 91.7(a). Included in this obligation is the requirement to perform any maintenance or inspections specified in the ALS, and in accordance with the ALS as specified in 14 CFR 43.16 and 91.403(c), unless an alternative has been approved by the FAA.

When a type certificate is issued for a type design, the specific ALS, including revisions, is a part of that type design, as specified in 14 CFR 21.31(c).

The sum effect of these operational and maintenance requirements is an obligation to comply with the ALS defined in the type design referenced in the manufacturer's conformity statement. This obligation may introduce a conflict with an AD that requires a specific ALS revision if new airplanes are delivered with a later revision as part of their type design.

To address this conflict, the FAA has approved alternative methods of compliance (AMOCs) that allow operators to incorporate the most recent ALS revision into their maintenance/inspection programs, in lieu of the ALS revision required by the AD. This eliminates the conflict and enables the operator to comply with both the AD and the type design.

However, compliance with AMOCs is normally optional, and we recently became aware that some operators choose to retain the AD-mandated ALS revision in their fleet-wide maintenance/inspection programs, including those for new airplanes delivered with later ALS revisions, to help standardize the maintenance of the fleet. To ensure that operators comply with the applicable ALS revision for newly delivered airplanes containing a later revision than that specified in an AD, we plan to limit the applicability of ADs that mandate ALS revisions to those airplanes that are subject to an earlier revision of the ALS, either as part of the type design or as mandated by an earlier AD.

This proposed AD therefore applies to all Airbus Model A350-941 airplanes with an original certificate of airworthiness or original export certificate of airworthiness that was issued on or before the date of approval of the ALS revision identified in this proposed AD. Operators of airplanes with an original certificate of airworthiness or original export certificate of airworthiness issued after that date must comply with the airworthiness limitations specified as part of the approved type design and referenced on the type certificate data sheet.

We estimate that this proposed AD affects 6 airplanes of U.S. registry.

We estimate the following costs to comply with this proposed AD:

We have determined that revising the maintenance or inspection program takes an average of 90 work-hours per operator, although this figure may vary from operator to operator. In the past, we have estimated that this action takes 1 work-hour per airplane. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), we have determined that a per-operator estimate is more accurate than a per-airplane estimate. Therefore, we estimate the total cost per operator to be $7,650 (90 work-hours × $85 per work-hour).

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 proposed AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes to the Director of the System Oversight Division.

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

For the reasons discussed above, I certify this proposed regulation:

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

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

3. Will not affect intrastate aviation in Alaska; and

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

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

We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2018-0404; Product Identifier 2018-NE-15-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. We will consider all comments received by the closing date and may amend this NPRM because of those comments.

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

In-flight engine shutdowns and aborted take-offs have occurred on certain IAE turbofan engines as the result of a failed knife edge seal on engine serial numbers (ESNs) P770450 through P770614. In response to these events, the European Aviation Safety Agency published AD 2018-0041R1, dated March 23, 2018 (corrected on April 4, 2018). Additionally, the FAA published AD 2018-04-01 (83 FR 6791, February 15, 2018), for all Airbus Model A320-271N, A321-271N, and A321-272N airplanes. Both ADs describe procedures to de-pair affected airplanes and to discontinue extended operations (ETOPS) for airplanes with at least one affected engine.

An analysis by the manufacturer of these engine failures has shown that production modifications to the diffuser case air seal assembly and the 2nd-stage HPT vane assemblies, beginning with ESN P770450, negatively affected the durability of the rear HPC rotor hub knife edge seal. The modifications caused the knife edge seal on the rear HPC rotor hub to experience high-cycle fatigue and failure. This condition, if not addressed, could result in failure of one or more engines, loss of thrust control, and loss of the airplane.

We reviewed Pratt & Whitney Alert Service Bulletin (ASB) PW1000G-C-72-00-0099-00A-930A-D, Issue No. 002, dated March 15, 2018. The ASB describes procedures for removing production modifications to the diffuser case air seal assembly, HPT 2nd-stage vane assembly, and the HPT 2nd-stage borescope stator vane assembly, beginning with ESN P770450, which resulted in an unanticipated increase in stress at the rear HPC rotor hub knife edge seal.

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

This proposed AD would require removing from service and replacing the diffuser case air seal assembly, P/N 30G4993-01; the HPT 2nd-stage vane assembly, P/N 30G7572; and the HPT 2nd-stage borescope stator vane assembly, P/N 30G7672, with parts eligible for installation.

We consider this proposed AD interim action. The manufacturer is currently developing a modification that will address the unsafe condition identified in this AD. Once this modification is developed, approved, and available, we might consider additional rulemaking.

We estimate that this proposed AD affects 16 engines installed on airplanes of U.S. registry.

We estimate the following costs to comply with this proposed AD:

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

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

This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to engines, propellers, and associated appliances to the Manager, Engine and Propeller Standards Branch, Policy and Innovation Division.

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

For the reasons discussed above, I certify this proposed regulation:

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

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

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

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

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would establish and amend Class E airspace at Ephrata Municipal Airport, Ephrata, WA, to support standard instrument approach procedures for IFR operations at the airport.

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Persons wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2017-1031; Airspace Docket No. 17-ANM-21”. The postcard will be date/time stamped and returned to the commenter.

All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the internet at http://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at http://www.faa.gov/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the ADDRESSES section for the address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined during normal business hours at the Northwest Mountain Regional Office of the Federal Aviation Administration, Air Traffic Organization, Western Service Center, Operations Support Group, 2200 S 216th St., Des Moines, WA 98198.

This document proposes to amend FAA Order 7400.11B, Airspace Designations and Reporting Points, dated August 3, 2017, and effective September 15, 2017. FAA Order 7400.11B is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11B lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The FAA is proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) part 71 by establishing Class E airspace extending upward from 700 feet above the surface and modifying Class E surface area airspace at Ephrata Municipal Airport, Ephrata, WA.

Class E surface area airspace would be modified to a 4.2-mile radius of the airport (from a 4.4-mile radius of the Ephrata Municipal Airport and within 2.7 miles each side of the Ephrata VORTAC 043° and 233° radials extending from the 4.4-mile radius to 7 miles northeast of the VORTAC). The exclusionary language noting Moses Lake, WA, Class D airspace would be removed as it is not needed to define the boundary.

Class E airspace extending upward from 700 feet would be established within 4.2 miles northwest and 6.6 miles southeast of the 043° and 223° bearings from the airport extending from the airport reference point to 11.1 miles northeast and 6.3 miles southwest of the airport, respectively.

Additionally, this action proposes to update the geographic coordinates for the associated Class E airspace areas to match the FAA's aeronautical database. Also, an editorial change would be made to the Class E airspace legal descriptions replacing Airport/Facility Directory with the term Chart Supplement.

Class E airspace designations are published in paragraph 6002 and 6005, respectively, of FAA Order 7400.11B, dated August 3, 2017, and effective September 15, 2017, which is incorporated by reference in 14 CFR 71.1. The Class D and E airspace designations listed in this document will be published subsequently in the Order.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

The Commission is seeking public comment from individual investors and other interested parties on enhancing investment company disclosures to improve the investor experience and to help investors make more informed investment decisions.

Today the Commission is continuing its efforts to enhance the information that is available to you, the investor, to help you make informed investment decisions. We have previously taken steps to improve the effectiveness of mutual fund, exchange-traded fund, and other types of public investment fund (“fund”) disclosures.1 We are now requesting comment from you and other interested parties on ways to enhance fund disclosures, including the delivery, design, and content of fund disclosures, to improve the investor experience and help investors make more informed investment decisions.2

Our mission is to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. Disclosure is the backbone of the federal securities laws and is a principal tool we use to fulfill our mission. Disclosure can provide you with the information you need to evaluate investment choices and make informed investment decisions. We recognize that investors have different levels of knowledge and experience, and we seek to promote disclosure that is inviting and usable by a broad spectrum of investors.

Fund disclosures are especially important because millions of American investors invest in funds to help them reach important financial goals, such as saving for retirement and their children's educations. As of the end of 2017, more than 100 million individuals representing nearly 60 million households owned funds.3 Given these numbers,4 it is vital that investors obtain the information necessary to help them decide how to invest their assets.

Disclosures can take many forms, and funds provide disclosure on paper as well as through electronic media. Regardless of the medium used, an effective disclosure system should help investors:

• Find what they need;

• Understand what they find; and

• Use what they find to make informed investment decisions.

A modern fund disclosure system should provide investors streamlined and user-friendly information that is material to an investment decision, while providing them the ability to access additional, more in-depth information on-demand. We developed our current disclosure requirements at a time when investors received information primarily on paper. Some have criticized fund prospectuses and other required disclosure documents for containing long narratives; generic, redundant, and even at times irrelevant disclosures; legalese; and extensive disclosure that may serve more to protect funds from liability rather than to inform investors.

As technology evolves, the Commission seeks to improve the fund disclosure system to reflect the way investors currently seek, receive, view, and digest information. Advances in technology have made available new, innovative, and effective ways to improve the delivery, design, and content of fund disclosures. Electronic-based disclosures allow for more interactive, user-friendly design features tailored to meet individual investors' needs and improve investor engagement. Technology could also improve the content of fund disclosures by, for example, allowing investors to customize certain fund disclosures, such as fees and expenses, based on an investor's individual circumstances.

This request for comment, as well as investor testing of disclosure alternatives,5 are two key initiatives the Commission is using to assess our current disclosure framework for funds. Through modernization of current disclosure requirements, the Commission can create a disclosure system that is better suited to meet the needs of 21st century investors. To that end, we are seeking your input on a wide range of issues relevant to fund disclosures. We have tailored our request to get information on your experience with the delivery, design, and content of fund disclosures. In addition to the specific issues highlighted for comment, we invite investors and other members of the public to address any other matters you believe are relevant to fund disclosure requirements.6

We have generally directed questions in this request for comment to you, the investor. If you seek to comment on the investor experience and improving fund disclosure, in addition to or in place of responses to questions in this release, you may want to submit a short Feedback Flier on Improving Fund Disclosure, available at Appendix B.7

We recognize that others have an interest in effective disclosure and can provide valuable perspectives. Therefore, we welcome input on these issues from all interested parties, including academics, literacy and design experts, market observers, and fund advisers and boards of directors, particularly comments pertaining to the following:

• How funds currently provide information;

• How investors currently access and use this information; and

• The potential costs and benefits of alternative approaches to our current fund disclosure framework.

There is a wide variety of fund information available to investors, including disclosure documents we require by regulation and materials that funds and others prepare at their discretion, such as sales materials. Together, these materials may be available in many forms, such as print or electronically (including through social media), and they may be static (such as a document) or interactive (such as a calculator or fund comparison tool).

Required Fund Disclosures. Required fund disclosures include the following:

• Prospectus. A prospectus provides key information about a fund to help investors make informed investment decisions. This document (or a summary version known as a “summary prospectus”) is typically available at the time of purchase. Funds typically deliver prospectuses or summary prospectuses to investors before or at the time of confirmation of a purchase of fund shares and each year for as long as they continue to own fund shares. Appendix A to this release contains a hypothetical summary prospectus solely for illustrative purposes. A summary prospectus generally includes a description of:

○ The fund's investment objectives or goals;

○ The fund's fees and expenses;

○ Its principal strategies for achieving those investment objectives or goals;

○ The principal risks of investing in the fund;

○ The fund's and a broad-based index's past performance;

○ The fund's advisers and portfolio managers;

○ How to purchase and sell fund shares;

○ Tax information; and

○ The compensation paid to intermediaries,8 such as your financial professional and/or his or her firm.9

• Statement of additional information (“SAI”). The SAI provides additional information that some investors may find useful, but that we do not consider essential information for all investors. The SAI largely expands on information that is contained in the prospectus. It is available online or upon request.

• Shareholder reports. Shareholder reports include both annual and semiannual reports, which describe how the fund has operated and include the fund's holdings and financial statements. The annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year.

• Proxy statements. A proxy statement informs investors about when and where a shareholder meeting is taking place, describes the matters shareholders will vote on, and explains how to vote shares. Funds send this document (or a brief notice describing basic details about the meeting and how to access the full proxy materials) to investors in advance of the shareholder meeting.

• Other information. Funds are required to make additional information available on EDGAR 10 that is not required to be delivered to investors. This information includes a fund's holdings for its first and third quarter-ends and its proxy voting record.

• A fund may prepare advertising materials to inform potential or current investors about the fund. Fund advertisements may take many forms and can include materials in newspapers, magazines, radio, television, mailings, fact sheets, fund commentaries, newsletters, and on various web-based platforms (including mobile devices, such as smartphones). Fund advertisements must comply with certain regulatory requirements.11

• Financial professionals, analysts, and the media may produce other materials that provide information about funds, such as research or analyst reports, tools or other services for researching and comparing funds, fund ratings, and news articles.

• Investor.gov. The SEC's Office of Investor Education and Advocacy maintains a website at www.Investor.gov that provides a variety of publications to help you understand the various features and risks of common investment products.

Given the volume and complexity of fund information, the delivery, design, and content of fund disclosures have significant effects on investors' ability to access and use important information. One way to assess the effectiveness of our disclosure regime is to examine how investors use fund disclosures today.

1. How do you select funds for investment? What do you look at before deciding on an investment? Do you look at fund disclosure documents or other publications or websites? If so, which do you primarily look at? Do you use online investment tools or other tools before making an investment?

2. What information do you want to know when you make an investment and monitor an investment you own? What information do you not receive that you would like to receive?

3. Do you rely on any of the disclosure documents we describe above, such as the fund summary prospectus, prospectus, shareholder report, or statement of additional information to invest or continue to hold an investment? If not, why not? If you do rely on any of the disclosure documents, which parts do you rely on and why?

4. Do you rely on certain disclosure when purchasing shares of a fund and different disclosures when holding or selling shares? If so, why?

5. How well do current fund disclosures assist you in your investment decision-making? What disclosures could funds improve? How does technology help you make investment decisions?

6. When making investment decisions, do you rely entirely, partially, or not at all on the advice of a financial professional? Does the assistance of a financial professional affect whether and how you use fund disclosures?

7. Are current fund disclosures understandable? Do you have access to sufficient information, tools, and analysis to help you evaluate potential investment choices and your current investments?

8. How do you compare different investment choices? Are there types of interactive comparison tools that you use? Are there other tools that would be helpful but do not appear to exist?

9. If the current tools available for comparing investment choices are not helpful, have you seen tools or features that compare other types of non-financial products (such as cars or cellphone plans) that are helpful? If so, what are they, and why are those tools more helpful?

10. Should we provide prominent links on our website to tools you can use to compare investment choices or products, such as FINRA's Fund Analyzer, which is available at https://tools.finra.org/fund_analyzer/?

11. Recent data indicates that approximately 21 percent of Americans do not speak English in their homes.12 Is the current disclosure regime effective for Americans whose primary language is not English or who have limited English proficiency? If not, what improvements do you recommend?

When and how investors receive information can be as important as the content and design of disclosures. Today, there is a lot of information about funds available online. The challenge is whether an investor can easily find, access, and compare the information at a time when the information is useful to the investor. Two important considerations to the delivery of fund information are the following:

• When investors receive fund disclosure relative to their investment decisions; and

• How investors receive fund disclosures, including the form of disclosure (paper or electronic) and the manner of delivery (such as whether an investor receives a copy of the disclosure or a notice that the disclosure is available online or in paper on request).

The Commission is seeking input with respect to all aspects of the timing and delivery of information to fund investors with the goal of improving the investor experience and helping investors make more informed investment decisions.

A well-functioning fund disclosure regime should provide material information to investors. It should also provide that information at a time when it can be useful to an investor.13 Regulatory documents, such as a prospectus, are typically available before an investment decision. Specifically, any summary prospectus, prospectus, or SAI is available upon request from the fund and may be available on a fund's website. You also can request these documents from your financial professional. In addition, funds and financial professionals typically make other materials available that describe the fund, which may also help an investor make an investment decision.

The federal securities laws do not require delivery of the prospectus at the time you make an investment decision to purchase fund shares. However, investors generally must receive a prospectus or summary prospectus before or at the time they receive a document confirming their purchase of fund shares.

We are seeking input on whether investors are able to obtain the information they need before investing and after investing.

12. What information (such as investment objectives, fees and expenses, strategies, risks, and performance) is important to you before you purchase fund shares? What information is important to you after you have made an investment? If you rely on the advice of a financial professional, would your conversations with him or her be more helpful if you received the prospectus before or during your discussion?

13. What information do you receive at or before your purchase of fund shares? Do you typically receive a prospectus (or summary prospectus) at the time of or before your purchase of fund shares? Is there sufficient information about funds available such that delivery of a prospectus before you purchase fund shares is unnecessary? If so, what information do you review?

14. Fund advertisements must include language that tells investors how to obtain a fund's prospectus or summary prospectus and that advises investors to read the prospectus carefully before investing in a fund. Below is an example.

15. Do you ever seek out fund information on your own without the help of a financial professional? If so, were you able to find the information easily at the time you were looking for it? If not, what were the problems?

16. Securities regulators in certain other jurisdictions require delivery to investors of a summary document describing the key features of a fund at or before the purchase of fund shares. This type of document generally is known as a “point-of-sale” disclosure. Should we consider a similar point-of-sale disclosure requirement? 14

Americans' preference for consuming information through electronic media has grown substantially as the use of the internet has grown.15 By mid-2017, 95 percent of households owning mutual funds had some form of internet access (up from 68 percent in 2000).16 While much fund information is available in an electronic format, many of these disclosures are an electronic rendering of paper documents (such as a PDF). Technology, including email and web-based information, can speed up the delivery of information and enhance disclosure.

Because internet access and technology enable varied methods for providing information and investor preferences may be changing in light of advancing technology, we are seeking information about your current use of the internet to communicate about and find information on fund investments. This information will help us improve funds' ability to get investors the information they need.

17. Do you use the internet to access your personal financial information such as your investment accounts? How often do you do so? Do you ever use the internet to research funds or to find information about your current fund investments? If so, do you look for information on a fund's website, on your financial professional's website, or elsewhere? For example, do you use your brokerage firm's website for fund research? When researching fund information online, do you prefer to use a computer, tablet, smartphone, or a different device?

18. If you do not use electronic media to receive or access information about funds, what are your reasons (such as lack of access to the internet, privacy concerns, preference for reading paper, discomfort with technology, or lack of time or interest)?

19. How do you prefer to receive communications about fund investments (for example, mail delivery, email, website availability, mobile applications, or a combination)? How do you currently receive communications about your investments?

20. Do you maintain an active email address on file with a fund in which you are invested or with your financial professional? Why or why not? Have you chosen to have your fund documents delivered by email? Why or why not? Do you log in to your funds' or financial professionals' website? If so, how often do you log in and what do you look at?

21. Is there particular website content that you like to access, such as blogs, videos, fund screeners, interactive calculators, performance presentations, fact sheets, research reports, or social media posts?

Increasingly, investors are relying on electronic media to get their news and information. We believe this includes information about their investments. Investors' increasing use of electronic media may change the way they like to receive information, including the form of disclosure delivery (paper versus electronic) and the manner of delivery (such as whether they receive full disclosure documents or notices that disclosure is available online or in paper on request).

Currently investors receive fund prospectuses and shareholder reports (as well as other documents such as account statements and confirmations) in paper through the mail unless they choose electronic delivery.17 As discussed above, a fund typically delivers a copy of the paper prospectus or summary prospectus to an investor before or at the time of confirmation of a purchase of fund shares and each year after that. A fund also may send investors a paper copy of a “sticker”—that is, a supplement to a previously sent prospectus or summary prospectus—to reflect certain changes that occur during the year.

Using electronic delivery more broadly could benefit funds and their investors. For example, funds and their shareholders (who ultimately bear the costs of sending paper documents) could potentially save money if a fund has to print and mail fewer paper documents. Electronic disclosure also could enhance design features that are unavailable in paper documents, such as improved searchability, easy reference to additional detail through hyperlinks, and the ability to compare multiple funds simultaneously. These features could improve the usefulness of fund disclosures for investors.

While there are benefits associated with electronic disclosure, there are potential concerns as well. Electronic delivery may vary in effectiveness depending on investor preferences and needs. Some investors may not be comfortable with using technology to access fund disclosures. Further, a small subset of investors do not have access to the internet, although the percentage of investors with internet access continues to increase.18 Other investors may simply prefer to read information on paper and may process that information better when read on paper rather than electronically. Investors who do not want to or who are unable to access electronic disclosure may be able to rely on a financial professional to provide the relevant disclosure in paper. However, to the extent these investors do not rely on a financial professional to assist with their investments, they may have difficulty accessing electronic fund disclosures.

Different disclosure documents may arrive in different ways. For example, an investor may receive a brief notice in the mail telling him or her how to get proxy materials in paper or online, while he or she would receive a full copy of a fund's prospectus or summary prospectus.

In light of the technological advances made in recent years and the increased reliance by investors on electronic media, we are seeking comment on the form and manner of disclosure delivery.

22. Do you prefer to access some types of information (such as a prospectus (or summary prospectus), shareholder reports, and proxy statements) electronically and to receive other types in paper? If so, which types of information do you wish to access electronically versus receive in paper?

23. Do you currently receive the right amount of fund information in the mail? If you receive too much or too little information by mail, have you found it difficult to tell your broker, investment adviser, or fund that you want to receive more or less paper?

24. Should we continue to require funds to deliver a paper copy of their prospectuses or summary prospectuses unless you have chosen to receive these documents electronically? Alternatively, should we permit funds to email this information to you and not send paper copies without having to ask you for permission first, if the fund has an email address on file for you? Are there other means such as text messages, notification via an app, or social media that funds should use to effectively communicate information (or the availability of information) to investors? Under an electronic delivery approach, how should investors be able to request delivery of paper disclosures?

25. Do you prefer to receive a prospectus or summary prospectus directly, or would you prefer to receive a brief notice (such as a postcard or an email containing a link to the document) informing you that new or amended fund disclosure is available? Are you more likely to read, retain, or act on a fund disclosure document if you receive it directly by mail or electronic communication (such as email) rather than simply being notified that it is available? If you prefer to receive a brief notice, how frequently should you receive this notice, and how should funds provide the notice (for example, paper, email, text, or robocall)? Alternatively, would you prefer not to receive communication from a fund and to find information independently about the fund online at a time of your choosing? If yes, should we permit this approach for all information, or should there be an exception for certain types of fund information, such as tax information and proxy materials? Are you more likely to read, retain, or act on a fund disclosure document if you receive it directly by mail or electronic communication (such as email)?

26. Do you have different informational needs or interests for new fund investments as opposed to your existing fund investments? For example, would you like a fund to send you a copy of its prospectus or summary prospectus when you first buy a fund's shares but prefer that the fund not send you a copy of the prospectus in subsequent years, except upon request? For your existing fund investments, would you like to receive a copy of the prospectus or other notice only if the fund has a material change (like a material change in its principal investment strategy or a material increase in fees)? If so, should the fund explain or highlight the material change(s) for you in some manner?

As discussed above and in section II.C.2, electronic delivery of fund disclosures could have significant benefits for funds and investors, such as cost savings and enhanced features improving the usefulness of disclosures. We are seeking comment on what, if anything, the Commission should do to encourage funds to deliver documents electronically in an investor friendly manner, and to encourage investors to take advantage of the benefits that electronic delivery can provide, while minimizing the drawbacks.

27. How should funds more effectively use technology and communication methods to help investors focus on important fund information?

28. Should we accommodate changes in the ways investors review electronic documents, such as the increasing use of mobile devices? If so, how? How likely are you to read fund disclosures on your mobile device?

29. What features in electronic disclosures (such as hyperlinks, searchability, and the ability to save on your computer) do you find most useful? How can more funds be encouraged to make these features available? Are there any features that funds should be required to make available?

30. Are there steps funds could take to help overcome barriers to electronic delivery in light of various concerns, such as privacy or discomfort with technology? Are there ways that funds can make electronic disclosures more user-friendly, especially for those averse to using the internet in making investment decisions?

31. Do cybersecurity issues make you reluctant to open an attachment, click on a link, or log in to a fund website based on links embedded in emails? How can funds make electronic access more secure, and how can they make you feel safer when receiving documents or other communications electronically? Are there protocols that the Commission could require to help make electronic delivery safer for investors?

32. Would you be more likely to access electronic information about funds, or access such information more frequently, if we required funds to disclose certain updated information online (for example, updated performance)?

The design of information can influence an investment decision. For this reason, the Commission has established requirements for certain disclosure documents to help ensure that key information is presented clearly, is easy to find, and facilitates comparisons between funds. These requirements prescribe, for example, the order, content, form, and timing of certain information.

Technology can be a powerful tool to enhance the design of disclosures and the investor experience of consuming them. As an example, a glossary of terms and definitions may be necessary for a paper-based document, but web-based disclosures could take advantage of pop-ups, hovers, or other tools to provide definitions when the investor needs them.

The Commission is seeking input with respect to all aspects of the way fund information is presented to investors and how to design disclosures to improve the investor experience and help investors make more informed investment decisions.

Plain language disclosure makes information more accessible to investors and promotes investor engagement in financial decision-making. Currently, funds are required to follow a plain English rule to make their prospectuses clear, concise, and understandable.19 More detailed standards apply to certain sections of the prospectus, such as the summary section and the description of risk factors. Under the rule, funds generally must follow these plain English principles, among others:

• Short sentences;

• Descriptive headings;

• Understandable language (generally avoiding reliance on glossaries, defined terms, and legal jargon or highly technical business terms);

• Active voice; and

• Tabular presentations or bullet lists, particularly when presenting complex material.

Plain language plays an important role in investors' ability to use fund disclosures. We are seeking comment on the effectiveness of our current plain English framework and how to improve the readability and usefulness of fund disclosures for investors.

33. Are required fund disclosures (such as a prospectus, shareholder report, and proxy statements) easy to read?

34. Should we do more to promote less technical writing in fund disclosures? For example, should we:

• Replace technical terms, such as “front-end load” or “12b-1 fees”? Alternatively, are these terms so well-established that replacing them would confuse investors?

• Require certain fund disclosure documents or sections of such documents to have specific readability scores? 20

• Add more sample language to Commission forms that funds can use to introduce a given topic in their disclosures using basic, understandable terms? 21 Which parts of the prospectus would benefit from additional explanation of the purpose of the disclosure?

• Encourage or require greater use of personal pronouns (such as “you”) in disclosures to speak directly to the reader?

35. Would you prefer more use of visual presentations (such as tables, charts, and graphs) in fund disclosures? Are there particular types of fund information that you would prefer to receive as visual presentations? Do you find the current visuals in fund disclosures (such as graphs showing the performance history of a fund) useful, or can they be too complex?

36. Should we modify the format of prospectuses or other required fund disclosures to make them more user-friendly? For example, should certain summary or other disclosure be presented in a question-and-answer (Q&A) format? 22 If a Q&A format is used, should we standardize the questions, or should funds have the flexibility to develop different questions based on their facts and circumstances?

37. A fund's name is often the first piece of information you see about a fund. If a fund name includes a particular type of investment, industry, country, or geographic region, what conclusions do you draw about how the fund invests? More generally, do you believe that a fund's name conveys information about the fund's investments and investment risks?

38. The SEC's Office of Investor Education and Advocacy maintains a website at www.Investor.gov that provides a variety of publications to help you understand the various features and risks of common investment products.23 Should we require fund disclosure documents to include a link to that website or its relevant publications to help investors make more informed investment decisions? In the alternative, should we require an investment education section within each prospectus that describes the basic features and risks of the relevant investment type? Are there additional ways the Commission could promote the overall financial education of fund investors?

Recent technological developments could enable more interactive, user-friendly disclosure that funds can tailor to individual investors' needs. Among other things, technology could help investors do the following:

• Find information of interest. For instance, while the electronic version of a paper-based disclosure may currently include hyperlinks in the table of contents section, funds could use other technological tools to help an investor better navigate or filter the disclosure to find and understand information of interest.

• Understand fund disclosures. Potential tools that funds could use to make their disclosures more understandable include pop-ups or hovers to provide plain language definitions or background on more complex issues.

• Personalize fund disclosure based on individual needs and circumstances. Funds or others could use technology to generate personalized fund data or illustrations based on investor inputs, such as fees and expenses on a specific investment size.

• Access more current information about funds. Technology could allow a fund to make static disclosure more useful by continuously updating information, such as fund performance.

Given advances in technology, we are seeking comment on ways funds could better use technology to make disclosure more useful and engaging for individual investors.

39. How can we encourage or require funds to display fund information in a more user-friendly manner? For example, are there ways a fund could use web-based disclosure to present prospectus information to make the information more accessible and useful to you than an electronic rendering of a paper document (such as a PDF)?

40. Should fund disclosures be more personalized to enhance your understanding and engagement? If so, how? For example, should we encourage or require funds to use tools in electronic disclosures to help investors filter information to align with their areas of interest or personalize information based on their individual circumstances?

41. We require certain fund disclosures to include hyperlinks to other pieces of information (such as a fund website or another fund document). Should we require other technologies in addition to or in lieu of hyperlinks to connect information (such as QR codes 24 )?

42. Should interactive fee calculators and performance presentations or other interactive tools supplement or replace certain required fund disclosures? If so, how would these tools integrate into the current disclosure regime?

43. How important are design elements—such as larger font sizes, greater use of white space, colors, or visuals, or the use of audio or video disclosures—to investors?

44. Assuming that more interactive and visually appealing disclosures may be more costly and that you will ultimately pay those costs, would you be willing to pay more for these enhanced features?

45. What do investors want to see done to give funds the ability to use technology creatively to effectively convey information to investors?

Concise, user-friendly disclosure assists investors in making their investment decisions. To promote these principles, in January 2009, the Commission amended the registration form used by mutual funds and ETFs to provide investors with streamlined and user-friendly information that is key to an investment decision.25 Specifically, the Commission added a new summary section to mutual fund and ETF prospectuses and allowed these funds to deliver a shorter summary prospectus to investors, subject to certain conditions. The key information in the summary section includes a fund's investment objectives and strategies, risks, costs, and performance. Having this information in a standardized order in all mutual fund and ETF prospectuses helps investors compare multiple funds.

A fund's summary prospectus includes the same key information that the fund provides in the summary section of its prospectus. Appendix A to this release contains a hypothetical summary prospectus solely for illustrative purposes. A fund that uses a summary prospectus must provide its prospectus, SAI, and recent shareholder reports on a website and deliver these documents by paper or email upon an investor's request. Under this layered approach to disclosure, investors receive key information directly and have access to more detailed information.

We generally believe that investors benefit from clear and accurate summary disclosure of key information. Specifically, summary disclosure, along with access to more detailed information, can assist investors in making more informed investment decisions. We are seeking comment on the effectiveness of the summary prospectus for mutual funds and ETFs and whether a similar summary disclosure framework might improve other fund disclosures.

46. Should we do more to encourage or require shorter, “summary” disclosures, with additional information available online or upon request? For example, should we require summary versions of other required fund disclosures, such as shareholder reports?

47. Do you use the summary prospectus in making investment decisions? Does the summary prospectus contain the right amount and type of information to assist you in making an investment decision? Would other information, such as measures of leverage 26 or derivative exposure, help you make an informed investment decision? Are there disclosure items currently required in the summary prospectus that we should eliminate?

48. Currently, we only permit funds to disclose certain pieces of information in their summary prospectuses. Should the summary prospectus also alert you to important imminent events, such as impending liquidations, mergers, or large distributions that might have a significant impact on your investment decisions?

49. Do you think summary prospectuses are too short, too long, or an appropriate length? The Commission intended each summary prospectus to consist of three or four pages, but allows funds flexibility to set the length.27 However, many summary prospectuses exceed this intended length. Certain foreign jurisdictions have adopted summary disclosure documents that include page limits. For example, Canada's Fund Facts document cannot exceed four pages, and the European Union's Key Investor Information Document (“KIID”) cannot exceed two pages.28 Should we limit the length of summary prospectuses, or should we continue to provide funds with flexibility in this area?

50. How can technology enhance the usefulness of summary disclosure for investors? Should electronic versions of summary documents provide the ability to more easily access additional, detailed information by clicking on a piece of information? Should we encourage technology that can aggregate fund information from multiple funds so an investor can see a summary of his or her entire portfolio? If so, what is the best way to encourage this type of technology? Would investors be willing to pay for these technological enhancements?

Logical organization of information can help investors easily find desired information at the appropriate level of detail. As previously discussed, the current disclosure framework for most funds consists of a prospectus (and a summary prospectus for most mutual funds and ETFs), SAI, and annual and semiannual shareholder reports. The prospectus and SAI generally describe how the fund will operate on an ongoing basis, and the shareholder reports reflect how the fund operated in the past. In addition, funds often make additional information available on their websites.

In certain contexts, such as in summary prospectuses, we require funds to disclose required information in a standardized order. We also require that certain information appear in a fund's prospectus as opposed to its SAI. However, we currently allow funds to choose how to order many individual items within a required disclosure document.

Fund websites can also be a valuable tool for providing information to investors in real-time. For example, performance information can quickly become out-of-date, so referring investors to a website for more current performance information may be preferred. Funds may also have certain arrangements in place with financial professionals with respect to the amount of sales charge imposed.29 Since the list of financial professionals and the terms of the agreements may change frequently, it may be more appropriate to disclose this information on a website rather than in a fund prospectus.

Because of the importance of providing investors fund information in a location where they can reasonably expect to find the information they want, we are seeking comments on how to rationalize and improve the requirements associated with the location and order of fund information.

51. Does the current disclosure framework of a summary prospectus, prospectus, SAI, and annual and semiannual reports provide you the necessary information to make informed investment decisions? Should funds provide additional information? Would a one-page sheet at the beginning of each prospectus (or summary prospectus with key information such as historical performance, fees, portfolio managers, date of inception and whether the fund employs leverage to a significant extent) be helpful to investors? If so, should this one-page sheet be standardized?

52. Is there information that is currently located in the summary prospectus, prospectus, SAI, or annual report that would be more appropriate in a different regulatory document or online?

53. Are there any disclosure materials that you receive separately, for example a summary prospectus or annual report, that you would prefer to receive in a single, combined document? If you would prefer to receive these disclosures as a single unified document, when should it be delivered?

54. Does the standardized order of information in a mutual fund or ETF summary prospectus help you more easily locate specific information or compare multiple funds? If so, would you find it helpful if information appeared in a set order in any other fund disclosure documents?

55. Currently, a single prospectus, SAI, or shareholder report may include information about many funds. Do you find these documents difficult to navigate? Should we limit these documents to one fund per document? Does your response depend if it imposes additional costs on investors? Alternatively, should we require that all the information about a single fund appear in one place in a multi-fund document?

56. Currently, while funds' regulatory documents are freely available through the Commission's EDGAR system, most funds include a number of those regulatory documents (such as a prospectus and shareholder report) on their websites. However, they often do not post all of them (such as a fund's quarterly holdings and proxy voting record). Do you typically obtain fund information through EDGAR, through the fund's website, or through a different (such as a, third-party) source—or some combination of these? Would it be useful to you to be able to access all required fund disclosures in one centralized location on a fund's website?

Structuring disclosures can enhance investors' access to information and improve the quality of available information. Even if investors do not know what structured disclosure is, they benefit from structured disclosure when they research and compare funds using various online tools. Structured disclosure consists of disclosure items that are machine-readable (meaning they can be understood by a computer or other electronic device) because the disclosure text has been labeled (sometimes referred to as “tagged”) using an electronic reporting language, such as eXtensible Markup Language (“XML”) or eXtensible Business Reporting Language (“XBRL”). Tagging disclosures allows investors and other market participants to more easily access, share, and analyze fund information across different systems or platforms. Figure 1 below illustrates the difference between disclosure as you might see it (left image) and structured disclosure as a computer sees it (right image). (To be clear, disclosure, to you, would appear as the example on the left—whether it is structured or

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

For the purpose of this document, we are giving meaning to certain words or initials as follows:

Table 1 lists the submitted rules addressed by this action with the dates that the rules were adopted by the MCAQD and submitted to EPA by the ADEQ, which is the governor's designee for Arizona SIP submittals. These rules constitute the MCAQD's air quality preconstruction NSR permit program.

States that have received final authorization from EPA under RCRA section 3006(b), 42 U.S.C. 6926(b), must maintain a hazardous waste program that is equivalent to, consistent with, and no less stringent than the Federal program. As the Federal program is revised to become more stringent or broader in scope, States must revise their programs and apply to EPA to authorize the revisions. Authorization of revisions to State programs may be necessary when Federal or State statutory or regulatory authority is modified or when certain other revisions occur. Most commonly, States must revise their programs because of revisions to EPA's regulations in 40 Code of Federal Regulations (CFR) parts 124, 260 through 268, 270, 273, and 279.

On August 15, 2012, the District submitted a final program revision application (with subsequent corrections) seeking authorization of revisions to its hazardous waste program that correspond to certain Federal rules promulgated between January 14, 1985 and July 1, 2004. EPA concludes that the District's application to revise its authorized program meets all of the statutory and regulatory requirements established by RCRA, as set forth in RCRA section 3006(b), 42 U.S.C. 6926(b), and 40 CFR part 271. Therefore, EPA proposes to authorize revisions to the District's hazardous waste program with the revisions described in its authorization application, and as listed below in Section G of this document.

The District has responsibility for permitting treatment, storage, and disposal facilities within its borders and for carrying out the aspects of the RCRA program described in its application, subject to the limitations of the Hazardous and Solid Waste Amendments of 1984 (HSWA). New Federal requirements and prohibitions imposed by Federal regulations that EPA promulgates under the authority of HSWA take effect in authorized States before they are authorized for the requirements. Thus, EPA will implement those HSWA requirements and prohibitions for which the District has not been authorized, including issuing HSWA permits, until the District is granted authorization to do so.

This proposal to authorize revisions to the District's authorized hazardous waste program will not impose additional requirements on the regulated community because the regulations for which the District has requested federal authorization are already effective under District law and are not changed by today's action. The District has enforcement responsibilities under its District hazardous waste program for violations of its program, but EPA retains its authority under RCRA sections 3007, 3008, 3013, and 7003, which include, among others, authority to:

• Perform inspections, and require monitoring, tests, analyses, or reports;

• Enforce RCRA requirements and suspend or revoke permits; and

• Take enforcement actions regardless of whether the District has taken its own actions.

If EPA receives comments on this proposed action, we will address those comments in our final action. If you want to comment on this proposed action, you must do so at this time. You may not have another opportunity to comment.

The District initially received final authorization effective March 22, 1985 (50 FR 9427, March 8, 1985) to implement its base hazardous waste management program. EPA granted authorization for revisions to the District's regulatory program on September 10, 2001, effective November 9, 2001 (66 FR 46961).

The District's previously-authorized hazardous waste program was administered through the District of Columbia Department of Health. However, on February 15, 2006, the District established the District Department of Environment (DDOE) and reassigned the hazardous waste program to DDOE. On July 23, 2015, DDOE was renamed as the Department of Energy and Environment (DOEE). This name change occurred after the District submitted a program revision application. As such, both DDOE and DOEE appear in the District's final program revision application (and subsequent corrections). The DOEE's Hazardous Waste Branch within its Toxic Substances Division has authority to implement the District's hazardous waste program.

On August 15, 2012, the District submitted a final program revision application (with subsequent corrections), seeking authorization of additional revisions to its program in accordance with 40 CFR 271.21. As described in Section F, the District has proposed to transfer the authority to administer the approved program from the District of Columbia Department of Health to DOEE. The District's revision application also includes the District's statutory and regulatory changes to the District's authorized hazardous waste program, including adoption of the Federal hazardous waste regulations published through July 1, 2004 (RCRA Cluster XIV), with certain exceptions described in Section H. The District's revised statutes and regulations are equivalent to, and no less stringent than, the analogous Federal requirements.

The District seeks authority to administer the Federal requirements that are listed in Table 1 below. Effective October 28, 2005, the District incorporates by reference these Federal provisions. This table lists the District's analogous requirements that are being recognized as no less stringent than the analogous Federal requirements.

The District's regulatory references are to Title 20 of the District of Columbia Municipal Regulations (DCMR), Chapters 42 and 43, as amended effective October 28, 2005. The District's statutory authority for its hazardous waste program is based on the District of Columbia Hazardous Waste Management Act of 1977, DC Official Code § 8-1301 et seq. The District's application also includes a revised Program Description, which provides a description of the hazardous waste regulatory program in the District.

In this proposed rule, EPA proposes, subject to public review and comment, that the District's hazardous waste program revision application satisfies all of the requirements necessary to qualify for final authorization. Therefore, EPA is proposing to authorize the District for the following program revisions:

The District hazardous waste program contains certain provisions that are broader than the scope of the Federal program. These broader in scope provisions are not part of the program EPA is proposing to authorize. EPA cannot enforce requirements that are broader in scope, although compliance with such provisions is required by District law. Examples of broader in scope provisions of the District's program include, but are not limited to, the following:

(a) 20 DCMR 4260.4(e) defines, and 20 DCMR Section 4203 identifies specific procedures for listing, solid wastes that are not considered hazardous wastes under 40 CFR part 261, but which the District may determine to regulate as hazardous wastes under 20 DCMR Chapters 42 and 43. Such District-only wastes would make the District's universe of regulated hazardous waste larger than EPA's and, therefore, broader in scope.

(b) At 20 DCMR Section 4390, the District requires permit application fees from generators, owners or operators of transfer facilities, and hazardous waste storage, treatment, and disposal facilities.

The District hazardous waste program contains several provisions that are more stringent than the RCRA program as codified in the July 1, 2004 edition of Title 40 of the CFR. More stringent provisions are part of a Federally-authorized program and are, therefore, Federally-enforceable. Under this proposed action, EPA would authorize the District program for each more stringent provision. The specific more stringent provisions are also noted in Table 1. They include, but are not limited to, the following:

(a) At 20 DCMR 4261.7, the District subjects generators of no more than 100 kilograms in a calendar month to the notification requirements at 20 DCMR 4204.1, rather than the reduced requirements in the Federal regulations for this group of generators. Additionally, the District does not incorporate the Federal provision at 40 CFR 261.5(j) that allows conditionally exempt small quantity generator waste that is mixed with used oil to be managed as used oil. Instead, the District requires such a mixture to be managed as hazardous waste.

(b) In addition to the requirements of 40 CFR part 265, subpart I, 20 DCMR 4265.7 requires generators storing waste in containers to also comply with the containment system requirements of 40 CFR 264.175 and the closure requirements of 40 CFR 264.178.

(c) At 20 DCMR 4262.4, the District limits hazardous waste satellite accumulation to 90 days (180 days or 270 days for generators of greater than 100 kilograms but less than 1,000 kilograms), and requires that containers in satellite accumulation areas are marked with an accumulation start date. The Federal requirements do not have a dating requirement or time limit for satellite accumulation as long as no more than 55 gallons of non-acute waste or one quart of acute waste is accumulated.

(d) In the District, transfer facilities are considered to be storage facilities and subject to full regulation under 20 DCMR Chapters 42 and 43, rather than the reduced requirements of the federal regulations. The District requirements are found at 20 DCMR 4264.2(a)(4) and 4265.2(a)(4).

(e) The District has a prohibition at 20 DCMR 4202.3 on any land-based treatment, storage, or disposal of hazardous waste within the District. This prohibition includes surface impoundments, waste piles, landfills, road treatment, and any other land application of hazardous waste. The District also prohibits land disposal, incineration, and underground injection of hazardous waste, and prohibits burning, processing, or incineration of hazardous waste, hazardous waste fuels, or mixtures of hazardous wastes and other materials in any type of incinerator, boiler, or industrial furnace. The Federal program does not include such prohibitions.

(f) Unlike the Federal program, the District (at 20 DCMR 4202.3) prohibits the burning of both on- and off-specification used oil in the District, and prohibits the use of used oil as a dust suppressant.

A number of the District's regulations are not part of the program revisions EPA is proposing to authorize. Those provisions include, but are not limited to, the following:

(a) The District has regulations defining how program information is to be shared with the public, but is not seeking authorization for the Availability of Information requirements relative to RCRA section 3006(f).

(b) The District is not seeking authority for the Federal corrective action program. EPA will continue to administer this part of the program.

(c) The District has incorporated the Federal hazardous waste export provisions as codified in the July 1, 2004 edition of Title 40, parts 262 and 264 of the CFR into 20 DCMR Sections 4262 and 4264. However, the District is not seeking authorization for these provisions at this time. EPA will continue to implement those requirements as appropriate.

(d) 20 DCMR Section 4266 incorporates the mixed waste provisions as codified in the July 1, 2004 edition of Title 40 of the CFR, but the District has not yet been authorized, nor is the District now seeking authorization, to implement the mixed waste regulations. The provisions at 20 DCMR 4266.1 and 4266.3 will become effective in the District when the District is authorized for the mixed waste rules.

The District will continue to issue permits covering all the provisions for which it is authorized and will administer the permits it issues. EPA will continue to administer any RCRA hazardous waste permits or portions of permits that EPA issued prior to the effective date of this authorization in accordance with the signed Memorandum of Agreement, dated March 10, 2017, which is included with this program revision application. Until such time as formal transfer of EPA permit responsibility to the District occurs and EPA terminates its permit, EPA and the District agree to coordinate the administration of permits in order to maintain consistency. EPA will not issue any new permits or new portions of permits for the provisions listed in Section G after the effective date of this authorization. EPA will continue to implement and issue permits for HSWA requirements for which the District is not yet authorized.

The District is not seeking authority to operate the program on Indian lands, since there are no Federally-recognized Indian Lands in the District.

This authorization revises the District's authorized hazardous waste management program pursuant to Section 3006 of RCRA and imposes no requirements other than those currently imposed by District law. This authorization complies with applicable executive orders and statutory provisions as follows:

Under Executive Order (E.O.) 12866 (58 FR 51735, October 4, 1993), Federal agencies must determine whether the regulatory action is “significant”, and therefore subject to Office of Management and Budget (OMB) review and the requirements of the E.O. The E.O. defines “significant regulatory action” as one that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more, or adversely affect in a material way, the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs, or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the E.O. EPA has determined that this authorization is not a “significant regulatory action” under the terms of E.O. 12866 and is therefore not subject to OMB review.

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., because this authorization does not establish or modify any information or recordkeeping requirements for the regulated community and only seeks to authorize the pre-existing requirements under State law and imposes no additional requirements beyond those imposed by State law.

Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing, and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in title 40 of the CFR are listed in 40 CFR part 9.

The Regulatory Flexibility Act (RFA), generally requires Federal agencies to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impacts of this authorization on small entities, small entity is defined as: (1) A small business defined by the Small Business Administration's size regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district, or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field. I certify that this authorization will not have a significant economic impact on a substantial number of small entities because the authorization will only have the effect of authorizing pre-existing requirements under State law and imposes no additional requirements beyond those imposed by State law.

Title II of the Unfunded Mandates Reform Act (UMRA) of 1995 (Pub. L. 104-4) establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost-effective, or least burdensome alternative if the Administrator publishes with the rule an explanation why the alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements. This authorization contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) for State, local, or tribal governments or the private sector. It imposes no new enforceable duty on any State, local or tribal governments or the private sector. Similarly, EPA has also determined that this authorization contains no regulatory requirements that might significantly or uniquely affect small government entities. Thus, this authorization is not subject to the requirements of sections 202 and 203 of the UMRA.

This authorization does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among various levels of government, as specified in E.O. 13132 (64 FR 43255, August 10, 1999). This document authorizes pre-existing State rules. Thus, E.O. 13132 does not apply to this authorization. In the spirit of E.O. 13132, and consistent with EPA policy to promote communications between EPA and State and local governments, EPA specifically solicited comment on this authorization from State and local officials.

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (59 FR 22951, November 9, 2000), requires the EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” This authorization does not have tribal implications, as specified in E.O. 13175 because EPA retains its authority over Indian Country. Thus, E.O. 13175 does not apply to this authorization.

EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the E.O. has the potential to influence the regulation. This action is not subject to E.O. 13045 because it proposes to approve a State program.

This authorization is not subject to Executive Order 13211, “Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not a “significant regulatory action” as defined under E.O. 12866, as discussed in detail above.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), (Pub. L. 104-113, 12(d)) (15 U.S.C. 272), directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Federal agency decides not to use available and applicable voluntary consensus standards. This authorization does not involve technical standards. Therefore, EPA is not considering the use of any voluntary consensus standards.

Executive Order 12898 (59 FR 7629, February 16, 1994) establishes Federal executive policy on environmental justice. Its main provision directs Federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States. EPA has determined that this authorization will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations. This authorization does not affect the level of protection provided to human health or the environment because this document authorizes pre-existing State rules which are equivalent to and no less stringent than existing Federal requirements.

The Congressional Review Act, 5 U.S.C. 801-808, 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 document 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 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).

You may be potentially affected by this action if you manufacture (including import), process, or distribute in commerce asbestos as defined by TSCA Title II, Section 202 (15 U.S.C. 2642) (including as part of an article). The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

• Construction (NAICS code 23)

• Manufacturing (NAICS codes 31-33)

• Wholesale Trade (NAICS code 42)

• Transportation (NAICS code 48)

This action may also affect certain entities through pre-existing import certification and export notification rules under TSCA (15 U.S.C.2601 et seq.). Persons who import or process any chemical substance governed by a final SNUR are subject to the TSCA section 13 (15 U.S.C. 2612) import certification requirements and the corresponding regulations at 19 CFR 12.118 through 12.127 (see also 19 CFR 127.28). Those persons must certify that the shipment of the chemical substance complies with all applicable rules and orders under TSCA, including any SNUR requirements. The EPA policy in support of import certification appears at 40 CFR part 707, subpart B.

In addition, asbestos, as defined in this proposed rule, is already subject to TSCA section 6(a) (40 CFR part 763, subparts G and I) rules that trigger the export notification provisions of TSCA section 12(b) (15 U.S.C. 2611(b); see also 40 CFR 721.20). Any person who exports or intends to export asbestos must comply with the export notification requirements in 40 CFR part 707, subpart D; however, although EPA is proposing to make inapplicable the exemption at 40 CFR 721.45(f) for persons who import or process any asbestos as part of an article in a category listed in Table 2, the Agency is not proposing to require export notification for articles containing asbestos.

If you have any questions regarding the applicability of this action to a particular entity, consult the technical information contact listed under FOR FURTHER INFORMATION CONTACT.

Section 5(a)(2) of TSCA (15 U.S.C. 2604(a)(2)) authorizes EPA to determine that a use of a chemical substance is a “significant new use.” EPA must make this determination by rule after considering all relevant factors, including those listed in TSCA section 5(a)(2) (see Unit IV). Once EPA determines that a use of a chemical substance is a significant new use, TSCA section 5(a)(1) requires persons to submit a significant new use notice (SNUN) to EPA at least 90 days before they manufacture (including import) or process the chemical substance for that use (15 U.S.C. 2604(a)(1)(B)(i)). TSCA further prohibits such manufacturing (including importing) or processing from commencing until EPA has conducted a review of the notice, made an appropriate determination on the notice, and taken such actions as are required in association with that determination (15 U.S.C. 2604(a)(1)(B)(ii)). As described in Unit V., the general SNUR provisions are found at 40 CFR part 721, subpart A.

EPA is proposing a SNUR for asbestos, using the definition in TSCA Title II, Section 202, which defines asbestos as the “asbestiform varieties of six fiber types—chrysotile (serpentine), crocidolite (riebeckite), amosite (cummingtonite-grunerite), anthophyllite, tremolite or actinolite.” The proposed significant new use of asbestos (including as part of an article) is manufacturing (including importing) or processing for certain uses no longer ongoing. The Agency found no information indicating that the following uses are ongoing, and therefore, the following uses are subject to this proposed SNUR: Adhesives, sealants, and roof and non-roof coatings; arc chutes; beater-add gaskets; extruded sealant tape and other tape; filler for acetylene cylinders; high-grade electrical paper; millboard; missile liner; pipeline wrap; reinforced plastics; roofing felt; separators in fuel cells and batteries; vinyl-asbestos floor tile; and any other building material (other than cement).

The Frank R. Lautenberg Chemical Safety for the 21st Century Act (Pub. L. 114-182, 130 Stat. 448) amended TSCA in June 2016. The new law includes statutory requirements related to the risk evaluations of conditions of use for existing chemicals. Based on the 2014 update of EPA's TSCA Work Plan for Chemical Assessments, in December of 2016, EPA designated asbestos as one of the first 10 chemical substances subject to the Agency's initial chemical risk evaluations (81 FR 91927), as required by TSCA section 6(b)(2)(A) (15 U.S.C. 2605(b)(2)(A)).

EPA is separately conducting a risk evaluation of asbestos under its conditions of use, pursuant to TSCA section 6(b)(4)(A). Through scoping and subsequent research for the asbestos risk evaluation, EPA identified several conditions of use of asbestos to include in the risk evaluation. Those include imported raw bulk chrysotile asbestos for the fabrication of diaphragms for use in chlorine and sodium hydroxide production and several imported chrysotile asbestos-containing materials, including sheet gaskets for use in titanium dioxide chemical production, brake blocks for use in oil drilling, aftermarket automotive brakes/linings and other vehicle friction products, other gaskets and packing, cement products, and woven products. This proposed significant new rule would not identify as significant new uses those uses that EPA believes are currently ongoing. EPA is requesting public comment on this proposal and welcomes specific and verifiable documentation of any ongoing uses not identified by the Agency as well as additional uses not identified as no longer ongoing. This proposed SNUR would require persons that intend to manufacture (including import) or process any form of asbestos as defined under Title II of TSCA (including as part of an article) for a significant new use, consistent with the requirements at 40 CFR 721.25, to notify EPA at least 90 days before commencing such manufacturing (including importing) or processing. This proposed SNUR would preclude the commencement of such manufacturing (including importing) or processing until EPA has conducted a review of the notice, made an appropriate determination on the notice, and taken such actions as are required in association with that determination.

This proposed SNUR is necessary to ensure that EPA receives timely advance notice of any future manufacturing (including importing) or processing of asbestos (including as part of an article) for new uses that may produce changes in human and environmental exposures, and to ensure that an appropriate determination (relevant to the risks associated with such manufacturing (including importing), processing, and use) has been issued prior to the commencement of such manufacturing (including importing) or processing. Today's action is furthermore necessary to ensure that manufacturing (including importing) or processing for the significant new use cannot proceed until EPA has responded to the circumstances by taking the required actions under Sections 5(e) or 5(f) of TSCA in the event that EPA determines any of the following: (1) That the significant new use presents an unreasonable risk under the conditions of use (without consideration of costs or other non-risk factors, and including an unreasonable risk to a potentially exposed or susceptible subpopulation identified as relevant by EPA); (2) that the information available to EPA is insufficient to permit a reasoned evaluation of the health and environmental effects of the significant new use; (3) that, in the absence of sufficient information, the manufacturing (including importing), processing, distribution in commerce, use, or disposal of the substance, or any combination of such activities, may present an unreasonable risk (without consideration of costs or other non-risk factors, and including an unreasonable risk to a potentially exposed or susceptible subpopulation identified as relevant by EPA); or (4) that there is substantial production and sufficient potential for environmental release or human exposure (as defined in TSCA section 5(a)(3)(B)(ii)(II)).

There is a strong causal association between asbestos exposure and lung cancer and mesotheliomas (tumors arising from the thin membranes that line the chest (thoracic) and abdominal cavities and surround internal organs) (Ref. 1; Ref. 2; Ref. 3; Ref. 4; Ref. 5; Ref. 6). In addition, other cancers, as well as non-cancer effects, such as respiratory and immune effects, have been associated with asbestos exposure (Ref. 7).

Agency research conducted in support of the TSCA risk evaluation of asbestos revealed that the use of asbestos has declined dramatically in the United States since the 1970s when asbestos use was at its peak. EPA is taking action in this proposed rule to ensure that EPA receives timely advance notice and makes an appropriate determination prior to the commencement of manufacturing (including importing) or processing for any significant new use of asbestos (including as part of an article) as identified in Table 2. The rationale and objectives for this proposed SNUR are explained in detail in Unit III.

EPA has evaluated the potential costs of establishing SNUR reporting requirements for potential manufacturers (including importers) and processors of the chemical substance included in this proposed rule. This Economic Analysis (Ref. 8), which is available in the docket, is discussed in Unit IX. and is briefly summarized here.

In the event that a SNUN is submitted, costs are estimated to be less than $10,000 per SNUN submission for large business submitters and $8,000 for small business submitters. In addition, for persons exporting a substance that is the subject of a SNUR, a one-time notice to EPA must be provided for the first export or intended export to a particular country, which is estimated to be approximately $96 per notification. However, asbestos is already subject to TSCA section 6(a) rules (40 CFR part 763, subparts G and I) that trigger the export notification provisions of TSCA section 12(b) (15 U.S.C. 2611(b); see also 40 CFR 721.20), and the Agency is not proposing to require export notifications for articles containing asbestos as articles are generally excluded from the TSCA section 12(b) export notification requirements. Therefore, EPA assumes no additional costs under TSCA section 12(b) for this proposed rule.

The proposed rule may also affect firms that plan to import or process articles that may be subject to the SNUR. Although there are no specific requirements in the rule for these firms, they may choose to undertake some activity to assure themselves they are not undertaking a new use. In the accompanying Economic Analysis for this proposed SNUR (Ref. 8), example steps (and their respective costs) that an importer or processor might take to identify asbestos in articles are provided. These steps can include gathering information through agreements with suppliers, declarations through databases or surveys, or use of a third-party certification system. Additionally, importers may require suppliers to provide certificates of testing analysis of the products or perform their own laboratory testing of certain articles. EPA is unable to predict, however, what, if any, particular steps an importer might take; thus, potential total costs were not estimated.

This proposed SNUR applies to asbestos, using the definition in TSCA Title II (added to TSCA in 1986), Section 202, which defines asbestos as the “asbestiform varieties of six fiber types—chrysotile (serpentine), crocidolite (riebeckite), amosite (cummingtonite-grunerite), anthophyllite, tremolite or actinolite.” This proposed SNUR Applies to the manufacturing (including importing) or processing of asbestos (including as part of an article) for certain uses no longer ongoing. EPA found no information indicating that the following uses are ongoing, and therefore, the following uses are subject to this proposed SNUR: Adhesives, sealants, and roof and non-roof coatings; arc chutes; beater-add gaskets; extruded sealant tape and other tape; filler for acetylene cylinders; high-grade electrical paper; millboard; missile liner; pipeline wrap; reinforced plastics; roofing felt; separators in fuel cells and batteries; vinyl-asbestos floor tile; and any other building material (other than cement). Under this proposed SNUR, the exemption at 40 CFR 721.45(f) would not apply to persons who import or process asbestos as part of an article (which includes as a component of an article) because there is reasonable potential for exposure to asbestos if the substance is incorporated into articles and then imported or processed. However, in accordance with the impurity exclusion at 40 CFR 721.45(d), this proposed significant new use rule would not apply to persons who manufacture (including import) or process asbestos (including as part of an article) only as an impurity.

Asbestos has not been mined or otherwise produced in the United States since 2002; therefore, any new raw bulk asbestos used in the United States is imported. According to the U.S. Geological Survey (USGS), approximately 300 metric tons of raw bulk asbestos was imported into the United States in 2017 (Ref. 9). Chrysotile is the only form of raw bulk asbestos currently imported, and the chlor-alkali industry is the only known importer (Ref. 9). EPA did not identify any domestic entity that uses raw bulk asbestos other than the chlor-alkali industry, which uses chrysotile asbestos to fabricate diaphragms for use in chlorine and sodium hydroxide production.

In an effort to identify national import volumes and conditions of use for the asbestos risk evaluation under TSCA section 6(b)(4)(A), EPA searched a number of available data sources including EPA's Chemical Data Reporting (CDR) database, USGS's Mineral Commodities Summary and the Minerals Yearbook, the U.S. International Trade Commission's Dataweb, the U.S. Customs and Border Protection's Automated Commercial Environment (ACE) System, and the Use and Market Profile for Asbestos (EPA-HQ-OPPT-2016-0736-0085). Based on this search, EPA published a preliminary list of information and sources related to asbestos conditions of use (see Preliminary Information on Manufacturing, Processing, Distribution, Use, and Disposal: Asbestos, EPA-HQ-OPPT-2016-0736-0005) prior to a February 2017 public meeting on the scoping efforts for the risk evaluation convened to solicit public comment. EPA also convened meetings with companies, associated industry groups, chemical users and other stakeholders to aid in identifying conditions of use and verifying conditions of use identified by EPA. On June 22, 2017, EPA published the Scope of the Risk Evaluation for Asbestos (EPA-HQ-OPPT-2016-0736-0086), which further provided opportunity for the public and private sector to identify conditions of use of asbestos in the United States.

During the public comment period for the Preliminary Information on Manufacturing, Processing, Distribution, Use, and Disposal: Asbestos (EPA-HQ-OPPT-2016-0736-0005), one company identified the use of asbestos-containing gaskets, which are imported, for use during the production of titanium dioxide. During stakeholder discussions another company confirmed importing and distributing brake blocks for use in drawworks by the oil industry. EPA believes that aftermarket automotive brakes/linings and other vehicle friction products, other gaskets and packing, cement products, and woven products containing asbestos could also be imported, as reported by USGS (Ref. 10) and also appear in data from ACE (Ref. 11); however, the volume of products and the quantity of asbestos within imported products is unknown. ACE is not a publicly accessible database because it contains information that is protected under the provisions of Freedom of Information Act (5 U.S.C. 552), the Privacy Act (5 U.S.C. 552a), and the Trade Secrets Act (18 U.S.C. 1905), and the information in ACE related to importer identity cannot be released.

Asbestos was listed as a known human carcinogen in the National Toxicology Program's First Annual Report on Carcinogens in 1980 (Ref. 1). In 1988, EPA assessed the health hazards and effects caused by exposure to asbestos under the Integrated Risk Information System (IRIS) program, and determined that asbestos exposure can lead to lung cancer and mesotheliomas (tumors arising from the thin membranes that line internal organs) (Ref. 2). Many authorities have established that there is causal association between asbestos and lung cancer and mesotheliomas (Ref. 1; Ref. 3; Ref. 4). EPA also noted in the Scope of the Risk Evaluation for Asbestos that there is a causal association between exposure to asbestos and cancer of the larynx and cancer of the ovary (Ref. 4). There is also suggestive evidence of a positive association between asbestos and cancer of the pharynx (Ref. 4; Ref. 12), stomach (Ref. 3; Ref. 4), and colorectum (Ref. 1; Ref. 3; Ref. 4; Ref. 12; Ref. 13; Ref. 14). All types of asbestos fibers have been reported to cause mesothelioma. (Ref. 4).

Increases in lung cancer mortality have been reported in both workers and residents exposed to various asbestos fiber types as well as fiber mixtures (Ref. 4). There is evidence in in-vitro, animal, and human studies that asbestos is genotoxic, meaning asbestos can damage an organism's genetic material (Ref. 3). There is also evidence that asbestos exposure is associated with adverse respiratory system effects, such as asbestosis and immunotoxicity (Ref. 3; Ref. 7).

The greatest risk of exposure to asbestos occurs when the substance is in a friable state, meaning the fibers can be crumbled, pulverized or reduced to a powder under hand pressure (Ref. 3). During use and over time, non-friable asbestos has the potential to become friable (Ref. 3). For example, testing has shown that non-friable asbestos-containing material can become friable during use such as cutting, crumbling, and tearing, and as a result of such use, asbestos fibers can be released into the air (Ref. 15). Similarly, non-friable asbestos-containing building materials can release fibers if disturbed during building repair or demolition (Ref. 16). Exposures to workers, consumers and the general population, as well as environmental receptors, may occur from industrial releases and use of asbestos-containing products. Based on EPA's research conducted during the early stages of the TSCA risk evaluation, most of the ongoing uses of asbestos pertain to industrial and commercial uses (Ref. 7).

The primary exposure route for asbestos is inhalation. Asbestos fibers can be released into the air during processing of raw bulk asbestos and asbestos-containing products. Weathering and the disturbance and/or degradation of asbestos-containing products can also cause asbestos fibers to be suspended in air (Ref. 3). Fibers can then enter the lungs through inhalation. Exposures to asbestos can potentially occur via oral and dermal routes; however, EPA anticipates that the most likely exposure route is inhalation.

EPA is concerned about the potential for adverse health effects of asbestos based on established sound scientific data indicating that asbestos is a known human carcinogen. Asbestos was listed as a human carcinogen in the National Toxicology Program's First Annual Report on Carcinogens in 1980 (Ref. 1).

Asbestos, in particular chrysotile asbestos, has several unique properties, including low electrical conductivity while maintaining high tensile strength, high friction coefficient, and high resistance to heat (Ref. 17). These properties made asbestos ideal for use in friction materials (e.g., brakes), insulation (e.g., sound, heat, and electrical), and building materials (e.g., cement pipes, roofing compounds, flooring) over the past century. However, the use of asbestos has declined dramatically due to health concerns and consumer preference (Ref. 17), which has led to the elimination of some exposure scenarios associated with such uses. According to USGS, in 1973, national consumption, including manufacturing/importing and processing, of raw bulk asbestos peaked around 800,000 metric tons and has since fallen approximately 99 percent to between 300 and 800 metric tons in recent years (Ref. 9). Today, most manufactured products in the United States are now asbestos-free (Ref. 17).

In 1989, EPA published a final rule Asbestos: Manufacture, Importation, Processing, and Distribution in Commerce Prohibitions (54 FR 29460, July 12, 1989) (FRL-3476-2), which was intended “to prohibit, at staged intervals, the future manufacture, importation, processing and distribution in commerce of asbestos in almost all products, as identified in the rule . . .” and to “reduce the unreasonable risks presented to human health by exposure to asbestos during activities involving these products.” The 1989 final rule applied to the asbestos product categories identified in the Regulatory Impact Analysis of Controls on Asbestos and Asbestos Products, which was conducted in support of the rule (Ref. 20). However, the ban against most of the asbestos product categories was overturned by the Fifth Circuit Court of Appeals in 1991. In addition to the asbestos products that remain banned after the court ruling, which are identified in Table 1 below, any new use of asbestos was also banned. The prohibition on any new uses of asbestos is for uses initiated for the first time after August 25, 1989. As a point of clarification, in this proposed rulemaking, a significant new use of asbestos addresses multiple uses that were initiated prior to August 25, 1989, for which manufacturing and processing are no longer ongoing in the United States.

As part of the information gathering activity associated with the current asbestos risk evaluation, the Agency researched market availability for the asbestos product categories subject to the 1989 asbestos ban and phase-out rule that was later overturned. EPA identified several asbestos product categories where manufacturing (including importing) and processing for the use is no longer ongoing. Through further refinement of the Scope of the Risk Evaluation for Asbestos, the Agency determined that asbestos-containing cement products (e.g., pipe, shingles and replacement parts) are the only condition of use of asbestos in building materials; therefore, this proposed SNUR also applies to all asbestos-containing building materials other than asbestos cement products. These product categories and descriptions are listed in Table 2, and manufacturing and processing for these product categories are significant new uses subject to this proposed rulemaking. The product category descriptions are based on the product category descriptions presented in the Regulatory Impact Analysis of Controls on Asbestos and Asbestos Products for the 1989 final rule (Ref. 20) and may not be all-encompassing.

As part of the current asbestos risk evaluation process, the Agency identified conditions of use to be considered under the TSCA risk evaluation. Those include: Imported raw bulk chrysotile asbestos for the fabrication of diaphragms for use in chlorine and sodium hydroxide production and several imported chrysotile asbestos-containing materials including sheet gaskets for use in titanium dioxide chemical production, brake blocks for use in oil drilling, aftermarket automotive brakes/linings and other vehicle friction products, other gaskets and packing, cement products, and woven products. These ongoing uses identified by EPA are not among the significant new uses identified in this proposal and therefore would not require a significant new use notification submission to the Agency. EPA requests comment regarding any ongoing uses not identified by the Agency and welcomes specific and verifiable documentation. EPA also requests comment on additional uses not identified as no longer ongoing.

In the absence of this proposed rule, the importing or processing of asbestos (including as part of an article) for the significant new uses proposed in this rule may begin at any time, without prior notice to EPA. Thus, EPA is concerned that commencement of the manufacturing (including importing) or processing for the significant new uses of asbestos identified in Table 2 could significantly increase the volume of manufacturing (including importing) and processing of asbestos as well as the magnitude and duration of exposure to humans over that which would otherwise exist currently. EPA has preliminarily concluded that action on this chemical substance is warranted and therefore proposes that any manufacturing (including importing) or processing of asbestos (including as part of an article), using the definition under Title II of TSCA, for any use identified in Table 2 would be a significant new use.

Consistent with EPA's past practice for issuing SNURs under TSCA section 5(a)(2), EPA's decision to propose a SNUR for a particular chemical use need not be based on an extensive evaluation of the hazard, exposure, or potential risk associated with that use. If a person decides to begin manufacturing (including importing) or processing asbestos (including as part of an article) for a use identified in Table 2, the notice to EPA allows the Agency to evaluate the use according to the specific parameters and circumstances surrounding the conditions of use.

Chemical substances that are part of an article may still result in exposure if the chemical substance has certain physical-chemical properties—as in the case of asbestos, fibers can degrade with use and become friable over time where human exposures can occur leading to increased risks for disease (Ref. 3; Ref. 15; Ref. 16). During use and over time, non-friable asbestos has the potential to become friable (Ref. 3). For example, testing has shown that non-friable asbestos-containing material can become friable during use such as cutting, crumbling, and tearing, and as a result of such use, asbestos fibers can be released into the air (Ref. 15). Similarly, non-friable asbestos-containing building materials can release fibers if disturbed during building repair or demolition (Ref. 16). Therefore, EPA is proposing to make inapplicable the exemption at 40 CFR 721.45(f) for persons who import or process any asbestos as part of an article for the proposed significant new uses, which are identified in Table 2. A person who imports or processes asbestos (including as part of an article) for a proposed significant new use identified in Table 2 would be subject to the significant new use notification requirements in this proposed rule. No person would be able to begin importing or processing asbestos (including as part of an article) for a proposed significant new use without first submitting a SNUN to EPA and until the Agency has conducted a review of the notice, made an appropriate determination on the notice, and taken such actions as are required in association with that determination.

As requested in Unit XII., EPA asks for comment on the Agency's understanding of ongoing uses. When submitting a comment to the Agency, EPA requests specific and verifiable information that provides evidence of ongoing uses beyond those identified in this proposed rule.

Based on the considerations in Unit III.A., EPA wants to achieve the following objectives with regard to the significant new use of asbestos (including as part of an article) as designated in this proposed rule:

1. EPA would receive notice of any person's intent to manufacture (including import) or process asbestos (including as part of an article) for the described significant new use before that activity begins.

2. EPA would have an opportunity to review and evaluate data submitted in a SNUN before the notice submitter begins manufacturing (including importing) or processing asbestos (including as part of an article) for the described significant new use.

3. EPA would be able to either determine that the significant new use is not likely to present an unreasonable risk, or take necessary regulatory action associated with any other determination before the described significant new use of asbestos (including as part of an article) occurs.

Section 5(a)(2) of TSCA states that EPA's determination that a use of a chemical substance is a significant new use must be made after consideration of all relevant factors including:

1. The projected volume of manufacturing and processing of a chemical substance.

2. The extent to which a use changes the type or form of exposure of human beings or the environment to a chemical substance.

3. The extent to which a use increases the magnitude and duration of exposure of human beings or the environment to a chemical substance.

4. The reasonably anticipated manner and methods of manufacturing, processing, distribution in commerce, and disposal of a chemical substance.

In addition to these factors enumerated in TSCA section 5(a)(2), the statute authorizes EPA to consider any other relevant factors.

Both federal and state environmental protection agencies and occupational safety and health organizations provide existing regulation pertaining to certain aspects of the manufacturing (including importing), processing, use, and/or disposal of asbestos in order to protect consumers, workers, and the environment. EPA believes the significant new uses of asbestos identified in Table 2 could increase the volume of manufacturing (including importing) and processing of asbestos, as well as the duration and magnitude of human and environmental exposure to the substance, reverse the declining trend of national import volumes of the substance, and reintroduce exposure scenarios that have become obsolete over the past several decades. It is imperative that EPA be notified of any intended significant new use of asbestos identified in Table 2 and be provided the opportunity to evaluate such proposed new use. Once a SNUR is finalized, failure to notify EPA and file a SNUN prior to manufacturing or processing for the significant new uses would constitute a violation of TSCA and would be subject to penalties, accordingly.

To determine what would constitute a significant new use of asbestos as discussed in this unit, EPA considered relevant information about the toxicity or expected toxicity of the substance, likely human exposures and environmental releases associated with possible uses, and the four factors listed in Section 5(a)(2) of TSCA. In addition to these factors enumerated in TSCA section 5(a)(2), the statute authorizes EPA to consider any other relevant factors.

The article exemption at 40 CFR 721.45(f) is based on an assumption that people and the environment will generally not be exposed to chemical substances in articles (Ref. 18). However, even when contained in an article, asbestos can become friable over time with use (Ref. 3; Ref. 15; Ref. 16). Based on this understanding, upon submission of a SNUN, EPA intends to evaluate the potential risk of exposure to human health and the environment for any proposed significant new use of asbestos (including as part of an article). This understanding warrants making the exemption at 40 CFR 721.45(f) inapplicable to importers or processors of articles containing asbestos. Considering the potential friability of asbestos, even when incorporated in articles, and the health risks associated with exposure to asbestos, EPA proposes to affirmatively find under TSCA section 5(a)(5) that notification is justified by the reasonable potential for exposure to asbestos through the articles subject to this SNUR. EPA intends to evaluate such potential uses whether in the form of an article or not before those uses would begin for any associated risks or hazards that might exist. EPA has reason to anticipate that importing or processing asbestos as part of an article would create the potential for exposure to asbestos, and that EPA should have an opportunity to review the intended use before such use could occur. Persons subject to this proposed SNUR are required to notify EPA at least 90 days prior to commencing manufacturing (including importing) or processing of the substance for the new use. This required notification provides EPA with the opportunity to evaluate an intended significant new use of the regulated chemical substance and, if necessary, an opportunity to protect against potential unreasonable risks.

General provisions for SNURs appear under 40 CFR part 721, subpart A. These provisions describe persons subject to the rule, recordkeeping requirements, and exemptions to reporting requirements.

Provisions relating to user fees appear at 40 CFR part 700. According to 40 CFR 721.1(c), persons subject to SNURs must comply with the same notice requirements and EPA regulatory procedures as submitters of Premanufacture Notices (PMNs) under TSCA section 5(a)(1)(A). In particular, these requirements include the information submission requirements of TSCA sections 5(b) and 5(d)(1), the exemptions authorized by TSCA sections 5(h)(1), (h)(2), (h)(3), and (h)(5), and the regulations at 40 CFR part 720. Once EPA receives a SNUN, EPA must either determine that the significant new use is not likely to present an unreasonable risk of injury or take such regulatory action as is associated with an alternative determination before the manufacturing (including importing) or processing for the significant new use can commence. If EPA determines that the significant new use is not likely to present an unreasonable risk, EPA is required under TSCA section 5(g) to make public, and submit for publication in the Federal Register, a statement of EPA's finding.

EPA designates June 1, 2018 (the date of web posting of this proposed rule) as the cutoff date for determining whether the new use is ongoing. The objective of EPA's approach is to ensure that a person cannot defeat a SNUR by initiating a significant new use before the effective date of the final rule. In developing this proposed rule, EPA has recognized that, given EPA's general practice of posting proposed and final SNURs on its website a week or more in advance of Federal Register publication, this objective could be thwarted even before that publication.

Persons who begin commercial manufacturing (including importing) or processing of the chemical substance (to include importing or processing articles and components thereof containing the chemical substance) for a significant new use identified as of June 1, 2018 would have to cease any such activity upon the effective date of the final rule. To resume their activities, these persons would have to first comply with all applicable SNUR notification requirements and wait until all TSCA prerequisites for the commencement of manufacturing (including importing) or processing have been satisfied (see Federal Register documents of April 24, 1990 (55 FR 17376) (FRL-3658-5) and November 28, 2016 (81 FR 85472) (FRL-9945-53) for additional information).

EPA recognizes that TSCA section 5 does not usually require developing new information (e.g., generating test data) before submission of a SNUN; however, there is an exception: Development of information is required where the chemical substance subject to the SNUR is also subject to a rule, order, or consent agreement under TSCA section 4 (see TSCA section 5(b)(1)). Also pursuant to TSCA section 4(h), which pertains to reduction of testing of vertebrate animals, EPA encourages consultation with the Agency on the use of alternative test methods and strategies (also called New Approach Methodologies or NAMs), if available, to generate any recommended test data. EPA encourages dialogue with Agency representatives to help determine how best the submitter can meet both the data needs and the objective of TSCA section 4(h).

In the absence of a TSCA section 4 test rule covering the chemical substance, persons are required to submit only information in their possession or control and to describe any other information known to or reasonably ascertainable by them (15 U.S.C. 2604(d); 40 CFR 721.25, and 40 CFR 720.50). However, as a general matter, EPA recommends that SNUN submitters include information that would permit a reasoned evaluation of risks posed by the chemical substance during its manufacturing (including importing), processing, use, distribution in commerce, or disposal. EPA encourages persons to consult with the Agency before submitting a SNUN. As part of this optional pre-notice consultation, EPA would discuss specific information it believes may be useful in evaluating a significant new use.

Submitting a SNUN that does not itself include information sufficient to permit a reasoned evaluation may increase the likelihood that EPA will either respond with a determination that the information available to the Agency is insufficient to permit a reasoned evaluation of the health and environmental effects of the significant new use or, alternatively, that in the absence of sufficient information, the manufacturing (including importing), processing, distribution in commerce, use, or disposal of the chemical substance may present an unreasonable risk of injury.

SNUN submitters should be aware that EPA will be better able to evaluate SNUNs and define the terms of any potentially necessary controls if the submitter provides detailed information on human exposure and environmental releases that may result from the significant new uses of the chemical substance.

EPA recommends that submitters consult with the Agency prior to submitting a SNUN to discuss what information may be useful in evaluating a significant new use. Discussions with the Agency prior to submission can afford ample time to conduct any tests that might be helpful in evaluating risks posed by the substance. According to 40 CFR 721.1(c), persons submitting a SNUN must comply with the same notice requirements and EPA regulatory procedures as persons submitting a PMN, including submission of test data on health and environmental effects as described in 40 CFR 720.50. SNUNs must be submitted on EPA Form No. 7710-25, generated using e-PMN software, and submitted to the Agency in accordance with the procedures set forth in 40 CFR 721.25 and 40 CFR 720.40. E-PMN software is available electronically at http://www.epa.gov/opptintr/newchems.

EPA has evaluated the potential costs of establishing SNUR reporting requirements for potential manufacturers (including importers) and processors of the chemical substance included in this proposed rule (Ref. 8). In the event that a SNUN is submitted, average costs are estimated at approximately $9,937 per SNUN submission for large business submitters and $7,537 for small business submitters. These estimates include the cost to prepare and submit the SNUN, and the payment of a user fee. Businesses that submit a SNUN would be subject to either a $2,500 user fee required by 40 CFR 700.45(b)(2)(iii), or, if they are a small business with annual sales of less than $40 million when combined with those of the parent company (if any), a reduced user fee of $100 (40 CFR 700.45(b)(1)). On February 26, 2018, EPA proposed raising the fee for SNUNs to $2,800 for small businesses and $16,000 for other businesses (83 FR 8212). Further, on November 30, 2017, EPA determined that revisions to the current small business size standards for TSCA reporting and recordkeeping requirements are warranted (82 FR 56824). Businesses that submit a SNUN are also estimated to incur average costs of $67 for rule familiarization. First time submitters will incur an average cost of $128 for Central Data Exchange (CDX) registration and associated activities. Companies manufacturing, importing, or processing asbestos or articles containing asbestos will incur an average cost of $80 for notifying their customers of SNUR regulatory activities.

The costs of submitting a SNUN will not be incurred by any company unless a company decides to pursue a significant new use as defined in this proposed SNUR. Additionally, these estimates reflect the costs and fees as they are known at the time this rule is promulgated. EPA's complete economic analysis is available in the public docket for this proposed rule (Ref. 8).

Under Section 12(b) of TSCA and the implementing regulations at 40 CFR part 707, subpart D, exporters must notify EPA if they export or intend to export a chemical substance or mixture for which, among other things, a rule has been proposed or promulgated under TSCA section 5. As explained in Unit I., export notifications are required for asbestos, but not for articles containing asbestos. EPA is not proposing that asbestos-containing articles be subject to the export notification requirements; therefore, EPA assumes no additional costs under TSCA section 12(b) for this proposed rule.

In general, for persons exporting a substance that is the subject of a SNUR, a one-time notice to EPA must be provided for the first export or intended export to a particular country. The total costs of export notification will vary by chemical, depending on the number of required notifications (i.e., the number of countries to which the chemical is exported). While EPA is unable to make any estimate of the likely number of export notifications for the chemical covered in this proposed SNUR, as stated in the accompanying economic analysis of this proposed SNUR, the estimated cost of the export notification requirement on a per unit basis is approximately $96.

In making inapplicable the exemption relating to persons that import or process certain chemical substances as part of an article, this action may affect firms that plan to import or process types of articles that may contain the asbestos. Some firms have an understanding of the contents of the articles they import or process. However, EPA acknowledges that importers and processors of articles may have varying levels of knowledge about the chemical content of the articles that they import or process. These parties may need to become familiar with the requirements of the rule. And, while not required by the SNUR, these parties may take additional steps to determine whether the subject chemical substance is part of the articles they are considering for importing or processing. This determination may involve activities such as gathering information from suppliers along the supply chain and/or testing samples of the article itself. Costs vary across the activities chosen and the extent of familiarity a firm has regarding the articles it imports or processes. Cost ranges are presented in the Understanding the Costs Associated with Eliminating Exemptions for Articles in SNURs (Ref. 19). Based on available information, EPA believes that article importers or processors that choose to investigate their products would incur costs at the lower end of the ranges presented in the Economic Analysis. For those companies choosing to undertake actions to assess the composition of the articles they import or process, EPA expects that importers or processors would take actions that are commensurate with the company's perceived likelihood that a chemical substance might be a part of an article for the significant new uses subject to this proposed rulemaking (identified in Table 2) and the resources it has available. Example activities and their costs are provided in the accompanying Economic Analysis of this proposed rule (Ref. 8).

Before proposing this SNUR, EPA considered the following alternative regulatory action: Promulgate a TSCA section 8(a) Reporting Rule.

Under a TSCA section 8(a) rule, EPA could, among other things, generally require persons to report information to the Agency when they intend to manufacture (including import) or process a listed chemical for a specific use or any use. However, for asbestos, the use of TSCA section 8(a) rather than SNUR authority would have several limitations. First, if EPA were to require reporting under TSCA section 8(a) instead of TSCA section 5(a), that action would not ensure that EPA receives timely advance notice of future manufacturing (including importing) or processing of asbestos (including as part of an articles and components thereof) for new uses that may produce changes in human and environmental exposures. Nor would action under 8(a) ensure that an appropriate determination (relevant to the risks of such manufacturing (including importing) or processing) has been issued prior to the commencement of such manufacturing (including importing) or processing. Furthermore, a TSCA section 8(a) rule would not ensure that manufacturing (including importing) or processing for the significant new use cannot proceed until EPA has responded to the circumstances by taking the required actions under Sections 5(e) or 5(f) of TSCA in the event that EPA determines any of the following: (1) That the significant new use presents an unreasonable risk under the conditions of use (without consideration of costs or other non-risk factors, and including an unreasonable risk to a potentially exposed or susceptible subpopulation identified as relevant by EPA); (2) that the information available to EPA is insufficient to permit a reasoned evaluation of the health and environmental effects of the significant new use; (3) that in the absence of sufficient information, the manufacture (including import), processing, distribution in commerce, use, or disposal of the substance, or any combination of such activities, may present an unreasonable risk (without consideration of costs or other non-risk factors, and including an unreasonable risk to a potentially exposed or susceptible subpopulation identified as relevant by EPA); or (4) that there is substantial production and sufficient potential for environmental release or human exposure (as defined in TSCA section 5(a)(3)(B)(ii)(II)).

In addition, EPA may not receive important information from small businesses, because such firms generally are exempt from TSCA section 8(a) reporting requirements (see TSCA sections 8(a)(1)(A) and 8(a)(1)(B)). In view of the level of health concerns about asbestos if used for a proposed significant new use, EPA believes that a TSCA section 8(a) rule for this substance would not meet EPA's regulatory objectives.

EPA has used scientific information, technical procedures, measures, methods, protocols, methodologies, and models consistent with the best available science, as applicable. These sources supply information relevant to whether a particular use would be a significant new use, based on relevant factors including those listed under TSCA section 5(a)(2). As noted in Unit III., EPA's decision to promulgate a SNUR for a particular chemical use need not be based on an extensive evaluation of the hazard, exposure, or potential risk associated with that use.

The clarity and completeness of the data, assumptions, methods, quality assurance, and analyses employed in EPA's decision are documented, as applicable and to the extent necessary for purposes of this proposed significant new use rule, in Unit II. and in the references cited throughout the preamble of this proposed rule. EPA recognizes, based on the available information, that there is variability and uncertainty in whether any particular significant new use would actually present an unreasonable risk. For precisely this reason, it is appropriate to secure a future notice and review process for these uses, at such time as they are known more definitively. The extent to which the various information, procedures, measures, methods, protocols, methodologies or models used in EPA's decision have been subject to independent verification or peer review is adequate to justify their use, collectively, in the record for a significant new use rule.

EPA welcomes comment on all aspects of this proposed rule. EPA based its understanding of the use profile of this chemical on the published literature, the 2016 Chemical Data Reporting submissions, market research, review of Safety Data Sheets, and extensive research conducted during the early stages of the TSCA risk evaluation for asbestos. To confirm EPA's understanding, the Agency is requesting public comment on all aspects of this proposed rule. In providing comments on an ongoing use of asbestos, it would be helpful to provide specific information and documentation sufficient for EPA to substantiate any assertions of use.

1. Submitting CBI. It is EPA's policy to include all comments received in the public docket without change or further notice to the commenter and to make the comments available online at www.regulations.gov, including any personal information provided, unless a comment includes information claimed to be CBI or other information whose disclosure is restricted by statute. Do not submit this information to EPA through regulations.gov or email. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM that you mail to EPA as CBI and then identify electronically within the disk or CD ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2, subpart B.

2. Tips for preparing your comments. When preparing and submitting your comments, see the commenting tips at http://www2.epa.gov/dockets/commenting-epa-dockets#tips.

The following is a listing of the documents that are specifically referenced in this document. The docket, EPA-HQ-OPPT-2018-0159, includes these documents and other information considered by EPA, including documents that are referenced within the documents that are included in the docket, even if the referenced document is not physically located in the docket. For assistance in locating these other documents, please consult the technical person listed under FOR FURTHER INFORMATION CONTACT.

Additional information about these statutes and Executive Orders can be found at http://www2.epa.gov/laws-regulations/laws-and-executive-orders.

This action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011).

This action is not expected to be a regulatory action subject to Executive Order 13771 (82 FR 9339, February 3, 2017), because this action is not a significant regulatory action under Executive Order 12866.

This action does not impose any new information collection burden under the PRA, 44 U.S.C. 3501 et seq. Burden is defined in 5 CFR 1320.3(b). The information collection activities associated with existing chemical SNURs are already approved under OMB control number 2070-0038 (EPA ICR No. 1188); and the information collection activities associated with export notifications are already approved under OMB control number 2070-0030 (EPA ICR No. 0795). If an entity were to submit a SNUN to the Agency, the burden is estimated to be approximately 100 hours per response (slightly less for submitters who have already registered to use the electronic submission system).

An agency may not conduct or sponsor, and a person is not required to respond to a collection of information that requires OMB approval under the PRA, unless it has been approved by OMB and displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in Title 40 of the CFR, after appearing in the Federal Register, are listed in 40 CFR, part 9, and included on the related collection instrument, or form, as applicable.

Pursuant to section 605(b) of the RFA, 5 U.S.C. 601 et seq., I certify that promulgation of this SNUR would not have a significant economic impact on a substantial number of small entities. The rationale supporting this conclusion is as follows.

A SNUR applies to any person (including small or large entities) who intends to engage in any activity described in the rule as a “significant new use.” By definition of the word “new” and based on all information currently available to EPA, it appears that no small or large entities presently engage in such activities. Since this proposed SNUR will require a person who intends to engage in such activity in the future to first notify EPA by submitting a SNUN, no economic impact will occur unless someone files a SNUN to pursue a significant new use in the future or forgoes profits by avoiding or delaying the significant new use. Although some small entities may decide to conduct such activities in the future, EPA cannot presently determine how many, if any, there may be. However, EPA's experience to date is that, in response to the promulgation of SNURs covering over 1,000 chemical substances, the Agency receives only a handful of notices per year. During the six-year period from 2005-2010, only three submitters self-identified as small in their SNUN submissions (Ref. 8). EPA believes the cost of submitting a SNUN is relatively small compared to the cost of developing and marketing a chemical new to a firm or marketing a new use of the chemical and that the requirement to submit a SNUN generally does not have a significant economic impact.

Therefore, EPA believes that the potential economic impact of complying with this proposed SNUR is not expected to be significant or adversely impact a substantial number of small entities. In a SNUR that published as a final rule on August 8, 1997 (62 FR 42690) (FRL-5735-4), the Agency presented its general determination that proposed and final SNURs are not expected to have a significant economic impact on a substantial number of small entities.

Based on EPA's experience with proposing and finalizing SNURs, State, local, and Tribal governments have not been impacted by these rulemakings, and EPA does not have any reason to believe that any State, local, or Tribal government would be impacted by this rulemaking. As such, the requirements of sections 202, 203, 204, or 205 of UMRA, 2 U.S.C. 1531-1538, do not apply to this action.

This action will not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it will not have substantial direct effect on 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.

This action does not have tribal implications as specified in Executive Order 13175 (65 FR 67249, November 9, 2000), because it will not have any effect on tribal governments, on the relationship between the Federal Government and the Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

This action is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because this action does not address environmental health or safety risks, and EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order.

This action is not a “significant energy action” as defined in Executive Order 13211 (66 FR 28355, May 22, 2001), because it is not likely to have any effect on energy supply, distribution, or use.

This rulemaking does not involve any technical standards, and is therefore not subject to considerations under section 12(d) of NTTAA, 15 U.S.C. 272 note.

This action will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations as specified in Executive Order 12898 (59 FR 7629, February 16, 1994). This action does not affect the level of protection provided to human health or the environment.

Therefore, for the reasons stated in the preamble, the Environmental Protection Agency proposes that 40 CFR chapter I be amended as follows:

The Coast Guard views public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.

We encourage you to submit comments through the Federal eRulemaking Portal at http://www.regulations.gov. If your material cannot be submitted using http://www.regulations.gov, contact the person in the FOR FURTHER INFORMATION CONTACT section of this proposed rule for alternate instructions. Documents mentioned in this proposed rule, and all public comments, are available in our online docket at http://www.regulations.gov, and can be viewed by following that website's instructions. Additionally, if you go to the online docket and sign up for email alerts, you will be notified when comments are posted or a final rule is published.

We accept anonymous comments. All comments received will be posted without change to http://www.regulations.gov and will include any personal information you have provided. For more about privacy and the docket, visit http://www.regulations.gov/privacyNotice.

We do not plan to hold a public meeting but we will consider doing so if public comments indicate that a meeting would be helpful. We would issue a separate Federal Register notice to announce the date, time, and location of such a meeting.

The purpose of this proposed rule is to amend the radar observer endorsement requirements by removing obsolete portions and harmonizing the expiration dates of the radar observer endorsement and the merchant mariner credential (MMC).

The Coast Guard is authorized to determine and establish the experience and professional qualifications required for the issuance of officer credentials pursuant to 46 U.S.C. 7101. Authority under 46 U.S.C. 7101 has been delegated to the Commandant of the Coast Guard by Department of Homeland Security Delegation No. 0170.1(II)(92)(e). The specifics of these professional qualifications and the Coast Guard's evaluation process are prescribed by 46 CFR parts 10 and 11, and the manning requirements are in 46 CFR part 15.

Section 304 of the Coast Guard Authorization Act of 2015 (CGAA 2015), Public Law 114-120, February 8, 2016 (codified as a statutory note to 46 U.S.C. 7302), requires the harmonization of expiration dates of a mariner's radar observer endorsement with his or her MMC and the medical certificate, subject to certain exceptions.1 Furthermore, the CGAA 2015 specifies that the process to harmonize cannot require a mariner to renew the MMC before it expires. This proposed rule would meet the statutory requirement with regard to the radar observer endorsement. The requirement regarding the medical certificate is already met through policy.2

Currently, 46 CFR 11.480 requires that a mariner with a radar observer endorsement complete a Coast Guard-approved radar observer refresher or re-certification course every 5 years to maintain a valid radar observer endorsement on his or her MMC. The MMC is typically valid for a 5-year period in accordance with 46 U.S.C. 7302(f). Under the current regulation, the radar observer endorsement must be added to the MMC. However, the course completion certificate dictates the validity of the radar observer endorsement. This requires the mariner to carry the MMC and have the course completion certificate available in order to demonstrate compliance with the regulations. Under current regulation, it is not possible to harmonize the expiration dates of the radar course completion certificate and the MMC.

The Coast Guard sought comments from the Merchant Marine Personnel Advisory Committee (MERPAC) about harmonization. In September 2015, at Meeting 43, MERPAC recommended that the Coast Guard review whether requiring a radar refresher or re-certification course for mariners with relevant and recent underway service on a vessel equipped with radar should be considered adequate experience for renewal (MERPAC Recommendation 2015-56).3 MERPAC recommended the Coast Guard consider the history of the radar observer endorsement, the current state of radar observer training and prevalence of radar, and the concept that knowledge and skills will degrade with time if not used or refreshed through training. MERPAC also recommended the Coast Guard consider whether the radar observer endorsement must be on the credential.

The Coast Guard first added a requirement to prove continued competence in radar operation every 5 years by completing a professional examination or completing a Coast Guard-approved course in 1958 (23 FR 3447, May 21, 1958). As discussed in that final rule, the merchant mariner license endorsement “Radar Observer” has its roots in a report by the Technical Staff of the Committee on Merchant Marine and Fisheries to the U.S. House of Representatives concerning the S.S. Andrea Doria and the M.V. Stockholm collision.4 That report recommended providing adequate training for deck officers and requiring certification of officers such as radar observers. The International Maritime Organization included a requirement for radar training in its International Convention on the Standards of Training, Certification and Watchkeeping for Seafarers, 1978, as amended (STCW) and the STCW Code.5

The Coast Guard believes that the potential for accidents continues, and that it is important for mariners to continue to benefit from training to be proficient in the use of radar as both a navigation and collision avoidance tool. The Coast Guard also believes that radar is now a commonly used navigation and collision avoidance tool. Radar carriage requirements, both in the United States and internationally, have increased in the last 60 years, and the current domestic training requirements have been in place for the last 35 years. Currently, mariners on vessels outfitted with radar maintain proficiency in the use of radar through its constant use to navigate and prevent collisions. Therefore, the Coast Guard has concluded that the current requirement for the completion of a radar refresher or re-certification course for mariners with relevant and recent service in a position using radar for navigation and collision avoidance purposes on board vessels equipped with radar is not necessary. Completion of refresher training is unnecessarily burdensome to mariners who routinely use radar.

Section 304 of the CGAA 2015 requires the harmonization of expiration dates of a mariner's radar observer endorsement with his or her MMC, and prohibits requiring a mariner to renew a credential before it expires. In this context, the Coast Guard believes that the MMC is the primary credential documenting the individual's qualifications to perform specific functions on board a ship, and should be the point of alignment when harmonizing the expiration dates of a mariner's endorsements.

In looking at this requirement, the Coast Guard also considered Executive Order 13771 of January 30, 2017, Reducing Regulation and Controlling Regulatory Costs, and Office of Management and Budget (OMB) Guidance of April 5, 2017, on that Executive order; and Executive Order 13777 of February 24, 2017, Enforcing the Regulatory Reform Agenda. These directives require agencies to review regulations in order to provide a reduction of regulatory costs to members of the public. Elimination of the requirement to take a radar refresher or re-certification course every 5 years will eliminate an unnecessary burden on the active mariner and make harmonization possible.

In this proposed rule, the Coast Guard proposes to revise its regulations so that the mariner who serves in a relevant position on board a radar-equipped vessel for 1 year in the previous 5 years is not required to complete a Coast Guard-approved radar refresher or re-certification course per 46 CFR 11.480 to renew their radar observer endorsement. The proposed requirement for 1 year of sea service within the past 5 years is consistent with similar existing sea service requirements found in, for example, 46 CFR 10.227(e)(1), Requirements for Renewal of an MMC; 46 CFR 11.302(c), Basic Training; and 46 CFR 11.303(c), Advanced Firefighting. For the purposes of this proposed rule, relevant sea service means having served in a position using radar for navigation and collision avoidance purposes on a radar-equipped vessel.

Additionally, mariners who provide evidence of being a qualified instructor and having taught a Coast Guard-approved radar endorsement refresher or re-certification course at least twice within the past 5 years would not be required to complete a radar refresher or re-certification course. The 5-year interval is based on both national and STCW endorsement requirements that follow recognized principles and standards of maritime skill acquisition and retention. The provision to allow renewal of the endorsement by an instructor of the radar course is the same provision that currently exists under 46 CFR 10.227(e)(1)(v) for MMC renewals. This provision would be applied to the radar observer endorsement.

This proposed rule would eliminate the requirement to carry a certificate of training if the radar observer endorsement is on the MMC, and would allow the endorsement and MMC to expire at the same time.

The Coast Guard did consider removing the radar refresher or re-certification course requirement altogether. However, the Coast Guard believes that the competencies required by a radar observer would degrade if the mariner does not use them on board vessels or periodically refresh them by teaching or completing a course. The concept that knowledge and skills will degrade with time if not used or refreshed has been applied in other basic maritime training arenas, such as the STCW requirements for basic training and a firefighting refresher course every 5 years, and is a recognized factor within the education industry. While there are few specific studies in skill degradation in the maritime industry, this issue has been the subject of discussion for decades in other industries, including the aviation industry, which is very similar to the maritime industry.6 Also, radar continues to be incorporated into other shipboard systems and continues to change with advancements in technology. The radar observer must keep current with these changes through onboard utilization of skills or a formal course of instruction. As a result, the Coast Guard did not pursue removing refresher training altogether.

In summary, the Coast Guard is proposing to continue to require attendance at a radar refresher or re-certification course for mariners seeking to renew a radar observer endorsement who do not have 1 year of relevant sea service in the previous 5 years using radar for navigation and collision avoidance purposes on vessels equipped with radar. As discussed earlier, mariners with radar observer endorsements who do have 1 year of relevant sea service within the previous 5 years and served in a position using radar for navigation and collision avoidance purposes on board a radar-equipped vessel, or who have met certain instructor requirements, would be able to renew the radar observer endorsement without completing a course. In addition, the radar observer endorsement would expire with the MMC, and the mariner with a radar observer endorsement would no longer be required to present a course completion certificate within 48 hours of the demand to do so by an authorized official.

Following is a section-by-section discussion of the proposed changes.

This proposed rule would revise 46 CFR 11.480(d), (e), (f), (g), and (h). Pursuant to these changes, a current course completion certificate from a Coast Guard-approved radar refresher or re-certification course in accordance with 46 CFR 11.480 would no longer be the only determinant of a mariner's continued competency as a radar observer.

The proposed rule would revise 46 CFR 11.480 to apply the provisions of 46 CFR 10.227(e)(1)(v) to the radar observer endorsement. A qualified instructor who has taught a Coast Guard-approved radar observer course at least twice within the past 5 years would not be required to complete a refresher or re-certification course because he or she will have met the standards to receive a course completion certificate. During the course approval process in accordance with 46 CFR subpart D, instructors are evaluated to determine whether they are qualified to teach the course; a qualified instructor does not need to complete a refresher or re-certification course.

This proposed rule would allow mariners to use recent sea service in place of completing a radar refresher or re-certification course. Mariners able to provide evidence of 1 year of relevant sea service within the last 5 years in a position using radar for navigation and collision avoidance purposes on vessels equipped with radar would not be required to attend a course to obtain a course completion certificate.

If the radar observer endorsement is on the MMC, then the radar observer endorsement is valid for the same period as the MMC. The validity of the MMC will coincide with the validity of the radar endorsement if the applicant provides the following information: (1) Evidence of 1 year of sea service within the last 5 years in a position using radar for navigation and collision avoidance purposes on board radar-equipped vessels; (2) evidence of having been a qualified instructor who has taught a Coast Guard-approved radar observer course at least twice within the past 5 years; or (3) successful completion of a Coast Guard-approved radar course within the past 5 years. If the applicant does not provide evidence of meeting the requirements for the radar observer endorsement, the endorsement will not be placed on the MMC.

The Coast Guard proposes to revise § 15.815 to eliminate the requirement that a person required to hold a radar endorsement must have his or her course completion certificate readily available. Having the course completion certificate available is not necessary if the MMC reflects a radar observer endorsement, because the radar observer endorsement indicates adequate training or experience demonstrated through one of the three methods described in this proposed rule.

The proposed rule would revise § 15.815(d) to allow the mariners listed in § 15.815(a), (b), and (c), to sail without a radar observer endorsement provided that they hold, and have immediately available, a course completion certificate, issued within the last 5 years, from a Coast Guard-approved radar course. This would create flexibility for mariners who were not qualified for the radar observer endorsement at their last credential application but have subsequently completed a Coast Guard-approved radar course and hold a course completion certificate.

Finally, the Coast Guard proposes to add a corresponding requirement to § 10.232(a) so that the sea service letter indicates whether the vessel the mariner has served on is equipped with radar, and that the mariner served in a position using radar for navigation and collision avoidance purposes. While certain vessels are required to carry radar, some vessels are not required to do so, such as offshore supply vessels of less than 100 gross tons and mechanically propelled vessels of less than 1,600 gross tons in ocean or coastwise service. This proposed rule would ensure that mariners serving in a position using radar for navigation and collision avoidance purposes on vessels equipped with radar will get credit towards renewal of the radar observer endorsement, regardless of whether the vessel was required to carry radar.

We developed this proposed rule after considering numerous statutes and Executive orders related to rulemaking. A summary of our analyses based on these statutes or Executive orders follows.

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

This proposed rule is not designated a significant regulatory action by OMB under section 3(f) of Executive Order 12866. Accordingly, OMB has not reviewed it. OMB considers this rule to be an Executive Order 13771 deregulatory action. See the OMB Memorandum titled “Guidance Implementing Executive Order 13771, titled `Reducing Regulation and Controlling Regulatory Costs' ” (April 5, 2017).

This regulatory analysis provides an evaluation of the economic impacts associated with this proposed rule. The Coast Guard proposes to revise its regulations so that the mariner who served on board a radar-equipped vessel for 1 year in the previous 5 years, in a position using radar for navigation and collision avoidance purposes, is not required to complete a Coast Guard-approved radar refresher or re-certification course to renew their radar observer endorsement, as discussed in section V of this proposed rule. Additionally, mariners who provide evidence of being a qualified instructor and having taught a Coast Guard-approved radar endorsement refresher or re-certification course at least twice within the past 5 years would not be required to complete a radar refresher or re-certification course. Table 1 provides a summary of the affected population, costs, and cost savings after implementation of this proposed rule. The total 10-year discounted cost savings of the rule would be $47,678,762 and the annualized total cost savings would be $6,788,383, both discounted at 7 percent. We expect that an average of 7,037 mariners would benefit from this proposed rule each year. The proposed rule would result in cost savings to these mariners for no longer incurring the costs to complete the radar observer refresher course. There would be no impact to those mariners seeking an original radar observer endorsement or who do not have 1 year of relevant sea service in a position using radar for navigation and collision avoidance purposes on board radar-equipped vessels on board radar-equipped vessels in the previous 5 years. This proposed rule would not impose costs on industry.

The proposed revisions to 46 CFR 11.480 would result in cost savings to those mariners who no longer would have to complete the radar observer refresher course.

The proposed revisions to 46 CFR 15.815 would eliminate the requirement that a person holding a radar endorsement must also have his or her course completion certificate readily available. While the mariner would no longer physically have to carry the certificate, the mariner would still have to physically carry an MMC that reflects a radar observer endorsement. The costs of obtaining the copy of the certificate are included in the cost of the completion of the course. Therefore, any cost savings from these revisions are included in the calculations of the cost savings to the revisions to 46 CFR 11.480. Those mariners who do not have an MMC that reflects a radar observer endorsement would be allowed to sail if they hold, and have immediately available, a course completion certificate, issued within the last 5 years, from a Coast Guard-approved radar course. There is no impact to these mariners, as they currently have to carry a certificate to show course completion.

The proposed revisions to 46 CFR 10.232 would add a requirement that the sea service letter indicate whether the mariner served on a vessel equipped with radar, and if the mariner served in a position using radar for navigation and collision avoidance purposes. The operating companies that use service letters are already required to provide mariner service information. The companies would have to add a line item once per vessel, and then the letter would be available for all other mariners serving on a radar-equipped vessel using radar for navigation and collision avoidance purposes. The companies generally produce a service letter once every 5 years to provide the employees the documentation necessary to renew their credentials. Because the cost to add one line item is a minimal burden and could be included in the company's regular updates to the service letter, we consider the proposed revisions to 46 CFR 10.232 to have no additional burden or cost savings to industry.

We expect that this proposed rule would affect mariners with a radar observer endorsement and mariners who would need one in the future. More specifically, it would affect those mariners with at least 1 year of sea service in the previous 5 years in a position using radar for navigation and collision avoidance purposes on board a radar-equipped vessel, as they will no longer be required to complete a Coast Guard-approved radar refresher or re-certification course per 46 CFR 11.480 in order to renew their radar observer endorsement. It would also affect mariners who have served as instructors for a Coast Guard-approved radar course at least twice within the past 5 years, the majority of whom hold a valid endorsement and would be included in the affected population. The radar observer endorsement would expire with the MMC and the mariner would no longer be required to carry the course completion certificate so that it can be presented to the Coast Guard upon demand.

We used data from the Coast Guard's Merchant Mariner Licensing and Documentation (MMLD) system to estimate the average number of mariners affected by this proposed rule. The MMLD system is used to produce MMCs at the National Maritime Center. Table 2 below shows the radar endorsement data from the MMLD system used to estimate the affected population. The MMLD system does not have exam data prior to 2011 for the mariners who took the rules of the road exam to renew an MMC.

The “Mariners Who Hold a Radar Observer Endorsement” column shows the number of unique mariners who, on January 1 of each year, held a valid MMC with a radar observer endorsement. Per § 11.480, each applicant for a renewal of a radar observer endorsement must complete the appropriate Coast Guard-approved refresher or re-certification course, receive the appropriate course completion certificate, and present the certificate or a copy of the certificate to the Coast Guard. A radar observer endorsement is typically valid for 5 years from the date of completion of the Coast Guard-approved course. From 2011 to 2017, there was an average of 35,843 total mariners with a valid MMC with a radar observer endorsement. The Coast Guard does not have more detailed information as to the expiration for each mariner's radar observer endorsement. Therefore, we divided the total mariners by 5 to estimate that an average of 7,169 mariners currently would need to take the radar renewal course each year (35,843 total mariners/5, rounded to nearest whole number).

Under this proposed rule, the Coast Guard expects that a portion of the total mariners would not have 1 year of sea service in the last 5 years in a position using radar for navigation and collision avoidance purposes on board radar-equipped vessels. There are some mariners who are inactive but still complete the requirements to renew an MMC. The requirements for the renewal of an MMC are in § 10.227. In order to renew their credentials, mariners must present acceptable documentary evidence of at least 1 year of sea service during the past 5 years, or pass a comprehensive, open-book exercise that includes a rules of the road examination. Mariners who take the rules of the road exam are tracked in the MMLD database. The “Mariners Who Took Rules of the Road Exam to Renew MMC” column in table 3 shows the number of the unique mariners in the “Mariners Who Hold a Radar Observer Endorsement (Current Total Population)” column who took the rules of the road examination as part of the MMC renewal process for their existing valid MMC, not the number of mariners who took the rules of the road exam in that given year. Therefore, we used this as a proxy to estimate the number of mariners who did not have 1 year of sea service in the last 5 years. Under this proposed rule, an average of 660 total mariners would still have had to take a radar refresher or re-certification course in order to maintain the radar observer endorsement. The Coast Guard does not have more detailed information as when each mariner took the radar refresher or re-certification course over the 5-year period. We divided the total mariners by 5 to find an average of 132 mariners would still need to take the exam each year (660 total mariners/5).

We subtracted the number in the “Mariners Who Took Rules of the Road Exam to Renew MMC” column from the number in the “Mariners Who Hold a Radar Observer Endorsement” column to find the mariners who, under this proposed rule, would not have had to take a radar refresher or re-certification course when they last renewed their MMC. From 2011 to 2017, there was an average of 35,183 mariners who held radar observer endorsements and had at least 1 year of relevant sea service during the past 5 years. This number represents the total number of mariners expected to benefit from this proposed rule. We divided the total number of mariners expected to benefit from this proposed rule by 5 to find the average mariners that would benefit each year (35,183 total mariners/5). This comes out to an average of 7,037 mariners per year that would no longer have to take a radar refresher or re-certification course (rounded to nearest whole number).

The regulatory changes in this proposed rule would not impose any costs to industry or government.

The cost savings to industry are the difference between the current baseline cost to industry and the cost to industry if the regulatory changes in this proposed rule are implemented.

To estimate the cost savings to industry, we first estimated the current costs to industry. The costs to industry include the cost of the refresher or re-certification course, the time to take the course, and time and mileage costs to travel to take the course. The mariners incur costs for the radar refresher or re-certification course. To estimate the cost of the course, the Coast Guard researched and found a sample of course costs from five training centers that offer Coast Guard-approved radar refresher or re-certification courses. The cost of the courses ranged from $199 to $250. We took an average of the 5 estimates to find the average cost of the courses is $228 (($199 + $250 + $225 + $225 + $243)/5, rounded to nearest dollar).7 8 9 10 11

We then estimated the cost of the time for the mariners to take the refresher or re-certification course. The 5 training centers state that the radar renewal course is 1-day. For the purposes of complying with service requirements, a day is defined as 8 hours (46 CFR 10.107, Definitions in subchapter B).12 We obtained the wage rate of a mariner from the Bureau of Labor Statistics (BLS), using Occupational Series 53-5021, Captains, Mates, and Pilots of Water Vessels (May 2016). The BLS reports that the mean hourly wage rate for a Captain, Mate, or Pilot is $39.19.13 To account for employee benefits, we used a load factor of 1.52, which we calculated from 2016 4th quarter BLS data.14 The loaded wage for a mariner is estimated at $59.57 ($39.19 wage rate × 1.52 load factor). We multiplied the loaded wage rate by the hourly burden to find the current cost for a mariner to take the radar renewal course is $476.56 ($59.57 wage rate × 8 hour burden).

We then estimated the cost for the mariners to travel to take the refresher or re-certification course. The radar refresher or re-certification course must be taken in person at a training center. This means the mariners incur costs for time to travel to take the course. We estimated mileage using travel costs assumptions from the Implementation of the 1995 Amendments to the International Convention on Standards of Training, Certification, and Watchkeeping for Seafarers, 1978, and Changes to National Endorsements Final Rule. 15 On average, a mariner commutes 50 miles to a training course one-way, or 100 miles round trip. The Federal Highway Administration reports the average commute speed for private vehicles is 28.87 miles per hour.16 We divided the average round trip mileage to the training center by the average commute time to find that it takes an average of 3.46 hours for a mariner to travel to the training center (100 miles/28.87 miles per hour, rounded). We multiplied this by the loaded hourly wage rate to find that the hourly burden per mariner to travel to the training center to take the refresher or re-certification course is $206.11 (3.46 hours × $59.57).

The mariners also incur additional mileage costs for traveling to the training facility to take the 1-day course, such as gas and wear and tear on their vehicles. We used the U.S. General Services Administration privately owned vehicle mileage reimbursement rate of $0.54 per mile to estimate this additional cost.17 We multiplied this rate by the 100 miles round trip to the training facility to estimate that the mariners incur a cost of $54 per mariner for the additional mileage costs.

Table 3 summarizes the costs per mariner to take the radar refresher or re-certification course. Adding the cost of the 1-day course, the opportunity cost of time to take the course, and the opportunity cost of roundtrip travel time and mileage costs to get to the training center, we found that it costs $964.67 per mariner to take the radar refresher or re-certification course.

To find the baseline total cost for all mariners to take the radar refresher or re-certification course, we multiplied the total cost per mariner of $964.67 by the annual average mariners who currently hold radar observer endorsements. As shown in table 2, we found this is an annual average of 7,169 mariners. Therefore, the total baseline annual average cost for all mariners is $6,915,719 (7,169 mariners × $964.67 per mariner, rounded).

Revising § 11.480 so that mariners who serve on board a radar-equipped vessel for 1 year in the previous 5 years are not required to take a radar refresher or re-certification course to renew their radar observer endorsement would reduce the number of mariners who would need to take the radar refresher or re-certification course. As shown in table 2 in the “Affected Population” subsection, an average of 132 mariners would still need to take the radar refresher or re-certification course each year. These mariners would continue to have the same costs per mariner shown in table 3. Multiplying the cost per mariner by the average mariners that would still need to take the course each year, we found the total annual cost to industry that would remain under this proposed rule would be $127,336 (132 mariners × $964.67 per mariner).

To find the total cost savings of this proposed rule, we subtracted the costs to industry after implementation of the proposed rule from the baseline costs. Subtracting $127,336 from $6,915,719, we found the total cost savings of this proposed rule would be $6,788,383. Table 4 shows the total 10-year undiscounted industry cost savings of this proposed rule would be $67,883,830. The 10-year estimated discounted cost savings to industry would be $47,678,762, with an annualized cost savings of $6,788,383, using a 7-percent discount rate. Using a perpetual period of analysis, we estimated the total annualized cost savings of the proposed rule would be $5,541,343 in 2016 dollars, using a 7-percent discount rate.

Under the Regulatory Flexibility Act, 5 U.S.C. 601-612, we have considered whether this proposed rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

This proposed rule reduces the burden on industry by removing the requirement to attend a radar refresher or re-certification course every 5 years for mariners who have 1 year of relevant sea service in the previous 5 years in a position using radar for navigation and collision avoidance purposes on board radar-equipped vessels, or for Coast Guard-approved radar course qualified instructors who have taught the class at least twice within the past 5 years. The MMC and radar observer endorsement is in the mariner's name and not the company's name, so we assume the affected mariners would receive the cost savings from this proposed rule. We do not have further information that any companies would reimburse the mariners for these costs and would acquire the costs savings.

Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities. This proposed rule reduces the burden associated with mariners taking the radar refresher or re-certification course and will not adversely affect small entities as defined by the Small Business Administration in 13 CFR 121.201. If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this proposed rule would have a significant economic impact on it, please submit a comment to the docket at the address listed in the ADDRESSES section of this preamble. In your comment, explain why you think it qualifies and how and to what degree this proposed rule would economically affect it.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121, we want to assist small entities in understanding this proposed rule so that they can better evaluate its effects on them and participate in the rulemaking. If the proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person in the FOR FURTHER INFORMATION CONTACT section of this proposed rule. The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).

This proposed rule would call for no new collection of information under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520. The information collection associated with this proposed rule is the currently approved collection 1625-0040 (MMC Application).18 The proposed revisions to 46 CFR 15.815 would eliminate the requirement that a person holding a radar endorsement must also have his or her course completion certificate readily available. While the mariner would no longer physically have to carry the certificate, the mariner would still have to carry an MMC that reflects a radar observer endorsement. Those mariners who do not have an MMC that reflects a radar observer endorsement would be allowed to sail provided that they hold, and have immediately available, a course completion certificate, issued within the last 5 years, from a Coast Guard-approved radar refresher or re-certification course. There is no impact to these mariners, as they currently have to carry a certificate to show course completion.

The proposed revisions to 46 CFR 10.232 would add a requirement that the sea service letter indicates whether the mariner served on a vessel equipped with radar, and if the mariner served in a position using radar for navigation and collision avoidance purposes. In place of an indication on an application or by separate certification that a mariner completed a Coast Guard-approved radar observer course, a statement would be added to the already-required sea service letter. The operating companies that use service letters are already required to provide mariner service information. The companies would have to add a line item once per vessel, and then the letter would be available for all other mariners serving on a radar-equipped vessel using radar for navigation and collision avoidance purposes. The companies generally produce a service letter once every 5 years to provide the employees the documentation necessary to renew their credentials. Because the cost to add one line item is a minimal burden and could be included in the company's regular updates to the service letter, we consider the proposed revisions to 46 CFR 10.232 to have no additional burden to industry. Therefore, the proposed revisions would not change the burden in the currently approved collection 1625-0040.

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

It is well settled that States may not regulate in categories reserved for regulation by the Coast Guard. It is also well settled that all of the categories covered in 46 U.S.C. 3306, 3703, 7101, and 8101 (design, construction, alteration, repair, maintenance, operation, equipping, personnel qualification, and manning of vessels), as well as the reporting of casualties and any other category in which Congress intended the Coast Guard to be the sole source of a vessel's obligations, are within the field foreclosed from regulation by the States. See the Supreme Court's decision in United States v. Locke and Intertanko v. Locke, 529 U.S. 89, 120 S.Ct. 1135 (2000). Because this proposed rule involves the credentialing of mariners under 46 U.S.C. 7101, it relates to personnel qualifications and, as a result, is foreclosed from regulation by the States. Therefore, because the States may not regulate within these categories, this proposed rule is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

While it is well settled that States may not regulate in categories in which Congress intended the Coast Guard to be the sole source of a vessel's obligations, the Coast Guard recognizes the key role that State and local governments may have in making regulatory determinations. Additionally, for rules with federalism implications and preemptive effect, Executive Order 13132 specifically directs agencies to consult with State and local governments during the rulemaking process. If you believe this rule has implications for federalism under Executive Order 13132, please contact the person listed in the FOR FURTHER INFORMATION section of this preamble.

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

This proposed rule would not cause a taking of private property or otherwise have taking implications under Executive Order 12630 (Governmental Actions and Interference with Constitutionally Protected Property Rights).

This proposed rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, (Civil Justice Reform), to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this proposed rule under Executive Order 13045 (Protection of Children from Environmental Health Risks and Safety Risks). This proposed rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children.

This proposed rule does not have tribal implications under Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments), because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

We have analyzed this proposed rule under Executive Order 13211 (Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use). We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and would not likely have a significant adverse effect on the supply, distribution, or use of energy.

The National Technology Transfer and Advancement Act, codified as a note to 15 U.S.C. 272, directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through OMB, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

This proposed rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this proposed rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD (COMDTINST M16475.1D), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. A preliminary (draft) Record of Environmental Consideration (REC) supporting this determination is available in the docket where indicated under the “Public Participation and Request for Comments” section of this preamble. This proposed rule would be categorically excluded under categorical exclusion (CATEX) numbers L52, L56, L57, and L62 of DHS Directive 023-01(series). As such, CATEX L52 pertains to regulations concerning vessel operation safety standards, CATEX L56 pertains to regulations concerning the training, qualifying, and licensing of maritime personnel, CATEX L57 pertains to regulations concerning manning of vessels, and CATEX L62 pertains to regulations in aid of navigation. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.

For the reasons discussed in the preamble, the Coast Guard proposes to amend 46 CFR parts 10, 11, and 15 as follows:

FMCSA is responsible for overseeing the safety of CMVs, their drivers, and those motor carriers operating CMVs in interstate commerce. The Agency works with Federal, State, and local enforcement agencies, the motor carrier industry, safety groups, and organized labor to reduce crashes, injuries, and fatalities involving large trucks and buses.

The FMCSRs provide rules to support the safe operation of CMVs, as defined in 49 CFR 390.5, which includes vehicles with a gross vehicle weight/gross combination weight or gross vehicle weight rating/gross combination weight rating, whichever is greater, of 10,001 pounds or more; passenger-carrying vehicles designed or used to transport nine to 15 passengers for direct compensation; passenger-carrying vehicles designed or used to transport 16 or more passengers; and any size vehicle transporting hazardous materials in a quantity requiring placards.

On September 12, 2017, the Department published the Automated Driving Systems (ADS): A Vision for Safety 2.0. (the Voluntary Guidance), adopting the SAE International (SAE) J3016 standard's definitions for levels of automation.1 The SAE definitions divide vehicles into levels based on “who does what, when.” Generally:

• SAE Level 0, No Driving Automation; the driver performs all driving tasks.

• SAE Level 1, Driver Assistance; the vehicle is controlled by the driver, but some driving assist features may be included in the vehicle design.

• SAE Level 2, Partial Driving Automation; the vehicle has combined automated functions, like acceleration and steering, but the driver must remain engaged with the driving task and monitor the environment at all times.

• SAE Level 3, Conditional Driving Automation; the driver is a necessity, but is not required to monitor the environment. The driver must be ready to take control of the vehicle at all times with notice.

• SAE Level 4, High Driving Automation; the vehicle is capable of performing all driving functions under certain conditions. The driver may have the option to control the vehicle.

• SAE Level 5, Full Driving Automation: the vehicle is capable of performing all driving functions under all conditions.

Using the SAE levels described above, the Department draws a distinction between Levels 0-2 and 3-5 based on whether the human driver or the automated system is primarily responsible for monitoring the driving environment. For the purposes of this public meeting, FMCSA's primary focus is SAE Levels 3-5 ADS.

FMCSA encourages the development of these advanced safety technologies for use in CMVs. The Agency also recognizes the need to work with the States and localities to ensure that all testing and use of these advanced safety systems supports the safe operation and deployment of ADS-equipped CMVs.

On March 28, 2018, FMCSA published “Request for Comments (RFC) Concerning Federal Motor Carrier Safety Regulations (FMCSRs) Which May Be a Barrier to the Safe Testing and Deployment of Automated Driving Systems-Equipped Commercial Motor Vehicles on Public Roads.” 2 The notice solicited public comments on existing Federal Motor Carrier Safety Regulations (FMCSRs) that may need to be updated, modified, or eliminated to facilitate the safe introduction of automated driving systems (ADS)-equipped commercial motor vehicles (CMVs) onto our Nation's roadways. The Agency indicated that it had commissioned the U.S. Department of Transportation's (DOT) John A. Volpe National Transportation Systems Center (Volpe) to conduct a preliminary review of the FMCSRs to identify regulations that may relate to the development, testing, and safe deployment of ADS. The Agency requested comments on this report in the RFC, including whether any of FMCSA's current safety regulations presented barriers to innovation and research related to ADS-equipped CMVs. Further, FMCSA requested comments on certain FMCSRs likely to be affected as ADS-equipped CMVs are increasingly integrated into our roadways, including regulations concerning hours of service and driver fatigue, the use of electronic devices, roadside inspection, and Commercial Driver's License requirements.

To further support FMCSA's effort to understand necessary changes to the FMCSRs, FMCSA requested information from companies and others engaged in the design, development, testing, and integration of ADS-equipped CMVs into their fleets. Specifically, the Agency requested information about: (1) The scenarios and environments in which ADS is being tested and will soon be integrated into CMVs operating on public roads or in interstate commerce; (2) the operational design domains (ODD) in which these systems are being operated, tested, and deployed; and (3) suggested measures to ensure the protection of any proprietary or confidential business information shared with the Agency on this topic.

The comment period ended on May 10, 2018. Interested parties can view the comments the Agency received at www.regulations.gov (docket number FMCSA-2018-0037).

In the Spring Regulatory and Deregulatory Agenda issued after the publication of the March 28 RFC notice, FMCSA announced the initiation of rulemaking concerning ADS-equipped CMVs beginning with an Advance Notice of Proposed Rulemaking (ANPRM), which is currently scheduled to be published in December 2018 (“Safe Integration of Automated Driving Systems-Equipped Commercial Motor Vehicles,” 2126-AC17).

FMCSA hopes to supplement the information gathered from the RFC by targeting stakeholders from whom they have not previously received many comments, including academia, insurance groups, and technology providers and developers. The listening session will provide interested parties an opportunity to assist the Agency's future rulemaking efforts by sharing their views on the FMCSRs as they relate to the development and safe integration of ADS through oral presentations. FMCSA also hopes to use this listening session as a platform to share the Agency's ADS strategy with the public. The Agency will provide the public with all relevant details and the opportunity to register for this meeting at https://fmcsaads.eventbrite.com/. Information about this listening session can also be found at: https://www.transportation.gov/AV.

Oral comments from the public will be heard during the meeting. Members of the public may also submit written comments to public docket referenced at the beginning of this notice using any of the following methods:

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

• Fax: 202-493-2251.

• Mail: Docket Management Facility; U.S. Department of Transportation, 1200 New Jersey Avenue SE, Room W12-140, Washington, DC 20590.

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