Federal Register Vol. 83, No.126,

Federal Register Volume 83, Issue 126 (June 29, 2018)

Page Range30525-30829
FR Document

83_FR_126
Current View
Page and SubjectPDF
83 FR 30778 - Sunshine Act MeetingPDF
83 FR 30573 - Control of Emissions From New and In-Use Highway Vehicles and EnginesPDF
83 FR 30539 - Occupational Safety and Health StandardsPDF
83 FR 30732 - Agency Information Collection Activities: Submission for OMB Review; Comment RequestPDF
83 FR 30609 - Air Plan Approval; Tennessee; Attainment Plan for Sullivan County SO2PDF
83 FR 30626 - Air Plan Approval; ID, Incorporations by Reference Updates and Rule RevisionsPDF
83 FR 30783 - Division of Coal Mine Workers' Compensation; Proposed Collection; Comment RequestPDF
83 FR 30534 - Antimicrobial Animal Drug Sales and Distribution Reporting; Small Entity Compliance Guide; AvailabilityPDF
83 FR 30539 - Removal of the Sudanese Sanctions Regulations and Amendment of the Terrorism List Government Sanctions RegulationsPDF
83 FR 30708 - Applications for New Awards; Educational Technology, Media, and Materials for Individuals With Disabilities-Center on Early Science, Technology, Engineering, and Math Learning for Young Children With DisabilitiesPDF
83 FR 30761 - Notice of Regulatory Waiver Requests Granted for the First Quarter of Calendar Year 2018PDF
83 FR 30769 - Proposed Information Collection: Comprehensive Listing of Transactional Documents for Mortgagors, Mortgagees and Contractors Federal Housing Administration (FHA) Healthcare Facility Documents; Re-Opening of Comment PeriodPDF
83 FR 30759 - Agency Information Collection Activities: Proposed Collection; Comment Request; Application for Community Disaster Loan (CDL) ProgramPDF
83 FR 30733 - Agency Information Collection Activities: Submission for OMB Review; Comment RequestPDF
83 FR 30704 - Proposed Collection; Comment RequestPDF
83 FR 30683 - Adoption of RecommendationsPDF
83 FR 30573 - Promoting Telehealth in Rural AmericaPDF
83 FR 30772 - ``Made in America'' Outdoor Recreation Advisory Committee Notice of Public MeetingPDF
83 FR 30528 - Fisheries of the Exclusive Economic Zone Off Alaska; Nontrawl Lead Level 2 ObserversPDF
83 FR 30705 - Intent To Prepare a Draft NEPA Document for the Upper St. Anthony Falls Lock and Dam, Lower St. Anthony Falls Lock and Dam, and Lock and Dam 1 Disposition Study, Hennepin and Ramsey Counties, MinnesotaPDF
83 FR 30666 - Defense Federal Acquisition Regulation Supplement: Submission of Summary Subcontract Reports (DFARS Case 2017-D005)PDF
83 FR 30598 - Air Plan Approval; Vermont; Infrastructure State Implementation Plan Requirements for the 2012 PM2.5PDF
83 FR 30622 - Approval and Promulgation of Implementation Plans; Arkansas; Interstate Transport Requirements for the 2012 PM2.5PDF
83 FR 30817 - Requested Administrative Waiver of the Coastwise Trade Laws: Vessel PRELUDE; Invitation for Public CommentsPDF
83 FR 30818 - Requested Administrative Waiver of the Coastwise Trade Laws: Vessel MELISSA; Invitation for Public CommentsPDF
83 FR 30816 - Requested Administrative Waiver of the Coastwise Trade Laws: Vessel BELLA LUNA; Invitation for Public CommentsPDF
83 FR 30661 - Defense Federal Acquisition Regulation Supplement: Electronic Submission and Processing of Payment Requests and Receiving Reports (DFARS Case 2016-D032)PDF
83 FR 30656 - Defense Federal Acquisition Regulation Supplement: Only One Offer (DFARS Case 2017-D009)PDF
83 FR 30777 - Folding Gift Boxes From ChinaPDF
83 FR 30541 - Global Magnitsky Sanctions RegulationsPDF
83 FR 30741 - Agency Information Collection Activities; Submission for Office of Management and Budget Review; Comment Request; Animal Food Labeling; Declaration of Certifiable Color AdditivesPDF
83 FR 30736 - Agency Information Collection Activities; Submission for Office of Management and Budget Review; Comment Request; Administrative Practices and Procedures; Formal Evidentiary Public HearingPDF
83 FR 30746 - Agency Information Collection Activities; Proposed Collection; Comment Request; Biosimilars User Fee ProgramPDF
83 FR 30738 - Agency Information Collection Activities; Proposed Collection; Comment Request; Labeling of Certain Beers Subject to the Labeling Jurisdiction of the Food and Drug AdministrationPDF
83 FR 30752 - Oncology Therapeutic Radiopharmaceuticals: Nonclinical Studies and Labeling Recommendations; Draft Guidance for Industry; AvailabilityPDF
83 FR 30811 - Projects Approved for Minor ModificationsPDF
83 FR 30595 - The Food and Drug Administration Predictive Toxicology Roadmap and Its Implementation; Public Hearing; Request for CommentsPDF
83 FR 30740 - Agency Information Collection Activities; Submission for Office of Management and Budget Review; Comment Request; National Agriculture and Food Defense Strategy SurveyPDF
83 FR 30753 - Sun Pharmaceutical Industries, Ltd., and Sun Pharma Global FZE; Withdrawal of Approval of Four Abbreviated New Drug Applications; CorrectionPDF
83 FR 30744 - Assessing User Fees Under the Biosimilar User Fee Amendments of 2017; Guidance for Industry; AvailabilityPDF
83 FR 30742 - Development of Non-Traditional Therapies for Bacterial Infections; Public Workshop; Request for CommentsPDF
83 FR 30700 - Proposed Information Collection; Comment Request; Analysis of Exoskeleton-Use for Enhancing Human Performance Data CollectionPDF
83 FR 30773 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; 30 CFR 580, Prospecting for Minerals Other Than Oil, Gas, and Sulphur on the Outer Continental Shelf and Authorizations of Noncommercial Geological and Geophysical ActivitiesPDF
83 FR 30825 - Defense Federal Acquisition Regulation Supplement: Offset Costs (DFARS Case 2015-D028)PDF
83 FR 30824 - Defense Federal Acquisition Regulation Supplement: Repeal of DFARS Clause “Pricing Adjustments” (DFARS Case 2018-D032)PDF
83 FR 30646 - Defense Federal Acquisition Regulation Supplement: Inapplicability of Certain Laws and Regulations to Commercial Items (DFARS Case 2017-D010)PDF
83 FR 30584 - Defense Federal Acquisition Regulation Supplement: Undefinitized Contract Action Definitization (DFARS Case 2015-D024)PDF
83 FR 30587 - Defense Federal Acquisition Regulation Supplement: Repeal of DFARS Clause “Requirements” (DFARS Case 2018-D030)PDF
83 FR 30659 - Defense Federal Acquisition Regulation Supplement: Modification of DFARS Clause “Surge Option” (DFARS Case 2018-D025)PDF
83 FR 30644 - Defense Federal Acquisition Regulation Supplement: Use of Commercial or Non-Government Standards (DFARS Case 2017-D014)PDF
83 FR 30592 - Licensing Private Remote Sensing Space SystemsPDF
83 FR 30735 - Proposed Information Collection ActivityPDF
83 FR 30781 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Bloodborne Pathogens StandardPDF
83 FR 30535 - Establishment of the Dahlonega Plateau Viticultural AreaPDF
83 FR 30702 - Procurement List; Proposed Additions and DeletionsPDF
83 FR 30589 - Federal Employees' Group Life Insurance Program: Clarifying Annual Rates of Pay and Amending the Employment Status of Judges of the United States Court of Appeals for Veterans ClaimsPDF
83 FR 30756 - Request for Information on the HEALing Communities Study: Developing and Testing an Integrated Approach To Address the Opioid CrisisPDF
83 FR 30717 - Notice of Petition for Waiver of LG Electronics USA, Inc. From the Department of Energy Room Air Conditioner Test Procedure and Notice of Grant of Interim WaiverPDF
83 FR 30815 - Motor Carrier Safety Advisory Committee (MCSAC); Public MeetingPDF
83 FR 30690 - Approval of Subzone Status; Amcor Flexibles LLC; Shelbyville, KentuckyPDF
83 FR 30690 - Approval of Subzone Expansion; Brake Parts Inc.; Hazleton, PennsylvaniaPDF
83 FR 30716 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Federal Student Loan Program Deferment Request FormsPDF
83 FR 30548 - Special Local Regulation; Corpus Christi Bay, Corpus Christi, TXPDF
83 FR 30551 - Safety Zone; Tennessee River, Gilbertsville, KYPDF
83 FR 30688 - Notice of Intent To Prepare an Environmental Impact Statement; Movement and Outdoor Use of Certain Genetically Engineered OrganismsPDF
83 FR 30687 - Determination of Total Amounts of Fiscal Year 2019 WTO Tariff-Rate Quotas for Raw Cane Sugar and Certain Sugars, Syrups and MolassesPDF
83 FR 30591 - United States Standards for CornPDF
83 FR 30590 - United States Standards for CanolaPDF
83 FR 30592 - United States Standards for SoybeansPDF
83 FR 30639 - Leased Commercial Access; Modernization of Media Regulation InitiativePDF
83 FR 30551 - Safety Zones; Recurring Events in Captain of the Port Duluth Zone-LaPointe FireworksPDF
83 FR 30779 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Occupational Requirements SurveyPDF
83 FR 30778 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Job Openings and Labor Turnover SurveyPDF
83 FR 30781 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; National Longitudinal Survey of Youth 1979PDF
83 FR 30701 - Marine Mammals; File No. 21006PDF
83 FR 30751 - Quality Metrics Site Visit Program for Center for Drug Evaluation and Research and Center for Biologics Evaluation and Research Staff; Information Available to IndustryPDF
83 FR 30748 - Modernizing Pharmaceutical Quality Systems; Studying Quality Metrics and Quality Culture; Quality Metrics Feedback ProgramPDF
83 FR 30783 - Zion Solutions, LLC; Zion Nuclear Power Station, Units 1 and 2PDF
83 FR 30730 - Environmental Impact Statements; Notice of AvailabilityPDF
83 FR 30821 - VA National Academic Affiliations Council, Notice of MeetingPDF
83 FR 30525 - Special Conditions: Bombardier Model BD-500-1A10 and BD-500-1A11 Airplanes, Installation of Inflatable Lap Belts on SeatsPDF
83 FR 30734 - Submission for OMB Review; Comment RequestPDF
83 FR 30701 - Marine Mammals; File No. 21485PDF
83 FR 30731 - Solicitation of Nominations for Appointment to the Healthcare Infection Control Practices Advisory Committee (HICPAC)PDF
83 FR 30731 - Healthcare Infection Control Practices Advisory Committee (HICPAC); Notice of Charter AmendmentPDF
83 FR 30731 - National Institute for Occupational Safety and Health (NIOSH), Safety and Occupational Health Study Section (SOHSS); Notice of Charter RenewalPDF
83 FR 30730 - Board of Scientific Counselors, National Center for Environmental Health/Agency for Toxic Substances and Disease Registry (BSC, NCEH/ATSDR); Notice of Charter RenewalPDF
83 FR 30760 - Agency Information Collection Activities: Submission for OMB Review; Comment Request; Elevation Certificate/Floodproofing CertificatePDF
83 FR 30758 - Agency Information Collection Activities: Proposed Collection; Comment Request; Standard Flood Hazard Determination FormPDF
83 FR 30813 - Petition for Exemption; Summary of Petition Received; Avitas Systems, Inc.PDF
83 FR 30814 - Petition for Exemption; Summary of Petition Received; John E. GreenPDF
83 FR 30804 - Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Relocate the Exchange's Rules Pertaining to Co-Location and Direct ConnectivityPDF
83 FR 30802 - Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing of Proposed Rule Change Relating to Amending the ICC Clearing Rules Regarding Mark-to-Market MarginPDF
83 FR 30793 - Self-Regulatory Organizations; NYSE Arca Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Commentary .02 to Rule 6.72-O in Order To Extend the Penny Pilot in Options Classes in Certain Issues Through December 31, 2018PDF
83 FR 30792 - Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 510 To Extend the Penny Pilot ProgramPDF
83 FR 30801 - Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Relocate the Exchange's Rules Pertaining to Co-Location and Direct ConnectivityPDF
83 FR 30786 - Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend MIAX Options Rule 510 To Extend the Penny Pilot ProgramPDF
83 FR 30806 - Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the DTC Operational Arrangements To Add Clarifying Text Relating to the Processing of Unit Investment Trust Securities Through the DTC Investor's Voluntary Redemptions and Sales ServicePDF
83 FR 30808 - Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Commentary .02 to Rule 960NY in Order To Extend the Penny Pilot in Options Classes in Certain Issues Through December 31, 2018PDF
83 FR 30787 - Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Exchange Rule 6.2., Hybrid Opening (and Sometimes Closing) System (“HOSS”)PDF
83 FR 30795 - Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Exchange Rule 6.2., Hybrid Opening (and Sometimes Closing) System (“HOSS”)PDF
83 FR 30704 - Submission for OMB Review; Comment RequestPDF
83 FR 30791 - Self-Regulatory Organizations; The Depository Trust Company; Fixed Income Clearing Corporation; National Securities Clearing Corporation; Notice of Designation of Longer Period for Commission Action on Proceedings To Determine Whether To Approve or Disapprove Proposed Rule Changes To Amend the Loss Allocation Rules and Make Other ChangesPDF
83 FR 30785 - Self-Regulatory Organizations; The Depository Trust Company; Fixed Income Clearing Corporation; National Securities Clearing Corporation; Notice of Designation of Longer Period for Commission Action on Proceedings To Determine Whether To Approve or Disapprove Proposed Rule Changes To Adopt a Recovery & Wind-Down Plan and Related RulesPDF
83 FR 30814 - Petition for Exemption; Summary of Petition Received; FlightScan CorporationPDF
83 FR 30812 - Petition for Exemption; Summary of Petition Received; Victor Lee & Associates Inc.PDF
83 FR 30813 - Petition for Exemption; Summary of Petition Received; Pan Am International Flight AcademyPDF
83 FR 30690 - Notice of Public Meeting of the Michigan Advisory CommitteePDF
83 FR 30779 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Definition and Requirements for a Nationally Recognized Testing LaboratoryPDF
83 FR 30703 - Submission for OMB Review; Comment RequestPDF
83 FR 30757 - National Institute of Diabetes and Digestive and Kidney Diseases; Notice of Closed MeetingsPDF
83 FR 30758 - National Center for Advancing Translational Sciences; Notice of Closed MeetingPDF
83 FR 30754 - Center for Scientific Review; Notice of Closed MeetingsPDF
83 FR 30776 - Certain Earpiece Devices and Components Thereof; Institution of InvestigationPDF
83 FR 30689 - Notice of Public Meeting of the Tennessee Advisory CommitteePDF
83 FR 30726 - Vigue, Peter A.; Notice of Supplemental FilingPDF
83 FR 30729 - ANR Pipeline Company; Notice of Request Under Blanket AuthorizationPDF
83 FR 30728 - Notice of Availability of the Draft Environmental Impact Statement for the Proposed Calcasieu Pass Project; Venture Global Calcasieu Pass, LLC, TransCameron Pipeline, LLCPDF
83 FR 30726 - Combined Notice of Filings #1PDF
83 FR 30810 - Data Collection Available for Public CommentsPDF
83 FR 30754 - Agency Information Collection Activities: Submission to OMB for Review and Approval; Public Comment Request; Faculty Loan Repayment Program, OMB No. 0915-0150-ExtensionPDF
83 FR 30812 - Petition for Exemption; Summary of Petition Received; Gulfstream Aerospace CorporationPDF
83 FR 30571 - Air Plan Approval; Michigan; Revisions to Volatile Organic Compound RulesPDF
83 FR 30818 - Notice of Request for Information Regarding Health Care Access StandardsPDF
83 FR 30819 - Announcement for Public Meeting Regarding Health Care Access StandardsPDF
83 FR 30553 - Approval and Promulgation of Implementation Plans; Arkansas; Revisions to Minor New Source Review ProgramPDF
83 FR 30668 - ELDT; Commercial Driver's License Upgrade From Class B to Class APDF
83 FR 30771 - Notice of Availability of the Draft San Pedro Riparian National Conservation Area Resource Management Plan and Associated Environmental Impact Statement, ArizonaPDF
83 FR 30695 - Utility Scale Wind Towers From the People's Republic of China: Rescission of Countervailing Duty Administrative Review; 2017PDF
83 FR 30708 - Submission for OMB Review; Comment RequestPDF
83 FR 30628 - Updating the Intercarrier Compensation Regime To Eliminate Access ArbitragePDF
83 FR 30699 - Certain Quartz Surface Products From the People's Republic of China: Postponement of Preliminary Determination in the Countervailing Duty InvestigationPDF
83 FR 30706 - Notice of Intent To Adopt U.S. Bureau of Reclamation's December 2015 Final Environmental Impact Report/Environmental Impact Statement/Environmental Impact Statement, Prepare Corps Record of Decision, and Reimburse the Sponsor for the Upper Truckee River and Marsh Restoration Project, City of South Lake Tahoe, El Dorado County, CAPDF
83 FR 30695 - Large Diameter Welded Pipe From the People's Republic of China: Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Determination With Final Antidumping DeterminationPDF
83 FR 30693 - Large Diameter Welded Pipe From the Republic of Korea: Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Determination With Final Antidumping Duty DeterminationPDF
83 FR 30697 - Large Diameter Welded Pipe From the Republic of Turkey: Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Determination With Final Antidumping Duty DeterminationPDF
83 FR 30690 - Large Diameter Welded Pipe From India: Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Determination With Final Antidumping Duty DeterminationPDF
83 FR 30533 - Adaptation of Regulations to Incorporate Swaps; CorrectionPDF

Issue

83 126 Friday, June 29, 2018 Contents Administrative Administrative Conference of the United States NOTICES Adoptions of Recommendations, 30683-30687 2018-14075 Agricultural Marketing Agricultural Marketing Service PROPOSED RULES United States Standards: Canola, 30590-30591 2018-14016 Corn, 30591-30592 2018-14017 Soybeans, 30592 2018-14015 Agriculture Agriculture Department See

Agricultural Marketing Service

See

Animal and Plant Health Inspection Service

NOTICES Total Amounts of Fiscal Year 2019 WTO Tariff-Rate Quotas: Raw Cane Sugar and Certain Sugars, Syrups and Molasses, 30687-30688 2018-14018
Alcohol Tobacco Tax Alcohol and Tobacco Tax and Trade Bureau RULES Establishment of Dahlonega Plateau Viticultural Area, 30535-30538 2018-14035 Animal Animal and Plant Health Inspection Service NOTICES Environmental Impact Statements; Availability, etc.: Movement and Outdoor Use of Certain Genetically Engineered Organisms, 30688-30689 2018-14019 Centers Disease Centers for Disease Control and Prevention NOTICES Charter Amendments: Healthcare Infection Control Practices Advisory Committee, 30731 2018-13995 Charter Renewals: Board of Scientific Counselors, National Center for Environmental Health/Agency for Toxic Substances and Disease Registry, 30730-30731 2018-13993 National Institute for Occupational Safety and Health, Safety and Occupational Health Study Section, 30731 2018-13994 Requests for Nominations: Healthcare Infection Control Practices Advisory Committee, 30731-30732 2018-13996 Centers Medicare Centers for Medicare & Medicaid Services NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 30732-30733 2018-14077 2018-14099 Children Children and Families Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 30734-30736 2018-13998 2018-14037 Civil Rights Civil Rights Commission NOTICES Meetings: Michigan Advisory Committee, 30690 2018-13970 Tennessee Advisory Committee, 30689-30690 2018-13961 Coast Guard Coast Guard RULES Safety Zones: Recurring Events in Captain of the Port Duluth Zone—LaPointe Fireworks, 30551 2018-14012 Tennessee River, Gilbertsville, KY, 30551-30553 2018-14020 Special Local Regulations: Corpus Christi Bay, Corpus Christi, TX, 30548-30551 2018-14021 Commerce Commerce Department See

Foreign-Trade Zones Board

See

International Trade Administration

See

National Institute of Standards and Technology

See

National Oceanic and Atmospheric Administration

Committee for Purchase Committee for Purchase From People Who Are Blind or Severely Disabled NOTICES Procurement List; Additions and Deletions, 30702-30703 2018-14033 Commodity Futures Commodity Futures Trading Commission RULES Adaptation of Regulations to Incorporate Swaps; Correction, 30533-30534 2018-13256 Defense Acquisition Defense Acquisition Regulations System RULES Defense Federal Acquisition Regulation Supplement: Offset Costs, 30825-30829 2018-14045 Repeal of Defense Federal Acquisition Regulation Supplement Clause Pricing Adjustments, 30824-30825 2018-14044 Repeal of Defense Federal Acquisition Regulation Supplement Clause Requirements, 30587-30588 2018-14041 Undefinitized Contract Action Definitization, 30584-30587 2018-14042 PROPOSED RULES Defense Federal Acquis Regulation Supplement: Electronic Submission and Processing of Payment Requests and Receiving Reports, 30661-30666 2018-14063 Defense Federal Acquisition Regulation Supplement: Inapplicability of Certain Laws and Regulations to Commercial Items, 30646-30656 2018-14043 Modification of DFARS Clause Surge Option, 30659-30661 2018-14040 Only One Offer, 30656-30659 2018-14062 Submission of Summary Subcontract Reports, 30666-30668 2018-14069 Use of Commercial or Non-Government Standards, 30644-30645 2018-14039 Defense Department Defense Department See

Defense Acquisition Regulations System

See

Engineers Corps

See

Navy Department

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 30703-30705 2018-13963 2018-13968 2018-13976 2018-14076
Education Department Education Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Federal Student Loan Program Deferment Request Forms, 30716-30717 2018-14022 Applications for New Awards: Educational Technology, Media, and Materials for Individuals with Disabilities—Center on Early Science, Technology, Engineering, and Math Learning for Young Children with Disabilities, 30708-30716 2018-14083 Energy Department Energy Department See

Federal Energy Regulatory Commission

NOTICES Petitions for Waivers: LG Electronics USA, Inc., 30717-30726 2018-14030
Engineers Engineers Corps NOTICES Environmental Assessments; Availability, etc.: Upper St. Anthony Falls Lock and Dam, Lower St. Anthony Falls Lock and Dam, and Lock and Dam 1 Disposition Study, Hennepin and Ramsey Counties, MN, 30705-30706 2018-14070 Environmental Impact Statements; Availability, etc.: Upper Truckee River and Marsh Restoration Project, City of South Lake Tahoe, El Dorado County, CA, 30706-30708 2018-13670 Environmental Protection Environmental Protection Agency RULES Air Quality State Implementation Plans; Approvals and Promulgations: Arkansas; Revisions to Minor New Source Review Program, 30553-30570 2018-13942 Michigan; Revisions to Volatile Organic Compound Rules, 30571-30573 2018-13953 Control of Emissions From New and In-Use Highway Vehicles and Engines; CFR Correction, 30573 2018-14145 PROPOSED RULES Air Quality State Implementation Plans; Approvals and Promulgations: Arkansas; Interstate Transport Requirements for the 2012 Fine Particulate Matter National Ambient Air Quality Standards and Definition Update, 30622-30626 2018-14067 Idaho; Incorporations by Reference Updates and Rule Revisions, 30626-30628 2018-14096 Tennessee; Attainment Plan for Sullivan County SO2 Nonattainment Area, 30609-30622 2018-14097 Vermont; Infrastructure State Implementation Plan Requirements for the 2012 Fine Particle National Ambient Air Quality Standards, 30598-30609 2018-14068 NOTICES Environmental Impact Statements; Availability, etc.: Weekly Receipts, 30730 2018-14003 Federal Aviation Federal Aviation Administration RULES Special Conditions: Bombardier Model BD-500-1A10 and BD-500-1A11 Airplanes, Installation of Inflatable Lap Belts on Seats, 30525-30528 2018-13999 NOTICES Petitions for Exemptions; Summaries: Avitas Systems, Inc., 30813-30814 2018-13988 FlightScan Corp., 30814-30815 2018-13973 Gulfstream Aerospace Corp., 30812 2018-13954 John E. Green, 30814 2018-13987 Pan Am International Flight Academy, 30813 2018-13971 Victor Lee and Associates, Inc., 30812-30813 2018-13972 Federal Communications Federal Communications Commission RULES Promoting Telehealth in Rural America, 30573-30584 2018-14073 PROPOSED RULES Leased Commercial Access; Modernization of Media Regulation Initiative, 30639-30644 2018-14014 Updating the Intercarrier Compensation Regime to Eliminate Access Arbitrage, 30628-30639 2018-13699 Federal Emergency Federal Emergency Management Agency NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Application for Community Disaster Loan Program, 30759-30760 2018-14078 Elevation Certificate/Floodproofing Certificate, 30760-30761 2018-13992 Standard Flood Hazard Determination Form, 30758-30759 2018-13991 Federal Energy Federal Energy Regulatory Commission NOTICES Combined Filings, 30726-30728 2018-13957 Environmental Impact Statements; Availability, etc.: Venture Global Calcasieu Pass, LLC; TransCameron Pipeline, LLC; Calcasieu Pass Project, 30728-30729 2018-13958 Requests under Blanket Authorizations: ANR Pipeline Co., 30729-30730 2018-13959 Supplemental Filings: Vigue, Peter A., 30726 2018-13960 Federal Motor Federal Motor Carrier Safety Administration PROPOSED RULES Entry-Level Driver Training: Commercial Driver's License Upgrade from Class B to Class A, 30668-30682 2018-13871 NOTICES Meetings: Motor Carrier Safety Advisory Committee, 30815-30816 2018-14029 Food and Drug Food and Drug Administration RULES Guidance: Antimicrobial Animal Drug Sales and Distribution Reporting; Small Entity Compliance Guide, 30534-30535 2018-14085 PROPOSED RULES Predictive Toxicology Roadmap and Its Implementation: Public Hearings, 30595-30598 2018-14052 NOTICES Abbreviated New Drug Applications; Approval Withdrawals: Sun Pharmaceutical Industries, Ltd., and Sun Pharma Global FZE, 30753-30754 2018-14050 Agency Information Collection Activities; Proposals, Submissions, and Approvals: Administrative Practices and Procedures; Formal Evidentiary Public Hearing, 30736-30738 2018-14058 Animal Food Labeling; Declaration of Certifiable Color Additives, 30741-30742 2018-14059 Biosimilars User Fee Program, 30746-30748 2018-14057 Labeling of Certain Beers Subject to Labeling Jurisdiction of Food and Drug Administration, 30738-30740 2018-14056 National Agriculture and Food Defense Strategy Survey, 30740-30741 2018-14051 Guidance: Assessing User Fees under Biosimilar User Fee Amendments of 2017, 30744-30746 2018-14049 Oncology Therapeutic Radiopharmaceuticals: Nonclinical Studies and Labeling Recommendations, 30752-30753 2018-14055 Meetings: Development of Non-Traditional Therapies for Bacterial Infections; Public Workshop, 30742-30744 2018-14048 Modernizing Pharmaceutical Quality Systems: Studying Quality Metrics and Quality Culture; Quality Metrics Feedback Program, 30748-30751 2018-14005 Quality Metrics Site Visit Program for Center for Drug Evaluation and Research and Center for Biologics Evaluation and Research Staff, 30751-30752 2018-14006 Foreign Assets Foreign Assets Control Office RULES Global Magnitsky Sanctions Regulations, 30541-30548 2018-14060 Removal of Sudanese Sanctions Regulations and Amendment of Terrorism List Government Sanctions Regulations, 30539-30541 2018-14084 Foreign Claims Foreign Claims Settlement Commission NOTICES Meetings; Sunshine Act, 30778 2018-14159 Foreign Trade Foreign-Trade Zones Board NOTICES Subzone Expansions; Approvals: Brake Parts Inc., Hazleton, PA, 30690 2018-14026 Subzone Status; Approvals: Amcor Flexibles, LLC, Shelbyville, KY, 30690 2018-14027 Health and Human Health and Human Services Department See

Centers for Disease Control and Prevention

See

Centers for Medicare & Medicaid Services

See

Children and Families Administration

See

Food and Drug Administration

See

Health Resources and Services Administration

See

National Institutes of Health

Health Resources Health Resources and Services Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Faculty Loan Repayment Program, 30754 2018-13955 Homeland Homeland Security Department See

Coast Guard

See

Federal Emergency Management Agency

Housing Housing and Urban Development Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Comprehensive Listing of Transactional Documents for Mortgagors, Mortgagees and Contractors Federal Housing Administration Healthcare Facility Documents, 30769-30771 2018-14081 Regulatory Waivers, 30761-30769 2018-14082 Interior Interior Department See

Land Management Bureau

See

National Park Service

See

Ocean Energy Management Bureau

International Trade Adm International Trade Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Utility Scale Wind Towers from the People's Republic of China, 30695 2018-13804 Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Quartz Surface Products from the People's Republic of China, 30699-30700 2018-13694 Large Diameter Welded Pipe from the India, 30690-30693 2018-13564 Large Diameter Welded Pipe from the People's Republic of China, 30695-30697 2018-13567 Large Diameter Welded Pipe from the Republic of Korea, 30693-30695 2018-13566 Large Diameter Welded Pipe from the Republic of Turkey, 30697-30699 2018-13565 International Trade Com International Trade Commission NOTICES Investigations; Determinations, Modifications, and Rulings, etc.: Certain Earpiece Devices and Components Thereof, 30776-30777 2018-13962 Folding Gift Boxes from China, 30777 2018-14061 Justice Department Justice Department See

Foreign Claims Settlement Commission

Labor Department Labor Department See

Occupational Safety and Health Administration

See

Workers Compensation Programs Office

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Bloodborne Pathogens Standard, 30781 2018-14036 Definition and Requirements for Nationally Recognized Testing Laboratory, 30779-30780 2018-13969 Job Openings and Labor Turnover Survey, 30778-30779 2018-14009 National Longitudinal Survey of Youth, 30781-30782 2018-14008 Occupational Requirements Survey, 30779 2018-14010
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83 126 Friday, June 29, 2018 Rules and Regulations DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 25 [Docket No. FAA-2018-0320; Special Conditions No. 25-731-SC] Special Conditions: Bombardier Model BD-500-1A10 and BD-500-1A11 Airplanes, Installation of Inflatable Lap Belts on Seats AGENCY:

Federal Aviation Administration (FAA), DOT.

ACTION:

Final special conditions; request for comments.

SUMMARY:

These special conditions are issued for the Bombardier Inc. (Bombardier) Model BD-500-1A10 and BD-500-1A11 airplanes. These airplanes will have a novel or unusual design feature when compared to the state of technology envisioned in the airworthiness standards for transport category airplanes. This design feature is installation of inflatable lap belts on seats. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.

DATES:

This action is effective on Bombardier on June 29, 2018. Send comments on or before August 13, 2018.

ADDRESSES:

Send comments identified by Docket No. FAA-2018-0320 using any of the following methods:

Federal eRegulations Portal: Go to http://www.regulations.gov/ and follow the online instructions for sending your comments electronically.

Mail: Send comments to Docket Operations, M-30, U.S. Department of Transportation (DOT), 1200 New Jersey Avenue SE, Room W12-140, West Building Ground Floor, Washington, DC 20590-0001.

Hand Delivery or Courier: Take comments to Docket Operations in Room W12-140 of the West Building Ground Floor at 1200 New Jersey Avenue SE, Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

Fax: Fax comments to Docket Operations at 202-493-2251.

Privacy: The FAA will post all comments it receives, without change, to http://www.regulations.gov/, including any personal information the commenter provides. Using the search function of the docket website, anyone can find and read the electronic form of all comments received into any FAA docket, including the name of the individual sending the comment (or signing the comment for an association, business, labor union, etc.). DOT's complete Privacy Act Statement can be found in the Federal Register published on April 11, 2000 (65 FR 19477-19478).

Docket: Background documents or comments received may be read at http://www.regulations.gov/ at any time. Follow the online instructions for accessing the docket or go to Docket Operations in Room W12-140 of the West Building Ground Floor at 1200 New Jersey Avenue SE, Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT:

Alan Sinclair, Airframe and Cabin Section, AIR-675, Transport Standards Branch, Policy and Innovation Division, Aircraft Certification Service, Federal Aviation Administration, 2200 South 216th Street, Des Moines, Washington 98198; telephone and fax 206-231-3215; email [email protected]

SUPPLEMENTARY INFORMATION:

The substance of these special conditions previously has been published in the Federal Register for public comment. These special conditions have been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. Therefore, the FAA has determined that prior public notice and comment are unnecessary, and finds that, for the same reason, good cause exists for adopting these special conditions upon publication in the Federal Register.

Comments Invited

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

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

Background

On December 6, 2017, Bombardier applied for an amendment to Type Certificate No. T00008NY to include the new Model BD-500-1A10 and BD-500-1A11 airplanes. These airplanes, which are a derivative of the Model BD-500 currently approved under Type Certificate No. T00008NY, are transport-category, twin-engine airplanes. The BD-500-1A10 has seating for 110 to 130 passengers and an estimated maximum take-off weight of 129,000 lbs. The BD-500-1A11 has seating for 130-150 passengers and an estimated maximum take-off weight of 144,000 lbs.

Type Certification Basis

Under the provisions of title 14, Code of Federal Regulations (14 CFR) 21.101, Bombardier must show that the Model BD-500-1A10 and BD-500-1A11 airplanes meet the applicable provisions of the regulations listed in Type Certificate No. T00008NY, or the applicable regulations in effect on the date of application for the change except for earlier amendments as agreed upon by the FAA.

If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR part 25) do not contain adequate or appropriate safety standards for the Bombardier Model BD-500-1A10 and BD-500-1A11 airplanes because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

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

In addition to the applicable airworthiness regulations and special conditions, the Bombardier Model BD-500-1A10 and BD-500-1A11 airplanes must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34, and the noise-certification requirements of 14 CFR part 36.

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

Novel or Unusual Design Features

The Bombardier Model BD-500-1A10 and BD-500-1A11 airplanes will incorporate the following novel or unusual design feature:

Installation of inflatable lap belts on seats.

Discussion

The inflatable lap belt has two potential advantages over other means of head-impact protection. First, it can provide significantly greater protection than would be expected with energy-absorbing pads, and second, it can provide essentially equivalent protection for occupants of all stature. These are significant advantages from a safety standpoint, because such devices will likely provide a level of safety that exceeds the minimum standards of part 25. Conversely, inflatable lap belts in general are active systems and must be relied upon to activate properly when needed, as opposed to an energy-absorbing pad or upper torso restraint that is passive and always available. Therefore, the potential advantages must be balanced against this and other potential disadvantages to develop standards for this design feature.

The FAA has considered the installation of inflatable lap belts to have two primary safety concerns: First, that they perform properly under foreseeable operating conditions; and second, that they do not perform in a manner or at such times as would constitute a hazard to the airplane or occupants. This latter point has the potential to be the more rigorous of the requirements, owing to the active nature of the system.

The inflatable lap belt will rely on electronic sensors for signaling, and will employ an automatic inflation mechanism for activation, so that it is available when needed. These same devices could be susceptible to inadvertent activation, causing deployment in a potentially unsafe manner. The consequences of such deployment must be considered in establishing the reliability of the system. The applicant must substantiate that the effects of an inadvertent deployment in flight are either not a hazard to the airplane, or that such deployment is an extremely improbable occurrence (less than 10−9 per flight hour). The effect of an inadvertent deployment on a passenger or crewmember that might be positioned close to the inflatable lap belt should also be considered. The person could be either standing or sitting. A minimum reliability level will have to be established for this case, depending upon the consequences, even if the effect on the airplane is negligible.

The potential for an inadvertent deployment could be increased as a result of conditions in service. The installation must take into account wear and tear so that the likelihood of an inadvertent deployment is not increased to an unacceptable level. In this context, an appropriate inspection interval and self-test capability are considered necessary. Other outside influences are lightning and high-intensity radiated fields (HIRF). Existing regulations regarding lightning, § 25.1316, and HIRF, § 25.1317, are applicable. For compliance with those conditions, if inadvertent deployment could cause a hazard to the airplane, the inflatable lap belt is considered a critical system; if inadvertent deployment could cause injuries to persons, the inflatable lap belt should be considered an essential system. Finally, the inflatable lap-belt installation should be protected from the effects of fire, so that an additional hazard is not created by, for example, a rupture of a pyrotechnic squib.

To function as an effective safety system, the inflatable lap belt must function properly and must not introduce any additional hazards to occupants as a result of its functioning. The inflatable lap belt differs variously from traditional occupant-protection systems and requires special conditions to ensure adequate performance.

Because the inflatable lap belt is essentially a single-use device, it could potentially deploy under crash conditions that are not sufficiently severe as to require head-injury protection from the inflatable lap belt. And because an actual crash is frequently composed of a series of impacts before the airplane comes to rest, this could render the inflatable lap belt useless if a larger impact follows the initial impact. This situation does not exist with energy-absorbing pads or upper-torso restraints, which tend to provide continuous protection regardless of severity or number of impacts in a crash event. Therefore, the inflatable lap-belt installation should be such that the inflatable lap belt will provide protection when it is required, by not expending its protection during a less-severe impact. Also, it is possible to have several large impact events during the course of a crash, but there will be no requirement for the inflatable lap belt to provide protection for multiple impacts.

Given that each occupant's restraint system provides protection for that occupant only, the installation must address unoccupied seats. It will be necessary to show that the required protection is provided for each occupant regardless of the number of occupied seats, and that unoccupied seats may have lap belts that are active.

The inflatable lap belt should be effective for a wide range of occupants. The FAA has historically considered the range from the 5th percentile female to the 95th percentile male as the range of occupants that must be taken into account. In this case, the FAA is proposing consideration of a broader range of occupants due to the nature of the lap-belt installation and its close proximity to the occupant. In a similar vein, these persons could have assumed the brace position for those accidents where an impact is anticipated. Test data indicate that occupants in the brace position do not require supplemental protection, so it would not be necessary to show that the inflatable lap belt will enhance the brace position. However, the inflatable lap belt must not introduce a hazard when it is deployed into a seated, braced occupant.

Another area of concern is the use of seats so equipped by children, whether they are lap-held, sitting in approved child-safety seats, or occupying the seat directly. Although specifically prohibited by FAA operating regulations, the use of the supplementary loop belt (“belly belt”) may be required by other civil aviation authorities, and should also be considered with the purpose of meeting those regulations. Similarly, if the seat is occupied by a pregnant woman, the installation needs to address such usage, either by demonstrating that it will function properly, or by adding appropriate limitation on usage.

The inflatable lap belt will be electrically powered. Likewise, the system could possibly fail due to a separation in the fuselage. Because this system is intended as crash/post-crash protection means, failure due to fuselage separation is not acceptable. As with emergency lighting, the restraint system should function properly if such a separation occurs at any point in the fuselage.

Because the inflatable lap belt is likely to have a large volume displacement, the inflated bag could potentially impede egress of passengers. However, the lap-belt bag deflates to absorb energy, so it is likely that an inflatable lap belt would be deflated by the time passengers begin to leave their seats. Nonetheless, it is appropriate to specify a time interval after which the inflatable lap belt may not impede rapid egress. The maximum time allowed for an exit to open fully after actuation is 10 seconds, according to § 25.809(b)(2). Therefore, the FAA has established 10 seconds as the time interval that the inflatable lap belt must not impede rapid egress from the seat after it is deployed. In actuality, it is unlikely that a flight attendant would prepare an exit this quickly in an accident severe enough to warrant deployment of the inflatable lap belt. The inflatable lap belt will likely deflate much more quickly than 10 seconds.

This potential impediment to rapid egress is even more critical at the seats installed in the emergency-exit rows. Installation of inflatable restraints at the Type III exit rows presents different egress concerns as compared with front-row seats. However, the need to address egress is already part of the special conditions, so the special conditions are not changed at this time. As noted below, the method of compliance with the special conditions may involve specific considerations when an inflatable restraint is installed at Type III exits. Section 25.813 clearly requires access to the exit from the main aisle in the form of an unobstructed passageway, and no interference in opening the exit. The restraint system must not create an impediment to the access to, and the opening of, the exit. These lap belts should be evaluated in the exit row under existing regulations (§§ 25.809 and 25.813) and guidance material. The inflatable lap belts must also be evaluated in post-crash conditions, and should be evaluated using representative restraint systems in the bag-deployed condition.

This evaluation would include reviewing the access to, and opening of, the exit, specifically for obstructions in the egress path; and any interferences in opening the exit. Each unique interior configuration must be considered, e.g., passageway width, single or dual passageways with outboard seat removed, etc. If the restraint creates any obstruction or interference, it is likely that it could impede rapid egress from the airplane. In some cases, the passenger is the one who will open the exit, such as a Type III over-wing hatch. Project-specific means-of-compliance guidance is likely necessary if these restraint systems are installed at the Type III exit rows.

Note that the special conditions are applicable to the inflatable lap-belt system as installed. The special conditions are not an installation approval. Therefore, while the special conditions relate to each such system installed, the overall installation approval is separate, and must consider the combined effects of all such systems installed.

Bombardier will install inflatable lap belts, a novel design feature, on certain seats of their Model BD-500-1A10 and BD-500-1A11 airplanes, to reduce the potential for head injury if an accident occurs. The inflatable lap belt works similar to an automotive inflatable air bag, except that the air bag in the applicant's design is integrated into the lap belt of the restraint system.

The performance criteria for head-injury protection in objective terms is stated in § 25.562. However, none of these criteria are adequate to address the specific issues raised concerning seats with inflatable lap belts. The FAA therefore has determined that, in addition to the requirements of part 25, special conditions are needed to address requirements particular to the installation of seats with inflatable lap belts.

Accordingly, in addition to the passenger-injury criteria specified in § 25.785, these special conditions are for Bombardier Model BD-500-1A10 and BD-500-1A11 airplanes equipped with inflatable lap belts. Other conditions may be developed, as needed, based on further FAA review and discussions with the manufacturer and civil-aviation authorities.

Part I of part 25, appendix F specifies the flammability requirements for interior materials and components. There is no reference to inflatable restraint systems in appendix F, because such devices did not exist at the time the flammability requirements were written. The existing requirements are based on material types as well as use, and have been specified in light of state-of-the-art materials available to perform a given function. Without a specific reference, the default requirement would apply to the type of material used in making the inflatable restraint, which is a fabric in this case. However, in writing special conditions, the FAA must also consider the use of the material, and whether the default requirement is appropriate. In this case, the specialized function of the inflatable restraint means that highly specialized materials are needed. The standard normally applied to fabrics is a 12-second vertical ignition test. However, materials that meet this standard do not perform adequately as inflatable restraints. Because the safety benefit of the inflatable restraint is significant, the flammability standard appropriate for these devices should not screen out suitable materials and thereby effectively eliminate the use of inflatable restraints. The FAA must establish a balance between the safety benefit of the inflatable restraint and its flammability performance. Presently, the 2.5-inch-per-minute horizontal test is considered to provide that balance. As the state-of-the-art in materials progresses (which is expected), the FAA may change this standard in subsequent special conditions to account for improved materials.

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

Applicability

As discussed above, these special conditions are applicable to Bombardier Model BD-500-1A10 and BD-500-1A11 airplanes. Should Bombardier apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, these special conditions would apply to that model as well.

Conclusion

This action affects only a certain novel or unusual design feature on one model series of airplanes. It is not a rule of general applicability.

List of Subjects in 14 CFR Part 25

Aircraft, Aviation safety, Reporting and recordkeeping requirements.

Authority Citation

The authority citation for these special conditions is as follows:

Authority:

49 U.S.C. 106(f), 106(g), 40113, 44701, 44702, 44704.

The Special Conditions

Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for Bombardier Model BD-500-1A10 and BD-500-1A11 airplanes.

1. The inflatable lap belt must be shown to deploy and provide protection under crash conditions where it is necessary to prevent serious head injury. The means of protection must take into consideration a range of stature from a two-year-old child to a 95th percentile male. The inflatable lap belt must provide a consistent approach to energy absorption throughout that range of occupants. In addition, the following situations must be considered.

The seat occupant is:

• Holding an infant • a child in a child-restraint device • a child not using a child-restraint device • a pregnant woman

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

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

4. The inflatable lap-belt system must be shown not to be susceptible to inadvertent deployment as a result of wear and tear, or inertial loads resulting from in-flight or ground maneuvers (including gusts and hard landings), likely to be experienced in service.

5. Deployment of the inflatable lap belt must not introduce injury mechanisms to the seated occupant, nor result in injuries that could impede rapid egress. This assessment should include an occupant who is in the brace position when it deploys, and an occupant whose inflatable lap belt is loosely fastened.

6. An inadvertent deployment that could cause injury to a standing or sitting person must be shown to be improbable.

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

8. The inflatable lap belt must be shown to not impede rapid egress of occupants 10 seconds after its deployment.

9. The inflatable lap-belt system must be protected from lightning and HIRF. The threats specified in existing regulations regarding lightning, § 25.1316, and HIRF, § 25.1317, are incorporated by reference for the purpose of measuring lightning and HIRF protection. For the purposes of complying with HIRF requirements, the inflatable lap-belt system is considered a “critical system” if its deployment could have a hazardous effect on the airplane; otherwise it is considered an “essential” system.

10. The inflatable lap belt must function properly after loss of normal airplane electrical power, and after a transverse separation of the fuselage at the most critical location. A separation at the location of the lap belt does not have to be considered.

11. The inflatable lap belt must be shown to not release hazardous quantities of gas or particulate matter into the cabin.

12. The inflatable lap-belt installation must be protected from the effects of fire such that no hazard to occupants will result.

13. A means must be available for a crewmember to verify the integrity of the inflatable-lap-belt-activation system prior to each flight, or it must be demonstrated to reliably operate between inspection intervals.

14. The inflatable material may not have an average burn rate of greater than 2.5 inches per minute when tested using the horizontal-flammability test as defined in 14 CFR part 25, appendix F, section I(b)(5).

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

Issued in Des Moines, Washington, on June 25, 2018. Victor Wicklund, Manager, Transport Standards Branch, Policy and Innovation Division, Aircraft Certification Service.
[FR Doc. 2018-13999 Filed 6-28-18; 8:45 am] BILLING CODE 4910-13-P
DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 15 CFR Part 902 50 CFR Part 679 [Docket No. 170621579-8522-02] RIN 0648-BG96 Fisheries of the Exclusive Economic Zone Off Alaska; Nontrawl Lead Level 2 Observers AGENCY:

National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

ACTION:

Final rule.

SUMMARY:

NMFS issues regulations to modify specific provisions of the North Pacific Observer Program. The first two elements of this final rule implement requirements for an observer to obtain a nontrawl lead level 2 (LL2) deployment endorsement and implement a pre-cruise meeting requirement for vessels required to carry an observer with a nontrawl LL2 deployment endorsement. These two elements are intended to increase the number of observers that qualify for a nontrawl LL2 deployment endorsement and maintain observer safety and data quality. The third element of this final rule removes duplicative and unnecessary reporting requirements and makes minor changes to reduce observer requirements for specific vessels when participating in the Western Alaska Community Development Quota (CDQ) Program. This action is intended to promote the goals and objectives of the Magnuson-Stevens Fishery Conservation and Management Act, the Fishery Management Plan for Groundfish of the Gulf of Alaska, and the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area, and other applicable law.

DATES:

Effective July 30, 2018.

ADDRESSES:

Electronic copies of the Regulatory Impact Review (RIR) and the Categorical Exclusion prepared for this action are available from www.regulations.gov or from the NMFS Alaska Region website at alaskafisheries.noaa.gov. All public comment letters submitted during the comment period may be obtained from www.regulations.gov/#!docketDetail;D=NOAA-NMFS-2017-0071.

Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this final rule may be submitted by mail to NMFS Alaska Region, P.O. Box 21668, Juneau, AK 99802-1668, Attn: Ellen Sebastian, Records Officer; in person at NMFS Alaska Region, 709 West 9th Street, Room 420A, Juneau, AK; and to OIRA by email to [email protected] or by fax to 202-395-5806.

FOR FURTHER INFORMATION CONTACT:

Alicia M Miller, (907) 586-7228 or [email protected]

SUPPLEMENTARY INFORMATION: Authority for Action

NMFS manages the groundfish fisheries in the exclusive economic zone under the Fishery Management Plan for Groundfish of the Gulf of Alaska (GOA FMP) and under the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area (BSAI FMP). The North Pacific Fishery Management Council (Council) prepared the FMPs under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), 16 U.S.C. 1801 et seq. Regulations governing U.S. fisheries and implementing the FMPs appear at 50 CFR parts 600 and 679.

NMFS published the proposed rule for this action on December 27, 2017 (82 FR 61243), with comments invited through January 26, 2018.

NMFS received five comment letters during the applicable comment period. Four of these comment letters were on topics that were outside the scope of this action. One comment letter addressed the proposed rule and contained five substantive comments which are summarized and responded to under the heading “Response to Comments” below.

A detailed review of the provisions of the regulations to modify specific provisions of the North Pacific Observer Program (Observer Program) and the rationale for these regulations are provided in the preamble to the proposed rule (82 FR 61243, December 27, 2017) and are briefly summarized in this final rule.

Background

Regulations at subpart E of 50 CFR part 679 require that most vessels fishing for groundfish or halibut must carry an observer for some or all fishing activities to ensure the collection of data necessary to manage the groundfish and halibut fisheries.

The Observer Program is an integral component in the management of North Pacific fisheries. The Observer Program has two observer coverage categories: Partial and full. Regulations at 50 CFR 679.51 require vessels and processors in the full coverage category to carry an observer at all times when fish are caught or processed. This final rule affects catcher/processors in the full coverage category (i.e., vessels that catch and process their own catch at-sea), and all motherships (i.e., those vessels that receive unsorted catch from other vessels and process that catch at-sea). Owners of vessels or processors in the full coverage category must contract directly with a permitted observer provider and pay for required observer coverage. Two groups of vessels are required to carry an observer with a nontrawl LL2 deployment endorsement.

The first group of vessels includes vessels named on a License Limitation Program license with a Pacific cod catcher/processor hook-and-line endorsement for the Bering Sea, Aleutian Islands, or both the Bering Sea and Aleutian Islands (BSAI). These vessels are subject to monitoring requirements at 50 CFR 679.100 and are referred to as “freezer longline vessels” throughout this final rule. Pursuant to 50 CFR 679.100, a freezer longline vessel must carry an observer with a nontrawl LL2 deployment endorsement when the vessel (1) operates in either the BSAI or Gulf of Alaska groundfish fisheries and directed fishing for Pacific cod is open in the BSAI, or (2) when the vessel participates in the CDQ groundfish fisheries. These monitoring requirements for freezer longline vessels were implemented in 2012 and require freezer longline vessel owners and operators to select between one of two monitoring options: Either carry two observers so that all catch can be sampled, or carry one observer and use a motion-compensated flow scale to weigh Pacific cod before it is processed. Both monitoring options require the vessel to carry one observer endorsed as a nontrawl LL2 observer (77 FR 59053; September 26, 2012).

The second group of vessels that is required to carry an observer with a nontrawl LL2 deployment endorsement includes catcher/processors that use pot gear when participating in the CDQ groundfish fisheries (groundfish CDQ fishing) (77 FR 6492; February 8, 2012). These pot catcher/processors are required to carry an observer with a nontrawl LL2 deployment endorsement when groundfish CDQ fishing and may participate in other fisheries that do not require a nontrawl LL2 observer. Regulations at 50 CFR 679.32 describe the specific monitoring requirements for vessels when participating in the sablefish CDQ, pollock CDQ, and other groundfish CDQ fisheries.

Since 2014, observer providers contracted by vessels in the full coverage category have reported that they have been unable to create and retain an adequate pool of qualified nontrawl LL2 observers resulting in a diminishing pool of qualified observers employed by those observer providers. The requirements in this final rule are intended to increase the number of observers that qualify for a nontrawl LL2 deployment endorsement and thereby minimize additional costs to affected entities for an observer to obtain a nontrawl LL2 deployment endorsement. This final rule also implements provisions that are intended to maintain observer safety and data quality.

This Final Rule

This final rule includes three elements. The first element implements new sampling experience requirements for an observer to obtain a nontrawl LL2 deployment endorsement. These sampling requirements allow sampling experience on a trawl catcher/processor or mothership vessel to count toward a nontrawl LL2 deployment endorsement. These requirements also authorize the Observer Program to require additional training for observers as necessary to adequately prepare them to safely perform data collection duties relevant to the nontrawl LL2 deployment endorsement.

The second element of this final rule requires the operator or manager of a vessel that carries nontrawl LL2 observers to participate in a pre-cruise meeting with the observer assigned to the vessel if notified to do so by NMFS. This final rule requires freezer longline vessels and pot catcher/processors when groundfish CDQ fishing to notify the Observer Program prior to embarking on a trip with a nontrawl LL2 observer who has not deployed on that vessel in the past 12 months. Subsequently, the Observer Program may contact the vessel and require the vessel operator or manager and the observer assigned to the vessel to participate in a pre-cruise meeting prior to embarking on a trip.

The third element of this final rule removes duplicative and unnecessary reporting requirements and makes minor changes to reduce observer requirements for specific vessels participating in the CDQ Program.

Response to Comments

NMFS received five comment letters during the comment period. Four of these comment letters were outside the scope of this action. These letters raised issues not relevant to this rulemaking and are not addressed in this final rule. One comment letter directly addressed the proposed rule and contained five substantive comments that are summarized and responded to below. This comment letter was from the Freezer Longline Coalition (FLC) that represents members of the Freezer Longline Conservation Cooperative (FLCC), which includes freezer longline vessels impacted by this action.

Comment 1: We support implementing new requirements for an observer to obtain a nontrawl LL2 deployment endorsement, and for the operator or manager of a vessel required to carry an observer with a nontrawl LL2 deployment endorsement to participate in a pre-cruise meeting with the observer if notified by NMFS to do so.

Response: NMFS acknowledges this comment.

Comment 2: We agree that increasing the number of observers that may qualify for a nontrawl LL2 deployment endorsement will reduce costs to vessel owners required to carry a nontrawl LL2 endorsed observer.

Response: NMFS acknowledges this comment.

Comment 3: NMFS' proposed rule did not include sufficient explanation about how the implementation of the nontrawl LL2 observer training class will result in enough observers receiving a nontrawl LL2 deployment endorsement to minimize additional costs to the industry.

Response: NMFS disagrees. The preamble to the proposed rule includes a description of the minimum and potential maximum demand for nontrawl LL2 observer training classes (82 FR 61243, December 27, 2017). As described in the preamble to the proposed rule and the RIR, observer providers and representatives of freezer longline vessels reported shortages in 2014 of nontrawl LL2 observers on freezer longline vessels, and that this shortage resulted in delayed fishing operations in some cases. This final rule provides a path for observers with sampling experience on trawl vessels to qualify for a nontrawl LL2 deployment endorsement. NMFS expects this to increase the availability of qualified nontrawl LL2 observers, which would reduce the potential for delayed fishing operations and would reduce costs associated with delays, such as costs for crew time, food, and missed fishing opportunities. Section 4.3.2 and Table 16 of the RIR and the preamble to the proposed rule include additional information about the costs to industry created by a shortage of nontrawl LL2 observers.

In addition, the proposed rule cites the best scientific information available, and Section 3.3.5 of the RIR provided a description of the estimated costs to the freezer longline fleet due to the shortage of nontrawl LL2 endorsed observers. Specifically, Section 3.3.5 of the RIR summarizes the costs of voluntarily carrying a second observer to allow the observer to gain experience required for a nontrawl LL2 deployment endorsement. That cost is estimated to be $11,130 per observer for a 30-day trip. NMFS estimated this cost per trip by using information provided in Table 16 of the RIR. NMFS multiplied the estimated length of a freezer longline trip (30 days) by the estimated cost per day to deploy an observer ($371). NMFS then multiplied that total by the number of trips for which a freezer longline vessel voluntarily carried a second observer to obtain the total annual estimated cost.

NMFS expects that the cost for an observer with the requisite experience aboard a vessel using trawl gear to obtain a LL2 deployment endorsement through a two to three day training course will be significantly lower than the cost associated with a 30-day deployment. Based on the best available scientific information, NMFS anticipates that providing at least one nontrawl LL2 observer training class annually will meet the demand for additional nontrawl LL2 deployment endorsements, and freezer longline vessels will not need to voluntarily carry a second observer and incur associated additional costs.

In addition, the Observer Program routinely determines the training necessary for an observer to receive certification, annual endorsements and deployment endorsements, and responds to requests from observer providers to schedule training classes at NMFS facilities. The Observer Program may adjust the number of nontrawl LL2 training classes offered each year if required to meet demand.

Comment 4: NMFS should not apply the Small Business Administration (SBA) principles of affiliation for the purpose of determining if members of the FLCC are considered small entities under the Regulatory Flexibility Act (RFA). In addition, SBA's principles are not the best guide for considering affiliation for RFA analyses performed by NMFS.

Response: NMFS disagrees. Under Executive Order 13272, signed on August 13, 2002, the SBA's Office of Advocacy is directed to provide Federal agencies with training and information on how to comply with the RFA. The SBA provides information about how to comply with the RFA through its regulations at 13 CFR part 121 and guidance posted on its website at www.sba.gov. Therefore, it is appropriate for NMFS to apply regulations and guidelines developed by the SBA in classifying entities for RFA analyses.

Based on the contractual relationships, recognized since the formation of the FLCC in August 2010, NMFS determined that all members of the FLCC are affiliated as described under 13 CFR 121.103(f) for the purpose of analyses prepared under the RFA. This application of the SBA principles of affiliation is consistent with how NMFS has applied this size standard to vessels and processors in fishing cooperatives in the North Pacific since at least 2001 (66 FR 65028; December 17, 2001). NMFS has applied this same determination to vessels and processors in fishing cooperatives under the American Fisheries Act, the Crab Rationalization Program, the Amendment 80 Program, the Gulf of Alaska Rockfish Program, and for the FLCC.

The FLCC is a registered active non-profit corporation in the State of Washington and, through the FLC, maintains an active website identifying all member vessels (http://www.freezerlonglinecoalition.com/members.html). In addition, the FLC affirms that the FLCC operates as a voluntary fishery cooperative in its letter of comment on the proposed rule by stating that “All members of the FLC [Freezer Longline Coalition] are also members of the Freezer Longline Conservation Cooperative (FLCC), a voluntary fishing cooperative established in 2010.”

Thus, NMFS maintains that the members of the FLCC are recognized as members of a voluntary fishing cooperative with a single identity of interest in the harvest of the annual allocation of Pacific cod to the BSAI freezer longline vessels such that interests should be aggregated for the purpose of analysis prepared under the RFA. The contractual relationship among vessels in the cooperative allows members to work together to more efficiently harvest fishery allocations. The ability to plan ahead, cooperate in harvest decisions, and share some expenses constitutes a degree of economic dependence not available to independent fishing vessels. In addition, the conclusion that the members of the FLCC are affiliated for purposes of the RFA is consistent with previous actions implemented since the formation of the FLCC in 2010 and impacting the same fleet prosecuting the same resources (77 FR 59053, September 26, 2012; 77 FR 58775, September 24, 2012; 79 FR 603, January 6, 2014; 79 FR 68610, November 18, 2014).

Comment 5: NMFS incorrectly classifies freezer longline vessels as predominantly engaged in fish harvesting rather than fish processing for the purpose of analysis required under the RFA. The commenter asserts that catcher/processors should be classified as predominantly involved in fish processing and the associated threshold of employing 750 or fewer persons on a full-time, part-time, temporary, or other basis, at all affiliated operations worldwide should be applied to determine if an entity is considered small under the RFA.

Response: NMFS disagrees. As described in the response to Comment 4, all freezer longline vessels impacted by this action are members of the FLCC. In a letter received by NMFS on May 19, 2011 from the FLCC, the FLCC describes itself as a voluntary fishing cooperative with the purpose of “promoting, fostering, and encouraging the intelligent and orderly harvest of Pacific cod and other groundfish species in the Bering Sea/Aleutian Islands longline fisheries off Alaska . . .” The FLCC's description of its members refers to coordinating the harvest of finfish and does not refer to processing as a primary activity. Further, the members of the FLCC have exclusive harvesting rights to the annual allocation in the BSAI to the defined class of longline catcher/processor subsector participants rather than exclusive processing rights. Additionally, none of the FLCC members purchase unprocessed catch for the sole purpose of increasing processing activity; therefore, the processing activity of an individual freezer longline vessel is limited by its harvesting activity. Without the primary harvesting activity, the secondary processing activity does not occur. For these reasons, NMFS affirms its determination that, for purposes of RFA analyses, the freezer longline vessels affected by this action are primarily engaged in commercial fishing. Therefore, it is appropriate for NMFS to classify freezer longline vessels in the commercial fishing industry category (NAICS 11411), and to apply the small business size standard of $11 million in annual gross receipts to the group of affiliated vessels.

Changes From Proposed to Final Rule

NMFS made three changes to this final rule. These changes provide minor clarifications that do not substantively modify the regulations as proposed.

The first change adds the word “either” and the regulatory text in paragraph (a)(5)(v)(C)(4) of the proposed rule to paragraph § 679.53(a)(5)(v)(C)(3) to clarify that either one of the two minimum sampling experience requirements may satisfy one of the three conditions set forth in paragraph (a)(5)(v)(C) necessary to deploy as a nontrawl lead level 2 observer.

The second change adds the words “at least” to § 679.53(a)(5)(v)(C)(3) to clarify that at least 100 or more sampled hauls on catcher/processors using trawl gear satisfies the minimum sampling experience requirement specified in this paragraph.

The third change correctly identifies the locations in 50 CFR part 679 where the term “Observer Program Office” will be replaced with the term “Observer Program” by including § 679.52(a)(2), (b)(1)(iii)(A), (b)(2)(iv), (b)(3)(ii)(B), and (b)(8) introductory text. These paragraphs were inadvertently incorrectly listed in the table as paragraphs of § 679.51 in the proposed rule.

OMB Revisions to PRA References in 15 CFR 902.1(b)

Section 3507(c)(B)(i) of the Paperwork Reduction Act (PRA) requires that agencies inventory and display a current control number assigned by the Director of the Office of Management and Budget (OMB), for each agency information collection. Section 902.1(b) identifies the location of NOAA regulations for which OMB control numbers have been issued. Because this final rule revises and adds data elements within a collection-of-information for recordkeeping and reporting requirements, this final rule includes revisions to 15 CFR 902.1(b) to correctly reference the control number and associated regulation sections included in this final rule.

Classification

The Administrator, Alaska Region, NMFS, has determined that this final rule is necessary for the conservation and management of the groundfish fishery and is consistent with the GOA and BSAI FMPs, the Magnuson-Stevens Act, and other applicable law.

This final rule has been determined to be not significant for the purposes of Executive Order 12866.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration (SBA) that this final rule will not have a significant economic impact on a substantial number of small entities. NMFS published a proposed rule on December 27, 2017 (82 FR 61243). An IRFA was prepared and included in the “Classification” section of the preamble to the proposed rule. The comment period closed on January 26, 2018. NMFS received five letters of comment on the proposed rule. One comment letter contained two comments on the IRFA, which are summarized in the “Response to Comments” section (Comments 4 and 5). The comments on the IRFA were considered by NMFS in the decision to certify this final rule. The Chief Counsel for Advocacy of the SBA did not file any comments on the proposed rule.

The factual basis for certification of this final rule is described below. This action includes three elements that modify specific provisions of the Observer Program. The first element modifies sampling experience requirements for an observer to obtain a nontrawl LL2 deployment endorsement. The second element requires the operator or manager of a vessel required to carry an observer with a nontrawl LL2 deployment endorsement to participate in a pre-cruise meeting when notified to do so by NMFS. The third element removes duplicative and unnecessary reporting requirements and makes minor changes to reduce or remove observer-related requirements for specific vessels when participating in the CDQ Program.

This action directly regulates observers and owners and operators of the following vessels: (1) Freezer longline vessels that participate in the BSAI hook-and-line Pacific cod fishery; and (2) pot catcher/processors, trawl catcher/processors, nontrawl catcher/processors, and motherships when groundfish CDQ fishing. For reasons explained in more detail in the IRFA and in responses to Comment 4 and Comment 5 in the preamble to this final rule, NMFS has determined that there are no small entities directly regulated by this final rule.

In addition, this action is expected to reduce the cost for vessels to comply with observer coverage requirements and is not expected to impose significant costs of complying with new reporting requirements. This action will benefit all affected vessels by increasing the number of observers that may qualify for a nontrawl LL2 deployment endorsement and will remove observer-related requirements for specific vessels when participating in the CDQ Program.

For all of these reasons, this action is not expected to have a significant economic impact on a substantial number of small entities. As a result, a final regulatory flexibility analysis is not required, and none has been prepared. The economic analysis contained in the RIR (see ADDRESSES) and in the IRFA included in the “Classification” section of the proposed rule prepared for this action further describes the regulatory and operational characteristics of the affected vessels, including the history of this action, and the details of the alternatives considered for this action, including the preferred alternative.

Collection-of-Information Requirements

This final rule contains collection-of-information requirements subject to the Paperwork Reduction Act (PRA) and which have been approved by the Office of Management and Budget (OMB) under OMB control number 0648-0318 (North Pacific Observer Program). The public reporting burden for these collection-of-information requirements includes the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

This final rule will require that the Observer Program be notified by phone at least 24 hours prior to departure when a vessel will carry an observer who has not deployed on that vessel in the past 12 months. Public reporting burden per response to notify the Observer Program by phone is estimated to be five minutes.

Send comments on these burden estimates or any other aspect of this data collection, including suggestions for reducing the burden, to NMFS Alaska Region (see ADDRESSES), and by email to [email protected], or by fax to (202) 395-5806.

Notwithstanding any other provision of the law, no person is required to respond to, and no person shall be subject to penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB control number. All currently approved NOAA collections of information may be viewed at http://www.cio.noaa.gov/services_programs/prasubs.html.

List of Subjects 15 CFR Part 902

Reporting and recordkeeping requirements.

50 CFR Part 679

Alaska, Fisheries, Recordkeeping and reporting requirements.

Dated: June 26, 2018. Samuel D. Rauch, III, Deputy Assistant Administrator for Regulatory Programs, National Marine Fisheries Service.

For the reasons set out in the preamble, NMFS amends 15 CFR part 902 and 50 CFR part 679 as follows:

Title 15—Commerce and Foreign Trade PART 902—NOAA INFORMATION COLLECTION REQUIREMENTS UNDER THE PAPERWORK REDUCTION ACT: OMB CONTROL NUMBERS 1. The authority citation for part 902 continues to read as follows: Authority:

44 U.S.C. 3501 et seq.

2. In §  902.1, in the table in paragraph (b), under the entry “50 CFR”, add entries in alphanumeric order for “679.84(c)(7)” and “679.93(c)(7)”; remove the entry for “679.100 (a) and (b)”; and add entries in alphanumeric order for “679.100(a)” and “679.100(b)” to read as follows:
§  902.1 OMB control numbers assigned pursuant to the Paperwork Reduction Act.

(b) * * *

CFR part or section where the information collection requirement is located Current OMB control number (all numbers begin with 0648-) *    *    *    *    * 50 CFR: *    *    *    *    * 679.84(c)(7) −0318. *    *    *    *    * 679.93(c)(7) −0318. *    *    *    *    * 679.100(a) −0330 and −0515. 679.100(b) −0318, −0330, and −0515. *    *    *    *    *
Title 50—Wildlife and Fisheries PART 679—FISHERIES OF THE EXCLUSIVE ECONOMIC ZONE OFF ALASKA 3. The authority citation for part 679 continues to read as follows: Authority:

16 U.S.C. 773 et seq.; 1801 et seq.; 3631 et seq.; Pub. L. 108-447; Pub. L. 111-281.

4. In § 679.2: a. Remove the definition for “Observer Program Office”; and b. Add the definitions for “Cruise” and “Observer Program” in alphabetical order to read as follows:
§ 679.2 Definitions.

Cruise means an observer deployment with a unique cruise number. A cruise begins when an observer receives an endorsement to deploy and ends when the observer completes all debriefing responsibilities.

Observer Program means the administrative office of the North Pacific Observer Program located at the Alaska Fisheries Science Center (See § 679.51(c)(3) for contact information).

5. In § 679.32: a. Remove and reserve paragraphs (c)(3)(i)(B)(2), (c)(3)(i)(C)(2), and (c)(3)(i)(E)(2); and b. Add paragraph (c)(3)(i)(E)(4) to read as follows:
§ 679.32 Groundfish and halibut CDQ catch monitoring.

(c) * * *

(3) * * *

(i) * * *

(E) * * *

(4) Notify the Observer Program by phone at 1 (907) 581-2060 (Dutch Harbor, AK) or 1 (907) 481-1770 (Kodiak, AK) at least 24 hours prior to departure when the vessel will be carrying an observer who has not previously been deployed on that vessel within the last 12 months. Subsequent to the vessel's departure notification, but prior to departure, NMFS may contact the vessel to arrange for a pre-cruise meeting. The pre-cruise meeting must minimally include the vessel operator or manager and any observers assigned to the vessel.

6. Revise the heading of subpart E to read as follows: Subpart E—North Pacific Observer Program 7. In § 679.50, revise paragraph (a)(2) to read as follows:
§ 679.50 Applicability.

(a) * * *

(2) Exceptions. A catcher vessel is not subject to the requirements of this subpart when delivering unsorted codends to a mothership.

8. In § 679.51, revise paragraph (a)(2)(vi)(A)(5) to read as follows:
§ 679.51 Observer and Electronic Monitoring System requirements for vessels and plants.

(a) * * *

(2) * * *

(vi) * * *

(A) * * *

(5) Motherships. A mothership that receives unsorted codends from catcher vessels groundfish CDQ fishing must have at least two observers aboard the mothership, at least one of whom must be endorsed as a lead level 2 observer. More than two observers must be aboard if the observer workload restriction would otherwise preclude sampling as required.

9. In § 679.53: a. Remove and reserve paragraph (a)(5)(v)(B); and b. Revise paragraph (a)(5)(v)(C) to read as follows:
§ 679.53 Observer certification and responsibilities.

(a) * * *

(5) * * *

(v) * * *

(C) A lead level 2 observer on a vessel using nontrawl gear must have completed the following:

(1) Two observer cruises (contracts) of at least 10 days each;

(2) Successfully completed training or briefing as prescribed by the Observer Program; and

(3) Either sampled at least 30 sets on a vessel using nontrawl gear or sampled at least 100 hauls on a catcher/processor using trawl gear or on a mothership.

§§ 679.51, 679.52, and 679.53 [Amended]
10. In the table below, for each section indicated in the “Location” column, remove the phrase indicated in the “Remove” column from wherever it appears in the section and add the word indicated in the “Add” column: Location Remove Add Frequency § 679.51(a)(2)(vi)(B)(1), (a)(2)(vi)(B)(3), (a)(2)(vi)(B)(4), (a)(2)(vi)(C), (a)(2)(vi)(D)(1), (a)(2)(vi)(D)(2), and (a)(2)(vi)(E)(1) certified endorsed 1 § 679.51(c)(3) Observer Program Office Observer Program 1 § 679.52(a)(2), (b)(1)(iii)(A), (b)(2)(iv), (b)(3)(ii)(B), and (b)(8) introductory text Observer Program Office Observer Program 1 § 679.52(b)(11) introductory text Observer Program Office Observer Program 2 § 679.52(b)(11)(i) introductory text, (b)(11)(ii), (b)(11)(iii), and (b)(11)(vi) introductory text Observer Program Office Observer Program 1 § 679.52(b)(11)(vii) introductory text Observer Program Office Observer Program 3 § 679.52(b)(11)(viii) introductory text, (b)(11)(viii)(A), (b)(11)(ix), (b)(11)(x) introductory text, and (b)(12) Observer Program Office Observer Program 1 § 679.53(a)(1) Observer Program Office Observer Program 1 § 679.53(a)(5)(v) introductory text, and (a)(5)(v)(A) “lead” lead 1 § 679.53(b)(2)(i) Observer Program Office Observer Program 1 11. In § 679.84, revise paragraph (c)(7) to read as follows:
§ 679.84 Rockfish Program Recordkeeping, permits, monitoring, and catch accounting.

(c) * * *

(7) Pre-cruise meeting. The Observer Program is notified by phone at 1 (907) 481-1770 (Kodiak, AK) at least 24 hours prior to departure when the vessel will be carrying an observer who has not previously been deployed on that vessel within the last 12 months. Subsequent to the vessel's departure notification, but prior to departure, NMFS may contact the vessel to arrange for a pre-cruise meeting. The pre-cruise meeting must minimally include the vessel operator or manager and any observers assigned to the vessel.

12. In § 679.93, revise paragraph (c)(7) to read as follows:
§ 679.93 Amendment 80 Program recordkeeping, permits, monitoring, and catch accounting.

(c) * * *

(7) Pre-cruise meeting. The Observer Program is notified by phone at 1 (907) 581-2060 (Dutch Harbor, AK) or 1 (907) 481-1770 (Kodiak, AK) at least 24 hours prior to departure when the vessel will be carrying an observer who has not previously been deployed on that vessel within the last 12 months. Subsequent to the vessel's departure notification, but prior to departure, NMFS may contact the vessel to arrange for a pre-cruise meeting. The pre-cruise meeting must minimally include the vessel operator or manager and any observers assigned to the vessel.

13. In § 679.100, add paragraphs (b)(1)(v) and (b)(2)(i)(E) to read as follows:
§ 679.100 Applicability.

(b) * * *

(1) * * *

(v) The Observer Program is notified by phone at 1 (907) 581-2060 (Dutch Harbor, AK) or 1 (907) 481-1770 (Kodiak, AK) at least 24 hours prior to departure when the vessel will be carrying an observer who has not previously been deployed on that vessel within the last 12 months. Subsequent to the vessel's departure notification, but prior to departure, NMFS may contact the vessel to arrange for a pre-cruise meeting. The pre-cruise meeting must minimally include the vessel operator or manager and any observers assigned to the vessel.

(2) * * *

(i) * * *

(E) The Observer Program is notified by phone at 1 (907) 581-2060 (Dutch Harbor, AK) or 1 (907) 481-1770 (Kodiak, AK) at least 24 hours prior to departure when the vessel will be carrying an observer who has not previously been deployed on that vessel within the last 12 months. Subsequent to the vessel's departure notification, but prior to departure, NMFS may contact the vessel to arrange for a pre-cruise meeting. The pre-cruise meeting must minimally include the vessel operator or manager and any observers assigned to the vessel.

[FR Doc. 2018-14071 Filed 6-28-18; 8:45 am] BILLING CODE 3510-22-P
COMMODITY FUTURES TRADING COMMISSION 17 CFR Part 1 RIN 3038-AD53 Adaptation of Regulations to Incorporate Swaps; Correction AGENCY:

Commodity Futures Trading Commission.

ACTION:

Correcting amendments.

SUMMARY:

On November 2, 2012, the Commodity Futures Trading Commission revised its rules. That document inadvertently failed to remove several obsolete provisions in the regulation. This document corrects the final regulations.

DATES:

Effective on June 29, 2018.

FOR FURTHER INFORMATION CONTACT:

Jacob Chachkin, Special Counsel, 202-418-5496, email: [email protected], Division of Swap Dealer and Intermediary Oversight, Commodity Futures Trading Commission.

SUPPLEMENTARY INFORMATION:

In the Federal Register of November 2, 2012 (77 FR 66287), the Commodity Futures Trading Commission published final rules adopting new regulations to implement particular provisions of the Commodity Exchange Act, as added by the Dodd-Frank Wall Street Reform and Consumer Protection Act. That document inadvertently failed to remove several obsolete provisions in § 1.33(a)(2) and (b)(3). Accordingly, the Commission is making a correcting amendment to § 1.33 that removes the second paragraph (a)(2)(ii), removes paragraph (a)(2)(v), and removes the introductory clause to paragraph (b)(3).

List of Subjects in 17 CFR Part 1

Agricultural commodity, Agriculture, Brokers, Committees, Commodity futures, Conflicts of interest, Consumer protection, Definitions, Designated contract markets, Directors, Major swap participants, Minimum financial requirements for intermediaries, Reporting and recordkeeping requirements, Swap dealers, Swaps.

Accordingly, 17 CFR part 1 is corrected by making the following correcting amendments:

PART 1—GENERAL REGULATIONS UNDER THE COMMODITY EXCHANGE ACT 1. The authority citation for part 1 continues to read as follows: Authority:

7 U.S.C. 1a, 2, 5, 6, 6a, 6b, 6c, 6d, 6e, 6f, 6g, 6h, 6i, 6k, 6l, 6m, 6n, 6o, 6p, 6r, 6s, 7, 7a-1, 7a-2, 7b, 7b-3, 8, 9, 10a, 12, 12a, 12c, 13a, 13a-1, 16, 16a, 19, 21, 23, and 24 (2012).

2. Amend § 1.33 as follows: a. Revise paragraph (a)(2); and b. Revise paragraph (b)(3) introductory text.

The revisions read as follows:

§ 1.33 Monthly and confirmation statements.

(a) * * *

(2) For each commodity option position and foreign option position—

(i) All commodity options and foreign options purchased, sold, exercised, or expired during the monthly reporting period, identified by underlying futures contract or underlying commodity, strike price, transaction date, and expiration date;

(ii) The open commodity option and foreign option positions carried for such customer or foreign futures or foreign options customer as of the end of the monthly reporting period, identified by underlying futures contract or underlying commodity, strike price, transaction date, and expiration date;

(iii) All open commodity option and foreign option positions marked to the market and the amount each position is in the money, if any; and

(iv) Any related customer funds carried in such customer's account(s) or any related foreign futures or foreign options secured amount carried in the account(s) of a foreign futures or foreign options customer.

(b) * * *

(3) A written confirmation of each commodity option transaction, containing at least the following information:

Dated: June 15, 2018. Robert N. Sidman, Deputy Secretary of the Commission.
[FR Doc. 2018-13256 Filed 6-28-18; 8:45 am] BILLING CODE 6351-01-P
DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 514 [Docket No. FDA-2012-N-0447] Antimicrobial Animal Drug Sales and Distribution Reporting; Small Entity Compliance Guide; Availability AGENCY:

Food and Drug Administration, HHS.

ACTION:

Notification of availability.

SUMMARY:

The Food and Drug Administration (FDA, the Agency, or we) is announcing the availability of a final guidance for industry #252 entitled “Antimicrobial Animal Drug Sales and Distribution Reporting Small Entity Compliance Guide.” The small entity compliance guide (SECG) is intended to help small entities comply with the final rule we issued in the Federal Register of May 11, 2016, entitled “Antimicrobial Animal Drug Sales and Distribution Reporting.”

DATES:

The announcement of the guidance is published in the Federal Register on June 29, 2018.

ADDRESSES:

You may submit either electronic or written comments on Agency guidances at any time as follows:

Electronic Submissions

Submit electronic comments in the following way:

Federal eRulemaking Portal: https://www.regulations.gov. Follow the instructions for submitting comments. Comments submitted electronically, including attachments, to https://www.regulations.gov will be posted to the docket unchanged. Because your comment will be made public, you are solely responsible for ensuring that your comment does not include any confidential information that you or a third party may not wish to be posted, such as medical information, your or anyone else's Social Security number, or confidential business information, such as a manufacturing process. Please note that if you include your name, contact information, or other information that identifies you in the body of your comments, that information will be posted on https://www.regulations.gov.

• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).

Written/Paper Submissions

Submit written/paper submissions as follows:

Mail/Hand Delivery/Courier (for written/paper submissions): Dockets Management Staff (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”

Instructions: All submissions received must include the Docket No. FDA-2012-N-0447 for “Antimicrobial Animal Drug Sales and Distribution Reporting; Small Entity Compliance Guide.” Received comments will be placed in the docket and, except for those submitted as “Confidential Submissions,” publicly viewable at https://www.regulations.gov or at the Dockets Management Staff between 9 a.m. and 4 p.m., Monday through Friday.

• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” We will review this copy, including the claimed confidential information, in our consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on https://www.regulations.gov. Submit both copies to the Dockets Management Staff. If you do not wish your name and contact information to be made publicly available, you can provide this information on the cover sheet and not in the body of your comments and you must identify this information as “confidential.” Any information marked as “confidential” will not be disclosed except in accordance with 21 CFR 10.20 and other applicable disclosure law. For more information about FDA's posting of comments to public dockets, see 80 FR 56469, September 18, 2015, or access the information at: https://www.thefederalregister.org/fdsys/pkg/FR-2015-09-18/pdf/2015-23389.pdf.

Docket: For access to the docket to read background documents or the electronic and written/paper comments received, go to https://www.regulations.gov and insert the docket number, found in brackets in the heading of this document, into the “Search” box and follow the prompts and/or go to the Dockets Management Staff, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).

Submit written requests for single copies of the SECG to the Policy and Regulations Staff (HFV-6), Center for Veterinary Medicine, Food and Drug Administration, 7500 Standish Pl., Rockville, MD 20855. Send two self-addressed adhesive labels to assist that office in processing your request. See the SUPPLEMENTARY INFORMATION section for electronic access to the SECG.

FOR FURTHER INFORMATION CONTACT:

Sujaya Dessai, Center for Veterinary Medicine (HFV-212), Food and Drug Administration, 7519 Standish Pl., Rockville, MD 20855, 240-402-5671, [email protected].

SUPPLEMENTARY INFORMATION: I. Background

Sponsors of approved or conditionally approved applications for new animal drugs containing an antimicrobial active ingredient are required by section 512 of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 360b), as amended by section 105 of the Animal Drug Use Fee Amendments of 2008 (ADUFA 105) (Pub. L. 110-316), to submit to us an annual report on the amount of each such ingredient in the drug that is sold or distributed for use in food-producing animals. We are also required by ADUFA 105 to publish annual summary reports of the data we receive from animal drug sponsors. In accordance with the law, sponsors of the affected antimicrobial new animal drug products began submitting their sales and distribution data to us on an annual basis, and we have published summaries of such data for each calendar year beginning with 2009.

In the Federal Register of May 11, 2016 (81 FR 29129), we published a final rule entitled “Antimicrobial Animal Drug Sales and Distribution Reporting” that amended our existing records and reports regulation in part 514 (21 CFR part 514) to incorporate the sales and distribution data reporting requirements specific to antimicrobial new animal drugs that were added to the FD&C Act by ADUFA 105. The rule also added an additional reporting provision intended to improve our understanding of antimicrobial animal drug sales intended for use in specific food-producing animal species. In accordance with the new rule, the sponsor of each approved or conditionally approved new animal drug product that contains an antimicrobial active ingredient must submit an annual report to us on the amount of each such ingredient in the drug product that is sold or distributed for use in food-producing animals, including information on any distributor-labeled product. The final rule, which is codified at §§ 514.80 and 514.87, became effective July 11, 2016.

We examined the economic implications of the final rule as required by the Regulatory Flexibility Act (5 U.S.C. 601-612) and determined that the final rule will not have a significant economic impact on a substantial number of small entities (81 FR 29129 at 29138). Nonetheless, we determined not to certify that finding due to the remote possibility that, in the future, a very small company could enter the market and sponsor an application for an antimicrobial new animal drug product that would be sold or distributed for use in food-producing animals. Thus, in compliance with section 212 of the Small Business Regulatory Enforcement Fairness Act (Pub. L. 104-121, as amended by Pub. L. 110-28), we are making available this SECG to explain the actions that a potential future market entrant small entity must take to comply with the rule.

We are issuing this SECG consistent with our good guidance practices regulation (21 CFR 10.115(c)(2)). The SECG represents the current thinking of FDA on this topic. It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations. This guidance is not subject to Executive Order 12866.

II. Paperwork Reduction Act of 1995

This guidance refers to previously approved collections of information found in FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in § 514.87 have been approved under OMB control number 0910-0659. The collections of information in § 514.80 have been approved under OMB control number 0910-0284.

III. Electronic Access

Persons with access to the internet may obtain the SECG at either https://www.fda.gov/AnimalVeterinary/GuidanceComplianceEnforcement/GuidanceforIndustry/default.htm or https://www.regulations.gov.

Dated: June 26, 2018. Leslie Kux, Associate Commissioner for Policy.
[FR Doc. 2018-14085 Filed 6-28-18; 8:45 am] BILLING CODE 4164-01-P
DEPARTMENT OF THE TREASURY Alcohol and Tobacco Tax and Trade Bureau 27 CFR Part 9 [Docket No. TTB-2016-0012; T.D. TTB-151; Ref: Notice No. 166] RIN 1513-AC33 Establishment of the Dahlonega Plateau Viticultural Area AGENCY:

Alcohol and Tobacco Tax and Trade Bureau, Treasury.

ACTION:

Final rule; Treasury decision.

SUMMARY:

The Alcohol and Tobacco Tax and Trade Bureau (TTB) establishes the approximately 133-square mile Dahlonega Plateau viticultural area in portions of Lumpkin and White counties in Georgia. The Dahlonega Plateau viticultural area is not located within any other established viticultural area. TTB designates viticultural areas to allow vintners to better describe the origin of their wines and to allow consumers to better identify wines they may purchase.

DATES:

This final rule is effective July 30, 2018.

FOR FURTHER INFORMATION CONTACT:

Dana Register, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005; phone 202-453-1039, ext. 022.

SUPPLEMENTARY INFORMATION: Background on Viticultural Areas TTB Authority

Section 105(e) of the Federal Alcohol Administration Act (FAA Act), 27 U.S.C. 205(e), authorizes the Secretary of the Treasury to prescribe regulations for the labeling of wine, distilled spirits, and malt beverages. The FAA Act provides that these regulations should, among other things, prohibit consumer deception and the use of misleading statements on labels and ensure that labels provide the consumer with adequate information as to the identity and quality of the product. The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the FAA Act pursuant to section 1111(d) of the Homeland Security Act of 2002, codified at 6 U.S.C. 531(d). The Secretary has delegated various authorities through Treasury Department Order 120-01, dated December 10, 2013 (superseding Treasury Order 120-01, dated January 24, 2003), to the TTB Administrator to perform the functions and duties in the administration and enforcement of these laws.

Part 4 of the TTB regulations (27 CFR part 4) authorizes the establishment of definitive viticultural areas and regulates the use of their names as appellations of origin on wine labels and in wine advertisements. Part 9 of the TTB regulations (27 CFR part 9) sets forth standards for the preparation and submission of petitions for the establishment or modification of American viticultural areas (AVAs) and lists the approved AVAs.

Definition

Section 4.25(e)(1)(i) of the TTB regulations (27 CFR 4.25(e)(1)(i)) defines a viticultural area for American wine as a delimited grape-growing region having distinguishing features, as described in part 9 of the regulations, and a name and a delineated boundary, as established in part 9 of the regulations. These designations allow vintners and consumers to attribute a given quality, reputation, or other characteristic of a wine made from grapes grown in an area to the wine's geographic origin. The establishment of AVAs allows vintners to describe more accurately the origin of their wines to consumers and helps consumers to identify wines they may purchase. Establishment of an AVA is neither an approval nor an endorsement by TTB of the wine produced in that area.

Requirements

Section 4.25(e)(2) of the TTB regulations (27 CFR 4.25(e)(2)) outlines the procedure for proposing an AVA and provides that any interested party may petition TTB to establish a grape-growing region as an AVA. Section 9.12 of the TTB regulations (27 CFR 9.12) prescribes standards for petitions for the establishment or modification of AVAs. Petitions to establish an AVA must include the following:

• Evidence that the area within the proposed AVA boundary is nationally or locally known by the AVA name specified in the petition;

• An explanation of the basis for defining the boundary of the proposed AVA;

• A narrative description of the features of the proposed AVA affecting viticulture, such as climate, geology, soils, physical features, and elevation, that make the proposed AVA distinctive and distinguish it from adjacent areas outside the proposed AVA boundary;

• The appropriate United States Geological Survey (USGS) map(s) showing the location of the proposed AVA, with the boundary of the proposed AVA clearly drawn thereon; and

• A detailed narrative description of the proposed AVA boundary based on USGS map markings.

Dahlonega Plateau Petition

TTB received a petition from Amy Booker, President of the Dahlonega-Lumpkin Chamber & Visitors Bureau, on behalf of the Vineyard and Winery Operators of the Dahlonega Region of Northern Georgia. The petitioner is proposing the establishment of the “Dahlonega Plateau” AVA in portions of Lumpkin and White counties in Georgia.

The proposed Dahlonega Plateau AVA derives its name from a long, narrow, northeast-southwest trending plateau in the northern foothills of the Georgia Piedmont known as the Dahlonega Plateau. The plateau covers most of Lumpkin, Dawson, White, Pickens, and Cherokee Counties. However, the proposed AVA is limited to the northeastern portion of the plateau, in Lumpkin and White Counties, due to a lack of viticulture in the southwestern region of the plateau, as well topographical and climatic differences.

The proposed Dahlonega Plateau AVA covers approximately 133 square miles and is not located within any other AVA. The petition notes that, at present, there are 7 wineries and 8 commercial vineyards covering a total of approximately 110 acres distributed throughout the proposed AVA. In the next few years, the proposed AVA would likely be expanded by an additional 12 acres of vineyards. According to the petition, the distinguishing features of the proposed Dahlonega Plateau AVA are its topography and climate. Unless otherwise noted, all information and data pertaining to the proposed AVA contained in this final rule comes from the petition for the proposed Dahlonega Plateau AVA and its supporting exhibits.

Topography

According to the petition, the distinctive topography of the proposed AVA is due to the underlying geology, which is comprised of layers of rocks that weather uniformly and are moderately resistant to erosion. Over time, wind and water have gradually worn down the underlying rocks and formed a gently rolling landscape with an average elevation of approximately 1,554 feet above sea level. The resulting broad, rounded hilltops separated by wide valleys have moderate slope angles and adequate sunlight for the cultivation of vineyards.

By contrast, the petition states that the topography of the regions surrounding the proposed AVA are less suitable for vineyards. The Blue Ridge Mountains and Hightower Ridges to the north, east, and southeast of the proposed AVA generally have higher elevations and narrow valleys that are often shadowed by the surrounding steep, high slopes. The steep, high slopes allow less light to reach any vineyard planted on the valley floors, when compared to vineyards planted in the proposed AVA. The steepness of the slopes would also make mechanical cultivation of any vineyard planted on the sides of the mountains impractical. In the lower elevations of the regions to the south and west of the proposed AVA, the cool air draining from higher elevations eventually settles and pools and would increase the risk of frost damage in any vineyard planted there.

Climate

The petition for the proposed Dahlonega Plateau AVA provided climate information including length of the growing season, growing degree day accumulations, and precipitation amounts from within the proposed AVA and the surrounding regions.

Length of Growing Season

According to the petition, the proposed Dahlonega Plateau AVA has a mean growing season length of 195 days. Over 60 percent of the terrain within the proposed AVA has a growing season length in the range of 190 to 200 days. The petition cited a publication by the College of Agriculture and Life Sciences at Cornell University in conjunction with the Institute for the Application of Geospatial Technology,1 which states that sites with growing seasons between 190 and 200 days are “not limited by growing season” because most grape varietals will be able to ripen within 200 days, while sites with growing seasons shorter than 160 days are not recommended for vineyards because most grape varietals would not have time to ripen fully. Based on this guidance, the petition proposes that the vineyard owners can plant many different grape varietals in the majority of the proposed AVA without the fear of having too short of a growing season for the grapes to ripen.

1 A.N. Lakso & T.E. Martinson, “The Basics of Vineyard Site Evaluation and Selection” (2014), available at http://arcserver2.iagt.org/vll/downloads/BasicSiteEvaluation-2015.pdf.

The petition also provided the growing season lengths for the areas surrounding the proposed AVA. The regions to the north and northeast each have a mean growing season of 164 days. Regions to the west and south, have growing seasons of 201 and 203 to 205 days, respectively. The proposed AVA has a higher percentage of terrain with a growing season length between 190 and 200 days than all surrounding areas except the Hightower Ridges to the east, where approximately 76 percent of the terrain is within this range of growing season lengths.

Growing Degree Days

The petition noted that although growing season length is important because it reflects the number of frost-free days, the temperatures that are reached during that frost-free period are just as important to viticulture. The petition further stated that grape vines do not grow and fruit does not mature when temperatures are below 50 degrees Fahrenheit (F). Therefore, a region that has a 180-day frost-free growing season would still be unsuitable for viticulture if temperatures seldom or never rise above 50 degrees F.

The petition presented growing degree days (GDD) data using the Winkler zone scale 2 from the very cool Zone I, for regions accumulating 2,500 or fewer GDDs in a growing season, to the very warm Zone V, for regions accumulating over 4,000 GDDs. The data showed that the terrain within the proposed Dahlonega Plateau AVA is classified in the intermediate ranges of the Winkler scale (Zones III and IV). The proposed AVA has a higher percentage of terrain within Zone IV than any of the surrounding regions and lacks any terrain in the very cool Zone I, the cool Zone II, or the very warm Zone V. The petition indicated, that regions classified as Zones III or IV, such as the proposed AVA, are suitable for growing a diverse range of late-ripening grape varietals.

2 A.J. Winkler et al., General Viticulture 60-71 (2nd. Ed. 1974).

Precipitation

According to the petition, the rising elevations of the proposed Dahlonega Plateau AVA and the regions to the north and east cause the moisture-laden winds travelling inland from the Gulf of Mexico and Atlantic Ocean to drop their rain in the proposed AVA. Annual rainfall amounts within the proposed AVA are approximately 62 inches per year and 17 inches during the winter months. The regions to the north and east generally receive more rainfall annually and during winter than the proposed AVA, and the regions to the south and west generally receive less. The petition stated that the proposed AVA receives adequate annual rainfall amounts, which make vineyard irrigation seldom necessary. Furthermore, the petition provides data collected from the proposed AVA and surrounding regions showing that the low winter rainfall amounts within the proposed AVA are relevant to viticulture because, when compared to the data from the surrounding regions, low levels of rain in winter in the proposed AVA reduce the possibility of a delayed bud break and subsequent later harvest.

Notice of Proposed Rulemaking and Comments Received

TTB published Notice No. 166 in the Federal Register on December 2, 2016 (81 FR 86980), proposing to establish the Dahlonega Plateau AVA. In the notice, TTB summarized the evidence from the petition regarding the name, boundary, and distinguishing features for the proposed AVA. The notice also compared the distinguishing features of the proposed AVA to the surrounding areas. For a detailed description of the evidence relating to the name, boundary, and distinguishing features of the proposed AVA, and for a detailed comparison of the distinguishing features of the proposed AVA to the surrounding areas, see Notice No. 166 and the petition for the proposed AVA, which are posted in Docket No. TTB-2016-0012 at http://www.regulations.gov. In Notice No. 166, TTB solicited comments on whether it should establish the proposed viticultural area, and also asked for comments on the accuracy of the name, boundary, and other required information submitted in support of the petition. The comment period closed on January 31, 2017.

In response to Notice No. 166, TTB received one comment, which supported the proposed AVA. The commenter stated that the Dahlonega plateau is a “gorgeous mountain region” that has “unique wine-growing characteristics” that qualify it as an AVA.

TTB Determination

After careful review of the petition and the comment received in response to Notice No. 166, TTB finds that the evidence provided by the petitioner supports the establishment of the Dahlonega Plateau AVA. Accordingly, under the authority of the FAA Act, section 1111(d) of the Homeland Security Act of 2002, and parts 4 and 9 of the TTB regulations, TTB establishes the “Dahlonega Plateau” AVA in Lumpkin and Whites counties of Georgia, effective 30 days from the publication date of this document.

Boundary Description

See the narrative description of the boundary of the Dahlonega AVA in the regulatory text published at the end of this final rule.

Maps

The petitioner provided the required maps, and they are listed below in the regulatory text.

Impact on Current Wine Labels

Part 4 of the TTB regulations prohibits any label reference on a wine that indicates or implies an origin other than the wine's true place of origin. For a wine to be labeled with an AVA name or with a brand name that includes an AVA name, at least 85 percent of the wine must be derived from grapes grown within the area represented by that name, and the wine must meet the other conditions listed in 27 CFR 4.25(e)(3). If the wine is not eligible for labeling with an AVA name and that name appears in the brand name, then the label is not in compliance and the bottler must change the brand name and obtain approval of a new label. Similarly, if the AVA name appears in another reference on the label in a misleading manner, the bottler would have to obtain approval of a new label. Different rules apply if a wine has a brand name containing an AVA name that was used as a brand name on a label approved before July 7, 1986. See 27 CFR 4.39(i)(2) for details.

With the establishment of this AVA, its name, “Dahlonega Plateau,” will be recognized as a name of viticultural significance under § 4.39(i)(3) of the TTB regulations. The text of the regulation clarifies this point. Consequently, wine bottlers using the name “Dahlonega Plateau” in a brand name, including a trademark, or in another label reference as to the origin of the wine, will have to ensure that the product is eligible to use the AVA name as an appellation of origin. The establishment of the Dahlonega Plateau AVA will not affect any existing AVA. The establishment of the Dahlonega Plateau AVA will allow vintners to use “Dahlonega Plateau” as an appellation of origin for wines made primarily from grapes grown within the Dahlonega Plateau AVA if the wines meet the eligibility requirements for the appellation.

Regulatory Flexibility Act

TTB certifies that this regulation will not have a significant economic impact on a substantial number of small entities. The regulation imposes no new reporting, recordkeeping, or other administrative requirement. Any benefit derived from the use of an AVA name would be the result of a proprietor's efforts and consumer acceptance of wines from that area. Therefore, no regulatory flexibility analysis is required.

Executive Order 12866

It has been determined that this final rule is not a significant regulatory action as defined by Executive Order 12866 of September 30, 1993. Therefore, no regulatory assessment is required.

Drafting Information

Dana Register of the Regulations and Rulings Division drafted this final rule.

List of Subjects in 27 CFR Part 9

Wine.

The Regulatory Amendment

For the reasons discussed in the preamble, TTB amends title 27, chapter I, part 9, Code of Federal Regulations, as follows:

PART 9—AMERICAN VITICULTURAL AREAS 1. The authority citation for part 9 continues to read as follows: Authority:

27 U.S.C. 205.

Subpart C—Approved American Viticultural Areas 2. Subpart C is amended by adding § 9.263 to read as follows:
§ 9.263 Dahlonega Plateau.

(a) Name. The name of the viticultural area described in this section is “Dahlonega Plateau”. For purposes of part 4 of this chapter, “Dahlonega Plateau” is a term of viticultural significance.

(b) Approved maps. The 9 United States Geological Survey (USGS) 1:24,000 scale topographic maps used to determine the boundary of the Dahlonega Plateau viticultural area are titled:

(1) Dawsonville, GA, 1997;

(2) Campbell Mountain, GA, 2014;

(3) Nimblewill, GA, 1997;

(4) Noontootla, GA, 1988;

(5) Suches, GA, 1988;

(6) Neels Gap, GA, 1988;

(7) Dahlonega, GA, 1951;

(8) Cowrock, GA, 1988; and

(9) Cleveland, GA, 1951; photo revised 1973; photo inspected 1981.

(c) Boundary. The Dahlonega Plateau viticultural area is located in Lumpkin and White Counties, Georgia. The boundary of the Dahlonega Plateau viticultural area is as described below:

(1) The beginning point is found on the Dawsonville map at the marked 1,412-foot elevation point at the intersection of an unnamed light-duty road known locally as Castleberry Bridge Road and an unimproved road known locally as McDuffie River Road.

(2) From the beginning point, proceed north-northeast in a straight line approximately 0.89 mile to the marked 1,453-foot elevation point; then

(3) Proceed northwest in a straight line approximately 1.94 miles, crossing onto the Campbell Mountain map, to the intersection of Arrendale Road and Windy Oaks Road; then

(4) Proceed northwest in a straight line approximately 0.77 mile to the intersection of the 1,400-foot elevation contour and Dennson Branch; then

(5) Proceed northwest in a straight line approximately 0.79 mile to the intersection of the 1,360-foot elevation contour and Mill Creek; then

(6) Proceed northwest in a straight line approximately 0.48 mile to the intersection of the 1,500-foot elevation contour and Sheep Wallow Road; then

(7) Proceed northwest in a straight line approximately 1.74 miles to the intersection of State Route 52 and the Chattahoochee National Forest boundary; then

(8) Proceed northwest in a straight line approximately 1.89 miles, crossing onto the Nimblewill map and then crossing over the marked 1,749-foot elevation point along an unnamed light duty road known locally as Nimblewill Church Road, to the line's intersection with the 1,800-foot elevation contour; then

(9) Proceed generally east-northeast along the 1,800-foot elevation contour approximately 170.72 miles (straight line distance between points is approximately 20.43 miles), crossing over the Noontootla, Suches, Neels Gap and Dahlonega maps and onto the Cowrock map, to the intersection of the 1,800-foot elevation contour with Tom White Branch; then

(10) Proceed southeast along Tom White Branch approximately 0.73 mile to the 1,600-foot elevation contour; then

(11) Proceed southeast in a straight line approximately 1.10 miles to the intersection of Cathey Creek and the secondary highway marked Alt. 75; then

(12) Proceed southwest in a straight line approximately 3.77 miles, crossing into the Cleveland map, to the intersection of two unnamed light-duty roads known locally as Dockery Road and Town Creek Road; then

(13) Proceed south in a straight line approximately 0.58 mile to the marked 1,774-foot elevation point; then

(14) Proceed southwest in a straight line approximately 0.60 mile to the 1,623-foot benchmark; then

(15) Proceed southwest in a straight line approximately 2.73 miles, crossing into the Dahlonega map, to the 1,562-foot benchmark, then

(16) Proceed southwest in a straight line approximately 3.46 miles to the marked 1,480-foot elevation point near the Mt. Sinai Church; then

(17) Proceed southwest in a straight line approximately 2.13 miles to the summit of Crown Mountain; then

(18) Proceed west in a straight line approximately 1.28 miles, crossing onto the Campbell Mountain map, to the intersection of the 1,160-foot elevation contour and Cane Creek; then

(19) Proceed southwest in a straight line approximately 1.61 miles to the intersection of the 1,300-foot elevation contour and Camp Creek; then

(20) Proceed southwest in a straight line approximately 2.02 miles, crossing into the Dawsonville map, to the intersection of the 1,200-foot elevation contour with the Etowah River, then

(21) Proceed southwest in a straight line approximately 1.29 miles to the beginning point.

Signed: March 6, 2018. John J. Manfreda, Administrator. Approved: June 25, 2018. Timothy E. Skud, Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 2018-14035 Filed 6-28-18; 8:45 am] BILLING CODE 4810-31-P
DEPARTMENT OF LABOR Occupational Safety and Health Administration 29 CFR Part 1910 Occupational Safety and Health Standards CFR Correction

In Title 29 of the Code of Federal Regulations, Parts 1910 to § 1910.999, revised as of July 1, 2017, on page 247, in § 1910.106, paragraph (d)(2)(iii) introductory text is revised to read as follows:

§ 1910.106 Flammable liquids.

(d) * * *

(1) * * *

(2) * * *

(iii) Size. Flammable liquid containers shall be in accordance with Table H-12, except that glass or plastic containers of no more than 1-gallon capacity may be used for a Category 1 or 2 flammable liquid if:

[FR Doc. 2018-14144 Filed 6-28-18; 8:45 am] BILLING CODE 1301-00-D
DEPARTMENT OF THE TREASURY Office of Foreign Assets Control 31 CFR Parts 538 and 596 Removal of the Sudanese Sanctions Regulations and Amendment of the Terrorism List Government Sanctions Regulations AGENCY:

Office of Foreign Assets Control, Treasury.

ACTION:

Final rule.

SUMMARY:

The Department of the Treasury's Office of Foreign Assets Control (OFAC) is removing from the Code of Federal Regulations the Sudanese Sanctions Regulations as a result of the revocation of certain provisions of one Executive Order and the entirety of another Executive Order on which the regulations were based. OFAC is also amending the Terrorism List Government Sanctions Regulations to incorporate a general license authorizing certain transactions related to exports of agricultural commodities, medicines, and medical devices, which has, until now, appeared only on OFAC's website.

DATES:

Effective: June 29, 2018.

FOR FURTHER INFORMATION CONTACT:

The Department of the Treasury's Office of Foreign Assets Control: Assistant Director for Licensing, tel.: 202-622-2480; Assistant Director for Regulatory Affairs, tel.: 202-622-4855; Assistant Director for Sanctions Compliance & Evaluation, tel.: 202-622-2490; or the Department of the Treasury's Office of the General Counsel: Office of the Chief Counsel (Foreign Assets Control); tel.: 202-622-2410.

SUPPLEMENTARY INFORMATION: Electronic and Facsimile Availability

This document and additional information concerning OFAC are available from OFAC's website (www.treasury.gov/ofac).

Background Removal of the Sudanese Sanctions Regulations

On November 3, 1997, the President issued Executive Order 13067, “Blocking Sudanese Government Property and Prohibiting Transactions With Sudan” (E.O. 13067), declaring a national emergency to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States posed by the policies and actions of the Government of Sudan. E.O. 13067 blocked all property and interests in property of the Government of Sudan that were in the United States, that thereafter came within the United States, or that thereafter came within the possession or control of United States persons. E.O. 13067 also prohibited: (a) The importation into the United States of any goods or services of Sudanese origin; (b) the exportation or reexportation, directly or indirectly, to Sudan of goods, technology, or services from the United States or by a United States person, wherever located, or requiring the issuance of a license by a Federal agency; (c) the facilitation by a United States person of the exportation or reexportation of goods, technology, or services to or from Sudan; (d) the performance by any United States person of any contract, including a financing contract, in support of an industrial, commercial, public utility, or governmental project in Sudan; (e) the grant or extension of credits or loans by any United States person to the Government of Sudan; (f) any transaction by a United States person relating to transportation of cargo to or from Sudan; and (g) any transaction by any United States person, or within the United States that evaded or avoided, or had the purpose of evading or avoiding, or attempted to violate any of the prohibitions set forth in E.O. 13067.

On July 1, 1998, OFAC issued the Sudanese Sanctions Regulations, 31 CFR part 538 (SSR), as a final rule to implement E.O. 13067. The SSR were amended on various occasions to, among other things, implement further Executive orders and add additional authorizations.

On April 26, 2006, in Executive Order 13400 (E.O. 13400), the President determined that the conflict in Sudan's Darfur region posed an unusual and extraordinary threat to the national security and foreign policy of the United States, expanded the scope of the national emergency declared in E.O. 13067 to deal with that threat, and ordered the blocking of property of certain persons connected to the conflict. On May 28, 2009, OFAC issued the Darfur Sanctions Regulations, 31 CFR part 546 (DSR), as a final rule to implement E.O. 13400. On October 13, 2006, the President issued Executive Order 13412 (E.O. 13412) to take additional steps with respect to the national emergency and to implement the Darfur Peace and Accountability Act of 2006, Public Law 109-344, 120 Stat. 1869.

On January 13, 2017, President Obama issued Executive Order 13761, “Recognizing Positive Actions by the Government of Sudan and Providing for the Revocation of Certain Sudan-Related Sanctions” (E.O. 13761). In E.O. 13761, President Obama found that the situation that gave rise to the actions taken in E.O.s 13067 and 13412 related to the policies and actions of the Government of Sudan had been altered by Sudan's positive actions over the prior six months. These actions included a marked reduction in offensive military activity, culminating in a pledge to maintain a cessation of hostilities in conflict areas in Sudan, and steps toward the improvement of humanitarian access throughout Sudan, as well as cooperation with the United States on addressing regional conflicts and the threat of terrorism. Given these developments, and in order to see these efforts sustained and enhanced by the Government of Sudan, President Obama ordered that, effective July 12, 2017, sections 1 and 2 of E.O. 13067 be revoked, and E.O. 13412 be revoked in its entirety, provided that a review before that date determined certain criteria were met.

On July 11, 2017, President Trump issued Executive Order 13804, “Allowing Additional Time for Recognizing Positive Actions by the Government of Sudan and Amending Executive Order 13761” (E.O. 13804). In E.O. 13804, President Trump amended E.O. 13761, extending until October 12, 2017, the review period established by E.O. 13761. This review period provided for the revocation of certain sanctions if the Government of Sudan sustained the positive actions that gave rise to E.O. 13761, including carrying out a pledge to maintain a cessation of hostilities in conflict areas in Sudan; continuing improvement of humanitarian access throughout Sudan; and maintaining its cooperation with the United States on addressing regional conflicts and the threat of terrorism.

On October 11, 2017, the Secretary of State, in consultation with the Secretary of the Treasury, the Director of National Intelligence, and the Administrator of the U.S. Agency for International Development, published notice in the Federal Register stating that the Government of Sudan had sustained the positive actions that gave rise to E.O. 13761. That notice also stated that the Secretary of State had provided to the President the report described in section 10 of E.O. 13761, fulfilling the requirement set forth in E.O. 13761, as amended by E.O. 13804, that make effective the revocation of certain economic sanctions related to Sudan. As such, effective October 12, 2017, pursuant to E.O. 13761, as amended by E.O. 13804, sections 1 and 2 of E.O. 13067 were revoked and E.O. 13412 was revoked in its entirety. As a result of the revocation of these sanctions provisions, U.S. persons are no longer prohibited from engaging in transactions that were previously prohibited solely under the SSR. Consistent with the revocation of these sanctions provisions, OFAC is removing the SSR from the Code of Federal Regulations.

The emergency declared by the President with respect to Sudan in E.O. 13067, and expanded in E.O. 13400, has not been terminated. These authorities remain the basis for the DSR, which remain in effect with respect to Darfur and continues to block the property and interests in property of certain persons connected with the conflict in Darfur.

Pursuant to section 1 of E.O. 13761, as amended by E.O. 13804, the revocation of sections 1 and 2 of E.O. 13067 and the entirety of E.O. 13412 shall not affect any violation of any rules, regulations, orders, licenses, or other forms of administrative action under those orders during the period that those provisions were in effect.

Authorization for Certain Exports of Agricultural Commodities, Medicine, and Medical Devices

Pursuant to Section 906 of the Trade Sanctions Reform and Export Enhancement Act of 2000, 22 U.S.C. 7205 (TSRA), an OFAC license is still required for certain exports and reexports to Sudan of agricultural commodities, medicine, and medical devices as a result of Sudan's inclusion on the State Sponsors of Terrorism List. Effective October 12, 2017, OFAC issued and made available on its website General License A. This general license authorized exports and reexports of these items to Sudan. Today, OFAC is incorporating General License A into the Terrorism List Government Sanctions Regulations, 31 CFR part 596, as new § 596.506. No OFAC license is required for financing of these exports and reexports.

U.S. persons and non-U.S. persons will still need to obtain any licenses required by the Department of Commerce's Bureau of Industry and Security (BIS) to export or reexport to Sudan certain items (commodities, software, and technology) that are on the Commerce Control List (CCL), Supp. No. 1 to part 774 of the Export Administration Regulations, 15 CFR parts 730 through 774 (EAR). In limited circumstances, U.S. persons and non-U.S. persons may also need to obtain licenses from BIS to export or reexport to Sudan items that are subject to the EAR but not specifically listed on the CCL (“EAR99” items) if such transactions implicate certain end-use or end-user concerns (see 15 CFR part 744).

Public Participation

Because the Regulations involve a foreign affairs function, the provisions of Executive Order 12866 and the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, opportunity for public participation, and delay in effective date, as well as the provisions of Executive Order 13771, are inapplicable. Because no notice of proposed rulemaking is required for this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not apply.

Paperwork Reduction Act

The Paperwork Reduction Act does not apply because this rule does not impose information collection requirements that would require the approval of the Office of Management and Budget under 44 U.S.C. 3501 et seq.

List of Subjects 31 CFR Part 538

Administrative practice and procedure, Banks, Banking, Blocking of assets, Sudan, Credit, Foreign Trade, Penalties, Reporting and recordkeeping requirements, Securities, Services.

31 CFR Part 596

Administrative practice and procedure, Banks, Banking, Blocking of assets, Foreign Trade, Penalties, Reporting and recordkeeping requirements, Terrorism.

For the reasons set forth in the preamble, and under the authority of 3 U.S.C. 301; 50 U.S.C. 1601-1651; E.O. 13067, 62 FR 59989, 3 CFR, 1997 Comp., p. 230; E.O. 13412, 71 FR 61369, 3 CFR, 2006 Comp., p. 244; E.O. 13761, 82 FR 5331, as amended by E.O. 13804, 82 FR 23611, OFAC amends 31 CFR parts 538 and 596 as follows:

PART 538—[REMOVED] 1. Remove part 538. PART 596—TERRORISM LIST GOVERNMENTS SANCTIONS REGULATIONS 2. The authority citation for part 596 is revised to read as follows: Authority:

18 U.S.C. 2332d; 22 U.S.C. 7201-7211; 31 U.S.C. 321(b).

Subpart E—Licenses, Authorizations and Statements of Licensing Policy 3. Add § 596.506 to read as follows:
§ 596.506 Authorizing Certain Transactions Pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000.

(a) Effective October 12, 2017, pursuant to section 906(a)(l) of the Trade Sanctions Reform and Export Enhancement Act of 2000 (22 U.S.C. 7205) (TSRA), all exports and reexports of agricultural commodities, medicine, or medical devices to the Government of Sudan or to any entity in Sudan or to any person in a third country purchasing specifically for resale to any of the foregoing are authorized, provided that the exports and reexports are shipped within the 12-month period beginning on the date of the signing of the contract for export or reexport.

(b) Consistent with section 906(a)(l) of TSRA, each year the Office of Foreign Assets Control will determine whether to revoke this general license. Unless revoked, the general license will remain in effect.

Note 1 to § 596.506:

This authorization does not eliminate the need to comply with other provisions of 31 CFR chapter V, including 31 CFR part 596, or other applicable provisions of law, including any requirements of agencies other than the Department of the Treasury's Office of Foreign Assets Control. Such requirements include the Export Administration Regulations (15 CFR parts 730 through 774) administered by the Bureau of Industry and Security of the Department of Commerce and the International Traffic in Arms Regulations (22 CFR parts 120 through 130) administered by the Department of State.

Andrea Gacki, Acting Director, Office of Foreign Assets Control.
[FR Doc. 2018-14084 Filed 6-28-18; 8:45 am] BILLING CODE 4810-AL-P
DEPARTMENT OF THE TREASURY Office of Foreign Assets Control 31 CFR Part 583 Global Magnitsky Sanctions Regulations AGENCY:

Office of Foreign Assets Control, Treasury.

ACTION:

Final rule.

SUMMARY:

The Department of the Treasury's Office of Foreign Assets Control (OFAC) is adding regulations to implement the Global Magnitsky Human Rights Accountability Act and Executive Order 13818 of December 20, 2017 (“Blocking the Property of Persons Involved in Serious Human Rights Abuse or Corruption”). OFAC intends to supplement these regulations with a more comprehensive set of regulations, which may include additional interpretive and definitional guidance, general licenses, and statements of licensing policy.

DATES:

Effective Date: June 29, 2018.

FOR FURTHER INFORMATION CONTACT:

OFAC: Assistant Director for Licensing, tel.: 202-622-2480; Assistant Director for Regulatory Affairs, tel.: 202-622-4855; Assistant Director for Sanctions Compliance & Evaluation, tel.: 202-622-2490; or the Department of the Treasury's Office of the Chief Counsel (Foreign Assets Control), Office of the General Counsel, tel.: 202-622-2410.

SUPPLEMENTARY INFORMATION:

Electronic Availability

This document and additional information concerning OFAC are available from OFAC's website (www.treasury.gov/ofac).

Background

On December 23, 2016, the President signed the Global Magnitsky Human Rights Accountability Act (Pub. L. 114-328, Title XII, Subtitle F) (the “Act”) into law. The Act authorized the President to impose targeted sanctions on any foreign person the President determines is, among other things, responsible for extrajudicial killings, torture, or other gross violations of internationally recognized human rights, or a government official, or a senior associate of such an official, responsible for, or complicit in, ordering, controlling, or otherwise directing, acts of significant corruption.

On December 20, 2017, the President, invoking the authority of, inter alia, the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) (IEEPA), issued Executive Order 13818 (82 FR 60839, December 26, 2017) (E.O. 13818), effective at 12:01 a.m. eastern standard time on December 21, 2017.

In E.O. 13818, the President determined that serious human rights abuse and corruption around the world constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States and declared a national emergency to deal with that threat.

OFAC is issuing the Global Magnitsky Sanctions Regulations, 31 CFR part 583 (the “Regulations”), to implement the Act and E.O. 13818, pursuant to authorities delegated to the Secretary of the Treasury in E.O. 13818. A copy of E.O. 13818 appears in appendix A to this part.

The Regulations are being published in abbreviated form at this time for the purpose of providing immediate guidance to the public. OFAC intends to supplement this part 583 with a more comprehensive set of regulations, which may include additional interpretive and definitional guidance, general licenses, and statements of licensing policy. The appendix to the Regulations will be removed when OFAC supplements this part with a more comprehensive set of regulations.

Public Participation

Because the Regulations involve a foreign affairs function, the provisions of Executive Order 12866 and the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, opportunity for public participation, and delay in effective date, as well as the provisions of Executive Order 13771, are inapplicable. Because no notice of proposed rulemaking is required for this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not apply.

Paperwork Reduction Act

The collections of information related to the Regulations are contained in 31 CFR part 501 (the “Reporting, Procedures and Penalties Regulations”). Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), those collections of information have been approved by the Office of Management and Budget under control number 1505-0164. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.

List of Subjects in 31 CFR Part 583

Administrative practice and procedure, Banks, Banking, Blocking of assets, Global Magnitsky, Penalties, Reporting and recordkeeping requirements, Sanctions.

For the reasons set forth in the preamble, the Department of the Treasury's Office of Foreign Assets Control adds part 583 to 31 CFR chapter V to read as follows: PART 583—GLOBAL MAGNITSKY SANCTIONS REGULATIONS Subpart A—Relation of This Part to Other Laws and Regulations Sec. 583.101 Relation of this part to other laws and regulations. Subpart B—Prohibitions 583.201 Prohibited transactions involving blocked property. 583.202 Effect of transfers violating the provisions of this part. 583.203 Holding of funds in interest-bearing accounts; investment and reinvestment. 583.204 Expenses of maintaining blocked physical property; liquidation of blocked property. 583.205 Exempt transactions. Subpart C—General Definitions 583.300 Applicability of definitions. 583.301 Blocked account; blocked property. 583.302 Effective date. 583.303 Entity. 583.304 Financial, material, or technological support. 583.305 Foreign person. 583.306 Information or informational materials. 583.307 Interest. 583.308 Licenses; general and specific. 583.309 OFAC. 583.310 Person. 583.311 Property; property interest. 583.312 Transfer. 583.313 United States. 583.314 United States person; U.S. person. 583.315 U.S. financial institution. Subpart D—Interpretations 583.401 [Reserved] 583.402 Effect of amendment. 583.403 Termination and acquisition of an interest in blocked property. 583.404 Transactions ordinarily incident to a licensed transaction. 583.405 Setoffs prohibited. 583.406 Entities owned by one or more persons whose property and interests in property are blocked. Subpart E—Licenses, Authorizations, and Statements of Licensing Policy 583.501 General and specific licensing procedures. 583.502 [Reserved] 583.503 Exclusion from licenses. 583.504 Payments and transfers to blocked accounts in U.S. financial institutions. 583.505 Entries in certain accounts for normal service charges. 583.506 Provision of certain legal services. 583.507 Payments for legal services from funds originating outside the United States. 583.508 Emergency medical services. Subpart F—Reports 583.601 Records and reports. Subpart G—Penalties and Findings of Violation 583.701 Penalties and Findings of Violation. Subpart H—Procedures 583.801 Procedures. 583.802 Delegation of certain authorities of the Secretary of the Treasury. Subpart I—Paperwork Reduction Act 583.901 Paperwork Reduction Act notice. Appendix A to Part 583—Executive Order 13818 of December 20, 2017 Authority:

3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); Pub. L. 110-96, 121 Stat. 1011 (50 U.S.C. 1705 note); Pub. L. 114-328, Title XII, Subtitle F, 130 Stat. 2533 (22 U.S.C. 2656 note); E.O. 13818, 82 FR 60839, December 26, 2017.

Subpart A—Relation of This Part to Other Laws and Regulations
§ 583.101 Relation of this part to other laws and regulations.

This part is separate from, and independent of, the other parts of this chapter, with the exception of part 501 of this chapter, the recordkeeping and reporting requirements and license application and other procedures of which apply to this part. Actions taken pursuant to part 501 of this chapter with respect to the prohibitions contained in this part are considered actions taken pursuant to this part. Differing foreign policy and national security circumstances may result in differing interpretations of similar language among the parts of this chapter. No license or authorization contained in or issued pursuant to those other parts authorizes any transaction prohibited by this part. No license or authorization contained in or issued pursuant to any other provision of law or regulation authorizes any transaction prohibited by this part. No license or authorization contained in or issued pursuant to this part relieves the involved parties from complying with any other applicable laws or regulations.

Note 1 to § 583.101:

This part has been published in abbreviated form for the purpose of providing immediate guidance to the public. OFAC intends to supplement this part with a more comprehensive set of regulations, which may include additional interpretive and definitional guidance, general licenses, and statements of licensing policy.

Subpart B—Prohibitions
§ 583.201 Prohibited transactions involving blocked property.

All transactions prohibited pursuant to Executive Order 13818 of December 20, 2017 are also prohibited pursuant to this part.

Note 1 to § 583.201:

The names of persons listed in or designated pursuant to Executive Order 13818, whose property and interests in property therefore are blocked pursuant to this section, are published in the Federal Register and incorporated into OFAC's Specially Designated Nationals and Blocked Persons List (SDN List) with the identifier “[GLOMAG].” The SDN List is accessible through the following page on OFAC's website: www.treasury.gov/sdn. Additional information pertaining to the SDN List can be found in appendix A to this chapter. See § 583.406 concerning entities that may not be listed on the SDN List but whose property and interests in property are nevertheless blocked pursuant to this section.

Note 2 to § 583.201:

The International Emergency Economic Powers Act (50 U.S.C. 1701-1706), in section 203 (50 U.S.C. 1702), authorizes the blocking of property and interests in property of a person during the pendency of an investigation. The names of persons whose property and interests in property are blocked pending investigation pursuant to this section also are published in the Federal Register and incorporated into the SDN List with the identifier “[BPI-GLOMAG]”.

Note 3 to § 583.201:

Sections 501.806 and 501.807 of this chapter describe the procedures to be followed by persons seeking, respectively, the unblocking of funds that they believe were blocked due to mistaken identity, and administrative reconsideration of their status as persons whose property and interests in property are blocked pursuant to this section.

§ 583.202 Effect of transfers violating the provisions of this part.

(a) Any transfer after the effective date that is in violation of any provision of this part or of any regulation, order, directive, ruling, instruction, or license issued pursuant to this part, and that involves any property or interest in property blocked pursuant to § 583.201, is null and void and shall not be the basis for the assertion or recognition of any interest in or right, remedy, power, or privilege with respect to such property or interests in property.

(b) No transfer before the effective date shall be the basis for the assertion or recognition of any right, remedy, power, or privilege with respect to, or any interest in, any property or interests in property blocked pursuant to § 583.201, unless the person who holds or maintains such property, prior to that date, had written notice of the transfer or by any written evidence had recognized such transfer.

(c) Unless otherwise provided, a license or other authorization issued by OFAC before, during, or after a transfer shall validate such transfer or make it enforceable to the same extent that it would be valid or enforceable but for the provisions of this part and any regulation, order, directive, ruling, instruction, or license issued pursuant to this part.

(d) Transfers of property that otherwise would be null and void or unenforceable by virtue of the provisions of this section shall not be deemed to be null and void or unenforceable as to any person with whom such property is or was held or maintained (and as to such person only) in cases in which such person is able to establish to the satisfaction of OFAC each of the following:

(1) Such transfer did not represent a willful violation of the provisions of this part by the person with whom such property is or was held or maintained (and as to such person only);

(2) The person with whom such property is or was held or maintained did not have reasonable cause to know or suspect, in view of all the facts and circumstances known or available to such person, that such transfer required a license or authorization issued pursuant to this part and was not so licensed or authorized, or, if a license or authorization did purport to cover the transfer, that such license or authorization had been obtained by misrepresentation of a third party or withholding of material facts or was otherwise fraudulently obtained; and

(3) The person with whom such property is or was held or maintained filed with OFAC a report setting forth in full the circumstances relating to such transfer promptly upon discovery that:

(i) Such transfer was in violation of the provisions of this part or any regulation, ruling, instruction, license, or other directive or authorization issued pursuant to this part;

(ii) Such transfer was not licensed or authorized by OFAC; or

(iii) If a license did purport to cover the transfer, such license had been obtained by misrepresentation of a third party or withholding of material facts or was otherwise fraudulently obtained.

(e) The filing of a report in accordance with the provisions of paragraph (d)(3) of this section shall not be deemed evidence that the terms of paragraphs (d)(1) and (2) of this section have been satisfied.

(f) Unless licensed pursuant to this part, any attachment, judgment, decree, lien, execution, garnishment, or other judicial process is null and void with respect to any property and interests in property blocked pursuant to § 583.201.

§ 583.203 Holding of funds in interest-bearing accounts; investment and reinvestment.

(a) Except as provided in paragraph (e) or (f) of this section, or as otherwise directed or authorized by OFAC, any U.S. person holding funds, such as currency, bank deposits, or liquidated financial obligations, subject to § 583.201 shall hold or place such funds in a blocked interest-bearing account located in the United States.

(b)(1) For purposes of this section, the term blocked interest-bearing account means a blocked account:

(i) In a federally insured U.S. bank, thrift institution, or credit union, provided the funds are earning interest at rates that are commercially reasonable; or

(ii) With a broker or dealer registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), provided the funds are invested in a money market fund or in U.S. Treasury bills.

(2) Funds held or placed in a blocked account pursuant to paragraph (a) of this section may not be invested in instruments the maturity of which exceeds 180 days.

(c) For purposes of this section, a rate is commercially reasonable if it is the rate currently offered to other depositors on deposits or instruments of comparable size and maturity.

(d) For purposes of this section, if interest is credited to a separate blocked account or subaccount, the name of the account party on each account must be the same.

(e) Blocked funds held in instruments the maturity of which exceeds 180 days at the time the funds become subject to § 583.201 may continue to be held until maturity in the original instrument, provided any interest, earnings, or other proceeds derived therefrom are paid into a blocked interest-bearing account in accordance with paragraph (a) or (f) of this section.

(f) Blocked funds held in accounts or instruments outside the United States at the time the funds become subject to § 583.201 may continue to be held in the same type of accounts or instruments, provided the funds earn interest at rates that are commercially reasonable.

(g) This section does not create an affirmative obligation for the holder of blocked tangible property, such as real or personal property, or of other blocked property, such as debt or equity securities, to sell or liquidate such property. However, OFAC may issue licenses permitting or directing such sales or liquidation in appropriate cases.

(h) Funds subject to this section may not be held, invested, or reinvested in a manner that provides financial or economic benefit or access to any person whose property and interests in property are blocked pursuant to § 583.201, nor may their holder cooperate in or facilitate the pledging or other attempted use as collateral of blocked funds or other assets.

§ 583.204 Expenses of maintaining blocked tangible property; liquidation of blocked property.

(a) Except as otherwise authorized, and notwithstanding the existence of any rights or obligations conferred or imposed by any international agreement or contract entered into or any license or permit granted prior to the effective date, all expenses incident to the maintenance of tangible property blocked pursuant to § 583.201 shall be the responsibility of the owners or operators of such property, which expenses shall not be met from blocked funds.

(b) Property blocked pursuant to § 583.201 may, in the discretion of OFAC, be sold or liquidated and the net proceeds placed in a blocked interest-bearing account in the name of the owner of the property.

§ 583.205 Exempt transactions.

(a) Personal communications. The prohibitions contained in this part do not apply to any postal, telegraphic, telephonic, or other personal communication that does not involve the transfer of anything of value.

(b) Information or informational materials. (1) The prohibitions contained in this part do not apply to the importation from any country and the exportation to any country of any information or informational materials, as defined in § 583.306, whether commercial or otherwise, regardless of format or medium of transmission.

(2) This section does not exempt from regulation transactions related to information or informational materials not fully created and in existence at the date of the transactions, or to the substantive or artistic alteration or enhancement of information or informational materials, or to the provision of marketing and business consulting services. Such prohibited transactions include payment of advances for information or informational materials not yet created and completed (with the exception of prepaid subscriptions for widely circulated magazines and other periodical publications); provision of services to market, produce or co-produce, create, or assist in the creation of information or informational materials; and payment of royalties with respect to income received for enhancements or alterations made by U.S. persons to such information or informational materials.

(3) This section does not exempt transactions incident to the exportation of software subject to the Export Administration Regulations, 15 CFR parts 730 through 774, or to the exportation of goods (including software) or technology for use in the transmission of any data, or to the provision, sale, or leasing of capacity on telecommunications transmission facilities (such as satellite or terrestrial network connectivity) for use in the transmission of any data. The exportation of such items or services and the provision, sale, or leasing of such capacity or facilities to a person whose property and interests in property are blocked pursuant to § 583.201 are prohibited.

(c) Travel. The prohibitions contained in this part do not apply to transactions ordinarily incident to travel to or from any country, including importation or exportation of accompanied baggage for personal use, maintenance within any country including payment of living expenses and acquisition of goods or services for personal use, and arrangement or facilitation of such travel including nonscheduled air, sea, or land voyages.

Subpart C—General Definitions
§ 583.300 Applicability of definitions.

The definitions in this subpart apply throughout the entire part.

§ 583.301 Blocked account; blocked property.

The terms blocked account and blocked property shall mean any account or property subject to the prohibitions in § 583.201 held in the name of a person whose property and interests in property are blocked pursuant to § 583.201, or in which such person has an interest, and with respect to which payments, transfers, exportations, withdrawals, or other dealings may not be made or effected except pursuant to a license or other authorization from OFAC expressly authorizing such action.

Note 1 to § 583.301:

See § 583.406 concerning the blocked status of property and interests in property of an entity that is directly or indirectly owned, whether individually or in the aggregate, 50 percent or more by one or more persons whose property and interests in property are blocked pursuant to § 583.201.

§ 583.302 Effective date.

(a) The term effective date refers to the effective date of the applicable prohibitions and directives contained in this part as follows:

(1) With respect to a person listed in the Annex to Executive Order 13818 of December 20, 2017, 12:01 a.m. eastern standard time on December 21, 2017; and

(2) With respect to a person whose property and interests in property are otherwise blocked pursuant to § 583.201, the earlier of the date of actual or constructive notice that such person's property and interests in property are blocked.

(b) For the purposes of this section, constructive notice is the date that a notice of the blocking of the relevant person's property and interests in property is published in the Federal Register.

§ 583.303 Entity.

The term entity means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization.

§ 583.304 Financial, material, or technological support.

The term financial, material, or technological support, as used in Executive Order 13818 of December 20, 2017, means any property, tangible or intangible, including currency, financial instruments, securities, or any other transmission of value; weapons or related materiel; chemical or biological agents; explosives; false documentation or identification; communications equipment; computers; electronic or other devices or equipment; technologies; lodging; safe houses; facilities; vehicles or other means of transportation; or goods. “Technologies” as used in this definition means specific information necessary for the development, production, or use of a product, including related technical data such as blueprints, plans, diagrams, models, formulae, tables, engineering designs and specifications, manuals, or other recorded instructions.

§ 583.305 Foreign person.

The term foreign person means any citizen or national of a foreign state (including any such individual who is also a citizen or national of the United States), or any entity not organized solely under the laws of the United States or existing solely in the United States, but does not include a foreign state.

§ 583.306 Information or informational materials.

(a)(1) The term information or informational materials includes publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, compact disks, CD-ROMs, artworks, and news wire feeds.

(2) To be considered information or informational materials, artworks must be classified under heading 9701, 9702, or 9703 of the Harmonized Tariff Schedule of the United States.

(b) The term information or informational materials, with respect to exports, does not include items:

(1) That were, as of April 30, 1994, or that thereafter become, controlled for export pursuant to section 5 of the Export Administration Act of 1979, 50 U.S.C. App. 2401-2420 (1979) (EAA), or section 6 of the EAA to the extent that such controls promote the nonproliferation or antiterrorism policies of the United States; or

(2) With respect to which acts are prohibited by 18 U.S.C. chapter 37.

§ 583.307 Interest.

Except as otherwise provided in this part, the term interest, when used with respect to property (e.g., “an interest in property”), means an interest of any nature whatsoever, direct or indirect.

§ 583.308 Licenses; general and specific.

(a) Except as otherwise provided in this part, the term license means any license or authorization contained in or issued pursuant to this part.

(b) The term general license means any license or authorization the terms of which are set forth in subpart E of this part or made available on OFAC's website: www.treasury.gov/ofac.

(c) The term specific license means any license or authorization issued pursuant to this part but not set forth in subpart E of this part or made available on OFAC's website: www.treasury.gov/ofac.

Note 1 to § 583.308:

See § 501.801 of this chapter on licensing procedures.

§ 583.309 OFAC.

The term OFAC means the Department of the Treasury's Office of Foreign Assets Control.

§ 583.310 Person.

The term person means an individual or entity.

§ 583.311 Property; property interest.

The terms property and property interest include money, checks, drafts, bullion, bank deposits, savings accounts, debts, indebtedness, obligations, notes, guarantees, debentures, stocks, bonds, coupons, any other financial instruments, bankers acceptances, mortgages, pledges, liens or other rights in the nature of security, warehouse receipts, bills of lading, trust receipts, bills of sale, any other evidences of title, ownership, or indebtedness, letters of credit and any documents relating to any rights or obligations thereunder, powers of attorney, goods, wares, merchandise, chattels, stocks on hand, ships, goods on ships, real estate mortgages, deeds of trust, vendors' sales agreements, land contracts, leaseholds, ground rents, real estate and any other interest therein, options, negotiable instruments, trade acceptances, royalties, book accounts, accounts payable, judgments, patents, trademarks or copyrights, insurance policies, safe deposit boxes and their contents, annuities, pooling agreements, services of any nature whatsoever, contracts of any nature whatsoever, and any other property, real, personal, or mixed, tangible or intangible, or interest or interests therein, present, future, or contingent.

§ 583.312 Transfer.

The term transfer means any actual or purported act or transaction, whether or not evidenced by writing, and whether or not done or performed within the United States, the purpose, intent, or effect of which is to create, surrender, release, convey, transfer, or alter, directly or indirectly, any right, remedy, power, privilege, or interest with respect to any property. Without limitation on the foregoing, it shall include the making, execution, or delivery of any assignment, power, conveyance, check, declaration, deed, deed of trust, power of attorney, power of appointment, bill of sale, mortgage, receipt, agreement, contract, certificate, gift, sale, affidavit, or statement; the making of any payment; the setting off of any obligation or credit; the appointment of any agent, trustee, or fiduciary; the creation or transfer of any lien; the issuance, docketing, filing, or levy of or under any judgment, decree, attachment, injunction, execution, or other judicial or administrative process or order, or the service of any garnishment; the acquisition of any interest of any nature whatsoever by reason of a judgment or decree of any foreign country; the fulfillment of any condition; the exercise of any power of appointment, power of attorney, or other power; or the acquisition, disposition, transportation, importation, exportation, or withdrawal of any security.

§ 583.313 United States.

The term United States means the United States, its territories and possessions, and all areas under the jurisdiction or authority thereof.

§ 583.314 United States person; U.S. person.

The term United States person or U.S. person means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.

§ 583.315 U.S. financial institution.

The term U.S. financial institution means any U.S. entity (including its foreign branches) that is engaged in the business of accepting deposits, making, granting, transferring, holding, or brokering loans or other extensions of credit, or purchasing or selling foreign exchange, securities, commodity futures or options, or procuring purchasers and sellers thereof, as principal or agent. It includes depository institutions, banks, savings banks, trust companies, securities brokers and dealers, futures and options brokers and dealers, forward contract and foreign exchange merchants, securities and commodities exchanges, clearing corporations, investment companies, employee benefit plans, and U.S. holding companies, U.S. affiliates, or U.S. subsidiaries of any of the foregoing. This term includes those branches, offices, and agencies of foreign financial institutions that are located in the United States, but not such institutions' foreign branches, offices, or agencies.

Subpart D—Interpretations
§ 583.401 [Reserved]
§ 583.402 Effect of amendment.

Unless otherwise specifically provided, any amendment, modification, or revocation of any provision in or appendix to this part or chapter or of any order, regulation, ruling, instruction, or license issued by OFAC does not affect any act done or omitted, or any civil or criminal proceeding commenced or pending, prior to such amendment, modification, or revocation. All penalties, forfeitures, and liabilities under any such order, regulation, ruling, instruction, or license continue and may be enforced as if such amendment, modification, or revocation had not been made.

§ 583.403 Termination and acquisition of an interest in blocked property.

(a) Whenever a transaction licensed or authorized by or pursuant to this part results in the transfer of property (including any property interest) away from a person whose property and interests in property are blocked pursuant to § 583.201, such property shall no longer be deemed to be property blocked pursuant to § 583.201, unless there exists in the property another interest that is blocked pursuant to § 583.201, the transfer of which has not been effected pursuant to license or other authorization.

(b) Unless otherwise specifically provided in a license or authorization issued pursuant to this part, if property (including any property interest) is transferred or attempted to be transferred to a person whose property and interests in property are blocked pursuant to § 583.201, such property shall be deemed to be property in which such person has an interest and therefore blocked.

§ 583.404 Transactions ordinarily incident to a licensed transaction.

Any transaction ordinarily incident to a licensed transaction and necessary to give effect thereto is also authorized, except:

(a) An ordinarily incident transaction, not explicitly authorized within the terms of the license, by or with a person whose property and interests in property are blocked pursuant to § 583.201; or

(b) An ordinarily incident transaction, not explicitly authorized within the terms of the license, involving a debit to a blocked account or a transfer of blocked property.

§ 583.405 Setoffs prohibited.

A setoff against blocked property (including a blocked account), whether by a U.S. bank or other U.S. person, is a prohibited transfer under § 583.201 if effected after the effective date.

§ 583.406 Entities owned by one or more persons whose property and interests in property are blocked.

Persons whose property and interests in property are blocked pursuant to § 583.201 have an interest in all property and interests in property of an entity in which such persons directly or indirectly own, whether individually or in the aggregate, a 50 percent or greater interest. The property and interests in property of such an entity, therefore, are blocked, and such an entity is a person whose property and interests in property are blocked pursuant to § 583.201, regardless of whether the name of the entity is incorporated into OFAC's Specially Designated Nationals and Blocked Persons List (SDN List).

Subpart E—Licenses, Authorizations, and Statements of Licensing Policy
§ 583.501 General and specific licensing procedures.

For provisions relating to licensing procedures, see part 501, subpart E, of this chapter. Licensing actions taken pursuant to part 501 of this chapter with respect to the prohibitions contained in this part are considered actions taken pursuant to this part. General licenses and statements of licensing policy relating to this part also may be available through the Global Magnitsky sanctions page on OFAC's website: www.treasury.gov/ofac.

§ 583.502 [Reserved]
§ 583.503 Exclusion from licenses.

OFAC reserves the right to exclude any person, property, transaction, or class thereof from the operation of any license or from the privileges conferred by any license. OFAC also reserves the right to restrict the applicability of any license to particular persons, property, transactions, or classes thereof. Such actions are binding upon actual or constructive notice of the exclusions or restrictions.

§ 583.504 Payments and transfers to blocked accounts in U.S. financial institutions.

Any payment of funds or transfer of credit in which a person whose property and interests in property are blocked pursuant to § 583.201 has any interest that comes within the possession or control of a U.S. financial institution must be blocked in an account on the books of that financial institution. A transfer of funds or credit by a U.S. financial institution between blocked accounts in its branches or offices is authorized, provided that no transfer is made from an account within the United States to an account held outside the United States, and further provided that a transfer from a blocked account may be made only to another blocked account held in the same name.

Note 1 to § 583.504:

See § 501.603 of this chapter for mandatory reporting requirements regarding financial transfers. See also § 583.203 concerning the obligation to hold blocked funds in interest-bearing accounts.

§ 583.505 Entries in certain accounts for normal service charges.

(a) A U.S. financial institution is authorized to debit any blocked account held at that financial institution in payment or reimbursement for normal service charges owed it by the owner of that blocked account.

(b) As used in this section, the term normal service charges shall include charges in payment or reimbursement for interest due; cable, telegraph, internet, or telephone charges; postage costs; custody fees; small adjustment charges to correct bookkeeping errors; and, but not by way of limitation, minimum balance charges, notary and protest fees, and charges for reference books, photocopies, credit reports, transcripts of statements, registered mail, insurance, stationery and supplies, and other similar items.

§ 583.506 Provision of certain legal services.

(a) The provision of the following legal services to or on behalf of persons whose property and interests in property are blocked pursuant to § 583.201 or any further Executive orders relating to the national emergency declared in Executive Order 13818 of December 20, 2017, is authorized, provided that receipt of payment of professional fees and reimbursement of incurred expenses must be authorized pursuant to § 583.507, which authorizes certain payments for legal services from funds originating outside the United States; via specific license; or otherwise pursuant to this part:

(1) Provision of legal advice and counseling on the requirements of and compliance with the laws of the United States or any jurisdiction within the United States, provided that such advice and counseling are not provided to facilitate transactions in violation of this part;

(2) Representation of persons named as defendants in or otherwise made parties to legal, arbitration, or administrative proceedings before any U.S. federal, state, or local court or agency;

(3) Initiation and conduct of legal, arbitration, or administrative proceedings before any U.S. federal, state, or local court or agency;

(4) Representation of persons before any U.S. federal, state, or local court or agency with respect to the imposition, administration, or enforcement of U.S. sanctions against such persons; and

(5) Provision of legal services in any other context in which prevailing U.S. law requires access to legal counsel at public expense.

(b) The provision of any other legal services to or on behalf of persons whose property and interests in property are blocked pursuant to § 583.201 or any further Executive orders relating to the national emergency declared in Executive Order 13818 of December 20, 2017, not otherwise authorized in this part, requires the issuance of a specific license.

(c) U.S. persons do not need to obtain specific authorization to provide related services, such as making filings and providing other administrative services, that are ordinarily incident to the provision of services authorized by this section. Additionally, U.S. persons who provide services authorized by this section do not need to obtain specific authorization to contract for related services that are ordinarily incident to the provision of those legal services, such as those provided by private investigators or expert witnesses, or to pay for such services. See § 583.404.

(d) Entry into a settlement agreement or the enforcement of any lien, judgment, arbitral award, decree, or other order through execution, garnishment, or other judicial process purporting to transfer or otherwise alter or affect property or interests in property blocked pursuant to § 583.201 or any further Executive orders relating to the national emergency declared in Executive Order 13818 of December 20, 2017 is prohibited unless licensed pursuant to this part.

Note 1 to § 583.506:

Pursuant to part 501, subpart E, of this chapter, U.S. persons seeking administrative reconsideration or judicial review of their designation or the blocking of their property and interests in property may apply for a specific license from OFAC to authorize the release of certain blocked funds for the payment of professional fees and reimbursement of incurred expenses for the provision of such legal services where alternative funding sources are not available. For more information, see OFAC's Guidance on the Release of Limited Amounts of Blocked Funds for Payment of Legal Fees and Costs Incurred in Challenging the Blocking of U.S. Persons in Administrative or Civil Proceedings, which is available on OFAC's website at: www.treasury.gov/ofac.

§ 583.507 Payments for legal services from funds originating outside the United States.

(a) Professional fees and incurred expenses. Receipt of payment of professional fees and reimbursement of incurred expenses for the provision of legal services authorized pursuant to § 583.506(a) to or on behalf of any person whose property and interests in property are blocked pursuant to § 583.201 or any further Executive orders relating to the national emergency declared in Executive Order 13818 of December 20, 2017 is authorized from funds originating outside the United States, provided that the funds do not originate from:

(1) A source within the United States;

(2) Any source, wherever located, within the possession or control of a U.S. person; or

(3) Any individual or entity, other than the person on whose behalf the legal services authorized pursuant to § 583.506(a) are to be provided, whose property and interests in property are blocked pursuant to any part of this chapter or any Executive order or statute.

Note 1 to paragraph (a):

Nothing in this paragraph authorizes payments for legal services using funds in which any other person whose property and interests in property are blocked pursuant to § 583.201, any other part of this chapter, or any Executive order has an interest.

(b) Reports. (1) U.S. persons who receive payments pursuant to paragraph (a) of this section must submit annual reports no later than 30 days following the end of the calendar year during which the payments were received providing information on the funds received. Such reports shall specify:

(i) The individual or entity from whom the funds originated and the amount of funds received; and

(ii) If applicable:

(A) The names of any individuals or entities providing related services to the U.S. person receiving payment in connection with authorized legal services, such as private investigators or expert witnesses;

(B) A general description of the services provided; and

(C) The amount of funds paid in connection with such services.

(2) The reports, which must reference this section, are to be submitted to OFAC using one of the following methods:

(i) Email (preferred method): [email protected]; or

(ii) U.S. mail: OFAC Regulations Reports, Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW, Freedman's Bank Building, Washington, DC 20220.

§ 583.508 Emergency medical services.

The provision and receipt of nonscheduled emergency medical services that are otherwise prohibited by this part or any further Executive orders relating to the national emergency declared in Executive Order 13818 of December 20, 2017 are authorized.

Subpart F—Reports
§ 583.601 Records and reports.

For provisions relating to required records and reports, see part 501, subpart C, of this chapter. Recordkeeping and reporting requirements imposed by part 501 of this chapter with respect to the prohibitions contained in this part are considered requirements arising pursuant to this part.

Subpart G—Penalties and Findings of Violation
§ 583.701 Penalties and Findings of Violation.

(a) The penalties available under section 206 of the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) (IEEPA), as adjusted annually pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410, as amended, 28 U.S.C. 2461 note) or, in the case of criminal violations, as adjusted pursuant to 18 U.S.C. 3571, are applicable to violations of the provisions of this part.

(b) OFAC has the authority, pursuant to IEEPA, to issue Pre-Penalty Notices, Penalty Notices, and Findings of Violation; impose monetary penalties; engage in settlement discussions and enter into settlements; refer matters to the United States Department of Justice for administrative collection; and, in appropriate circumstances, refer matters to appropriate law enforcement agencies for criminal investigation and/or prosecution. For more information, see appendix A to part 501 of this chapter, which provides a general framework for the enforcement of all economic sanctions programs administered by OFAC, including enforcement-related definitions, types of responses to apparent violations, general factors affecting administrative actions, civil penalties for failure to comply with a requirement to furnish information or keep records, and other general civil penalties information.

Subpart H—Procedures
§ 583.801 Procedures.

For license application procedures and procedures relating to amendments, modifications, or revocations of licenses; administrative decisions; rulemaking; and requests for documents pursuant to the Freedom of Information and Privacy Acts (5 U.S.C. 552 and 552a), see part 501, subpart E, of this chapter.

§ 583.802 Delegation of certain authorities by the Secretary of the Treasury.

Any action that the Secretary of the Treasury is authorized to take pursuant to Executive Order 13818 of December 20, 2017 and any further Executive orders relating to the national emergency declared therein, may be taken by the Director of OFAC or by any other person to whom the Secretary of the Treasury has delegated authority so to act.

Subpart I—Paperwork Reduction Act
§ 583.901 Paperwork Reduction Act notice.

For approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) of information collections relating to recordkeeping and reporting requirements, licensing procedures, and other procedures, see § 501.901 of this chapter. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB.

Appendix A to Part 583—Executive Order 13818 Executive Order 13818 of December 20, 2017 Blocking the Property of Persons Involved in Serious Human Rights Abuse or Corruption

By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.) (NEA), the Global Magnitsky Human Rights Accountability Act (Public Law 114-328) (the “Act”), section 212(f) of the Immigration and Nationality Act of 1952 (8 U.S.C. 1182(f)) (INA), and section 301 of title 3, United States Code,

I, DONALD J. TRUMP, President of the United States of America, find that the prevalence and severity of human rights abuse and corruption that have their source, in whole or in substantial part, outside the United States, such as those committed or directed by persons listed in the Annex to this order, have reached such scope and gravity that they threaten the stability of international political and economic systems. Human rights abuse and corruption undermine the values that form an essential foundation of stable, secure, and functioning societies; have devastating impacts on individuals; weaken democratic institutions; degrade the rule of law; perpetuate violent conflicts; facilitate the activities of dangerous persons; and undermine economic markets. The United States seeks to impose tangible and significant consequences on those who commit serious human rights abuse or engage in corruption, as well as to protect the financial system of the United States from abuse by these same persons.

I therefore determine that serious human rights abuse and corruption around the world constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States, and I hereby declare a national emergency to deal with that threat.

I hereby determine and order:

Section 1. (a) All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in:

(i) The persons listed in the Annex to this order;

(ii) any foreign person determined by the Secretary of the Treasury, in consultation with the Secretary of State and the Attorney General:

(A) To be responsible for or complicit in, or to have directly or indirectly engaged in, serious human rights abuse;

(B) to be a current or former government official, or a person acting for or on behalf of such an official, who is responsible for or complicit in, or has directly or indirectly engaged in:

(1) Corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery; or

(2) the transfer or the facilitation of the transfer of the proceeds of corruption;

(C) to be or have been a leader or official of:

(1) An entity, including any government entity, that has engaged in, or whose members have engaged in, any of the activities described in subsections (ii)(A), (ii)(B)(1), or (ii)(B)(2) of this section relating to the leader's or official's tenure; or

(2) an entity whose property and interests in property are blocked pursuant to this order as a result of activities related to the leader's or official's tenure; or

(D) to have attempted to engage in any of the activities described in subsections (ii)(A), (ii)(B)(1), or (ii)(B)(2) of this section; and

(iii) any person determined by the Secretary of the Treasury, in consultation with the Secretary of State and the Attorney General:

(A) To have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of:

(1) Any activity described in subsections (ii)(A), (ii)(B)(1), or (ii)(B)(2) of this section that is conducted by a foreign person;

(2) any person whose property and interests in property are blocked pursuant to this order; or

(3) any entity, including any government entity, that has engaged in, or whose members have engaged in, any of the activities described in subsections (ii)(A), (ii)(B)(1), or (ii)(B)(2) of this section, where the activity is conducted by a foreign person;

(B) to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this order; or

(C) to have attempted to engage in any of the activities described in subsections (iii)(A) or (B) of this section.

(b) The prohibitions in subsection (a) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted before the effective date of this order.

Sec. 2. The unrestricted immigrant and nonimmigrant entry into the United States of aliens determined to meet one or more of the criteria in section 1 of this order would be detrimental to the interests of the United States, and the entry of such persons into the United States, as immigrants or nonimmigrants, is hereby suspended. Such persons shall be treated as persons covered by section 1 of Proclamation 8693 of July 24, 2011 (Suspension of Entry of Aliens Subject to United Nations Security Council Travel Bans and International Emergency Economic Powers Act Sanctions).

Sec. 3. I hereby determine that the making of donations of the types of articles specified in section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)) by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order would seriously impair my ability to deal with the national emergency declared in this order, and I hereby prohibit such donations as provided by section 1 of this order.

Sec. 4. The prohibitions in section 1 include:

(a) The making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order; and

(b) the receipt of any contribution or provision of funds, goods, or services from any such person.

Sec. 5. (a) Any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this order is prohibited.

(b) Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.

Sec. 6. For the purposes of this order:

(a) The term “person” means an individual or entity;

(b) the term “entity” means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization; and

(c) the term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.

Sec. 7. For those persons whose property and interests in property are blocked pursuant to this order who might have a constitutional presence in the United States, I find that because of the ability to transfer funds or other assets instantaneously, prior notice to such persons of measures to be taken pursuant to this order would render those measures ineffectual. I therefore determine that for these measures to be effective in addressing the national emergency declared in this order, there need be no prior notice of a listing or determination made pursuant to this order.

Sec. 8. The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to take such actions, including adopting rules and regulations, and to employ all powers granted to me by IEEPA and the Act as may be necessary to implement this order and section 1263(a) of the Act with respect to the determinations provided for therein. The Secretary of the Treasury may, consistent with applicable law, redelegate any of these functions to other officers and agencies of the United States. All agencies shall take all appropriate measures within their authority to implement this order.

Sec. 9. The Secretary of State is hereby authorized to take such actions, including adopting rules and regulations, and to employ all powers granted to me by IEEPA, the INA, and the Act as may be necessary to carry out section 2 of this order and, in consultation with the Secretary of the Treasury, the reporting requirement in section 1264(a) of the Act with respect to the reports provided for in section 1264(b)(2) of that Act. The Secretary of State may, consistent with applicable law, redelegate any of these functions to other officers and agencies of the United States consistent with applicable law.

Sec. 10. The Secretary of the Treasury, in consultation with the Secretary of State and the Attorney General, is hereby authorized to determine that circumstances no longer warrant the blocking of the property and interests in property of a person listed in the Annex to this order, and to take necessary action to give effect to that determination.

Sec. 11. The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to submit recurring and final reports to the Congress on the national emergency declared in this order, consistent with section 401(c) of the NEA (50 U.S.C. 1641(c)) and section 204(c) of IEEPA (50 U.S.C. 1703(c)).

Sec. 12. This order is effective at 12:01 a.m., Eastern Standard Time, December 21, 2017.

Sec. 13. This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

Donald J. Trump THE WHITE HOUSE, December 20, 2017.
Annex 1. Mukhtar Hamid Shah; Date of Birth (DOB) August 11, 1939; alt. DOB November 8, 1939; nationality, Pakistan 2. Angel Rondon Rijo; DOB July 16, 1950; nationality, Dominican Republic 3. Dan Gertler; DOB December 23, 1973; nationality, Israel; alt. nationality, Democratic Republic of the Congo 4. Maung Maung Soe; DOB March 1964; nationality, Burma 5. Yahya Jammeh; DOB May 25, 1965; nationality, The Gambia 6. Sergey Kusiuk; DOB December 1, 1966; nationality, Ukraine; alt. nationality, Russia 7. Benjamin Bol Mel; DOB January 3, 1978; alt. DOB December 24, 1978; nationality, South Sudan; alt. nationality, Sudan 8. Julio Antonio Juarez Ramirez; DOB December 1, 1980; nationality, Guatemala 9. Goulnora Islamovna Karimova; DOB July 8, 1972; nationality, Uzbekistan 10. Slobodan Tesic; DOB December 21, 1958; nationality, Serbia 11. Artem Yuryevich Chayka; DOB September 25, 1975; nationality, Russia 12. Gao Yan; DOB April 1963; nationality, China 13. Roberto Jose Rivas Reyes; DOB July 6, 1954; nationality, Nicaragua
Dated: June 26, 2018. Andrea Gacki, Acting Director, Office of Foreign Assets Control.

Approved:

Dated: June 26, 2018. Sigal P. Mandelker, Under Secretary, Office of Terrorism and Financial Intelligence, Department of the Treasury.
[FR Doc. 2018-14060 Filed 6-28-18; 8:45 am] BILLING CODE 4810-AL-P
DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 100 [Docket Number USCG-2018-0340] RIN 1625-AA08 Special Local Regulation; Corpus Christi Bay, Corpus Christi, TX AGENCY:

Coast Guard, DHS.

ACTION:

Temporary final rule.

SUMMARY:

The Coast Guard is establishing a temporary special local regulation for certain navigable waters of Corpus Christi Bay. This action is necessary to protect marine event participants, spectators and transiting vessels on these navigable waters during the Youth World's Championship regatta held at the Corpus Christi Yacht Club. Entry of vessels or persons into this regulated area is prohibited unless authorized by the Captain of the Port Sector Corpus Christi or designated representative.

DATES:

This rule is effective from 6:15 a.m. on July 14, 2018 through 3 p.m. on July 21, 2018.

ADDRESSES:

To view documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov, type USCG-2018-0340 in the “SEARCH” box and click “SEARCH.” Click on Open Docket Folder on the line associated with this rule.

FOR FURTHER INFORMATION CONTACT:

If you have questions on this rule, call or email Petty Officer Kevin Kyles, Waterways Management Division, U.S. Coast Guard; telephone 361-939-5125, email [email protected]

SUPPLEMENTARY INFORMATION:

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

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(3)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it would be impracticable. This regulated area must be established by July 14, 2018 and we lack sufficient time to provide a reasonable comment period and then consider those comments before issuing this rule. The NPRM process would delay the establishment of the special local regulation until after the scheduled date of the regatta and compromise public safety.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register. Delaying the effective date of this rule would be contrary to the public interest because immediate action is necessary to ensure the safety of persons and vessels during the regatta.

III. Legal Authority and Need for Rule

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1233. The Captain of the Port Sector Corpus Christi (COTP) has determined that potential hazards associated with the vessel traffic occurring on July 14, 2018 through July 21, 2018 will be a safety concern for participants within the boating course. Potential hazards include risk of injury or death resulting from near or actual contact among participant vessels and spectator vessels or waterway users if normal vessel traffic were to interfere with the event. The purpose of this rule is to ensure safety of participants, spectators, and transiting vessels in the regulated area before, during, and after the Youth World's Championship regatta.

IV. Discussion of the Rule

This rule establishes a temporary special local regulation from 6:15 a.m. through 3 p.m. each day from July 14, 2018 through July 21, 2018 in Corpus Christi Bay, approximately 3,000 feet east of People's Street T-Head in Corpus Christi, TX. The regatta will be inside a rectangular area with the most northwestern point located at 027°47′31″ N, 097°22′33.05″ W, most northeastern point located at 027°47′29.46″ N, 097°19′44.26″ W, most southeastern point located at 027°46′12.06″ N, 097°19′44.78″ W, and the most southwestern located at 027°46′09.55″ N, 097°22′28.78″ W. The duration of the special local regulation is intended to protect the public from potential navigation hazards before, during, and after the event. No vessel or person is permitted to enter the regulated area without obtaining permission from the COTP or a designated representative. A designated representative may be a Patrol Commander (PATCOM). The PATCOM will be aboard either a Coast Guard or Coast Guard Auxiliary vessel. The PATCOM may be contacted on Channel 16 VHF-FM (156.8 MHz) by the call sign “PATCOM”.

All persons and vessels not registered with the sponsor as participants or official patrol vessels are considered spectators. The “official patrol vessels” consist of any Coast Guard, state, or local law enforcement and sponsor provided vessels assigned or approved by the COTP to patrol the regulated area.

Spectator vessels desiring to enter, transit through or within, or exit the regulated area may do so only with permission from the COTP or a designated representative, and when permitted, must operate at a minimum safe navigation speed in a manner which will not endanger participants in the regulated area or any other vessels. No spectator vessel shall anchor, block, loiter, or impede the through transit of participants or official patrol vessels in the regulated area during the effective dates and times, unless cleared for entry by or through an official patrol vessel. Any spectator vessel may anchor outside the regulated area, but may not anchor in, block, or loiter in a navigable channel.

The COTP or a designated representative may forbid and control the movement of all vessels in the regulated area. When hailed or signaled by an official patrol vessel, a vessel shall come to an immediate stop and comply with the directions given. Failure to do so may result in expulsion from the area, citation for failure to comply, or both.

The COTP or a designated representative may terminate the event or the operation of any vessel at any time it is deemed necessary for the protection of life or property. The COTP or a designated representative can terminate enforcement of the special local regulations at the conclusion of the event.

The COTP or a designated representative would inform the public of the enforcement times for this regulated area through Broadcast Notices to Mariners (BNMs), Local Notices to Mariners (LNMs), and/or Marine Safety Information Bulletins (MSIBs) as appropriate.

V. Regulatory Analyses

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

A. Regulatory Planning and Review

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This rule has not been designated a “significant regulatory action” under Executive Order 12866. Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.

This regulatory action determination is based on size, location, duration, and time-of-day for the special local regulation. Vessel traffic will be able to safely navigate around the regulated area, which will impact only a small portion of the Laguna Madre for 3 hours and 15 minutes on one day. Moreover, the Coast Guard will issue Broadcast Notices to Mariners (BNMs) via VHF-FM marine channel 16 about the regulation so that waterway users may plan accordingly for transits during this restriction, and the rule allows vessels to seek permission from the COTP or a designated representative to enter the regulated area.

B. Impact on Small Entities

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

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

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

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

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

C. Collection of Information

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

D. Federalism and Indian Tribal Governments

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

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it 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. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

E. Unfunded Mandates Reform Act

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

F. Environment

We have analyzed this rule under Department of Homeland Security Directive 023-01 and Commandant Instruction 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. This rule is a special local regulation that limits daily access to certain navigable waters of Corpus Christi Bay over eight days. Normally such actions are categorically excluded from further review under paragraph L61 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A preliminary Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES.

G. Protest Activities

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

List of Subjects in 33 CFR Part 100

Marine safety, Navigation (water), Reporting and recordkeeping requirements, Waterways.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 100 as follows:

PART 100—SAFETY OF LIFE ON NAVIGABLE WATERS 1. The authority citation for part 100 continues to read as follows: Authority:

33 U.S.C. 1233; 33 CFR 1.05-1.

2. Add § 100.35T08-0340 to read as follows:
§ 100.35T08-0340 Special Local Regulation; Corpus Christi Bay, Corpus Christi, TX.

(a) Location. The following area is a special local regulation: all navigable waters inside approximate rectangular area from with the most northwestern point located at 027°47′31″ N, 097°22′33.05″ W, the most northeastern point being located at 027°47′29.46″ N, 097°19′44.26″ W, the most southeastern point located at 027°46′12.06″ N, 097°19′44.78″ W, and the most southwestern located at 027°46′09.55″ N, 097°22′28.78″ W, in Corpus Christi Bay, approximately 3,000 feet east of People's Street T-Head in Corpus Christi, TX.

(b) Effective period. This section is effective from 6:15 a.m. on July 14, 2018 through 3 p.m. on July 21, 2018.

(c) Enforcement period. This section will be enforced from 6:15 a.m. through 3 p.m. during each day of the effective period.

(d) Regulations. (1) In accordance with the general regulations in § 100.35, entry into this regulated area is prohibited unless authorized by the Captain of the Port Sector Corpus Christi (COTP) or a designated representative. A designated representative may be a Patrol Commander (PATCOM). The PATCOM may be aboard either a Coast Guard or Coast Guard Auxiliary vessel. The Patrol Commander may be contacted on Channel 16 VHF-FM (156.8 MHz) by the call sign “PATCOM”.

(2) All persons and vessels not registered with the sponsor as participants or official patrol vessels are considered spectators. The “official patrol vessels” consist of any Coast Guard, state, or local law enforcement and sponsor provided vessels assigned or approved by the COTP or a designated representative to patrol the regulated area.

(3) Spectator vessels desiring to transit the regulated area may do so only with prior approval of the COTP or a designated representative and when so directed by that officer will be operated at a minimum safe navigation speed in a manner which will not endanger participants in the regulated area or any other vessels.

(4) No spectator vessel shall anchor, block, loiter, or impede the through transit of participants or official patrol vessels in the regulated area during the effective dates and times, unless cleared for entry by or through an official patrol vessel.

(5) Spectator vessels may anchor outside the regulated area, but may not anchor in, block, or loiter in a navigable channel.

(6) The COTP or a designated representative may forbid and control the movement of all vessels in the regulated area. When hailed or signaled by an official patrol vessel, a vessel shall come to an immediate stop and comply with the directions given. Failure to do so may result in expulsion from the area, citation for failure to comply, or both.

(7) The COTP or a designated representative may terminate the event or the operation of any vessel at any time it is deemed necessary for the protection of life or property.

(8) The COTP or a designated representative will terminate enforcement of the special local regulations at the conclusion of the event.

(e) Information broadcasts. The COTP or a designated representative will inform the public of the enforcement times and date for this regulated area through Broadcast Notices to Mariners (BNMs), Local Notices to Mariners (LNMs), and/or Marine Safety Information Bulletins (MSIBs) as appropriate.

Dated: June 25, 2018. E.J. Gaynor, Captain, U.S. Coast Guard, Captain of the Port Sector Corpus Christi.
[FR Doc. 2018-14021 Filed 6-28-18; 8:45 am] BILLING CODE 9110-04-P
DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket No. USCG-2018-0607] Safety Zones; Recurring Events in Captain of the Port Duluth Zone—LaPointe Fireworks AGENCY:

Coast Guard, DHS.

ACTION:

Notice of enforcement of regulation.

SUMMARY:

The Coast Guard will enforce the safety zone for the LaPointe Fireworks in LaPointe, WI from 9:30 p.m. through 11:30 p.m. on July 4, 2018, with a rain date of 9:30 p.m. through 11:30 p.m. on July 5, 2018. This action is necessary to protect participants and spectators during the LaPointe Fireworks. During the enforcement period, entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Duluth or designated on-scene representative.

DATES:

The regulations in 33 CFR 165.943(b) will be enforced from 9:30 p.m. through 11:30 p.m. on July 4, 2018, with a rain date of 9:30 p.m. through 11:30 p.m. on July 5, 2018, for the LaPointe Fireworks safety zone, § 165.943(a)(5).

FOR FURTHER INFORMATION CONTACT:

If you have questions on this document, call or email LT John Mack, Chief of Waterways Management, Coast Guard; telephone (218)725-3818, email [email protected]

SUPPLEMENTARY INFORMATION:

The Coast Guard will enforce the safety zone for the annual LaPointe Fireworks in 33 CFR 165.943(a)(5) from 9:30 p.m. through 11:30 p.m. on July 4, 2018, with a rain date of 9:30 p.m. through 11:30 p.m. on July 5, 2018, on all waters of Lake Superior bounded by the arc of a circle with a 350-foot radius from the fireworks launch site with its center in position 46°46′40″ N, 090°47′22″ W.

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

This document is issued under authority of 33 CFR 165.943 and 5 U.S.C. 552(a). In addition to this publication in the Federal Register, the Coast Guard will provide the maritime community with advance notification of the enforcement of this safety zone via Broadcast Notice to Mariners.

Dated: June 18, 2018. E.E. Williams, Commander, U.S. Coast Guard, Captain of the Port Duluth.
[FR Doc. 2018-14012 Filed 6-28-18; 8:45 am] BILLING CODE 9110-04-P
DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket Number USCG-2018-0239] RIN 1625-AA00 Safety Zone; Tennessee River, Gilbertsville, KY AGENCY:

Coast Guard, DHS.

ACTION:

Temporary final rule.

SUMMARY:

The Coast Guard is establishing a temporary safety zone for certain waters of the Tennessee River. This action is necessary to provide for the safety of life on these navigable waters near the Kentucky Dam Marina, Gilbertsville, KY, during a fireworks display. Entry of vessels or persons into this zone is prohibited unless authorized by the Captain of the Port Sector Ohio Valley or a designated representative.

DATES:

This rule is effective from 6:50 p.m. through 10:10 p.m. on June 30, 2018.

ADDRESSES:

To view documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov, type USCG-2018-0239 in the “SEARCH” box and click “SEARCH.” Click on Open Docket Folder on the line associated with this rule.

FOR FURTHER INFORMATION CONTACT:

If you have questions on this rule, call or email MST3 Joseph Stranc, Marine Safety Unit Paducah Waterways Division, U.S. Coast Guard; telephone 270-442-1621 ext. 2124, email [email protected]

SUPPLEMENTARY INFORMATION:

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

On January 17, 2018, the Kentucky Dam Marina notified the Coast Guard that it would be conducting a fireworks display from 7 p.m. through 10 p.m. on June 30, 2018. The fireworks are to be launched from the break wall of Kentucky Dam Marina. In response, on April 26, 2018, the Coast Guard published a notice of proposed rulemaking (NPRM) titled Safety Zone; Tennessee River, Gilbertsville, KY (83 FR 18241). There we stated why we issued the NPRM, and invited comments on our proposed regulatory action related to this fireworks display. During the comment period that ended May 29, 2018, we received no comments.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register. Delaying the effective date of this rule would be contrary to the public interest because immediate action is needed to respond to the potential safety hazards associated with this fireworks display.

III. Legal Authority and Need for Rule

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Sector Ohio Valley (COTP) has determined that potential hazards associated with the fireworks to be used in this June 30, 2018 display will be a safety concern for anyone within a 350-foot radius from the fireworks launch site on the Kentucky Dam Marina break wall in Gilbertsville, KY. Hazards from firework displays include accidental discharge of fireworks, dangerous projectiles, and falling hot embers or other debris. The purpose of this rule is to ensure safety of vessels and the navigable waters in the safety zone before, during, and after the scheduled event.

IV. Discussion of Comments, Changes, and the Rule

As noted above, we received no comments on our NPRM published April 26, 2018. However, we have noticed an error in the title of the proposed rule, which included “Ohio” River, instead of “Tennessee” River. The regulatory text of this rule corrects an error in the title of the regulatory text of this temporary final rule.

This rule establishes a temporary safety zone from 6:50 p.m. through 10:10 p.m. on June 30, 2018. The safety zone will cover all navigable waters within a 350-foot radius from the fireworks launch site on the Kentucky Dam Marina break wall in Gilbertsville, KY. The duration of the zone is intended to ensure the safety of vessels on these navigable waters before, during, and after the scheduled fireworks display. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative. Persons or vessels desiring to enter into or pass through the zone must request permission from the COTP or a designated representative. They may be contacted on VHF-FM Channel 16 or by phone at 1-800-253-7465. If permission is granted, all persons and vessels must transit at their slowest safe speed and comply with all lawful directions issued by the COTP or a designated representative. The COTP or a designated representative will inform the public through Broadcast Notice to Mariners (BNMs) of the enforcement period for the safety zone as well as the date and time of enforcement.

V. Regulatory Analyses

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

A. Regulatory Planning and Review

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.

This regulatory action determination is based on the size, location, duration and time-of-day of the safety zone. Vessel traffic would be able to safely transit around this safety zone, which will impact a 350-foot designated area of the Tennessee River for approximately three hours on one evening. Moreover, the Coast Guard will issue a Broadcast Notice to Mariners (BNMs) via VHF-FM marine channel 16 about the zone, and the rule allows vessels to seek permission to enter the zone.

B. Impact on Small Entities

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard received no comments from the Small Business Administration on this rulemaking. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

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

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

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

C. Collection of Information

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

D. Federalism and Indian Tribal Governments

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

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

E. Unfunded Mandates Reform Act

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

F. Environment

We have analyzed this rule under Department of Homeland Security Directive 023-01 and Commandant Instruction 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 determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone lasting approximately three hours that will prohibit entry within 350 feet of a break wall at Kentucky Dam Marina in Gilbertsville, KY. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES.

G. Protest Activities

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

List of Subjects in 33 CFR Part 165

Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.

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

PART 165—REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS 1. The authority citation for part 165 continues to read as follows: Authority:

33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.

2. Add § 165.T08-0239 to read as follows:
§ 165.T08-0239 Safety Zone; Tennessee River, Gilbertsville, KY.

(a) Location. The following area is a safety zone: All navigable waters of the Tennessee River at mile marker (MM) 23 within a 350-foot radius from the fireworks launch site on the Kentucky Dam Marina break wall in Gilbertsville, KY.

(b) Effective date. This section is effective from 6:50 p.m. through 10:10 p.m. on June 30, 2018.

(c) Regulations. (1) In accordance with the general regulations in §  165.23 of this part, entry into this zone is prohibited unless authorized by the Captain of the Port Sector Ohio Valley (COTP) or a designated representative.

(2) Persons or vessels desiring to enter into or pass through the zone must request permission from the COTP or a designated representative. They may be contacted on VHF-FM Channel 16 or by phone at 1-800-253-7465.

(3) If permission is granted, all persons and vessels must transit at their slowest safe speed and comply with all lawful directions issued by the COTP or a designated representative.

(d) Informational broadcasts. The COTP or a designated representative will inform the public through Broadcast Notice to Mariners (BNMs) of the enforcement period for the safety zone as well as the date and time of enforcement.

Dated: June 19, 2018. M.B. Zamperini, Captain, U.S. Coast Guard, Captain of the Port Sector Ohio Valley.
[FR Doc. 2018-14020 Filed 6-28-18; 8:45 am] BILLING CODE 9110-04-P
ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R06-OAR-2017-0435; FRL-9979-15—Region 6] Approval and Promulgation of Implementation Plans; Arkansas; Revisions to Minor New Source Review Program AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

Pursuant to the Federal Clean Air Act (CAA or the Act), the Environmental Protection Agency (EPA) is approving revisions to the Arkansas State Implementation Plan (SIP) minor New Source Review (NSR) program submitted on July 26, 2010, and March 24, 2017, including supplemental information provided on November 30, 2015, May 26, 2016, July 5, 2017, July 27, 2017, and March 16, 2018. Specifically, we are proposing to approve revisions that revise the minor NSR permitting thresholds and de minimis levels, as well as, additional non-substantive revisions contained in those submittals. This final action is consistent with the requirements of section 110 of the CAA.

DATES:

This rule is effective on July 30, 2018.

ADDRESSES:

The EPA has established a docket for this action under Docket ID No. EPA-R06-OAR-2017-0435. All documents in the docket are listed on the http://www.regulations.gov website. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through http://www.regulations.gov or in hard copy at the EPA Region 6, 1445 Ross Avenue, Suite 700, Dallas, Texas 75202-2733.

FOR FURTHER INFORMATION CONTACT:

Ashley Mohr, 214-665-7289, [email protected]

SUPPLEMENTARY INFORMATION:

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

I. Background

The background for this action is discussed in detail in our September 18, 2017 proposal (82 FR 43506). In that document we proposed to approve revisions to the Arkansas SIP submitted on July 26, 2010, and March 24, 2017, including supplemental information submitted on November 30, 2015, May 26, 2016, July 5, 2017, July 27, 2017, and March 16, 2018. The revisions addressed in our proposal included revisions to the Arkansas minor NSR permitting thresholds and de minimis levels, as well as, additional revisions to the minor NSR provisions that are considered to be non-substantive.

We received one set of comments on the proposal. The full text of the comment letter received during the public comment period, which closed on October 18, 2017, is included in the publicly posted docket associated with this action at www.regulations.gov. Below the EPA provides a summary of the comments received and corresponding responses.

II. Response to Comments

Comment: The commenter stated that the revised minor NSR rule fails to provide legally enforceable procedures to ensure new sources that could interfere with NAAQS attainment or maintenance or violate the control strategy won't be allowed to construct. More specifically, they stated that the minor NSR program does not explain how “actual emissions” are to be determined for a new source with no operational history. To the extent that Arkansas Department of Environmental Quality (ADEQ) determined applicability for new sources based on projected actual emissions, then the rule could ultimately allow sources with emissions greater than the permitting thresholds to construct without a permit and without evaluation of air quality impacts by a new source underestimating emission factors and/or operating parameters and exceeding those projected emissions after its construction. Therefore, the commenter stated it is unclear what size of sources could ultimately end up exempt from Arkansas' minor NSR program. The commenter claims that because of the noted deficiencies there is a problem with any attempt to determine whether the revised minor NSR rule's applicability thresholds are set to the appropriate level to ensure the state meets the applicable federal requirements found in CAA section 110(a)(2)(C) and 40 CFR 51.160(b).

Response: This comment is not relevant to our current rulemaking. As shown in Section IV of the Technical Support Document that accompanied our proposed approval action, our rulemaking only addresses revisions to the permitting thresholds values contained in Reg. 19.401. The applicability determination for the minor NSR program and its reliance on “actual emissions” was not revised by Arkansas as part of the July 26, 2010, or May 24, 2017 SIP revision submittals. Therefore, the applicability determination as originally SIP-approved October 16, 2000 (65 FR 61103) remains unchanged, is not a part of this rulemaking, and any comment on it is not relevant to the current rulemaking.

While the comments regarding the applicability determination basis are not relevant to this rulemaking, we will respond to the commenter's assertion that any attempt to determine if the revised minor NSR permitting thresholds meet the referenced federal requirements is problematic. We do not agree with this statement. As outlined in our proposed rulemaking, we evaluated several analyses submitted by Arkansas in support of the revised thresholds, including an emissions inventory analysis, a monitoring trends analysis, and a modeling analysis. Based on our evaluation of those analyses along with the SIP revisions submittals documentation (found in the Technical Support Document (TSD)), we find that the proposed thresholds will meet applicable federal requirements and not interfere with NAAQS attainment or maintenance or violate the control strategy. As required by Reg. 19.401, a source with actual emissions greater than the applicability thresholds would be required to obtain a permit and is subject to enforcement action if the source fails to do so. The emissions from a new source to be compared with the permitting thresholds would be based on controlled emission factors and projected operations (hours of operation and/or amounts of material processed). This approach allows permitting applicability to be based on emissions that are close to actual emissions. The regulation specifically does not allow construction and operation of sources with actual emissions in excess of the thresholds, and any source that did underestimate their emissions and exceed the emissions thresholds would be in violation of the regulations and beyond the scope of the analyses conducted to demonstrate the regulation's compliance with applicable federal requirements for minor NSR programs.

Comment: The commenter stated that the rule exempting de minimis changes at existing sources from permitting fails to provide legally enforceable procedures to ensure that modified sources that could interfere with NAAQS attainment or maintenance or violate the control strategy won't be allowed to construct. More specifically, they stated a physical change or change in the method of operation at a source with no existing permit has no existing “permitted rates” to compare “proposed permitted rates” to, and the rule does not explain how applicability is determined in such cases and the rule does not clearly say that it applies only to sources with existing permits. In addition, the commenter stated that Reg. 19 does not clearly require a permit application for de minimis changes. Therefore, they claim that de minimis exemptions rule does not meet the requirements of 40 CFR 51.160(a) of providing legally enforceable procedures.

Response: We do not agree that the applicability of the de minimis changes rule to existing sources with no permits is unclear. The de minimis change provisions are found in paragraph C of Reg. 19.407 of Arkansas' “Minor Source Review” regulation (Reg. 19, Chapter 4). Reg. 19.407 is titled “Permit Amendments” and as stated in our original 2000 approval of Reg. 19.407 (65 FR 26795; finalized at 65 FR 61103), this section describes the procedures for amending a permit. Because Reg. 19.407 describes permit amendments, including de minimis changes, these provisions are not applicable to a source that does not have a permit. Existing sources with no existing permit would be subject to the minor NSR permitting thresholds found in Reg. 19.401 under the “General Applicability” section to determine if the source was subject to minor NSR permitting requirements. In addition to the clarity provided in the rule itself, the current “Air Application Instructions for Registrations, Minor Source Permits, or Title V Permits” made available on ADEQ's air permitting website also indicates that de minimis applications are for “small modifications to a permit.” (Pg. 5) 1 Page 12 of the application instructions reiterates the applicability of the de minimis rule and states that a de minimis application “applies to facilities having a current air permits [sic].” Much like the de minimis change provisions in the rule, it is clear based on ADEQ's current air permit application guidance that the de minimis change rule only applies to existing permitted facilities and not new facilities.

1 Air Application Instructions available online at: https://www.adeq.state.ar.us/downloads/WebDatabases/Air/PermitData/Forms%20and%20Instructions/Form%20and%20Instructions/Air_Permit_Application_Forms_Instructions.pdf.

The portion of the comment raised regarding permit application requirements for de minimis changes is not relevant to our current rulemaking. As shown in Section IV of the Technical Support Document that accompanied our proposed action, our rulemaking only addresses revisions related to de minimis changes that are found in Reg. 19.407(C)(2)(a) and (b). Permit application requirements, which are found in Reg. 19.404, are currently SIP-approved and were not revised as part of the July 26, 2010, or May 24, 2017 SIP revision submittals under review in this rulemaking. Similarly, Reg. 19.407(C)(7) was not revised in the 2010 or 2017 SIP revision submittals. Therefore, the SIP-approved Reg. 19.404 and Reg. 19.407(C)(7) provisions as most-recently approved on October 16, 2000 (65 FR 61103) and April 12, 2007 (72 FR 18394), respectively, remain unchanged and are not part of this rulemaking and any comment on those provisions is not relevant.

Comment: The commenter claims that Arkansas has failed to adequately justify the basis for its revised emission thresholds for exempting new sources and de minimis changes from its minor NSR program. They state that 40 CFR 51.160(e) requires states to identify the types and sizes of sources subject to its minor NSR program and to explain the basis for determining which facilities are subject to review. ADEQ's justification for the emission thresholds adopted in its minor NSR program for Reg. 19, Chapter 4, was essentially that these tons per year thresholds were the same thresholds identified as “de minimis” under major NSR permitting programs. However, there has been no analysis with current modeling techniques that the major NSR significance levels are adequate to ensure a modified source won't interfere with the attainment or maintenance of all of the various current NAAQS, which differ in stringency from the NAAQS applicable at the time the PSD significant emission rates were developed. The commenter also stated that the AERMOD (dispersion) modeling results, which they believe underestimate actual impacts, indicate that the pollutant concentrations resulting from the emissions exempt from permitting based on the revised thresholds are significantly higher than 4% of the NAAQS, which was a threshold for the EPA's analyses from 1980, 1987, and 2008 for demonstrating that the significant emission levels were de minimis to the PSD program.

Response: We do not agree with this comment. Although ADEQ did include the data referenced by the commenter in their initial 2010 SIP revision submittal, the basis for ADEQ's findings regarding the appropriateness of the revised thresholds was different and they also provided additional analyses to demonstrate the scope of the exempt sources and modifications resulting from the revised minor NSR permitting thresholds and de minimis change levels and to demonstrate that the revised thresholds will not interfere with attainment or maintenance of the NAAQS. These analyses were included in their entirety in the March 24, 2017 SIP revision submittal and included: (1) An emissions inventory analysis that determined the percentage of the total statewide emissions that were to be exempt under the revised minor NSR permitting thresholds and de minimis change levels; (2) a monitoring trends analysis that included a review of the current status of ambient air quality, as well as, the impacts of the revised thresholds on ambient concentration monitoring trends in the state of Arkansas; and (3) a modeling analysis that included photochemical and dispersion modeling analyses that evaluated the impacts of the revised thresholds through model predicted results. The air quality modeling analysis report included in Appendix D of the March 24, 2017 SIP submittal describes the modeling approach used by ADEQ as part of the demonstration showing that the revised minor NSR permitting thresholds and de minimis change levels will not adversely impact the current NAAQS. Based on our review of the modeling analysis, which did use current air quality modeling techniques, and the other analyses completed by ADEQ, we found that the impacts resulting from the revised minor NSR permitting thresholds and de minimis levels would not interfere with the state's ability to maintain compliance with the NAAQS.

As discussed in the Technical Support Document accompanying our proposed action, ADEQ conducted both regional scale photochemical modeling using CMAQ and local-scale dispersion modeling using AERMOD to examine the predicted impacts from sources or de minimis changes that would be exempt from minor NSR permitting based on the revised thresholds.2 ADEQ employed this combined modeling approach in an effort to look at both regional and local scale impacts from emissions equal to the revised thresholds for VOC, NOX, SO2, CO, PM10, and PM2.5. In both the regional- and local-scale modeling analyses, ADEQ modeled hypothetical sources with emissions equal to the minor NSR permitting and de minimis change thresholds and stack parameters set equal to median values based on the 2011 National Emissions Inventory (NEI) for Arkansas sources. As part of photochemical modeling, the maximum CMAQ-derived impacts on daily maximum 8-hour ozone, 24-hour PM2.5, annual average PM2.5, 1-hour NO2, 1-hour SO2, and 24-hour PM10 were calculated. The statewide maximum impacts for each day resulting from the hypothetical sources was added to the unmodified future year concentration for each day and grid cell. The resulting concentrations represented the worst-case ambient concentrations including impacts from the threshold emission increases at any location in Arkansas. These worst-case ambient concentrations were then used to calculate relative response factors (RRFs) to estimate future design values (FDVs) at both monitored and unmonitored locations throughout Arkansas.34 The FDVs were compared with FDVs without the thresholds increase impacts, as well as, the NAAQS in an effort to determine whether emissions increases less than the minor NSR thresholds would cause or contribute to NAAQS violations or potentially interfere with NAAQS maintenance. Similar to the regional-scale photochemical modeling, the hypothetical sources modeling in the near-field dispersion modeling analysis were modeled with emission rates equal to the minor NSR permitting thresholds and de minimis levels and stack parameters were set equal to median stack parameter based on the 2011 NEI data. The maximum AERMOD-derived impacts on daily maximum 1-hr NO2, annual average NO2, daily maximum 1-hour SO2, daily maximum 1-hour CO, daily maximum 8-hour average CO, and 24-hour average PM10 were calculated for each air quality control region. The daily AERMOD-derived concentrations were added to the CMAQ-derived concentrations for the same location, using the CMAQ values as “background.” ADEQ stated that the values determined for the statewide daily maximum impacts are expected to represent the near-field concentrations assuming worst-case impacts from threshold emission increases at a range of locations through Arkansas. The daily maximum worst case AERMOD impacts were added to the unmodified future year concentration for each day and grid cell. The resulting concentrations represented the worst-case ambient concentrations including impacts from the threshold emission increases at any location in Arkansas. Similar to the CMAQ-only modeling analysis, the worse-case modeled impacts were used to calculate RRFs and FDVs. The calculated FDVs were compared with the original unmodified FDVs and the NAAQS in order to examine the potential impacts of the proposed minor NSR threshold emissions on NAAQS attainment and maintenance. The modeling conducted by Arkansas utilized current air quality modeling techniques to demonstrate that the predicted impacts resulting from emissions at or below the revised minor NSR permitting thresholds and de minimis change levels, which happen to be equal in magnitude to the major NSR significance levels, will not interfere with the attainment or maintenance of the NAAQS current in effect at the time of the analysis—including those that were not applicable at the time the PSD significant emission rates were developed.

2 See Pages 31-32 of the EPA's Technical Support Document dated August 24, 2017, which discusses the air quality modeling analyses that were completed by ADEQ in support of the submitted SIP revisions. In addition to the TSD, additional details regarding the modeling analyses are located in the modeling report submitted as part of the March 24, 2017 SIP revisions submittal, which outlines modeling tools and techniques utilized by Arkansas along with the results from the modeling analyses. (ADEQ's modeling report located in the “ADEQ 2010 Minor NSR Permitting Thresholds and De Minimis Levels SIP Revision—Technical Support Document” dated November 2015,)

3 A RRF is the ratio of future case modeled concentrations to base case modeled concentrations, which is used to quantify the relative impacts of the emissions added to the model. In the photochemical modeling conducted by ADEQ, the base case modeled concentrations are taken from the 2015 modeling without the hypothetical sources added while the future case modeling results are taken from the 2015 modeling plus the 8 modeled hypothetical sources. Therefore, the RRFs calculated in this modeling analysis quantify the relative impacts from the additional emissions from the hypothetical sources that would be exempt from permitting based on the new thresholds/de minimis levels.

4 RRFs can be used to estimate FDVs, which are determined by applying the RRF ratios to monitored design values from the base year taken from ambient monitoring data.

Further, the entirety of the additional analyses provided by ADEQ in the March 24, 2017 SIP revision submittal, including the NAAQS non-interference modeling demonstration, was the basis of the EPA's finding that the revised thresholds were approvable. As such, a linkage to the PSD significant emission rate values and/or comparison of modeled impacts to percentage thresholds relied upon during the EPA's development of the significant emission rates in 1980, 1987, and 2008 for the PSD program was not applicable to our proposed approval of the revised minor NSR permitting thresholds and de minimis levels. Elsewhere in this final rulemaking, we have addressed the comments specifically made regarding the modeling techniques used by Arkansas and restated our finding that those techniques were reasonable and appropriate for the NAAQS non-interference demonstration required by CAA section 110(l).

Comment: The commenter stated that modified major sources exempted from major source permitting under the PSD program will also be exempt from minor source permitting under Arkansas' de minimis changes rule and that the revised minor NSR program will not pick up the slack and ensure protection of the NAAQS as was intended when EPA promulgated the 2002 revisions to the major source NSR rules.

Response: The commenter is incorrect that modifications to existing PSD major sources, which are exempt from PSD permitting, would be exempt from minor source permitting under the de minimis change rule. As discussed below, any change at an existing major NSR source (PSD source) is prohibited from using the de minimis change process because the de minimis change rule at Reg. 19.407(C) is located in Chapter 4 of Reg. 19, which does not apply to PSD sources or any modifications at those sources.

The SIP-approved Arkansas NSR program is comprised of two types of review: “Minor Source Review” and “Major Source Review”. Arkansas operates a so-called “merged, one permit” system, which is divided into these two types of review based on whether a source is required to obtain a title V operating permit. As such, “Minor Source Review”, which is contained in Reg. 19, Chapter 4, applies only to those sources that are not subject to title V permitting and require only a title I NSR authorization.5 All sources that are subject to title V, which would include PSD sources, are subject to “Major Source Review” under Reg. 26 provisions incorporated by reference in Reg. 19, Chapter 11. Therefore, all permitting at PSD sources, including all modifications, would be subject to Reg. 19, Chapter 11 “Major Source Review” under the Arkansas NSR permitting program and cannot use the de minimis change provisions, which are limited to “Minor Source Review” in Chapter 4. Only those non-title V sources that are minor under the SIP-approved definition of minor source may qualify for the de minimis change exemption found in Reg. 19.407(C). As discussed in our proposed rulemaking and the accompanying TSD, the emissions inventory analysis for the de minimis changes found that the scope of changes expected to qualify for the de minimis change exemption is very small with emissions associated with those exempted changes making up a fraction of a percent of statewide emissions. The range of percentage of statewide emissions for the pollutants determined in the emissions inventory analysis for de minimis changes was 0.0005% to 0.019%. At these levels it would require over 50 times the NOX emissions authorized in 2016 to approach 1% of the statewide emissions and over 300 times the emissions for the other pollutants.

5 As stated in our original SIP approval of Chapter 4, “[a] minor source is any source which does not meet the requirements of a major source. The Act in section 302(j) defines the terms “major stationary source” and “major emitting facility” as “any stationary facility of source of air pollutants which directly emits, or has the potential to emit, one hundred tons per year of more of any air pollutant (including any major emitting facility or source of fugitive emissions of any such pollutant, as determined by rule by the Administrator).”

The state did not rely solely on the emissions inventory analysis to demonstrate NAAQS compliance. This emissions inventory analysis was coupled with additional analyses specifically looking at ambient concentrations (monitoring trends analysis) and potential ambient impacts (modeling analysis) that were completed by ADEQ as part of the 110(l) demonstration. The results from the modeling analysis indicate that while the addition of the exempt emissions did result in slight increases in the model predicted impacts, it did not violate the NAAQS. As such, the modeling analysis portion of the 110(l) demonstration shows that revised minor NSR program will continue to ensure NAAQS protection.

EPA's intent at the time of promulgation of the 2002 revisions to the major source NSR rules is not relevant here. What is relevant here is the approvability of these revisions in the context of the current regulatory framework as promulgated. The commenter has not cited any ambiguous regulatory language in order to justify an examination of EPA's intent. In the absence of any ambiguity in regulatory language it is not necessary to address EPA's intent here as there is no dispute regarding interpretation on the applicable rules.

Comment: The commenter stated that EPA has previously required minor NSR programs to use much smaller emission thresholds than the major modification significant impact levels and gave the example of the Montana minor NSR program includes a de minimis increase exemption threshold of 5 TPY, which was approved by EPA, after a 15 TPY threshold that was initially set by Montana was not approved by EPA into the SIP.

Response: In the case of Montana, which was referenced by the commenter, the state did not provide an adequate demonstration to support the approval of the 15 TPY exemption threshold that was initially established by the state into the SIP. The state later revised the threshold to 5 TPY and submitted this threshold for SIP approval along with an analysis to show that the 5 TPY exemption would not interfere with NAAQS attainment or maintenance or violate the control strategy. Based on the revised submittal and supporting information, EPA approved the lower threshold of 5 TPY into the Montana SIP. Our proposed approval of the de minimis change levels in Arkansas does not contradict the previous Montana approval. In fact, our proposed approval mirrors the Montana SIP approval in that we requested analyses from Arkansas as part of the 110(l) demonstration for the revised de minimis change levels and our approval is based on those analyses as documented in the proposed rulemaking. Specifically, we found that Arkansas' documentation adequately demonstrates that these revised thresholds will not interfere with NAAQS compliance. Our approval of one de minimis exemption threshold level in one state does not preclude the approval of a different threshold in another state. Each state's universe of minor NSR sources, meteorology, and ambient air quality conditions are unique and influence the types of exemptions that would not interfere with the minor NSR program's ability to meet the applicable federal requirements.

Comment: The commenter stated that the de minimis change rule contradicts with how applicability is determined under PSD permitting requirements and thus fails to ensure projects that should be required to obtain a PSD permit will not be instead considered a de minimis change under Reg. 19.407(C). They also state that EPA must disapprove the current submittal and require Arkansas to revise its de minimis rule and relevant definitions rule to clearly state that changes that are considered major modifications under the PSD permitting regulations cannot be considered as de minimis changes. Without such language clearly stated, the Arkansas minor NSR program could allow sources that would otherwise be subject to PSD permitting to improperly avoid major source PSD permitting requirements for a major modification. The commenter also states that EPA must disapprove the version of Reg. 19.407(C) currently approved into the SIP which EPA has reopened with this action to the extent the provisions could interfere with compliance with the PSD permitting regulations.

Response: We agree with the commenter that changes that are considered major modifications under the PSD permitting regulations cannot be considered as de minimis changes. However, the commenter is incorrect that the revisions to the de minimis change provisions will interfere with proper implementation of the PSD permitting requirements. As previously stated in our responses, the de minimis change rules contained in Chapter 4 of Reg. 19 cannot be used for any changes at PSD sources/modifications. Therefore, our proposed approval of revisions to Chapter 4, including the de minimis change rule, will not impact PSD permitting implementation. Changes that are considered major would be subject to permitting under Reg. 26 is incorporated by reference in Chapter 11, which utilizes an actual-to-projected actual test for modifications to existing units and an actual-to-potential test for new units, are not exempted from the requirements of Chapter 11 by the provisions we are approving in this rulemaking. As noted in Section IV of the TSD, we are not taking action on any portion of Chapter 11 and the requirements of that chapter, which mainly incorporate by reference the requirements of the federal PSD program at 40 CFR 52.21, remain in effect.

Regarding the commenter's statement that EPA should take action to disapprove Reg. 19.407(C) as it is currently approved into the SIP, aside from the revisions to 407(C)(2)(a) and 407(C)(2)(b) which are clearly annotated in Section IV of the TSD, the other portions of Reg. 19.407 are not being revised by our current rulemaking.6 Therefore, the other SIP-approved portions of Reg. 19.407 will remain unchanged by our rulemaking. As previously stated in our responses, any comment on provisions that are not being revised as part of our rulemaking is irrelevant to this action. Further, our current rulemaking does not reopen the current SIP-approved and unchanged provisions for any action, including disapproval.

6 Reg. 407(C)(2)(a) and (b) contain the de minimis change emissions and air quality impacts thresholds.

Comment: The commenter stated that because the minor NSR revisions could allow for increased deterioration in air quality over PSD baseline concentration the EPA cannot approve such a SIP revision without a demonstration that it will not cause or contribute to a violation of the applicable PSD increment. The commenter listed the following as chances for increased deterioration resulting from the SIP revision: (1) The minor NSR SIP revisions submitted by ADEQ allow for an increase in allowable emission rates to occur under the de minimis provisions of Reg. 19.407(C)(7); (2) Reg. 19.417 allows sources currently holding permits pursuant to Reg. 19 but whose emissions are below the permitting thresholds to submit a registration request under Reg. 18.315, which is a state-only rule and not part of the SIP, and request that their permit containing federally enforceable requirements be terminated; and (3) to the extent ADEQ ensures compliance with the PSD increment as part of its minor NSR program, the relaxation in the sizes of sources and modifications subject to minor NSR permitting also could allow increased deterioration of air quality above baseline concentration. The commenter also stated that the modeling analysis provided by ADEQ to support approval of the minor NSR relaxations included violations of the Class I and Class II PM10 increments that were predicted due to the increased emissions thresholds that would exempt from minor NSR review under the proposed SIP revision, which indicates that an unpermitted source pursuant to the expanded exemptions from Arkansas' minor NSR could cause an exceedance of the PM10 increment. The commenter also stated that pursuant to CAA section 110(l) and 40 CFR 51.166(a)(2), EPA cannot approve a SIP submittal which admittedly allows a violation of the PSD increments.

Response: We agree with the commenter that the revisions to the Arkansas minor NSR program do allow larger increases in allowable emissions to be authorized via the de minimis change rule by increasing the de minimis change thresholds. We also agree that the revisions allow currently permitted sources with emissions that fall between the old minor NSR permitting thresholds and the revised permitting thresholds to submit a registration under Reg. 18.315 and request that their Reg. 19 permit be terminated. However, the applicable legal test for determining approvability of these revisions, which revise the minor NSR program so that it becomes less stringent, is the requirement of CAA section 110(l), EPA cannot approve a revision to the SIP if it interferes with applicable requirements of the Act. The PSD increment requirement found at 40 CFR 51.166(a)(2) is inapplicable here because it is required to be met by a major source/major modification application, not a minor NSR permitting application. The major source/major modification application must show that the PSD increment is not violated and the applicant's modeling must include the emissions from all of the nearby minor sources, as well as any other nearby major sources. If the major source/major modification modeling shows the PSD increment will be violated by the proposed construction/modification, then the major source/major modification must reduce its requested emissions or obtain reductions from the other sources impacting the increment. Because the burden of not violating the PSD increment is placed on the source subject to PSD, the PSD increment requirement does not apply to a minor NSR permitting SIP. As stated previously in our responses to the commenter, the PSD increment requirements are contained in the PSD rules under 40 CFR 51.166 and apply only to sources subject to PSD. They do not apply to minor sources. Therefore, an increment analysis would only be required to be completed as part of a PSD permitting action (Reg. 19, Chapter 9) and would be a separate analysis than that completed as part of the NAAQS demonstration. Further, the air quality modeling that was conducted by Arkansas was conducted for NAAQS compliance demonstration purposes as part of the 110(l) non-interference demonstration. (See the March 24, 2017 SIP Revision Submittal, Appendix D—Air Quality Modeling Analysis of Minor Source Permit Thresholds.) Because the PSD increment analysis and NAAQS analysis serve separate and distinct purposes, these analyses use different modeling approaches and often different model inputs. Therefore, a modeling demonstration conducted for NAAQS compliance cannot be relied upon to make a modeled PSD increment analysis determination, such as if a PSD increment violation exists. Therefore, we do not agree with the commenter that the NAAQS modeling indicates that the proposed SIP revision allows a violation of the PSD increments. We also do not agree that the modeled PM10 impacts exceed the referenced increments because the state's modeling analysis did not include a PSD increment analysis for comparison with the PSD increments to determine if a predicted exceedance occurred. In addition, we reiterate that a PSD increment analysis is not necessary as part of a 110(l) analysis to support revisions to a minor NSR permitting program, since the federal PSD increment analysis requirement at 40 CFR 51.166(a)(2) is not applicable to minor NSR programs.

Comment: The commenter stated that a comparison of emissions that could be exempt from the relaxed minor NSR with total statewide emissions across the state of more than 53,000 square miles does not give any indication of whether the exempted emissions would interfere with attainment or maintenance of the NAAQS or increments. As such, the commenter stated that the emissions comparison analysis does not provide information relevant to whether the relaxations to Arkansas' minor NSR program will interfere with attainment or maintenance of the NAAQS or any other CAA requirement.

Response: We do not agree with the commenter that the emissions inventory analysis for the emissions exempt from minor NSR permitting based on the revised permitting thresholds does not provide information that is relevant to the 110(l) analysis. This analysis serves to determine the scope, or portion of emissions that would not undergo minor NSR permitting requirements relative to the statewide emissions. The approach to determine the scope is independent of the physical size of the state since the emissions inventory analysis was conducted to compare exempt emissions with the statewide emissions inventory. As detailed in our proposed rulemaking the scope of emissions anticipated to be exempt from minor NSR permitting by the revised permitting thresholds was minimal. The pollutant-based emissions inventory analysis showed that the scope of emissions exempt from permitting based on the revised permitting thresholds ranged from 0.006% to 0.125% of the total statewide emissions. This analysis clearly demonstrates that the magnitude of emissions that would be exempt from minor NSR permitting program makes up an extremely small portion of the statewide emissions. The state did not rely solely on the emissions inventory analysis to demonstrate NAAQS compliance. This emissions inventory analysis was coupled with additional analyses specifically looking at ambient concentrations (monitoring trends analysis) and potential ambient impacts (modeling analysis) that were completed by ADEQ as part of the 110(l) demonstration. The modeling trends analysis looked specifically at the current status of ambient air quality and the trends in ambient concentrations since the 2008 state adoption and on-going implementation of the revised minor NSR permitting thresholds. The modeling analysis examined the potential impacts of the exempt emissions on ambient air quality via local and regional air quality modeling. (See the March 24, 2017 SIP Revisions Submittal Appendix C—2010 Minor NSR Permitting Thresholds and De Minimis Levels SIP Technical Support Document and Appendix D—Air Quality Modeling Analysis of Minor Source Permitting Thresholds. Monitoring analysis is discussed on pages 3-17 of Appendix C. Modeling analysis is discussed on pages 17-25 of Appendix C and pages 1-35 of Appendix D.) Regarding interference with increments, we previously responded regarding the non-applicability of PSD increment requirements to the 110(l) analysis completed for this rulemaking.

Comment: The commenter stated that ADEQ's emissions analysis was incomplete because it analyzed sources with allowable emissions less than the emission thresholds of Reg. 19.401 when the exemptions for new sources are not based on “allowable emissions,” but instead are based on “actual emissions.” The commenter also claimed the analysis was incomplete because it does not project total emissions that might be exempt from minor NSR in the future and instead reflects on sources that may request permits to be revoked because they are no longer subject to minor NSR permitting requirements found in Reg. 19, Chapter 4.

Response: We do not agree with the commenter that the emissions inventory analysis conducted for the permitting thresholds exemptions was incomplete. In their analysis, ADEQ compiled a complete list of all currently permitted minor NSR sources and determined which currently permitted sources would not be required to obtain a permit based on the revised permitting thresholds. It is important to note that this analysis included the review of all currently permitted facilities in the minor NSR program which spanned the entirety of the program—meaning all active minor NSR permits that had been issued by ADEQ. EPA originally SIP-approved the Arkansas construction permitting requirements in October 1976 (effective November 1976).7 This means that ADEQ looked at all minor NSR permits that had ever been issued and were still active. To determine the percentage of emissions exempt from permitting, the permitted emission rates were totaled for each pollutant and compared with the total emissions from the statewide emissions inventory. The state's analysis based on the permitted allowable emissions is more conservative than the use of actual emissions for those permitted sources since they represent the maximum permit allowable emissions for the particular source. In most cases, the actual emissions would be less than the allowable emissions because of actual operations at less than maximum levels during a given calendar year and because of non-operational periods that may have taken place. If the state had further refined their analysis to determine the historical actual emissions emitted by the currently permitted sources which would not be required to be permitted under the new thresholds and compared the total actual emissions with the total statewide emissions inventory, the actual emissions would be expected to make up an even smaller fraction of the total statewide emissions.

7 EPA originally approved the Arkansas requirements for permitting the construction of new and modified sources, which were contained in the Regulation of Plan (ROP) Section 4—Permits, on October 5, 1976, effective November 4, 1976. (41 FR 43904) EPA later approved the recodification of the permitting requirements for minor sources from ROP Section 4 into Regulation 19, Chapter 4—Minor Source Review on October 26, 2000, effective November 15, 2000. (65 FR 61103)

As stated above, Arkansas conducted the emissions review as a part of the 110(l) demonstration to determine the scope of emissions that were previously subject to minor NSR permitting that would be exempt from permitting under the revised thresholds. As stated above, Arkansas reviewed their entire minor NSR permitting universe, which included all active permits that had historically been issued by ADEQ, to determine the currently permitted emissions that would be exempt from minor NSR permitting under the revised permitting thresholds.8 They found that the magnitude of currently permitted emissions that would be exempt from minor NSR permitting was a fraction of a percent of the total emissions in the statewide emissions inventory. (The range of calculated percentages by pollutant was 0.006% to 0.125%.) While emissions will be exempt in the future, the emissions inventory analysis shows the percentage of statewide emissions that were exempt from permitting for the entire minor NSR program based on the revised permitting thresholds indicates that the magnitude of emissions exempt from minor NSR permitting in the future will continue to make up a small fraction of the total statewide emissions. In addition, the state's regulations require that a source exempt from minor NSR permitting based on the new revised permitting thresholds but with emissions greater than the previous thresholds obtain a registration in accordance with Reg. 18.315, which allows ADEQ to keep track of the sources exempt as a result of the new thresholds. In addition to the emissions inventory analysis, Arkansas provided additional analyses, both monitoring and modeling, to further show the limited potential impacts of the revised minor NSR permitting thresholds. The monitoring analysis examined statewide ambient air quality data since the adoption of the revised minor NSR permitting thresholds in 2008 for CO, NOX, SO2, VOC, and PM10, including the examination of trends in design values (DVs). Since adoption of the revised thresholds, the DVs remain unchanged or show downward thresholds since the 2008 adoption of revised thresholds.9 The modeling analysis included regional-scale photochemical and local-scale air dispersion modeling to examine the potential impacts from emissions exempt from minor NSR permitting based on the revised thresholds. (See the March 24, 2017 SIP Revision Submittal, Appendix D—Air Quality Modeling Analysis of Minor Source Permit Thresholds.) As expected, both the regional and local modeling indicated some increases in model predicted concentration as a result of adding the exempt emissions into the modeled emissions inventory. However, for all pollutants and averaging period, the resulting ambient concentrations were less than the corresponding NAAQS. As stated in our proposed rulemaking, we find that the analyses submitted by Arkansas as part of the 110(l) demonstration show that the revised thresholds will not interfere with attainment or maintenance of the NAAQS.10

8 Ibid.

9 The Springdale ozone monitor was the only exception and showed increased DVs since 2008. ADEQ did further evaluation of the Springdale monitor and determined that the increase in the monitored ozone DVs at this monitor are likely due to the increase in mobile emissions in the Fayetteville-Springdale-Rogers MSA as a result of rapid population growth in that area (population grew by over 65,000 people in the 2007-2014 timeframe. The monitoring trends analysis included in the March 24, 2017 SIP submittal indicated that the 2012-2014 DV at the Springdale monitor was 67 ppb (as compared with the 2008 and 2015 O3 NAAQS of 75 and 70 ppb, respectively).

10 EPA's review of the monitoring and modeling analyses is detailed in Pages 27-33 of the Technical Support Document that accompanied our proposed rulemaking and if available in the docket.

Comment: The commenter stated that the emissions inventory analysis of the de minimis increases allowed (based on the 2016 de minimis approvals) is not persuasive because, the increased de minimis thresholds have not yet been approved as part of the SIP, and thus it is not reasonable to assume that all sources that might take advantage of this rule did take advantage of this rule in 2016. The commenter also states that because the revised minor NSR permitting thresholds and de minimis levels have not been approved as part of the SIP, the state cannot infer anything in the monitoring trends analysis regarding the impacts of the revised minor NSR rules on air pollutant concentrations from reviewing past monitoring data and trends since it is likely that sources would be unwilling to rely on the revised values prior to SIP approval.

Response: We do agree with the commenter's claims that the SIP approval status of the revised minor NSR permitting thresholds and de minimis change levels impacts the validity or persuasiveness of the data included in the emissions inventory and monitoring trends analyses. While the revised de minimis change rule provisions are not approved into the current Arkansas SIP, they are adopted by the state into the state regulations and thereby state law. The CAA requires states to adopt, after reasonable notice and public hearings, revised regulations for submission to EPA as SIP revisions. (See CAA 110(a)(1)). Since adoption of the revised permitting thresholds and de minimis change levels into their states regulations, Arkansas has been implementing those revised levels through the issuance of Reg. 18 registrations and de minimis change approvals. Lookback information regarding the historical de minimis change approvals was specifically cited in the emissions inventory analysis portion of the 110(l) demonstration. The calendar year (CY2016) de minimis change approvals included approval issued based on the revised thresholds that were adopted as state law December 2008 (effective January 2009). ADEQ has subsequently provided more information regarding the number of Reg. 18 registrations (issued to those sources exempt from minor NSR permitting with emissions that fall within the old and revised permitting thresholds) submitted and de minimis change approvals issued since the adoption of the revised regulations. This additional lookback information clearly indicates that sources have been utilizing the revised thresholds—75 registrations have been submitted since the permitting thresholds were revised and 476 de minimis change actions have taken place since 2010.11 Because state law requires that if a source used either the minor NSR permitting thresholds or de minimis changes levels to avoid minor NSR permitting the source must submit the required registration (in accordance with Reg. 19.417 and Reg. 18.315) or obtain the required approval (in accordance with Reg. 19.407(C)(6)), a source not accounted for in the lookback information provided by ADEQ would have been, and still is, in violation of state law. Furthermore, ADEQ has indicated that since the adoption of the revised minor NSR permitting thresholds and de minimis change levels, they are not aware of any instance where a source has been unwilling to utilize the revised thresholds because of the status of the revisions with respect to the SIP.12 Based on the historical information provided, we find that the data included in the emissions inventory and monitoring trends analyses is valid and reflects the reality and do not agree with the commenter that nothing can be inferred from those analyses regarding the impacts of the revised minor NSR permitting thresholds and de minimis levels. Following adoption of the revised permitting thresholds and de minimis change levels in 2008, Arkansas began implementing the revised provisions (at the owner or operator's own risk of federal enforcement) to exempt qualifying sources from minor NSR permitting requirements. The persuasiveness of data used in the monitoring trends analysis is not dependent on the SIP approval status.

11 The number of Reg. 18 registrations submitted and de minimis change actions provided via emails received from Ms. Tricia Treece, ADEQ, on July 5, 2017.

12 Information regarding source inquiries to utilize SIP-approved thresholds instead of revised thresholds provided during telephone discussion between Ms. Ashley Mohr, EPA, and Mr. Thomas Rheaume and Ms. Tricia Treece, ADEQ, on March 16, 2018.

Comment: The commenter stated that the de minimis exemption is based on a comparison of allowable emissions increases, thus it could allow larger increases in actual emissions than the tpy emissions thresholds in Reg. 19.407(C). Thus, the commenter states that any analysis, including the emissions inventory analysis, presented by ADEQ about the thresholds is not sufficient to ensure that the actual emissions increases allowed by the de minimis exemption will not threaten NAAQS attainment or maintenance or otherwise interfere with the control strategy. Similarly, the commenter also stated that the photochemical modeling also did not model the true increase in emissions that could be allowed—the actual emissions increases resulting from a de minimis change could be significantly higher than the de minimis levels and the actual emissions from a new source could exceed projected actuals that were used as a basis to exempt the source from permitting.

Response: We do not agree with the commenter that the emissions inventory analysis and modeling analysis provided by ADEQ is not sufficient to support the proposed revisions to the de minimis change levels. Also, we do not agree with the commenters that the analysis provided by Arkansas did not model the true increase in emissions that could be allowed under Arkansas' relaxed minor NSR program (i.e., those emissions exempt from minor NSR permitting requirements based on the revised permitting thresholds and de minimis change levels) under the revised minor NSR program. As stated in our proposed rulemaking, the de minimis change levels listed in Reg. 19.407(C)(2)(a) are the maximum increases in permitted emission rates that can be exempt from minor NSR permitting requirements via the de minimis change rule. As such, to demonstrate that the proposed SIP revision resulting in revised de minimis change levels will not interfere with NAAQS compliance, it is reasonable that the 110(l) demonstration should evaluate the projected impacts resulting from the maximum emission increases allowed by the revised rule (i.e., the de minimis change levels). As documented in the modeling report submitted as part of the March 24, 2017 SIP revision submittal, Arkansas did follow this approach in their 110(l) demonstration and evaluated the impacts resulting from emission rates equal to the de minimis change levels. (See the March 24, 2017 SIP Revision Submittal, Appendix D—Air Quality Modeling Analysis of Minor Source Permit Thresholds.) When a source seeks authorization for a proposed change at a facility via the de minimis change provision, they are requesting authorization specifically for the increase in the permitting emission rates. The previously permitted emission rates underwent a previous minor NSR permitting review and were demonstrated to be in compliance with the NAAQS. Evaluation of emissions accounted for in the pre-de minimis change permitted emission rates, which were previously authorized and evaluated for NAAQS compliance under an existing permit, are beyond the scope of the 110(l) analysis for the revised de minimis change levels. Therefore, a NAAQS demonstration associated with the potential impacts from a de minimis change should be based on the magnitude of increases in the permitted emission rates, which are being authorized via the de minimis change rule. With respect to the photochemical modeling, the purpose of the modeling analysis submitted by Arkansas was to demonstrate that those emissions exempt from permitting based on the revised thresholds would not cause a NAAQS violation.

In the case of a new source that has actual emissions in excess of the minor NSR permitting thresholds without an issued permit authorizing those emissions, the source would be in violation of the minor NSR permitting requirements contained in Reg. 19, Chapter 4, and they could be subject to an enforcement action. For example, if a source was initially constructed as a seasonal source with emission below the de minimis levels, it is exempt from permitting. However, if the source's actual emissions rise above those levels without first obtaining a permit, it would be in violation of minor NSR. It is reasonable (for the purposes of demonstrating compliance with 110(l)) to assume a new source would be required to obtain a permit to authorize the emissions and demonstrate they will not cause or contribute to a violation of a NAAQS if they have actual emissions above the minor NSR permitting thresholds. Therefore, the scenarios involving potentially violating sources are not a reasonable scenario to be included in an analysis conducted to support the minor NSR permitting thresholds.

In the case of a de minimis change, the emissions exempt from minor NSR permitting by the de minimis change rule are the increases in the permitted emission rates. For the de minimis revisions to be approvable the analysis should demonstrate that the increases in the permitted emissions will not cause a NAAQS violation. By modeling the minor NSR permitting thresholds and de minimis change levels for each pollutant, Arkansas did evaluate the prospective impacts associated with the emission levels that could qualify for exemption from minor NSR permitting requirements under the revised rule.

Comment: The commenter stated that the analysis of the de minimis increases allowed (based on the 2016 de minimis approvals) is not persuasive because 2016 only reflects one year of implementation and this rule will be in effect for the foreseeable future.

Response: We do not agree with the commenter that the emissions inventory analysis for the de minimis changes is not persuasive because it is limited to 2016. CY2016 provides a portion of time when the revised thresholds were being relied upon by owners and operators in Arkansas. The review of emissions associated with de minimis changes limited to CY2016 found that the 2016 emissions inventory analysis shows the percentage of statewide emissions exempt by the de minimis change levels in the range of 0.0005 to 0.019%. While the analysis was limited to one calendar year, as discussed in our proposal, at these percentage levels it would require over 50 times the NOX emissions authorized in 2016 to approach 1% of the statewide emissions and over 300 times the emissions for the other pollutants. In addition, this analysis conservatively did not account for any emissions decreases occurring as part of the approved de minimis changes. In addition, the analysis for 2016 was conservative in that it did not account for emissions decreases that did occur as part of the de minimis changes. We believe that additional analysis beyond one calendar year is unnecessary because the CY2016 data, that did not account for any associated emissions decreases, shows that exempt emissions makes up such a small fraction (much less than 1% for all pollutants) of the total statewide emissions.

Comment: The commenter restates that a comparison of emissions that could be exempt from minor NSR permitting based on the revised de minimis change levels with total statewide emissions does not give any indication of whether the exempt emissions would interfere with attainment or maintenance of the NAAQS because of the various factors (such as: Stack parameters, operational stages, topography, and meteorology) that dictate ambient impacts. Because of the variability of these factors between sources, the commenter stated that the fact that two sources have similar annual emissions is not a rational basis to claim that they have similar ambient impacts.

Response: We do agree with the commenter that a variety of factors may dictate ambient impacts, and that reliance on the state's emissions inventory analysis does not demonstrate non-interference with the NAAQS. Instead, the emissions inventory analysis serves to determine the scope, or portion, of emissions that would not undergo minor NSR permitting based on the revised thresholds. However, the state did not only rely upon the emissions inventory analysis to demonstrate NAAQS compliance. The state addressed ambient concentrations and potential ambient impacts by looking specifically at the current status of ambient air quality, the historical ambient air quality trends since adoption in 2008 and the on-going implementation of the revised de minimis levels, and the potential impacts of the exempt emissions on ambient air quality via local dispersion (AERMOD) and regional photochemical (CMAQ) air quality modeling. As previously discussed in our responses, the monitoring analysis shows that since the adoption and implementation of the revised permitting thresholds and de minimis change levels the overall trends in DVs are either unchanged or decreasing. Meanwhile, the local and regional modeling analyses show that model predicted concentrations resulting from the addition of the emissions exempt from permitting remain less than the NAAQS. (See the March 24, 2017 SIP Revision Submittal, Appendix D—Air Quality Modeling Analysis of Minor Source Permit Thresholds.) While the emissions inventory analysis served to determine the scope, or portion of emissions that would not undergo minor NSR permitting requirements based on the revised de minimis change levels relative to the statewide emissions, the monitoring and modeling analyses completed as part of the 110(l) analysis accounted for the various factors cited by the commenter in evaluating the impacts of the revised de minimis levels. Specifically, the results from the air quality modeling analyses were impacted by the following factors, which are included as air quality model inputs: Emissions, stack parameters, topography and meteorology.

Comment: The commenter stated that there are numerous other factors that came into play during the same timeframe that could cause pollutant concentrations to decrease in the timeframe right after the December 2008 adoption of the minor NSR rule relaxations, including: The Great Recession began in 2007 and continued through 2009; natural gas prices dropped significantly and renewable sources of power generation became more competitive, reducing demand for coal-fired power plants which was replaced by gas turbines and renewables; various vehicle emission and liquid fuel standards came into effect; and less fuel efficient vehicles were replaced with more fuel efficient vehicles. The commenter stated that these factors make it very difficult for ADEQ to infer anything regarding the relaxations to its minor NSR program through the review of how air monitoring design values have changed over time.

Response: We agree that the monitoring data reflects not only the impacts of the revised thresholds and de minimis levels, but other factors such as those cited by the commenter as well. However, the monitoring analysis does show that since Arkansas' adoption in 2008 and ongoing implementation of the revised values, the monitored ambient concentration data shows no NAAQS issues along with overall decreasing trends in DVs for some pollutants indicative of improved air quality since 2008. The monitoring analysis submitted by Arkansas spanned eight years of ambient data (2007-2014, which includes and extends beyond the time period referenced as “the Great Recession” by the commenter). The 8-year period covered in the ambient monitoring study is a reasonable and representative period of time to examine the impacts of the revised thresholds while also accounting for the variability in the other factors that may contribute to ambient concentrations. Further, we would like to point out that a NAAQS demonstration, including demonstrations of non-interference with attainment or maintenance of the NAAQS under section 110(l), should reflect ambient air quality as a whole, which would take into account the impacts on ambient concentrations resulting from the revised minor NSR regulations, as well as, the other factors mentioned by the commenter. As shown in the referenced monitoring analysis, the resulting ambient concentrations including the impacts from the minor NSR program revisions do not indicate NAAQS compliance issues. As stated in our proposal, the monitoring trends analysis is one part of the demonstration provided by Arkansas that supports the finding that the revised permitting thresholds and de minimis levels will not adversely impact NAAQS attainment or maintenance. In addition to the monitoring analysis, the modeling analysis is an important element of the NAAQS compliance demonstration and as discussed in our proposed rulemaking and previous responses, the modeling results indicate that the addition of the emissions exempt from minor NSR permitting requirements will not interfere with NAAQS compliance. (See the March 24, 2017 SIP Revision Submittal, Appendix D—Air Quality Modeling Analysis of Minor Source Permit Thresholds.)

Comment: The commenter stated that because the state does not have a monitoring network that covers all pollutants and all areas of the state where industrial sources are constructing and operating, a review of the monitoring data from Arkansas monitors provides an incomplete picture of the NAAQS attainment status around the state.

Response: We do not agree that Arkansas' submittal provided an incomplete picture of NAAQS attainment around the state. The ambient monitoring analysis was one part of the demonstration provided by the state to meet the 110(l) requirement. The monitoring trends analysis discussion included in Appendix C of the March 24, 2017 SIP revision submittal includes a figure showing the Arkansas Ambient Air Monitoring Network. This network includes ambient monitoring for the NAAQS 13 at monitoring sites located throughout the state in accordance with federal requirements.14 The State of Arkansas' ambient air monitoring network is reviewed each year to ensure the air quality surveillance system continues to meet applicable requirements. The most recent review of the ambient air monitoring network for Arkansas, the 2017 Annual Monitoring Network Plan, was reviewed and approved by EPA on October 3, 2017, as meeting the requirements of 40 CFR and its appendices. The analysis of the available monitoring data does provide valuable information about the current ambient air quality in the state, and the historical trends analysis of the data shows that since the adoption in 2008 and the ongoing implementation of the revised exemption thresholds, ambient air quality has not been adversely impacted. In fact, as discussed in our proposed rulemaking, for several pollutants the ambient air quality has shown continued improvements since the state adoption and implementation of the revised thresholds. This information was supplemented by the additional analyses conducted by Arkansas, one of which specifically addresses the comment regarding the completeness of the picture of attainment status around the state. As discussed in our proposed rulemaking, Arkansas completed a modeling analysis to determine the potential impacts from sources exempt from permitting based on the revised minor NSR permitting thresholds and de minimis change levels, which included statewide modeling. (See the March 24, 2017 SIP Revision Submittal, Appendix D—Air Quality Modeling Analysis of Minor Source Permit Thresholds.) Arkansas conducted photochemical modeling to support the revised thresholds based on a previous statewide modeling effort conducted for the 2008 base year and the 2008/2015 future year scenarios. For the minor NSR thresholds analysis, the future year (2015) emissions inventory was modified to include eight hypothetical point sources that were distributed throughout the state's Air Quality Control Regions. The emission rates for each of the hypothetical sources were set equal to the revised minor NSR permitting thresholds and de minimis levels. The statewide maximum impacts for each day resulting from the hypothetical sources was added to the unmodified future year concentration for each day and grid cell. The resulting concentrations represented the maximum ambient concentrations including impacts from the threshold emission increases at any location located throughout Arkansas. While the results from the photochemical modeling showed that while the addition of the hypothetical source emissions may increase the predicted concentrations within most grid cells, the calculated FDVs were still less than each of the NAAQS at each monitoring site. (See the March 24, 2017 SIP Revision Submittal, Appendix D—Air Quality Modeling Analysis of Minor Source Permit Thresholds.)

13 EPA has set National Ambient Air Quality Standards for six principal pollutants, called criteria pollutants: Carbon Monoxide (CO), Lead (Pb), Nitrogen Dioxide (NO2), Ozone (O3), Particulate Matter (PM), and Sulfur Dioxide (SO2), as indicated in 40 CFR part 50 and appendices.

14 See 40 CFR part 58 and its appendices for federal requirements related to measuring ambient air quality and for reporting ambient air quality data and related information.

Comment: The commenter stated that it is not appropriate to rely on a modeling assessment intended to estimate future pollutant concentrations out to 2015 to assess whether Arkansas' relaxed minor NSR program will interfere with attainment or maintenance of the NAAQS. The commenter based their statement on the possibility that some of the rules that were relied on for the 2015 emission inventories could go away, the possibility of an economic boom in the state, the possibility of growth in a certain type of industry, or a combination of these events, which in turn could result in the approval of this SIP relaxation interfering with attainment or maintenance of the NAAQS in the future despite the CMAQ (photochemical) modeling predictions for 2015.

Response: We do not agree with the commenter that the use of the future year (FY) modeling for 2015 is not appropriate.15 Arkansas submitted several analyses as part of the 110(l) demonstration, with the modeling assessment being one part of the demonstration submitted to support the proposed revisions to the Arkansas SIP. As such, our determination regarding the approvability of the SIP revisions relied on the combined demonstration and not just one element. Regarding the use of the future year modeling, Arkansas used this modeling in combination with the baseline modeling to determine RRFs both with and without the hypothetical exempt sources to calculate FDVs) 161718 These FDVs were used to compare and contrast those DVs and determine the potential impacts of the exempt sources. This approach allowed for a quantitative comparison to determine what potential impacts would be expected from the additional emissions associated with sources and/or de minimis changes that would be exempt from minor NSR permitting requirements based on the revised thresholds. The quantitative comparison provided information regarding relative difference in impacts both with and without the newly exempt emissions compared with the NAAQS. When conducting future year modeling, informed assumptions must be made and some of these assumptions may differ from the actual real world conditions present when the future year becomes the present.19 However, it is important to note that the future year modeling approach was conducted in order to quantify the relative change in ambient concentrations resulting from the added potential impacts from the newly exempt sources using RRFs. Specifically, this analysis results in the calculation of FDVs both with and without the hypothetical source emissions and the difference between the FDVs represents the modeled predicted impacts from those emissions on ambient concentrations. The results of this quantitative comparison of ambient impacts with and without the newly exempt sources are not expected to deviate significantly, even with actual real world conditions potentially being different than the assumed modeled conditions, since the analysis focused on the relative impacts of the addition of the hypothetical source emissions. We believe that the future year modeling approach used by Arkansas that focused on the quantitative difference in the relative ambient impacts with and without the hypothetical sources is reasonable and informative for a 110(l) demonstration in that it specifically evaluated the impacts from newly exempt emissions based on revised minor NSR permitting thresholds and de minimis levels. The concerns raised by the commenter regarding the state's ability to predict the exact conditions of a future year do not change our determination that this approach is reasonable. In fact, the inclusion of informed assumptions in a future year modeling analysis is not only reasonable, but also necessary, since neither we nor Arkansas can know with any certainty what emissions and/or sources may change in the future. The inclusion of informed assumptions in the modeling analysis provides a reasonable estimate of future levels, given the inability to foresee the future. If ADEQ modified or removed any SIP-approved regulations (as relied upon to make these assumptions) and relax the SIP and render them substantially inadequate to attain or maintain the relevant NAAQ's standard, EPA has the authority to publish a SIP call Federal Register notice requiring the state to adopt and submit a 110(l) justification for the relaxation. Regarding the commenter's concern with potential boom in industrial growth, those sources seeking a construction permit, such as a PSD permit, would have to demonstrate NAAQS compliance as part of their permit application modeling. As such, we find that the state's analysis based on future year photochemical modeling, along with the additional modeling, monitoring, and emissions inventory analyses, demonstrate that the revised thresholds are not expected to adversely impact the state's ability to attain and maintain the NAAQS.

15 Arkansas's initial statewide criteria pollutant modeling was conducted prior to 2015 using base case years of 2005 and 2008 and a future year of 2015. The final modeling report detailing this initial modeling entitled “Criteria Pollutant Modeling Analysis for Arkansas” dated July 28, 2014 was included in the March 24, 2017 SIP revision submittal. Arkansas relied upon the 2015 modeling scenario from this statewide modeling as the baseline scenario in the minor NSR permitting thresholds and de minimis change levels modeling. They modified the 2015 emissions inventory to include the hypothetical source to represent the addition of emissions from a newly exempt emissions source based on the revised thresholds in order to examine the potential impacts and sensitivity of model predicted ambient concentrations to the exempt emissions.

16 A RRF is the ratio of future case modeled concentrations to base case modeled concentrations, which is used to quantify the relative impacts of the emissions added to the model. In the photochemical modeling conducted by ADEQ, the base case modeled concentrations are taken from the 2015 modeling without the hypothetical sources added while the future case modeling results are taken from the 2015 modeling plus the 8 modeled hypothetical sources. Therefore, the RRFs calculated in this modeling analysis quantify the relative impacts from the additional emissions from the hypothetical sources that would be exempt from permitting based on the new thresholds/de minimis levels.

17 RRFs can be used to estimate FDVs, which are determined by applying the RRF ratios to monitored design values from the base year taken from ambient monitoring data.

18 Arkansas applied the RRFs derived from the 2015 baseline and 2015 baseline with hypothetical sources modeling analyses to calculated FDVs at all ambient monitoring locations for each pollutant. The difference between these FDVs represents the impacts from the hypothetical source emissions on ambient air quality. Appendix D of the March 24, 2017 SIP revision submittal contains the details of this analysis including the calculated RRFs and FDVs.

19 The methodology used by Arkansas to develop the modeled future year 2015 emissions inventory is detailed in Section 3.6 of the “Criteria Pollutant Modeling Analysis for Arkansas” report provided in Appendix D of the March 24, 2017 SIP revision submittal. The 2015 emissions inventory was assumed equal to the 2014 emissions inventory with no further adjustments that were prepared based on as part of the EPA's 2005-based platform, which included future year cases developed from it, that was used in the Final Transport Rule modeling (available at ftp://ftp.epa.gov/EmisInventory/2005v4_2/). Arkansas did adjust the emissions inventory to include a new facility (AEP Service Corporations' John W. Turk, Jr. facility located in southwestern Arkansas.

Comment: The commenter stated that photochemical modeling submitted by Arkansas in support of the SIP revisions does not give a rational picture of the effect the SIP relaxations could have on air quality in Arkansas. The commenter stated that first, there could clearly be more than 8 sources, which was the number of sources included in the photochemical modeling, exempt from permitting under the revised minor NSR rules. The commenter also stated that the photochemical modeling did not model the worst case conditions such as terrain, stack height, stack temperature and velocity.

Response: While we agree with the commenters that the potential number of exemptions resulting from the revised rule may not be limited to 8 sources, we do not agree with their assessment that the modeling analysis was limited to the impacts from only those 8 sources. Arkansas submitted statewide modeling that accounted for cumulative impacts from the 8 hypothetical sources along with the emissions contained in the statewide emissions inventory. (See the March 24, 2017 SIP Revision Submittal, Appendix D—Air Quality Modeling Analysis of Minor Source Permit Thresholds.) The 8 modeled sources were distributed throughout the state's Air Quality Control Regions. The modeling results showed the impacts of the addition of these eight hypothetical sources to the predicted ambient concentrations. In addition, the modeling extrapolated for the maximum modeled impacts from the hypothetical sources applied at each modeled grid cell throughout the state. In addition to examining the modeled impacts from these 8 hypothetical sources in their chosen locations in the Air Quality Control Regions, the modeling analysis conducted by Arkansas also looked at the impacts of sources with emissions equal to the revised thresholds throughout the state. This analysis was accomplished by determining the statewide maximum modeled impacts in the photochemical modeling for each day resulting from the hypothetical sources and adding those impacts to the unmodified future year concentration for each day and grid cell. This approach allowed the examination of the maximum predicted hypothetical source impacts combined at different geographic/topographic locations along with looking at those impacts combined with a variety of cumulative source inventory impacts throughout the state. It is impossible for the state to project each source that may be exempt under the revised rule and unreasonable to expect the inclusion of every potentially exempt source within an air quality modeling analysis. We determined that the approach used by Arkansas to include a number of hypothetical sources throughout the state and to examine the combined impacts of these sources with background emissions sources at each modeled grid cell in Arkansas provides information and a rational picture regarding the potential impacts of newly exempt emissions throughout the state. By modeling these 8 hypothetical sources with emission rates equal to the revised thresholds, the state's approach provided for the examination of the actual model predicted impacts at locations within each Air Quality Control Region from the maximum level of emissions that could be exempt from permitting for a source based on the revised minor NSR permitting thresholds and de minimis change levels. As a second step, the approach to apply the daily maximum modeled impacts from the hypothetical sources to each grid cell for each day in the modeled period provided for the examination of the impacts of the exempt emissions at each grid cell throughout the state. In the case of the minor NSR program revisions proposed by Arkansas, the state developed a 110(l) demonstration comprised of air quality modeling, as well as an emissions inventory analysis and a monitoring trends analysis. As stated in our proposed rulemaking, we found in combination that the modeling analysis along with the other analyses submitted by the state demonstrated that the proposed revisions would not interfere with NAAQS attainment or maintenance. Based on our review, we find the analysis conducted and the methods used to be appropriate and sufficient to support the proposed SIP revisions, especially for exemptions from minor NSR permitting requirements that are expected to make up fractional percentages (<1% for all pollutants) of the total emissions in the statewide emissions inventory—as documented in the state supplied emissions inventory analysis.

Regarding the commenter's statement regarding the modeling of worst-case conditions, we do not agree with the commenter. The modeling of the worst case conditions such as terrain, stack height, stack temperature and velocity is inappropriate for assessing whether the relaxed applicability to Arkansas' minor NSR rule would violate the NAAQs. The hypothetical sources included in the 110(l) demonstration modeling were meant to represent the exempt emissions that could occur from a variety of sources and were being modeled to examine the potential impacts from exempt emissions as part of the demonstration of non-interference with attainment or maintenance of the NAAQS under CAA section 110(l). Arkansas determined representative values to be used as model inputs for the hypothetical sources by reviewing real world stack parameters available through their emissions inventory data. Based on their review, the state chose the average stack conditions from the emissions inventory data as the representative inputs for the modeled hypothetical sources. As stated in the modeling report included in the March 24, 2017 SIP revision submittal and in our proposed rulemaking, the state modeled the hypothetical sources with the maximum emissions exempt by the rule (i.e., emissions equal to the thresholds values), even though not all exempt sources would have those emissions levels.

The use of the worst case conditions (as referenced by the commenter) is typically applied in modeling for an existing source or a proposed source of known type/size and location as part of a case-by-case NSR modeling analysis, such as a modeling analysis completed as part of a PSD permit action. In the case of the modeling analysis conducted by Arkansas to support the proposed SIP revisions, the state was examining the potential impacts of emissions exempt from minor NSR permitting by adding hypothetical exempt sources to represent those added emissions in the modeled emissions inventory. The modeling conducted by Arkansas as part of the 110(l) demonstration modeling serves a different purpose, and therefore is inherently different than PSD permit modeling. PSD permit modeling is conducted as part of the source analysis PSD requirement (40 CFR 51.21(k)) to examine the impacts from the construction or major modification of a specific, known PSD source where model inputs are based on the actual design and operational parameters of the emission points located at the source. That said, we do not agree that the modeling analysis conducted by Arkansas did not take terrain into account. As discussed previously in this response, at least one of the modeled hypothetical sources was located in each of the AQCRs. This allowed the examination of model predicted impacts across the different geographic and topographic areas in the state, including those areas in NW Arkansas with more elevated/complex terrain (1 source located in AQCR 17 and 2 sources located in AQCR 21), which are expected to have higher impacts. As discussed in our evaluation of the photochemical modeling conducted by Arkansas, the model predicted impacts from the hypothetical sources did not indicate any model predicted violations of the NAAQS for any pollutant or averaging period. The photochemical modeling approach was one element of the 110(l) demonstration provided by the state to support the proposed SIP revisions. The approaches used by Arkansas in their modeling demonstration to determine the potential impacts from the newly exempt emissions were reasonable and appropriate for 110(l) analysis being conducted to demonstrate non-interference, especially considering the small amounts of emissions expected to be exempt from minor NSR permitting based on the revised rule relative to the current statewide emissions.

Comment: The commenter stated that the photochemical modeling gave no justification for where it located the sources within the state and it is not clear if the sources were located in areas where the source's plume could cause high concentrations due to nearby elevated terrain or in areas where there are other significant sources of air pollutants to determine the cumulative impacts.

Response: We do not agree with the commenter that no justification was provided for the location of the hypothetical sources within the photochemical modeling. Arkansas did state that they placed at least one source in each of their Air Quality Control Regions. They also stated that the sources were typically located in or near more urban areas of the state. A figure was included in the modeling report showing the location of the modeled sources relative to the populated areas in the state, which are also more likely to have larger “background” emissions within the modeled emissions inventory. (See the March 24, 2017 SIP Revision Submittal, Appendix C—2010 Minor NSR Permitting Thresholds and De Minimis Levels SIP Technical Support Document, Figure 19.) The chosen locations allowed for the examination of impacts throughout the various regions of the state, focused on the more populated areas. As stated in our previous response, two of the modeled hypothetical sources were included in the areas in NW Arkansas with more elevated/complex terrain (1 source located in AQCR 17 and 2 sources located in AQCR 21). Additionally, the modeling approach used by the state in their 110(l) demonstration included a separate analysis to specifically examine the model predicted concentrations at each grid cell throughput the state when the maximum modeled impacts from the hypothetical sources were applied. This approach allowed the examination of the maximum hypothetical source impacts combined at different geographic locations along with looking at those impacts combined with a variety of cumulative source inventory impacts throughout the state.

Comment: The commenter stated that the photochemical modeling did not attempt to take into account the cumulative impacts of exempt sources or modifications, and it did not include the possibility of multiple exempt sources locating nearby each other, nor did the modeling attempt to model more than one exemption at a single or multiple sources over time.

Response: As discussed previously in our responses, we do not agree that cumulative impacts analysis was not conducted as part of the state's modeling analysis. The photochemical modeling analysis combined the impacts from the hypothetical sources with the impacts of background emissions inventory sources via emissions inventory model inputs.20 Further, this cumulative impacts analysis was conducted in such a way as to examine the maximum modeled impacts from the hypothetical sources with the impacts from the background emissions inventory sources at each grid cell in the state. Regarding the cumulative impacts from multiple exempt sources potentially located nearby each other, the modeling report included in the March 24, 2017 SIP revision submittal stated that “since the modeled impacts occur within or nearby the source location, cumulative effects from multiple sources in multiple grid cells are expected to be small.” Based on the 110(l) demonstration provided by Arkansas, which included modeling that looked at cumulative impacts from hypothetical exempt sources and the background emissions sources inventory, we do not find the revised thresholds to adversely impact the NAAQS.

20 As discussed in Arkansas's “2010 Minor NSR Permitting Thresholds and De Minimis Levels SIP Technical Support Document” (Appendix C to March 24, 2017 SIP revision submittal), the CMAQ photochemical modeling requires as input, hourly, gridded pollutant emissions from both anthropogenic and biogenic sources.

Comment: The commenter stated that there is no indication that the modeling took into account variability of emission rates over time to account for the very likely possibility that an exempt source could emit at higher rates over shorter periods of time rather than emitting at a consistent level.

Response: It is unreasonable to expect the type of modeling conducted by Arkansas to examine the potential impacts of a small subset of minor sources that make up much less than 1% of the total emissions in the statewide emissions inventory (less than or equal to 0.125% of the statewide emissions for minor NSR permitting thresholds; less than or equal to 0.019% of the statewide emissions for de minimis change levels) to include variable emissions modeling. The evaluation of impacts from variable emission rates is typically associated with modeling an existing source or a proposed source of known type/size and operation as part of a case-by-case NSR modeling analysis (such as the modeling conducted for PSD permitting). As stated in our previous responses, the modeling analysis conducted by Arkansas as part of the SIP revision submittal was completed as part of a 110(l) demonstration for the purposes of determining the potential impacts of the revised missions exempt from minor NSR permitting by adding hypothetical exempt sources to represent those added emissions in the modeled emissions inventory. Modeling conducted as part of the 110(l) demonstration is conducted to determine whether a SIP revision will interfere with attainment or maintenance of the NAAQS, any required milestone, or any other requirement of the Act. Because the modeled sources were hypothetical in nature, source-specific information including emission rates and their potential variability, cannot be available, nor does it need to be. As stated in the modeling report included in the March 24, 2017 SIP revision submittal and in our proposed rulemaking, in the modeling analysis the hypothetical source emission rates were set equal to the revised minor NSR permitting thresholds and de minimis change levels to examine the potential impacts resulting from the newly exempt emissions. (See the March 24, 2017 SIP Revision Submittal, Appendix D—Air Quality Modeling Analysis of Minor Source Permit Thresholds.) The approaches used by Arkansas in their modeling demonstration to determine the potential impacts from the newly exempt emissions were reasonable and appropriate for the type of analysis being conducted, especially considering the relatively small amount of emissions expected to be exempt from minor NSR permitting based on the revised rule compared to statewide emissions.

Comment: The commenter stated that because presumably the same emission rates, stack parameters, and sources locations were modeled with AERMOD (dispersion model) as were modeled in the CMAQ photochemical modeling. Therefore, they stated that all of the prior comments raised with the CMAQ (photochemical) modeling also apply to the AERMOD (dispersion) modeling results. The commenter also stated that there is no indication that the air dispersion modeling accounted for impacts from startup, shutdown and malfunction emissions.

Response: The comments raised on the CMAQ photochemical modeling were addressed above. Those responses would also apply to the AERMOD dispersion modeling, with some slight clarifications due to the inherent differences between photochemical and dispersion modeling analyses. We provide the following clarification related to the comments raised on cumulative impacts analyses since the CMAQ photochemical modeling and AERMOD dispersion modeling have different approaches to account for cumulative impacts because the models differ on how off-site background sources emissions inventories are represented and how impacts are determined. As discussed in the modeling report included in the March 24, 2017 SIP revisions submittal, the CMAQ photochemical modeled concentrations/impacts from the background emissions inventory sources were included as background values in the AERMOD dispersion modeling and added to the AERMOD dispersion modeled concentrations from the hypothetical sources to determine cumulative impacts from the exempt emissions and the off-site emissions. (See the March 24, 2017 SIP Revision Submittal, Appendix D—Air Quality Modeling Analysis of Minor Source Permit Thresholds.) Although these approaches differ because of the nature of the modeling system used, both the CMAQ photochemical and AERMOD dispersion modeling analyses include the cumulative impacts of the hypothetical sources plus the background emissions inventory sources.

Regarding the modeling of impacts from startup, shutdown and malfunction emissions, the evaluation of impacts from routine and/or predictable startup and shutdown emissions would be associated with modeling an existing source or a proposed source of known type/size and operation as part of a case-by-case NSR modeling analysis, such as PSD permit modeling.21 The routine and predictable startups and shutdowns are permitted emissions which are accounted for in the emissions inventory. As stated in our previous responses, the hypothetical sources included in the 110(l) demonstration modeling were meant to represent the exempt emissions that could occur from a variety of sources and were being modeled to examine the potential impacts from exempt emissions. Because the modeled sources were hypothetical in nature, information regarding source inputs including a small subset of their emissions such as source-specific startup, shutdown and malfunction emissions, was not available, nor should it be. Further, the emissions expected to be exempt from minor NSR permitting based on the revised permitting thresholds and de minimis levels made up much less than 1% of the total statewide emissions (less than or equal to 0.125% of the statewide emissions for minor NSR permitting thresholds; less than or equal to 0.019% of the statewide emissions for de minimis change levels) meaning that the startup, shutdown and malfunctions being a small subset of total emissions would make up an even smaller fraction of the statewide emissions. The commenter's expectation for this type of analysis is unreasonable on the basis that these emissions make up such a small fraction of the statewide emissions (that is, a small subset of the total exempt emissions that are anticipated to make up much less than 1% of the statewide emissions). As stated in the modeling report included in the March 24, 2017 SIP revision submittal and in our proposed rulemaking, the hypothetical source emission rates were set equal to the revised minor NSR permitting thresholds and de minimis change levels to examine the potential impacts resulting from the newly exempt emissions. The approaches used by Arkansas in their modeling demonstration to determine the potential impacts from the newly exempt emissions were reasonable and appropriate for the type of analysis being conducted, especially considering the relatively small amount of emissions expected to be exempt from minor NSR permitting based on the revised rule compared to statewide emissions.

21 Any emissions resulting from unplanned startup or shutdown activities or from malfunctions, and therefore not accounted for in the NSR permit authorization, would be considered violations of the SIP unless these emissions limits are reflected in a NSR SIP or a SIP rule.

Comment: The commenter stated that the dispersion modeling did not include the modeling of line sources and that fugitive PM10 emissions often cause increment and NAAQS violations. Therefore, the commenter claims that the AERMOD (dispersion) modeling does not reflect reasonable worst case impacts that could occur due to the sources and de minimis changes exempt from minor NSR based on the SIP revisions.

Response: As discussed in our previous responses, the worst case impacts conditions (or potential worst case source type in the case of this comment) referenced by the commenter are typically associated with case-by-case NSR modeling of an existing source or a proposed source with known stack/emission characteristics (such as, modeling associated with a PSD permit action). This would also be the case for the modeling of line sources mentioned by the commenter. The 110(l) demonstration modeling conducted by Arkansas in support of the SIP revisions has a different purpose and associated requirements than case-by-case NSR modeling. As discussed in our earlier response to the comment raised regarding worst case stack parameters, Arkansas relied on real world stack parameters available in their emissions inventory data to determine representative stack parameters to represent emissions newly exempt from minor NSR permitting via the inclusion of hypothetical sources in their modeling analyses. Specifically, they reviewed the stack parameters and determined the average stack parameters included as hypothetical point sources with emissions set equal to the minor NSR permitting thresholds and de minimis change levels. Because the modeled sources were hypothetical in nature, source-specific information including whether or not any portion of the emissions were fugitive in nature (such as road emissions) versus stack emissions, cannot be available, nor does it need to be. Modeling of hypothetical sources with emissions rates set equal to the revised minor NSR permitting and de minimis change thresholds ensures that the analysis accounts for the maximum amount of emissions that would be exempt from minor NSR permitting based on the revisions. The approaches used by Arkansas in their modeling demonstration and their reliance on representative stack parameters to determine the potential impacts from the newly exempt emissions were reasonable and appropriate for the type of analysis being conducted, especially considering the relatively small fraction of emissions expected to be exempt from minor NSR permitting based on the revised rule compared with statewide emissions.

Comment: The commenter stated that the revised Arkansas NSR program conflicts with the requirements of section 110(2)(C). More specifically, the commenter stated that the de minimis change exemptions will exempt most if not all modifications at existing major stationary sources from minor NSR permitting. They indicate that this is in direct contrast with the intention for the new source review program required by CAA section 110(a)(2)(C) and 40 CFR 51.160 to be a backstop on threats to attainment or maintenance of the NAAQS posed by new source growth that is not planned for in existing SIP rules.

Response: We do not agree with the commenter that the de minimis exemptions will exempt most if not all modifications at existing major stationary sources from minor NSR permitting. As previously stated in our responses, the SIP-approved Arkansas NSR program is comprised of two types of review: “Minor Source Review” and “Major Source Review”. Arkansas operates a so-called “merged, one permit” system, which is divided into these two types of review based on whether a source is required to obtain a title V operating permit. As such, “Minor Source Review”, which is contained in Reg. 19, Chapter 4, applies only to those sources that are not subject to title V permitting and require only a title I minor NSR authorization.22 Any source that would be a major source for purposes of PSD review would also be a major source subject to title V permitting. Compare 40 CFR 52.21(b)(1) (establishing major source thresholds of 100 and 250 tons per year) with Reg. 26, Chapter 2 (defining major sources to include, inter alia, any source with the potential to emit 100 tons per year). Therefore, any source subject to title V, which would include any new PSD major source and/or any modification to an existing PSD major source, cannot utilize the de minimis change exemption found at Reg. 19.407(C). Instead, all modifications at title V sources that are not be subject to Reg. 19, Chapter 9 would instead be subject to the “Major Source Review” requirements found in Reg. 26 and incorporated by reference in Reg. 19, Chapter 11 and cannot use the de minimis change provisions, which are limited to “Minor Source Review” in Chapter 4 of Reg. 19. The revisions addressed in our proposed rulemaking are limited to “Minor Source Review” under Chapter 4 of Reg. 19 and do not impact “Major Source Review” in Chapter 11, which has already been approved into the SIP as part of Arkansas' minor NSR program, most recent approval on March 4, 2015 (See 80 FR 11573), and which contains the permitting requirement provisions applicable to the modifications not subject to Reg. 19, Chapter 9 at all title V sources, including all of the sources referenced by the commenter.

22 As stated in our original SIP approval of Chapter 4, “[a] minor source is any source which does not meet the requirements of a major source. The Act in section 302(j) defines the terms “major stationary source” and “major emitting facility” as “any stationary facility of source of air pollutants which directly emits, or has the potential to emit, one hundred tons per year of more of any air pollutant (including any major emitting facility or source of fugitive emissions of any such pollutant, as determined by rule by the Administrator).” ”

Comment: The commenter stated that the NSR program required by CAA section 110(a)(2)(C) and 40 CFR 51.160 is intended to be a backstop on threats to attainment or maintenance of the NAAQS posed by new sources growth that is not planned for in existing SIP rules. Because of the commenter's assessment that NSR program is an important part of the SIP, they stated that EPA cannot approve exemptions from a minor NSR program unless it is shown that the exemptions are truly de minimis to the purposes of the program.

Response: We agree that the NSR program is an important part of the SIP but this does not mean that under the CAA and the minor NSR SIP rules, EPA cannot approve exemptions from a minor NSR program. Consequently, what is relevant is whether or not the revisions to the Arkansas minor NSR program are approvable under the plain reading of the applicable statute and rules. There is no regulatory or statutory prohibition that prohibits the types and/or sizes of sources that could be exempt from the minor NSR program. In fact, the minor NSR SIP rules at 40 CFR 51.160(e) only require that the minor NSR program include procedures that “identify types and sizes of facilities, buildings, structures, or installations which will be subject to review under this section. [and] The plan must discuss the basis for determining which facilities will be subject to review.” These rules furthermore require that the plan must ensure that the issuance of minor NSR permits not result in a violation of the control strategy or interfere with the attainment or maintenance of a national standard. The CAA at section 110((a)(2)((C) requires regulation of the modification or construction of any stationary source within the area as necessary (emphasis added) to assure that the standards are achieved. As such, the CAA at section 110((a)(2)(C) and the minor NSR SIP rules found at 40 CFR 51.160-165, as well as case law,23 allow exemptions from a minor NSR permitting program. In cases such as this, where the minor NSR SIP is being revised, the state must also demonstrate that the revisions meet the requirements of CAA section 110(l). Similar to the provisions of the Act and rules discussed above, section 110(l) requires that EPA cannot approve revisions to the Arkansas minor NSR SIP unless EPA finds that the changes would not interfere with any applicable requirement concerning attainment and reasonable further progress, as well as any other applicable statutory requirement. The clear reading of the Act and the EPA rules are that EPA can approve exemptions to the Arkansas minor NSR SIP program as long as it finds these exemptions will not interfere with attainment or maintenance of a NAAQS or other control strategy. Consistent with what is allowed, Arkansas has identified revised permitting thresholds and de minimis change levels to serve as the exemption thresholds for their minor NSR permitting program. To support the revised exemption thresholds, Arkansas provided analyses to define the scope of the exemptions and to demonstrate that these revised thresholds will not adversely impact NAAQS maintenance or attainment. The analyses, which were submitted as part of the March 24, 2017 SIP revision submittal, included: (1) An emissions inventory analysis that determined the percentage of the statewide total emissions inventory that would be newly exempt by the revised thresholds; (2) a monitoring analysis that included a review of the current status of ambient air quality in the state along with a review of the trends in monitoring data since the state adopted and implemented the revised thresholds; and (3) a modeling analysis that examined the impacts of the exempt emissions on ambient concentrations. The analyses provided by Arkansas in the SIP revision submittals show that the minor NSR permitting exemptions resulting from the revised rule were limited in scope and comprised much less than 1% of the total emissions in the statewide emissions inventory and that the impacts from the newly exempt emissions would not adversely impact NAAQS maintenance or attainment, as part of their 110(l) demonstration. The EPA's review of these analyses and our finding that the proposed SIP revisions were approvable were detailed in the proposed rulemaking and the Technical Support Document accompanying the rulemaking.

23 Alabama Power Company, et al., Petitioners,* v. Douglas M. Costle, As Administrator, Environmental Protection Agency, et al., Respondents,* Sierra Club, et al., Intervenors.*, 636 F.2d 323 (D.C. Cir. 1980).

Comment: The commenter stated that the results from the state's AERMOD (dispersion) modeling show that the exemptions are not “de minimis.” The commenter also states that the EPA must not approve the revised program because it will interfere with the requirements that SIPs include programs to ensure that new and modified sources not be allowed to construct or modify if they would interfere with attainment or maintenance of the NAAQS.

Response: Our proposed rulemaking specifically addressed the scope of the exemptions resulting from the revised minor NSR permitting thresholds and de minimis levels. As discussed in our proposal, Arkansas provided an analysis to quantify the amount of emissions that would be expected to be exempt from minor NSR permitting requirements relative to total emissions from the statewide emissions inventories. For all pollutants, the exempt emissions for both the permitting thresholds and de minimis levels made up a fraction of 1% of the statewide emissions. Therefore, we find that the scope of emissions expected to be exempt from minor NSR permitting as a result of the revised minor NSR program thresholds and de minimis change levels is extremely limited. Regarding the commenter's claim that the revised program will interfere with NAAQS attainment or maintenance, the 110(l) demonstration submitted by Arkansas in support of the proposed revisions to the SIP specifically addressed the anticipated impacts on the NAAQS through both a review of the current status of ambient air quality in Arkansas and an evaluation the impacts of the revised thresholds on ambient air quality via air monitoring and air modeling data. As discussed in our proposed rulemaking, based on the ambient monitoring trend analysis, the implementation of the revised minor NSR permitting thresholds and de minimis levels following state adoption of the revisions in 2008 and ongoing implementation have not negatively impacted ambient air quality or interfered with the attainment of the NAAQS. In fact, for several pollutants the ambient air quality has shown continued improvements via decreases in monitored DVs during this period; and currently Arkansas does not have any areas classified as nonattainment for any NAAQS. Our proposal also summarized the air quality modeling results that Arkansas submitted as part of the SIP revisions. The modeling analysis included an evaluation of both statewide regional-scale (photochemical) and local-scale impacts. (See the March 24, 2017 SIP Revision Submittal, Appendix D—Air Quality Modeling Analysis of Minor Source Permit Thresholds.) The photochemical modeling was designed to specifically examine ozone and PM2.5, the model also simulates NO2, SO2, and PM10 so the results for those pollutants were also examined. The maximum photochemical modeling derived impacts including the hypothetical source emissions on daily maximum 8-hr ozone, 24-hr PM2.5, and annual average PM2.5 for any location in Arkansas was calculated. The maximum impacts including hypothetical source emissions on daily maximum 1-hr NO2 and SO2 and 24-hr average PM10 was also calculated. These maximum impacts were added to the baseline modeled predicted concentrations for each day and grid cell for the future year simulation. The resultant model predicted concentrations represented the future year concentrations assuming the worst-case impacts from the threshold emission increases at any location within the modeling grid. These model results were used in conjunction with the baseline modeling results to calculate the RRFs necessary to estimate FDVs. The FDVs were used to examine whether emission increases less than or equal to the revised thresholds will cause or contribute to a NAAQS violation or interfere with NAAQS maintenance. To further examine the potential near-field impacts from new or existing sources with emission increases less than or equal to the revised permitting and de minimis change thresholds, a dispersion modeling analysis was conducted. The dispersion model was applied for the same hypothetical sources used in the photochemical modeling with emissions set to the revised thresholds. The dispersion model was applied for one year for NOX, SO2, CO, and PM10. For each source location, daily concentrations (for the receptor with the maximum annual average value) taken from the dispersion modeling were added to the photochemical model -derived concentrations for that same location. In this manner, the photochemical modeling values were used as “background”. The statewide daily maximum impact (maximum over all locations/AQCRs) obtained were expected to represent the near-field future-year concentrations assuming worst-case impacts from threshold emission increases at a range of locations throughout the state. Similar to the photochemical modeling, these maximum impacts were added to the baseline modeled predicted concentrations for each day and grid cell for the future year simulation. The resultant model predicted concentrations represented the future year concentrations assuming the worst-case impacts from the threshold emission increases at any location within the modeling grid. The resultant concentrations were used in conjunction with the baseline modeling results to calculate the RRFs necessary to estimate FDVs. Once again, the FDVs were used to examine if the emissions under the revised threshold values would cause/contribute to a NAAQS violation and/or interfere with NAAQS attainment. Both the photochemical and dispersion modeling results did show that the addition of exempt emissions via modeled hypothetical sources may result in some increases in ambient concentrations. However, as discussed in the TSD accompanying our proposed rulemaking, the FDVs calculated as part of the regional-scale modeling analysis that were based on the maximum modeled impacts from the hypothetical source were less than the NAAQS for each pollutant and averaging period.24 Similarly, the results from the near-field dispersion modeling also showed the modeled impacts from the hypothetical sources combined with background concentrations were all less than their corresponding NAAQS.25 Based on our evaluation of these analyses conducted by ADEQ to support the revised minor NSR permitting thresholds and de minimis levels, we find that the increased levels will not interfere with attainment or maintenance of the NAAQS.

24 For more detailed discussion regarding the regional-scale photochemical modeling results see Pages 29-31 of EPA's Technical Support Document dated August 24, 2017, available in the electronic docket for this rulemaking.

25 For more detailed discussion regarding the near-field dispersion modeling results see Pages 31-32 of the EPA's Technical Support Document dated August 24, 2017, including Table V.5 which contains the maximum and average AERMOD concentrations both with and without the CMAQ-derived background concentrations that were determined in ADEQ's nearfield hypothetical source analysis.

Comment: The commenter stated that EPA does not cite to the specific rule that states that “de minimis changes are still required to meet minor NSR requirements contained in Reg. 19, Chapter 4 including a demonstration that the proposed modification will not interfere with the NAAQS on a case-by-case basis” and that the EPA's claim that this requirement remains is without merit. The commenter stated that EPA may be assuming that Reg. 19.402 applies since a permit revision is implied by Reg. 19.407(C)(6), it is not clear that this requirement applies to what appears to be an administrative amendment to a source's permit if it makes a de minimis change. The commenter also states that ADEQ made it clear that it does not plan to require or base any decision for de minimis changes on air quality modeling, and without conducting modeling, they will not be able to ensure that the proposed modification will not interfere with attainment or maintenance of a NAAQS on a case-by-case basis. So, the commenter stated that it is unlikely that ADEQ considered Reg. 19.402 as applying to de minimis permit changes.

Response: We do not agree that our proposed rulemaking did not include a citation to the specific rule related to a case-by-case demonstration of non-interference with the NAAQS that is applicable to de minimis changes. We also do not agree that our statement that de minimis changes must still meet minor NSR requirements is without merit. Our position that de minimis changes must include a demonstration that the proposed modification will not interfere with the NAAQS on a case-by-case basis is based on the applicability of Reg. 19.405(A)(1) to these changes. Further, the provisions in the de minimis change rule indicate that de minimis changes include an application submittal/review process at Reg. 19.407(C)(5) at it references applications for de minimis changes. In addition to the rule language, the current “Air Application Instructions for Registrations, Minor Source Permits, or Title V Permits” made available on ADEQ's air permitting website indicate that the forms are to be used for de minimis changes.26 As such, we do not agree with the commenter that EPA assuming the de minimis changes include an application process without a basis. Further we do not agree with the commenter, that our proposed rulemaking did not clearly state the specific rule regarding the referenced technical review requirement to demonstrate NAAQS compliance for a de minimis change. In our proposed rulemaking, we specifically stated that the requirement found at Reg. 19.405(A)(1) requires ADEQ must ensure as part of their technical review of de minimis change applications that the source will be modified to operate without interfering with NAAQS attainment or maintenance.27 The de minimis change rule found at Reg. 19.407(C)(2) of the current Arkansas SIP exempts qualified proposed changes at an existing source from minor NSR permitting requirements, including public notice. The exemption only exempts the de minimis change from minor NSR permitting requirements and not all applicable minor NSR requirements. Therefore, the exemption does not exempt the change from the technical review requirements found at Reg. 19.405(A). Reg. 19.405(A) applies to the review of applications submitted under Chapter 4 of Reg. 19, where the de minimis change rule is located, and requires that on an application-by-application basis ADEQ must ensure as part of their technical review that the source will be modified to operate without interfering with NAAQS attainment or maintenance. Our approval of the de minimis change level revisions does not revise or in any way change the applicability of the SIP-approved technical review requirements found in Reg. 19.405(A), or any other applicable minor NSR requirements, to de minimis changes. It is important to note that the Reg. 19.405(A) technical review requirements do not specify that modeling be completed to demonstrate that the source will be constructed/modified without interfering with attainment or maintenance of the NAAQS. The EPA minor NSR SIP rules found in 40 CFR 51.160-165 do not require modeling either. We do not agree with the commenter that without conducting modeling, ADEQ cannot ensure that a de minimis change will not interfere with attainment or maintenance of a NAAQS on a case-by-case basis. Case-by-case modeling, such as air dispersion modeling, is one of the methods that is commonly used to meet NAAQS requirements, but it is not the only method. Depending on the source and the proposed de minimis change, as part of their technical review ADEQ could alternatively utilize past modeling analyses, such as the statewide modeling that was included as part of the 110(l) demonstration in the March 24, 2017 SIP revision submittal, or existing ambient monitoring data or emissions inventory data relevant to the proposed change to make a determination regarding NAAQS compliance. In addition, the SIP-approved provision found at Reg. 19.407(C)(1)(b) specifies that “a proposed change to a facility will be considered De Minimis if: . . . the change will result in a trivial environmental impact.” Our rulemaking does not revise or in any way change this provision.

26 Air Application Instructions available online at: https://www.adeq.state.ar.us/downloads/WebDatabases/Air/PermitData/Forms%20and%20Instructions/Form%20and%20Instructions/Air_Permit_Application_Forms_Instructions.pdf.

27 See 82 FR 43508.

Comment: The commenter stated that EPA has not evaluated whether the SIP revision satisfies CAA section 193. They state that because the revisions allow ADEQ to relax emission limits via de minimis changes and for previously permitting sources to terminate the existing permit and replace with a registration, EPA's review should include an evaluation pursuant to CAA section 193 of whether these relaxations would allow for the relaxation of any control requirements in effect before November 15, 1990, in any nonattainment area, in which case equivalent or greater emissions reductions.

Response: We do not agree with the commenter that this rulemaking is subject to CAA section 193. Section 193 applies to nonattainment areas only and provides that “[n]o control requirement in effect, or required to be adopted by an order, settlement agreement, or plan in effect before the date of the enactment of the Clean Air Act Amendments of 1990 in area for any air pollutant may be modified after such enactment in any manner unless the modifications insures equivalent or greater emission reductions of such air pollutant.” The proposed rule does not change control requirements in nonattainment areas, of which Arkansas currently has none. Therefore, EPA did not address section 193 in the proposed approval action, since it does not apply. In the future, should an area become designated as nonattainment, Arkansas when developing the required nonattainment NSR permitting program would have to ensure that this program applied the Act's thresholds, which might require Arkansas to revise its minor NSR SIP program.

III. Final Action

In this action, EPA is approving revisions to the minor NSR permitting program as submitted as revisions to the Arkansas SIP on July 26, 2010, and March 24, 2017, including supplemental information submitted on November 30, 2015, May 26, 2016, July 5, 2017, July 27, 2017, and March 16, 2018. Our approval includes the following revisions to the Arkansas SIP:

• Revisions to Reg. 19.401 (submitted 07/26/2010 and 03/24/2017);

• Revisions to Reg. 19.407(C)(2)(a) and (b) (submitted 07/26/2010 and 03/24/2017); and

• Revisions to Reg. 19.417(A) and (B) (submitted 07/26/2010).

As previously stated in our proposed rulemaking, this final action does not remove or modify the existing federal and state requirements that each NSR permit action issued by ADEQ include an analysis completed by the Department and their determination that the proposed construction or modification authorized by the permit action will not interfere with attainment or maintenance of a national ambient air quality standard.

IV. Incorporation by Reference

In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the revisions to the Arkansas regulations as described in the Final Action section above. The EPA has made, and will continue to make, these materials generally available through www.regulations.gov and at the EPA Region 6 Office (please contact Ashley Mohr for more information). Therefore, these materials have been approved by EPA for inclusion in the SIP, have been incorporated by reference by EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of EPA's approval, and will be incorporated by reference in the next update to the SIP compilation.

V. Statutory and Executive Order Reviews

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

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

• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by August 28, 2018. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Incorporation by reference, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.

Dated: June 20, 2018. Anne Idsal, Regional Administrator, Region 6.

40 CFR part 52 is amended as follows:

PART 52—APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS 1. The authority citation for part 52 continues to read as follows: Authority:

42 U.S.C. 7401 et seq.

Subpart E—Arkansas 2. In § 52.170(c), the table titled “EPA-Approved Regulations in the Arkansas SIP” is amended by: a. Revising entries for Reg. 19.401 and Reg. 19.407; and b. Adding an entry for Reg. 19.417 immediately following the entry for Reg. 19.413.

The amendments read as follows:

§ 52.170 Identification of plan.

(c) * * *

EPA-Approved Regulations in the Arkansas SIP State citation Title/subject State
  • submittal/
  • effective
  • date
  • EPA approval date Explanation
    Regulation No. 19: Regulations of the Arkansas Plan of Implementation for Air Pollution Control *         *         *         *         *         *         * Chapter 4: Minor Source Review Reg. 19.401 General Applicability 03/24/17 6/29/2018, [Insert Federal Register citation] Includes supplemental information provided on 11/30/2015, 05/26/2016, 07/05/2017, and
  • 03/16/2018.
  • *         *         *         *         *         *         * Reg. 19.407 Permit Amendments 03/24/17 6/29/2018, [Insert Federal Register citation] Includes supplemental information provided on 11/30/2015, 05/26/2016, 07/05/2017, 07/27/2017, and 03/16/2018. *         *         *         *         *         *         * Reg. 19.417 Registration 07/26/10 6/29/2018, [Insert Federal Register citation] Includes supplemental information provided on 11/30/2015, 05/26/2016, 07/05/2017, and
  • 03/16/2018.
  • *         *         *         *         *         *         *
    [FR Doc. 2018-13942 Filed 6-28-18; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R05-OAR-2017-0100; EPA-R05-OAR-2017-0501; FRL-9980-08—Region 5] Air Plan Approval; Michigan; Revisions to Volatile Organic Compound Rules AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Final rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is approving revised rules submitted by the State of Michigan as State Implementation Plan (SIP) revisions. The main revision specifies volatile organic compound (VOC) limits for cutback and emulsified asphalts as well as the test methods for determining the VOC content of these products. Michigan also moved the adoption by reference citations from Part 6. Emission Limitations and Prohibitions—Existing Sources of Volatile Organic Emissions to Part 9. Emission Limitations and Prohibitions—Miscellaneous and updated references to federal test methods in several of its Part 6 rules.

    DATES:

    This final rule is effective on July 30, 2018.

    ADDRESSES:

    EPA has established a docket for this action under Docket ID No. EPA-R05-OAR-2017-0100 and EPA-R05-OAR-2017-0501. All documents in the docket are listed on the www.regulations.gov website. Although listed in the index, some information is not publicly available, i.e., Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the internet and will be publicly available only in hard copy form. Publicly available docket materials are available either through www.regulations.gov or at the Environmental Protection Agency, Region 5, Air and Radiation Division, 77 West Jackson Boulevard, Chicago, Illinois 60604. This facility is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding Federal holidays. We recommend that you telephone Steven Rosenthal, Environmental Engineer, at (312) 886-6052 before visiting the Region 5 office.

    FOR FURTHER INFORMATION CONTACT:

    Steven Rosenthal, Environmental Engineer, Attainment Planning and Maintenance Section, Air Programs Branch (AR-18J), Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604, (312) 886-6052, [email protected].

    SUPPLEMENTARY INFORMATION:

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

    I. Background II. What action is EPA taking? III. Incorporation by Reference IV. Statutory and Executive Order Reviews I. Background

    Michigan revised its rule R 336.1618 “Use of cutback or emulsified paving asphalt” along with several other of its VOC rules. Michigan also revised rules R 336.1611 to R 336.1614, R 336.1619, R 336.1622, R 336.1625, R336.1627 to R 336.1629, R 336.1632, R 336.1651, R 336.1660, and R 336.1661 for the purpose of removing adoptions by reference which have been moved to and consolidated in R 336.1902 “Adoption of standards by reference.” Revisions to R 336.1622, R 336.1627 to R 336.1629, and R 336.1632 update references to federal test methods.

    On March 30, 2018 (83 FR 13710) EPA published a notice of proposed rulemaking (NPR) proposing approval of Michigan's VOC revisions. The specific details of Michigan's VOC revisions and the rationale for EPA's approval are discussed in the NPR and will not be restated here. EPA received no relevant comments on this proposal.

    II. What action is EPA taking?

    EPA is approving Michigan's VOC revisions in Part 6 and Part 9 because they satisfy the EPA's requirement of reasonably available control technology.

    III. Incorporation by Reference

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

    1 62 FR 27968 (May 22, 1997).

    IV. Statutory and Executive Order Reviews

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

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

    • Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;

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

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

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

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

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

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

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

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

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

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

    Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by August 28, 2018. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

    List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Ozone, Reporting and recordkeeping requirements, and Volatile organic compounds.

    Dated: June 18, 2018. Cathy Stepp, Regional Administrator, Region 5.

    40 CFR part 52 is amended as follows:

    PART 52—APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS 1. The authority citation for part 52 continues to read as follows: Authority:

    42 U.S.C. 7401 et seq.

    2. In § 52.1170 amend the table in paragraph (c) by: a. Revising the entries under the heading “Part 6: Emission Limitations and Prohibitions—Existing Sources of Volatile Organic Compound Emissions”, for rules “R 336.1611”, “R 336.1612”, “R 336.1613”, “R 336.1614”, “R 336.1618”, “R 336.1619”, “R 336.1622”, “R 336.1625”, “R336.1627”, “R 336.1628”, “R 336.1629”, “R 336.1632”, “R 336.1651”, “R 336.1660”, and “R 336.1661”; b. Adding an entry under the heading “Part 9: Emission Limitations and Prohibitions—Miscellaneous” for rule “R 336.1902” in numerical order.

    The addition and revisions read as follows:

    § 52.1170 Identification of plan.

    (c) * * *

    EPA-Approved Michigan Regulations Michigan
  • citation
  • Title State
  • effective
  • date
  • EPA approval date Comments
    *         *         *         *         *         *         * Part 6: Emission Limitations and Prohibitions—Existing Sources of Volatile Organic Compound Emissions *         *         *         *         *         *         * R 336.1611 Existing cold cleaners 3/29/2017 6/29/2018, [Insert Federal Register citation] R 336.1612 Existing open top vapor degreasers 3/29/2017 6/29/2018, [Insert Federal Register citation] R 336.1613 Existing conveyorized cold cleaners 3/29/2017 6/29/2018, [Insert Federal Register citation] R 336.1614 Existing conveyorized vapor degreasers 3/29/2017 6/29/2018, [Insert Federal Register citation] *         *         *         *         *         *         * R 336.1618 Use of cutback or emulsified paving asphalt 3/29/2017 6/29/2018, [Insert Federal Register citation] R 336.1619 Standards for perchloroethylene dry cleaning equipment 3/29/2017 6/29/2018, [Insert Federal Register citation] *         *         *         *         *         *         * R 336.1622 Emission of volatile organic compounds from existing components of petroleum refineries; refinery monitoring program 3/29/2017 6/29/2018, [Insert Federal Register citation] *         *         *         *         *         *         * R 336.1625 Emission of volatile organic compound from existing equipment utilized in manufacturing synthesized pharmaceutical products 3/29/2017 6/29/2018, [Insert Federal Register citation] R 336.1627 Delivery vessels; vapor collection systems 3/29/2017 6/29/2018, [Insert Federal Register citation] R 336.1628 Emission of volatile organic compounds from components of existing process equipment used in manufacturing synthetic organic chemicals and polymers; monitoring program 3/29/2017 6/29/2018, [Insert Federal Register citation] R 336.1629 Emission of volatile organic compounds from components of existing process equipment used in processing natural gas; monitoring program 3/29/2017 6/29/2018, [Insert Federal Register citation] *         *         *         *         *         *         * R 336.1632 Emission of volatile organic compounds from existing automobile, truck, and business machine plastic part coating lines 3/29/2017 6/29/2018, [Insert Federal Register citation] R 336.1651 Standards for degreasers 3/29/2017 6/29/2018, [Insert Federal Register citation] R 336.1660 Standards for volatile organic compounds emissions from consumer products 3/29/2017 6/29/2018, [Insert Federal Register citation] R 336.1661 Definitions for consumer products 3/29/2017 6/29/2018, [Insert Federal Register citation] *         *         *         *         *         *         * Part 9: Emission Limitations and Prohibitions—Miscellaneous R 336.1902 Adoption of Standards by reference 12/20/2016 6/29/2018, [Insert Federal Register citation] Only sections (1)(a), (b)(i), (b)(iii), (b)(iv), (b)(vii), (b)(viii), (c), (d), (e), (f), (g), (i), (j), (k), (l), (m), (n), and (s); (2)(b), (e), and (g); (3)(a); (4)(a), (b), (c), (d), (e), (f), (l), (m),(o), and (p); (5); (8); and (9). *         *         *         *         *         *         *
    [FR Doc. 2018-13953 Filed 6-28-18; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 86 Control of Emissions From New and In-Use Highway Vehicles and Engines CFR Correction

    ▪ In Title 40 of the Code of Federal Regulations, Parts 82 to 86, revised as of July 1, 2017, on page 1134, following paragraph (b) of § 86.1917, the section heading of § 86.1920 is inserted to read as follows:

    § 86.1920 What in-use testing information must I report to EPA?
    [FR Doc. 2018-14145 Filed 6-28-18; 8:45 am] BILLING CODE 1301-00-D
    FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 54 [WC Docket No. 17-310; FCC 18-82] Promoting Telehealth in Rural America AGENCY:

    Federal Communications Commission.

    ACTION:

    Final rule.

    SUMMARY:

    In this document, the Federal Communications Commission (the Commission or FCC) addresses the current funding shortfall in the Rural Health Care (RHC) Program, including by raising the annual Program funding cap and applying it to the current funding year to fully fund eligible funding requests for funding year (FY) 2017, adjusting the funding cap to reflect inflation, and establishing a process to carry-forward unused funds from past funding years for use in future funding years.

    DATES:

    Effective June 29, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Elizabeth Drogula, [email protected], Telecommunications Access Policy Division, Wireline Competition Bureau, (202) 418-1591 or TTY: (202) 418-0484.

    SUPPLEMENTARY INFORMATION:

    This is a summary of the Commission's Report and Order (R&O) in WC Docket No. 17-310; FCC 18-82, adopted on June 19, 2018, and released on June 25, 2018. The full text of this document is available for public inspection during regular business hours in the FCC Reference Center, Room CY-A257, 445 12th Street SW, Washington, DC 20554, or at the following internet address: https://docs.fcc.gov/public/attachments/FCC-18-82A1.pdf.

    I. Introduction

    1. Technology and telemedicine have assumed an increasingly important role in health care delivery, particularly in rural and remote areas of the country. For Americans living in rural and isolated areas, doctor shortages and hospital closures are endemic, and obtaining access to high-quality health care is a constant challenge. Broadband greatly changes that equation, however, by enabling a wide range of telemedicine services—from specialists providing consultations via video conferencing to radiologists remotely reading X-rays via high-speed connectivity. Today, the Commission takes steps to help ensure that health care providers participating in the Commission's RHC Program can continue providing these and other essential telemedicine services to their communities.

    2. In 1996, Congress recognized the value of providing rural health care providers with “an affordable rate for the services necessary for the provision of telemedicine,” and the Commission established the RHC Program the following year. At that time, the Commission capped RHC Program funding at $400 million annually, and for many years, the $400 million funding cap was sufficient to fulfill Program demand. More recently, however, funding requests for high-speed broadband from health care providers have outpaced the RHC Program funding cap, placing a strain on the Program's ability to increase access to broadband for health care providers, particularly in rural areas, and foster the deployment of broadband health care networks. Further, rural health care providers face imminent financial hardship in FY 2017 due to the significant, automatic proration of their funding requests pursuant to RHC Program rules. These funding reductions have forced providers to assume additional costs of providing critical health care services to their communities.

    3. Given rural health care providers' urgent need for funding, the Commission takes immediate action in the R&O to address the current funding shortfall in the RHC Program, including by raising the annual Program funding cap to $571 million and applying it to the current funding year to fully fund eligible funding requests for FY 2017. The Commission takes this action consistent with the goals of ensuring that rural health care providers are able to get the funding they need from the RHC Program. At the same time, the Commission is mindful of the need to guard against Program waste, fraud, and abuse to ensure that this funding is being spent appropriately. The Commission remains committed to this goal and for that reason, have proposed and sought comment in this proceeding on measures to ensure compliance and to reduce waste, fraud, and abuse in the RHC Program.

    II. Discussion

    4. In the R&O, the Commission adopts measures to address the increased demand for funding from the RHC Program and thereby promote health care delivery and telemedicine in rural America. Specifically, the Commission (1) increases the annual RHC Program funding cap to $571 million and apply it to FY 2017; (2) decides to annually adjust the RHC Program funding cap to reflect inflation, beginning with FY 2018; and (3) establishes a process to carry-forward unused funds from past funding years for use in future funding years. These actions will provide rural health care providers with a sufficient and more predictable source of universal service funding to deliver vital telemedicine services to their communities.

    A. Raising the RHC Program Funding Cap

    5. Background. In the 2017 NPRM and Order (FCC 17-164), the Commission sought comment on whether to increase the RHC Program's $400 million annual funding cap and how to determine the appropriate funding cap level. The Commission explained that one metric would be to consider what the cap would have been if adjusted by inflation since its adoption. It therefore sought comment on whether to establish a new RHC Program funding cap based on the expected level had the Commission initiated an annual inflation adjustment in 1997 using the gross domestic product chain-type price index (GDP-CPI). The Commission also sought comment on whether to apply any increased funding cap to FY 2017.

    6. The majority of commenters agree that the Commission should raise the RHC Program funding cap. Of those commenters, most argue that setting the cap at $571 million, the level it would be had the Program been indexed for inflation since its inception, is a sufficient and appropriate metric for establishing a new funding cap today. Some commenters instead argue that the cap should be raised beyond $571 million to account for the expansion of eligible services and entities since the Program's inception, as well as advances in telehealth capabilities and technologies, and increased broadband requirements. Other commenters contend that the GDP-CPI index does not sufficiently represent Program demand because the costs of providing health care services have historically outpaced inflation, or they assert that the funding cap should simply be doubled to $800 million to account for inflation, the increased number of eligible entities, and advances in technology.

    7. Additionally, some parties assert that the Commission's analysis in setting the original cap of $400 million was arbitrary or based on incorrect estimates of the number of qualifying rural health care providers. Despite this, these commenters advocate raising the annual funding cap based on the broadband communications requirements for health care providers, the increased demand for the services that such broadband can support, other potential sources of funding of rural health care broadband needs, or indexing the $400 million cap to GDP-CPI.

    8. Discussion. The Commission concludes that raising the RHC Program funding cap is necessary to address current and future demand for supported services by health care providers. Raising the funding cap to $571 million responds to the significant increase in RHC Program demand resulting from the expansion of eligible services and entities since the Program's creation, as well as the advances in technology that often require higher bandwidth (e.g., higher-speed bandwidth, less latency, and diverse routing) than was contemplated by the Commission when it established a $400 million cap for the Program in 1997. The Commission also finds that increasing the funding cap to what it would have been if indexed annually for inflation since the inception of the Program, using the GDP-CPI index, ensures that RHC Program funding is sufficient to meet current demand, while also minimizing the increased costs of funding, which are imposed on USF contributors and generally passed on to consumers. In addition, adjusting the funding cap to account for inflation over the past 20 years maintains the purchasing power in today's dollars that health care providers held when the RHC Program was first instituted. On these bases, the Commission raises the RHC Program annual funding cap from $400 million to $571 million.

    9. The Commission disagrees with those commenters who advocate doubling the RHC Program funding cap to $800 million at this time. The $171 million increase in the annual funding cap exceeds the current demand of $521 million, and commenters fail to provide reliable data justifying a $400 million increase. Moreover, the Commission believes that adopting such a substantial increase at this time is especially imprudent given the concerns in this proceeding about whether potential waste in the RHC Telecommunications Program has contributed to reaching the cap sooner than anticipated and what steps the Commission should take to reduce such waste.

    10. Accordingly, the Commission concludes that increasing the cap to $571 million strikes the appropriate balance between ensuring adequate funding for vital telehealth services while minimizing the burden placed on USF contributors and consumers. As necessary, the Commission will assess the need for any future increases in the cap to ensure that the RHC Program is sufficiently funded to achieve the Program's goals of increasing access to broadband for health care providers, particularly in rural areas, and fostering the deployment of broadband health care networks. For these reasons, the Commission is not persuaded by the arguments submitted by SHLB, ACS, and others that raising the cap to $571 million is insufficient to address RHC Program demand. By raising the cap by $171 million and taking the other steps discussed in this R&O (i.e., indexing the cap to reflect inflation and adopting a carry-forward process for unused funding), the Commission is addressing the substantial increase in RHC Program demand.

    11. The Commission is also unpersuaded by AT&T's arguments that until the Telecommunications Program is fundamentally reformed, it is premature to consider increasing the annual RHC Program funding cap. In light of the current funding shortfall in the RHC Program, the Commission believes that raising the funding cap to $571 million now is necessary to ensure that sufficient funding is available for eligible health care providers to maintain their current network connections and telehealth services, and to provide additional certainty as health care providers consider their future bandwidth needs. The Commission does, however, agree with AT&T and other commenters that managing waste, fraud, and abuse in the RHC Program is essential to ensuring efficient Program disbursements, and that the Commission should consider additional measures to ensure Program compliance. For that very reason, the 2017 NPRM and Order proposed and sought comment on measures to control outlier costs and reform support calculations in the Telecommunications Program, improve competitive bidding, and establish more effective oversight of the RHC Program.

    12. In addition to raising the annual RHC Program funding cap, the Commission addresses the immediate needs of participating health care providers by applying the increased cap to the current funding year (FY 2017). Given the significant financial hardship faced by rural health care providers due to the scarcity of Program funding and the substantial proration of FY 2017 funding requests, it is incumbent on the Commission to make available the additional funding in this funding year. This decision will eliminate the need to prorate the amount of qualified FY 2017 funding requests and relieve rural health care providers of burdensome service cost increases resulting from the required proration.

    13. None of the commenters who support raising the annual funding cap oppose applying the funding cap to FY 2017. In the 2017 NPRM and Order, the Commission sought comment on whether to raise the funding cap, and whether the funding cap should be increased for FY 2017 to address the financial distress that can result from the proration of funding requests. The Commission anticipated that demand would exceed the funding cap in FY 2017, potentially at a level requiring a deeper proration than required in FY 2016, and recognized that the “proration that comes with capped funding may be especially hard on small, rural healthcare providers with limited budgets. . . .” USAC has since announced and applied a significant proration factor for FY 2017, and the hardship anticipated by the Commission has been reflected in petitions for relief and correspondence filed in the RHC Program dockets. The Commission concludes that the public health consequences that could result from rural health care providers receiving reduced funding as a result of the proration of their funding requests in FY 2017 weighs in favor of increasing the FY 2017 RHC Program cap to the $571 million level as adopted by this R&O.

    14. By taking this action, the Commission makes significant funding available to issue commitments for the full amount approved for FY 2017 funding requests prior to proration. The Commission directs USAC to collect the additional funds needed to fully fund FY 2017 demand over the next two quarters in accordance with the standard process for calculating and announcing the quarterly contribution factor to reduce the impact on ratepayers. The Commission further directs USAC to take any other steps necessary to reverse the proration of approved FY 2017 funding requests, consistent with this R&O.

    B. Instituting an Annual Inflation Adjustment

    15. Background. In addition to whether and how to raise the RHC Program annual funding cap, in the 2017 NPRM and Order, the Commission sought comment on whether the cap should be adjusted annually for inflation. The Commission noted that other universal service support mechanisms use the GDP-CPI inflation index to adjust funding caps, and inquired whether the RHC Program cap should also be adjusted annually on the same basis. Commenters that support raising the RHC Program funding cap to the level that it would be had it been indexed for inflation using GDP-CPI since the inception of the Program also support adjusting the cap for inflation in future funding years.

    16. Discussion. The Commission adopts a rule that, beginning in FY 2018, the RHC Program funding cap will be adjusted annually for inflation using the GDP-CPI inflation index. By itself, raising the cap does not create the flexibility necessary to ensure that rural health care providers have affordable access to telecommunications and broadband services in the event of future price inflation. Accordingly, the Commission must also institute an annual inflation adjustment to ensure that the RHC Program maintains consistent purchasing power without unreasonably increasing the size of the USF and increasing the USF contribution charges that are ultimately passed through to consumers.

    17. The Commission concludes that it is appropriate to rely upon the GDP-CPI index for the RHC Program's inflation adjustment. There is no index that specifically examines the cost of services funded under the RHC Program. Given that GDP-CPI is the same index the Commission uses to inflation-adjust the E-Rate Program cap, the high-cost loop support mechanism cap, and in other contexts to estimate inflation of carrier costs, the Commission concludes that it is reasonable to use the GDP-CPI to approximate the impact of inflation on RHC Program supported services. In the event of periods of deflation, the Commission will maintain the prior-year cap to maintain predictability.

    18. To compute the annual inflation adjustment, the percentage increase in the GDP-CPI from the previous year will be used. The increase shall be rounded to the nearest 0.1 percent. The increase in the inflation index will then be used to calculate the maximum amount of funding for the next RHC Program funding year which runs from July 1 to June 30. When the calculation of the yearly average GDP-CPI is determined, the Wireline Competition Bureau (Bureau) will publish a Public Notice in the Federal Register within 60 days announcing any increase in the annual funding cap based on the rate of inflation. For FY 2018, based on GDP-CPI, the RHC Program funding cap will be $581 million.

    C. Adopting a Carry-Forward Process for the RHC Program

    19. Background. In the 2017 NPRM and Order, the Commission sought comment on whether to allow unused funds committed in one funding year to be carried forward to a subsequent funding year. In fact, in the accompanying Order (FCC 17-164), the Commission directed that unused funds from prior years be carried forward to reduce the effect of proration for certain health care providers in FY 2017. All those who commented on this issue supported the proposal that unused funds be carried forward for use in subsequent years.

    20. Discussion. The Commission finds that, beginning in FY 2018, unused funds may be carried forward from previous years for use in subsequent funding years. Unused funds are the difference between the amount of funds collected, or made available for that particular funding year, and the amount of funds disbursed or to be disbursed for that funding year. Funds carried forward from one funding year may be rolled over to multiple funding years until ultimately committed and disbursed. Considering the high demand for RHC Program funding, the Commission concludes that this action is consistent with the goals of the RHC Program, aligns the RHC Program with the E-Rate Program's carry-forward process, and is in the public interest.

    21. Additionally, as in the E-Rate Program, the Commission will require USAC to provide quarterly estimates to the Commission regarding the amount of unused funds that will be available for carryover in subsequent years. This requirement codifies USAC's existing reporting practice and reporting cycle. The quarterly estimate will also provide stakeholders of the RHC Program with general notice regarding the estimated amount of unused funds that may be made available in the subsequent year.

    22. Further, the Commission will make unused funds available annually in the second quarter of each calendar year for use in the next full funding year of the RHC Program. Based on the estimates provided by USAC, the Commission will announce a specific amount of unused funds from prior funding years to be carried forward to increase available funding for future funding years. This unused funding may be used to commit to eligible services in excess of the annual funding cap in the event demand in a given year exceeds the cap, or it may be used to reduce collections for the RHC Program in a year when demand is less than the cap. The Bureau will announce the availability and amount of carryover funds during the second quarter of the calendar year.

    23. Finally, the Commission finds it is in the public interest to carry forward unused funds for disbursement on an annual basis. Distribution of unused funds on an annual basis allows USAC to refine its calculation of available funds over four reporting quarters as the funding year progresses. The Commission also believes that the timing of this process provides certainty regarding when unused funds will be carried forward for use in the RHC Program with minimal disruption to the administration of the Program.

    III. Procedural Matters A. Paperwork Reduction Act Analysis

    24. This document contains no new information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, the Commission notes that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), it previously sought specific comments on how the Commission might further reduce the information collection burden for small business concerns with fewer than 25 employees. The Commission describes impacts that might affect small businesses, which includes most business with fewer than 25 employees, in the Final Regulatory Flexibility Analysis (FRFA).

    B. Congressional Review Act

    25. The Commission will send a copy of the R&O to Congress and the Government Accountability Office, pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

    C. Regulatory Flexibility Act

    26. The Regulatory Flexibility Act of 1980 (RFA) requires that an agency prepare a regulatory flexibility analysis for notice and comment rulemakings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” Accordingly, we have prepared a Final Regulatory Flexibility Analysis (FRFA) concerning the possible impact of the rule changes contained in the R&O on small entities. The Commission will send a copy of the R&O, including the FRFA below, in a report to be sent to Congress and the Government Accountability Office pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996. In addition, the Commission will send a copy of the R&O, including the FRFA, to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the R&O and FRFA (or summaries thereof) will also be published in the Federal Register.

    D. Final Regulatory Flexibility Analysis

    27. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on a substantial number of small entities by the policies and rules was incorporated into the 2017 Notice of Proposed Rulemaking. Written comments were requested on this IRFA. This present FRFA conforms to the RFA.

    1. Need for, and Objectives of, the Report and Order

    28. Through the R&O, the Commission seeks to improve the Rural Health Care (RHC) Program's capacity to distribute telecommunications and broadband support to health care providers—especially small, rural health care providers—in the most equitable, effective, efficient, clear, and predictable manner as possible. Telemedicine has become an increasingly vital component of health care delivery to rural Americans and, in Funding Year (FY) 2016, for the first time in the RHC Program's twenty-year history, and then again in FY 2017, demand for support exceeded the $400 million annual cap which necessitated reduced, pro rata distribution of support. In light of the significance and scarcity of RHC Program support, the Commission adopts several measures to most effectively meet health care providers' needs while responsibly stewarding the RHC Program's limited funds. Specifically, the Commission adopts rules that: (1) Raise the annual RHC Program funding cap to $571 million to apply to FY 2017; (2) adjust the annual RHC Program funding cap for inflation; and (3) establish a mechanism to carry-forward unused funds from past funding years for use in future funding years.

    2. Summary of Significant Issues Raised by Public Comments in Response to the IRFA

    29. There were no comments filed that specifically addressed the rules and policies proposed in the IRFA.

    3. Response to Comments by the Chief Counsel for Advocacy of the Small Business Administration

    30. The Chief Counsel did not file any comments in response to the proposed rules in this proceeding.

    4. Description and Estimate of the Number of Small Entities to Which the Rules Will Apply

    31. The RFA directs agencies to provide a description of and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one that: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).

    32. Small Businesses, Small Organizations, Small Governmental Jurisdictions. The Commission's actions, over time, may affect small entities that are not easily categorized at present. The Commission therefore describes here, at the outset, three broad groups of small entities that could be directly affected herein. First, while there are industry specific size standards for small businesses that are used in the RFA, according to data from the SBA's Office of Advocacy, in general a small business is an independent business having fewer than 500 employees. These types of small businesses represent 99.9 percent of all businesses in the United States, which translates to 28.8 million businesses.

    33. Next, the type of small entity described as a “small organization” is generally “any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.” Nationwide, as of August 2016, there were approximately 356,494 small organizations based on registration and tax data filed by nonprofits with the Internal Revenue Service (IRS).

    34. Finally, the small entity described as a “small governmental jurisdiction” is defined generally as “governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.” U.S. Census Bureau data from the 2012 Census of Governments indicate that there were 90,056 local governmental jurisdictions consisting of general purpose governments and special purpose governments in the United States. Of this number, there were 37,132 General purpose governments (county, municipal and town or township) with populations of less than 50,000 and 12,184 Special purpose governments (independent school districts and special districts) with populations of less than 50,000. The 2012 U.S. Census Bureau data for most types of governments in the local government category show that the majority of these governments have populations of less than 50,000. Based on this data the Commission estimates that at least 49,316 local government jurisdictions fall in the category of “small governmental jurisdictions.”

    35. Small entities potentially affected by the reforms adopted herein include eligible non-profit and public health care providers and the eligible service providers offering them services, including telecommunications service providers, Internet Service Providers (ISPs), and vendors of the services and equipment used for dedicated broadband networks.

    a. Health Care Providers

    36. Offices of Physicians (except Mental Health Specialists). This U.S. industry comprises establishments of health practitioners having the degree of M.D. (Doctor of Medicine) or D.O. (Doctor of Osteopathy) primarily engaged in the independent practice of general or specialized medicine (except psychiatry or psychoanalysis) or surgery. These practitioners operate private or group practices in their own offices (e.g., centers, clinics) or in the facilities of others, such as hospitals or health maintenance organization (HMO) medical centers. The SBA has created a size standard for this industry, which is annual receipts of $11 million or less. According to 2012 U.S. Economic Census, 152,468 firms operated throughout the entire year in this industry. Of that number, 147,718 had annual receipts of less than $10 million, while 3,108 firms had annual receipts between $10 million and $24,999,999. Based on this data, the Commission concludes that a majority of firms operating in this industry are small under the applicable size standard.

    37. Offices of Physicians, Mental Health Specialists. The U.S. industry comprises establishments of health practitioners having the degree of M.D. (Doctor of Medicine) or D.O. (Doctor of Osteopathy) primarily engaged in the independent practice of psychiatry or psychoanalysis. These practitioners operate private or group practices in their own offices (e.g., centers, clinics) or in the facilities of others, such as hospitals or HMO medical centers. The SBA has established a size standard for businesses in this industry, which is annual receipts of $11 million dollars or less. The U.S. Economic Census indicates that 8,809 firms operated throughout the entire year in this industry. Of that number 8,791 had annual receipts of less than $10 million, while 13 firms had annual receipts between $10 million and $24,999,999. Based on this data, the Commission concludes that a majority of firms in this industry are small under the applicable standard.

    38. Offices of Dentists. This U.S. industry comprises establishments of health practitioners having the degree of D.M.D. (Doctor of Dental Medicine), D.D.S. (Doctor of Dental Surgery), or D.D.S. (Doctor of Dental Science) primarily engaged in the independent practice of general or specialized dentistry or dental surgery. These practitioners operate private or group practices in their own offices (e.g., centers, clinics) or in the facilities of others, such as hospitals or HMO medical centers. They can provide either comprehensive preventive, cosmetic, or emergency care, or specialize in a single field of dentistry. The SBA has established a size standard for that industry of annual receipts of $7.5 million or less. The 2012 U.S. Economic Census indicates that 115,268 firms operated in the dental industry throughout the entire year. Of that number 114,417 had annual receipts of less than $5 million, while 651 firms had annual receipts between $5 million and $9,999,999. Based on this data, the Commission concludes that a majority of business in the dental industry are small under the applicable standard.

    39. Offices of Chiropractors. This U.S. industry comprises establishments of health practitioners having the degree of D.C. (Doctor of Chiropractic) primarily engaged in the independent practice of chiropractic. These practitioners provide diagnostic and therapeutic treatment of neuromusculoskeletal and related disorders through the manipulation and adjustment of the spinal column and extremities, and operate private or group practices in their own offices (e.g., centers, clinics) or in the facilities of others, such as hospitals or HMO medical centers. The SBA has established a size standard for this industry, which is annual receipts of $7.5 million or less. The 2012 U.S. Economic Census statistics show that in 2012, there were 33,940 firms operated throughout the entire year. Of that number 33,910 operated with annual receipts of less than $5 million per year, while 26 firms had annual receipts between $5 million and $9,999,999. Based on that data, the Commission concludes that a majority of chiropractors are small.

    40. Offices of Optometrists. This U.S. industry comprises establishments of health practitioners having the degree of O.D. (Doctor of Optometry) primarily engaged in the independent practice of optometry. These practitioners examine, diagnose, treat, and manage diseases and disorders of the visual system, the eye and associated structures as well as diagnose related systemic conditions. Offices of optometrists prescribe and/or provide eyeglasses, contact lenses, low vision aids, and vision therapy. They operate private or group practices in their own offices (e.g., centers, clinics) or in the facilities of others, such as hospitals or HMO medical centers, and may also provide the same services as opticians, such as selling and fitting prescription eyeglasses and contact lenses. The SBA has established a size standard for businesses operating in this industry, which is annual receipts of $7.5 million or less. The 2012 Economic Census indicates that 18,050 firms operated the entire year. Of that number, 17,951 had annual receipts of less than $5 million, while 70 firms had annual receipts between $5 million and $9,999,999. Based on this data, the Commission concludes that a majority of optometrists in this industry are small.

    41. Offices of Mental Health Practitioners (except Physicians). This U.S. industry comprises establishments of independent mental health practitioners (except physicians) primarily engaged in (1) the diagnosis and treatment of mental, emotional, and behavioral disorders and/or (2) the diagnosis and treatment of individual or group social dysfunction brought about by such causes as mental illness, alcohol and substance abuse, physical and emotional trauma, or stress. These practitioners operate private or group practices in their own offices (e.g., centers, clinics) or in the facilities of others, such as hospitals or HMO medical centers. The SBA has created a size standard for this industry, which is annual receipts of $7.5 million or less. The 2012 U.S. Economic Census indicates that 16,058 firms operated throughout the entire year. Of that number, 15,894 firms received annual receipts of less than $5 million, while 111 firms had annual receipts between $5 million and $9,999,999. Based on this data, the Commission concludes that a majority of mental health practitioners who do not employ physicians are small.

    42. Offices of Physical, Occupational and Speech Therapists and Audiologists. This U.S. industry comprises establishments of independent health practitioners primarily engaged in one of the following: (1) Providing physical therapy services to patients who have impairments, functional limitations, disabilities, or changes in physical functions and health status resulting from injury, disease or other causes, or who require prevention, wellness or fitness services; (2) planning and administering educational, recreational, and social activities designed to help patients or individuals with disabilities, regain physical or mental functioning or to adapt to their disabilities; and (3) diagnosing and treating speech, language, or hearing problems. These practitioners operate private or group practices in their own offices (e.g., centers, clinics) or in the facilities of others, such as hospitals or HMO medical centers. The SBA has established a size standard for this industry, which is annual receipts of $7.5 million or less. The 2012 U.S. Economic Census indicates that 20,567 firms in this industry operated throughout the entire year. Of this number, 20,047 had annual receipts of less than $5 million, while 270 firms had annual receipts between $5 million and $9,999,999. Based on this data, the Commission concludes that a majority of businesses in this industry are small.

    43. Offices of Podiatrists. This U.S. industry comprises establishments of health practitioners having the degree of D.P.M. (Doctor of Podiatric Medicine) primarily engaged in the independent practice of podiatry. These practitioners diagnose and treat diseases and deformities of the foot and operate private or group practices in their own offices (e.g., centers, clinics) or in the facilities of others, such as hospitals or HMO medical centers. The SBA has established a size standard for businesses in this industry, which is annual receipts of $7.5 million or less. The 2012 U.S. Economic Census indicates that 7,569 podiatry firms operated throughout the entire year. Of that number, 7,545 firms had annual receipts of less than $5 million, while 22 firms had annual receipts between $5 million and $9,999,999. Based on this data, the Commission concludes that a majority of firms in this industry are small.

    44. Offices of All Other Miscellaneous Health Practitioners. This U.S. industry comprises establishments of independent health practitioners (except physicians; dentists; chiropractors; optometrists; mental health specialists; physical, occupational, and speech therapists; audiologists; and podiatrists). These practitioners operate private or group practices in their own offices (e.g., centers, clinics) or in the facilities of others, such as hospitals or HMO medical centers. The SBA has established a size standard for this industry, which is annual receipts of $7.5 million or less. The 2012 U.S. Economic Census indicates that 11,460 firms operated throughout the entire year. Of that number, 11,374 firms had annual receipts of less than $5 million, while 48 firms had annual receipts between $5 million and $9,999,999. Based on this data, the Commission concludes that the majority of firms in this industry are small.

    45. Family Planning Centers. This U.S. industry comprises establishments with medical staff primarily engaged in providing a range of family planning services on an outpatient basis, such as contraceptive services, genetic and prenatal counseling, voluntary sterilization, and therapeutic and medically induced termination of pregnancy. The SBA has established a size standard for this industry, which is annual receipts of $11 million or less. The 2012 Economic Census indicates that 1,286 firms in this industry operated throughout the entire year. Of that number 1,237 had annual receipts of less than $10 million, while 36 firms had annual receipts between $10 million and $24,999,999. Based on this data, the Commission concludes that the majority of firms in this industry are small.

    46. Outpatient Mental Health and Substance Abuse Centers. This U.S. industry comprises establishments with medical staff primarily engaged in providing outpatient services related to the diagnosis and treatment of mental health disorders and alcohol and other substance abuse. These establishments generally treat patients who do not require inpatient treatment. They may provide a counseling staff and information regarding a wide range of mental health and substance abuse issues and/or refer patients to more extensive treatment programs, if necessary. The SBA has established a size standard for this industry, which is $15 million or less in annual receipts. The 2012 U.S. Economic Census indicates that 4,446 firms operated throughout the entire year. Of that number, 4,069 had annual receipts of less than $10 million while 286 firms had annual receipts between $10 million and $24,999,999. Based on this data, the Commission concludes that a majority of firms in this industry are small.

    47. HMO Medical Centers. This U.S. industry comprises establishments with physicians and other medical staff primarily engaged in providing a range of outpatient medical services to the HMO subscribers with a focus generally on primary health care. These establishments are owned by the HMO. Included in this industry are HMO establishments that both provide health care services and underwrite health and medical insurance policies. The SBA has established a size standard for this industry, which is $32.5 million or less in annual receipts. The 2012 U.S. Economic Census indicates that 14 firms in this industry operated throughout the entire year. Of that number, 5 firms had annual receipts of less than $25 million, while 1 firm had annual receipts between $25 million and $99,999,999. Based on this data, the Commission concludes that approximately one-third of the firms in this industry are small.

    48. Freestanding Ambulatory Surgical and Emergency Centers. This U.S. industry comprises establishments with physicians and other medical staff primarily engaged in (1) providing surgical services (e.g., orthoscopic and cataract surgery) on an outpatient basis or (2) providing emergency care services (e.g., setting broken bones, treating lacerations, or tending to patients suffering injuries as a result of accidents, trauma, or medical conditions necessitating immediate medical care) on an outpatient basis. Outpatient surgical establishments have specialized facilities, such as operating and recovery rooms, and specialized equipment, such as anesthetic or X-ray equipment. The SBA has established a size standard for this industry, which is annual receipts of $15 million or less. The 2012 U.S. Economic Census indicates that 3,595 firms in this industry operated throughout the entire year. Of that number, 3,222 firms had annual receipts of less than $10 million, while 289 firms had annual receipts between $10 million and $24,999,999. Based on this data, the Commission concludes that a majority of firms in this industry are small.

    49. All Other Outpatient Care Centers. This U.S. industry comprises establishments with medical staff primarily engaged in providing general or specialized outpatient care (except family planning centers, outpatient mental health and substance abuse centers, HMO medical centers, kidney dialysis centers, and freestanding ambulatory surgical and emergency centers). Centers or clinics of health practitioners with different degrees from more than one industry practicing within the same establishment (i.e., Doctor of Medicine and Doctor of Dental Medicine) are included in this industry. The SBA has established a size standard for this industry, which is annual receipts of $20.5 million or less. The 2012 U.S. Economic Census indicates that 4,903 firms operated in this industry throughout the entire year. Of this number, 4,269 firms had annual receipts of less than $10 million, while 389 firms had annual receipts between $10 million and $24,999,999. Based on this data, the Commission concludes that a majority of firms in this industry are small.

    50. Blood and Organ Banks. This U.S. industry comprises establishments primarily engaged in collecting, storing, and distributing blood and blood products and storing and distributing body organs. The SBA has established a size standard for this industry, which is annual receipts of $32.5 million or less. The 2012 U.S. Economic Census indicates that 314 firms operated in this industry throughout the entire year. Of that number, 235 operated with annual receipts of less than $25 million, while 41 firms had annual receipts between $25 million and $49,999,999. Based on this data, the Commission concludes that approximately three-quarters of firms that operate in this industry are small.

    51. All Other Miscellaneous Ambulatory Health Care Services. This U.S. industry comprises establishments primarily engaged in providing ambulatory health care services (except offices of physicians, dentists, and other health practitioners; outpatient care centers; medical and diagnostic laboratories; home health care providers; ambulances; and blood and organ banks). The SBA has established a size standard for this industry, which is annual receipts of $15 million or less. The 2012 U.S. Economic Census indicates that 2,429 firms operated in this industry throughout the entire year. Of that number, 2,318 had annual receipts of less than $10 million, while 56 firms had annual receipts between $10 million and $24,999,999. Based on this data, the Commission concludes that a majority of the firms in this industry are small.

    52. Medical Laboratories. This U.S. industry comprises establishments known as medical laboratories primarily engaged in providing analytic or diagnostic services, including body fluid analysis, generally to the medical profession or to the patient on referral from a health practitioner. The SBA has established a size standard for this industry, which is annual receipts of $32.5 million or less. The 2012 U.S. Economic Census indicates that 2,599 firms operated in this industry throughout the entire year. Of this number, 2,465 had annual receipts of less than $25 million, while 60 firms had annual receipts between $25 million and $49,999,999. Based on this data, the Commission concludes that a majority of firms that operate in this industry are small.

    53. Diagnostic Imaging Centers. This U.S. industry comprises establishments known as diagnostic imaging centers primarily engaged in producing images of the patient generally on referral from a health practitioner. The SBA has established size standard for this industry, which is annual receipts of $15 million or less. The 2012 U.S. Economic Census indicates that 4,209 firms operated in this industry throughout the entire year. Of that number, 3,876 firms had annual receipts of less than $10 million, while 228 firms had annual receipts between $10 million and $24,999,999. Based on this data, the Commission concludes that a majority of firms that operate in this industry are small.

    54. Home Health Care Services. This U.S. industry comprises establishments primarily engaged in providing skilled nursing services in the home, along with a range of the following: Personal care services; homemaker and companion services; physical therapy; medical social services; medications; medical equipment and supplies; counseling; 24-hour home care; occupation and vocational therapy; dietary and nutritional services; speech therapy; audiology; and high-tech care, such as intravenous therapy. The SBA has established a size standard for this industry, which is annual receipts of $15 million or less. The 2012 U.S. Economic Census indicates that 17,770 firms operated in this industry throughout the entire year. Of that number, 16,822 had annual receipts of less than $10 million, while 590 firms had annual receipts between $10 million and $24,999,999. Based on this data, the Commission concludes that a majority of firms that operate in this industry are small.

    55. Ambulance Services. This U.S. industry comprises establishments primarily engaged in providing transportation of patients by ground or air, along with medical care. These services are often provided during a medical emergency but are not restricted to emergencies. The vehicles are equipped with lifesaving equipment operated by medically trained personnel. The SBA has established a size standard for this industry, which is annual receipts of $15 million or less. The 2012 U.S. Economic Census indicates that 2,984 firms operated in this industry throughout the entire year. Of that number, 2,926 had annual receipts of less than $15 million, while 133 firms had annual receipts between $10 million and $24,999,999. Based on this data, the Commission concludes that a majority of firms in this industry are small.

    56. Kidney Dialysis Centers. This U.S. industry comprises establishments with medical staff primarily engaged in providing outpatient kidney or renal dialysis services. The SBA has established assize standard for this industry, which is annual receipts of $38.5 million or less. The 2012 U.S. Economic Census indicates that 396 firms operated in this industry throughout the entire year. Of that number, 379 had annual receipts of less than $25 million, while 7 firms had annual receipts between $25 million and $49,999,999. Based on this data, the Commission concludes that a majority of firms in this industry are small.

    57. General Medical and Surgical Hospitals. This U.S. industry comprises establishments known and licensed as general medical and surgical hospitals primarily engaged in providing diagnostic and medical treatment (both surgical and nonsurgical) to inpatients with any of a wide variety of medical conditions. These establishments maintain inpatient beds and provide patients with food services that meet their nutritional requirements. These hospitals have an organized staff of physicians and other medical staff to provide patient care services. These establishments usually provide other services, such as outpatient services, anatomical pathology services, diagnostic X-ray services, clinical laboratory services, operating room services for a variety of procedures, and pharmacy services. The SBA has established a size standard for this industry, which is annual receipts of $38.5 million or less. The 2012 U.S. Economic Census indicates that 2,800 firms operated in this industry throughout the entire year. Of that number, 877 has annual receipts of less than $25 million, while 400 firms had annual receipts between $25 million and $49,999,999. Based on this data, the Commission concludes that approximately one-quarter of firms in this industry are small.

    58. Psychiatric and Substance Abuse Hospitals. This U.S. industry comprises establishments known and licensed as psychiatric and substance abuse hospitals primarily engaged in providing diagnostic, medical treatment, and monitoring services for inpatients who suffer from mental illness or substance abuse disorders. The treatment often requires an extended stay in the hospital. These establishments maintain inpatient beds and provide patients with food services that meet their nutritional requirements. They have an organized staff of physicians and other medical staff to provide patient care services. Psychiatric, psychological, and social work services are available at the facility. These hospitals usually provide other services, such as outpatient services, clinical laboratory services, diagnostic X-ray services, and electroencephalograph services. The SBA has established a size standard for this industry, which is annual receipts of $38.5 million or less. The 2012 U.S. Economic Census indicates that 404 firms operated in this industry throughout the entire year. Of that number, 185 had annual receipts of less than $25 million, while 107 firms had annual receipts between $25 million and $49,999,999. Based on this data, the Commission concludes that more than one-half of the firms in this industry are small.

    59. Specialty (Except Psychiatric and Substance Abuse) Hospitals. This U.S. industry consists of establishments known and licensed as specialty hospitals primarily engaged in providing diagnostic, and medical treatment to inpatients with a specific type of disease or medical condition (except psychiatric or substance abuse). Hospitals providing long-term care for the chronically ill and hospitals providing rehabilitation, restorative, and adjustive services to physically challenged or disabled people are included in this industry. These establishments maintain inpatient beds and provide patients with food services that meet their nutritional requirements. They have an organized staff of physicians and other medical staff to provide patient care services. These hospitals may provide other services, such as outpatient services, diagnostic X-ray services, clinical laboratory services, operating room services, physical therapy services, educational and vocational services, and psychological and social work services. The SBA has established a size standard for this industry, which is annual receipts of $38.5 million or less. The 2012 U.S. Economic Census indicates that 346 firms operated in this industry throughout the entire year. Of that number, 146 firms had annual receipts of less than $25 million, while 79 firms had annual receipts between $25 million and $49,999,999. Based on this data, the Commission conclude that more than one-half of the firms in this industry are small.

    60. Emergency and Other Relief Services. This industry comprises establishments primarily engaged in providing food, shelter, clothing, medical relief, resettlement, and counseling to victims of domestic or international disasters or conflicts (e.g., wars). The SBA has established a size standard for this industry, which is annual receipts of $32.5 million or less. The 2012 U.S. Economic Census indicates that 541 firms operated in this industry throughout the entire year. Of that number, 509 had annual receipts of less than $25 million, while 7 firms had annual receipts between $25 million and $49,999,999. Based on this data, the Commission concludes that a majority of firms in this industry are small.

    b. Providers of Telecommunications and Other Services i. Telecommunications Service Providers

    61. Incumbent Local Exchange Carriers (LECs). Neither the Commission nor the SBA has developed a small business size standard specifically for incumbent local exchange services. The closest applicable NAICS Code category is Wired Telecommunications Carriers and under the SBA size standard, such a business is small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2012 indicate that 3,117 firms operated during that year. Of this total, 3,083 operated with fewer than 1,000 employees. Consequently, the Commission estimates that most providers of incumbent local exchange service are small businesses that may be affected by our actions. According to Commission data, one thousand three hundred and seven (1,307) Incumbent Local Exchange Carriers reported that they were incumbent local exchange service providers. Of this total, an estimated 1,006 have 1,500 or fewer employees. Thus, using the SBA's size standard the majority of Incumbent LECs can be considered small entities.

    62. Interexchange Carriers (IXCs). Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to providers of IXCs. The closest NAICS Code category is Wired Telecommunications Carriers and the applicable size standard under SBA rules consists of all such companies having 1,500 or fewer employees. U.S. Census Bureau data for 2012 indicate that 3,117 firms operated during that year. Of that number, 3,083 operated with fewer than 1,000 employees. According to internally developed Commission data, 359 companies reported that their primary telecommunications service activity was the provision of interexchange services. Of this total, an estimated 317 have 1,500 or fewer employees. Consequently, the Commission estimates that the majority of interexchange service providers that may be affected are small entities.

    63. Competitive Access Providers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to competitive access services providers (CAPs). The closest applicable definition under the SBA rules is Wired Telecommunications Carriers and under the size standard, such a business is small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2012 indicate that 3,117 firms operated during that year. Of that number, 3,083 operated with fewer than 1,000 employees. Consequently, the Commission estimates that most competitive access providers are small businesses that may be affected by these actions. According to Commission data the 2010 Trends in Telephone Report, dated September 2010, 1,442 CAPs and competitive local exchange carriers (competitive LECs) reported that they were engaged in the provision of competitive local exchange services. Of these 1,442 CAPs and competitive LECs, an estimated 1,256 have 1,500 or few employees and 186 have more than 1,500 employees. Consequently, the Commission estimates that most providers of competitive exchange services are small businesses.

    64. Wired Telecommunications Carriers. The U.S. Census Bureau defines this industry as “establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired communications networks. Transmission facilities may be based on a single technology or a combination of technologies. Establishments in this industry use the wired telecommunications network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP services, wired (cable) audio and video programming distribution, and wired broadband internet services. By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry.” The SBA has developed a small business size standard for Wired Telecommunications Carriers, which consists of all such companies having 1,500 or fewer employees. U.S. Census data for 2012 show that there were 3,117 firms that operated that year. Of this total, 3,083 operated with fewer than 1,000 employees. Thus, under this size standard, the majority of firms in this industry can be considered small.

    65. Wireless Telecommunications Carriers (except Satellite). This industry comprises establishments engaged in operating and maintaining switching and transmission facilities to provide communications via the airwaves. Establishments in this industry have spectrum licenses and provide services using that spectrum, such as cellular services, paging services, wireless internet access, and wireless video services. The appropriate size standard under SBA rules is that such a business is small if it has 1,500 or fewer employees. For this industry, U.S. Census Bureau data for 2012 shows that there were 967 firms that operated for the entire year. Of this total, 955 firms had employment of 999 or fewer employees and 12 had employment of 1,000 employees or more. Thus, under this category and the associated size standard, the Commission estimates that the majority of wireless telecommunications carriers (except satellite) are small entities.

    66. The Commission's own data—available in its Universal Licensing System—indicate that, as of October 25, 2016, there are 280 Cellular licensees that will be affected by these actions. The Commission does not know how many of these licensees are small, as the Commission does not collect that information for these types of entities. Similarly, according to internally developed Commission data, 413 carriers reported that they were engaged in the provision of wireless telephony, including cellular service, Personal Communications Service (PCS), and Specialized Mobile Radio (SMR) Telephony services. Of this total, an estimated 261 have 1,500 or fewer employees, and 152 have more than 1,500 employees. Thus, using available data, the Commission estimates that the majority of wireless firms can be considered small.

    67. Wireless Telephony. Wireless telephony includes cellular, personal communications services, and specialized mobile radio telephony carriers. The closest applicable SBA category is Wireless Telecommunications Carriers (except Satellite) and the appropriate size standard for this category under the SBA rules is that such a business is small if it has 1,500 or fewer employees. For this industry, U.S. Census Bureau data for 2012 show that there were 967 firms that operated for the entire year. Of this total, 955 firms had fewer than 1,000 employees and 12 firms has 1,000 employees or more. Thus, under this category and the associated size standard, the Commission estimates that a majority of these entities can be considered small. According to Commission data, 413 carriers reported that they were engaged in wireless telephony. Of these, an estimated 261 have 1,500 or fewer employees and 152 have more than 1,500 employees. Therefore, more than half of these entities can be considered small.

    68. Satellite Telecommunications. This category comprises firms “primarily engaged in providing telecommunications services to other establishments in the telecommunications and broadcasting industries by forwarding and receiving communications signals via a system of satellites or reselling satellite telecommunications.” Satellite telecommunications service providers include satellite and earth station operators. The category has a small business size standard of $32.5 million or less in average annual receipts, under SBA rules. For this category, U.S. Census Bureau data for 2012 shows that there were a total of 333 firms that operated for the entire year. Of this total, 299 firms had annual receipts of less than $25 million. Consequently, the Commission estimates that the majority of satellite telecommunications providers are small entities.

    69. All Other Telecommunications. The “All Other Telecommunications” category is comprised of establishments that are primarily engaged in providing specialized telecommunications services, such as satellite tracking, communications telemetry, and radar station operation. This industry also includes establishments primarily engaged in providing satellite terminal stations and associated facilities connected with one or more terrestrial systems and capable of transmitting telecommunications to, and receiving telecommunications from, satellite systems. Establishments providing internet services or voice over internet protocol (VoIP) services via client-supplied telecommunications connections are also included in this industry. The SBA has developed a small business size standard for “All Other Telecommunications,” which consists of all such firms with gross annual receipts of $32.5 million or less. For this category, U.S. Census Bureau data for 2012 show that there were 1,442 firms that operated for the entire year. Of these firms, a total of 1,400 had gross annual receipts of less than $25 million and 42 firms had gross annual receipts of $25 million to $49, 999,999. Thus, the Commission estimates that a majority of “All Other Telecommunications” firms potentially affected by our action can be considered small.

    ii. Internet Service Providers

    70. Internet Service Providers (Broadband). Broadband internet service providers include wired (e.g., cable, DSL) and VoIP service providers using their own operated wired telecommunications infrastructure fall in the category of Wired Telecommunication Carriers. Wired Telecommunications Carriers are comprised of establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired telecommunications networks. Transmission facilities may be based on a single technology or a combination of technologies. The SBA size standard for this category classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2012 show that there were 3,117 firms that operated that year. Of this total, 3,083 operated with fewer than 1,000 employees. Consequently, under this size standard, the majority of firms in this industry can be considered small.

    71. Internet Service Providers (Non-Broadband). Internet access service providers such as Dial-up internet service providers, VoIP service providers using client-supplied telecommunications connections and internet service providers using client-supplied telecommunications connections (e.g., dial-up ISPs) fall in the category of All Other Telecommunications. The SBA has developed a small business size standard for All Other Telecommunications, which consists of all such firms with gross annual receipts of $32.5 million or less. For this category, U.S. Census Bureau data for 2012 show that there were 1,442 firms that operated for the entire year. Of these firms, a total of 1,400 had gross annual receipts of less than $25 million. Consequently, under this size standard, a majority of firms in this industry can be considered small.

    iii. Vendors and Equipment Manufacturers

    72. Vendors of Infrastructure Development or “Network Buildout.” The Commission has not developed a small business size standard specifically directed toward manufacturers of network facilities. There are two applicable SBA categories in which manufacturers of network facilities could fall and each have different size standards under the SBA rules. The SBA categories are “Radio and Television Broadcasting and Wireless Communications Equipment” with a size standard of 1,250 employees or less and “Other Communications Equipment Manufacturing” with a size standard of 750 employees or less.” U.S. Census Bureau data for 2012 show that for Radio and Television Broadcasting and Wireless Communications Equipment firms 841 establishments operated for the entire year. Of that number, 828 establishments operated with fewer than 1,000 employees, 7 establishments operated with between 1,000 and 2,499 employees and 6 establishments operated with 2,500 or more employees. For Other Communications Equipment Manufacturing, U.S. Census Bureau data for 2012 show that 383 establishments operated for the year. Of that number, 379 firms operated with fewer than 500 employees and 4 had 500 to 999 employees. Based on this data, the Commission concludes that the majority of Vendors of Infrastructure Development or “Network Buildout” are small.

    73. Telephone Apparatus Manufacturing. This industry comprises establishments primarily engaged in manufacturing wire telephone and data communications equipment. These products may be standalone or board-level components of a larger system. Examples of products made by these establishments are central office switching equipment, cordless telephones (except cellular), PBX equipment, telephones, telephone answering machines, LAN modems, multi-user modems, and other data communications equipment, such as bridges, routers, and gateways.” The SBA size standard for Telephone Apparatus Manufacturing is all such firms having 1,250 or fewer employees. According to U.S. Census Bureau data for 2012, there were a total of 266 establishments in this category that operated for the entire year. Of this total, 262 had employment of under 1,000, and an additional 4 had employment of 1,000 to 2,499. Thus, under this size standard, the majority of firms can be considered small.

    74. Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing. This industry comprises establishments primarily engaged in manufacturing radio and television broadcast and wireless communications equipment. Examples of products made by these establishments are: Transmitting and receiving antennas, cable television equipment, GPS equipment, pagers, cellular phones, mobile communications equipment, and radio and television studio and broadcasting equipment. The SBA has established a small business size standard for this industry of 1,250 employees or less. U.S. Census Bureau data for 2012 show that 841 establishments operated in this industry in that year. Of that number, 828 establishments operated with fewer than 1,000 employees, 7 establishments operated with between 1,000 and 2,499 employees and 6 establishments operated with 2,500 or more employees. Based on this data, the Commission concludes that a majority of manufacturers in this industry are small.

    75. Other Communications Equipment Manufacturing. This industry comprises establishments primarily engaged in manufacturing communications equipment (except telephone apparatus, and radio and television broadcast, and wireless communications equipment). Examples of such manufacturing include fire detection and alarm systems manufacturing, Intercom systems and equipment manufacturing, and signals (e.g., highway, pedestrian, railway, traffic) manufacturing. The SBA has established a size for this industry as all such firms having 750 or fewer employees. U.S. Census Bureau data for 2012 show that 383 establishments operated in that year. Of that number, 379 operated with fewer than 500 employees and 4 had 500 to 999 employees. Based on this data, the Commission concludes that the majority of Other Communications Equipment Manufacturers are small.

    5. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements for Small Entities

    76. There are no new or different reporting, recordkeeping, or other compliance requirements adopted in this R&O that would likely financially impact either large or small entities, including health care providers and service providers.

    6. Steps Taken To Minimize the Significant Economic Impact on Small Entities, and Significant Alternatives Considered

    77. The RFA requires an agency to describe any significant, specifically small business, alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): “(1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof, for such small entities.”

    78. In the R&O, the Commission increases available funding for all eligible RHC Program entities including small entities. Specifically, the Commission increases RHC Program support, and thereby increases support available for rural, mostly small, health care providers, by: (1) Increasing the RHC Program support cap to $571 million to apply to FY 2017; (2) prospectively increasing the $571 million RHC Program support cap via inflation using the Gross Domestic Price Chain-type Price Index (GDP-CPI) in FY 2018 and beyond; and (3) “carrying forward” unused funds committed in one funding year into subsequent funding years.

    79. In the R&O, the Commission carefully balanced the significant financial hardship faced by rural health care providers due to the otherwise scarcity of funding and the public health consequences that could result from lack of broadband service with the increase in funding needed to meet the new cap. The Commission considered and rejected arguments to double the cap or to increase it beyond the $571 million adopted in the R&O. The increased cap, indexed to inflation, and the carry forward of unused funds will make more funding available to eligible health care providers including small entities, while minimizing the amount of funds that are needed to be collected. No commenters proposed significant small business alternatives.

    7. Report to Congress

    80. The Commission will send a copy of the R&O, including this FRFA, in a report to be sent to Congress pursuant to the Congressional Review Act. In addition, the Commission will send a copy of the R&O, including this FRFA, to the Chief Counsel for Advocacy of the SBA. A copy of the R&O and FRFA (or summaries thereof) will also be published in the Federal Register.

    E. Effective Date of Report and Order

    81. The Commission finds good cause to make the rule changes herein effective June 29, 2018, pursuant to section 553(d) of the Administrative Procedure Act. Agencies determining whether there is good cause to make a new rule or rule revision take effect less than 30 days after Federal Register publication must balance the necessity for immediate implementation against principles of fundamental fairness that require that all affected persons be afforded a reasonable time to prepare for the effective date of the new rule. Making these rule changes effective June 29, 2018 enables eligible health care providers to benefit from the increased funding cap for FY 2017, thereby avoiding the financial hardship caused by the proration of their funding commitments and the potential public health crises that could result. As noted earlier, the current reduction in funding may impede the ability of rural health care providers to provide essential health care services in their rural communities, or require them to scale back service offerings or quality, and these consequences could be particularly severe for small, rural health care providers with limited budgets.

    82. Further, making these rule changes effective upon publication will not burden contributors or RHC Program participants. As a practical matter, contributors pass through their contribution obligations to their end users by a line item on the end user's invoice, which they update quarterly based on the contribution factor. The additional funding required by the R&O to be applied to FY 2017 will be collected over the next two quarters in accordance with our regular course of business for calculating and announcing the quarterly contribution factor, thus requiring no additional or different administrative burden on contributors. No additional time is needed for affected parties to prepare for the rules' effectiveness because USAC and interested parties have already applied for and processed the requests for funding for the current RHC Program year (FY 2017). Additionally, the rule change to increase the funding cap enables eligible health care providers to benefit from increased funding in the current funding year and does not oblige them to take any particular action. The rule changes that index the funding cap to inflation and carry forward unused funds do not impose any additional requirement on RHC Program participants and will be implemented by Commission staff and USAC during FY 2018. Thus, the Commission finds good cause to make these rule changes effective June 29, 2018.

    IV. Ordering Clauses

    83. Accordingly, it is ordered that, pursuant to sections 4(i) through (j), 201(b), and 254 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i) through (j), 201(b), 254, the Report and Order is adopted.

    84. It is furthered ordered that part 54 of the Commission's rules, 47 CFR part 54, is amended, and such rules shall become effective June 29, 2018.

    85. It is further ordered that, pursuant to the authority contained in sections 1 through 4 and 254 of the Communications Act of 1934, as amended, 47 U.S.C. 151 through 154 and 254, and pursuant to § 1.3 and of the Commission's rules, 47 CFR 1.3, that § 54.675 of the Commission's rules, 47 CFR 54.675, is waived to the extent provided herein.

    86. It is further ordered that, pursuant to the authority contained in sections 1 through 4 and 254 of the Communications Act of 1934, as amended, 47 U.S.C. 151 through 154 and 254, the petitions for waiver filed by Schools, Health, and Libraries Broadband Coalition filed on April 3, 2018, Advanced Data Solutions (on behalf of Frontier Community Services, Central Peninsula Hospital, Cordova Community Medical Center, Camai Community Health Center, IHS/ABQ Alamo Health Center and Kenaitze Indian Tribe) filed on May 15, 2018, Bristol Bay Area Health Corporation filed on April 2, 2018, and Council of Athabascan Tribal Government filed on April 9, 2018 are dismissed as moot.

    87. It is further ordered that, pursuant to 5 U.S.C. 801(a)(1)(A), the Commission shall send a copy of the Report and Order to Congress and to the Government Accountability Office pursuant to the Congressional Review Act.

    88. It is further ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of the Report and Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

    Federal Communications Commission. Katura Jackson, Federal Register Liaison Officer, Office of the Secretary. List of Subjects in 47 CFR Part 54

    Communications common carriers, Health facilities, internet, Telecommunications.

    Final Rule

    For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 54 as follows:

    PART 54—UNIVERSAL SERVICE 1. The authority citation for part 54 continues to read as follows: Authority:

    47 U.S.C. 151, 154(i), 155, 201, 205, 214, 219, 220, 254, 303(r), 403, and 1302 unless otherwise noted.

    2. Amend § 54.675 by revising paragraph (a) to read as follows:
    § 54.675 Cap.

    (a) Amount of the annual cap. The aggregate annual cap on federal universal service support for health care providers shall be $571 million per funding year, of which up to $150 million per funding year will be available to support upfront payments and multi-year commitments under the Healthcare Connect Fund.

    (1) Inflation increase. In funding year 2018 and the subsequent funding years, the $571 million cap on federal universal support in the Rural Health Care Program shall be automatically increased annually to take into account increases in the rate of inflation as calculated in paragraph (a)(2) of this section.

    (2) Increase calculation. To measure increases in the rate of inflation for the purposes of this paragraph (a), the Commission shall use the Gross Domestic Product Chain-type Price Index (GDP-CPI). To compute the annual increase as required by this paragraph (a), the percentage increase in the GDP-CPI from the previous year will be used. For instance, the annual increase in the GDP-CPI from 2017 to 2018 would be used for the 2018 funding year. The increase shall be rounded to the nearest 0.1 percent by rounding 0.05 percent and above to the next higher 0.1 percent and otherwise rounding to the next lower 0.1 percent. This percentage increase shall be added to the amount of the annual funding cap from the previous funding year. If the yearly average GDP-CPI decreases or stays the same, the annual funding cap shall remain the same as the previous year.

    (3) Public notice. When the calculation of the yearly average GDP-CPI is determined, the Wireline Competition Bureau shall publish a public notice in the Federal Register within 60 days announcing any increase of the annual funding cap based on the rate of inflation.

    (4) Amount of unused funds. All funds collected that are unused shall be carried forward into subsequent funding years for use in the Rural Health Care Program in accordance with the public interest and notwithstanding the annual cap. The Administrator shall report to the Commission, on a quarterly basis, funding that is unused from prior years of the Rural Health Care Program.

    (5) Application of unused funds. On an annual basis, in the second quarter of each calendar year, all funds that are collected and that are unused from prior years shall be available for use in the next full funding year of the Rural Health Care Program in accordance with the public interest and notwithstanding the annual cap as described in this paragraph (a).

    [FR Doc. 2018-14073 Filed 6-28-18; 8:45 am] BILLING CODE 6712-01-P
    DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Parts 215, 217, and 243 [Docket DARS-2016-0026] RIN 0750-AI99 Defense Federal Acquisition Regulation Supplement: Undefinitized Contract Action Definitization (DFARS Case 2015-D024) AGENCY:

    Defense Acquisition Regulations System, Department of Defense (DoD).

    ACTION:

    Final rule.

    SUMMARY:

    DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to provide a more transparent means of documenting the impact of costs incurred during the undefinitized period of an undefinitized contract action on allowable profit.

    DATES:

    Effective June 29, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Mr. Mark Gomersall, telephone 571-372-6176.

    SUPPLEMENTARY INFORMATION:

    I. Background

    DoD published a proposed rule in the Federal Register at 81 FR 73007 on October 21, 2016, to amend the DFARS to provide a more transparent means of documenting the impact of costs incurred during the undefinitized period of an undefinitized contract action (UCA), and to recognize when contractors demonstrate efficient management and internal cost control systems through the submittal of a timely, auditable proposal in furtherance of definitization of a UCA. In some cases, DoD contracting personnel have not documented their consideration of the reduced risk to the contractor of costs incurred during the undefinitized period of a UCA. While such costs generally present very little risk to the contractor, the contracting officer should consider the reasons for any delays in definitization in making their determination of the appropriate assigned value for contract type risk.

    II. Discussion and Analysis

    Two respondents submitted public comments in response to the proposed rule. DoD reviewed the public comments in the development of this final rule. An analysis of the comments is provided as follows:

    A. Summary of Significant Changes

    The following changes were made to the language published in the proposed rule:

    1. The term “auditable proposal” in 215.404-71-2 is revised as “qualifying proposal as defined in 217.7401(c)” for consistency with 10 U.S.C. 2326.

    2. The instructions for completing blocks 24a and 24b have been revised for clarity.

    3. The language at 215.404-71-3(d)(2)(ii) is revised for clarity.

    B. Analysis of Public Comments 1. Weighted Guidelines Revision

    Comment: One respondent did not see the need to change the current weighted guidelines form and structure to address unique requirements associated with establishing profit objectives for undefinitized contract actions, and therefore recommended no change to the current weighted guidelines application. The respondent asserted that the Government should comply with guidance provided by USD/AT&L, and the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017, which stipulates that allowable profit should reflect the cost risk at the time that a contractor submits a qualifying proposal. The respondent stated that contractors should not be penalized for positive and efficient performance because they agreed to start work before final agreement on price, particularly when Government action or inaction is the cause of the delay. The respondent therefore asserted that profit should be based upon the risk at the time of the proposal and not at the time of negotiation.

    Response: The stated purpose of this rule is to provide a more transparent means of documenting the impact of costs incurred during the undefinitized period of a UCA, and to recognize when contractors demonstrate efficient management and internal cost control systems through the submittal of a timely, auditable proposal in furtherance of definitization of a UCA. Therefore, the weighted guidelines form is revised to provide a means of clearly demonstrating that the contracting officer has appropriately considered and documented the risk to the contractor during the undefinitized period, as well as the contractor's due diligence in submitting a timely, auditable proposal. DFARS case 2017-D022 has been opened to implement section 811, Modified Restrictions on Undefinitized Contractual Actions, of the NDAA for FY 2017.

    2. Costs Incurred Prior to Definitization

    Comment: One respondent stated that the requirements of DFARS 215.404-71-3(d)(2), which direct contracting officers to assess the extent to which costs have been incurred prior to definitization of the UCA, are inconsistent with the tenets of the NDAA for FY 2017 and should also be deleted.

    Response: The requirements of DFARS 215.404-71-3(d)(2) are consistent with the requirements of section 811 of the NDAA for FY 2017, which are being implemented under DFARS case 2017-D022.

    3. Management/Cost Control Weighted Guidelines Factor Adjustment

    Comment: One respondent expressed concern that the 1 percent adjustment to the management/cost control factor is tied to the contractor's timely submission of an auditable proposal. The respondent stated that in many cases, industry submits timely, auditable proposals only to have the Government, usually after lengthy delay, deem them insufficient and request an updated proposal. This becomes an endless loop of auditing, requests for updated information (including actuals), more auditing, more requests for updated information, etc.

    Response: The adjustment to the management/cost control factor in the weighted guidelines is established to allow contracting officers to recognize when contractors demonstrate efficient management and internal cost control systems through the submittal of a timely, auditable proposal in furtherance of definitization of a UCA. It is incumbent on contractors to provide timely, auditable proposals in order to demonstrate their efficient management and internal cost control systems.

    4. Timely UCA Definitization

    Comment: Both respondents expressed concern that the rule does not address the need for the Government to definitize UCAs in a timely manner.

    Response: To provide for enhanced management and oversight of UCAs, departments and agencies prepare and maintain semiannual Consolidated UCA Management Plans and UCA Management Reports to ensure contracting officers are actively and efficiently pursuing definitization of UCAs. Likewise, contractors are expected to submit timely, auditable proposals, including adequate supporting data in order to avoid unnecessary delays.

    III. Applicability to Contracts at or Below the Simplified Acquisition Threshold (SAT) and for Commercial Items, Including Commercially Available Off-the-shelf (COTS) Items

    This rule amends the DFARS to provide a more transparent means of documenting the impact of costs incurred during the undefinitized period of an undefinitized contract action on allowable profit. The revisions do not add any new burdens or impact applicability of clauses and provisions at or below the simplified acquisition threshold, or to commercial items.

    IV. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all 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). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

    V. Executive Order 13771

    This rule is not an E.O. 13771, Reducing and Controlling Regulatory Costs, regulatory action, because this rule is not significant under E.O. 12866.

    VI. Regulatory Flexibility Act

    This rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq.

    The objective of the rule is to gain visibility into the contracting officer's rationale for the contract type risk values entered on the DD Form 1547, Record of Weighted Guidelines Application. The rule requires contracting officers to document in the price negotiation memorandum their rationale for assigning a specific contract type risk value. In addition, Item 24 on the DD Form 1547 is separated into Item 24a, Contract Type Risk (based on contractor incurred costs under a UCA) and Item 24b, Contract Type Risk (based on Government projected costs).

    This rule will not have a significant economic impact on a substantial number of small entities. This rule only changes processes that are internal to the Government by providing a more transparent means of documenting the impact of costs incurred during the undefinitized period of a UCA when calculating negotiation profit objectives. This rule does not revise the current regulatory requirements at DFARS 215.404-71-3(d)(2), which direct contracting officers to assess the extent to which costs have been incurred prior to definitization of the contract action. However, to recognize when contractors demonstrate efficient management and cost control through the submittal of a timely, auditable proposal in furtherance of definitization of a UCA, and the proposal demonstrates effective cost control from the time of award to the present, the contracting officer may add 1 percentage point to the value determined for management/cost control up to the maximum of 7 percent.

    There is no change to reporting or recordkeeping as a result of this rule. The rule does not duplicate, overlap, or conflict with any other Federal rules.

    There are no known significant alternative approaches to the rule that would meet the requirements. DoD considers the approach described in the proposed rule to be the most practical and beneficial for both Government and industry.

    VII. Paperwork Reduction Act

    The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

    List of Subjects in 48 CFR Parts 215, 217, and 243

    Government procurement.

    Amy G. Williams, Deputy, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 215, 217, and 243 are amended as follows:

    1. The authority citation for 48 CFR parts 215, 217, and 243 continues to read as follows: Authority:

    41 U.S.C. 1303 and 48 CFR chapter 1.

    PART 215—CONTRACTING BY NEGOTIATION 2. Amend section 215.404-71-2 by adding paragraph (e)(2)(iii) to read as follows:
    215.404-71-2 Performance risk.

    (e) * * *

    (2) * * *

    (iii) If the contractor demonstrates efficient management and cost control through the submittal of a timely, qualifying proposal (as defined in 217.7401(c)) in furtherance of definitization of an undefinitized contract action, and the proposal demonstrates effective cost control from the time of award to the present, the contracting officer may add 1 percentage point to the value determined for management/cost control up to the maximum of 7 percent.

    3. Amend section 215.404-71-3 by revising paragraphs (b) introductory text, (b)(1) through (3), and (d)(2) to read as follows:
    215.404-71-3 Contract type risk and working capital adjustment.

    (b) Determination. The following extract from the DD 1547 is annotated to explain the process.

    Item Contractor risk factors Assigned
  • value
  • Base Profit
  • objective
  • 24a Contract Type Risk (based on incurred costs at the time of qualifying proposal submission) (1) (2)(i) (3) 24b Contract Type Risk (based on Government estimated cost to complete) (1) (2)(ii) (3) 24c Totals (3) (3)
    Item Contractor risk factors Costs
  • financed
  • Length
  • factor
  • Interest
  • rate
  • Profit
  • objective
  • 25 Working Capital (4) (5) (6) (7) (8)

    (1) Select a value from the list of contract types in paragraph (c) of this section using the evaluation criteria in paragraph (d) of this section. See paragraph (d)(2) of this section.

    (2)(i) Insert the amount of costs incurred as of the date the contractor submits a qualifying proposal, such as under an undefinitized contract action, (excluding facilities capital cost of money) into the Block 24a column titled Base.

    (ii) Insert the amount of Government estimated cost to complete (excluding facilities capital cost of money) into the Block 24b column titled Base.

    (3) Multiply (1) by (2)(i) and (2)(ii), respectively for Blocks 24a and 24b. Add Blocks 24a and 24b and insert the totals in Block 24c.

    (d) * * *

    (2) Mandatory. (i) The contracting officer shall assess the extent to which costs have been incurred prior to definitization of the contract action (also see 217.7404-6(a) and 243.204-70-6). When costs have been incurred prior to definitization, generally regard the contract type risk to be in the low end of the designated range. If a substantial portion of the costs have been incurred prior to definitization, the contracting officer may assign a value as low as 0 percent, regardless of contract type.

    (ii) Contracting officers shall document in the price negotiation memorandum the reason for assigning a specific contract type risk value, to include the extent to which any reduced cost risk during the undefinitized period of performance was considered, in determining the negotiation objective.

    PART 217—SPECIAL CONTRACTING METHODS
    217.7404-6 [Amended]
    4. Amend section 217.7404-6 by— a. In paragraph (b), removing “The contractor's reduced cost risk for costs incurred” and adding in its place “Any reduced cost risk to the contractor for costs expected to be incurred” in its place; and b. In paragraph (c), removing “contract file” and adding “price negotiation memorandum” in its place. PART 243—CONTRACT MODIFICATIONS
    243.204-70-6 [Amended]
    5. Amend section 243.204-70-6 by— a. In paragraph (b), removing “The contractor's reduced cost risk for costs incurred” and adding “Any reduced cost risk to the contractor for costs expected to be incurred” in its place; and b. In paragraph (c), removing “contract action” and adding “unpriced change order” in its place and removing “contract file” and adding “price negotiation memorandum” in its place.
    [FR Doc. 2018-14042 Filed 6-28-18; 8:45 am] BILLING CODE 5001-06-P
    DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Parts 216, 247, and 252 [Docket DARS-2018-0031] RIN 0750-AJ91 Defense Federal Acquisition Regulation Supplement: Repeal of DFARS Clause “Requirements” (DFARS Case 2018-D030) AGENCY:

    Defense Acquisition Regulations System, Department of Defense (DoD).

    ACTION:

    Final rule.

    SUMMARY:

    DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to remove a clause that is duplicative of an existing Federal Acquisition Regulation (FAR) clause.

    DATES:

    Effective June 29, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Ms. Carrie Moore, telephone 571-372-6093.

    SUPPLEMENTARY INFORMATION:

    I. Background

    DoD is amending the DFARS to remove the DFARS clause 252.216-7010, Requirements, the Alternate clause, the associated clause prescription at DFARS 216.506, and a cross-reference to the clause at DFARS 247.271-3(p).

    The DFARS clause is included in contracts for preparation of personal property for movement or storage, or for intra-city or intra-area movement; advises contractors that a requirements contract has been issued and how quantities work under the contract; that the delivery of items or performance of work is subject to the issuance of orders; and, that the Government shall order all requirements covered by the contract from the contractor, unless certain circumstances apply.

    FAR clause, 52.216-21, Requirements, advises contractors of the same information in the DFARS clause, and also provides a date after which the contractor is not required to make any deliveries under the contract. The DFARS clause is no longer necessary, because the FAR clause applies to the situations in which the DFARS clause is prescribed for use and covers the information contained in the DFARS clause. As such, this DFARS clause is now redundant and can be removed.

    The removal of this DFARS clause supports a recommendation from the DoD Regulatory Reform Task Force. On February 24, 2017, the President signed Executive Order (E.O.) 13777, “Enforcing the Regulatory Reform Agenda,” which established a Federal policy “to alleviate unnecessary regulatory burdens” on the American people. In accordance with E.O. 13777, DoD established a Regulatory Reform Task Force to review and validate DoD regulations, including the DFARS. A public notification of the establishment of the DFARS Subgroup to the DoD Regulatory Reform Task Force, for the purpose of reviewing DFARS provisions and clauses, was published in the Federal Register at 82 FR 35741 on August 1, 2017, and requested public input. No public comments were received on this provision. Subsequently, the DoD Task Force reviewed the requirements of DFARS clause 252.216-7010, Requirements, and determined that the DFARS coverage was redundant and recommended removal.

    II. Applicability to Contracts at or Below the Simplified Acquisition Threshold and for Commercial Items, Including Commercially Available Off-the-Shelf Items

    This rule does not add any new solicitation provisions or contract clauses. This rule only removes obsolete DFARS provision 252.216-7010, Requirements. Therefore, the rule does not impose any new requirements on contracts at or below the simplified acquisition threshold and for commercial items, including commercially available off-the-shelf items.

    III. Executive Orders 12866 and 13563

    Executive Order (E.O.) 12866, Regulatory Planning and Review; and E.O. 13563, Improving Regulation and Regulatory Review, direct agencies to assess all 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). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The Office of Management and Budget, Office of Information and Regulatory Affairs (OIRA), has determined that this is not a significant regulatory action as defined under section 3(f) of E.O. 12866 and, therefore, was not subject to review under section 6(b). This rule is not a major rule as defined at 5 U.S.C. 804(2).

    IV. Executive Order 13771

    This rule is not an E.O. 13771, Reducing Regulation and Controlling Regulatory Costs, regulatory action, because this rule is not significant under E.O. 12866.

    V. Publication of This Final Rule for Public Comment Is Not Required by Statute

    The statute that applies to the publication of the Federal Acquisition Regulation (FAR) is the Office of Federal Procurement Policy statute (codified at title 41 of the United States Code). Specifically, 41 U.S.C 1707(a)(1) requires that a procurement policy, regulation, procedure or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure, or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment, because DoD is not issuing a new regulation; rather, this rule merely removes an obsolete clause from the DFARS.

    VI. Regulatory Flexibility Act

    Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule under 41 U.S.C. 1707(a)(1) (see section V. of this preamble), the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are not applicable. Accordingly, no regulatory flexibility analysis is required and none has been prepared.

    VII. Paperwork Reduction Act

    The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

    List of Subjects in 48 CFR Parts 216, 247, and 252

    Government procurement.

    Amy G. Williams, Deputy, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 216, 247, and 252 are amended as follows:

    1. The authority citation for 48 CFR parts 216, 247, and 252 continues to read as follows: Authority:

    41 U.S.C. 1303 and 48 CFR chapter 1.

    PART 216—TYPES OF CONTRACTS
    216.506 [Amended]
    2. In section 216.506, remove paragraph (d). PART 247—TRANSPORTATION
    247.271-3 [Amended]
    3. In section 247.271-3, remove paragraph (p). PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES
    252.216-7010 [Removed]
    4. Remove section 252.216-7010.
    [FR Doc. 2018-14041 Filed 6-28-18; 8:45 am] BILLING CODE 5001-06-P
    83 126 Friday, June 29, 2018 Proposed Rules OFFICE OF PERSONNEL MANAGEMENT 5 CFR Part 870 RIN 3206-AN52 Federal Employees' Group Life Insurance Program: Clarifying Annual Rates of Pay and Amending the Employment Status of Judges of the United States Court of Appeals for Veterans Claims AGENCY:

    Office of Personnel Management.

    ACTION:

    Proposed rule.

    SUMMARY:

    The Office of Personnel Management (OPM) is issuing a proposed rule to amend the Federal Employees' Group Life Insurance (FEGLI) regulations to clarify the definition of annual rates of pay for insured employees and to clarify the status of judges of the United States Court of Appeals for Veterans Claims.

    DATES:

    Comments are due on or before August 28, 2018.

    ADDRESSES:

    Send written comments to Ronald Brown, Policy Analyst, Healthcare and Insurance, U.S. Office of Personnel Management, Room 4316, 1900 E Street NW, Washington, DC. You may also submit comments identified by the RIN number stated above using the Federal eRulemaking Portal (http://www.regulations.gov). Follow the instructions for submitting comments.

    FOR FURTHER INFORMATION CONTACT:

    Ronald Brown, Policy Analyst, (202) 606-2128, or by email to [email protected]

    SUPPLEMENTARY INFORMATION: Background

    The Federal Employees' Group Life Insurance Program (FEGLI) is administered by the United States Office of Personnel Management (OPM) in accordance with Chapter 87 of Title 5 of the U.S. Code and our implementing regulations (title 5, part 87, and title 48, part 21, of the Code of Federal Regulations). The FEGLI enabling legislation was signed August 17, 1954. As of September 30, 2017, FEGLI covers an estimated 4,231,000 employees and annuitants enrolled in Basic insurance, including 1,144,000 employees and annuitants with Option B insurance that has not reduced to zero, 1,187,000 employees and annuitants enrolled in Option A insurance, and 933,000 employees and annuitants enrolled in Option C insurance that has not reduced to zero.

    The FEGLI statute establishes the basic rules for benefits, enrollment, and participation, and provides that OPM “shall specify the types of pay included in annual pay.” See 5 U.S.C. 8704(c). In accordance, OPM has promulgated regulations defining the “basic insurance amount” for all Program enrollees. Further, the “basic insurance amount” is defined by law using the term “annual rate of basic pay.” See 5 U.S.C. 8701(c). For Program purposes, the basic insurance amount applies to Basic and Option B insurance.

    This proposed rule clarifies what is considered annual basic pay for FEGLI Program purposes, but does not change how the annual rate of basic pay is computed, provide additional enrollment or change opportunities, or make other changes not in the existing Program regulations. The proposed rule makes this clear in the revised sections of part 870 by aligning the Program and retirement regulations, and, in the process, eliminating certain outdated regulatory provisions on basic pay.

    Discussion of Proposed Changes

    OPM is issuing a proposed regulation to clarify that (1) annual basic pay for FEGLI includes any type of pay treated as basic pay for purposes of the retirement systems established under 5 U.S.C. chapters 83 and 84 consistent with applicable law or OPM regulation, and (2) basic pay for FEGLI purposes does not include bonuses, allowances, overtime pay, or any other pay to a covered civilian employee given in addition to the base pay of the position except as otherwise provided by specific provision of law or OPM regulation.

    The proposed rule changes existing paragraphs 5 CFR 870.204(a)(1) and (a)(2) to clarify that basic pay for FEGLI purposes includes all payments that are retirement-creditable basic pay under 5 U.S.C. chapters 83 and 84. The proposed rule also deletes paragraphs that are obsolete or creditable by other provisions of law or covered as exceptions to existing law. This includes a revised paragraph on locality pay, special pay supplements, and customs officer pay.

    The proposed regulation updates FEGLI regulations to state that (1) judges of the United States Court of Appeals for Veterans Claims, formerly judges of the United States Court of Veterans Appeals, are covered under applicable provisions of 5 U.S.C. chapter 87, and (2) any such judge who is in regular active service and a judge who is retired under chapter 72 of title 38 or under chapter 83 or 84 of title 5 shall be treated as an employee under FEGLI law and regulation.

    The proposed regulation updates 5 CFR 870.101 with the correct title of the United States Court of Appeals for Veterans Claims and updates paragraph 5 CFR 870.101 with the correct title of the United States Court of Appeals for Veterans Claims. The proposed regulation also updates paragraph 5 CFR 870.703(e)(1) to state that a judge of the United States Court of Appeals for Veterans Claims who is in regular active service and a judge who is retired under 38 U.S.C. 7296 is considered an employee under the FEGLI Program as required by Public Law 114-315.

    Regulatory Impact Analysis: OPM has examined the impact of this proposed rule as required by Executive Order 12866 and Executive Order 13563, which directs agencies to assess all 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). A regulatory impact analysis must be prepared for major rules with economically significant effects of $100 million or more in any one year. This rule is not considered a major rule because the regulation only clarifies the definition of basic pay, but does not make substantive changes to its computation. This rule only affects the life insurance of a small number of federal employees and annuitants that are or have served as judges for the United States Court of Appeals for Veteran's Claims. As the Court is authorized seven permanent, active Judges, and two additional Judges as part of a temporary expansion provision, who are appointed for 15-year terms, OPM estimates the number of affected employees is de minimus.

    Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA) establishes “as a principle of regulatory issuance that agencies shall endeavor, consistent with the objectives of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation.” To achieve this principle, agencies are required to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are given serious consideration.” The RFA covers a wide range of small entities, including small businesses, not-for-profit organizations, and small governmental jurisdictions.

    Agencies must perform a review to determine whether a rule will have a significant economic impact on a substantial number of small entities. If the agency determines that it will, the agency must prepare a regulatory flexibility analysis as described in the RFA. I certify that this regulation will not have a significant economic impact on a substantial number of small entities because the regulation only affects a small number of Federal employees and annuitants.

    Executive Order 12866, Regulatory Review

    This proposed rule has been reviewed by the Office of Management and Budget in accordance with Executive Orders 13563 and 12866.

    Executive Order 13771, Reducing Regulation and Controlling Regulatory Costs

    This proposed rule is not expected to be an E.O. 13771 regulatory action because this proposed rule is not significant under Executive Order 12866. The proposed rule makes minimal changes to coverage for certain judges, and clarifies that annual basic pay for FEGLI includes any type of pay treated as basic pay for purposes of the retirement systems established under 5 U.S.C. chapters 83 and 84 consistent with applicable law or OPM regulation.

    This proposed rule is not subject to the requirements of E.O. 13771 (82 FR 9339, February 3, 2017) because it is related to agency organization, management, or personnel and affects only a small number of federal employees and annuitants.

    Federalism

    We have examined this rule in accordance with Executive Order 13132, Federalism, and have determined that this rule will not have any negative impact on the rights, roles and responsibilities of State, local, or tribal governments.

    Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. chapter 3507(d); see 5 CFR part 1320) requires that the U.S. Office of Management and Budget (OMB) approve all collections of information by a Federal agency from the public before they can be implemented. Respondents are not required to respond to any collection of information unless it displays a current valid OMB control number. OPM is not proposing any additional collections in this rule. This rule does not affect any existing collections.

    List of Subjects in 5 CFR Part 870

    Administrative practice and procedure, Government employees, Hostages, Iraq, Kuwait, Lebanon, Life Insurance, Retirement.

    Office of Personnel Management. Jeff T.H. Pon, Director.

    For the reasons stated in the preamble, OPM is proposing to amend part 870 of title 5 of the Code of Federal Regulations as follows:

    PART 870—FEDERAL EMPLOYEES' GROUP LIFE INSURANCE PROGRAM 1. The authority citation for Part 870 continues to read: Authority:

    5 U.S.C. 8716; Subpart J also issued under section 599C of Pub. L. 101-513, 104 Stat. 2064, as amended; Sec. 870.302(a)(3)(ii) also issued under section 153 of Pub. L. 104-134, 110 Stat. 1321; Sec. 870.302(a)(3) also issued under sections 11202(f), 11232(e), and 11246(b) and (c) of Pub. L. 105-33, 111 Stat. 251, and section 7(e) of Pub. L. 105-274, 112 Stat. 2419; Sec. 870.302(a)(3) also issued under section 145 of Pub. L. 106-522, 114 Stat. 2472; Secs. 870.302(b)(8), 870.601(a), and 870.602(b) also issued under Pub. L. 110-279, 122 Stat. 2604; Subpart E also issued under 5 U.S.C. 8702(c); Sec. 870.601(d)(3) also issued under 5 U.S.C. 8706(d); Sec. 870.703(e)(1) also issued under section 502 of Pub. L. 110-177, 121 Stat. Start Printed Page 773662542; Sec. 870.705 also issued under 5 U.S.C. 8714b(c) and 8714c(c); Public Law 104-106, 110 Stat. 521.

    2. Amend § 870.101 by revising the definition of Employing Office, to read as follows:
    § 870.101 Definitions.

    Employing Office

    (4) The United States Court of Appeals for Veterans Claims is the employing office for judges of the United States Court of Appeals for Veterans Claims.

    3. Amend § 870.204 by revising paragraph (a) to read as follows:
    § 870.204 Annual rates of pay.

    (a)(1) An employee's annual pay is the annual basic pay of the position as fixed by law or regulation, except as otherwise provided by specific provision of law or OPM regulation. Annual pay for this purpose includes the following:

    (i) Any pay of a type that is treated as basic pay for purposes of the retirement systems established under 5 U.S.C. chapters 83 and 84, consistent with 5 U.S.C. 8331(3);

    (ii) Any geographic-based pay supplement that is equivalent to a locality-based comparability payment under 5 U.S.C. 5304; and

    (iii) Any special pay supplement for a defined subcategory of employees that is equivalent to a special rate supplement under 5 U.S.C. 5305.

    (2) Notwithstanding paragraph (a)(1) of this section, annual basic pay does not include the following:

    (i) Bonuses, allowances, overtime pay, or any other pay to a covered civilian employee given in addition to the base pay of the position, except as otherwise provided by specific provision of law or OPM regulation.

    (ii) Physicians comparability allowances under 5 U.S.C. 5948.

    4. Amend § 870.703 by adding paragraph (e)(1)(vii) to read as follows:
    § 870.703 Election of Basic insurance.

    (e) * * *

    (1) * * *

    (vii) 38 U.S.C. 7296.

    [FR Doc. 2018-14032 Filed 6-28-18; 8:45 am] BILLING CODE 6325-63-P
    DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 810 [Doc. No. AMS-FGIS-18-0053] United States Standards for Canola AGENCY:

    Agricultural Marketing Service, USDA.

    ACTION:

    Request for information.

    SUMMARY:

    The United States Department of Agriculture's (USDA) Agricultural Marketing Service (AMS) is seeking comments from the public regarding the United States (U.S.) Standards for Canola under the United States Grain Standards Act (USGSA). To ensure that standards and official grading practices remain relevant, AMS invites interested parties to comment on whether the current canola standards and grading practices need to be changed.

    DATES:

    We will consider comments we receive by August 28, 2018.

    ADDRESSES:

    Submit comments or notice of intent to submit comments by any of the following methods:

    Postal Mail: Please send your comment addressed to Kendra Kline, AMS, USDA, 1400 Independence Avenue SW, Room 2043-S, Washington, DC 20250-3614.

    Hand Delivery or Courier: Kendra Kline, AMS, USDA, 1400 Independence Avenue SW, Room 2043-S, Washington, DC 20250-3614.

    Internet: Go to http://www.regulations.gov. Follow the on-line instructions for submitting comments.

    FOR FURTHER INFORMATION CONTACT:

    Patrick McCluskey, USDA AMS; Telephone: (816) 659-8403; Email: [email protected]

    SUPPLEMENTARY INFORMATION:

    Section 4 of the USGSA (7 U.S.C. 76(a)) grants the Secretary of Agriculture the authority to establish standards for canola and other grains regarding kind, class, quality, and condition. The canola standards were established by USDA on February 28, 1992 (57 FR 3271) and appear in the USGSA regulations at 7 CFR 810.301-810.306. The standards facilitate canola marketing and define U.S. canola quality in the domestic and global marketplace. The standards define commonly used industry terms; contain basic principles governing the application of standards, such as the type of sample used for a particular quality analysis; the basis of determination; and specify grades and grade requirements. Official procedures for determining grading factors are provided in Grain Inspection Handbook, Book II, Chapter 3, “Canola”. The Handbook also includes standardized procedures for additional quality attributes not used to determine grade, such as dockage and moisture content. Together, the grading standards and official procedures allow buyers and sellers to communicate quality requirements, compare canola quality using equivalent forms of measurement, and assist in price discovery.

    The realignment of offices within the U.S. Department of Agriculture authorized by the Secretary's Memorandum dated November 14, 2017, “Improving Customer Service and Efficiency”, eliminates the Grain Inspection, Packers and Stockyards Administration (GIPSA) as a standalone agency. Federal Grain Inspection Service (FGIS) activities, formerly part of GIPSA, are now organized under AMS. FGIS grading and inspection services are provided through a network of federal, state, and private laboratories that conduct tests to determine the quality and condition of canola. These tests are conducted in accordance with applicable standards using approved methodologies and can be applied at any point in the marketing chain. Furthermore the tests yield rapid, reliable, and consistent results. In addition, FGIS-issued certificates describing the quality and condition of graded canola are accepted as prima facie evidence in all Federal courts. U.S. Standards for Canola and the affiliated grading and testing services offered by FGIS verify that a seller's canola meet specified requirements, and ensure that customers receive the quality of canola they purchased.

    In order for U.S. standards and grading procedures for canola to remain relevant, AMS is issuing this request for information to invite interested parties to submit comments, ideas, and suggestions on all aspects of the U.S. Standards for Canola and official procedures.

    Authority:

    7 U.S.C. 71-87k.

    Dated: June 26, 2018. Greg Ibach, Under Secretary, Marketing and Regulatory Programs.
    [FR Doc. 2018-14016 Filed 6-28-18; 8:45 am] BILLING CODE 3410-02-P
    DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 810 [Doc. No. AMS-FGIS-18-0052] United States Standards for Corn AGENCY:

    Agricultural Marketing Service, USDA.

    ACTION:

    Request for information.

    SUMMARY:

    The United States Department of Agriculture's (USDA) Agricultural Marketing Service (AMS) is seeking comments from the public regarding the United States (U.S.) Standards for Corn under the United States Grain Standards Act (USGSA). To ensure that standards and official grading practices remain relevant, AMS invites interested parties to comment on whether the current corn standards and grading practices need to be changed.

    DATES:

    We will consider comments we receive by August 28, 2018.

    ADDRESSES:

    Submit comments or notice of intent to submit comments by any of the following methods:

    Postal Mail: Please send your comment addressed to Kendra Kline, AMS, USDA, 1400 Independence Avenue SW, Room 2043-S, Washington, DC 20250-3614.

    Hand Delivery or Courier: Kendra Kline, AMS, USDA, 1400 Independence Avenue SW, Room 2043-S, Washington, DC 20250-3614.

    Internet: Go to http://www.regulations.gov. Follow the on-line instructions for submitting comments.

    FOR FURTHER INFORMATION CONTACT:

    Patrick McCluskey, USDA AMS; Telephone: (816) 659-8403; Email: [email protected]

    SUPPLEMENTARY INFORMATION:

    Section 4 of the USGSA (7 U.S.C. 76(a)) grants the Secretary of Agriculture the authority to establish standards for corn and other grains regarding kind, class, quality, and condition. The corn standards, established by USDA on December 1, 1916, were last revised in 1995 (60 FR 61194) and appear in the USGSA regulations at 7 CFR 810.401-810.405. The standards facilitate corn marketing and define U.S. corn quality in the domestic and global marketplace. The standards define commonly used industry terms; contain basic principles governing the application of standards, such as the type of sample used for a particular quality analysis; the basis of determination; and specify grades and grade requirements. Official procedures for determining grading factors are provided in Grain Inspection Handbook, Book II, Chapter 4, “Corn”. The Handbook also includes standardized procedures for additional quality attributes not used to determine grade, such as stress crack analysis and moisture content. Together, the grading standards and official procedures allow buyers and sellers to communicate quality requirements, compare corn quality using equivalent forms of measurement, and assist in price discovery.

    The realignment of offices within the U.S. Department of Agriculture authorized by the Secretary's Memorandum dated November 14, 2017, “Improving Customer Service and Efficiency”, eliminates the Grain Inspection, Packers and Stockyards Administration (GIPSA) as a standalone agency. Federal Grain Inspection Service (FGIS) activities, formerly part of GIPSA, are now organized under AMS. FGIS grading and inspection services are provided through a network of federal, state, and private laboratories that conduct tests to determine the quality and condition of corn. These tests are conducted in accordance with applicable standards using approved methodologies and can be applied at any point in the marketing chain. Furthermore the tests yield rapid, reliable, and consistent results. In addition, FGIS-issued certificates describing the quality and condition of graded corn are accepted as prima facie evidence in all Federal courts. U.S. Standards for Corn and the affiliated grading and testing services offered by FGIS verify that a seller's corn meet specified requirements, and ensure that customers receive the quality of corn they purchased.

    In order for U.S. standards and grading procedures for corn to remain relevant, AMS is issuing this request for information to invite interested parties to submit comments, ideas, and suggestions on all aspects of the U.S. Standards for Corn and official procedures.

    Authority:

    7 U.S.C. 71-87k.

    Dated: June 26, 2018. Greg Ibach, Under Secretary, Marketing and Regulatory Programs.
    [FR Doc. 2018-14017 Filed 6-28-18; 8:45 am] BILLING CODE 3410-02-P
    DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 810 [Doc. No. AMS-FGIS-18-0054] United States Standards for Soybeans AGENCY:

    Agricultural Marketing Service, USDA.

    ACTION:

    Request for information.

    SUMMARY:

    The United States Department of Agriculture's (USDA) Agricultural Marketing Service (AMS) is seeking comments from the public regarding the United States (U.S.) Standards for Soybeans under the United States Grain Standards Act (USGSA). To ensure that standards and official grading practices remain relevant, AMS invites interested parties to comment on whether the current soybean standards and grading practices need to be changed.

    DATES:

    We will consider comments we receive by August 28, 2018.

    ADDRESSES:

    Submit comments or notice of intent to submit comments by any of the following methods:

    Postal Mail: Please send your comment addressed to Kendra Kline, AMS, USDA, 1400 Independence Avenue SW, Room 2043-S, Washington, DC 20250-3614.

    Hand Delivery or Courier: Kendra Kline, AMS, USDA, 1400 Independence Avenue SW, Room 2043-S, Washington, DC 20250-3614.

    Internet: Go to http://www.regulations.gov. Follow the on-line instructions for submitting comments.

    FOR FURTHER INFORMATION CONTACT:

    Patrick McCluskey, USDA AMS; Telephone: (816) 659-8403; Email: [email protected]

    SUPPLEMENTARY INFORMATION:

    Section 4 of the USGSA (7 U.S.C. 76(a)) grants the Secretary of Agriculture the authority to establish standards for soybeans and other grains regarding kind, class, quality, and condition. The soybean standards, established by USDA on November 20, 1940, were last revised in 2006 (71 FR 52403) and appear in the USGSA regulations at 7 CFR 810.1601-810.1605. The standards facilitate soybean marketing and define U.S. soybean quality in the domestic and global marketplace. The standards define commonly used industry terms; contain basic principles governing the application of standards, such as the type of sample used for a particular quality analysis; the basis of determination; and specify grades and grade requirements. Official procedures for determining grading factors are provided in Grain Inspection Handbook, Book II, Chapter 10, “Soybeans”. The Handbook also includes standardized procedures for additional quality attributes not used to determine grade, such as oil and protein content. Together, the grading standards and official procedures allow buyers and sellers to communicate quality requirements, compare soybean quality using equivalent forms of measurement, and assist in price discovery.

    The realignment of offices within the U.S. Department of Agriculture authorized by the Secretary's Memorandum dated November 14, 2017, “Improving Customer Service and Efficiency”, eliminates the Grain Inspection, Packers and Stockyards Administration (GIPSA) as a standalone agency. Federal Grain Inspection Service (FGIS) activities, formerly part of GIPSA, are now organized under AMS. FGIS grading and inspection services are provided through a network of federal, state, and private laboratories that conduct tests to determine the quality and condition of soybeans. These tests are conducted in accordance with applicable standards using approved methodologies and can be applied at any point in the marketing chain. Furthermore the tests yield rapid, reliable, and consistent results. In addition, FGIS-issued certificates describing the quality and condition of graded soybeans are accepted as prima facie evidence in all Federal courts. U.S. Standards for Soybeans and the affiliated grading and testing services offered by FGIS verify that a seller's soybeans meet specified requirements, and ensure that customers receive the quality of soybeans they purchased.

    In order for U.S. standards and grading procedures for soybeans to remain relevant, AMS is issuing this request for information to invite interested parties to submit comments, ideas, and suggestions on all aspects of the U.S. Standards for Soybeans and official procedures.

    Authority:

    7 U.S.C. 71-87k.

    Dated: June 26, 2018. Greg Ibach, Under Secretary, Marketing and Regulatory Programs.
    [FR Doc. 2018-14015 Filed 6-28-18; 8:45 am] BILLING CODE 3410-02-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 15 CFR Part 960 [Docket No. 100903432-8557-01] RIN 0648-BA15 Licensing Private Remote Sensing Space Systems AGENCY:

    National Environmental Satellite, Data, and Information Service (NESDIS), National Oceanic and Atmospheric Administration (NOAA), Department of Commerce (Department, or Commerce).

    ACTION:

    Advance notice of proposed rulemaking.

    SUMMARY:

    Commerce is considering revisions to its regulations for the licensing of private remote sensing space systems, currently administered by NOAA. These revisions would facilitate the continued growth of this critical industry and update the regulatory regime to address significant technological developments, new business models, and increased foreign competition since their last update in 2006. In support of this effort, the Department through NOAA seeks public comment on substantive and procedural matters involved in commercial remote sensing licensing. Based in part on this public input, and based on a potential public meeting, the Department may draft proposed regulations and issue a Notice of Proposed Rulemaking.

    DATES:

    Comments must be received by August 28, 2018.

    ADDRESSES:

    You may send comments by the following method:

    Federal eRulemaking Portal: Go to: www.regulations.gov and search for the docket number NOAA-NESDIS-2018-0058. Click the “Comment Now!” icon, complete the required fields, and enter or attach your comments.

    Mail: NOAA Commercial Remote Sensing Regulatory Affairs, 1335 East-West Highway, G101, Silver Spring, Maryland 20910.

    Instructions: The Department of Commerce and NOAA are not responsible for comments sent by any other method, to any other address or individual, or received after the end of the comment period. All submissions received must include the agency name and docket number or RIN for this rulemaking. All comments received will be posted without change to www.regulations.gov, including any personal or commercially proprietary information provided.

    FOR FURTHER INFORMATION CONTACT:

    Tahara Dawkins, Commercial Remote Sensing Regulatory Affairs, at 301-713-3385, or Glenn Tallia, NOAA Office of General Counsel, at 301-628-1622.

    SUPPLEMENTARY INFORMATION: Background

    Per Article VI of the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies (“Outer Space Treaty”), activities of private U.S. entities in outer space require the “authorization and continuing supervision” of the United States Government. Subchapter VI of Title 51, National and Commercial Space Programs (51 U.S.C. 60121 et seq., hereinafter “Statute”), authorizes the Secretary of Commerce (“Secretary”) to fulfill this responsibility for operators of private remote sensing space systems, by authorizing the Secretary to issue and enforce licenses for the operation of such systems. The Secretary's authority under the Statute is currently delegated to the Assistant Administrator for Satellite and Information Services and implemented through NOAA's existing regulations, 15 CFR part 960, last updated in 2006. Under the Statute, NOAA has issued 119 licenses to U.S. corporations, universities, and people to operate over 1,000 imaging satellites, helping to ensure that the United States remains the clear world leader in this industry.

    Through the National Space Council, the Administration has made clear that long-term U.S. national security and foreign policy interests are best served by ensuring that U.S. industry continues to lead this rapidly maturing and highly competitive market. The priorities for the National Space Council and the Department are to: Encourage companies to do business in the United States; help businesses maintain a competitive advantage here; facilitate the growth of this important industry; and support innovation within it. To that end, the Department and NOAA wish to relieve any unnecessary regulatory burdens in the remote sensing area.

    Additionally, technological and other developments have highlighted ambiguities in the current regulatory regime, many of which were unforeseeable even just a few years ago. Specific examples include:

    • Dramatic increase in the number of license applications • Increasing remote sensing capabilities in other countries • Cubesat constellations • Non-Earth imaging • Satellite servicing • Innovative systems capable of imaging in different spectral bands • Live video broadcasting from space • Venture capital investment, including significant amounts from foreign nationals and corporations • New entrants to space markets • Hosted payloads • Increasing use of public-private partnerships • Complex contractual relationships • Satellite servicing missions, including proximity operations • Ground station networks located in multiple countries with different regulatory regimes • Launch vehicles imaging on orbit

    The Department recognizes that there have been many proposals to improve the commercial remote sensing regulatory regime, some of which may require new or revised statutory authority to implement. However, the Department may be able to make significant improvements to the licensing of remote sensing even under the existing statute, simply by revising its regulations. Therefore, to support the Administration's above-mentioned priorities and to reflect the dramatic changes in the remote sensing industry since the last update of remote sensing regulations, the Department plans to revise its regulations. Before drafting specific provisions, the Department is seeking input from stakeholders regarding how it should best address a variety of important issues.

    Request for Public Comments

    The Department welcomes input on any matters related to commercial remote sensing regulation, including specific examples of industry standards, alternative regulatory approaches, and legal definitions that work well in other areas. The Department also invites comment on the overall cost of complying with NOAA's existing regulations and any specific regulatory requirements that are particularly burdensome.

    In addition, the Department seeks input on the following specific topics:

    Topic 1: Requirement To Obtain a License

    The Statute authorizes the Secretary of Commerce to license “private sector parties to operate private remote sensing space systems” and prohibits a “person that is subject to the jurisdiction or control of the United States” from “operat[ing] any private remote sensing space system” without a license (51 U.S.C. 60121(a), 60122(a)).

    In pursuit of the Department's goal to facilitate innovation, the Department seeks input on how to define these and other statutory terms in its regulations, and at what level of specificity. Definitions that are more specific would provide greater certainty to industry in determining whether a license is required, but specific definitions could quickly be outpaced by technological change, becoming obsolete or burdensome. Alternatively, less specific definitions could adapt as technology and business models develop, but might provide insufficient certainty to industry. The Department may be able to augment less specific definitions in its regulations with interpretive guidance, which could be updated more regularly to reflect industry developments.

    With this background in mind, the Department seeks general comments on this topic. In addition, the Department seeks input in response to the following specific questions:

    a. How should Commerce define the statutory terms “private sector party” and “person subject to the jurisdiction or control of the United States?”

    b. How should Commerce define the statutory term “private remote sensing space system?”

    c. How should Commerce determine which entity is the operator of a private remote sensing system (the operator is required to obtain a license under the statute) in complex cases, such as when there are multiple entities involved in the operation of the system?

    Topic 2: License Application and Review Processes

    Before a license can be granted, the Statute requires the Secretary to determine that the applicant will comply with the Statute, the regulations, and any international obligations and national security concerns (51 U.S.C. 60121(b)(1)). The Statute also requires the Secretary to consult with the Secretaries of Defense and State (51 U.S.C. 60147(a), (b)).

    The Department seeks to expedite review of applications as much as possible within statutory constraints. Commerce recognizes that modern remote sensing space systems present a broad range of technical capabilities and possible risks to national security, foreign policy, and international obligations of the United States. Commerce would prefer that the majority of applicants, whose systems present few, if any, such risks, could be reviewed more quickly and be subject to a lighter regulatory approach overall. In addition to providing certainty and quicker review for most applicants, this approach would allow Commerce and its interagency partners to work with industry to focus resources on mitigating only the most critical risks posed by the most capable proposed systems.

    With this background in mind, the Department seeks general comments on this topic. In addition, Commerce seeks input in response to the following specific questions:

    a. Commerce is considering grouping proposed systems into two or more categories based on the potential risk presented by their capabilities. Those systems categorized as posing only a de minimis risk would be subject to an expedited review process, less restrictive license conditions, and less burdensome compliance requirements (note: Comments are sought on factors potentially relevant for defining review categories and review processes for different categories (Topic 2, below), on license conditions (Topic 3), and on compliance requirements (Topic 4)). The Department seeks input on whether such a strategy is advisable, and if so, how to implement it.

    1. Would the proposed category system be advisable?

    2. How should Commerce define categories in such a system? Consider the following factors, for example:

    A. Earth-surface imaging capabilities, including temporal and spatial resolution B. Non-Earth imaging capabilities, including temporal and spatial resolution C. Other technical factors, including spectral range, data management cycle, and duration of the on-orbit capabilities D. Non-technical matters, including business structure, foreign investment, and the degree of third-party investment in the system

    3. What application information should Commerce collect from applicants in different categories (e.g., applications in a de minimis sensing capability category versus moderate or precise sensing capability categories)?

    4. How should the review process for the different categories differ, including interagency consultation? Should Commerce issue a license based solely on notification by the applicant and confirmation by Commerce that the proposed system satisfies the criteria for the de minimis category?

    5. How and how often should Commerce reevaluate its definition of these categories over time?

    b. Should all applications or only applications for some categories of commercial remote sensing licenses enjoy a “presumption of approval?” If so, how should Commerce implement this presumption?

    c. Would it be helpful to require a pre-application consultation? If so, under which circumstances?

    d. How can the Department improve transparency during the application review process?

    e. Noting that new technologies can require extensive study, how can Commerce work proactively with the other reviewing agencies and potential future licensees to ensure that the Department is prepared to swiftly review any submitted applications?

    Topic 3: License Conditions

    While some license conditions are required by statute or regulation, the Secretaries of Defense and State also determine additional individual conditions addressing national security, foreign policy, and international obligations (51 U.S.C. 60122, 60147; 15 CFR 960.11). The Secretary of Commerce, through NOAA, ultimately implements and enforces all license conditions.

    Listing standard license conditions in Commerce's regulations would provide applicants with certainty. However, some flexibility may be necessary to allow the Department to tailor conditions to specific systems, as appropriate. Additionally, the Department recognizes that some license conditions can impose a heavy cost burden, which harms industry and frustrates U.S. policy. Commerce seeks to impose those conditions only when legally required or when critical risks to national security, foreign policy, and international obligations are identified. Finally, Commerce recognizes that once a license is issued, permanent retroactive changes to license conditions can be disruptive to a licensee's operations and business.

    With this background in mind, the Department seeks general comments on this topic. In addition, the Department seeks input in response to the following specific questions:

    a. Considering the default conditions in 15 CFR 960.11, are there any conditions that should be added, removed, or modified in light of technological changes or impacts to the industry?

    b. Should there be different default conditions for the different “categories” of systems as described in Topic 2?

    c. When considering license conditions, how should NOAA think about the cost and benefit of conditions? What information could licensees provide to NOAA to inform that analysis?

    d. How should Commerce respond to emerging and unforeseeable national security, foreign policy, and international obligation issues for existing licensed systems (e.g., retroactive conditions, temporary restrictions)?

    e. Should the U.S. Government be required to attempt to mitigate any national security or other risks before imposing conditions? If such mitigation would be costly, how should Commerce balance the taxpayer cost with any avoided cost to licensees?

    f. Under the Convention on International Liability for Damage Caused by Space Objects, the U.S. Government and taxpayers may be liable for damage caused by a licensee to a space object, person, or property of another nation. The U.S. Government would not be liable if a licensee damages a space object, person, or property of another U.S. entity, but the licensee may lack the financial means to pay damages to an aggrieved entity. NOAA currently requires licensees to submit an orbital debris assessment report and spacecraft disposal plan, but should Commerce also consider a license condition requiring licensees to obtain some level of insurance to cover these potential liabilities? If such insurance is prohibitively expensive, should Commerce consider other, less burdensome means to protect U.S. taxpayers and other U.S. satellite owners?

    g. How should Commerce adjust conditions in response to the increasing capabilities of non-U.S. entities? How frequently should NOAA evaluate those increasing capabilities?

    h. How can Commerce best provide transparency to licensees regarding classified national security risks?

    Topic 4: Compliance and Enforcement

    The Secretary is required to ensure compliance with the regulations and with licenses (51 U.S.C. 60123, 15 CFR 960.13-960.15). To meet this obligation, NOAA must collect information, but it seeks to minimize the burden on licensees.

    With this background in mind, the Department seeks general comments on this topic. In addition, the Department seeks input in response to the following specific questions:

    a. What are appropriate mechanisms for ensuring compliance? Currently, Commerce uses site visits, virtual inspections, quarterly and annual audits, and no-notice inspections as needed.

    b. How should Commerce ensure compliance when multiple parties (including investors) play a role in a single licensed system? Options could include licensing all involved parties, or holding a single licensee responsible for the entire system.

    c. Are there any improvements the Department could make to its formal adjudication procedures in the regulations?

    d. Should Commerce mandate licensees to use certain technical standards, or particular software, for compliance purposes? If so, what standards or software should Commerce require?

    e. Should Commerce adopt different compliance policies and procedures for the different categories described in Topic 2? If so, what policies and procedures would be appropriate for the different categories?

    Topic 5: Integration With Other Licensing and Regulatory Regimes

    The Department recognizes that many NOAA-licensed systems also require licenses from other U.S. Government agencies, and occasionally from agencies in other countries. The Department seeks to reduce the overall regulatory burden to licensees, when possible.

    With this background in mind, Commerce seeks general comments on this topic. In addition, the Department seeks input in response to the following specific questions:

    a. Within statutory constraints, how can Commerce avoid redundancies and inconsistencies between domestic regulatory regimes?

    b. Within statutory constraints, how can Commerce minimize burdens to licensees who operate in multiple countries and are subject to multiple countries' regulatory regimes?

    Classification

    This advance notice of proposed rulemaking was determined to be significant for purposes of E.O. 12866.

    Dated: June 25, 2018. Stephen Volz, Assistant Administrator for Satellite and Information Services, National Oceanic and Atmospheric Administration, Department of Commerce.
    [FR Doc. 2018-14038 Filed 6-28-18; 8:45 am] BILLING CODE 3510-HR-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 15 [Docket No. FDA-2018-N-2309] The Food and Drug Administration Predictive Toxicology Roadmap and Its Implementation; Public Hearing; Request for Comments AGENCY:

    Food and Drug Administration, HHS.

    ACTION:

    Notification of public hearing; request for comments.

    SUMMARY:

    The Food and Drug Administration (FDA or Agency) is announcing a public hearing to solicit comments on FDA's Predictive Toxicology Roadmap, which was issued by FDA on December 6, 2017. FDA is seeking comments on how to foster the development and evaluation of emerging toxicological methods and new technologies and incorporate these methods and technologies into regulatory review, as applicable.

    DATES:

    The public hearing will be held on Wednesday, September 12, 2018, from 9 a.m. to 4 p.m. Persons seeking to attend or to present at the public hearing must register by Wednesday, August 29, 2018. Section III provides attendance and registration information. Electronic or written comments will be accepted after the public hearing until Friday, October 12, 2018.

    ADDRESSES:

    The public hearing will be held at the FDA White Oak Campus, 10903 New Hampshire Ave., Bldg. 31 Conference Center, the Great Room (Rm. 1503A), Silver Spring, MD 20993-0002. Entrance for public hearing participants (non-FDA employees) is through Building 1, where routine security check procedures will be performed. For parking and security information, please refer to: https://www.fda.gov/AboutFDA/WorkingatFDA/BuildingsandFacilities/WhiteOakCampusInformation/ucm241740.htm.

    Electronic Submissions

    You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted via the https://www.regulations.gov electronic filing system by midnight Eastern Time on October 12, 2018. Comments received by mail/hand delivery/courier (for written/paper submissions) will be considered timely if they are postmarked or the delivery service acceptance receipt is on or before that date.

    Federal eRulemaking Portal: https://www.regulations.gov. Follow the instructions for submitting comments. Comments submitted electronically, including attachments, to https://www.regulations.gov will be posted to the docket unchanged. Because your comment will be made public, you are solely responsible for ensuring that your comment does not include any confidential information that you or a third party may not wish to be posted, such as medical information, your or anyone else's Social Security number, or confidential business information, such as a manufacturing process. Please note that if you include your name, contact information, or other information that identifies you in the body of your comments, that information will be posted on https://www.regulations.gov.

    • If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).

    Written/Paper Submissions

    Submit written/paper submissions as follows:

    Mail/Hand delivery/Courier (for written/paper submissions): Dockets Management Staff (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    • For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked, and identified as confidential, if submitted as detailed in “Instructions.”

    Instructions: All submissions received must include the Docket No. FDA-2018-N-2309 for “The FDA Predictive Toxicology Roadmap and its Implementation; Public Hearing; Request for Comments.” Received comments will be placed in the docket and, except for those submitted as “Confidential Submissions,” publicly viewable at https://www.regulations.gov or at the Dockets Management Staff between 9 a.m. and 4 p.m., Monday through Friday.

    • Confidential Submissions: To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on https://www.regulations.gov. Submit both copies to the Dockets Management Staff. If you do not wish your name and contact information to be made publicly available, you can provide this information on the cover sheet and not in the body of your comments and you must identify this information as “confidential.” Any information marked as “confidential” will not be disclosed except in accordance with 21 CFR 10.20 and other applicable disclosure law. For more information about FDA's posting of comments to public dockets, see 80 FR 56469, September 18, 2015, or access the information at: https://www.fda.gov/regulatoryinformation/dockets/default.htm.

    Docket: For access to the docket to read background documents or the received electronic and written/paper comments, go to https://www.regulations.gov and insert the docket number, found in brackets in the heading of this document, into the “Search” box and follow the prompts and/or go to the Dockets Management Staff, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    FOR FURTHER INFORMATION CONTACT:

    Tracy Chen, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 1, Rm. 4309A, Silver Spring, MD 20993, [email protected]

    SUPPLEMENTARY INFORMATION: I. Background

    The scientific discipline of toxicology is particularly essential to FDA's mission because it is applied across the breadth of FDA-regulated product areas. Toxicological testing is performed during the development and evaluation of FDA-regulated products, ranging from human and animal drugs and medical devices to food and food ingredients, human biologics, and tobacco products. Advances in systems biology, stem cells, engineered tissues, and mathematical modeling are creating unique opportunities to improve toxicology's predictive ability, potentially enhancing FDA's ability to predict risk. Also critical is the potential of these advances for replacing, reducing, and/or refining animal testing. Today, novel methods such as organs on a chip and mathematical modeling are generating unique opportunities that may improve our ability to quickly and more accurately predict potential toxicities and reduce associated risks to the public.

    FDA centers have each taken significant steps to enhance the use and evaluation of cutting-edge toxicological assays. However, more work needs to be done to achieve broad acceptance of new toxicology methodologies and technologies. FDA's six product centers have different legal authorities for evaluating product safety or toxicity. Nevertheless, more robust methodological evaluation and datasets can help speed the acceptance of emerging predictive toxicology methods across the regulatory product areas.

    FDA recognized that a comprehensive strategy was needed to evaluate new methodologies and technologies for their potential to offer greater predictive ability and to protect public health. Acceptance of any new toxicology testing method will require convincing data as well as continuous dialogue and feedback among all relevant stakeholders, from development to implementation, including qualification and acceptance by regulatory authorities.

    To ensure that FDA continues to employ cutting-edge science to assess the toxicity of its regulated products and to leverage advances being made in toxicology, the Commissioner of Food and Drugs (the Commissioner) tasked the Agency's Toxicology Working Group with developing a more efficient process for identifying and qualifying emerging predictive toxicology technologies. Established in 2015 and comprised of senior FDA toxicologists from across the Agency, the Working Group has deep expertise in the various FDA product areas and knowledge of the differing legal authorities for evaluating toxicity in those product areas.

    For a new testing method to be accepted for use in determining the toxicity of an FDA-regulated product there must be convincing data to ensure that the method can be relied upon for both product development and regulatory decision-making. FDA evaluates the test or series of tests for their applicability, limitations, relevance, reliability, accuracy, reproducibility, and sensitivity in the evaluation of human response and toxicity. Undergoing this process requires continuous dialogue and feedback among all relevant stakeholders, beginning with developers and ending with qualification and acceptance by regulatory authorities.

    FDA's Predictive Toxicology Roadmap (https://www.fda.gov/PredictiveToxRoadmap) is a six-part framework for integrating predictive toxicology methods into safety and risk assessments. Among other recommendations, it calls for FDA research to identify data gaps and to support research to ensure that the most promising technologies are developed, validated, and integrated into regulatory use. The roadmap also identifies toxicology issues that need addressing for FDA-regulated products and toxicology areas that could benefit from improved predictivity. Because this is a high priority for the Agency, FDA's Toxicology Working Group will be reporting yearly to FDA's Chief Scientist on progress made in this important effort.

    II. Topics for Discussion at the Public Hearing

    The purpose of this public meeting is to invite public comment on how FDA can better work with its stakeholders to implement the goals of its Predictive Toxicology Roadmap. We invite interested parties to submit comments, especially on the questions listed below on each of the six parts in the roadmap. Comments on additional areas are also welcome.

    A. FDA Toxicology Working Group

    FDA has formed a senior-level Toxicology Working Group under the direction of the Commissioner to foster enhanced communication among FDA product centers and researchers and leverage FDA resources to advance the evaluation and integration of emerging predictive toxicology methods and new technologies into regulatory safety and risk assessments.

    1. Which goals of the FDA Roadmap are most important to FDA stakeholders?

    2. What role could FDA stakeholders play in achieving these goals?

    B. Training

    Continuing current education in new predictive toxicology methods is essential for FDA regulators.

    1. What training topics and approaches do you think would help FDA staff to appropriately implement new alternative methods?

    2. Are there relevant courses that you can recommend?

    3. Should FDA partner with its stakeholders for these training courses and how might this be achieved?

    C. Continued Communication

    FDA will continue to reaffirm its commitment to and support for incorporating data from newly qualified toxicology methods into regulatory submissions and encourage discussions with stakeholders as part of the regulatory submission process.

    1. How can FDA better communicate with stakeholders to encourage discussion on the use of qualified new toxicology methods early in the regulatory process?

    2. How can new toxicology methods and approaches be integrated into FDA's review of regulated products?

    3. What information do stakeholders need from FDA to qualify alternative methods for a specific context of use?

    D. Collaborations

    FDA will continue its long practice of fostering collaborations across disciplines nationally and internationally.

    1. What partnerships could be useful to FDA to advance the roadmap?

    2. Are there existing partnerships that FDA should be involved in to achieve the roadmap's goals?

    E. Research

    FDA's research programs will identify data gaps and support research to ensure that the most promising technologies are identified, evaluated, and integrated into product development and assessment.

    1. What data gaps should be addressed by FDA research and research conducted by external groups?

    2. How can FDA encourage and support research in areas of importance to its mission?

    3. How could FDA and stakeholders evaluate whether alternative methods are appropriately qualified for a specific context of use?

    F. Oversight

    The Toxicology Working Group, with representation from each FDA center, will track the progress of these recommendations and report to FDA's Chief Scientist annually.

    1. How can FDA ensure transparency in its progress?

    2. How can FDA better foster opportunities to share ideas and knowledge with its stakeholders?

    3. How can FDA highlight collaborations on the development and testing of new methods?

    III. Participating in the Public Hearing

    Registration and Requests To Make an Oral Presentation: The FDA Conference Center at the White Oak location is a Federal facility with security procedures and limited seating. Attendance will be free and on a first-come, first-served basis. If you wish to attend either in person or by webcast and/or present at the hearing, please register by Friday, August 17, 2018, at the following website at: https://www.fda.gov/PredictiveToxRoadmap.

    FDA will try to accommodate all persons who wish to make a presentation. Individuals wishing to present should identify the number of the specific question, or questions, they wish to address. This will help FDA organize the presentations. Individuals and organizations with common interests should consolidate or coordinate their presentations and request time for a joint presentation. FDA will notify registered presenters of their scheduled presentation times. The time allotted for each presentation will depend on the number of individuals who wish to speak but should last a maximum of 10 minutes. Presenters are encouraged to submit an electronic copy of their presentation to [email protected] (See FOR FURTHER INFORMATION CONTACT) on or before Friday, August 24, 2018. Persons registered to make an oral presentation are encouraged to arrive at the hearing room early and check in at the onsite registration table to confirm their designated presentation time. An agenda for the hearing and any other background materials will be made available 5 days before the hearing at https://www.fda.gov/PredictiveToxRoadmap.

    If you need special accommodations because of a disability, please contact Shari Solomon ([email protected]) no later than Friday, August 17, 2018, at 12 noon Eastern Time.

    Transcripts: Please be advised that as soon as a transcript is available, it will be accessible at https://www.regulations.gov. It may be viewed at the Dockets Management Staff, 5630 Fishers Lane, Room 1061, Rockville, MD 20852.

    Table 1—Information on Participation in the Meeting and on Submitting Comments to the Rulemaking Dockets Activity Date Electronic address Address Public hearing September 12, 2018 FDA White Oak Campus, 10903 New Hampshire Ave., Bldg. 31, Rm. 1503A, Silver Spring, MD 20993. Advance registration By Wednesday, August 29, 2018 https://www.fda.gov/predictivetoxroadmap Technical assistance [email protected] Request to make an oral presentation By Friday, August 17, 2018 [email protected] Send PowerPoint slides (10 minutes maximum) By Friday August 24, 2018 [email protected] Request special accommodations due to a disability By Friday, August 17, 2018 [email protected] Submit electronic or written comments By October 12, 2018 https://www.regulations.gov Dockets Management Staff (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852. IV. Notice of Hearing Under 21 CFR Part 15

    The Commissioner is announcing that the public hearing will be held in accordance with 21 CFR part 15. The hearing will be conducted by a presiding officer, who will be accompanied by FDA senior management from the Office of the Commissioner and the relevant Centers/Offices. Under § 15.30(f), the hearing is informal and the rules of evidence do not apply. No participant may interrupt the presentation of another participant. Only the presiding officer and panel members can pose questions; they can question any person during or after each presentation. Public hearings under part 15 are subject to FDA's policy and procedures for electronic media coverage of FDA's public administrative proceedings (21 CFR part 10, subpart C). Under § 10.205, representatives of the media may be permitted, subject to certain limitations, to videotape, film, or otherwise record FDA's public administrative proceedings, including presentations by participants. The hearing will be transcribed as stipulated in § 15.30(b) (see Transcripts). To the extent that the conditions for the hearing, as described in this notice, conflict with any provisions set out in part 15, this notice acts as a waiver of those provisions as specified in § 15.30(h).

    Dated: June 26, 2018. Leslie Kux, Associate Commissioner for Policy.
    [FR Doc. 2018-14052 Filed 6-28-18; 8:45 am] BILLING CODE 4164-01-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R01-OAR-2017-0696; FRL-9979-82—Region 1] Air Plan Approval; Vermont; Infrastructure State Implementation Plan Requirements for the 2012 PM2.5 NAAQS AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is proposing to approve elements of a State Implementation Plan (SIP) submission from Vermont that addresses the infrastructure requirements of the Clean Air Act (CAA or Act)—including the interstate transport provisions—for the 2012 fine particle (PM2.5) National Ambient Air Quality Standards (NAAQS). The infrastructure requirements are designed to ensure that the structural components of each state's air quality management program are adequate to meet the state's responsibilities under the CAA. This action is being taken under the Clean Air Act.

    DATES:

    Written comments must be received on or before July 30, 2018.

    ADDRESSES:

    Submit your comments, identified by Docket ID No. EPA-R01-OAR-2017-0696, to the www.regulations.gov website or via email to [email protected] For comments submitted to the www.regulations.gov website, follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from www.regulations.gov. For either manner of submission, the EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (i.e., on the web, cloud, or other file sharing system). For additional submission methods, please contact the person identified in the “For Further Information Contact” section. For the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit www.epa.gov/dockets/commenting-epa-dockets. Publicly available docket materials are available at www.regulations.gov or at the U.S. Environmental Protection Agency, EPA New England Regional Office, Office of Ecosystem Protection, Air Quality Planning Unit, 5 Post Office Square—Suite 100, Boston, MA. EPA requests that if at all possible, you contact the contact listed in the FOR FURTHER INFORMATION CONTACT section to schedule your inspection. The Regional Office's official hours of business are Monday through Friday, 8:30 a.m. to 4:30 p.m., excluding legal holidays.

    FOR FURTHER INFORMATION CONTACT:

    Alison C. Simcox, Air Quality Unit, U.S. Environmental Protection Agency, EPA New England Regional Office, 5 Post Office Square—Suite 100, (Mail code OEP05-2), Boston, MA 02109-3912, tel. (617) 918-1684; [email protected]

    SUPPLEMENTARY INFORMATION:

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

    Table of Contents I. Background and Purpose A. What Vermont SIP submissions does this rulemaking address? B. What is the scope of this rulemaking? II. What guidance is EPA using to evaluate these SIP submissions? III. EPA's Review A. Section 110(a)(2)(A)—Emission Limits and Other Control Measures B. Section 110(a)(2)(B)—Ambient Air Quality Monitoring/Data System C. Section 110(a)(2)(C)—Program for Enforcement of Control Measures and for Construction or Modification of Stationary Sources D. Section 110(a)(2)(D)—Interstate Transport E. Section 110(a)(2)(E)—Adequate Resources F. Section 110(a)(2)(F)—Stationary Source Monitoring System G. Section 110(a)(2)(G)—Emergency Powers H. Section 110(a)(2)(H)—Future SIP Revisions I. Section 110(a)(2)(I)—Nonattainment Area Plan or Plan Revisions Under Part D J. Section 110(a)(2)(J)—Consultation With Government Officials; Public Notifications; Prevention of Significant Deterioration; Visibility Protection K. Section 110(a)(2)(K)—Air Quality Modeling/Data L. Section 110(a)(2)(L)—Permitting Fees M. Section 110(a)(2)(M)—Consultation/Participation by Affected Local Entities IV. Proposed Action V. Statutory and Executive Order Reviews I. Background and Purpose A. What Vermont SIP submissions does this rulemaking address?

    This rulemaking addresses a SIP submission from the Vermont Department of Environmental Conservation (VT DEC). The state submitted its infrastructure SIP for the 2012 fine particle (PM2.51 ) National Ambient Air Quality Standard (NAAQS) on October 31, 2017. This included an enclosure addressing the “Good Neighbor” (or “transport”) provisions for the 2012 PM2.5 NAAQS (Section 110(a)(2)(D)(i)(I) of the CAA). Under sections 110(a)(1) and (2) of the CAA, states are required to submit infrastructure SIPs to ensure that SIPs provide for implementation, maintenance, and enforcement of the NAAQS, including the 2012 PM2.5 NAAQS.

    1 PM2.5 refers to particulate matter of 2.5 microns or less in diameter, often referred to as “fine” particles.

    B. What is the scope of this rulemaking?

    EPA is acting on a SIP submission from Vermont that addresses the infrastructure requirements of CAA sections 110(a)(1) and 110(a)(2) for the 2012 PM2.5 NAAQS.

    The requirement for states to make a SIP submission of this type arises out of CAA sections 110(a)(1) and 110(a)(2). Pursuant to these sections, each state must submit a SIP that provides for the implementation, maintenance, and enforcement of each primary or secondary NAAQS. States must make such SIP submission “within 3 years (or such shorter period as the Administrator may prescribe) after the promulgation of a new or revised NAAQS.” This requirement is triggered by the promulgation of a new or revised NAAQS and is not conditioned upon EPA's taking any other action. Section 110(a)(2) includes the specific elements that “each such plan” must address.

    EPA commonly refers to such SIP submissions intended to satisfy the requirements of CAA sections 110(a)(1) and 110(a)(2) as “infrastructure SIP” submissions. Although the term “infrastructure SIP” does not appear in the CAA, EPA uses the term to distinguish this type of SIP submission from submissions that are intended to satisfy other SIP requirements under the CAA, such as “nonattainment SIP” or “attainment plan SIP” submissions to address the nonattainment planning requirements of part D of title I of the CAA.

    This rulemaking will not cover three substantive areas that are not integral to acting on a state's infrastructure SIP submission: (i) Existing provisions related to excess emissions during periods of start-up, shutdown, or malfunction at sources (“SSM” emissions) that may be contrary to the CAA and EPA's policies addressing such excess emissions; (ii) existing provisions related to “director's variance” or “director's discretion” that purport to permit revisions to SIP-approved emissions limits with limited public process or without requiring further approval by EPA, that may be contrary to the CAA (“director's discretion”); and, (iii) existing provisions for Prevention of Significant Deterioration (PSD) programs that may be inconsistent with current requirements of EPA's “Final New Source Review (NSR) Improvement Rule,” 67 FR 80186 (December 31, 2002), as amended by 72 FR 32526 (June 13, 2007) (“NSR Reform”). Instead, EPA has the authority to address each one of these substantive areas separately. A detailed history, interpretation, and rationale for EPA's approach to infrastructure SIP requirements can be found in EPA's May 13, 2014, proposed rule entitled, “Infrastructure SIP Requirements for the 2008 Lead NAAQS” in the section, “What is the scope of this rulemaking?” See 79 FR 27241 at 27242-45.

    II. What guidance is EPA using to evaluate these SIP submissions?

    EPA highlighted the statutory requirement to submit infrastructure SIPs within 3 years of promulgation of a new NAAQS in an October 2, 2007, guidance document entitled “Guidance on SIP Elements Required Under Sections 110(a)(1) and (2) for the 1997 8-hour Ozone and PM2.5 National Ambient Air Quality Standards” (2007 Guidance). EPA has issued additional guidance documents and memoranda, including a September 13, 2013, guidance document entitled “Guidance on Infrastructure State Implementation Plan (SIP) Elements under Clean Air Act Sections 110(a)(1) and 110(a)(2)” (2013 Guidance) and a September 25, 2009, guidance document entitled “Guidance on SIP Elements Required Under Sections 110(a)(1) and (2) for the 2006 24-Hour Fine Particle (PM2.5) National Ambient Air Quality Standards (NAAQS)” (2009 Guidance).2

    2 This memorandum and other referenced guidance documents and memoranda are included in the docket for this action.

    With respect to the Good Neighbor provision, the most recent relevant document was a memorandum published on March 17, 2016, entitled “Information on the Interstate Transport `Good Neighbor' Provision for the 2012 Fine Particulate Matter National Ambient Air Quality Standards under Clean Air Act Section 110(a)(2)(D)(i)(I)” (2016 memorandum). The 2016 memorandum describes EPA's past approach to addressing interstate transport, and provides EPA's general review of relevant modeling data and air quality projections as they relate to the 2012 annual PM2.5 NAAQS. The 2016 memorandum provides information relevant to EPA Regional office review of the CAA section 110 (a)(2)(D)(i)(I) “Good Neighbor” provision requirements in infrastructure SIPs with respect to the 2012 annual PM2.5 NAAQS. This rulemaking considers information provided in that memorandum.

    III. EPA's Review

    In this notice of proposed rulemaking, EPA is proposing action on a SIP submission from the state of Vermont. In its submission, Vermont presents a detailed list of Vermont Laws and previously SIP-approved Air Quality Regulations showing how the various components of its EPA-approved SIP meet each of the requirements of section 110(a)(2) of the CAA for the 2012 PM2.5 NAAQS. The following review evaluates the state's submissions in light of section 110(a)(2) requirements and relevant EPA guidance.

    For Vermont's October 31, 2017 submission addressing the 2012 PM2.5 NAAQS, we reviewed all Section 110(a)(2) elements, including the transport provisions, but excluding the three areas discussed above under the scope of this rulemaking.

    A. Section 110(a)(2)(A)-Emission Limits and Other Control Measures

    This section (also referred to in this action as an element) of the Act requires SIPs to include enforceable emission limits and other control measures, means or techniques, schedules for compliance, and other related matters. However, EPA has long interpreted emission limits and control measures for attaining the standards as being due when nonattainment planning requirements are due.3 In the context of an infrastructure SIP, EPA is not evaluating the existing SIP provisions for this purpose. Instead, EPA is only evaluating whether the state's SIP has basic structural provisions for the implementation of the NAAQS.

    3 See, for example, EPA's final rule on “National Ambient Air Quality Standards for Lead.” 73 FR 66964, 67034 (November 12, 2008).

    Vermont's infrastructure submittal for this element cites Vermont Statutes Annotated (V.S.A) and several Vermont Air Pollution Control Regulations (VT APCR) as follows: Vermont's 10 V.S.A. § 554, “Powers,” authorizes the Secretary of the Vermont Agency of Natural Resources (ANR) to “[a]dopt, amend and repeal rules, implementing the provisions” of Vermont's air pollution control laws set forth in 10 V.S.A. chapter 23. It also authorizes the Secretary to “conduct studies, investigations and research relating to air contamination and air pollution” and to “[d]etermine by appropriate means the degree of air contamination and air pollution in the state and the several parts thereof.” Ten V.S.A. § 556, “Permits for the construction or modification of air contaminant sources,” requires applicants to obtain permits for constructing or modifying air contaminant sources, and 10 V.S.A. § 558, “Emission control requirements,” authorizes the Secretary “to establish emission control requirements . . . necessary to prevent, abate, or control air pollution.” EPA approved 10 V.S.A. § 554 on June 27, 2017 (82 FR 29005).

    The Vermont submittal cites more than 20 specific rules that the state has adopted to control the emissions of PM2.5 and its precursors: sulfur dioxide (SO2), volatile organic compounds (VOCs), and nitrogen oxides (NOX). A few, with their EPA approval citation 4 are listed here: § 5-201—Open Burning Prohibited (63 FR 19825; April 22, 1998); § 5-251—Control of Nitrogen Oxides Emissions (81 FR 50342; August 1, 2016); § 5-252—Control of Sulfur Dioxide Emissions (81 FR 50342; August 1, 2016); § 5-261—Control of Hazardous Air Contaminants (47 FR 6014; February 10, 1982); § 5-502—Major Stationary Sources and Major Modifications (81 FR 50342; August 1, 2016); § 5-702—Excessive Smoke Emissions from Motor Vehicles (45 FR 10775; February 19, 1980).

    4 The citations reference the most recent EPA approval of the stated rule, or of revisions to the rule. For example, § 5-252 was initially approved on February 4, 1977 (42 FR 6811), with various revisions being approved since then, with the most recent approval of revisions to the applicability section occurring on August 1, 2016 (81 FR 50342).

    Based upon EPA's review of the submittals, EPA proposes that Vermont meets the infrastructure SIP requirements of section 110(a)(2)(A) with respect to the 2012 PM2.5 NAAQS.

    As previously noted, EPA is not proposing to approve or disapprove any existing state provisions or rules related to SSM or director's discretion in the context of section 110(a)(2)(A).

    B. Section 110(a)(2)(B)—Ambient Air Quality Monitoring/Data System

    This section requires SIPs to provide for establishing and operating ambient air quality monitors, collecting and analyzing ambient air quality data, and making these data available to EPA upon request. Each year, states submit annual air monitoring network plans to EPA for review and approval. EPA's review of these annual monitoring plans includes our evaluation of whether the state: (i) Monitors air quality at appropriate locations throughout the state using EPA-approved Federal Reference Methods or Federal Equivalent Method monitors; (ii) submits data to EPA's Air Quality System (AQS) in a timely manner; and (iii) provides EPA Regional Offices with prior notification of any planned changes to monitoring sites or the network plan.

    State law authorizes the Secretary of ANR, or authorized representative, to “conduct studies, investigations and research relating to air contamination and air pollution” and to “[d]etermine by appropriate means the degree of air contamination and air pollution in the state and the several parts thereof.” See 10 V.S.A. § 554(8), (9). VT DEC, one of several departments within ANR, operates an air quality monitoring network, and EPA approved the state's 2017 Annual Air Monitoring Network Plan for PM2.5 on August 23, 2017.5 Furthermore, VT DEC populates AQS with air quality monitoring data in a timely manner, and provides EPA with prior notification when considering a change to its monitoring network or plan. EPA proposes that VT DEC has met the infrastructure SIP requirements of section 110(a)(2)(B) with respect to the 2012 PM2.5 NAAQS.

    5 See EPA approval letter located in the docket for this action.

    C. Section 110(a)(2)(C)—Program for Enforcement of Control Measures and for Construction or Modification of Stationary Sources

    States are required to include a program providing for enforcement of the emission limits and control measures described in section 110(a)(2)(A) and for the regulation of construction of new or modified stationary sources to meet NSR requirements under PSD and nonattainment new source review (NNSR) programs. Part C of the CAA (sections 160-169B) addresses PSD, while part D of the CAA (sections 171-193) addresses NNSR requirements.6 The evaluation of each state's submission addressing the infrastructure SIP requirements of section 110(a)(2)(C) covers the following: (i) Enforcement of SIP measures; (ii) PSD program for major sources and major modifications; and (iii) a permit program for minor sources and minor modifications.

    6 EPA considers the evaluation of permit provisions that implement Part D to be outside the scope of an infrastructure SIP action because SIPs incorporating necessary local nonattainment area controls are due on separate schedules, pursuant to CAA section 172 and the various pollutant-specific subparts 2 through 5 of part D. Thus, our review under section 110(a)(2)(C) does not evaluate the nonattainment NSR program required by part D of the Act. We are only evaluating the state's PSD program as required by part C of the Act and the state's minor source program (applicable regardless of attainment status) as required by section 110(a)(2)(C).

    Sub-Element 1: Enforcement of SIP Measures

    State law provides the Secretary of ANR with the authority to enforce air pollution control requirements, including SIP-approved 10 V.S.A. § 554, which authorizes the Secretary of ANR to “[i]ssue orders as may be necessary to effectuate the purposes of [the state's air pollution control laws] and enforce the same by all appropriate administrative and judicial proceedings.” In addition, Vermont's SIP-approved regulations VT APCR § 5-501, “Review of Construction or Modification of Air Contaminant Sources,” and VT APCR § 5-502, “Major Stationary Sources and Major Modifications,” establish requirements for permits to construct, modify or operate major air contaminant sources.

    EPA proposes that Vermont has met the enforcement of SIP measures requirements of section 110(a)(2)(C) with respect to the 2012 PM2.5 NAAQS.

    Sub-Element 2: PSD Program for Major Sources and Major Modifications

    PSD applies to new major sources or modifications made to major sources for pollutants where the area in which the source is located is in attainment of, or unclassifiable with regard to, the relevant NAAQS. The EPA interprets the CAA to require each state to make an infrastructure SIP submission for a new or revised NAAQS demonstrating that the air agency has a complete PSD permitting program in place satisfying the current requirements for all regulated NSR pollutants. VT DEC's EPA-approved PSD rules, contained at VT APCR Subchapters I, IV, and V, contain provisions that address applicable requirements for all regulated NSR pollutants, including GHGs.

    With respect to current requirements for PM2.5, we evaluate Vermont's PSD program for consistency with two EPA rules. The first is a final rule issued May 16, 2008, entitled “Implementation of the New Source Review (NSR) Program for Particulate Matter Less than 2.5 Micrometers (PM2.5)” (2008 NSR Rule). See 73 FR 28321. The 2008 NSR Rule finalized several new requirements for SIPs to address sources that emit direct PM2.5 and other pollutants that contribute to secondary PM2.5 formation, including requirements for NSR permits to address pollutants responsible for the secondary formation of PM2.5, otherwise known as precursors. As part of identifying precursors to PM2.5, the 2008 NSR Rule also required states to revise the definition of “significant” as it relates to a net emissions increase or the potential of a source to emit pollutants. Finally, the 2008 NSR Rule requires states to account for PM2.5 and PM10 condensables for applicability determinations and in establishing emissions limitations for PM2.5 and PM10 in PSD permits beginning on or after January 1, 2011.7 These requirements are codified in 40 CFR 51.166(b) and 52.21(b). States were required to revise their SIPs consistent with these changes to the federal regulations. On August 1, 2016 (81 FR 50342), EPA approved revisions to Vermont's PSD program satisfying these requirements of the 2008 NSR Rule. See also 82 FR 15671 at 15674-75 (March 30, 2017); 82 FR 29005 (June 27, 2017).

    7 On January 4, 2013, the U.S. Court of Appeals for the D.C. Circuit held that EPA should have issued the 2008 NSR Rule in accordance with the CAA's requirements for PM10 nonattainment areas (Title I, Part D, subpart 4), and not the general requirements for nonattainment areas under subpart 1. Nat. Res. Def. Council v. EPA, 706 F.3d 428. The EPA's approval of Vermont's infrastructure SIP as to elements C, D(i)(II), or J with respect to the PSD requirements promulgated by the 2008 NSR Rule does not conflict with the court's opinion. For more information, see 80 FR 42446, July 17, 2015).

    The second is a final rule issued October 20, 2010, entitled “Prevention of Significant Deterioration (PSD) for Particulate Matter Less Than 2.5 Micrometers (PM2.5)—Increments, Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC)” (2010 NSR Rule). See 75 FR 64864. This rule established several components for making PSD permitting determinations for PM2.5, including adding the required elements for PM2.5 into a state's existing system of “increment analysis,” which is the mechanism used in the PSD permitting program to estimate significant deterioration of ambient air quality for a pollutant in relation to new source construction or modification. The 2010 NSR Rule revised the existing system for determining increment consumption by establishing a new “major source baseline date” for PM2.5 and by establishing a trigger date for PM2.5 in relation to the definition of “minor source baseline date.” Lastly, the 2010 NSR Rule revised the definition of “baseline area” to include a level of significance of 0.3 micrograms per cubic meter, annual average, for PM2.5. These requirements are codified in 40 CFR 51.166(b) and (c) and in 40 CFR 52.21(b) and (c). States were required to revise their SIPs consistent with these changes to the federal regulations.

    On August 1, 2016 (81 FR 50342) and September 14, 2016 (81 FR 63102), EPA approved revisions to the Vermont SIP that address certain aspects of EPA's 2010 NSR rule. In addition, on March 19, 2018, EPA approved the state's method for determining the amount of PSD increments available to a new or modified major source. See 83 FR 11884. As a result, Vermont's approved PSD program meets the current requirements for PM2.5.

    On March 19, 2018 (83 FR 11884), EPA also approved revisions to Vermont's PSD program that addressed the PSD requirements of EPA's “Final Rule to Implement the 8- Hour Ozone National Ambient Air Quality Standard—Phase 2; Final Rule To Implement Certain Aspects of the 1990 Amendments Relating to New Source Review and Prevention of Significant Deterioration as They Apply in Carbon Monoxide, Particulate Matter, and Ozone NAAQS; Final Rule for Reformulated Gasoline,” which obligated states to revise their PSD programs to explicitly identify NOX as a precursor to ozone. See 70 FR 71612 (November 29, 2005). Therefore, Vermont's approved PSD program meets the current requirements for ozone.

    With respect to GHGs, on June 23, 2014, the United States Supreme Court issued a decision addressing the application of PSD permitting requirements to GHG emissions. Utility Air Regulatory Group v. Envtl. Prot. Agency, 134 S.Ct. 2427. The Supreme Court said that EPA may not treat GHGs as an air pollutant for purposes of determining whether a source is a major source required to obtain a PSD permit. The Court also said that EPA could continue to require that PSD permits, otherwise required based on emissions of pollutants other than GHGs, contain limitations on GHG emissions based on the application of Best Available Control Technology (BACT).

    In accordance with the Supreme Court decision, on April 10, 2015, the U.S. Court of Appeals for the District of Columbia Circuit (the D.C. Circuit) issued an amended judgment vacating the regulations that implemented Step 2 of the EPA's PSD and Title V Greenhouse Gas Tailoring Rule, but not the regulations that implement Step 1 of that rule. Step 1 of the Tailoring Rule covers sources that are required to obtain a PSD permit based on emissions of pollutants other than GHGs. Step 2 applied to sources that emitted only GHGs above the thresholds triggering the requirement to obtain a PSD permit. The amended judgment preserves, without the need for additional rulemaking by EPA, the application of the BACT requirement to GHG emissions from Step 1 or “anyway” sources. With respect to Step 2 sources, the D.C. Circuit's amended judgment vacated the regulations at issue in the litigation, including 40 CFR 51.166(b)(48)(v), “to the extent they require a stationary source to obtain a PSD permit if greenhouse gases are the only pollutant (i) that the source emits or has the potential to emit above the applicable major source thresholds, or (ii) for which there is a significant emission increase from a modification.”

    On August 19, 2015 (80 FR 50199), EPA amended its PSD and Title V regulations to remove from the Code of Federal Regulations portions of those regulations that the D.C. Circuit specifically identified as vacated. EPA intends to further revise the PSD and Title V regulations to fully implement the Supreme Court and D.C. Circuit rulings in a separate rulemaking. This future rulemaking will include revisions to additional definitions in the PSD regulations.

    Some states have begun to revise their existing SIP-approved PSD programs in light of these court decisions, and some states may prefer not to initiate this process until they have more information about the additional planned revisions to EPA's PSD regulations. EPA is not expecting states to have revised their PSD programs in anticipation of EPA's additional actions to revise its PSD program rules in response to the court decisions for purposes of infrastructure SIP submissions. At present, EPA has determined that Vermont's SIP is sufficient to satisfy element C with respect to GHGs because the PSD permitting program previously approved by EPA into the SIP continues to require that PSD permits (otherwise required based on emissions of pollutants other than GHGs) contain limitations on GHG emissions based on the application of BACT. Although the approved Vermont PSD permitting program may currently contain provisions that are no longer necessary in light of the Supreme Court decision, this does not render the infrastructure SIP submission inadequate to satisfy element C. The SIP contains the necessary PSD requirements at this time, and the application of those requirements is not impeded by the presence of other previously-approved provisions regarding the permitting of sources of GHGs that EPA does not consider necessary at this time in light of the Supreme Court decision. Accordingly, the Supreme Court decision does not affect EPA's proposed approval of Vermont's infrastructure SIP as to the requirements of element C.

    For the purposes of the 2012 PM2.5 NAAQS infrastructure SIPs, EPA reiterates that NSR Reform regulations are not in the scope of these actions. Therefore, we are not taking action on existing NSR Reform regulations for Vermont.

    The EPA is proposing to approve Vermont's infrastructure SIP for the 2012 PM2.5 NAAQS with respect to the requirement in section 110(a)(2)(C) to include a PSD permitting program in the SIP that covers the requirements for all regulated NSR pollutants as required by part C of the Act.

    Sub-Element 3: Preconstruction Permitting for Minor Sources and Minor Modifications

    To address the pre-construction regulation of the modification and construction of minor stationary sources and minor modifications of major stationary sources, an infrastructure SIP submission should identify the existing EPA-approved SIP provisions and/or include new provisions that govern the minor source pre-construction program that regulate emissions of the relevant NAAQS pollutants. EPA approved revisions to Vermont's minor NSR program on August 1, 2016 (81 FR 50342). Vermont and EPA rely on the existing minor NSR program to ensure that new and modified sources not captured by the major NSR permitting programs, VT APCR § 5-502, do not interfere with attainment and maintenance of the 2012 PM2.5 NAAQS.

    We are proposing to find that Vermont has met the requirement to have a SIP-approved minor new source review permit program as required under Section 110(a)(2)(C) for the 2012 PM2.5 NAAQS.

    D. Section 110(a)(2)(D)—Interstate Transport

    This section contains a comprehensive set of air quality management elements pertaining to the transport of air pollution with which states must comply. It covers the following five topics, categorized as sub-elements: Sub-element 1, Significant contribution to nonattainment, and interference with maintenance of a NAAQS; Sub-element 2, PSD; Sub-element 3, Visibility protection; Sub-element 4, Interstate pollution abatement; and Sub-element 5, International pollution abatement. Sub-elements 1 through 3 above are found under section 110(a)(2)(D)(i) of the Act, and these items are further categorized into the four prongs discussed below, two of which are found within sub-element 1. Sub-elements 4 and 5 are found under section 110(a)(2)(D)(ii) of the Act and include provisions insuring compliance with sections 115 and 126 of the Act relating to interstate and international pollution abatement.

    Sub-Element 1: Section 110(a)(2)(D)(i)(I)—Contribute to Nonattainment (Prong 1) and Interfere With Maintenance of the NAAQS (Prong 2)

    Section 110(a)(2)(D)(i)(I) of the CAA requires a SIP to prohibit any emissions activity in the state that will contribute significantly to nonattainment or interfere with maintenance of the NAAQS in any downwind state. EPA commonly refers to these requirements as prong 1 (significant contribution to nonattainment) and prong 2 (interference with maintenance), or jointly as the “Good Neighbor” or “transport” provisions of the CAA. This rulemaking proposes action on the portion of Vermont's October 31, 2017 SIP submission that addresses the prong 1 and 2 requirements with respect to the 2012 PM2.5 NAAQS.

    EPA has developed a consistent framework for addressing the prong 1 and 2 interstate-transport requirements with respect to the PM2.5 NAAQS in several previous federal rulemakings. The four basic steps of that framework include: (1) Identifying downwind receptors that are expected to have problems attaining or maintaining the NAAQS; (2) identifying which upwind states contribute to these identified problems in amounts sufficient to warrant further review and analysis; (3) for states identified as contributing to downwind air quality problems, identifying upwind emissions reductions necessary to prevent an upwind state from significantly contributing to nonattainment or interfering with maintenance of the NAAQS downwind; and (4) for states that are found to have emissions that significantly contribute to nonattainment or interfere with maintenance of the NAAQS downwind, reducing the identified upwind emissions through adoption of permanent and enforceable measures. This framework was most recently applied with respect to PM2.5 in the Cross-State Air Pollution Rule (CSAPR), which addressed both the 1997 and 2006 PM2.5 standards, as well as the 1997 ozone standard. See 76 FR 48208 (August 8, 2011).

    EPA's analysis for CSAPR, conducted consistent with the four-step framework, included air-quality modeling that evaluated the impacts of 38 eastern states on identified receptors in the eastern United States. EPA indicated that, for step 2 of the framework, states with impacts on downwind receptors that are below the contribution threshold of 1% of the relevant NAAQS would not be considered to significantly contribute to nonattainment or interfere with maintenance of the relevant NAAQS, and would, therefore, not be included in CSAPR. See 76 FR 48220, August 8, 2011. EPA further indicated that such states could rely on EPA's analysis for CSAPR as technical support in order to demonstrate that their existing or future interstate transport SIP submittals are adequate to address the transport requirements of 110(a)(2)(D)(i)(I) with regard to the relevant NAAQS. Id.

    In addition, as noted above, on March 17, 2016, EPA released the 2016 memorandum to provide information to states as they develop SIPs addressing the Good Neighbor provision as it pertains to the 2012 PM2.5 NAAQS. Consistent with step 1 of the framework, the 2016 memorandum provides projected future-year annual PM2.5 design values for monitors throughout the country based on quality-assured and certified ambient-monitoring data and recent air-quality modeling and explains the methodology used to develop these projected design values. The memorandum also describes how the projected values can be used to help determine which monitors should be further evaluated to potentially address if emissions from other states significantly contribute to nonattainment or interfere with maintenance of the 2012 PM2.5 NAAQS at these monitoring sites. The 2016 memorandum explained that the pertinent year for evaluating air quality for purposes of addressing interstate transport for the 2012 PM2.5 NAAQS is 2021, the attainment deadline for 2012 PM2.5 NAAQS nonattainment areas classified as Moderate. Accordingly, because the available data included 2017 and 2025 projected average and maximum PM2.5 design values calculated through the CAMx photochemical model, the memorandum suggests approaches states might use to interpolate PM2.5 values at sites in 2021.

    For all, but one, monitoring sites in the eastern United States, the modeling data provided in the 2016 memorandum showed that monitors were expected to both attain and maintain the 2012 PM2.5 NAAQS in both 2017 and 2025. The modeling results project that this one monitor, the Liberty monitor, (ID number 420030067), located in Allegheny County, Pennsylvania, will be above the 2012 annual PM2.5 NAAQS in 2017, but only under the model's maximum projected conditions, which are used in EPA's interstate transport framework to identify maintenance receptors. The Liberty monitor (along with all the other Allegheny County monitors) is projected to both attain and maintain the NAAQS in 2025. The 2016 memorandum suggests that under such a condition (again, where EPA's photochemical modeling indicates an area will maintain the 2012 annual PM2.5 NAAQS in 2025, but not in 2017), further analysis of the site should be performed to determine if the site may be a nonattainment or maintenance receptor in 2021 (which, again, is the attainment deadline for moderate PM2.5 areas). The memorandum also indicates that for certain states with incomplete ambient monitoring data, additional information including the latest available data, should be analyzed to determine whether there are potential downwind air quality problems that may be impacted by transported emissions. This rulemaking considers these analyses for Vermont, as well as additional analysis conducted by EPA during review of Vermont's submittal.

    To develop the projected values presented in the memorandum, EPA used the results of nationwide photochemical air-quality modeling that it recently performed to support several rulemakings related to the ozone NAAQS. Base-year modeling was performed for 2011. Future-year modeling was performed for 2017 to support the proposed CSAPR Update for the 2008 Ozone NAAQS. See 80 FR 75705 (December 3, 2015). Future-year modeling was also performed for 2025 to support the Regulatory Impact Assessment of the final 2015 Ozone NAAQS.8 The outputs from these model runs included hourly concentrations of PM2.5 that were used in conjunction with measured data to project annual average PM2.5 design values for 2017 and 2025. Areas that were designated as moderate PM2.5 nonattainment areas for the 2012 annual PM2.5 NAAQS in 2014 must attain the NAAQS by December 31, 2021, or as expeditiously as practicable. Although neither the available 2017 nor 2025 future-year modeling data correspond directly to the future-year attainment deadline for moderate PM2.5 nonattainment areas, EPA believes that the modeling information is still helpful for identifying potential nonattainment and maintenance receptors in the 2017-2021 period. Assessing downwind PM2.5 air-quality problems based on estimates of air-quality concentrations in a future year aligned with the relevant attainment deadline is consistent with the instructions from the United States Court of Appeals for the District of Columbia Circuit in North Carolina v. EPA, 531 F.3d 896, 911-12 (D.C. Cir. 2008), that upwind emission reductions should be harmonized, to the extent possible, with the attainment deadlines for downwind areas.

    8See 2015 ozone NAAQS RIA at: www3.epa.gov/ttnecas1/docs/20151001ria.pdf.

    Vermont's Submissions for Prongs 1 and 2

    On October 31, 2017, VT DEC submitted an infrastructure SIP for the 2012 PM2.5 NAAQS that addressed prongs 1 and 2 for the 2012 PM2.5 NAAQS. Vermont's SIP submittal relied in part on EPA's analysis performed for the CSAPR rulemaking to conclude that the state will not significantly contribute to nonattainment or interfere with maintenance of the 2012 PM2.5 NAAQS in any downwind area.

    EPA analyzed the state's October 2017 submittal to determine whether it fully addressed the prong 1 and 2 transport provisions with respect to the 2012 PM2.5 NAAQS. As discussed below, EPA concludes that emissions of PM2.5 and PM2.5 precursors (NOX and SO2) in Vermont will not significantly contribute to nonattainment or interfere with maintenance of the 2012 PM2.5 NAAQS in any other state.

    As noted, the modeling discussed in EPA's 2016 memorandum identified one potential maintenance receptor for the 2012 PM2.5 NAAQS at the Liberty monitor (ID number 420030067), located in Allegheny County, Pennsylvania. The memorandum also identified certain states with incomplete ambient monitoring data as areas that may require further analysis to determine whether there are potential downwind air quality problems that may be impacted by transported emissions.

    While developing the 2011 CSAPR rulemaking, EPA modeled the impacts of all 38 eastern states in its modeling domain on fine particulate matter concentrations at downwind receptors in other states in the 2012 analysis year in order to evaluate the contribution of upwind states on downwind states with respect to the 1997 and 2006 PM2.5. Although the modeling was not conducted for purposes of analyzing upwind states' impacts on downwind receptors with respect to the 2012 PM2.5 NAAQS, the contribution analysis for the 1997 and 2006 standards can be informative for evaluating Vermont's compliance with the Good Neighbor provision for the 2012 standard.

    This CSAPR modeling showed that Vermont had a very small impact (0.002 μg/m3 annual PM2.5) on the Liberty monitor in Allegheny County, Pennsylvania, which is the only out-of-state monitor that may be a nonattainment or maintenance receptor in 2021. (A spreadsheet showing CSAPR contributions for ozone and PM2.5 is included in docket EPA-HQ-OAR-2009-0491-4228.) Although EPA has not proposed a particular threshold for evaluating the 2012 PM2.5 NAAQS, EPA notes that Vermont's impact on the Liberty monitor is far below the threshold of 1% for the annual 2012 PM2.5 NAAQS (i.e., 0.12 μg/m3) that EPA previously used to evaluate the contribution of upwind states to downwind air-quality monitors. Therefore, even if the Liberty monitor were considered a receptor for purposes of transport, the EPA proposes to conclude that Vermont will not significantly contribute to nonattainment, or interfere with maintenance, of the 2012 PM2.5 NAAQS at that monitor.

    In addition, the Liberty monitor is already close to attaining the 2012 PM2.5 NAAQS, and expected emissions reductions in the next four years will lead to additional reductions in measured PM2.5 concentrations. There are both local and regional components to measured PM2.5 levels. All monitors in Allegheny County have a regional component, with the Liberty monitor most strongly influenced by local sources. This is confirmed by the fact that annual average measured concentrations at the Liberty monitor have consistently been 2-4 μg/m3 higher than other monitors in Allegheny County.

    Specifically, previous CSAPR modeling showed that regional emissions from upwind states, particularly SO2 and NOx emissions, contribute to PM2.5 nonattainment at the Liberty monitor. In recent years, large SO2 and NOX reductions from power plants have occurred in Pennsylvania and states upwind from the Greater Pittsburgh region. Pennsylvania's energy sector emissions of SO2 will have decreased 166,000 tons between 2015-2017 as a result of CSAPR implementation. This is due to both the installation of emissions controls and retirements of electric generating units (EGUs). Projected power plant closures and additional emissions controls in Pennsylvania and upwind states will help further reduce both direct PM2.5 and PM2.5 precursors. Regional emission reductions will continue to occur from current on-the-books federal and state regulations such as the federal on-road and non-road vehicle programs, and various rules for major stationary emissions sources. See proposed approval of the Ohio Infrastructure SIP for the 2012 PM2.5 NAAQS (82 FR 57689; December 7, 2017).

    In addition to regional emissions reductions and plant closures, additional local reductions to both direct PM2.5 and SO2 emissions are expected to occur and should contribute to further declines in Allegheny County's PM2.5 monitor concentrations. For example, significant SO2 reductions have recently occurred at US Steel's integrated steel mill facilities in southern Allegheny County as part of a 1-hr SO2 NAAQS SIP.9 Reductions are largely due to declining sulfur content in the Clairton Coke Work's coke oven gas (COG). Because this COG is burned at US Steel's Clairton Coke Works, Irvin Mill, and Edgar Thompson Steel Mill, these reductions in sulfur content should contribute to much lower PM2.5 precursor emissions in the immediate future. The Allegheny SO2 SIP also projects lower SO2 emissions resulting from vehicle fuel standards, reductions in general emissions due to declining population in the Greater Pittsburgh region, and several shutdowns of significant sources of emissions in Allegheny County.

    9www.achd.net/air/pubs/SIPs/SO2_2010_NAAQS_SIP_9-14-2017.pdf.

    EPA modeling projections, the recent downward trend in local and upwind emissions reductions, the expected continued downward trend in emissions between 2017 and 2021, and the downward trend in monitored PM2.5 concentrations all indicate that the Liberty monitor will attain and be able to maintain the 2012 annual PM2.5 NAAQS by 2021. See proposed approval of the Ohio Infrastructure SIP (82 FR 57689, December 7, 2017).

    As noted in the 2016 memorandum, several states have had recent data-quality issues identified as part of the PM2.5 designations process. In particular, some ambient PM2.5 data for certain time periods between 2009 and 2013 in Florida, Illinois, Idaho, Tennessee, and Kentucky did not meet all data-quality requirements under 40 CFR part 50, appendix L. The lack of data means that the relevant areas in those states could potentially be in nonattainment or be maintenance receptors in 2021. However, EPA's analysis for the 2011 CSAPR rulemaking with respect to the 2006 PM2.5 NAAQS determined that Vermont's impact to all these downwind receptors would be well below the 1% contribution threshold for this NAAQS. That conclusion informs the analysis of Vermont's contributions for purposes of the 2012 PM2.5 NAAQS as well. Given this, and the fact, discussed below, that the state's PM2.5 design values for all ambient monitors have been well below the 2012 PM2.5 NAAQS during the period from 2009 to 2013, EPA concludes that it is highly unlikely that Vermont significantly contributes to nonattainment or interferes with maintenance of the 2012 PM2.5 NAAQS in areas with data-quality issues.10

    10 Vermont's PM2.5 design values for all ambient monitors from 2004-2006 through 2013-2015 are available on Table 6 of the 2015 Design Value Report at https://19january2017snapshot.epa.gov/air-trends/air-quality-design-values_.html.

    Information in Enclosure 5 of Vermont's October 2017 SIP submission (Vermont Good Neighbor SIP) corroborates EPA's proposed conclusion that Vermont's SIP meets its obligations under CAA section 110(a)(2)(D)(i)(I). This enclosure includes 2011-2015 design values for the 2012 PM2.5 NAAQS in the bordering states of Massachusetts, New Hampshire and New York, which are all well below the annual standard (12.0 μg/m3). In addition, the analysis includes a graph showing that the design-value trend at the four ambient monitoring locations in Vermont declined from 2005 to 2016.

    This technical analysis is supported by additional indications that air quality is improving and emissions are falling in Vermont. Specifically, certified annual PM2.5 monitor values (for monitors meeting minimum data completeness criteria) recorded since 2014 show that the highest value in 2015 was 9.1 μg/m3 at a monitor in Rutland, and the highest value in 2016 was 6.8 μg/m3 at the same monitor in Rutland.11

    11 24-hour and annual PM2.5 monitor values for individual monitoring sites throughout Vermont are available at www.epa.gov/outdoor-air-quality-data/monitor-values-report.

    Second, Vermont's sources are well-controlled. Vermont's 2017 submission indicates that the state has many SIP-approved rules and programs that limit emissions of PM2.5, including rules to control emissions of SO2, PM2.5, VOCs and NOX12 ; Vermont's PSD program contained in VT APCR Subchapters I, IV, and V; Vermont's Regional Haze SIP; and Vermont's Title V program contained in Subchapter X of VT APCR. In addition, Vermont adopted limitations on sulfur in fuel (VT APCR § 5-221(1)) on September 28, 2011.

    12 SO2, NOX and VOCs contribute to the formation of PM2.5.

    It should also be noted that Vermont is not in the CSAPR program because EPA analyses show that the state does not emit ozone-season NOX at a level that contributes significantly to non-attainment or interferes with maintenance of the 1997 and 2006 PM2.5 NAAQS in any other state.

    For the reasons explained herein, EPA agrees with Vermont's conclusions and proposes to determine that Vermont will not significantly contribute to nonattainment or interfere with maintenance of the 2012 PM2.5 NAAQS in any other state. Therefore, EPA is proposing to approve the October 2017 infrastructure SIP submission from Vermont addressing prongs 1 and 2 of CAA section 110(a)(2)(D)(i)(I) for the 2012 PM2.5 NAAQS.

    Sub-Element 2: Section 110(a)(2)(D)(i)(II)—PSD (Prong 3)

    To prevent significant deterioration of air quality, this sub-element requires SIPs to include provisions that prohibit any source or other type of emissions activity in one state from interfering with measures that are required in any other state's SIP under Part C of the CAA. As explained in the 2013 Guidance, a state may meet this requirement with respect to in-state sources and pollutants that are subject to PSD permitting through a comprehensive PSD permitting program that applies to all regulated NSR pollutants and that satisfies the requirements of EPA's PSD implementation rules. As discussed above under element C, Vermont has such a PSD permitting program. For in-state sources not subject to PSD, this requirement can be satisfied through a fully-approved nonattainment new source review (NNSR) program with respect to any previous NAAQS. EPA's latest approval of some revisions to Vermont's NNSR regulations was on August 1, 2016 (81 FR 50342). Therefore, we are proposing to approve this sub-element for the 2012 PM2.5 NAAQS.

    Sub-Element 3: Section 110(a)(2)(D)(i)(II)—Visibility Protection (Prong 4)

    With regard to applicable requirements for visibility protection of section 110(a)(2)(D)(i)(II), states are subject to visibility and regional-haze program requirements under part C of the CAA (which includes sections 169A and 169B). The 2009 Guidance, 2011 Guidance, and 2013 Guidance recommend that these requirements can be satisfied by an approved SIP addressing reasonably attributable visibility impairment, if required, or an approved SIP addressing regional haze. A fully approved regional haze SIP meeting the requirements of 40 CFR 51.308 will ensure that emissions from sources under an air agency's jurisdiction are not interfering with measures required to be included in other air agencies' plans to protect visibility. Vermont's Regional Haze SIP was approved by EPA on May 22, 2012 (77 FR 30212). Accordingly, EPA proposes that Vermont has met the visibility protection requirements of 110(a)(2)(D)(i)(II) for the 2012 PM2.5 NAAQS.

    Sub-Element 4: Section 110(a)(2)(D)(ii)—Interstate Pollution Abatement

    This sub-element requires that each SIP contain provisions requiring compliance with requirements of section 126 relating to interstate pollution abatement. Section 126(a) requires new or modified sources to notify neighboring states of potential impacts from the source. The statute does not specify the method by which the source should provide the notification. States with SIP-approved PSD programs must have a provision requiring such notification by new or modified sources.

    On August 1, 2016 (81 FR 50342), EPA approved revisions to VT APCR § 5-501, which includes a provision that requires VT ANR to provide notice of a draft PSD permit to, among other entities, any state whose lands may be affected by emissions from the source. VT APCR § 5-501(7)(c). Vermont's public notice requirements are consistent with the Federal PSD program's public notice requirements for affected states under 40 CFR 51.166(q). Therefore, we propose to approve Vermont's compliance with the infrastructure SIP requirements of section 126(a) with respect to with respect to the 2012 PM2.5 NAAQS. Vermont has no obligations under any other provision of section 126, and no source or sources within the state are the subject of an active finding under section 126 of the CAA with respect to the 2012 PM2.5 NAAQS.

    Sub-Element 5: Section 110(a)(2)(D)(ii)—International Pollution Abatement

    This sub-element also requires each SIP to contain provisions requiring compliance with the applicable requirements of section 115 relating to international pollution abatement. There are no final findings under section 115 of the CAA against Vermont with respect to the 2012 PM2.5 NAAQS. Therefore, EPA is proposing that Vermont has met the applicable infrastructure SIP requirements of section 110(a)(2)(D)(ii) related to section 115 of the CAA for the 2012 PM2.5 NAAQS.

    E. Section 110(a)(2)(E)—Adequate Resources

    Section 110(a)(2)(E)(i) requires each SIP to provide assurances that the state will have adequate personnel, funding, and legal authority under state law to carry out its SIP. In addition, section 110(a)(2)(E)(ii) requires each state to comply with the requirements under CAA section 128 about state boards. Finally, section 110(a)(2)(E)(iii) requires that, where a state relies upon local or regional governments or agencies for the implementation of its SIP provisions, the state retain responsibility for ensuring implementation of SIP obligations with respect to relevant NAAQS. Section 110(a)(2)(E)(iii), however, does not apply to this action because Vermont does not rely upon local or regional governments or agencies for the implementation of its SIP provisions.

    Sub-Element 1: Adequate Personnel, Funding, and Legal Authority Under State Law To Carry Out Its SIP, and Related Issues

    Vermont, through its infrastructure SIP submittals, has documented that its air agency has the requisite authority and resources to carry out its SIP obligations. Vermont cites 10 V.S.A. § 553, which designates ANR as the air pollution control agency of the state, and 10 V.S.A § 554, which provides the Secretary of ANR with the power to “[a]dopt, amend and repeal rules, implementing the provisions” of 10 V.S.A. Chapter 23, Air Pollution Control, and to “[a]ppoint and employ personnel and consultants as may be necessary for the administration of” 10 V.S.A. Chapter 23. Section 554 also authorizes the Secretary of ANR to “[a]ccept, receive and administer grants or other funds or gifts from public and private agencies, including the federal government, for the purposes of carrying out any of the functions of” 10 V.S.A. Chapter 23. Additionally, 3 V.S.A. § 2822 provides the Secretary of ANR with the authority to assess air permit and registration fees, which fund state air programs. In addition to Federal funding and permit and registration fees, Vermont notes that the Vermont Air Quality and Climate Division (AQCD) receives state funding to implement its air programs.13

    13 VT ANR's authority to carry out the provisions of the SIP identified in 40 CFR 51.230 is discussed in the sections of this document assessing elements A, C, F, and G, as applicable.

    EPA proposes that Vermont has met the infrastructure SIP requirements of this portion of section 110(a)(2)(E) with respect to the 2012 PM2.5 NAAQS.

    Sub-Element 2: State Board Requirements Under Section 128 of the CAA

    Section 110(a)(2)(E)(ii) requires each SIP to contain provisions that comply with the state board requirements of section 128 of the CAA. That provision contains two explicit requirements: (1) That any board or body which approves permits or enforcement orders under this chapter shall have at least a majority of members who represent the public interest and do not derive any significant portion of their income from persons subject to permits and enforcement orders under this chapter, and (2) that any potential conflicts of interest by members of such board or body or the head of an executive agency with similar powers be adequately disclosed.

    In Vermont, no board or body approves permits or enforcement orders; these are approved by the Secretary of Vermont ANR. Thus, with respect to this sub-element, Vermont is subject only to the requirements of paragraph (a)(2) of section 128 of the CAA (regarding conflicts of interest). On June 27, 2017, EPA approved Vermont's SIP revision addressing the conflict of interest requirements of section 128. See 82 FR 29005. For a detailed analysis explaining how Vermont meets these requirements, see EPA's notice of proposed rulemaking for that action. 82 FR 15671, 15678 (March 30, 2017).

    EPA proposes that Vermont has met the applicable infrastructure SIP requirements for this sub-element for the 2012 PM2.5 NAAQS.

    F. Section 110(a)(2)(F)—Stationary Source Monitoring System

    States must establish a system to monitor emissions from stationary sources and submit periodic emissions reports. Each plan shall also require the installation, maintenance, and replacement of equipment, and the implementation of other necessary steps, by owners or operators of stationary sources to monitor emissions from such sources. The state plan shall also require periodic reports on the nature and amounts of emissions and emissions-related data from such sources, and correlation of such reports by each state agency with any emission limitations or standards. Lastly, the reports shall be available at reasonable times for public inspection.

    Vermont's infrastructure submittal references existing state regulations previously approved by EPA that require sources to monitor emissions and submit reports. In particular, VT APCR § 5-405, Required Air Monitoring, (45 FR 10775, February 19, 1980), provides that ANR “may require the owner or operator of any air contaminant source to install, use and maintain such monitoring equipment and records, establish and maintain such records, and make such periodic emission reports as [ANR] shall prescribe.” Moreover, section 5-402, Written Reports When Requested (81 FR 50342; August 1, 2016), authorizes ANR to “require written reports from the person operating or responsible for any proposed or existing air contaminant source, which reports shall contain,” among other things, information concerning the “nature and amount and time periods or durations of emissions and such other information as may be relevant to the air pollution potential of the source. These reports shall also include the results of such source testing as may be required under Section 5-404 herein.” Section 5-404, Methods for Sampling and Testing of Sources (45 FR 10775 February 19, 1980) in turn authorizes ANR to “require the owner or operator of [a] source to conduct tests to determine the quantity of particulate and/or gaseous matter being emitted” and requires a source to allow access, should ANR have reason to believe that emission limits are being violated by the source, and allows ANR “to conduct tests of [its] own to determine compliance.” In addition, operators of sources that emit more than five tons of any and all air contaminants per year are required to register the source with the Secretary of ANR and to submit emissions data annually, pursuant to § 5-802, Requirement for Registration, and § 5-803, Registration Procedure (60 FR 2524 January 10, 1995). Vermont also certifies that nothing in its SIP would preclude the use, including the exclusive use, of any credible evidence or information, relevant to whether a source would have been in compliance with applicable requirements if the appropriate performance or compliance test or procedure had been performed. See 40 CFR 51.212(c).

    Vermont's infrastructure SIP submittal for the 2012 PM2.5 NAAQS provides for correlation by VT DEC of emissions reports by sources with applicable emission limitations or standards, as required by CAA § 110(a)(2)(F)(iii). Vermont receives emissions data through its annual registration program. Currently, VT DEC analyzes a portion of these data manually to correlate a facility's actual emissions with permit conditions, NAAQS, and, if applicable, hazardous air contaminant action levels. VT DEC reports that it is in the process of setting up an integrated electronic database that will merge all air contaminant source information across permitting, compliance and registration programs, so that information concerning permit conditions, annual emissions data, and compliance data will be accessible in one location for a particular air contaminant source. The database will be capable of correlating certain emissions data with permit conditions and other applicable standards electronically, where feasible, to allow VT DEC to complete this correlation more efficiently and accurately.

    Regarding the section 110(a)(2)(F) requirement that the SIP ensure that the public has availability to emission reports, Vermont certified in its October 31, 2017 submittal for the 2012 PM2.5 NAAQS that the Vermont Public Records Act, 1 V.S.A. §§ 315-320, provides for the free and open examination of public records, including emissions reports. Furthermore, 10 V.S.A. § 563 specifically provides that the ANR “Secretary shall not withhold emissions data and emission monitoring data from public inspection or review” and “shall keep confidential any record or other information furnished to or obtained by the Secretary concerning an air contaminant source, other than emissions data and emission monitoring data, that qualifies as a trade secret pursuant to 1 V.S.A. § 317(c)(9).” (emphasis added). EPA approved section 563 into the Vermont SIP on June 27, 2017 (82 FR 29005).

    Consequently, EPA proposes that Vermont has met the infrastructure SIP requirements of section 110(a)(2)(F) for the 2012 PM2.5 NAAQS.

    G. Section 110(a)(2)(G)—Emergency Powers

    This section requires that a plan provide for state authority analogous to that provided to the EPA Administrator in section 303 of the CAA, and adequate contingency plans to implement such authority. Section 303 of the CAA provides authority to the EPA Administrator to seek a court order to restrain any source from causing or contributing to emissions that present an “imminent and substantial endangerment to public health or welfare, or the environment.” Section 303 further authorizes the Administrator to issue “such orders as may be necessary to protect public health or welfare or the environment” in the event that “it is not practicable to assure prompt protection . . . by commencement of such civil action.”

    On June 27, 2017, EPA approved a Vermont SIP revision addressing the requirement that the plan provide for state authority comparable to that in section 303 of the CAA. See 82 FR 29005. For a detailed analysis explaining how Vermont meets this requirement, see EPA's March 30, 2017 (82 FR 15671, 15679) notice of proposed rulemaking for that action. Therefore, we are proposing to approve the state's submittals with respect to this requirement of Section 110(a)(2)(G) for 2012 PM2.5 NAAQS.

    Section 110(a)(2)(G) also requires that Vermont have an approved contingency plan for any Air Quality Control Region (AQCR) within the state that is classified as Priority I, IA, or II for certain pollutants. See 40 CFR 51.150, 51.152(c). In general, contingency plans for Priority I, IA, and II areas must meet the applicable requirements of 40 CFR part 51, subpart H (40 CFR 51.150 through 51.153) (“Prevention of Air Pollution Emergency Episodes”) for the relevant NAAQS, if the NAAQS is covered by those regulations. In the case of PM2.5, EPA has not issued regulations that provide the ambient levels to classify different priority levels for the 2012 standard (or any PM2.5 NAAQS). EPA's 2009 Guidance recommends that states develop emergency episode plans for any area that has monitored and recorded 24-hour PM2.5 levels greater than 140 µg/m3 since 2006. EPA's review of Vermont's certified air quality data in AQS indicates that the highest 24-hour PM2.5 level since 2006 was 43.5 µg/m3, which occurred in 2015 at the ambient monitor in Rutland.14 Thus, an emergency episode plan for PM2.5 is not necessary. Although not expected, if PM2.5 conditions were to change, Vermont does have general authority, as noted previously (i.e., 10 V.S.A. § 560 and 10 V.S.A. § 8009), to order a source to cease operations if it is determined that emissions from the source pose an imminent danger to human health or safety or an immediate threat of substantial harm to the environment.

    14 24-hour PM2.5 monitor values for individual monitoring sites throughout Vermont are available at www.epa.gov/outdoor-air-quality-data/monitor-values-report.

    In addition, as stated in Vermont's infrastructure SIP submittal under the discussion of public notification (Element J), Vermont posts near real-time air quality data, air quality predictions and a record of historical data on the VT DEC website and distributes air quality alerts by email to many parties, including the media. Alerts include information about the health implications of elevated pollutant levels and list actions to reduce emissions and to reduce the public's exposure. In addition, daily forecasted fine particle levels are also made available on the internet through the EPA AirNow and EnviroFlash systems. Information regarding these two systems is available on EPA's website at www.airnow.gov. Notices are sent out to EnviroFlash participants when levels are forecast to exceed the current 24-hour PM2.5 standard.

    EPA proposes that Vermont has met the applicable infrastructure SIP requirements for section 110(a)(2)(G) with respect to contingency plans for the 2012 PM2.5 NAAQS.

    H. Section 110(a)(2)(H)—Future SIP Revisions

    This section requires that a state's SIP provide for revision from time to time as may be necessary to take account of changes in the NAAQS or availability of improved methods for attaining the NAAQS and whenever the EPA finds that the SIP is substantially inadequate. To address this requirement, Vermont's infrastructure submittal references 10 V.S.A § 554, which provides the Secretary of Vermont ANR with the power to “[p]repare and develop a comprehensive plan or plans for the prevention, abatement and control of air pollution in this state” and to “[a]dopt, amend and repeal rules, implementing the provisions” of Vermont's air pollution control laws set forth in 10 V.S.A. chapter 23. EPA approved 10 V.S.A. § 554 on June 27, 2017 (82 FR 29005). EPA proposes that Vermont has met the infrastructure SIP requirements of CAA section 110(a)(2)(H) with respect to the 2012 PM2.5 NAAQS.

    I. Section 110(a)(2)(I)—Nonattainment Area Plan or Plan Revisions Under Part D

    The CAA requires that each plan or plan revision for an area designated as a nonattainment area meet the applicable requirements of part D of the CAA. Part D relates to nonattainment areas. EPA has determined that section 110(a)(2)(I) is not applicable to the infrastructure SIP process. Instead, EPA takes action on part D attainment plans through separate processes.

    J. Section 110(a)(2)(J)—Consultation With Government Officials; Public Notifications; Prevention of Significant Deterioration; Visibility Protection

    Section 110(a)(2)(J) of the CAA requires that each SIP “meet the applicable requirements of section 121 of this title (relating to consultation), section 127 of this title (relating to public notification), and part C of this subchapter (relating to PSD of air quality and visibility protection).” The evaluation of the submission from Vermont with respect to these requirements is described below.

    Sub-Element 1: Consultation With Government Officials

    Pursuant to CAA section 121, a state must provide a satisfactory process for consultation with local governments and Federal Land Managers (FLMs) in carrying out its NAAQS implementation requirements.

    Vermont's 10 V.S.A § 554 specifies that the Secretary of Vermont ANR shall have the power to “[a]dvise, consult, contract and cooperate with other agencies of the state, local governments, industries, other states, interstate or interlocal agencies, and the federal government, and with interested persons or groups.” EPA approved 10 V.S.A. § 554 on June 27, 2017 (82 FR 29005). In addition, VT APCR § 5-501(7)(c) requires VT ANR to provide notice to local governments and federal land managers of a determination by ANR to issue a draft PSD permit for a major stationary source or major modification. On August 1, 2016 (81 FR 50342), EPA approved VT APCR § 5-501(7)(c) into Vermont's SIP. Therefore, EPA proposes that Vermont has met the infrastructure SIP requirements of this portion of section 110(a)(2)(J) with respect to the 2012 PM2.5 NAAQS.

    Sub-Element 2: Public Notification

    Pursuant to CAA section 127, states must notify the public if NAAQS are exceeded in an area, advise the public of health hazards associated with exceedances, and enhance public awareness of measures that can be taken to prevent exceedances and of ways in which the public can participate in regulatory and other efforts to improve air quality.

    Vermont's 10 V.S.A § 554 authorizes the Secretary of Vermont ANR to “[c]ollect and disseminate information and conduct educational and training programs relating to air contamination and air pollution.” In addition, the VT DEC Air Quality and Climate Division website includes near real-time air quality data, and a record of historical data. Air quality forecasts are distributed daily via email to interested parties. Air quality alerts are sent by email to a large number of affected parties, including the media. Alerts include information about the health implications of elevated pollutant levels and list actions to reduce emissions and to reduce the public's exposure. Also, Air Quality Data Summaries of the year's air quality monitoring results are issued annually and posted on the VT DEC Air Quality and Climate Division website. Vermont is also an active partner in EPA's AirNow and EnviroFlash air quality alert programs.

    EPA proposes that Vermont has met the infrastructure SIP requirements of this portion of section 110(a)(2)(J) with respect to the 2012 PM2.5 NAAQS.

    Sub-Element 3: PSD

    EPA has already discussed Vermont's PSD program in the context of infrastructure SIPs in the paragraphs addressing section 110(a)(2)(C) and 110(a)(2)(D)(i)(II) and determined that it satisfies the requirements of EPA's PSD implementation rules. Therefore, the SIP also satisfies the PSD sub-element of section 110(a)(2)(J) for the 2012 PM2.5 NAAQS.

    Sub-Element 4: Visibility Protection

    With regard to the applicable requirements for visibility protection, states are subject to visibility and regional haze program requirements under part C of the CAA (which includes sections 169A and 169B). In the event of the establishment of a new NAAQS, however, the visibility and regional haze program requirements under part C do not change. Thus, as noted in EPA's 2013 guidance, we find that there is no new visibility obligation “triggered” under section 110(a)(2)(J) when a new NAAQS becomes effective. In other words, the visibility protection requirements of section 110(a)(2)(J) are not germane to infrastructure SIPs for the 2012 PM2.5 NAAQS.

    Based on the above analysis, EPA proposes that Vermont has met the infrastructure SIP requirements of section 110(a)(2)(J) with respect to the 2012 PM2.5 NAAQS.

    K. Section 110(a)(2)(K)—Air Quality Modeling/Data

    Section 110(a)(2)(K) of the Act requires that a SIP provide for the performance of such air quality modeling as the EPA Administrator may prescribe for the purpose of predicting the effect on ambient air quality of any emissions of any air pollutant for which EPA has established a NAAQS, and the submission, upon request, of data related to such air quality modeling. EPA has published modeling guidelines at 40 CFR part 51, appendix W, for predicting the effects of emissions of criteria pollutants on ambient air quality. EPA also recommends in the 2013 Guidance that, to meet section 110(a)(2)(K), a state submit or reference the statutory or regulatory provisions that provide the air agency with the authority to conduct such air quality modeling and to provide such modeling data to EPA upon request. See 2013 Guidance at 55.

    In its submittal, Vermont cites to VT APCR § 5-406, Required Air Modeling, which authorizes “[t]he Air Pollution Control Officer [to] require the owner or operator of any proposed air contaminant source . . . to conduct . . . air quality modeling and to submit an air quality impact evaluation to demonstrate that operation of the proposed source . . . will not directly or indirectly result in a violation of any ambient air quality standard, interfere with the attainment of any ambient air quality standard, or violate any applicable prevention of significant deterioration increment . . . .” Vermont reviews the potential impact of such sources consistent with EPA's “Guidelines on Air Quality Models” at 40 CFR part 51, appendix W. See VT APCR § 5-406(2). Vermont also cites to VT APCR § 5-502, Major Stationary Sources and Major Modifications, which requires the submittal of an air quality impact evaluation or air quality modeling to ANR to demonstrate impacts of new and modified major sources, in accordance with VT APCR § 5-406. The modeling data are sent to EPA along with the draft major permit. As a result, the SIP provides for such air quality modeling as the Administrator has prescribed and for the submission, upon request, of data related to such modeling.

    The state also collaborates with the Ozone Transport Commission (OTC) and the Mid-Atlantic Regional Air Management Association and EPA in order to perform large-scale urban air shed modeling for ozone and PM, if necessary. EPA proposes that Vermont has met the infrastructure SIP requirements of section 110(a)(2)(K) with respect to the 2012 PM2.5 NAAQS.

    L. Section 110(a)(2)(L)—Permitting Fees

    This section requires SIPs to mandate that each major stationary source pay permitting fees to cover the costs of reviewing, approving, implementing, and enforcing a permit.

    Vermont implements and operates a Title V permit program. See Subchapter X of VT APCR, which was approved by EPA on November 29, 2001 (66 FR 59535). To gain this approval, Vermont demonstrated the ability to collect sufficient fees to run the program. Vermont also notes in its submittals that the costs of all CAA permitting, implementation, and enforcement for new or modified sources are covered by Title V fees, and that Vermont state law provides for the assessment of application fees from air emissions sources for permits for the construction or modification of air contaminant sources, and sets forth permit fees. See 10 V.S.A § 556, 3 V.S.A § 2822(j).

    EPA proposes that Vermont has met the infrastructure SIP requirements of section 110(a)(2)(L) for the 2012 PM2.5 NAAQS.

    M. Section 110(a)(2)(M)—Consultation/Participation by Affected Local Entities

    To satisfy Element M, states must provide for consultation with, and participation by, local political subdivisions affected by the SIP. Vermont's infrastructure submittal references 10 V.S.A § 554, which was approved into the VT SIP on June 27, 2017 (82 FR 29005). This statute authorizes the Secretary of Vermont ANR to “[a]dvise, consult, contract and cooperate with other agencies of the state, local governments, industries, other states, interstate or interlocal agencies, and the federal government, and with interested persons or groups.” In addition, VT APCR § 5-501(7) provides for notification to local officials and agencies about the opportunity for participating in permitting determinations for the construction or modification of major sources. EPA proposes that Vermont has met the infrastructure SIP requirements of section 110(a)(2)(M) with respect to the 2012 PM2.5 NAAQS.

    IV. Proposed Action

    EPA is proposing to approve the elements of the infrastructure SIP submitted by Vermont on October 31, 2017 for the 2012 PM2.5 NAAQS. Specifically, EPA's proposed action regarding each infrastructure SIP requirement is contained in Table 1 below.

    Table 1—Proposed Action on Vermont's Infrastructure SIP Submittal for the 2012 PM2.5 NAAQS Element 2012 PM2.5 (A): Emission limits and other control measures A (B): Ambient air quality monitoring and data system A (C)1: Enforcement of SIP measures A (C)2: PSD program for major sources and major modifications A (C)3: PSD program for minor sources and minor modifications A (D)1: Contribute to nonattainment/interfere with maintenance of NAAQS A (D)2: PSD A (D)3: Visibility Protection A (D)4: Interstate Pollution Abatement A (D)5: International Pollution Abatement A (E)1: Adequate resources A (E)2: State boards A (E)3: Necessary assurances with respect to local agencies NA (F): Stationary source monitoring system A (G): Emergency power A (H): Future SIP revisions A (I): Nonattainment area plan or plan revisions under part D + (J)1: Consultation with government officials A (J)2: Public notification A (J)3: PSD A (J)4: Visibility protection + (K): Air quality modeling and data A (L): Permitting fees A (M): Consultation and participation by affected local entities A In the above table, the key is as follows: A, Approve; NA, Not applicable; +, Not germane to infrastructure SIPs.

    EPA is soliciting public comments on the issues discussed in this proposal or on other relevant matters. These comments will be considered before EPA takes final action. Interested parties may participate in the Federal rulemaking procedure by submitting comments to this proposed rule by following the instructions listed in the ADDRESSES section of this Federal Register.

    V. Statutory and Executive Order Reviews

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

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

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

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

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

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

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

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

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

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

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

    List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.

    Dated: June 22, 2018. Alexandra Dunn, Regional Administrator, EPA Region 1.
    [FR Doc. 2018-14068 Filed 6-28-18; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R04-OAR-2017-0626; FRL-9980-18-Region 4] Air Plan Approval; Tennessee; Attainment Plan for Sullivan County SO2 Nonattainment Area AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is proposing to approve a State Implementation Plan (SIP) revision submitted by the State of Tennessee, through the Tennessee Department of Environment and Conservation (TDEC), to EPA on May 12, 2017, for attaining the 2010 1-hour sulfur dioxide (SO2) primary national ambient air quality standard (NAAQS) for the Sullivan County SO2 nonattainment area (hereafter referred to as the “Sullivan County Area” or “Area”). The Sullivan County Area is comprised of a portion of Sullivan County in Tennessee surrounding the Eastman Chemical Company (hereafter referred to as “Eastman”). This plan (herein called a “nonattainment plan or SIP” or “attainment plan or SIP”) includes Tennessee's attainment demonstration and other elements required under the Clean Air Act (CAA or Act). In addition to an attainment demonstration, the plan addresses the requirement for meeting reasonable further progress (RFP) toward attainment of the NAAQS, reasonably available control measures and reasonably available control technology (RACM/RACT), base-year and projection-year emissions inventories, enforceable emissions limitations and control measures, and contingency measures. EPA proposes to conclude that Tennessee has appropriately demonstrated that the plan's provisions provide for attainment of the 2010 1-hour primary SO2 NAAQS in the Sullivan County Area and that the plan meets the other applicable requirements under the CAA.

    DATES:

    Comments must be received on or before July 30, 2018.

    ADDRESSES:

    Submit your comments, identified by Docket ID No. EPA-R04-OAR-2017-0626 at http://www.regulations.gov. Follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. EPA will generally not consider comments or comment contents located outside of the primary submission (i.e., on the web, cloud, or other file sharing system). For additional submission methods, the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

    FOR FURTHER INFORMATION CONTACT:

    D. Brad Akers, Air Regulatory Management Section, Air Planning and Implementation Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW, Atlanta, Georgia 30303-8960. Mr. Akers can be reached via telephone at (404) 562-9089 or via electronic mail at [email protected]

    SUPPLEMENTARY INFORMATION: I. Requirement for Tennessee to Submit an SO2 Attainment Plan for the Sullivan County Area II. Requirements for SO2 Attainment Plans III. Attainment Demonstration and Longer Term Averaging IV. Review of Attainment Plan Requirements A. Emissions Inventory B. Attainment Modeling Demonstration 1. Model Selection 2. Meteorological Data 3. Emissions Data 4. Emission Limits i. Enforceability ii. Longer Term Average Limits 5. Background Concentration 6. Analysis of Multi-Stack Limit 7. Summary of Modeling Results C. RACM/RACT D. New Source Review (NSR) E. Reasonable Further Progress (RFP) F. Contingency Measures V. Additional Elements of Tennessee's Submittal VI. Incorporation by Reference VII. EPA's Proposed Action VIII. Statutory and Executive Orders I. Requirement for Tennessee To Submit an SO2 Attainment Plan for the Sullivan County Area

    On June 22, 2010, EPA promulgated a new 1-hour primary SO2 NAAQS of 75 parts per billion (ppb), which is met at an ambient air quality monitoring site when the 3-year average of the annual 99th percentile of daily maximum 1-hour average concentrations does not exceed 75 ppb, as determined in accordance with appendix T of 40 CFR part 50. See 75 FR 35520, codified at 40 CFR 50.17(a)-(b). On August 5, 2013, EPA designated a first set of 29 areas of the country as nonattainment for the 2010 SO2 NAAQS. See 78 FR 47191, codified at 40 CFR part 81, subpart C. These designations included the Sullivan County Area, which encompasses the primary SO2 emitting source Eastman and the nearby SO2 monitor (Air Quality Site ID: 47-163-0007). These area designations were effective October 4, 2013. Section 191(a) of the CAA directs states to submit SIPs for areas designated as nonattainment for the SO2 NAAQS to EPA within 18 months of the effective date of the designation, i.e., by no later than April 4, 2015 in this case. Under CAA section 192(a) these SIPs are required to demonstrate that their respective areas will attain the NAAQS as expeditiously as practicable, but no later than 5 years from the effective date of designation, which is October 4, 2018. In addition, sections 110(a) and 172(c), as well as EPA regulations at 40 CFR part 51, set forth substantive elements each SIP must contain to be approved by EPA.

    For the Sullivan County Area (and many other areas), EPA published a notice on March 18, 2016, that Tennessee (and other pertinent states) had failed to submit the required SO2 nonattainment plan by this submittal deadline. See 81 FR 14736. This finding initiated a deadline under CAA section 179(a) for the potential imposition of new source review and highway funding sanctions. However, pursuant to Tennessee's submittal of May 12, 2017, and EPA's subsequent letter dated October 10, 2017, to Tennessee finding the submittal complete and noting the termination of these sanctions deadlines, these sanctions under section 179(a) will not be imposed as a result of Tennessee having missed the April 4, 2015 deadline. Under CAA section 110(c), the March 18, 2016 finding also triggered a requirement that EPA promulgate a federal implementation plan (FIP) within two years of the finding unless (a) the state has made the necessary complete submittal and (b) EPA has approved the submittal as meeting applicable requirements.

    II. Requirements for SO2 Attainment Plans

    To be approved by EPA, nonattainment areas must provide SIPs meeting the applicable requirements of the CAA, and specifically CAA sections 110(a), 172, 191 and 192 for SO2. EPA's regulations governing nonattainment SIPs are set forth at 40 CFR part 51, with specific procedural requirements and control strategy requirements residing at subparts F and G, respectively. Soon after Congress enacted the 1990 Amendments to the CAA, EPA issued comprehensive guidance on SIPs, in a document entitled the “General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990,” published at 57 FR 13498 (April 16, 1992) (General Preamble). Among other things, the General Preamble addressed SO2 SIPs and fundamental principles for SIP control strategies. Id., at 13545-49, 13567-68. On April 23, 2014, EPA issued recommended guidance for meeting the statutory requirements in SO2 SIPs under the 2010 revised NAAQS, in a document entitled, “Guidance for 1-Hour SO2 Nonattainment Area SIP Submissions,” available at https://www.epa.gov/sites/production/files/2016-06/documents/20140423guidance_nonattainment_sip.pdf (hereafter referred to as EPA's April 2014 SO2 guidance or guidance). In this guidance EPA described the statutory requirements for SO2 SIPs for nonattainment areas, which includes: An accurate emissions inventory of current emissions for all sources of SO2 within the nonattainment area; an attainment demonstration; demonstration of RFP; implementation of RACM (including RACT); new source review (NSR); enforceable emissions limitations and control measures; and adequate contingency measures for the affected area.

    For EPA to fully approve a SIP as meeting the requirements of CAA sections 110, 172 and 191-192, and EPA's regulations at 40 CFR part 51, the SIP for the affected area needs to demonstrate to EPA's satisfaction that each of the aforementioned requirements have been met. Under CAA sections 110(l) and 193, EPA may not approve a SIP that would interfere with any applicable requirement concerning NAAQS attainment and RFP, or any other applicable requirement, and no requirement in effect (or required to be adopted by an order, settlement, agreement, or plan in effect before November 15, 1990) in any area which is a nonattainment area for any air pollutant, may be modified in any manner unless it insures equivalent or greater emission reductions of such air pollutant.

    III. Attainment Demonstration and Longer Term Averaging

    CAA sections 172(c)(1) and (6) direct states with areas designated as nonattainment to demonstrate that the submitted plan provides for attainment of the NAAQS. 40 CFR part 51, subpart G further delineates the control strategy requirements that SIPs must meet, and EPA has long required that all SIPs and control strategies reflect four fundamental principles of quantification, enforceability, replicability, and accountability. General Preamble, at 13567-68. SO2 attainment plans must consist of two components: (1) Emission limits and other control measures that assure implementation of permanent, enforceable and necessary emission controls, and (2) a modeling analysis which meets the requirements of 40 CFR part 51, appendix W which demonstrates that these emission limits and control measures provide for timely attainment of the primary SO2 NAAQS as expeditiously as practicable, but by no later than the attainment date for the affected area. In all cases, the emission limits and control measures must be accompanied by appropriate methods and conditions to determine compliance with the respective emission limits and control measures and must be quantifiable (i.e., a specific amount of emission reduction can be ascribed to the measures), fully-enforceable (specifying clear, unambiguous and measurable requirements for which compliance can be practicably determined), replicable (the procedures for determining compliance are sufficiently specific and non-subjective so that two independent entities applying the procedures would obtain the same result), and accountable (source specific limits must be permanent and must reflect the assumptions used in the SIP demonstrations).

    EPA's April 2014 SO2 guidance recommends that the emission limits be expressed as short-term average limits (e.g., addressing emissions averaged over one or three hours), but also describes the option to utilize emission limits with longer averaging times of up to 30 days so long as the state meets various suggested criteria. See EPA's April 2014 SO2 guidance, pp. 22 to 39. The guidance recommends that—should states and sources utilize longer averaging times—the longer term average limit should be set at an adjusted level that reflects a stringency comparable to the 1-hour average limit at the critical emission value (CEV) shown by modeling to provide for attainment that the plan otherwise would have set.

    EPA's April 2014 SO2 guidance provides an extensive discussion of EPA's rationale for concluding that appropriately set comparably stringent limitations based on averaging times as long as 30 days can be found to provide for attainment of the 2010 SO2 NAAQS. In evaluating this option, EPA considered the nature of the standard, conducted detailed analyses of the impact of use of 30-day average limits on the prospects for attaining the standard, and carefully reviewed how best to achieve an appropriate balance among the various factors that warrant consideration in judging whether a state's plan provides for attainment. Id. at pp. 22 to 39. See also id. at Appendices B, C, and D.

    As specified in 40 CFR 50.17(b), the 1-hour primary SO2 NAAQS is met at an ambient air quality monitoring site when the 3-year average of the annual 99th percentile of daily maximum 1-hour average concentrations is less than or equal to 75 ppb. In a year with 365 days of valid monitoring data, the 99th percentile would be the fourth highest daily maximum 1-hour value. The 2010 SO2 NAAQS, including this form of determining compliance with the standard, was upheld by the U.S. Court of Appeals for the District of Columbia Circuit in Nat'l Envt'l Dev. Ass'n's Clean Air Project v. EPA, 686 F.3d 803 (D.C. Cir. 2012). Because the standard has this form, a single hourly exceedance of the 75-ppb level does not create a violation of the standard. Instead, at issue is whether a source operating in compliance with a properly set longer term average could cause hourly exceedances of the NAAQS level, and if so the resulting frequency and magnitude of such exceedances, and in particular whether EPA can have reasonable confidence that a properly set longer term average limit will provide that the 3-year average of the annual fourth highest daily maximum 1-hour value will be at or below 75 ppb. A synopsis of how EPA judges whether such plans “provide for attainment,” based on modeling of projected allowable emissions and in light of the NAAQS's form for determining attainment at monitoring sites, follows.

    For SO2 plans that are based on 1-hour emission limits, the standard approach is to conduct modeling using fixed emission rates. The maximum emission rate that would be modeled to result in attainment (i.e., in an “average year” 1 shows three, not four days with maximum hourly levels exceeding 75 ppb) is labeled the “critical emission value.” The modeling process for identifying this critical emissions value inherently considers the numerous variables that affect ambient concentrations of SO2, such as meteorological data, background concentrations, and topography. In the standard approach, the state would then provide for attainment by setting a continuously applicable 1-hour emission limit at this critical emission value.

    1 An “average year” is used to mean a year with average air quality. While 40 CFR 50 appendix T provides for averaging three years of 99th percentile daily maximum hourly values (e.g., the fourth highest maximum daily hourly concentration in a year with 365 days with valid data), this discussion and an example below uses a single “average year” to simplify the illustration of relevant principles.

    EPA recognizes that some sources have highly variable emissions, for example due to variations in fuel sulfur content and operating rate, that can make it extremely difficult, even with a well-designed control strategy, to ensure in practice that emissions for any given hour do not exceed the critical emission value. EPA also acknowledges the concern that longer term emission limits can allow short periods with emissions above the “critical emissions value,” which, if coincident with meteorological conditions conducive to high SO2 concentrations, could in turn create the possibility of a NAAQS exceedance occurring on a day when an exceedance would not have occurred if emissions were continuously controlled at the level corresponding to the critical emission value. However, for several reasons, EPA believes that the approach recommended in its guidance document suitably addresses this concern. First, from a practical perspective, EPA expects the actual emission profile of a source subject to an appropriately set longer term average limit to be similar to the emission profile of a source subject to an analogous 1-hour average limit. EPA expects this similarity because it has recommended that the longer term average limit be set at a level that is comparably stringent to the otherwise applicable 1-hour limit (reflecting a downward adjustment from the critical emissions value) and that takes the source's emissions profile into account. As a result, EPA expects either form of emission limit to yield comparable air quality.

    Second, from a more theoretical perspective, EPA has compared the likely air quality with a source having maximum allowable emissions under an appropriately set longer term limit, as compared to the likely air quality with the source having maximum allowable emissions under the comparable 1-hour limit. In this comparison, in the 1-hour average limit scenario, the source is presumed at all times to emit at the critical emission level, and in the longer term average limit scenario the source is presumed to occasionally emit more than the critical emission value but on average, and presumably at most times, to emit well below the critical emission value. In an “average year,” compliance with the 1-hour limit is expected to result in three exceedance days (i.e., three days with hourly values above 75 ppb) and a fourth day with a maximum hourly value at 75 ppb. By comparison, with the source complying with a longer term limit, it is possible that additional exceedances would occur that would not occur in the 1-hour limit scenario (if emissions exceed the critical emission value at times when meteorology is conducive to poor air quality). However, this comparison must also factor in the likelihood that exceedances that would be expected in the 1-hour limit scenario would not occur in the longer term limit scenario. This result arises because the longer term limit requires lower emissions most of the time (because the limit is set well below the critical emission value), so a source complying with an appropriately set longer term limit is likely to have lower emissions at critical times than would be the case if the source were emitting as allowed with a 1-hour limit.

    As a hypothetical example to illustrate these points, suppose a source that always emits 1,000 pounds of SO2 per hour, which results in air quality at the level of the NAAQS (i.e., results in a design value of 75 ppb). Suppose further that in an “average year,” these emissions cause the 5-highest maximum daily average 1-hour concentrations to be 100 ppb, 90 ppb, 80 ppb, 75 ppb, and 70 ppb. Then suppose that the source becomes subject to a 30-day average emission limit of 700 pounds per hour (lbs/hr). It is theoretically possible for a source meeting this limit to have emissions that occasionally exceed 1,000 pounds per hour, but with a typical emissions profile, emissions would much more commonly be between 600 and 800 lbs/hr. In this simplified example, assume a zero-background concentration, which allows one to assume a linear relationship between emissions and air quality. (A nonzero background concentration would make the mathematics more difficult but would give similar results.) Air quality will depend on what emissions happen on what critical hours, but suppose that emissions at the relevant times on these 5 days are 800 lbs/hr, 1,100 lbs/hr, 500 lbs/hr, 900 lbs/hr, and 1,200 lbs/hr, respectively. (This is a conservative example because the average of these emissions, 900 lbs/hr, is well over the 30-day average emission limit.) These emissions would result in daily maximum 1-hour concentrations of 80 ppb, 99 ppb, 40 ppb, 67.5 ppb, and 84 ppb. In this example, the fifth day would have an exceedance that would not otherwise have occurred, but the third and fourth days would not have exceedances that otherwise would have occurred. In this example, the fourth highest maximum daily concentration under the 30-day average would be 67.5 ppb.

    This simplified example illustrates the findings of a more complicated statistical analysis that EPA conducted using a range of scenarios using actual plant data. As described in Appendix B of EPA's April 2014 SO2 guidance, EPA found that the requirement for lower average emissions is highly likely to yield better air quality than is required with a comparably stringent 1-hour limit. Based on analyses described in appendix B of its 2014 guidance, EPA expects that an emission profile with maximum allowable emissions under an appropriately set comparably stringent 30-day average limit is likely to have the net effect of having a lower number of exceedances and better air quality than an emission profile with maximum allowable emissions under a 1-hour emission limit at the critical emission value. This result provides a compelling policy rationale for allowing the use of a longer averaging period, in appropriate circumstances where the facts indicate this result can be expected to occur.

    The question then becomes whether this approach—which is likely to produce a lower number of overall exceedances even though it may produce some unexpected exceedances above the critical emission value—meets the requirements in sections 110(a)(1) and (2), 172(c)(1) and (6) for SIPs to contain enforceable emissions limitations and other control measures to “provide for attainment” of the NAAQS. For SO2, as for other pollutants, it is generally impossible to design a nonattainment plan in the present that will guarantee that attainment will occur in the future. A variety of factors can cause a well-designed attainment plan to fail and unexpectedly not result in attainment, for example if meteorology occurs that is more conducive to poor air quality than was anticipated in the plan. Therefore, in determining whether a plan meets the requirement to provide for attainment, EPA's task is commonly to judge not whether the plan provides absolute certainty that attainment will in fact occur, but rather whether the plan provides an adequate level of confidence of prospective NAAQS attainment. From this perspective, in evaluating use of a 30-day average limit, EPA must weigh the likely net effect on air quality. Such an evaluation must consider the risk that occasions with meteorology conducive to high concentrations will have elevated emissions leading to exceedances that would not otherwise have occurred, and must also weigh the likelihood that the requirement for lower emissions on average will result in days not having exceedances that would have been expected with emissions at the critical emissions value. Additional policy considerations, such as in this case the desirability of accommodating real world emissions variability without significant risk of violations, are also appropriate factors for EPA to weigh in judging whether a plan provides a reasonable degree of confidence that the plan will lead to attainment. Based on these considerations, especially given the high likelihood that a continuously enforceable limit averaged over as long as 30 days, determined in accordance with EPA's guidance, will result in attainment, EPA believes as a general matter that such limits, if appropriately determined, can reasonably be considered to provide for attainment of the 2010 SO2 NAAQS.

    The April 2014 SO2 guidance offers specific recommendations for determining an appropriate longer term average limit. The recommended method starts with determination of the 1-hour emission limit that would provide for attainment (i.e., the critical emission value), and applies an adjustment factor to determine the (lower) level of the longer term average emission limit that would be estimated to have a degree of stringency comparable to the otherwise necessary 1-hour emission limit. This method uses a database of continuous emission data reflecting the type of control that the source will be using to comply with the SIP emission limits, which (if compliance requires new controls) may require use of an emission database from another source. The recommended method involves using these data to compute a complete set of emission averages, computed according to the averaging time and averaging procedures of the prospective emission limitation. In this recommended method, the ratio of the 99th percentile among these long term averages to the 99th percentile of the 1-hour values represents an adjustment factor that may be multiplied by the candidate 1-hour emission limit to determine a longer term average emission limit that may be considered comparably stringent.2 The guidance also addresses a variety of related topics, such as the potential utility of setting supplemental emission limits, such as mass-based limits, to reduce the likelihood and/or magnitude of elevated emission levels that might occur under the longer term emission rate limit.

    2 For example, if the critical emission value is 1,000 pounds of SO2 per hour, and a suitable adjustment factor is determined to be 70 percent, the recommended longer term average limit would be 700 lbs/hr.

    Preferred air quality models for use in regulatory applications are described in Appendix A of EPA's Guideline on Air Quality Models (40 CFR part 51, appendix W). In 2005, EPA promulgated AERMOD as the Agency's preferred near-field dispersion modeling for a wide range of regulatory applications addressing stationary sources (for example in estimating SO2 concentrations) in all types of terrain based on extensive developmental and performance evaluation. Supplemental guidance on modeling for purposes of demonstrating attainment of the SO2 NAAQS is provided in appendix A to the April 2014 SO2 guidance document referenced above. Appendix A provides extensive guidance on the modeling domain, the source inputs, assorted types of meteorological data, and background concentrations. Consistency with the recommendations in this guidance is generally necessary for the attainment demonstration to offer adequately reliable assurance that the plan provides for attainment.

    As stated previously, attainment demonstrations for the 2010 1-hour primary SO2 NAAQS must demonstrate future attainment and maintenance of the NAAQS in the entire area designated as nonattainment (i.e., not just at the violating monitor) by using air quality dispersion modeling (see appendix W to 40 CFR part 51) to show that the mix of sources and enforceable control measures and emission rates in an identified area will not lead to a violation of the SO2 NAAQS. For a short-term (i.e., 1-hour) standard, EPA believes that dispersion modeling, using allowable emissions and addressing stationary sources in the affected area (and in some cases sources located outside the nonattainment area which may affect attainment in the area) is technically appropriate, efficient and effective in demonstrating attainment in nonattainment areas because it takes into consideration combinations of meteorological and emission source operating conditions that may contribute to peak ground-level concentrations of SO2.

    The meteorological data used in the analysis should generally be processed with the most recent version of AERMET. Estimated concentrations should include ambient background concentrations, should follow the form of the NAAQS, and should be calculated as described in section 2.6.1.2 of the August 23, 2010 clarification memo on “Applicability of appendix W Modeling Guidance for the 1-hr SO2 National Ambient Air Quality Standard” (U.S. EPA, 2010a).

    IV. Review of Attainment Plan Requirements A. Emissions Inventory

    The emissions inventory and source emission rate data for an area serve as the foundation for air quality modeling and other analyses that enable states to: (1) Estimate the degree to which different sources within a nonattainment area contribute to violations within the affected area; and (2) assess the expected improvement in air quality within the nonattainment area due to the adoption and implementation of control measures. As noted above, the State must develop and submit to EPA a comprehensive, accurate and current inventory of actual emissions from all sources of SO2 emissions in each nonattainment area, as well as any sources located outside the nonattainment area which may affect attainment in the area. See CAA section 172(c)(3).

    The primary SO2-emitting point source located within the Sullivan County Area is Eastman, which produces organic acids, aldehydes, esters, polymers, cellulose esters, specialty plastics, and acetate fibers. The facility also produces process steam and electricity for most of the operations, including hazardous waste combustion, and wastewater treatment. Eastman consists of three main SO2 emitting sources comprised of three powerhouses that include a total of 14 boilers and several smaller emitters:

    • Powerhouse B-83 consists of Boilers 18-24, denoted B-18—B-24, which fire coal to provide steam for facility operations. Each of the seven emissions units has the following capacities: Boilers B-18—B-20 are rated at 246 million British thermal units per hour (MMBtu/hr); Boilers B-21—B-22 have a rated capacity of 249 MMBtu/hr; and Boilers B-23—B-24 have a rated capacity of 501 MMBtu/hr. All seven B-83 boilers have existing limits on SO2 emissions of 2.4 lbs/MMBtu based on a 1-hour averaging period. Actual emissions from B-83 were 5,686 tons per year (tpy) in 2011.

    • Powerhouse B-253 consists of units B-25—B-29 which fire coal to provide steam for facility operations. Each emissions unit, B-25—B-29 has a rated capacity of 655 MMBtu/hr and an existing limit on SO2 emissions of 2.4 lbs/MMBtu based on a 24-hour averaging period. The B-253 powerhouse is currently undergoing a multi-year project to convert the power generation from the coal-fired boilers to natural gas-fired boilers to comply with regional haze best available retrofit technology (BART). See section IV.B.4.i for additional BART discussion. The result will be that the emissions units B-25—B-29 will fire only natural gas as repowered units start up and for all units no later than the attainment date for the 1-hour SO2 NAAQS, October 4, 2018.3 Actual emissions from B-253 were 14,897 tpy in 2011.

    3 As mentioned elsewhere in this proposed action, four boilers have converted to exclusive use of natural gas for fuel combustion already. These repowered units have different heat capacities, and the fuel content is such that the actual emissions of SO2 will always be much less than the formerly permitted rate.

    • Powerhouse B-325 consists of Boilers B-30 and B-31, which fire coal to provide steam for facility operations. Boiler B-30 has a rated capacity of 780 MMBtu/hr and an existing emission limit on SO2 emissions of 317 lbs/hr based on a 30-day averaging period, equivalent to 0.406 lbs/MMBtu. Boiler B-31 is rated at 880 MMBtu/hr and has an existing limit on SO2 emissions of 293 lbs/hr based on a 30-day averaging period, equivalent to 0.333 lbs/MMBtu. Actual emissions from B-325 were 1,276 tpy in 2011.

    • The B-248 unit consists of three hazardous waste combustors, one liquid chemical waste incinerator and two rotary kilns that can burn solid or liquid chemical waste, B-248-2, Vent A, and B-248-1, Vents D and E, respectively. According to the attainment SIP submitted by TDEC in May 2017, each of these units is subject to an existing limit on SO2 emissions for an exhaust concentration of 1,000 parts per million by volume SO2, equivalent to 1,109 tpy for B-248-2, Vent A, and 1,552 tpy each for 248-1, Vents D and E. Actual emissions from B-248 were 7.3 tpy in 2011. On February 1, 2018, TDEC issued a revised title V permit (568496) that included additional SO2 limits of 20 tpy for Vent A and 40 tpy for Vents D and E, combined.

    • Eastman has 31 other smaller emission units that provide various services to other parts of the facility, and these units account for 194.56 tpy of the allowable emissions across the facility. Actual emissions from the remaining units were 40.9 tpy in 2011. For more information on these miscellaneous units, see the May 12, 2017, submittal.

    The emissions at units for Eastman were recorded either by using data collected from CEMS or by material balances based on feed rates and other parameters and are quality-assured by TDEC.4

    4 As detailed in Section IV. of this proposed action, CEMS will be installed for Powerhouse B-83. Therefore, all subsequent emissions inventories and all compliance assessments will be based on CEMS measurements.

    The next largest SO2 source within the nonattainment area is the EnviraGlass, LLC glass manufacturing facility (EnviraGlass). SO2 emissions from EnviraGlass were 49.3 tons in 2011, as determined from material balances. The EnviraGlass Kingsport facility consists of one main SO2 emitter. The glass melting furnace #1 (GMF-1) fires natural gas and No. 2 fuel oil. The allowable permit limit for EnviraGlass of 39.6 lb/hr was included in the attainment modeling.

    The next largest SO2 source in Sullivan County is located just outside the Sullivan County Area boundary: Domtar Paper Company, LLC, Kingsport Paper Mill (Domtar). Domtar produces pulp and paper and is permitted to burn hog fuel, dry wood residue, engineered fuel, wastewater treatment plant sludge, fuel oil, and natural gas. SO2 emissions from this facility were 70.8 tons in 2011, as determined from material balances. The permitted allowable SO2 emissions limit for the main SO2 emissions unit at Domtar, the HFB1-1 biomass boiler, was included in the attainment modeling (264 lb/hr = 33.26 g/s). TDEC determined that the other SO2 emissions units at Domtar did not need to be explicitly modeled because of their smaller emissions levels. Therefore, these sources were accounted for using the background concentration discussed in section IV.B.5 of this notice.

    TDEC utilized EPA's 2011 National Emissions Inventory (NEI), Version 2 as the starting point for compiling point source emissions for the base year emissions inventory. The hazardous waste incinerators at Eastman in B-248 were erroneously reported as 20 tpy each for B-248-1 and B-248-2. TDEC corrected this information from the 2011 NEI with information submitted by Eastman.5 EnviraGlass, formerly Heritage Glass, did not report emissions for the 2011 NEI, so TDEC used semiannual compliance reports pursuant to the title V operating permit for the facility to determine emissions.

    5 For more information on this correction to the 2011 NEI, Version 2 emissions, see Attachment A of Tennessee's May 12, 2017, submittal.

    TDEC also used the 2011 NEI, Version 2 to obtain estimates of the area and nonroad sources. For onroad mobile source emissions, TDEC utilized EPA's Motor Vehicle Emissions Simulator (MOVES2014). A more detailed discussion of the emissions inventory development for the Sullivan County Area can be found in Tennessee's May 12, 2017, submittal.

    Table 1 below shows the level of emissions, expressed in tpy, in the Sullivan County Area for the 2011 base year by emissions source category. The point source category includes all sources within the nonattainment area.

    Table 1—2011 Base Year Emissions Inventory for the Sullivan County Area [tpy] Year Point Onroad Nonroad Area Total 2011 21,956.5 1.62 0.16 10.6 21,968.88

    Domtar is not included in the base year inventory for the Sullivan County Area because it is outside of the boundary of the nonattainment area. However, TDEC evaluated 2011 emissions from this facility to evaluate its impact on the area. Domtar's emissions were reported for the 2011 NEI, but TDEC determined that emissions from HFB1-1, the biomass boiler, were initially reported in error as 2.06 tons. Actual emissions were determined from fuel usage data supplied by Domtar, leading to 44.1 tpy SO2 emitted in 2011 from HFB1-1 and total facility-wide emissions of 70.8 tpy.6

    6 For more information on this correction to the 2011 NEI, Version 2 emissions, see Table 3-8 of the May 12, 2017, submittal.

    EPA has evaluated Tennessee's 2011 base year emissions inventory for the Sullivan County Area and has made the preliminary determination that this inventory was developed consistent with EPA's guidance. Therefore, pursuant to section 172(c)(3), EPA is proposing to approve Tennessee's 2011 base year emissions inventory for the Sullivan County Area.

    The attainment demonstration also provides for a projected attainment year inventory that includes estimated emissions for all emission sources of SO2 which are determined to impact the nonattainment area for the year in which the area is expected to attain the standard. This inventory must address any future growth in the Area. Growth means any potential increases in emissions of the pollutant for which the Sullivan County Area is nonattainment (SO2) due to the construction and operation of new major sources, major modifications to existing sources, or increased minor source activity. TDEC included a statement in its May 12, 2017 submittal declaring that the air agency assumes no growth of major sources in the Sullivan County Area, and that minor source growth should not significantly impact the Area. TDEC cites to its “Growth Policy” found at Tennessee Air Pollution Control Regulations (TAPCR) 1200-03-09-.01(5), which includes the nonattainment new source review (NNSR) program and the requirement for minor sources and minor modifications proposing to construct in a nonattainment area to apply BACT, approved into the SIP and last updated on July 30, 2012 (see 77 FR 44481). The NNSR program includes lowest achievable emissions rate, offsets, and public hearing requirements for major stationary sources and major modifications.

    TDEC provided a future year projected emissions inventory for all known sources included in the 2011 base year inventory, discussed above, that were determined to impact the Sullivan County Area. The projected emissions are set to be accurate beyond October 1, 2018, when the control strategy for the attainment demonstration will be fully implemented. Therefore, as an annual future year inventory, the point source portion is accurate beyond October 1, 2018, and would represent an annual inventory for 2019 or beyond. The projected emissions in Table 2 are estimated actual emissions, representing a 67.6 percent reduction from the base year SO2 emissions. The point source emissions were estimated by taking credit for the control strategy to repower the boilers at B-253 and assuming actual emissions at other Eastman units would remain the same as in 2011. Additionally, EnviraGlass has not operated in recent years, and TDEC includes a statement in its May 12, 2017 submittal that as of February 2017, the source had not resumed its operations. Therefore, EnviraGlass emissions were projected as zero tpy. If this source began operation again, actual emissions would be much less than those from Eastman (~50 tpy), and would be reported in future inventories.

    Per EPA's April 2014 SO2 guidance, the existing allowable emissions limits and the new 30-day, combined emission limit (see section IV.B.4) that TDEC is requesting EPA approve into the SIP, were modeled to show attainment. These projected actual emissions included in the future year inventory are less than the allowable emission limits, and therefore offer a greater level of certainty that the NAAQS will be protected under all operating scenarios. Emissions estimates for onroad sources were re-estimated with MOVES2014. The nonroad emissions were projected using national growth factors, and area source emissions were scaled based on emission factors developed using the Annual Energy Outlook 2014 for consumption and production forecasts. Both categories were then apportioned to the nonattainment area based on population in the nonattainment area relative to that of Sullivan County.7

    7 For more information, see Attachments A-D of the May 12, 2017, submittal.

    Table 2—Projected 2018 SO2 Emissions Inventory for the Sullivan County Area [tpy] Year Point Onroad Nonroad Area Total 2011 21,956.5 1.62 0.16 10.6 21,968.88 2019 7,104.5 0.64 0.006 10.521 7,115.67 B. Attainment Modeling Demonstration

    Eastman operates a large manufacturing facility in Kingsport that includes major SO2 sources with the potential to emit greater than 100 tons per year (tpy) of SO2. The SO2 emissions come from three main boiler groups B-83, B-253 and B-325. Powerhouse B-253 serves five boilers (Boilers 25-29), each with an individual stack, that provide steam and electricity to the facility. Powerhouse B-325 serves two coal-fired boilers that vent to a single stack (Boiler 30 and Boiler 31). Boiler 30 is equipped with a spray dryer absorber and electrostatic precipitator to control particulate matter and acid gases. Boiler 31 is equipped with a spray dryer absorber and fabric filter to control particulate matter and acid gases. Powerhouse B-83 serves seven boilers; five coal-fired boilers (Boilers 18-22) venting to a single stack, and two coal-fired boilers (Boilers 23 and 24) that also burn wastewater treatment sludge, venting to a single stack.

    These boilers, along with three other backup natural gas-fired boilers with minimal SO2 emissions (B-423), provide process steam and most of the electrical power needed to supply Eastman's operations. The combination of boilers and boiler operating loads at any given time depends on manufacturing demands along with availability of boilers, as each boiler has annual scheduled shutdowns. The following discussion evaluates various features of the modeling that Tennessee used in its attainment demonstration.

    1. Model Selection

    Tennessee's attainment demonstration used AERMOD, the preferred model for this application, and the associated pre-processor modeling programs. The State used the 16216r version of AERMOD with regulatory default options and urban dispersion coefficients.8 Receptor elevations and hill heights required by AERMOD were determined using the AERMAP terrain preprocessor version 11103. The meteorological data was processed using AERMET version 16216 with the regulatory adjusted U* option. The surface characteristics around the meteorological surface station were determined using AERSURFACE version 13016 and building downwash was assessed with the BPIP processor (version 04274). EPA proposes to find these model selections appropriate for the attainment demonstration.

    8 Tennessee and Eastman determined that urban dispersion coefficients are appropriate for the modeling analysis based upon an assessment of land use within a 3-kilometer radius of the Eastman boiler stacks using the Auer technique contained in Section 7.2.1.1.b.i of 40 CFR part 51, appendix W. The analysis resulted in 52.4 percent of the area being classified as urban land use categories, which is above the 50 percent criteria for using urban dispersion coefficients. Additionally, Tennessee and Eastman performed an analysis to estimate an effective population for the urban option to account for the large industrial heat release at the Eastman facility. The results of this analysis yield an effective population of 200,000, which is approximately four times the approximate 50,000 population of Kingsport, Tennessee. The complete details of Tennessee and Eastman's analysis are discussed in Section 4.1 of Attachment G1, “NAAQS Attainment Demonstration Modeling Analysis,” in Tennessee's final SIP submittal. EPA preliminarily agrees that urban dispersion coefficients with an effective population of 200,000 is appropriate for the modeling, and believes the procedures to estimate the effective population are appropriate.

    2. Meteorological Data

    The Sullivan County nonattainment area is in a wide valley surrounded by complex terrain ridges. Eastman evaluated available surface meteorological data in the area and determined that none of nearby National Weather Surface (NWS) stations in area were representative of the site-specific winds that occur in the nonattainment area valley. Therefore, Eastman installed and operated a site-specific 100-meter meteorological data tower and Doppler SODAR system to collect profiles of meteorological data (wind speed, wind direction, temperature). One year of site-specific data was collected from April 1, 2012 through March 31, 2013.9 EPA has reviewed the site-specific meteorological data and has preliminarily determined that the data meets the quality assurance criteria and the 1-year of data is appropriate for the modeling analysis. Site-specific turbulence parameters (sigma-theta and sigma-w) were also collected. However, as recommended in the December 2016 final revisions to the EPA's Guideline on Air Quality Models, contained in 40 CFR part 51, appendix W (Appendix W), since Eastman chose to use the adjusted U* (surface friction velocity) regulatory option in AERMET, the site-specific turbulence parameters were not used. The data from the 100-meter tower and Doppler SODAR were merged with concurrent additional NWS surface data parameters needed by AERMOD (e.g., cloud cover data) from the Tri-City Regional Airport National Weather Station (13877) and upper air data from Nashville, TN (13897).

    9 Pursuant to Section 8.4.2.e of 40 CFR part 51, appendix W, if site-specific meteorology is used for the modeling analysis, at least 1-year of site-specific data should be collected. The data should meet the quality assurance criteria in EPA's 2000 “Meteorological Monitoring Guidance for Regulatory Modeling Applications.” Publication No. EPA-454/R-99-005. Office of Air Quality Planning and Standards, Research Triangle Park, NC. (NTIS No. PB 2001-103606).

    The surface roughness (zo), albedo (r), and Bowen ratio (Bo) required surface parameters were determined for the area around the site-specific meteorological surface station using AERSURFACE version 13016. Eastman processed the meteorological data and surface parameters into AERMOD-ready files using AERMET version 16216 with the regulatory adjusted U* option. Complete details of the meteorological data collection and processing are available in sections 3.1-3.8 of Attachment G1, “NAAQS Attainment Demonstration Modeling Analysis,” in Tennessee's final SIP submittal. EPA preliminarily finds that the meteorological data collection and processing is appropriate for the modeled attainment demonstration.

    3. Emissions Data

    The emission inputs to Tennessee's attainment demonstration modeling reflect 1-hour emissions that correspond to allowable emissions from sulfur dioxide emission units at the Eastman facility and other nearby emissions sources located within and outside the Sullivan County nonattainment area. Eastman's modeled emissions sources include nine coal-fired boilers, five natural gas boilers that were converted from coal-fired to natural gas-fired units, and a tail-gas incineration unit. Although the limit on emissions from Eastman governs the 30-day average sum of emissions from all nine coal-fired boilers, Tennessee conducted modeling using a constant hourly rate (the 1,905 lb/hr 1-hour CEV), as recommended by EPA's April 2014 SO2 guidance. As discussed in more detail in section IV.B.6 below, Tennessee has conducted 34 modeling runs using a full range of emission distributions, to show that the limit ensures attainment, regardless of how emissions are distributed among the various boilers within this limit. In addition, Tennessee used the statistical procedures recommended in Appendix C of EPA's guidance to establish an adjustment factor that it applied to determine the limit it would otherwise have set.

    Two additional SO2 emissions sources, EnviraGlass, located within the nonattainment area, and Domtar Paper, located just outside the nonattainment area, were also included in Tennessee's attainment demonstration modeling, modeled at their hourly emission limits. Additional details regarding the emissions units are included in the Emissions Inventory, section IV.A., of this proposed rule and section 2 of Attachment G1, “NAAQS Attainment Demonstration Modeling Analysis,” in Tennessee's final SIP submittal. EPA proposes to find that the emissions sources included in the modeling are appropriate for the attainment demonstration. All other sources not explicitly included in the modeling were addressed using the background concentration discussed in section IV.B.5 of this notice.

    4. Emission Limits

    An important prerequisite for approval of an attainment plan is that the emission limits that provide for attainment be quantifiable, fully enforceable, replicable, and accountable. See General Preamble at 13567-68. Some of the limits that Tennessee's plan relies on are expressed as 30-day average limits. Therefore, part of the review of Tennessee's attainment plan must address the use of these limits, both with respect to the general suitability of using such limits for this purpose and with respect to whether the limits included in the plan have been suitably demonstrated to provide for attainment. The first subsection that follows addresses the enforceability of the limits in the plan, and the second subsection that follows addresses the combined, 30-day emission limit for Boilers 18-24, 30 and 31. Sections IV.B.6 and 7 discuss the modeling conducted to demonstrate that the limit of combined emissions of these boilers suitably provides for attainment.

    i. Enforceability

    Section 172(c)(6) provides that emission limits and other control measures in the attainment SIP shall be enforceable. Tennessee's attainment SIP for the Sullivan County nonattainment area relies on control measures and enforceable emission limits for Powerhouses B-253, B-83 and B-325 (for more discussion on these boilers, please refer to section IV.A above). These emission reduction measures were accounted for in the attainment modeling for the Eastman facility which demonstrates attainment for the 2010 NAAQS.

    Tennessee's control strategy for B-253 relies on compliance with the State's Regional Haze SIP to install BART for SO2 and other pollutants that impair visibility at Class I areas. TDEC's original April 4, 2008, regional haze SIP identified B-253 (Boilers 25-29) at Eastman Chemical as BART-eligible units.10 Tennessee subsequently amended its regional haze SIP (May 14, 2012 and May 25, 2012) to establish BART requirements for Eastman including an alternative BART option to repower (convert coal-fired boilers to natural gas) Boilers 25-29 at B-253 by December 31, 2018.11 The alternative BART measure became federally-enforceable through the issuance of BART permit 066116H on May 9, 2012, and an amendment on May 22, 2012, which changed the conversion completion date to align with the 1-hour SO2 NAAQS compliance deadline of October 4, 2018 (Condition 4(f)).12 Tennessee issued construction permit 966859F on June 15, 2013, authorizing construction of the B-253 boilers conversion to natural gas. Condition 6 of Permit 966859F establishes a natural gas fuel restriction after conversion is complete for each boiler.

    10 A BART-eligible source is an emission source that has the potential to emit 250 tons or more of a visibility-impairing pollutant, was constructed between August 7, 1962 and August 7, 1977, and whose operations fall within one or more of 26 listed source categories. The Clean Air Act requires BART for any BART-eligible source that a State determines “emits any air pollutant which may reasonably be anticipated to cause or contribute to any impairment of visibility in any such area.” EPA finalized a limited approval/limited disapproval of portions of Tennessee's April 4, 2008, regional haze SIP on April 24, 2012 (77 FR 24392). The April 4, 2008, SIP established the State's plan to comply with federal requirements to ensure natural visibility conditions at Class I areas by requiring affected sources to install BART for SO2 and other visibility-impairing pollutants.

    11 Tennessee's initial Eastman BART determination required Eastman to reduce SO2 emissions at Boilers 25-29 either by 92 percent or comply with a limit of 0.20 lbs/MMBtu established through the BART permit (066116H). EPA approved Eastman's BART determination, the alternative BART option and permit 066116H on November 27, 2012 (77 FR 70689).

    12 Condition 4(f) also prohibits operation of any B-253 boiler not converted after the October 2018 SO2 NAAQS compliance date until repowered to natural gas.

    In conjunction with the natural gas conversion control strategy at B-253, Tennessee also established a 30-day combined SO2 emission limit for nine coal-fired boilers at B-83 (seven boilers) and B-325 (two boilers) pursuant to EPA's April 2014 SO2 guidance on longer term average limits (see section IV.B.4.ii below). Tennessee established a single, combined 30-day rolling average of 1,753 lbs/hr SO2 emission limit through Permit 070072F on May 10, 2017, for Boilers 18-24 at B-83 and Boilers 30-31 at B-325. Boilers 30 and 31 at B-325 also have existing individual SO2 emission limits of 317 lbs/hr and 293 lbs/hr, respectively, based on a 30-calendar day rolling average.13 Eastman must comply with the combined 30-day limit for the 30-day period ending on October 31, 2018 14 and each 30-day period thereafter. Therefore, Eastman must begin to comply with the new limit no later than October 2, 2018. Compliance will be determined based on continuous emission monitoring system (CEMS) data for all nine boilers. EPA provides additional details, section IV.B.4.ii below, regarding how the combined 30-day SO2 emission limit was derived. The enforceable emission limit and compliance parameter ensure control measures will achieve the necessary incremental SO2 emissions reductions necessary to attain the NAAQS as expeditiously as practicable. Based on the attainment modeling of B-253 repowering combined with the 30-day SO2 emission limits for B-83 and B-325, the area is projected to begin showing attaining monitoring design values.

    13 Established in construction Permit 955272F, Boiler 30 has a 317 lbs/hr 30-day SO2 limit and Boiler 31 has a 293 lbs/hr 30-day SO2 limit, giving B-325 an allowable limit of 610 lbs/hr on a 30-day average.

    14 EPA's April 2014 SO2 guidance recommends that attainment plans provide for compliance at least one calendar year prior to the attainment deadline, to facilitate collection of air quality monitoring data reflecting attainment plan implementation. This air quality data would indicate whether the attainment plan is in fact successfully providing for attainment. Nevertheless, the guidance also notes that EPA has the discretion to approve plans that are judged to provide for attainment by the statutory attainment deadline, even if the monitoring data collected prior to the attainment deadline are judged to indicate that that plan has not yielded timely attainment. EPA believes that Tennessee's attainment plan provides for attainment, notwithstanding the possibility that subsequent review of available monitoring data may support a conclusion that the plan did not in fact provide for timely attainment.

    Tennessee's May 11, 2017, attainment SIP requests EPA approve into the SIP the authorization for alternative BART repowering of Boilers 25-29 at B-253 at Condition 4(f) of Regional Haze permit 066116H 15 (approved into Tennessee's regional haze SIP on November 12, 2012), natural gas fuel restriction for Boilers 25-29 (after each natural gas conversion) at Condition 6 of PSD construction permit 966859F, and the 30-day rolling single, combined SO2 emission limit of 1,753 lbs/hr for boilers at B-83 and B-325 at Conditions 1 through 4 16 of permit 070072F, which also include compliance parameters (monitoring, recordkeeping and reporting). The accountability of the SO2 emission limit is established through TDEC's inclusion in the nonattainment SIP and in the attainment modeling demonstration to ensure permanent and enforceable emission limitations as necessary to provide for attainment of the 2010 SO2 NAAQS.

    15 EPA notes condition 4(f) was approved into Tennessee's SIP on November 12, 2012 as part of the State's Regional Haze SIP. See77 FR 70689.

    16 In Tennessee's SO2 attainment SIP (page 33) the state requested EPA approve Conditions 1-5 from Permit 070072F however, EPA notes only four conditions were included in the final issued permit.

    ii. Longer Term Average Limits

    Tennessee has developed a single, combined emission limit of 1,753 lbs/hr of SO2 emissions on a 30-day average basis. This emission limit applies to nine coal-fired boilers, which emit SO2 from three separate stacks from powerhouses B-83 and B-325. These nine coal-fired boilers help provide both steam and electricity for the Eastman facility and Boilers 23 and 24 (at B-83) also burn wastewater treatment sludge. Based on the unique, interconnected operations and the steam demand for the Eastman facility, Tennessee elected to establish a single, combined emission limit governing the sum of emissions from these nine boilers. Tennessee concluded that the NAAQS will be attained so long as total hourly emissions from these nine boilers are at or below 1,905 lbs/hr. Tennessee based this conclusion on a set of 34 modeling runs, which encompassed several “worst-case” emissions scenarios. These scenarios and the modeling results are described in detail in section IV.B.6 of this notice. EPA ordinarily uses the term critical emissions value (CEV) to mean the 1-hour emission rate for an individual stack that, in combination with the other CEVs for other relevant stacks, the state shows through proper modeling to yield attainment. However, in this case, EPA is using the term CEV to mean the total emissions from all nine Eastman coal-fired boilers emitting from three stacks that Tennessee has shown to yield attainment, reflecting Tennessee's approach of evaluating an appropriate limit on the sum of these emissions.

    After establishment of this combined-source CEV, Tennessee used the procedures recommended in Appendix C of EPA's April 2014 SO2 guidance to determine an adjustment factor with which to establish a single, combined emission limit with a longer term averaging time (30-day). Tennessee analyzed three years of historical hourly emissions data (2013-2015) from the nine boilers in question. Tennessee used the sum of emissions from the nine boilers in this analysis, determining a 99th percentile of the 1-hour total emissions values and a 99th percentile of the 30-day average total emission values. The ratio of these 99th percentile values yielded an adjustment factor of 0.92. Multiplication of this adjustment factor times the collective CEV yielded a 30-day average limit of 1,753 lbs/hr. EPA believes that Tennessee, by following the approach recommended in Appendix C of the April 2014 SO2 guidance, has justified a conclusion that this 1,753 lbs/hour limit (governing the sum of emissions from the nine boilers) may be considered comparably stringent to a 1-hour limit of 1,905 lbs/hr (again governing the sum of emissions from the nine boilers). Since the emission limit being established for these nine boilers is a single, combined limit, EPA believes it is appropriate for the adjustment factor also to be computed based on the total combined emissions from the nine boilers. Therefore, EPA proposes to agree that the adjustment factor of 0.92 is appropriate in this case.

    EPA's April 2014 SO2 guidance further states, “The second important factor in assessing whether a longer term average limit provides appropriate protection against NAAQS violations is whether the source can be expected to comply with a longer term average limit in a manner that minimizes the frequency of occasions with elevated emissions and magnitude of emissions on those occasions.” The guidance advises that the establishment of supplemental limits to provide direct constraints on the frequency and/or magnitude of emissions exceeding the CEV can be valuable, but the guidance also acknowledges the possibility that occasions of emissions exceeding the CEV may be rare and modest in magnitude even without supplemental enforceable limitations. Tennessee concluded that occasions of emissions exceeding the critical emissions would be infrequent and modest in magnitude even without adoption of supplemental limits. EPA conducted its own evaluation of whether this element of the guidance is satisfied, such that compliance with Tennessee's 30-day average emission limit would provide adequate confidence that the area will attain the standard.

    The historical emissions data do not provide a direct measure of the frequency and magnitude of elevated emissions to expect once Eastman complies with the 30-day limit. The historical Eastman emissions data that Tennessee used is from a period in which emissions frequently were higher than the new limit. During the 2013 to 2015 period, Eastman's total emissions exceeded the subsequently adopted limit (1,753 lbs/hr) in approximately 32.4 percent of 30-day averages, and exceeded the 1-hour CEV (1,905 lbs/hr) in approximately 21.5 percent of hours. Thus, Eastman will be required to make emission reductions sufficient to comply with the new 30-day limit (1,753 lb/hr), which would both eliminate the occasions of 30-day average emissions above 1,753 lbs/hr and reduce the number and possibly eliminate the occasions when 1-hour emission levels exceed 1,905 lbs/hr. The question then is how frequently and with what associated emission levels can 1-hour emissions levels be expected to exceed the CEV once Eastman complies with the 30-day average limit.

    Since Tennessee has permitted a combined, multi-stack emission limit (1,753 lb/hr) for the nine coal-fired boilers, there are multiple compliance scenarios possible. Consequently, there is also a range of frequencies that the hourly emissions can exceed the CEV while still meeting the 30-day permit limit. To forecast the frequency and magnitude of emissions of occasions with emissions above the CEV, EPA asked Tennessee for information regarding how Eastman expects to comply with the new limit. Tennessee responded 17 that Eastman's compliance strategy will likely be to modify the order of dispatch of the nine boilers in question, dispatching Boilers 18 through 22 from Powerhouse B-83 less often in the future, in particular by reducing the dispatching of the smaller coal-fired boilers (Boilers 18, 19, and 20) in favor of greater operation of the larger boilers that are being converted to burn natural gas.18 These smaller boilers are the oldest and least efficient boilers of the nine and provide only low pressure steam to the facility. EPA used this information provided by Tennessee and the less efficient nature of these boilers and further analyzed the historical (2013 to 2015) emissions. Given the order of preference in boiler dispatch provided by Tennessee and efficiency considerations, EPA expects that three boilers (B-18 to B-20) may be operated at approximately 20 percent of their historical rates. This level of operation for these boilers would yield compliance with the new limit and allow Eastman to meet its steam generation needs. With that level of operation of those boilers, the number of occasions of total plant emissions exceeding the CEV was found to be 1.1 percent of the hours, with these hours on average being 4.4 percent above the CEV.19 During EPA's analyses, we found that the frequency of emissions over the CEV could range from 1 to 10 percent of the time, depending on the operational scenario used to comply with the 30-day limit. While EPA acknowledges the uncertainty in forecasting the frequency of elevated emissions and the magnitude of emissions on those occasions, based on the information received from Tennessee and our own analysis, EPA believes that emissions at Eastman are unlikely to exceed the CEV more than a few percent of the hours, at levels generally only a modest percent over the CEV. Compliance with the 30-day limit will be ensured using a CEMS and appropriate monitoring, recordkeeping and reporting requirements. Consequently, EPA proposes to conclude that the second criterion for use of longer term average limits is satisfied, even without supplemental limits to constrain the frequency and emissions level of occasions when emissions exceed the CEV.

    17 See emails from TDEC to EPA Region 4 dated January 26 and February 8, 2018.

    18 Tennessee's analysis in the February 8 email confirmed that, under the new combined limit, there should be adequate capacity available at natural gas boilers at B-253 and B-423, without the need to revise existing permit limits for these individual units.

    19 The email correspondence with TDEC and supporting documentation (including Tennessee's spreadsheet data and EPA's spreadsheet used for these calculations) are in the docket (ID: EPA-R04-OAR-2017-0626) for this proposed rule.

    Based on a review of the State's submittal, EPA believes that the single, combined 30-day average limit for the nine boilers in Powerhouses B-83 and B-325, in conjunction with the existing individual 30-day average limits for Boilers B-30 and B-31, provides a suitable alternative to establishing a 1-hour average emission limit for each unit or for the collected units at this source. Further discussion of Tennessee's modeling analysis of its set of limits, along with discussion of pertinent considerations in applying the procedures of Appendix C of EPA's guidance in determining appropriate longer term limits, is provided in section IV.B.6 below. In summary, EPA believes that the State has used a suitable data base in an appropriate manner and has thereby applied an appropriate adjustment, yielding an emission limit that has comparable stringency to the 1-hour average limit that the State determined would otherwise have been necessary to provide for attainment. While the 30-day average limit allows for occasions in which emissions may be higher than the level that would be allowed with the combined-unit 1-hour limit, the State's limit compensates by requiring average emissions to be lower than the level that would otherwise have been required by a 1-hour average limit. As described above in this section, in section III and explained in more detail in EPA's April 2014 SO2 guidance for nonattainment plans, EPA believes that appropriately set longer term average limits provide a reasonable basis by which nonattainment plans may provide for attainment. Based on the general information provided in this guidance document as well as the information in Tennessee's attainment SIP, EPA proposes to find that the 30-day average limit for Eastman's nine boilers in combination with other limitations in the State's plan will provide for attainment of the NAAQS.

    5. Background Concentration

    In accordance with section 8.3 of 40 CFR part 51, appendix W, Tennessee's attainment demonstration addresses the impacts from all SO2 emissions sources not explicitly included in the AERMOD modeling analysis by adding representative background concentrations to the impacts from the modeled sources. The State and Eastman chose to use 2013-2015 ambient monitoring data from a sulfur dioxide monitor located at Mammoth Cave National Park in Kentucky (AQS ID 21-061-0501) to develop “seasonal by hour of the day” background concentrations. The hourly concentrations range from 2.79 to 18.51 micrograms per cubic meter (µg/m3). The complete details of the background concentrations are described in section 3.9 of Attachment G1 of the Tennessee's Attainment Demonstration submittal. EPA preliminarily finds use of the Mammoth Cave background data is appropriate for the attainment modeling analysis.

    6. Analysis of Multi-Stack Limit

    The use of a limit governing the sum of emissions from multiple stacks, in lieu of individual limits for each stack, calls for a demonstration that the worst-case distribution of these emissions provides for attainment. To provide this demonstration, Tennessee conducted thirty-four (34) AERMOD modeling runs using varying combinations of boiler load and emissions scenarios for the nine coal-fired boilers to verify that the modeling includes the worst-case operational scenarios allowed under the single, thirty-day rolling average, emissions limit of 1,753 lbs/hr for the nine coal-fired boilers. The 34 modeling scenarios were performed to derive the single, combined 1,905 lbs/hr CEV for the nine coal-fired boilers (two stacks at the B-83 Powerhouse and one stack at the B-325 Powerhouse) that results in modeled attainment of the NAAQS. As defined in EPA's April 2014 SO2 guidance, the CEV is the level of emissions that results in modeled concentrations that are just below the level of the NAAQS; as noted above, this term is being applied to the combination of emissions from the nine coal-fired boilers referenced earlier in the notice.

    With these 34 AERMOD modeling runs, Tennessee and Eastman evaluated a wide range of future potential operational scenarios, considering boiler steam load demands for Eastman's production processes and boiler load-shifting that is projected to occur once the conversion of the five coal-fired boilers at B-253 (Boilers 25-29) from burning coal to natural gas is completed by October 2018. Based upon this evaluation, 34 operational scenarios were selected by Tennessee and Eastman for the CEV modeling analysis. Four of these 34 operation scenarios reflected all of the SO2 being emitted from a single stack, including two scenarios where all of the 1,905 lbs/hr is released from one or the other of the two B-83 stacks individually, one scenario where the B-325 stack emitted 726 lbs/hr 20 (which is the one hour equivalent to the current permitted, federally enforceable allowable emissions limit for B-325), and one scenario where the B-325 stack emitted 1,800 lbs/hr to simulate a B-325 worst-case emissions scenario. The modeled predicted concentrations from the three single-stack scenarios with permissible emission levels ranged from 89.08 µg/m3 to 182.7 µg/m3; the scenario with B-325 emitting 1,800 lbs/hr, well above its permissible level, yielded an estimated highest concentration of 190.8 µg/m3. Nine modeling scenarios were performed to evaluate emissions from various combinations when two of the three stacks are in operation. For these scenarios, the 1,905 lbs/hr CEV rate was divided between the two stacks in multiple combinations to represent reasonable potential worst-case future operations. The modeled predicted concentrations from the nine two-stack scenarios range from 171.6 µg/m3 to 190.5 µg/m3, with the highest value of 190.5 µg/m3 resulting from a scenario when the Boilers 18-22 B-83 stack was emitting at the highest level near its maximum capacity (1,039 lbs/hr), the Boilers 23-24 B-83 stack was emitting near its average rate (866 lbs/hr), and Boilers 30-31 were not operating (0 lb/hr). Twenty-one modeling scenarios were performed to evaluate simultaneous operation of all three stacks. As with the two-stack scenarios, the 1,905 lbs/hr critical value emissions rate was divided among the three stacks in multiple combinations to represent reasonable potential worst-case future operations. The modeled predicted concentrations from the twenty-one three-stack scenarios range from 186.0 µg/m3 to 195.37 µg/m3. The maximum model predicted concentration from the three-stack scenarios, which is also the maximum for all 34 scenarios, 195.37 µg/m3, occurred in the three-stack operational scenario that assumes the majority of the emissions came from the Boilers 18-22 B-83 stack emitting near its maximum capacity (1,133 lbs/hr), emissions were slightly below normal from the Boilers 23-24 B-83 stack (719 lbs/hr), and emissions were low from the B-325 stack (53 lbs/hr, as Boiler 30 was assumed to not be operating and Boiler 31 operating under minimal load). Tables which summarize the emissions and modeling input parameters for each of the 34 scenarios and additional details about the full range of scenarios are contained in the State's modeling analysis in sections 7.11 and 7.12 of the State's Attainment Demonstration Submittal and section 5 of Attachment G1, “NAAQS Attainment Demonstration Modeling Analysis,” in Tennessee's final SIP submittal.

    20 Established in PSD Permit 955272F, Boiler 30 has a 317 lbs/hr 30-day SO2 limit and Boiler 31 has a 293 lbs/hr 30-day SO2 limit, giving B-325 an allowable limit of 610 lbs/hr on a 30-day average. For the purposes of modeling, Eastman calculated an adjustment factor specific to the B-325 stack in accordance with the methods of Appendix C of EPA's guidance. Eastman calculated an adjustment factor of 0.84, which yielded a corresponding one-hour emission rate of 726 lbs/hr.

    As noted earlier, in calculating the adjustment factor to multiply times the collective CEV (the 1-hour sum of emissions providing for attainment in the full range of distribution of the emissions) to determine a comparably stringent collective 30-day emission limit, Tennessee used statistics for the sum of emissions from all the stacks governed by this limit. EPA's guidance does not expressly recommend how to address comparable stringency for limits that address the sum of emissions across multiple stacks. However, EPA's guidance at page 32 states:

    The selection of data handling procedures influences the longer term averages that are computed and thus influences the relationship between a 1-hour limit and a comparably stringent longer term average limit. Therefore, . . . all analyses for determining comparably stringent longer term average limits should then apply those data handling procedures.

    This suggests that the computation of adjustment factors for a limit governing the sum of emissions from multiple stacks should be based on statistical analysis of the variability of the sum of emissions from the multiple stacks, irrespective of the variability of emissions from the individual stacks. In the case of Eastman, while the facility shifts load among its various boilers, resulting in relatively variable emissions at any boiler, the total load is relatively steady, resulting in only modest variability of total emissions. As a result, use of a 30-day limit makes less difference in the control measure needed to meet the limit, and so less adjustment is needed to establish a 30-day limit that is comparably stringent to the corresponding 1-hour limit. Given the demonstration that the full range of potential distributions of 1,905 lb/hr provides for attainment, EPA also believes that a 30-day average limit of 1,753 lb/hr provides suitable assurance that attainment would result under the full range of distribution of these allowable emissions. 7. Summary of Modeling Results

    The AERMOD modeling analysis contained in Tennessee's Attainment Demonstration submittal resulted in a maximum modeled design value of 195.37 µg/m3, including the background concentration, which is less than the 196.4 µg/m3 (75 ppb) 1-hour sulfur dioxide NAAQS.

    EPA has evaluated the modeling procedures, inputs and results and proposes to find that the results of the State's modeling analysis demonstrate that there are no modeled violations of the NAAQS within the nonattainment area when the combined emissions from the nine coal-fired boilers are no greater that the 1,905 lbs/hr CEV. Additionally, EPA proposes to find that the 34 modeling scenarios are adequate to address the range of possible future operating scenarios of the boilers at the Eastman facility and, therefore, support that the 1,905 lbs/hr combined CEV is appropriate. Section IV.B.4.ii. of this notice explains how Tennessee and Eastman developed the 1,753 lbs/hr 30-day rolling average permit limit following the procedures in EPA's April 2014 SO2 guidance.

    C. RACM/RACT

    CAA section 172(c)(1) requires that each attainment plan provide for the implementation of all RACM as expeditiously as practicable (including such reductions in emissions from existing sources in the area as may be obtained through the adoption, at a minimum, of RACT) and shall provide for attainment of the NAAQS. EPA interprets RACM, including RACT, under section 172, as measures that a state determines to be reasonably available and which contribute to attainment as expeditiously as practicable for existing sources in the area.

    Tennessee's plan for attaining the 1-hour SO2 NAAQS in the Sullivan County SO2 nonattainment area is based on several measures, including repowering the B-253 boilers from coal to natural gas operation. Tennessee's plan requires compliance with these measures by October 1, 2018. This date is consistent with Tennessee's Regional Haze SIP, which was amended on May 9, 2012. The amended SIP allowed Eastman to implement BART no later than April 30, 2017, or an alternative BART option (repowering of the boilers from coal to natural gas) by December 31, 2018. The alternative BART option became federally enforceable with the issuance of BART permit 066116H on May 9, 2012. A prevention of significant deterioration (PSD) construction permit (966859F), which authorizes construction for the boiler repowering, was issued June 5, 2013. Condition 4(f) of permit 066116H requires the repowering of B-253 to be completed no later than the compliance deadline for the one-hour SO2 NAAQS. Also, Tennessee evaluated B-325 Boiler 31, and determined that the spray dryer absorber/fabric filter baghouse combination already in place constitutes RACT, and that therefore no further analysis is required.

    Tennessee considered various other measures for the remaining B-83 and B-325 boilers. The State evaluated a range of measures to reduce SO2 emissions, including switching to low-sulfur coal, upgraded or additional control equipment, conversion of existing coal-fired boilers to natural gas, and replacing existing coal-fired boilers with natural gas boilers. Tennessee determined that these other measures are not reasonable for a variety reasons, including infeasibility and cost, and that they were not needed to attain the NAAQS and would not advance the attainment date. See Table 5-2 in the submittal for additional details on the measures analyzed. In addition, Tennessee evaluated other operations at Eastman as well as additional sources within and adjacent to the nonattainment area and determined that no additional controls were required as RACT.

    Tennessee has determined that repowering B-253 to natural gas constitutes RACT and EPA proposes to concur with the state's RACT analysis. Based on the attainment modeling, described herein, for the B-253 control measures combined with the 30-day SO2 emission limit for B-83 and B-325, the area is projected to show attainment of the 1-hour SO2 standard. EPA believes the attainment plan provides for attainment through the adoption and implementation of Tennessee's RACT/RACM emission control strategy. Therefore, EPA proposes to conclude that the state has satisfied the requirement in section 172(c)(1) to adopt and submit all RACM as needed to attain the standards as expeditiously as practicable.

    D. New Source Review (NSR)

    Tennessee's SIP-approved NSR rules for nonattainment areas (NNSR) are at TAPCR 1200-03-09-.01(5), last approved by EPA on July 30, 2012. See 77 FR 44481. These rules provide for appropriate NSR for SO2 sources undergoing construction or major modification in the Sullivan County Area without need for modification of the approved rules. Therefore, EPA proposes to conclude that this requirement is met for this Area through Tennessee's existing NSR rules.

    E. Reasonable Further Progress (RFP)

    The CAA section 172(c)(2) requires the SIP provide reasonable further progress towards attainment of the applicable NAAQS. Regarding part D nonattainment plans, section 171(1) of the CAA defines RFP as the annual incremental reduction in emissions of the relevant pollutant as are required for the purpose of ensuring attainment of the applicable NAAQS by the applicable date. As discussed above, Tennessee's 2008 regional haze SIP required Eastman implement BART at B-253 (Boilers 25-29). The State revised its SIP to establish an alternative BART option to repower/convert all five coal-fired boilers at B-253 to natural gas units and changed the compliance deadline to the 1-hour SO2 NAAQS attainment date or October 4, 2018.21 TDEC and Eastman indicated that the size and complexity of the repowering required additional time to ensure the conversion was technically feasible. Tennessee's control strategy to reduce SO2 emission and attain the 2010 standard as expeditiously as practicable include the repowering of the five coal-fired boilers at B-253 and imposing an SO2 emission limit for the nine coal-fired boilers for B-83 and B-325. Eastman established a repowering timeline for B-253 listed in Table 3 below and in Tennessee' SO2 attainment SIP.

    21 Tennessee's attainment SIP mistakenly states that the 1-hour SO2 attainment date is October 5, 2018 instead of October 4, 2018.

    Table 3—Estimated Compliance Schedule for B-253 Repowering Boiler Date 22 Activity 25 1st Quarter(Q1), 2014 Complete; startup date was April 23, 2014. 27 1st and 2nd Quarter in 2016 Equipment mobilization, six-week conversion and demobilization; pre-outage construction conducted 4th quarter of 2017 thru the 1st quarter in 2018.
  • Conversion Complete—start-up date was April 23, 2016.
  • 28 2nd and 3rd Quarter in 2016 Equipment mobilization, six-week conversion and demobilization; pre-outage construction conducted 4th quarter of 2017 thru the 1st quarter in 2018.
  • Conversion Complete—start-up date was October 2, 2016.
  • 29 1st and 2nd Quarter in 2018 Equipment mobilization, six-week conversion and demobilization; pre-outage construction conducted 4th quarter of 2017 thru the 1st quarter in 2018.
  • Conversion Complete—start-up date was March 30, 2018.
  • 26 3rd Quarter in 2018 Equipment mobilization, six-week conversion and demobilization; pre-outage construction conducted 4th quarter of 2017 thru the 1st quarter in 2018.

    Based on this projected timeline, Eastman intends to complete conversion of B-253 by the 3rd quarter of 2018 just before the October 4, 2018 attainment date. At the time of this proposed rulemaking, four of the five coal-fired boilers at B-253 (B-25, 27, 28, and 29) have been converted, are fully operational and currently subject to the natural gas fuel restriction established in Permit 966859F. According to Eastman, this compliance schedule was the most practicable to meet the BART requirements and attain the SO2 NAAQS to maintain the necessary steam and electricity for manufacturing operations. This is also due, in part, to the state required (Tennessee Code Section 68-122-110) annual boiler safety inspection and maintenance of all 17 boilers at Eastman (including B-253) while ensuring necessary boiler capacity to sustain facility operations.23 According to Eastman, to complete the conversion of a boiler to natural gas the normal safety inspection is extended to 6 weeks. Because of extended inspections and boiler shutdowns in 2017, Eastman did not convert any boilers at B-253 in 2017. As indicated in Table 3, the final boiler (B-26) is scheduled for conversion in the 3rd quarter of 2018.

    22 According to TDEC, Eastman did not schedule the conversion of any boilers in 2015 or 2017 due to legally required annual boiler safety inspections and maintenance to ensure facility steam and electricity reliability. The necessary engineering work for the conversion of Boilers 27 and 28 in 2016 was performed in 2015 and 2017 for Boilers 26 and 29. For additional information, please refer to Tennessee's Attainment SIP Narrative located in the docket (ID: EPA-R04-OAR-2017-0626).

    23 The Tennessee Boiler and Unfired Pressure Vessel inspection law (Tennessee Code Section 68-122-110) requires annual inspection and maintenance of Eastman's 17 power boilers. According to Eastman, only one boiler at a time is taken off-line to ensure the necessary steam and electricity reliability for manufacturing operations. The duration of each inspection depends on the size and maintenance cycle of the boiler components. Eastman has stated it takes 46-48 of the 52 weeks to complete the scheduled inspections and boiler maintenance. Eastman also indicated that it is not practicable for the facility to schedule more than two extended inspections per calendar year without potential risk meeting production demands.

    Tennessee's May 2017 attainment SIP also provides estimated incremental emission reductions during the conversion of all five boilers at B-253. Table 6-2 in TDEC's submittal 24 provides for projected change in actual emissions at Eastman over the duration of the repowering at B-253 and post-control after the attainment date. TDEC compared the pre-control emission rates for all boilers at B-83, B-325 and B-253 for the period of April 1, 2012 through March 31, 2013 over the course of the conversion (interim years 2015 and 2017) to post-control emissions (after October 4, 2018). Projected emission reductions after the completion of B-253 conversion and compliance with the SO2 emission limit for B-83 and B-325, are expected to be 66 percent compared to pre-control levels (with estimated incremental emission reductions of 11 percent and 39 percent in 2015 and 2017 respectively (after complete conversion of B-25 in 2014 and B-27 and 28 in 2016). The average pre-control emissions from each B-253 boiler was 677 pounds per hour (or 2,965 tpy). TDEC estimates that each boiler conversion will reduce emissions by 2,960 tpy.

    24 EPA notes the second note to Table 6-2 list 1,794 lbs/hr as the combined 30-day average allowable emission rate for B-83 and B-325 boilers, however, the correct emission rate is 1,753 lbs/hr.

    The control measures for attainment of the 2010 SO2 NAAQS included in the State's submittal have been modeled to achieve attainment of the 1-hour SO2 NAAQS. The adoption of new emissions limits, and compliance parameters and a natural gas restriction (for repowered B-253 boilers) require these control measures to achieve emissions reductions. Tennessee finds that the attainment plan requires the affected sources to implement control measures as expeditiously as practicable to ensure attainment of the 1-hour standard and therefore concludes that the attainment plan provides for RFP in accordance with the approach to RFP described in EPA's guidance. EPA believes Tennessee's SIP provides for incremental reduction in emissions to ensure reasonable further progress towards attainment of the standard and therefore concurs and proposes to preliminary conclude that the plan provides for RFP and therefore satisfies the requirements of CAA section 172(c)(2).

    F. Contingency Measures

    As noted above, EPA guidance describes special features of SO2 planning that influence the suitability of alternative means of addressing the requirement in section 172(c)(9) for contingency measures for SO2, such that in particular an appropriate means of satisfying this requirement is for the state to have a comprehensive enforcement program that identifies sources of violations of the SO2 NAAQS and to undertake an aggressive follow-up for compliance and enforcement. Tennessee's plan provides for satisfying the contingency measure requirement in this manner.

    Specifically, upon notification by Tennessee that a reference monitor for the Area has registered four validated ambient SO2 concentrations in excess of the NAAQS during calendar years 2019 or 2020, or that a monitored SO2 NAAQS violation based on the design value occurred during calendar years 2021 and beyond, Eastman will, without any further action by Tennessee or EPA, undertake a full system audit of all emission units subject to emission limits under this plan and submit a written system audit report to Tennessee within 30 days of the notification. Upon receipt of the system audit report, Tennessee will immediately begin a 30-day evaluation period to diagnose the cause of the monitored exceedance. This evaluation will be followed by a 30-day consultation period with Eastman to develop and implement operational changes necessary to prevent future monitored violations of the NAAQS. These changes may include fuel switching to reduce or eliminate the use of sulfur-containing fuels, physical or operational reduction of production capacity, or other changes as appropriate. If a permit modification is deemed necessary, Tennessee would issue a final permit within the statutory timeframes required in Tennessee Comprehensive Rules and Regulations 1200-03-09, and any new emissions limits required by such a permit would be submitted to EPA as a SIP revision. EPA concurs and proposes to approve Tennessee's plan for meeting the contingency measure requirement in this manner.

    V. Additional Elements of Tennessee's Submittal

    To verify that the 30-day limit is resulting in continued attainment of the 1-hour SO2 standard in the Sullivan County area, Tennessee is establishing an additional safeguard within the nonattainment area by upgrading its existing SO2 ambient air monitoring network in the Sullivan County area. TDEC has committed to deploy additional ambient air monitors within the nonattainment area 25 to characterize expected areas of maximum 1-hour SO2 concentrations near the Eastman Chemical Plant. The State intends to designate the monitors as State/Local air monitoring stations in accordance with 40 CFR part 58 and locate the monitors as close as possible to the areas of expected maximum concentration. These monitors will be submitted for approval by EPA as part of the state's annual ambient air monitoring network plan.

    25 See email from TDEC to EPA Region 4, Air, Pesticides and Toxic Management Division, Air Director Beverly Banister on June 6, 2018 included in the docket for this proposal (ID: EPA-R04-OAR-2017-0626).

    VI. Incorporation by Reference

    EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference into Tennessee's SIP a natural gas fuel restriction, a new SO2 emission limit and specified compliance conditions established in permits 966859F and 070072F for monitoring, recordkeeping and reporting parameters for emissions units at Eastman Chemical Company. Specifically, EPA is proposing to incorporate into the Tennessee SIP, a new 1,753 lbs/hr 30-day SO2 emission limit and operating, monitoring, recordkeeping and reporting parameters all established at Conditions 1 thru 4 in Permit 070072F for Boilers 18-24 at B-83 and Boilers 30-31 at B-325 and, a natural gas fuel restriction for Boilers 25-29 at B-253 (after each natural gas conversion) established at Condition 6 in Permit 966859F. The SO2 emission standards specified in each permit are the basis for the SO2 attainment demonstration in the SIP. EPA has made, and will continue to make, these materials generally available through www.regulations.gov and at EPA Region 4 office (please contact the person identified in the For FURTHER INFORMATION CONTACT section of this preamble for more information).

    VII. EPA's Proposed Action

    EPA is proposing to approve Tennessee's SO2 nonattainment SIP submission, which the State submitted to EPA on May 11, 2017, for attaining the 2010 1-hour SO2 NAAQS for the Sullivan County Area and for meeting other nonattainment area planning requirements. EPA has preliminarily determined that Tennessee's nonattainment SIP meets the applicable requirements of sections 110(a), 172, 191 and 192 of the CAA and regulatory requirements at 40 CFR part 51. This SO2 nonattainment SIP includes Tennessee's attainment demonstration for the Sullivan County Area and other nonattainment requirements for a RFP, RACT/RACM, NNSR, base-year and projection-year emission inventories, enforceable emission limits and compliance parameters and contingency measures. Specifically, EPA is proposing to approve into the Tennessee SIP, Eastman Chemical's enforceable SO2 emission limit and compliance parameters (monitoring, recordkeeping and reporting) from PSD construction permit 966859F (condition 6) and Permit No. 070072F (conditions 1-4) (see section IV.B.4.1).

    VIII. Statutory and Executive Order Reviews

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

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

    • Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;

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

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

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

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

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

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

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

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

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

    List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by Reference, Intergovernmental relations, Reporting and recordkeeping requirements, Sulfur oxides.

    Authority:

    42 U.S.C. 7401 et seq.

    Dated: June 19, 2018. Onis “Trey” Glenn, III, Regional Administrator, Region 4.
    [FR Doc. 2018-14097 Filed 6-28-18; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R06-OAR-2017-0435; FRL-9979-25-Region 6] Approval and Promulgation of Implementation Plans; Arkansas; Interstate Transport Requirements for the 2012 PM2.5 NAAQS and Definition Update AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    Pursuant to the Clean Air Act (CAA or Act), the Environmental Protection Agency (EPA) is proposing to approve portions of the Arkansas State Implementation Plan (SIP) submittal addressing the CAA requirement that SIPs address the potential for interstate transport of air pollution to significantly contribute to nonattainment or interfere with maintenance of the 2012 fine particulate matter (PM2.5) National Ambient Air Quality Standards (NAAQS) in other states. EPA is proposing to determine that emissions from Arkansas sources do not contribute significantly to nonattainment in, or interfere with maintenance by, any other state with regard to the 2012 PM2.5 NAAQS. The EPA is also proposing to approve a revision to update incorporation by reference of NAAQS germane to this proposed action.

    DATES:

    Written comments must be received on or before July 30, 2018.

    ADDRESSES:

    Submit your comments, identified by Docket Number EPA-R06-OAR-2017-0435, at http://www.regulations.gov or via email to [email protected] Follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. The EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (i.e. on the web, cloud, or other file sharing system). For additional submission methods, please contact Sherry Fuerst, 214-665-6454, [email protected] For the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

    Docket: The index to the docket for this action is available electronically at www.regulations.gov and in hard copy at the EPA Region 6, 1445 Ross Avenue, Suite 700, Dallas, Texas. While all documents in the docket are listed in the index, some information may be publicly available only at the hard copy location (e.g., copyrighted material), and some may not be publicly available at either location (e.g., CBI).

    FOR FURTHER INFORMATION CONTACT:

    Sherry Fuerst, 214-665-6454, [email protected] To inspect the hard copy materials, please schedule an appointment with Ms. Fuerst or Mr. Bill Deese at 214-665-7253.

    SUPPLEMENTARY INFORMATION:

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

    I. Background A. The PM2.5 NAAQS and Interstate Transport of Air Pollution

    Under Section 109 of the CAA, we establish NAAQS to protect human health and public welfare. In 2012, we established a new annual NAAQS for PM2.5 of 12 micrograms per cubic meter (μg/m3), (78 FR 3085, January 15, 2013). The CAA requires states to submit, within three years after promulgation of a new or revised standard, SIPs meeting the applicable “infrastructure” elements of sections 110(a)(1) and (2). One of these applicable infrastructure elements, CAA section 110(a)(2)(D)(i), requires SIPs to contain provisions to prohibit certain adverse air quality effects on neighboring states due to interstate transport of pollution. There are four sub-elements within CAA section 110(a)(2)(D)(i). This action reviews how the first two sub-elements contained in CAA section 110(a)(2)(D)(i)(I) were addressed in an infrastructure SIP submission from Arkansas for the 2012 PM2.5 NAAQS. These sub-elements require that each SIP for a new or revised NAAQS contain adequate provisions to prohibit any source or other type of emissions activity in one state that will “contribute significantly to nonattainment” or “interfere with maintenance” of the applicable air quality standard in any other state.

    The EPA has addressed the interstate transport requirements of CAA section 110(a)(2)(D)(i)(I) with respect to PM2.5 in several past regulatory actions. In 2011, we promulgated the Cross-State Air Pollution Rule (CSAPR, 76 FR 48208, August 8, 2011) in order to address the obligations of states—and of the EPA when states have not met their obligations—under CAA section 110(a)(2)(D)(i)(I) to prohibit air pollution contributing significantly to nonattainment in, or interfering with maintenance by, any other state with regard to several NAAQS, including the 1997 annual and 2006 24-hour PM2.5 NAAQS.1 In that rule, we considered states linked to downwind nonattainment or maintenance receptors 2 if they were projected by air quality modeling to contribute more than the threshold amount (1% of the standard) of PM2.5 pollution for the 1997 and 2006 PM2.5 NAAQS (76 FR 48208, 48239-43). The EPA has not established a threshold amount for the 2012 PM2.5 NAAQS. In 2016 we provided an informational memorandum (the 2016 memo) about the steps states should follow as they develop and review SIPs that address this provision of the CAA for the 2012 PM2.5 NAAQS.3

    1 Federal Implementation Plans; Interstate Transport of Fine Particulate Matter and Ozone and Correction of SIP Approvals, 76 FR 48207 (August 8, 2011) (codified as amended at 40 CFR 52.38 and 52.39 and 40 CFR part 97).

    2 Nonattainment or maintenance receptors are monitors projected to have air quality problems.

    3 Information on the Interstate Transport “Good Neighbor” Provision for the 2012 Fine Particulate Matter National Ambient Air Quality Standards under Clean Air Act Section 110(a)(2)(D)(i)(I) March 17, 2016 from Stephen D. Page.

    B. Arkansas SIP Submittal Pertaining to the 2012 PM2.5 NAAQS and Interstate Transport of Air Pollution

    On March 24, 2017, Arkansas submitted a SIP revision to address the requirements of CAA section 110(a)(2)(D)(i)(I) for the 2012 PM2.5 NAAQS. The submittal stated that the State had adequate provisions to prohibit air pollutant emissions from within the State that significantly contribute to nonattainment or interfere with maintenance of the 2012 PM2.5 NAAQS stating, “Past contribution modeling by EPA for the 2006 PM2.5 NAAQS, included in `Air Quality Modeling Final Rule Technical Support Document' published in June 2001 to support the Final Cross-State Air Pollution Rule (CSAPR) (76 FR 48208), demonstrated that Arkansas did not significantly contribute to nonattainment or interfere with maintenance of the annual PM2.5. NAAQS that was set in 1997 and retained in 2006.” 4 Arkansas's largest contribution to nonattainment for the 2006 annual PM2.5 NAAQS was 0.1 μg/m3 and Arkansas's largest downwind contribution to maintenance of the 2006 PM2.5 annual standard was 0.04 μg/m3. Not only are both of these values below the 1% significance threshold for the annual PM2.5 NAAQS retained in 2006 (15 μg/m3), they are also below 1% of the 2012 PM2.5 NAAQS value of 12 μg/m3.”

    4 Air Quality Modeling Final Rule Technical Support Document, June 2011 http://www.epa.gov/airtransport/CSAPR/pdfs/AQModeling.pdf.

    We previously approved the portions of Arkansas's 2006 PM2.5 NAAQS i-SIP which addressed the requirements that emissions within Arkansas be prohibited from contributing to the nonattainment or interfere with maintenance of the NAAQS in other states (sub-elements 1 and 2). 78 FR 53269 (August 29, 2013). Based on our evaluation of the State's submission discussed below, we propose to approve the March 24, 2017 submittal intended to demonstrate that the SIP meets the requirements of CAA section 110(a)(2)(D)(i)(I) for the 2012 PM2.5 NAAQS.

    C. Revisions to the Arkansas SIP Definitions and National Ambient Air Quality Standards List

    Included in the March 24, 2017 submission were updates to Regulation 19, Chapter 2 and Appendix B (Regulations of the Arkansas Plan of Implementation for Air Pollution Control) of the Arkansas Code Annotated § 8-4-201. We are proposing to approve the revised definition of “National Ambient Air Quality Standards” in Chapter 2 that changes the effective date to January 15, 2013. We also are proposing to approve the changes in Appendix B under “Particle Pollution, PM2.5.” that reflect the update and apply the Chapter 2 definition to all Chapters of Regulation 19. Please see the Technical Support Document (TSD) for additional information and evaluation below.

    II. The EPA's Evaluation A. Pertaining to 110(a)(2)(D)(i)(I) for the 2012 PM2.5 NAAQS

    As stated above, Section 110(a)(2)(D)(i) requires SIPs to include adequate provisions prohibiting any source or other type of emissions activity in one state that will (I) contribute significantly to nonattainment, or interfere with maintenance of the NAAQS in another state, and (II) interfere with measures required to prevent significant deterioration of air quality, or to protect visibility in another state. This action addresses only CAA Section 110(a)(2)(D)(i)(I).

    EPA issued the 2016 memo about the steps states should follow and we will be following the framework outlined in the memo for our evaluation. The 2016 EPA memo outlined the four-step framework EPA has historically used to evaluate interstate transport under section 110(a)(2)(D)(i)(I), including the EPA's CSAPR.

    (1) Identification of potential downwind nonattainment and maintenance receptors;

    (2) Identification of upwind states contributing to downwind nonattainment and maintenance receptors;

    (3) For states identified as contributing to downwind air quality problem, identification of upwind emissions reductions necessary to prevent upwind states from significantly contributing to nonattainment or interfering with maintenance of receptors, and;

    (4) For states that are found to have emissions that significantly contribute to non-attainment or interfere with maintenance downwind, reducing the identified upwind emissions through adoption of permanent and enforceable measures.

    Based on this approach, the potential receptors are outlined in Table 1 in the memo. Most of the potential receptors are in California, located in the San Joaquin Valley or South Coast nonattainment areas. However, there is also one potential receptor in Shoshone County, Idaho, and one potential receptor in Allegheny County, Pennsylvania.

    The 2016 memo did note that because of data quality problems nonattainment and maintenance projections were not done for all or portions of Florida, Illinois, Idaho, Tennessee and Kentucky. After issuance of the memo, data quality problems were resolved for Idaho, Tennessee, Kentucky and most of Florida, identifying no additional potential receptors, with those areas having design values (DV) below the 2012 PM2.5 NAAQS and expected to maintain the NAAQS due to downward emission trends for NOX and SO2 (www.epa.gov/air-trends/air-quality-design-values and www.epa.gov/air-emissions-inventories/air-pollutant-emissions-trends-data). Florida certified in March 2018 its 2017 PM2.5 ambient air data for the counties in Florida that had had 2009-2013 data gaps, allowing us to develop 2015-2017 preliminary design values. The preliminary design values indicate the highest value is 8 μg/m3 in Florida well below the NAAQS. For these reasons, we find that none of the counties in Florida with monitoring gaps between 2009-2013 should be considered either nonattainment or maintenance receptors for the 2012 PM2.5 NAAQS, based on the 2015-2017 preliminary DV. Therefore, as of April 2018, only Illinois still has data quality issues preventing projections of nonattainment and maintenance receptors. As a result, Illinois will be evaluated below to determine if they have potential nonattainment or maintenance receptors for 2012 PM2.5 NAAQS.

    For “Step 1” of this evaluation, the areas identified as “potential downwind nonattainment and maintenance receptors” are:

    • Seventeen potential receptors in California, located in the San Joaquin Valley or South Coast nonattainment areas;

    • Shoshone County, Idaho;

    • Allegheny County, Pennsylvania;

    • All of Illinois

    As stated above, “Step 2” is the identification of states contributing to downwind nonattainment and maintenance receptors, such that further analysis is required to identify necessary upwind reductions. For this step, we will be specifically determining if Arkansas emissions contribute to downwind nonattainment and maintenance receptors.

    Each of the potential receptors is discussed below, with a more in-depth discussion provided in the TSD for this action. For additional information, links to the documents relied upon for this analysis can be found throughout the document, more information is available in the TSD and the documents can be found in the docket for this action.

    California

    As described in our TSD, our analysis shows that Arkansas's PM2.5 emissions and/or PM2.5 precursors do not significantly impact the California potential receptors identified in the memo. In our analysis, we found specifically that the majority of the emissions impacting PM2.5 levels in California are directly emitted PM2.5 and/or PM2.5 precursors from within the state, and that meteorological and topographic conditions serve as barriers to transport from Arkansas. We note that air quality designations are not relevant to our evaluation of interstate transport, however, the analysis developed for the 2012 annual PM2.5 NAAQS designations process provides an in depth evaluation of factors critical in evaluating transport of PM2.5 and PM2.5 precursors, including evaluation of local emissions, wind speed and direction, topographical and meteorological conditions and seasonal variations recorded at the monitors, which all support the conclusion that Arkansas's PM2.5 and PM2.5 precursors do not significantly contribute to nonattainment or interfere with maintenance of the California potential receptors. Furthermore, Arkansas is more than 1,700 miles to the east and generally downwind of the California receptors.5

    5 California: Imperial County, Los Angeles-South Coast Air Basin, Plumas County, San Joaquin Valley Area Designations for the 2012 Primary Annual PM2.5 National Ambient Air Quality Standard Technical Support Document https://www.regulations.gov/document?D=EPA-HQ-OAR-2012-0918-0330.

    For these reasons, we propose to find that Arkansas does not significantly contribute to nonattainment, nor will it interfere with maintenance of the 2012 PM2.5 NAAQS for California.

    Shoshone County, Idaho

    As discussed in the TSD, our analysis shows that Arkansas's PM2.5 emissions and/or PM2.5 precursors do not significantly impact the Idaho potential receptor identified in the memo. In our analysis, we found specifically that the majority of the emissions impacting PM2.5 levels, came during the winter time and could be attributed to residential wood combustion. The analysis developed for the 2012 annual PM2.5 NAAQS designations process provide an in depth evaluation of factors that are useful in evaluating transport of PM2.5 and PM2.5 precursors, including evaluation of local emissions, wind speed and direction, topographical and meteorological conditions and seasonal variations recorded at the monitor, which all support the conclusion that Arkansas PM2.5 and PM2.5 precursors do not significantly contribute to nonattainment nor interfere with maintenance of the Idaho potential receptor.6 Furthermore, Arkansas is to the southeast and downwind of this receptor.

    6 Idaho: West Silver Valley Nonattainment Area- 2012 Primary Annual PM2.5 National Ambient Air Quality Standard Technical Support Document. Prepared by EPA Region 10.

    For these reasons, we propose to find that Arkansas does not significantly contribute to nonattainment, nor will it interfere with maintenance of the 2012 PM2.5 NAAQS for Shoshone, Idaho.

    Allegheny County, Pennsylvania

    As discussed in the TSD, our analysis shows that Arkansas's PM2.5 emissions and/or PM2.5 precursors do not significantly impact the Allegheny County, Pennsylvania (Liberty monitor) potential receptor identified in the memo. In our analysis, we found that there were strong local influences throughout Allegheny County and contributions from nearby states that contributed to its nonattainment for both the 1997 and 2006 PM2.5 NAAQS. Contributors to the Liberty monitor in Allegheny County, Pennsylvania in recent years, have taken steps to improve air quality which will likely bring the monitor into compliance with the 2012 PM2.5 annual NAAQS by the 2021 attainment date.

    Another compelling fact is that in previous modeling, nonattainment in Allegheny County, Pennsylvania was linked to significant contributions from other states.7 Arkansas was analyzed in this modeling, and emissions from Arkansas were not linked to Allegheny County.

    7 Air Quality Modeling for 2011 Cross-State Air Pollution Rule (CSAPR) (76 FR 48207, August 8, 2011).

    For these reasons, we propose to find that Arkansas does not significantly contribute to nonattainment, nor will it interfere with maintenance of the 2012 PM2.5 NAAQS for Allegany County, Pennsylvania.

    Illinois

    Due to ambient monitoring data gaps in the 2009-2013 data that would have been used to identify potential PM2.5 nonattainment and maintenance receptors in Illinois, the modeling analysis of potential receptors could not be completed for the state. As a result, the entire state is considered unclassifiable.

    Arkansas was included in the CSAPR modeling analysis for the 1997 PM2.5 NAAQS. This analysis showed Illinois did have a nonattainment receptor identified through the CSAPR modeling analysis for the 1997 PM2.5 NAAQS. The receptor was in Madison, Illinois, located near St. Louis, Missouri. The modeling did not, however, show a linkage for nonattainment or maintenance between Arkansas and Illinois meaning Arkansas' impact was estimated to be less than 1% of the 1997 NAAQS at the Madison, Illinois receptor. While this modeling does not directly address the 2012 standard it is indicative that Arkansas emissions are unlikely to impact attainment or maintenance receptors in Illinois.

    As further evidence, recent 3-year averages for the monitors in Madison, Illinois have shown downward trends. There are three active monitors in Madison. The 3-year averages for the monitors are shown in Table 1 below. Because of data gaps, the data cannot be used to establish a valid design value but can be used to show a downward trend. Also, as noted in the TSD for this action, Illinois has been collecting valid data for 2015 and 2016. This data, while not a complete three-year period indicates that air quality in Illinois is meeting the 2012 p.m. 2.5 NAAQS.

    Table 1—Annual Standard 3-Year Averages (μg/m 3) for Madison, Illinois Monitors Monitor No. 2012-2014 2013-2015 2014-2016 171191007 12.9 11.6 10.8 171192009 10.4 9.7 9.4 171193007 12.5 10.8 10.1

    For these reasons, we propose that Arkansas will not significantly contribute to nonattainment, nor will it interfere with maintenance of the 2012 PM2.5 NAAQS in Illinois.

    Since we determined that Arkansas's SIP includes provisions prohibiting any source or other type of emissions activity from contributing significantly to nonattainment in, or interfering with maintenance of the NAAQS, in another state, steps 3 and 4 of this evaluation are not necessary.

    In conclusion, based on our review of the potential receptors presented in the March 17, 2016 informational memo, an evaluation identifying likely emission sources affecting these potential receptors, and the 2014 base case modeling in CSAPR final rule, we propose to determine that emissions from Arkansas sources will not contribute significantly to nonattainment in, nor interfere with maintenance by, any other state with regard to the 2012 annual PM2.5 NAAQS.

    B. Pertaining to Revisions to SIP Definition and the National Ambient Air Quality Standards List

    The ADEQ submitted a collection of revisions to the Arkansas SIP on March 24, 2017. Included in these revisions is an update to the Arkansas SIP definition for the National Ambient Air Quality Standards. The definition in Chapter 2 of Regulation 19 updates the incorporation by reference date included in 40 CFR part 50 from July 27, 2012 to January 15, 2013. The changes in the revised Appendix B to Regulation 19 titled the “National Ambient Air Quality Standards List” reflect the definition update and applies it to all Chapters of Regulation 19.

    III. Proposed Action

    We have determined that the revisions submitted on March 24, 2017, were developed in accordance with the CAA and EPA's regulations. Therefore, under section 110 of the Act, the EPA proposes approval of the following revisions to the Arkansas SIP:

    • The portion of the Arkansas SIP submittal, pertaining to interstate transport of air pollution demonstrating emissions from Arkansas will not significantly contribute to nonattainment or interfere with maintenance of the 2012 PM2.5 NAAQS in any other state pursuant to the requirements of CAA section 110(a)(2)(D)(i)(I).

    • The portion of the Arkansas SIP submittal where the definition of National Ambient Air Quality Standards in Regulation 19, Chapter 2 is revised to be the effective date of January 15, 2013 and Appendix B to Regulation 19, “National Ambient Air Quality Standards List” at “Particle Pollution, PM2.5” as consistent with the CAA.

    IV. Incorporation by Reference

    In this action, we are proposing to include in a final rule regulatory text that includes incorporation by reference. In accordance with the requirements of 1 CFR 51.5, we are proposing to incorporate by reference revisions to the Arkansas regulations as described in the Proposed Action section above. We have made, and will continue to make, these documents generally available electronically through www.regulations.gov and in hard copy at the EPA Region 6 office (please contact Sherry Fuerst, 214-665-6454, [email protected] for more information).

    V. Statutory and Executive Order Reviews

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

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

    • Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;

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

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

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

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

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

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

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

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

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

    List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by reference, Particulate matter.

    Authority:

    42 U.S.C. 7401 et seq.

    Dated: June 26, 2018. David Gray, Acting Regional Administrator, Region 6.
    [FR Doc. 2018-14067 Filed 6-28-18; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R10-OAR-2018-0214, FRL-9980-19—Region 10] Air Plan Approval; ID, Incorporations by Reference Updates and Rule Revisions AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) proposes to approve state implementation plan (SIP) revisions submitted by the Idaho Department of Environmental Quality (IDEQ) on March 20, 2018 and April 12, 2018. The submitted revisions update incorporation by reference (IBR) of Federal regulations in the Idaho's rules. The revisions also remove an interim regulation that expired in 2003.

    DATES:

    Comments must be received on or before July 30, 2018.

    ADDRESSES:

    Submit your comments, identified by Docket ID No. EPA-R10-OAR-2018-0214, at http://www.regulations.gov. Follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. EPA may publish any comment received to its public docket. Do not electronically submit any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. EPA will generally not consider comments or comment contents located outside of the primary submission (i.e. on the web, cloud, or other file sharing system). For additional submission methods, the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

    FOR FURTHER INFORMATION CONTACT:

    Randall Ruddick at (206) 553-1999, or [email protected].

    SUPPLEMENTARY INFORMATION:

    Throughout this document, wherever “we,” “us,” or “our” is used, it is intended to refer to EPA.

    Table of Contents I. Background II. EPA Evaluation of Idaho's SIP Revisions A. 2016 Federal Rule IBR Update B. 2017 Federal Rule IBR Update C. Removal of Expired Rule III. Proposed Action IV. Incorporation by Reference V. Statutory and Executive Orders Review I. Background

    Section 110 of the Clean Air Act (CAA) specifies the general requirements for states to submit SIPs to attain and maintain the National Ambient Air Quality Standards (NAAQS) and the EPA's actions regarding approval of those SIPs. Idaho incorporates by reference (IBR) various portions of Federal regulations codified in the Code of Federal Regulations (CFR) into the Rules for the Control of Air Pollution in Idaho (IDAPA 58.01.01). Idaho then submits parts of IDAPA 58.01.01 to the EPA for approval into the Federally-approved Idaho SIP (generally those provisions that relate to the criteria pollutants regulated under section 110 of the CAA for which the EPA has promulgated NAAQS or other specific requirements of section 110).

    To ensure that its rules remain consistent with the EPA requirements, Idaho generally updates the IBR citations in IDAPA 58.01.01 on an annual basis and submits a SIP revision to reflect any changes made to the Federal regulations during that year. Idaho's current SIP includes the approved incorporation by reference of specific Federal regulations, revised as of July 1, 2015, at IDAPA 58.01.01.107 “Incorporation by Reference.” On March 20, 2018, the State of Idaho submitted SIP revisions to the EPA to account for more recent Federal regulatory changes adopted by Idaho.

    Additionally, on April 12, 2018, Idaho submitted a separate SIP revision to remove an expired interim transportation conformity provision. Transportation conformity is required under section 176(c) of the CAA to ensure Federally supported highway, transit projects, and other activities are consistent with (“conform to”) the purpose of the SIP.

    II. EPA Evaluation of Idaho's SIP Revisions

    Idaho submitted several state dockets (rulemakings) for approval to the EPA. We note that the dockets also include revisions to Idaho's regulations relating to its Title V operating permits, hazardous air pollutants (referred to as “toxic air pollutants” in Idaho regulations), and other air requirements that do not implement section 110 of the CAA. Idaho submitted these regulations for informational purposes only, in order to provide a complete record of each docket. In the cover letter to the March 20, 2018, submittal, Idaho specifically stated that the identified provisions (IDAPA 58.01.01.107.03.f-n) were not being submitted to update Idaho's SIP. We provide our analysis of the revisions below.

    A. 2016 Federal Rule IBR Update

    Docket 58-0101-1603 “2016 Federal Rule IBR” revises IDAPA 58.01.01.107.03 “Documents Incorporated by Reference” to update the citation dates for specific provisions incorporated by reference into the Idaho SIP as of July 1, 2016. Although Idaho requested approval of this docket, it has been superseded by the annual IBR update for 2017, described below. Therefore, we are acting on only the most recently adopted and submitted version of Idaho's regulations (namely, the 2017 Federal Rule IBR Update). Further action on this docket is not necessary because this version of Idaho's regulations is no longer in effect.

    B. 2017 Federal Rule IBR Update

    Docket 58-0101-1702 “2017 Federal Rule IBR Update” revises IDAPA 58.01.01.107 “Incorporations by Reference” to update the citation dates for specific provisions incorporated by reference in IDAPA 58.01.01.107.03 “Documents Incorporated by Reference” as of July 1, 2017. Subparagraph (a) of IDAPA 58.01.01.107.03 incorporates by reference the Requirements for Preparation, Adoption, and Submittal of Implementation Plans, 40 CFR part 51, with the exception of certain visibility-related provisions, revised as of July 1, 2017. Importantly, Idaho's update to the incorporation by reference of 40 CFR part 51 includes nonattainment new source review (NNSR) requirements at 40 CFR 51.165.

    Idaho has two designated PM2.5 nonattainment areas: West Silver Valley 2012 annual PM2.5 nonattainment area, and the Idaho portion of the Logan, Utah-Idaho 2006 24-hour PM2.5 nonattainment area. Idaho's incorporation by reference of 40 CFR 51.165 as of July 1, 2017, as referenced by IDAPA 58.01.01.204 Permit Requirements for New Major Facilities and Modifications in Nonattainment Areas, captures the EPA's 2016 rule changes to 40 CFR 51.165 promulgated under subpart 4, part D, of the Clean Air Act. See Fine Particulate Matter National Ambient Air Quality Standards: State Implementation Plan Requirements; Final Rule (81 FR 58010, August 24, 2016).

    As a result, Idaho's NNSR program now regulates the four precursors to PM2.5 that have been recognized by the EPA, namely, nitrogen oxides, sulfur dioxide, volatile organic compounds, and ammonia. Therefore, EPA is proposing to fully approve the Idaho SIP as meeting current Federal NNSR requirements for all pollutants, including PM2.5.

    Subparagraph (b) of IDAPA 58.01.01.107.03 incorporates by reference the National Primary and Secondary Ambient Air Quality Standards, 40 CFR part 50. The current Idaho SIP approved version of subparagraph (b) includes NAAQS revised as of July 1, 2015. On October 1, 2015, EPA signed a notice of final rulemaking revising the 8-hour primary and secondary ozone NAAQS (80 FR 65292; October 26, 2015). While both standards retain the same general form and averaging time (annual fourth-highest daily maximum 8-hour average concentration, averaged over three years 1 ), the levels were lowered from 0.075 parts per million (ppm) to 0.070 ppm.2 Idaho's 2017 Federal Rules IBR update changed the citation date in subparagraph (b) to July 1, 2017 and therefore reflects the current (October 2015) Federal NAAQS for ozone. Other than ozone, EPA has not revised any other NAAQS since July 1, 2015. We therefore propose to approve Idaho's revision to subparagraph (b) as consistent with Federal standards.

    1See 80 FR 65296 (October 26, 2015), for a detailed explanation of the calculation of the 3-year 8-hour average; see also 40 CFR part 50, Appendix U.

    2 These levels are commonly referred to in parts per billion (ppb): 75ppb and 70ppb, respectively.

    Subparagraph (c) of IDAPA 58.01.01.107.03 incorporates the Approval and Promulgation of Implementation Plans, 40 CFR part 52, subparts A and N, and appendices D and E. This includes the Federal Prevention of Significant Deterioration (PSD) permitting rules at 40 CFR 52.21 and 52.22 as of July 15, 2017. The current Idaho SIP approved version of subparagraph (c) incorporates these Federal rules as effective July 1, 2015.

    Since July 1, 2015, EPA promulgated revisions to 40 CFR 52.21 and repealed 52.22 in response to a court remand and vacatur. Specifically, on June 23, 2014, the United States Supreme Court, in Utility Air Regulatory Group (UARG) v. EPA, issued a decision addressing the application of PSD permitting to greenhouse gas (GHG) emissions. The Supreme Court said EPA may not treat GHGs as air pollutants for purposes of determining whether a source is a major source (or modification thereof) required to obtain a PSD permit. The Court also said EPA could continue to require that PSD permits, otherwise required based on emissions of pollutants other than GHGs, contain limits on GHG emissions based on the application of Best Available Control Technology (BACT). In response to the UARG decision, and the subsequent Amended Judgment issued by the D.C. Circuit (Amended Judgment), EPA revised the Federal PSD rules to allow for the rescission of PSD permits that are no longer required under these decisions, 80 FR 26183 (May 7, 2015), and to remove the regulatory provisions that were specifically vacated by the Amended Judgment, 80 FR 50199 (August 19, 2015). In addition, EPA has proposed to revise provisions in the PSD permitting regulations applicable to GHGs to fully conform with UARG and the Amended Judgment, but those revisions have not been finalized. 81 FR 68110 (Oct. 3, 2016).

    Idaho's incorporation by reference of 40 CFR 52.21 and 52.22 as of July 1, 2015, included the May 7, 2015 revisions to 40 CFR 52.21(w), providing a mechanism for Idaho to rescind PSD permits that are no longer required in light of UARG and the Amended Judgment, but did not include the August 19, 2015 revisions to the Federal PSD program removing the PSD provisions vacated by the Amended Judgment. Idaho's March 20, 2018 SIP submittal updates the IBR citation date to July 1, 2017 and thereby encompasses the August 19, 2015 revisions to the Federal PSD program. The Idaho SIP will still contain some of the vacated GHG provisions (EPA has not finalized the actions proposed in 81 FR 68110), so EPA's approval of the Idaho's CFR incorporation by reference update to July 1, 2017 does not change the Idaho SIP with respect to the remaining vacated provisions. However, the remaining vacated portions of 40 CFR 52.21 incorporated into the Idaho SIP-approved PSD program are no longer enforceable.

    EPA believes this portion of the Idaho SIP should be revised in light of the D.C. Circuit's Amended Judgment, but EPA also notes that these provisions may not be implemented even prior to their removal from the Idaho SIP because the court decisions described above have determined these parts of EPA's regulations are unlawful. Further, Idaho has advised EPA that it is not currently enforcing these provisions in light of the Supreme Court decision. See 82 FR 22083, May 12, 2017. We are therefore proposing to approve subparagraph (c) with the understanding that the GHG provisions vacated by the court decisions cannot be implemented and are not being enforced by Idaho.

    Subparagraphs (d) and (e) of IDAPA 58.01.01.107.03 incorporate by reference the following provisions revised as of July 1, 2017: (d) Ambient Air Monitoring Reference and Equivalent Methods, 40 CFR part 53; and (e) Ambient Air Quality Surveillance, 40 CFR part 58. These provisions relate to the criteria pollutants regulated under section 110 of title I of the CAA or other specific requirements of section 110 and make the Idaho SIP consistent with Federal law. The EPA is proposing to approve the revisions to IDAPA 58.01.01.107.03 (d) and (e).

    C. Removal of Expired Rule

    Idaho submitted Docket 58-0101-1602 that repealed IDAPA 58.01.01.582 “Interim Conformity Provisions for Northern Ada County Former Nonattainment Area for PM-10” (section 582) because it was outdated and no longer applicable. Section 582 was promulgated in 2001 as a temporary measure that was necessary only until a required maintenance plan could be developed to address CAA transportation conformity requirements for the PM10 Ada County nonattainment area. Idaho has since developed and adopted the required maintenance plan and EPA approved the maintenance plan on October 27, 2003 (68 FR 61106), effective November 26, 2003. Idaho repealed the expired section 582 (state effective March 28, 2017) and submitted the revision to EPA. EPA is therefore proposing to remove section 582 from Idaho's SIP as requested by Idaho in its April 12, 2018 SIP submittal.

    III. Proposed Action

    EPA is proposing to approve, and incorporate by reference where appropriate, in Idaho's SIP all revisions to IDAPA 58.01.01.107 Incorporations by Reference, except .03.f through .p (state effective March 28, 2018) as requested by Idaho on March 20, 2018, and as described in Section II.B. above.

    EPA is also proposing, as requested by Idaho on April 12, 2018, to remove IDAPA 58.01.01.582 Interim Conformity Provisions for Northern Ada County Former Nonattainment Area for PM 10 from the Idaho SIP because it expired in 2003 and Idaho has repealed it as a matter of state law (state effective March 29, 2017). See Section II.C. (above).

    We have made the preliminary determination that the submitted SIP revisions are consistent with section 110 and part C of Title I of the CAA.

    IV. Incorporation by Reference

    In this rule, EPA is proposing to include in a final rule, regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference the provisions described above in Section III. Also in this rule, EPA is proposing to remove, in a final EPA rule, regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to remove the incorporation by reference of IDAPA 58.01.01.582 as described in Section III. EPA has made, and will continue to make, these documents generally available electronically through www.regulations.gov and in hard copy at the appropriate EPA office (see the ADDRESSES section of this preamble for more information).

    V. Statutory and Executive Orders Review

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

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

    • Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;

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

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

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

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

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

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

    • Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because it does not involve technical standards; and

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

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

    List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.

    Authority:

    42 U.S.C. 7401 et seq.

    Dated: June 20, 2018. Michelle L. Pirzadeh, Regional Administrator, Region 10.
    [FR Doc. 2018-14096 Filed 6-28-18; 8:45 am] BILLING CODE 6560-50-P
    FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 51 [WC Docket No. 18-155; FCC 18-68] Updating the Intercarrier Compensation Regime To Eliminate Access Arbitrage AGENCY:

    Federal Communications Commission.

    ACTION:

    Proposed rule.

    SUMMARY:

    In this document, the Commission proposed to adopt rules to curb the financial incentive to engage in access stimulation by giving access-stimulating LECs two choices for receiving calls. The access-stimulating LEC can choose either: To be financially responsible for the delivery of calls to its network, in which case intermediate access providers would charge the access-stimulating LEC for the delivery of calls; or to accept direct connections from long distance carriers seeking to terminate telephone calls to the LEC or from intermediate access providers of the long distance carriers' choosing, which would allow the long distance carriers to bypass intermediate access providers chosen by the access-stimulating LEC. This document seeks comment on several alternatives, including requiring LECs engaged in access stimulation to immediately transition their terminating access charges to bill-and-keep. This document also seeks comment on the effect the proposed rules will have on specific arbitrage schemes described in the record. Finally, it seeks comment on how to curb other arbitrage schemes.

    DATES:

    Comments are due on or before July 20, 2018; reply comments are due on or before August 3, 2018.

    ADDRESSES:

    You may submit comments, identified by WC Docket No. 18-155, by any of the following methods:

    Federal Communications Commission's website: http://apps.fcc.gov/ecfs//. Follow the instructions for submitting comments.

    People with Disabilities: Contact the FCC to request reasonable accommodations (accessible format documents, sign language interpreters, CART, etc.) by email: [email protected] or phone: 202-418-0530 or TTY: 888-835-5322.

    For detailed instructions for submitting comments and additional information on the rulemaking process, see the SUPPLEMENTARY INFORMATION section of this document.

    FOR FURTHER INFORMATION CONTACT:

    Edward Krachmer, FCC Wireline Competition Bureau, Pricing Policy Division at 202-418-1525, or at [email protected]

    SUPPLEMENTARY INFORMATION:

    This is a summary of the Commission's Notice of Proposed Rulemaking (NPRM), WC Docket No. 18-155; FCC 18-68, adopted on June 4, 2018 and released on June 5, 2018. The full text of this document may be obtained at the following internet address: https://www.fcc.gov/document/fcc-proposes-reforms-eliminate-intercarrier-compensation-arbitrage.

    I. Background A. The Current Access Stimulation Rules

    1. To reduce access stimulation, as part of the USF/ICC Transformation Order, 76 FR 73860, FCC 11-161, the Commission defined “access stimulation” as occurring when two conditions are met. First, the involved LEC must have a “revenue sharing agreement,” which may be “express, implied, written or oral” that “over the course of the agreement, would directly or indirectly result in a net payment to the other party (including affiliates) to the agreement, in which payment” by the LEC is “based on the billing or collection of access charges from interexchange carriers or wireless carriers.” Second, the LEC must also meet one of two traffic tests. An access-stimulating LEC either has “an interstate terminating-to-originating traffic ratio of at least 3:1 in a calendar month, has had more than a 100 percent growth in interstate originating and/or terminating switched access minutes of use in a month compared to the same month in the preceding year.” Even if a LEC no longer meets either of these traffic tests, once it is considered to have engaged in access stimulation, this regulatory classification persists so long as the LEC maintains any revenue sharing agreement.

    2. A LEC that is engaged in access stimulation is required by our rules to reduce its access charges either by adjusting its rates to account for its high traffic volumes (if a rate-of-return LEC) or to reduce its access charges to those of the price cap LEC with the lowest switched access rates in the state (if a competitive LEC). These reduced rates lower the cost to interexchange carriers (IXCs) and the amount received by the LEC and the provider of high call volume services with which it has a revenue sharing agreement.

    B. Arbitrage Schemes After the USF/ICC Transformation Order

    3. Last year, the Wireline Competition Bureau (Bureau) issued a public notification, 82 FR 44754, seeking to refresh the record on ICC issues raised by the Commission in the USF/ICC Transformation Order. In response to that public notification, commenters argue that, notwithstanding prior Commission action, arbitrage continues as “companies engaged in access stimulation use a variety of tactics to prevent interexchange carriers from avoiding their excessive charges.” The record indicates that today's access arbitrage schemes are often enabled by the use of intermediate access providers selected by the terminating LECs. When an intermediate access provider is in the call path, the IXC pays access charges on a per-minute-of-use (MOU) basis to the intermediate access provider and to the terminating LEC. This tactic evades existing Commission rules intended to stop access stimulation to the extent that an intermediate access provider is not captured by the definition of “access stimulation,” and thus, is not subject to those rules.

    4. Recent complaint activity suggests that much of the post-USF/ICC Transformation Order access arbitrage activity specifically involves LECs that use centralized equal access (CEA) providers to connect to IXCs. CEA providers are a specialized type of intermediate access provider that were formed in the 1980s to implement long distance equal access obligations (permitting end users to use 1+ dialing to reach the IXC of their choice) and to aggregate traffic for connection between rural incumbent LECs and other networks, particularly those of IXCs. There are currently three CEA providers, and the LECs that use them (subtending LECs) have traditionally been reliant on CEA providers for this equal access implementation as well as traffic measurement and billing.

    II. Discussion

    5. We propose solutions to the persistent, costly, and inefficient access stimulation arbitrage scheme described here and seek comment on how to prevent other types of arbitrage. We are mindful of the fact that practices adjust to regulatory change; therefore we invite comment on how to avoid introducing incentives for new types of arbitrage to arise.

    A. Requiring Access-Stimulating LECs Either To Be Financially Responsible for Calls Delivered to Their Networks or To Accept Direct Connections

    6. To rid the ICC system of the inefficiencies caused by access stimulation relating to intermediate access providers, we propose to require access-stimulating LECs to choose either to: (i) Bear the financial responsibility for the delivery of terminating traffic to their end office, or functional equivalent, or; (ii) accept direct connections from either the IXC or an intermediate access provider of the IXC's choice.

    7. Revised Financial Responsibility. We seek comment on the first prong of our proposal and the impact it will have on access stimulation schemes. Under this prong, an access-stimulating LEC that does not offer direct connections to IXCs would bear all financial responsibility for applicable intermediate access provider terminating charges normally assessed to an IXC (from the point of indirect interconnection to the access-stimulating LEC's end office or functional equivalent), and would be prohibited from assessing transport charges for any portion of transport between the intermediate access provider and the LEC's end office or functional equivalent that the LEC, itself, provides. What are the advantages of placing the financial responsibility for delivery of traffic to its end office, or functional equivalent, on the access-stimulating LEC? Are there disadvantages?

    8. What implementation issues does this part of our proposal raise? What steps would intermediate access providers need to take to bill access-stimulating LECs for terminating access and to not bill IXCs? How much time do access-stimulating LECs and intermediate access providers need to make modifications necessary to accomplish this proposed change in financial responsibility? We propose to require carriers to come into compliance with these requirements within 45 days of the effective date of any revised rule. Is that timeframe sufficient? For example, is it possible to implement necessary billing system changes within that time frame? We similarly propose to require any carriers that newly qualify as access-stimulating LECs to come into compliance with these requirements within 45 days of such qualification.

    9. For purposes of this proposal, we propose to define “intermediate access provider” as “any entity that carries or processes traffic at any point between the final interexchange carrier in a call path and the carrier providing end office access service.” We seek comment on the use of this definition in this context. Does it adequately capture the types of intermediate access providers currently benefiting from access stimulation schemes? Is it too narrow or too broad?

    10. Direct Connection. Commenters have argued that the volume of traffic bound for access-stimulating LECs justifies direct connections, but allege that access-stimulating LECs currently refuse to accept such connections. Direct connections do not pass through intermediate switches and are offered on a capacity basis at monthly-recurring rates, as opposed to a per-MOU rate. If there is a sufficient volume of traffic, the monthly charges for direct connections can often be substantially lower than per-MOU rates for an equivalent amount of traffic. As the second prong of our proposal, we propose to provide access-stimulating LECs the option to offer to connect directly to the IXC or an intermediate access provider of the IXC's choice as an alternative to bearing financial responsibility for intermediate access provider charges and ceasing to bill their own transport charges. Under this proposal, IXCs would have the option of selecting an intermediate access provider that would bill the IXC for transport to the access-stimulating LEC on a dedicated basis. We seek comment on this proposal and on how best to implement it. We note that as a result of this election, an IXC would have the choice to connect with an access-stimulating LEC directly or indirectly through the LEC's existing intermediate access provider or another IXC directly connecting to the access-stimulating LEC.

    EP29JN18.009

    11. For direct connections between an IXC (or an intermediate access provider of the IXC's choosing) and an access-stimulating LEC to be established, not only must the access-stimulating LEC be willing and able to accept direct connections, but arrangements need to be made between the IXCs seeking to avail themselves of such connections and the LEC. If we adopt the approach we propose today, how long should we give existing access-stimulating LECs to indicate their willingness to accept direct connections and how long should we give them to implement those direct connections? How detailed a timeline should we adopt for this process? Should we adopt rules regarding the conduct of any negotiations for direct connections? For example, should we adopt a timeframe within which negotiations must be concluded before the LEC must assume financial responsibility for the delivery of traffic or the impasse submitted to arbitration? Similarly, if, at some later date, an access-stimulating LEC decides to offer direct connections, what process should the access-stimulating LEC need to follow to cease bearing the financial obligation for the intermediate access providers' charges? How should we address LECs that meet the definition of access-stimulating LEC after adoption of our rules? If they chose to offer direct connections, what time frame should we provide for making and implementing that decision?

    12. We propose to adopt a rule that makes clear that allowing access-stimulating LECs to accept direct connection as a means of not bearing financial responsibility for intermediate access provider charges does not carry with it an obligation for such LECs to extend their networks absent a request and an independent obligation to do so. Is this a reasonable limitation? Are there any other limitations or exceptions we should apply? Are there other rules we should adopt to help providers implement the option to accept direct connections if a provider makes that choice? For example, because IXCs are not currently directly connected to access-stimulating LECs in the scenario to which our proposal applies, a third-party vendor may need to connect the two networks via dedicated transport such as, perhaps, the current intermediate access provider. Are there any rules that we should adopt to facilitate such arrangements?

    13. One result of permitting access-stimulating LECs that subtend CEA providers to connect with IXCs directly (or an intermediate access provider of an IXC's choice) would be to end the “mandatory use” policy applicable to some CEA providers, at least with respect to access-stimulating LECs. Historically, this mandatory use policy has permitted the CEA providers in Iowa and South Dakota to require IXCs to connect to LECs that subtend the CEA provider indirectly through the CEA provider's tandem switch rather than indirectly through another intermediate access provider or directly to the subtending LEC. In initially permitting this practice almost thirty years ago, the Commission concluded that it “[did] not believe that the mandatory termination requirement for interstate traffic is unreasonable or differs substantially from the normal way access is provided, as both an originating and terminating service by the local exchange company.”

    14. It appears that access stimulation, particularly when practiced by competitive LECs, which were formed well after CEA providers were established, presents a reasonable circumstance for departing from the policy of permitting mandatory use requirements because delivery of such traffic, particularly in the pertinent volumes, was not the purpose for which CEA providers were formed. We seek comment on this assumption, and on the impact of this proposal on CEA providers, on the LECs that subtend CEA providers, and on the customers of such subtending LECs. For example, to the extent that creating the opportunity for access-stimulation traffic to bypass CEA providers threatens the viability of CEA providers, we seek comment on whether and how this potential effect should be addressed. Are there other companies that can perform the traditional functions of CEA providers, including equal access implementation and traffic measurement and billing? Recognizing that most states do not have CEA providers, are there ways that equal access and traffic identification and measurement are handled by small LECs in those states that can inform our decision making in this proceeding?

    15. Notice Requirement. We propose to require access-stimulating LECs to notify affected IXCs and intermediate access providers of their intent to accept financial responsibility for calls delivered to their networks or to accept direct connections from IXCs or intermediate access providers of the IXCs' choosing. Should we also require the access-stimulating LEC to provide public, written notice of its choice to the Commission? Should we provide specific requirements regarding the form and content of such notice? For example, should we require an access-stimulating LEC to accept direct connections at current points of interconnection (POI) with intermediate access providers, as well as at the LECs' end office, and to provide notice of those locations? Or, should we allow an access-stimulating LEC to choose where to provide POIs and to specify those locations in its notice? Should access-stimulating LECs also provide notice to the Commission and state commissions of their choice to accept direct connections and of the location of their POIs? To ensure that the investment made by an IXC to extend its network to directly interconnect with an access-stimulating LEC is not stranded, should an access-stimulating LEC be prohibited from ending its election of direct connections once made? Should such a prohibition be permanent or for a specified period of time?

    16. Impact of this Proposal. We seek comment on the costs and benefits of our proposal. To what extent will our two-pronged proposal alleviate market distortions created by the ability of access-stimulating LECs to bill for switched transport services at rates that our rules have not required to be reduced below 2011 interstate levels? Will the incentives created by our proposal for access-stimulating LECs to accept direct connections (to avoid bearing intermediate access provider charges imposed by a provider of the access-stimulating LEC's choosing) alleviate the problem of IXCs paying relatively-high tandem-switched transport rates by giving IXCs more options to reach end users?

    17. How will our proposal affect incentives for carriers to migrate their services to IP? To what extent do parties expect that direct connections would be provided in time division multiplexed (TDM) format rather than IP? Are there circumstances under which an access-stimulating LEC should be required, upon request, to interconnect using IP rather than TDM and bear any costs necessary to do so? Are calls bound for high call volume service providers ultimately converted to IP for delivery? Would requiring IP interconnection obviate the need to convert TDM traffic to IP for delivery?

    18. NTCA et al. Proposal. NTCA et al. has recommended that we adopt rules similar to the first prong of our proposal, but without providing an access-stimulating LEC the option of electing to accept direct connections as a means of avoiding bearing intermediate access provider charges. Under the NTCA et al. proposal, within 45 days of the effective date of the implementing rules, access-stimulating LECs would be required to revise their tariffs to remove any terminating interstate tandem switching and tandem transport charges of their own and also begin to assume financial responsibility for all intermediate switched access provider interstate tandem switching and transport charges for traffic bound for such access-stimulating LECs. The NTCA et al. proposal would also require access-stimulating LECs to provide written notice to all affected providers, including intermediate access providers, of the substance of these tariff revisions at the time that such tariff revisions are filed, as well as the fact that such access-stimulating LECs will be bearing financial responsibility for pertinent intermediate switched access provider interstate tandem switching and transport charges.

    19. Although the NTCA et al. proposal does not preclude an access-stimulating LEC from avoiding incurring intermediate access provider charges by beginning to accept direct connections, it also does not provide IXCs any incentive to accept offers of direct connection from such LECs. By permitting access-stimulating LECs to elect to accept direct connections, our proposal seeks to provide a formal means by which access-stimulating LECs may eventually avoid incurring intermediate access provider charges. We seek comment on the NTCA et al. proposal both as an independent proposal and also as it relates to our proposal above.

    20. CenturyLink Proposal. CenturyLink suggests that we consider an approach similar to our proposal, but with broader applicability. Rather than focusing on access-stimulating LECs, CenturyLink recommends shifting financial responsibility to any LEC that declines to accept a request for direct interconnection for the purpose of terminating access traffic. We seek comment on this recommendation. What would be the impact of such an approach on the affected companies and their customers?

    B. Requiring All Access-Stimulating LECs To Transition to Bill-and-Keep

    21. If we do not adopt rules requiring access-stimulating LECs to either choose to accept financial responsibility for the delivery of calls or to accept direct connections, should we reduce all terminating tandem switching, common transport, and tandem-switched transport rate elements for access stimulators to bill-and-keep? Moving these access charges to bill-and-keep would be consistent with our overarching goals of discouraging arbitrage, in particular access stimulation, and ultimately transitioning all traffic to bill-and-keep. It would also be consistent with the Commission's finding in the USF/ICC Transformation Order that with respect to terminating traffic, the LEC's end user is the cost causer and therefore the LEC should look first to its subscribers to recover the costs of it network. To what extent would this approach resolve the access arbitrage concerns identified in this NPRM? We also seek comment on how this approach fits with the other proposals in this NPRM. For example, if we reduce all terminating access charges to bill-and-keep is there any remaining incentive for carriers to stimulate traffic? We also seek comment on any implementation issues or concerns related to the proposal. Should we provide for a transition period to bill-and-keep for access stimulators? If so, how long should the transition last and what steps should it include?

    22. We also seek comment on whether to require an access-stimulating LEC to transition its dedicated transport and originating rates to bill-and-keep. The only potential access arbitrage scheme of which we are aware regarding originating access concerns 8YY traffic, which we leave for separate consideration. Outside the 8YY context, are there arbitrage schemes involving originating access about which we should be concerned? Can they be addressed by a transition to bill-and-keep or by other proposals in this NPRM?

    C. Defining Access Stimulation

    23. Given evidence that access stimulation schemes are still being perpetrated notwithstanding our existing rules, we seek comment on whether, and if so how, to revise the current definition of access stimulation to more accurately and effectively target harmful access stimulation practices. What has been the impact of the current definition over the last seven years? Has it proved effective at identifying actors that are distorting the ICC system for their own gain? If not, how can we revise the definition to more accurately identify these types of harmful practices? Should we, for example, modify the ratios or triggers in the definition? If so, how should those ratios or triggers be modified? Should we adopt triggers that relate to the stimulation of tandem and transport services? If so, what should those triggers be? Is the current revenue sharing agreement requirement in our rules sufficiently broad or should it be revised, and if so how? Or, should we remove the revenue sharing portion of the definition, because access stimulation seems to be occurring in some instances even in the absence of revenue sharing? Do commenters believe that revenue sharing alone is an indication of access stimulation? If so, should we revise our rules so that the existence of a revenue sharing agreement triggers the access stimulation rule? How will we know if parties are engaged in revenue sharing? Should we require these parties to self-report? If so, we seek comment on how to implement a self-reporting requirement.

    24. Alternatively, based on parties' experience with our existing access stimulation rules, is there reason to find that access stimulation itself is unjust and unreasonable because of the imposition of excess charges on IXCs, wireless carriers, and their customers? Or, is there a subset of such activities that we should separately identify as unlawful?

    25. To address specific concerns identified in the record, commenters should also consider the extent to which the access stimulation definition should be revised to address intermediate access providers. Do intermediate access providers that are not engaged in access stimulation as defined in our current rules nevertheless benefit from access stimulation schemes? To remove incentives for intermediate access providers to enable access arbitrage schemes, aside from the proposals discussed above, should we adopt new access stimulation rules, or modify our existing rules, to apply specifically to intermediate access providers? Would doing so be unduly burdensome to intermediate access providers or small LECs who subtend them? Are there technical obstacles that would make it infeasible for intermediate access providers to comply with the Commission's current, or any modified, access stimulation rules? Would a requirement that access-stimulating subtending LECs notify the intermediate access provider that they are engaged in access stimulation and identify the traffic that is being stimulated provide a practical solution?

    D. Addressing Other Arbitrage Schemes, and Alternative Approaches to Arbitrage

    26. The record indicates the existence of at least three other types of arbitrage schemes. We seek comment on the prevalence and impact of these types of schemes described in more detail below. Will any of the rules we propose today help retard these schemes? Are there other rules we should adopt to prevent these schemes?

    27. First, parties describe an access arbitrage scheme involving a revenue sharing or other type of agreement between an intermediate access provider and a terminating carrier that may not meet the definition of access stimulation under our rules, such as a Commercial Mobile Radio Service (CMRS) carrier. CMRS carriers are prohibited from tariffing access charges. However, intermediate access providers that transport traffic from an IXC to CMRS carriers can charge for access services through filed tariffs or negotiated agreements. Some IXCs claim that certain CMRS carriers that previously offered direct connections between their networks and the IXCs' networks have begun to use intermediate access providers to terminate their traffic from IXCs, to reap the benefit of alleged revenue sharing agreements with the intermediate access providers. Should we adopt rules that discourage all revenue sharing agreements between terminating providers and intermediate access providers? If a terminating provider requires that some or all traffic be routed through an intermediate access provider, should we require the terminating provider to pay the intermediate access provider's charges? Or are there instances where it is most efficient or beneficial in other ways for a carrier to require traffic be routed through an intermediate access provider? What would be the costs and benefits of requiring a terminating provider that requires the use of a specific intermediate access provider to pay the intermediate access provider's charges? And would the cost-benefit analysis change if we focused any such rules on large terminating providers—i.e., those with 100,000 or more “lines” at the holding company level?

    28. Second, because LECs and intermediate access providers receive greater compensation from IXCs the further the LEC or intermediate access provider carries the traffic to reach a POI with the IXC, some commenters allege that LECs have changed their POI with IXCs for the sole purpose of artificially inflating their per-MOU, per-mile transport rates and revenue. This scheme is often referred to as mileage pumping. Shortly after the USF/ICC Transformation Order, the Commission released an order addressing this practice finding such network changes were merely sham arrangements and that the LECs did not have the unilateral right under their tariffs to make such changes. Nevertheless, allegations of mileage pumping continue. We seek comment on the prevalence of this practice, its impact in the market, and the likely effect of the rules proposed in this NPRM on this concern. What more can we do to prevent these practices?

    29. Third, some commenters raise concerns about the addition of superfluous network facilities for which the LEC can bill switched access charges, but the rates for which are not subject to the current transition to bill-and-keep. This practice is sometimes referred to as “daisy chaining.” This practice may inefficiently inflate per-mile charges and insert unnecessary facilities to justify assessment of additional rate elements, such as remote switches that subtend end offices. What actions can we take to prevent daisy chaining?

    30. Would the CenturyLink suggestion of shifting financial responsibility to LECs that decline to accept direct connections eliminate or reduce the three types of inefficient routing schemes described above? Even if an IXC chose not to seek a direct connection, would the risk of IXCs seeking direct connections provide a disciplining counterweight to some providers' incentives to engage in mileage pumping or daisy-chaining? What would be the impact on affected parties?

    E. Other Issues

    31. We recognize that any action we take to address access arbitrage may affect the costs to carriers and their customers and the choices they make, as they provide and receive telecommunications services. Consumers that enjoy high call volume services could be affected by regulatory adjustments targeting arbitrage. Are there efficiencies that are in the public's interest in what some describe as arbitrage? Would addressing the arbitrage described here unfairly advantage any particular competitor or class of competitors? If so, are there alternative means to address the arbitrage issues described here and presented in the record? How would the changes proposed herein affect small businesses?

    32. In the USF/ICC Transformation Order, the Commission considered direct costs imposed on consumers by arbitrage schemes. The Commission also found that access stimulation diverts “capital away from more productive uses such as broadband deployment.” We believe this continues to be true. Are there additional, more-current data available to estimate the annual cost of arbitrage schemes to companies, long distance rate payers, and consumers in general? Likewise, are there data available to quantify the resources being diverted from infrastructure investment because of arbitrage schemes? To what degree are consumers indirectly affected by potentially inefficient networking and cost recovery due to current regulations and the exploitation of those regulations? Are there other costs or benefits we should consider?

    F. Legal Authority

    33. The proposals in this NPRM, targeted to address the particular issues described in the record, continue the work the Commission began in the USF/ICC Transformation Order to stop economically wasteful arbitrage activity and the damage it causes in telecommunications markets. Therefore, we rely on the legal authority the Commission set forth in the USF/ICC Transformation Order, as support for modifications to rules we propose in this NPRM. The Commission made clear that its rules to address access arbitrage would result in interstate access rates “consistent with section 201(b) of the Act.” The Commission likewise found that “[o]ur statutory authority to implement bill-and-keep as the default framework for the exchange of traffic with LECs flows directly from sections 251(b)(5) and 201(b) of the Act.” We seek comment on whether additional statutory authority is available, or necessary, to support the actions proposed here.

    III. Rule Revisions

    34. We seek comment on the rule changes proposed at the end of this document. What, if any, other rule additions or modifications should we make to codify these proposals? Are there any conforming rule changes that commenters consider necessary? For example, we intend for any rules that we adopt to apply not only to interstate traffic, but also intrastate traffic. Do our proposed rules adequately address this? Are there any conflicts or inconsistencies between existing rules and those proposed herein? We ask commenters to provide any other proposed actions and rule additions or modifications we should consider to address the access arbitrage schemes described in this NPRM including updates to any relevant comments or proposals made in response to the USF/ICC Transformation FNPRM, 76 FR 78383.

    IV. Procedural Matters

    35. Filing Instructions. Pursuant to §§ 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may file comments and reply comments on or before the dates indicated on the first page of this document. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS). See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).

    Electronic Filers: Comments may be filed electronically using the internet by accessing the ECFS: https://www.fcc.gov/ecfs/ Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number.

    Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

    • All hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be delivered to FCC Headquarters at 445 12th St. SW, Room TW-A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes and boxes must be disposed of before entering the building.

    • Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9050 Junction Drive, Annapolis Junction, MD 20701.

    • U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street SW, Washington, DC 20554.

    36. People with Disabilities. To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to [email protected] or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

    37. Ex Parte Requirements. This proceeding shall be treated as a “permit-but-disclose” proceeding in accordance with the Commission's ex parte rules. Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must: (1) List all persons attending or otherwise participating in the meeting at which the ex parte presentation was made; and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter's written comments, memoranda, or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with Rule 1.1206(b). In proceedings governed by Rule 1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission's ex parte rules.

    38. Paperwork Reduction Act Analysis. This document contains proposed new and modified information collection requirements. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and the Office of Management and Budget to comment on the information collection requirements contained in this document, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we seek specific comment on how we might further reduce the information collection burden for small business concerns with fewer than 25 employees.

    39. Initial Regulatory Flexibility Act Analysis. Pursuant to the Regulatory Flexibility Act (RFA), we have prepared an Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities of the policies and actions considered in this NPRM. The Commission prepared an IRFA to accompany the first Further Notice of Proposed Rulemaking in this docket, USF/ICC Transformation FNPRM. The questions asked in this NPRM are different than those the Commission sought comment on previously. Therefore, we have prepared a new IRFA to reflect the substance of this NPRM. The text of the IRFA is set forth in section V of this document. Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the NPRM. The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, will send a copy of the NPRM, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration.

    40. Contact Person. For further information about this proceeding, please contact Edward Krachmer, FCC Wireline Competition Bureau, Pricing Policy Division, Room 5-A230, 445 12th Street SW, Washington, DC 20554, (202) 418-1525, [email protected]

    V. Initial Regulatory Flexibility Analysis

    41. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), we have prepared this Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on a substantial number of small entities by the policies and rules proposed in this Notice of Proposed Rulemaking (NPRM). We request written public comments on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments provided on the first page of the NPRM. We will send a copy of the NPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In addition, the NPRM and IRFA (or summaries thereof) will be published in the Federal Register.

    A. Need for, and Objective of, the Proposed Rules

    42. In the USF/ICC Transformation FNPRM, the Commission sought comment on additional steps to implement the bill-and-keep regime as well as possible communications network definitional changes, the appropriate recovery mechanisms going forward and VoIP and IP-to-IP related intercarrier compensation issues. In this NPRM we propose to adopt rules to address access arbitrage schemes that persist despite previous Commission action. We propose to adopt rules to give access-stimulating LECs two choices about how they connect to IXCs. First, an access-stimulating LEC can choose to be financially responsible for calls delivered to its networks so it, rather than IXCs, pays for the delivery of calls to its end office or the functional equivalent. Or, second, instead of accepting this financial responsibility, an access-stimulating LEC can choose to accept direct connections from either the IXC or an intermediate access provider of the IXC's choosing. In the alternative, we seek comment on moving all traffic bound for an access-stimulating LEC to bill-and-keep. The NPRM also seeks comment on potential revisions to the definition of access stimulation, in particular to address intermediate access providers. The record in this proceeding suggests additional access arbitrage activities are occurring, including: (1) Use of intermediate access providers by Commercial Mobile Radio Carriers; (2) mileage pumping; and (3) daisy chaining. Comment is sought on how best to address these activities. The NPRM seeks comment on the costs and benefits of these proposals.

    B. Legal Basis

    43. The legal basis for any action that may be taken pursuant to this NPRM is contained in sections 1, 2, 4(i), 201-206, 214, 218-220, 251, 252, 254, 256, 303(r), and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 201-206, 214, 218-220, 251, 252, 254, 256, 303(r), and 403.

    C. Description and Estimate of the Number of Small Entities to Which the Proposed Rules Will Apply

    44. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rule revisions, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small-business concern” under the Small Business Act. A “small-business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.

    45. Small Businesses, Small Organizations, Small Governmental Jurisdictions. Our actions, over time, may affect small entities that are not easily categorized at present. We therefore describe here, at the outset, three comprehensive small entity size standards that could be directly affected herein. First, while there are industry specific size standards for small businesses that are used in the regulatory flexibility analysis, according to data from the SBA's Office of Advocacy, in general a small business is an independent business having fewer than 500 employees. These types of small businesses represent 99.9% of all businesses in the United States which translates to 28.8 million businesses. Next, the type of small entity described as a “small organization” is generally “any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.” Nationwide, as of August 2016, there were approximately 356,494 small organizations based on registration and tax data filed by nonprofits with the Internal Revenue Service (IRS). Finally, the small entity described as a “small governmental jurisdiction” is defined generally as “governments of cities, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.” U.S. Census Bureau data from the 2012 Census of Governments indicate that there were 90,056 local governmental jurisdictions consisting of general purpose governments and special purpose governments in the United States. Of this number there were 37, 132 General purpose governments (county, municipal and town or township) with populations of less than 50,000 and 12,184 Special purpose governments (independent school districts and special districts) with populations of less than 50,000. The 2012 U.S. Census Bureau data for most types of governments in the local government category show that the majority of these governments have populations of less than 50,000. Based on this data we estimate that at least 49,316 local government jurisdictions fall in the category of “small governmental jurisdictions.”

    46. Wired Telecommunications Carriers. The U.S. Census Bureau defines this industry as “establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired communications networks. Transmission facilities may be based on a single technology or a combination of technologies. Establishments in this industry use the wired telecommunications network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP services, wired (cable) audio and video programming distribution, and wired broadband internet services. By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry.” The SBA has developed a small business size standard for Wired Telecommunications Carriers, which consists of all such companies having 1,500 or fewer employees. Census data for 2012 show that there were 3,117 firms that operated that year. Of this total, 3,083 operated with fewer than 1,000 employees. Thus, under this size standard, the majority of firms in this industry can be considered small.

    47. Local Exchange Carriers (LECs). Neither the Commission nor the SBA has developed a size standard for small businesses specifically applicable to local exchange services. The closest applicable NAICS Code category is Wired Telecommunications Carriers and under the applicable SBA size standard, such a business is small if it has 1,500 or fewer employees. U.S. Census data for 2012 show that there were 3,117 firms that operated that year. Of that total, 3,083 operated with fewer than 1,000 employees. Thus under this category and the associated size standard, the Commission estimates that the majority of local exchange carriers are small entities.

    48. Incumbent LECs. Neither the Commission nor the SBA has developed a small business size standard specifically for incumbent local exchange services. The closest applicable NAICS Code category is Wired Telecommunications Carriers as defined above. Under that size standard, such a business is small if it has 1,500 or fewer employees. According to Commission data, 3,117 firms operated in that year. Of this total, 3,083 operated with fewer than 1,000 employees. Consequently, the Commission estimates that most providers of incumbent local exchange service are small businesses that may be affected by the rules and policies adopted. Three hundred and seven (307) Incumbent Local Exchange Carriers reported that they were incumbent local exchange service providers. Of this total, an estimated 1,006 have 1,500 or fewer employees.

    49. Competitive Local Exchange Carriers (Competitive LECs), Competitive Access Providers (CAPs), Shared-Tenant Service Providers, and Other Local Service Providers. Neither the Commission nor the SBA has developed a small business size standard specifically for these service providers. The appropriate NAICS Code category is Wired Telecommunications Carriers, as defined above. Under that size standard, such a business is small if it has 1,500 or fewer employees. U.S. Census data for 2012 indicate that 3,117 firms operated during that year. Of that number, 3,083 operated with fewer than 1,000 employees. Based on this data, the Commission concludes that the majority of Competitive LECS, CAPs, Shared-Tenant Service Providers, and Other Local Service Providers, are small entities. According to Commission data, 1,442 carriers reported that they were engaged in the provision of either competitive local exchange services or competitive access provider services. Of these 1,442 carriers, an estimated 1,256 have 1,500 or fewer employees. In addition, 17 carriers have reported that they are Shared-Tenant Service Providers, and all 17 are estimated to have 1,500 or fewer employees. Also, 72 carriers have reported that they are Other Local Service Providers. Of this total, 70 have 1,500 or fewer employees. Consequently, based on internally researched FCC data, the Commission estimates that most providers of competitive local exchange service, competitive access providers, Shared-Tenant Service Providers, and Other Local Service Providers are small entities.

    50. We have included small incumbent LECs in this present RFA analysis. As noted above, a “small business” under the RFA is one that, inter alia, meets the pertinent small business size standard (e.g., a telephone communications business having 1,500 or fewer employees), and “is not dominant in its field of operation.” The SBA's Office of Advocacy contends that, for RFA purposes, small incumbent LECs are not dominant in their field of operation because any such dominance is not “national” in scope. We have therefore included small incumbent LECs in this RFA analysis, although we emphasize that this RFA action has no effect on Commission analyses and determinations in other, non-RFA contexts.

    51. Interexchange Carriers (IXCs). Neither the Commission nor the SBA has developed a definition for Interexchange Carriers. The closest NAICS Code category is Wired Telecommunications Carriers as defined above. The applicable size standard under SBA rules is that such a business is small if it has 1,500 or fewer employees. U.S. Census data for 2012 indicates that 3,117 firms operated during that year. Of that number, 3,083 operated with fewer than 1,000 employees. According to internally developed Commission data, 359 companies reported that their primary telecommunications service activity was the provision of interexchange services. Of this total, an estimated 317 have 1,500 or fewer employees. Consequently, the Commission estimates that the majority of IXCs are small entities.

    52. Local Resellers. The SBA has developed a small business size standard for the category of Telecommunications Resellers. The Telecommunications Resellers industry comprises establishments engaged in purchasing access and network capacity from owners and operators of telecommunications networks and reselling wired and wireless telecommunications services (except satellite) to businesses and households. Establishments in this industry resell telecommunications; they do not operate transmission facilities and infrastructure. Mobile virtual network operators (MVNOs) are included in this industry. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census data for 2012 show that 1,341 firms provided resale services during that year. Of that number, all operated with fewer than 1,000 employees. Thus, under this category and the associated small business size standard, the majority of these resellers can be considered small entities.

    53. Toll Resellers. The Commission has not developed a definition for Toll Resellers. The closest NAICS Code Category is Telecommunications Resellers. The Telecommunications Resellers industry comprises establishments engaged in purchasing access and network capacity from owners and operators of telecommunications networks and reselling wired and wireless telecommunications services (except satellite) to businesses and households. Establishments in this industry resell telecommunications; they do not operate transmission facilities and infrastructure. Mobile virtual network operators (MVNOs) are included in this industry. The SBA has developed a small business size standard for the category of Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees. Census data for 2012 show that 1,341 firms provided resale services during that year. Of that number, 1,341 operated with fewer than 1,000 employees. Thus, under this category and the associated small business size standard, the majority of these resellers can be considered small entities. According to Commission data, 881 carriers have reported that they are engaged in the provision of toll resale services. Of this total, an estimated 857 have 1,500 or fewer employees. Consequently, the Commission estimates that the majority of toll resellers are small entities.

    54. Other Toll Carriers. Neither the Commission nor the SBA has developed a definition for small businesses specifically applicable to Other Toll Carriers. This category includes toll carriers that do not fall within the categories of interexchange carriers, operator service providers, prepaid calling card providers, satellite service carriers, or toll resellers. The closest applicable NAICS Code category is for Wired Telecommunications Carriers as defined above. Under the applicable SBA size standard, such a business is small if it has 1,500 or fewer employees. Census data for 2012 shows that there were 3,117 firms that operated that year. Of this total, 3,083 operated with fewer than 1,000 employees. Thus, under this category and the associated small business size standard, the majority of Other Toll Carriers can be considered small. According to internally developed Commission data, 284 companies reported that their primary telecommunications service activity was the provision of other toll carriage. Of these, an estimated 279 have 1,500 or fewer employees. Consequently, the Commission estimates that most Other Toll Carriers are small entities.

    55. Prepaid Calling Card Providers. The SBA has developed a definition for small businesses within the category of Telecommunications Resellers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. According to the Commission's Form 499 Filer Database, 500 companies reported that they were engaged in the provision of prepaid calling cards. The Commission does not have data regarding how many of these 500 companies have 1,500 or fewer employees. Consequently, the Commission estimates that there are 500 or fewer prepaid calling card providers that may be affected by the rules.

    56. Wireless Telecommunications Carriers (except Satellite). This industry comprises establishments engaged in operating and maintaining switching and transmission facilities to provide communications via the airwaves. Establishments in this industry have spectrum licenses and provide services using that spectrum, such as cellular services, paging services, wireless internet access, and wireless video services. The appropriate size standard under SBA rules is that such a business is small if it has 1,500 or fewer employees. For this industry, U.S. Census data for 2012 show that there were 967 firms that operated for the entire year. Of this total, 955 firms had employment of 999 or fewer employees and 12 had employment of 1000 employees or more. Thus under this category and the associated size standard, the Commission estimates that the majority of wireless telecommunications carriers (except satellite) are small entities.

    57. The Commission's own data—available in its Universal Licensing System—indicate that, as of October 25, 2016, there are 280 Cellular licensees that may be affected by our actions today. The Commission does not know how many of these licensees are small, as the Commission does not collect that information for these types of entities. Similarly, according to internally developed Commission data, 413 carriers reported that they were engaged in the provision of wireless telephony, including cellular service, Personal Communications Service, and Specialized Mobile Radio Telephony services. Of this total, an estimated 261 have 1,500 or fewer employees, and 152 have more than 1,500 employees. Thus, using available data, we estimate that the majority of wireless firms can be considered small.

    58. Wireless Communications Services. This service can be used for fixed, mobile, radiolocation, and digital audio broadcasting satellite uses. The Commission defined “small business” for the wireless communications services (WCS) auction as an entity with average gross revenues of $40 million for each of the three preceding years, and a “very small business” as an entity with average gross revenues of $15 million for each of the three preceding years. The SBA has approved these definitions.

    59. Wireless Telephony. Wireless telephony includes cellular, personal communications services, and specialized mobile radio telephony carriers. As noted, the SBA has developed a small business size standard for Wireless Telecommunications Carriers (except Satellite). Under the SBA small business size standard, a business is small if it has 1,500 or fewer employees. According to Commission data, 413 carriers reported that they were engaged in wireless telephony. Of these, an estimated 261 have 1,500 or fewer employees and 152 have more than 1,500 employees. Therefore, a little less than one third of these entities can be considered small.

    60. Cable and Other Subscription Programming. This industry comprises establishments primarily engaged in operating studios and facilities for the broadcasting of programs on a subscription or fee basis. The broadcast programming is typically narrowcast in nature (e.g., limited format, such as news, sports, education, or youth-oriented). These establishments produce programming in their own facilities or acquire programming from external sources. The programming material is usually delivered to a third party, such as cable systems or direct-to-home satellite systems, for transmission to viewers. The SBA has established a size standard for this industry stating that a business in this industry is small if it has 1,500 or fewer employees. The 2012 Economic Census indicates that 367 firms were operational for that entire year. Of this total, 357 operated with less than 1,000 employees. Accordingly we conclude that a substantial majority of firms in this industry are small under the applicable SBA size standard.

    61. Cable Companies and Systems (Rate Regulation). The Commission has developed its own small business size standards for the purpose of cable rate regulation. Under the Commission's rules, a “small cable company” is one serving 400,000 or fewer subscribers nationwide. Industry data indicate that there are currently 4,600 active cable systems in the United States. Of this total, all but eleven cable operators nationwide are small under the 400,000-subscriber size standard. In addition, under the Commission's rate regulation rules, a “small system” is a cable system serving 15,000 or fewer subscribers. Current Commission records show 4,600 cable systems nationwide. Of this total, 3,900 cable systems have fewer than 15,000 subscribers, and 700 systems have 15,000 or more subscribers, based on the same records. Thus, under this standard as well, we estimate that most cable systems are small entities.

    62. Cable System Operators (Telecom Act Standard). The Communications Act also contains a size standard for small cable system operators, which is “a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.” There are approximately 52,403,705 cable video subscribers in the United States today. Accordingly, an operator serving fewer than 524,037 subscribers shall be deemed a small operator if its annual revenues, when combined with the total annual revenues of all its affiliates, do not exceed $250 million in the aggregate. Based on available data, we find that all but nine incumbent cable operators are small entities under this size standard. We note that the Commission neither requests nor collects information on whether cable system operators are affiliated with entities whose gross annual revenues exceed $250 million. Although it seems certain that some of these cable system operators are affiliated with entities whose gross annual revenues exceed $250 million, we are unable at this time to estimate with greater precision the number of cable system operators that would qualify as small cable operators under the definition in the Communications Act.

    63. All Other Telecommunications. The “All Other Telecommunications” industry is comprised of establishments that are primarily engaged in providing specialized telecommunications services, such as satellite tracking, communications telemetry, and radar station operation. This industry also includes establishments primarily engaged in providing satellite terminal stations and associated facilities connected with one or more terrestrial systems and capable of transmitting telecommunications to, and receiving telecommunications from, satellite systems. Establishments providing internet services or voice over internet protocol (VoIP) services via client-supplied telecommunications connections are also included in this industry. The SBA has developed a small business size standard for “All Other Telecommunications,” which consists of all such firms with gross annual receipts of $32.5 million or less. For this category, U.S. Census data for 2012 show that there were 1,442 firms that operated for the entire year. Of these firms, a total of 1,400 had gross annual receipts of less than $25 million. Thus a majority of “All Other Telecommunications” firms potentially may be affected by our action can be considered small.

    D. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements for Small Entities

    64. The NPRM proposes and seeks comment on rule changes that will affect LECs and intermediate access providers, including CEA providers. The NPRM proposes rules to further limit or eliminate the occurrence of access arbitrage, including access stimulation, which could reduce potential reporting requirements. One possible result of the proposed rules would be greater availability of direct connections between IXCs and access-stimulating LECs to avoid the use of intervening third parties, including CEA providers, and thus create more efficient and economical network connections. Direct connections would also likely reduce recordkeeping requirements. Specifically, we propose amending our rules to allow access-stimulating LECs to choose either to be financially responsible for the delivery of calls to their networks or to accept direct connections from IXCs or from intermediate access providers of the IXC's choosing. The proposed rules also contain notification requirements for access-stimulating LECs, which may impact small entities. Some of these requirements may also involve tariff changes.

    65. The NPRM also seeks comment on other actions the Commission could take to further discourage or eliminate access arbitrage activity. Rules which achieve these objectives could potentially affect recordkeeping and reporting requirements.

    E. Steps Taken To Minimize the Significant Economic Impact on Small Entities, and Significant Alternatives Considered

    66. The RFA requires an agency to describe any significant, specifically small business, alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance and reporting requirements under the rules for such small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof, for such small entities.

    67. This NPRM invites comment on a number of proposals and alternatives to modify or adopt access arbitrage rules and on the legality of access stimulation generally. The Commission has found these arbitrage practices inefficient and to ultimately increase consumer telecommunications rates. The NPRM proposes rules to further limit or eliminate the occurrence of access stimulation as well as other access arbitrage in turn promoting the efficient function of the nation's telecommunications network. We believe that if companies are able to operate with greater efficiency this will benefit the communications network as a whole, and its users, by allowing companies to increase their investment in broadband deployment. Thus, we propose to adopt rules to give access-stimulating LECs two choices about how they connect to IXCs. First, an access-stimulating LEC can choose to be financially responsible for calls delivered to its networks so it, rather than IXCs, pays for the delivery of calls to its end office or the functional equivalent. Or, second, instead of accepting this financial responsibility, an access-stimulating LEC can choose to accept direct connections from either the IXC or an intermediate access provider of the IXC's choosing. In the alternative, we seek comment on moving all traffic bound for an access-stimulating LEC to bill-and-keep. The NPRM also seeks comment on potential revisions to the definition of access stimulation, in particular to address intermediate access providers. The record in this proceeding suggests additional access arbitrage activities are occurring, including: (1) Use of intermediate access providers by Commercial Mobile Radio Carriers; (2) mileage pumping; and (3) daisy chaining. Comment is sought on how best to address these activities. The NPRM seeks comment on the costs and benefits of these proposals. Providing carriers, especially small carriers, with options will enable them to best assess the financial effects on their operation allowing them to determine how best to respond.

    68. The NPRM also seeks comment on other actions we can take to further discourage or eliminate access arbitrage activity. Comment is sought on alternatives to our proposal that could be considered to achieve our objectives with potentially less impact on small entities.

    F. Federal Rules That May Duplicate, Overlap, or Conflict With the Proposed Rules

    69. None.

    VI. Ordering Clauses

    70. Accordingly, it is ordered that, pursuant to sections 1, 2, 4(i), 201-206, 214, 218-220, 251, 252, 254, 256, 303(r), and 403 of the Communications Act of 1934, as amended, and section 706 of the Telecommunications Act of 1996, 47 U.S.C. 151, 152, 154(i), 201-206, 218-220, 251, 252, 254, 256, 303(r), and 403, and § 1.1 of the Commission's rules, 47 CFR 1.1, this Notice of Proposed Rulemaking is adopted.

    71. It is further ordered that pursuant to applicable procedures set forth in §§ 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may file comments on this Notice of Proposed Rulemaking on or before July 20, 2018 and reply comments on or before August 3, 2018.

    72. It is further ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of the Notice of Proposed Rulemaking, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

    List of Subjects in 47 CFR Part 51

    Common carriers, Communications.

    Federal Communications Commission. Marlene Dortch, Secretary, Office of the Secretary. Proposed Rules

    For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 51 as follows:

    PART 51—INTERCONNECTION 1. The authority citation for part 51 continues to read as follows: Authority:

    47 U.S.C. 151-55, 201-05, 207-09, 218, 220, 225-27, 251-54, 256, 271, 303(r), 332, 1302.

    2. Amend § 51.903 by adding paragraphs (k), (l), and (m) to read as follows:
    § 51.903 Definitions.

    (k) Access Stimulation has the same meaning as that term is defined in § 61.3(bbb) of this chapter.

    (l) Intermediate Access Provider means any entity that carries or processes traffic at any point between the final Interexchange Carrier in a call path and the carrier providing End Office Access Service.

    (m) Interexchange Carrier means a telecommunications carrier that uses the exchange access or information access services of another telecommunications carrier for the provision of telecommunications.

    3. Add § 51.914 to read as follows:
    § 51.914 Additional provisions applicable to Access Stimulation traffic.

    (a) Notwithstanding any other provision of the Commission's rules, if a local exchange carrier is engaged in Access Stimulation, it shall within 45 days of commencing Access Stimulation, or by [date 45 days after the effective date of the final rule], whichever is later:

    (1)(i) Not bill any affected Interexchange Carrier or any Intermediate Access Provider for the terminating switched access tandem switching or any terminating switched access transport charges for any traffic between such local exchange carrier's terminating end office or equivalent and the associated access tandem switch; and

    (ii) Assume financial responsibility for the applicable Intermediate Access Provider terminating tandem switching and terminating switched transport access charges relating to traffic bound for the access-stimulating local exchange carrier; or

    (2) Upon request of an Interexchange Carrier for direct-trunked transport service, provision and enable direct-trunked transport service to either the Interexchange Carrier or an Intermediate Access Provider of the Interexchange Carrier's choosing within [period of time to be determined] of such a request.

    (b) Notwithstanding any other provision of the Commission's rules, if a local exchange carrier is engaged in Access Stimulation, it shall within 45 days of commencing Access Stimulation, or by [date 45 days after effective date of the final rule], whichever is later, notify in writing all Intermediate Access Providers which it subtends and Interexchange Carriers with which it does business of the following:

    (1) That it is a local exchange carrier engaged in Access Stimulation;

    (2) That it will either:

    (i) Obtain and pay for terminating access services from Intermediate Access Providers for such traffic as of that date; or

    (ii) Offer direct-trunked transport service to any affected Interexchange Carrier (or to an Intermediate Access Provider of the Interexchange Carrier's choosing); and

    (3) To the extent that the local exchange carrier engaged in Access Stimulation intends to comply with paragraph (a) of this section through electing the option described in paragraph (a)(2) of this section, designate where on its network it will accept the requested direct connection.

    (c) Nothing in this section creates an independent obligation for a local exchange carrier to construct new facilities other than, as necessary, adding switch trunk ports.

    (d) In the event that an Intermediate Access Provider receives notice under paragraph (b) of this section that a local exchange carrier engaged in Access Stimulation will be obtaining and paying for terminating access service from such Intermediate Access Provider, an Intermediate Access Provider shall not bill Interexchange Carriers terminating tandem switching and terminating switched transport access for traffic bound for such local exchange carrier but, instead bill such local exchange carrier for such services.

    (e) Notwithstanding any provision of this section, any carrier that is not itself engaged in Access Stimulation, as that term is defined in § 61.3(bbb) of this chapter, but serves as an Intermediate Access Provider with respect to traffic bound for an access-stimulating local exchange carrier, shall not itself be deemed a local exchange carrier engaged in Access Stimulation or be affected by this rule other than paragraph (d) of this section.

    4. Amend § 51.917 by revising paragraph (c) to read as follows:
    § 51.917 Revenue recovery for Rate-of-Return Carriers.

    (c) Adjustment for Access Stimulation activity. 2011 Rate-of-Return Carrier Base Period Revenue shall be adjusted to reflect the removal of any increases in revenue requirement or revenues resulting from Access Stimulation activity the Rate-of-Return Carrier engaged in during the relevant measuring period. A Rate-of-Return Carrier should make this adjustment for its initial July 1, 2012, tariff filing, but the adjustment may result from a subsequent Commission or court ruling.

    [FR Doc. 2018-13699 Filed 6-28-18; 8:45 am] BILLING CODE 6712-01-P
    FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 76 [MB Docket Nos. 07-42 and 17-105; FCC 18-80] Leased Commercial Access; Modernization of Media Regulation Initiative AGENCY:

    Federal Communications Commission.

    ACTION:

    Proposed rule.

    SUMMARY:

    In this document, the Commission seeks to update its leased access rules as part of its Modernization of Media Regulation Initiative. First, the Commission tentatively concludes that it should vacate its 2008 Leased Access Order, which the U.S. Court of Appeals for the Sixth Circuit has stayed for a decade in conjunction with several judicial appeals of the order. Second, the Commission seeks input on the state of the leased access marketplace generally and invites comment on ways to modernize its existing leased access rules.

    DATES:

    Comments are due on or before July 30, 2018; reply comments are due on or before August 13, 2018.

    ADDRESSES:

    You may submit comments, identified by MB Docket Nos. 18-80 and 17-105, by any of the following methods:

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

    Federal Communications Commission's website: http://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting comments.

    Mail: Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

    People with Disabilities: Contact the FCC to request reasonable accommodations (accessible format documents, sign language interpreters, CART, etc.) by email: [email protected] or phone: (202) 418-0530 or TTY: (202) 418-0432.

    FOR FURTHER INFORMATION CONTACT:

    For additional information on this proceeding, contact Diana Sokolow, [email protected], of the Policy Division, Media Bureau, (202) 418-2120.

    SUPPLEMENTARY INFORMATION:

    This is a summary of the Commission's Further Notice of Proposed Rulemaking, FCC 18-80, adopted on June 7, 2018 and released on June 8, 2017. The full text is available for public inspection and copying during regular business hours in the FCC Reference Center, Federal Communications Commission, 445 12th Street SW, Room CY-A257, Washington, DC 20554. This document will also be available via ECFS at http://fjallfoss.fcc.gov/ecfs/. Documents will be available electronically in ASCII, Microsoft Word, and/or Adobe Acrobat. Alternative formats are available for people with disabilities (Braille, large print, electronic files, audio format), by sending an email to [email protected] or calling the Commission's Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

    Synopsis

    1. In this Further Notice of Proposed Rulemaking (FNPRM), we seek to update our leased access rules as part of the Commission's Modernization of Media Regulation Initiative. In response to the public notice initiating the media modernization proceeding, some commenters made proposals related to the Commission's leased access rules, which require cable operators to set aside channel capacity for commercial use by unaffiliated video programmers.1 By addressing these proposals in this FNPRM, we advance our efforts to modernize our media regulations and remove unnecessary requirements that can impede competition and innovation in the media marketplace.

    1 The leased access rules are in Subpart N of Part 76, which was listed in the Media Modernization Public Notice as one of the principal rule parts that pertains to media entities and that is the subject of the media modernization review.

    2. We tentatively conclude that we should vacate the 2008 Leased Access Order, including the Further Notice of Proposed Rulemaking issued in conjunction with that order. This action would enable the Commission to clean up a longstanding backlog and position us to freshly consider new revisions to the leased access rules.2 Due to the Sixth Circuit proceedings as well as the OMB disapproval, the rule changes contained in the 2008 Leased Access Order never went into effect. The leased access rules that are currently in effect, and that currently appear in the Code of Federal Regulations, are those that were in existence prior to the 2008 Leased Access Order. Accordingly, vacating the 2008 Leased Access Order would not have any impact on any party's compliance with or expectations concerning the leased access requirements.

    2 If we vacate the 2008 Leased Access Order, we will subsequently dismiss as moot the NCTA FCC Stay Request (asking the Commission to stay the 2008 Leased Access Order) and the TVC Recon Petition (seeking reconsideration of the 2008 Leased Access Order).

    3. In making this tentative conclusion, we note the concerns the Sixth Circuit expressed in its Stay Order regarding the leased access rules that were adopted in the 2008 Leased Access Order, including “that NCTA has raised some substantial appellate issues.” The Sixth Circuit determined that a stay of the 2008 Leased Access Order was justified due to “[t]he balance of the harms and the public interest, as well as NCTA's potential of success on the merits.” The Sixth Circuit also noted NCTA's argument that cable operators would suffer irreparable harm absent a stay because the new leased access rate formula adopted in the order would set leased access rates at an unreasonably low level, which would lead to more leased access requests that would displace other programming, ultimately leading to dissatisfied cable customers.

    4. Further support for our tentative finding that we should vacate the 2008 Leased Access Order arises from the concerns about the paperwork burden set forth in the OMB Notice. OMB detailed five ways in which certain requirements adopted in the order were inconsistent with the PRA. OMB specifically cited the Commission's failure to demonstrate the need for the more burdensome requirements adopted, its failure to demonstrate that it had taken reasonable steps to minimize the burdens, and its failure to provide reasonable protection for proprietary and confidential information. Some commenters in the media modernization proceeding agree with OMB that the 2008 Leased Access Order failed to comply with the PRA.

    5. We also tentatively find that vacating the 2008 Leased Access Order would be consistent with the goal of the Commission's Modernization of Media Regulation Initiative to remove rules that are outdated or no longer justified by market realities. Because of the concerns raised in the Sixth Circuit Stay Order and the OMB Notice, the significant amount of time that has passed since the 2008 Leased Access Order was adopted and became subject to a stay, the significant amount of time that the cable industry and programmers have remained subject to the pre-existing leased access rules during the pendency of the stay, and the very small number of leased access disputes brought before the Commission in recent years,3 we tentatively find that there is no sound policy basis for the rules adopted in the 2008 order at this point. For all these reasons, rather than proceeding with the pending judicial review of the 2008 Leased Access Order that has now been stayed for a decade, we tentatively conclude that a better approach would be for the Commission to vacate the 2008 Leased Access Order and consider potential rule revisions anew.

    3 The Commission currently adjudicates an average of less than one leased access dispute per year.

    6. We seek comment on our tentative conclusions. Is there any policy justification for not vacating the entire order? Is there any policy justification for retaining any particular rules adopted therein? Parties urging us not to vacate the entire order or particular rules should specify how the Commission should overcome both the judicial concerns noted in the Sixth Circuit Stay Order and those raised in the OMB Notice. We also ask parties to address any benefits associated with the 2008 rules and whether these benefits outweigh the costs.

    7. We next seek comment on any updates and improvements we should make to our existing leased access rules. The stated purpose of the leased access statute “is to promote competition in the delivery of diverse sources of video programming and to assure that the widest possible diversity of information sources are made available to the public from cable systems in a manner consistent with growth and development of cable systems.” The statute also specifies that the price, terms, and conditions for commercial leased access should be “at least sufficient to assure that such use will not adversely affect the operation, financial condition, or market development of the cable system.” We note that the video distribution marketplace has become much more competitive since Congress first established the leased access regime in 1984. For example, at that time, direct broadcast satellite (DBS) service was not available to consumers as an alternative to cable. While consumers previously had access to only one pay television service, today they have access to multiple pay television services as well as online video programming. In addition, the number of channels offered by cable operators has increased.

    8. Against this backdrop, we invite comment on the current state of the leased access marketplace generally and on whether, and if so how, the prevalence of alternative means of video distribution should influence our actions in this proceeding. How many leased access programmers are currently in existence, and is that number increasing or decreasing? What portion of a cable system's programming consists of leased access? Do the leased access rules currently in effect facilitate the successful leasing of time by leased access programmers, and if not, what issues do programmers experience? To what extent do leased access programmers continue to rely on cable carriage versus alternative means of distribution? Does the widespread availability of DBS service today or the proliferation of online video distributors provide programmers, including leased access programmers, with more options for content distribution?

    9. As discussed below, we also seek comment on specific proposals raised in the media modernization proceeding to update and improve the Commission's existing leased access rules as well as on any other proposals we should consider.

    10. First, as supported by several commenters in the media modernization proceeding, we propose to revise § 76.970(i) of our rules to provide that all cable operators, and not just those that qualify as “small systems” under that rule, are required to provide the information specified in paragraph (i)(1) only in response to a bona fide request for leased access information from a prospective leased access programmer.4 For purposes of the leased access rules applicable to cable operators eligible for small system relief,5 a bona fide request for information is defined as a request from a potential leased access programmer that includes: “(i) The desired length of a contract term; (ii) The time slot desired; (iii) The anticipated commencement date for carriage; and (iv) The nature of the programming.”

    4 The 2008 Leased Access Order distinguished between “requests for information” and “proposals for leased access.” Had that order gone into effect, it would have provided non-small cable systems with three days to respond to a request for information, whereas small cable systems would have had 30 days to respond to a bona fide request for information. All cable systems, regardless of size, would have been required to respond to bona fide leased access proposals within 10 days of receipt.

    5 For purposes of the leased access rules, a small system is defined as either (i) a system that qualifies as small under § 76.901(c) of the Commission's rules and is owned by a small cable company as defined in § 76.901(e); or (ii) a system that has been granted special relief.

    11. Section 76.970(i)(1) directs cable operators to provide prospective leased access programmers with the following information: “(i) How much of the operator's leased access set-aside capacity is available; (ii) A complete schedule of the operator's full-time and part-time leased access rates; (iii) Rates associated with technical and studio costs; and (iv) If specifically requested, a sample leased access contract.” Current rules require operators of small cable systems to provide the information only in response to a bona fide request from a prospective leased access programmer, whereas other cable system operators must provide the information in response to any request for leased access information.6 As a result, some operators of systems that do not qualify as small may spend a significant amount of time compiling information to respond to non-bona fide leased access inquiries. These operators are not permitted to ask prospective leased access programmers for any information before responding to a leased access request, due to the Commission's concern that cable operators otherwise could use requests for information to discourage leasing access.

    6 We propose to correct § 76.970(i)(2) by replacing the reference to “paragraph (h)(1) of this section,” which does not exist, with “paragraph (i)(1) of this section.” All leased access requests are required to be in writing and to specify the date on which the request was sent to the cable operator.

    12. We seek comment on our proposal to extend the bona fide request limitation to all leased access requests. Is there any reason not to provide all cable operators with the flexibility of responding only to a bona fide request? We ask commenters to provide information on the costs that cable operators currently face in responding to non-bona fide leased access requests. How often do cable operators receive non-bona fide leased access requests, and how much time does it take to provide the required information in response to such a request? Does the bona fide request limitation that currently applies to operators of small cable systems in any way discourage prospective leased access programmers, including small programmers, from seeking to lease access and if so, how? If we extend the bona fide request limitation to all leased access requests, should we adopt any modifications to the current definition of a bona fide request?

    13. Second, we invite comment on whether we should extend the time within which cable operators must provide prospective leased access programmers with the information specified in § 76.970(i)(1) of our rules. Current rules require cable system operators to provide the required information “within 15 calendar days of the date on which a request for leased access information is made,” while operators of systems that are subject to small system relief must provide the required information “within 30 calendar days of a bona fide request from a prospective leased access programmer.” We invite comment on whether cable operators have found it difficult to comply with the current deadlines for providing the required information, and if so, why. What steps must cable operators take to compile the information listed in § 76.970(i)(1) of the Commission's rules, and what costs do cable operators face in doing so under the current timeframe? Is the information readily available to cable operators? We also seek input on whether leased access programmers have found that the required information is generally provided on a timely basis in accordance with current rules. If, as discussed above, we revise our rules to provide that all cable operators, and not just those with small systems, are required to provide the listed information only in response to a bona fide request from a prospective leased access programmer, then is there any basis for extending the deadline to provide the information?

    14. NCTA asks the Commission to provide cable operators with additional time, such as 45 days, within which “to respond to requests to lease time on multiple systems.” Is a 45-day response period reasonable for leased access requests covering multiple systems, and if not, what response time period is appropriate? Is it necessary to also provide additional response time for single cable systems? Do leased access requests typically involve multiple systems or are single-system requests often made? Would lengthening the deadline serve as a deterrent to or create a hardship for potential leased access programmers? Should we maintain a longer deadline for operators of small cable systems as compared to other cable operators?

    15. Third, as urged by several commenters in the media modernization proceeding, we seek comment on whether we should permit cable operators to require leased access programmers to pay a nominal application fee 7 and/or a deposit,8 which is currently prohibited. Cable operators state that requiring a deposit or a nominal application fee would “help defray the costs of gathering the information necessary to calculate the leased access rate and to respond to any bona fide requests for leased access capacity that never lead to an actual leased access agreement.” In the past the Commission has not supported the collection of fees or deposits with respect to leased access. In light of this history, how should we consider the impact of fees and deposits on interest, accessibility and diversity in leased access? Although the Commission previously found that such fees and deposits are not permissible, has anything changed that may persuade us that they are now a reasonable means of covering the costs of responding to leased access inquiries? If the Commission permits fees, what criteria should be used to determine whether an application fee is nominal? Rather than adopting rules governing what constitutes a “nominal” application fee, should the Commission evaluate such fees on a case-by-case basis when presented with a complaint that a particular fee is not nominal? Similarly, if we permit deposits, should we establish rules regarding an appropriate deposit amount, or alternatively, evaluate deposits on a case-by-case basis? If the Commission decides to adopt rules, how should it decide whether a deposit is reasonable? Should the cable operator refund all or part of the deposit if the leased access request does not result in carriage?

    7 By “nominal application fee,” we mean a processing fee that would be collected and retained by the cable operator regardless of whether the request results in leased access carriage.

    8 By “deposit,” we mean a potentially more substantial fee that would be collected by the cable operator and used to offset future payments (e.g., the first month's payment) if the leased access request results in carriage.

    16. We seek comment on whether it would be preferable to permit a nominal application fee or a deposit, or both, and on the costs and benefits of each option. If we adopt our proposal to require all cable operators to respond only to bona fide leased access requests, is there any justification for requiring a deposit or application fee? Would requiring a deposit or application fee prior to obtaining the information set forth in § 76.970(i)(1) dissuade potential leased access programmers, particularly small entities, from seeking to lease access? Finally, should the Commission permit all cable operators, or permit only small cable operators, to require a nominal application fee or deposit before the operator responds to a leased access request by providing the information set forth in § 76.970(i)(1)? Any commenter advocating that we permit only small cable operators to require a nominal application fee or deposit should explain its rationale.

    17. Fourth, we invite comment on modifications to our procedures for addressing leased access disputes. Congress has provided the Commission with authority to adjudicate leased access disputes. Parties previously have contacted Commission staff to express confusion about inconsistencies between the leased access dispute resolution rule (§ 76.975) and the Commission's more general rule governing complaints (§ 76.7). Accordingly, to promote consistency between the two rules, we propose to revise § 76.975 of our rules as follows. First, we propose to revise our terminology by referencing an answer to a petition, rather than a response to a petition. Second, we propose that the 30-day timeframe for filing an answer to a leased access petition should be calculated from the date of service of the petition, rather than the date on which the petition was filed. Third, whereas § 76.975 currently does not include any allowance for replies, we propose adding a provision stating that replies to answers must be filed within 15 days after submission of the answer. Fourth, we propose adding a statement that § 76.7 applies to petitions for relief filed under § 76.975, unless otherwise provided in § 76.975. We invite comment on these proposals, which we intend to alleviate any ongoing confusion about how both §§ 76.7 and 76.975 govern leased access proceedings. Is 15 days the appropriate timeframe for submitting a reply to an answer to a leased access petition? We note that the general complaint-filing rule provides 10 days for filing replies, but it also provides only 20 days for filing an answer, whereas the leased access rule provides 30 days for an answer. Are there any other changes we should make to our rules in order to make the adjudication of leased access disputes more efficient?

    18. Finally, we invite comment on any other ways in which we should modernize our leased access rules. For example, are any new rules needed to govern the relationship between leased access programmers and cable operators, such as a rule requiring cable operators to provide programmers with contact information for the person responsible for leased access matters? Should we adopt any new rules governing leased access rates or part-time leased access? Commenters supporting additional rules governing leased access rates should explain why additional rate rules are needed and what issues the rules should address. We ask commenters to explain the relative costs and benefits of any additional proposals.

    19. In seeking comment on updating the FCC's leased access rules, we also seek comment on whether our rules implicate First Amendment interests. If so, what level of First Amendment scrutiny is appropriate, and how does that analysis apply to our existing rules and the potential changes we seek comment on here, in light of the statutory obligations of section 612? In this context, we also seek comment on whether there have been any changes in the video distribution market since Congress and the FCC first addressed these issues that are relevant to the First Amendment analysis. For instance, are there relevant changes in the distribution market that we should now consider? Is the FCC's 2015 decision regarding effective competition relevant to this analysis?

    20. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) concerning the possible significant economic impact on small entities by the policies and rules proposed in the FNPRM. Written public comments are requested on the IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments provided on the first page of the FNPRM. The Commission will send a copy of the FNPRM, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In summary, the FNPRM seeks to update the Commission's leased access rules as part of its Modernization of Media Regulation Initiative. First, it tentatively concludes that we should vacate the Commission's 2008 Leased Access Order, which the U.S. Court of Appeals for the Sixth Circuit has stayed for a decade in conjunction with several judicial appeals of the order. Second, it seeks input on the state of the leased access marketplace generally and invites comment on ways to modernize our existing leased access rules. The proposed action is authorized pursuant to sections 4(i), 303, and 612 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 303, and 532. The types of small entities that may be affected by the proposals contained in the FNPRM fall within the following categories: Cable Television Distribution Services, Cable Companies and Systems (Rate Regulation), Cable System Operators (Telecom Act Standard), Cable and Other Subscription Programming, Motion Picture and Video Production, and Motion Picture and Video Distribution. The projected reporting, recordkeeping, and other compliance requirements are: (1) A tentative conclusion that we should vacate the 2008 Leased Access Order; (2) as suggested by commenters in response to the Media Modernization Public Notice, a proposal to require cable operators to respond only to bona fide requests from prospective leased access programmers; (3) seeking comment on other suggested changes to leased access rules that were raised in the media modernization proceeding, including extending the timeframe for providing responses to leased access requests and permitting cable operators to require leased access programmers to pay a nominal application fee and/or a deposit; and (4) seeking comment on proposals to modify our procedures for addressing leased access disputes. There is no overlap with other regulations or laws.

    21. We note that the FNPRM tentatively finds that vacating the 2008 Leased Access Order would be consistent with the goal of the Commission's Modernization of Media Regulation Initiative to remove rules that are outdated or no longer justified by market realities. It is within this backdrop that the Commission tentatively concludes that it should vacate the 2008 Leased Access Order. The FNPRM explains that further support for our tentative finding that we should vacate the 2008 Leased Access Order arises from the concerns about the paperwork burden set forth in the OMB Notice, where OMB detailed five ways in which certain requirements adopted in the order were inconsistent with the PRA.

    22. Regarding specific proposals involving the leased access rules, the Commission invites comment on alternative ways it can reduce burdens on small entities. For example, the Commission proposes to extend the current bona fide request limitation, which only applies to operators of small cable systems, to all operators. The FNPRM seeks information on whether the current bona fide request limitation in any way discourages prospective leased access programmers, including small programmers, from seeking to lease access and if so, how. For example, if prospective leased access programmers indicate that they find it difficult to prepare a request that constitutes a “bona fide” request, the Commission will consider such difficulties in determining how to proceed. To the extent there is currently any negative impact on prospective leased access programmers, including small programmers, the Commission will weigh that impact in determining how to proceed. The FNPRM also considers the timeframe within which cable operators must provide prospective leased access programmers with the information specified in § 76.970(i)(1) of the Commission's rules. The FNPRM considers whether, in the alternative to adopting a single deadline for all cable systems, it should instead maintain a longer deadline for operators of small cable systems. Such an approach could minimize the impact of the leased access rules on small cable system operators. Similarly, in the alternative to permitting all cable operators to require a nominal application fee or deposit before the operator responds to a leased access request by providing the information set forth in § 76.970(i)(1), the FNPRM considers whether it should permit only small cable operators to do so. Such an approach could ease burdens on small cable operators. The FNPRM also considers the impact of requiring a deposit or application fee on small programmers, by asking whether potential leased access programmers, particularly small entities, would be dissuaded from seeking to lease access if faced with a deposit or application fee. The Commission will consider responses to all of these issues in determining how to proceed.

    23. This document contains proposed new or revised information collection requirements, including the proposal that all cable operators are required to provide the information specified in § 76.970(i)(1) only in response to a bona fide request from a prospective leased access programmer, and the addition of a provision governing replies to answers to leased access complaints. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and the Office of Management and Budget (OMB) to comment on the information collection requirements contained in this document, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3501-3520). In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the Commission seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”

    24. Permit-But-Disclose. This proceeding shall be treated as a “permit-but-disclose” proceeding in accordance with the Commission's ex parte rules. Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter's written comments, memoranda or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with rule 1.1206(b). In proceedings governed by rule 1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission's ex parte rules.

    25. The proposed action is authorized pursuant to sections 4(i), 303, and 612 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 303, and 532.

    List of Subjects in 47 CFR Part 76

    Administrative practice and procedure, Cable television, Reporting and recordkeeping requirements.

    Federal Communications Commission. Katura Jackson, Federal Register Liaison Officer, Office of the Secretary. Proposed Rules

    For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 76 as follows:

    PART 76—MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE 1. The authority citation for part 76 continues to read as follows: Authority:

    47 U.S.C. 151, 152, 153, 154, 301, 302, 302a, 303, 303a, 307, 308, 309, 312, 315, 317, 325, 338, 339, 340, 341, 503, 521, 522, 531, 532, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554, 556, 558, 560, 561, 571, 572, 573.

    2. Amend § 76.970 by revising paragraph (i)(1) and (2) to read as follows:
    § 76.970 Commercial leased access rates.

    (i)(1) Cable system operators shall provide prospective leased access programmers with the following information within 15 calendar days of the date on which a bona fide request for leased access information is made:

    (i) How much of the operator's leased access set-aside capacity is available;

    (ii) A complete schedule of the operator's full-time and part-time leased access rates;

    (iii) Rates associated with technical and studio costs; and

    (iv) If specifically requested, a sample leased access contract.

    (2) Operators of systems subject to small system relief shall provide the information required in paragraph (i)(1) of this section within 30 calendar days of a bona fide request from a prospective leased access programmer. For these purposes, systems subject to small system relief are systems that either:

    (i) Qualify as small systems under § 76.901(c) and are owned by a small cable company as defined under § 76.901(e); or

    (ii) Have been granted special relief.

    3. Amend § 76.975 by revising paragraph (e) and adding paragraph (i) to read as follows:
    § 76.975 Commercial leased access dispute resolution.

    (e) The cable operator or other respondent will have 30 days from service of the petition to file an answer. If a leased access rate is disputed, the answer must show that the rate charged is not higher than the maximum permitted rate for such leased access, and must be supported by the affidavit of a responsible company official. If, after an answer is submitted, the staff finds a prima facie violation of our rules, the staff may require a respondent to produce additional information, or specify other procedures necessary for resolution of the proceeding. Replies to answers must be filed within fifteen (15) days after submission of the answer.

    (i) Section 76.7 applies to petitions for relief filed under this section, except as otherwise provided in this section.

    [FR Doc. 2018-14014 Filed 6-28-18; 8:45 am] BILLING CODE 6712-01-P
    DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 211 [Docket DARS-2018-0021] RIN 0750-AJ23 Defense Federal Acquisition Regulation Supplement: Use of Commercial or Non-Government Standards (DFARS Case 2017-D014) AGENCY:

    Defense Acquisition Regulations System, Department of Defense (DoD).

    ACTION:

    Proposed rule.

    SUMMARY:

    DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) implement a section of the National Defense Authorization Act for Fiscal Year 2017 (Pub. L. 114-328), which requires DoD to revise the DFARS to encourage contractors to propose commercial or non-Government standards and industry-wide practices that meet the intent of military specifications and standards.

    DATES:

    Comments on the proposed rule should be submitted in writing to the address shown below on or before August 28, 2018, to be considered in the formation of a final rule.

    ADDRESSES:

    Submit comments identified by DFARS Case 2017-D014, using any of the following methods:

    Federal eRulemaking Portal: http://www.regulations.gov. Search for “DFARS Case 2017-D014.” Select “Comment Now” and follow the instructions provided to submit a comment. Please include “DFARS Case 2017-D014” on any attached documents.

    Email: [email protected] Include DFARS Case 2017-D014 in the subject line of the message.

    Fax: 571-372-6094.

    Mail: Defense Acquisition Regulations System, Attn: Mr. Mark Gomersall, OUSD(A&S)DPAP/DARS, Room 3B941, 3060 Defense Pentagon, Washington, DC 20301-3060.

    Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided. To confirm receipt of your comment(s), please check www.regulations.gov, approximately 2 to 3 days after submission to verify posting (except allow 30 days for posting of comments submitted by mail).

    FOR FURTHER INFORMATION CONTACT:

    Mr. Mark Gomersall, telephone 571-372-6099.

    SUPPLEMENTARY INFORMATION:

    I. Background

    DoD is proposing to amend the DFARS to implement section 875(c) of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017 (Pub. L. 114-328). Section 875(c) requires DoD to revise the DFARS to encourage contractors to propose commercial or non-Government standards and industry-wide practices that meet the intent of military specifications and standards.

    II. Discussion and Analysis

    DoD is proposing to amend DFARS 211.107(b) to require the use of Federal Acquisition Regulation (FAR) provision 52.211-7, Alternatives to Government-Unique Standards, in DoD solicitations and contracts that include military or Government-unique specifications and standards; and, in so doing, encourage and permit offerors to propose alternatives to Government-unique standards using an existing FAR provision.

    The use of FAR provision 52.211-7 is optional for agencies that report their use of voluntary consensus standards to the National Institute of Standards and Technology using the categorical reporting method. However, Office of Management and Budget (OMB) Circular A-119, Federal Participation in the Development and Use of Voluntary Consensus Standards and in Conformity Assessment Activities, requires, at paragraph 12.a.(4), that agencies using the categorical method of reporting method must “Enable potential offerors to suggest voluntary consensus standards that can replace Government-unique standards.” Use of this existing FAR provision will enable DoD to meet the intent of section 875(c).

    In response to OMB Circular A-119, the National Institute of Standards and Technology collects reports from Federal Agencies on their use of Government-unique standards, which is reported annually to Congress. DoD statistics used for that report do not differentiate among the many different types of Government-unique Standards. The overriding conceptual approach is to reduce Government reliance on standards produced by Government entities for their own use.

    As a matter of existing policy, DoD discourages the use of military specifications and standards in solicitations. As stated in DoD Directive 5000.01: “When using performance-based strategies, contract requirements shall be stated in performance terms, limiting the use of military specifications and standards to Government-unique requirements only.” However, to meet the intent of section 875(c) of the NDAA for FY 2017, DoD is proposing to amend DFARS 211.107(b) to require the use of FAR provision 52.211-7, Alternatives to Government-Unique Standards, in DoD solicitations and contracts that include military or Government-unique specifications and standards to encourage and permit offerors to propose alternatives to Government-unique standards.

    III. Applicability to Contracts at or Below the Simplified Acquisition Threshold (SAT) and Contracts for Commercial Items, Including Commercially Available Off-the-Shelf (COTS) Items

    The purpose of this rule is to implement section 875(c) of the NDAA for FY 2017, which requires DoD to revise the DFARS to encourage contractors to propose commercial or non-Government standards and industry-wide practices that meet the intent of military specifications and standards. DoD does not intend to apply the requirements of section 875(c) to solicitations for contracts valued at or below the SAT or to contracts for commercial items, including COTS items, because such contracts do not generally include or require use of military or Government-unique standards or specifications.

    IV. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all 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). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

    V. Executive Order 13771

    This rule is not an E.O. 13771, Reducing Regulation and Controlling Regulatory Costs, regulatory action, because this rule is not significant under E.O. 12866.

    VI. Regulatory Flexibility Act

    DoD does not expect this proposed rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, at 5 U.S.C. 601 et. seq. However, an initial regulatory flexibility analysis has been prepared and is summarized as follows:

    This proposed rule implements section 875(c) of the National Defense Authorization Act (NDAA) for FY 2017 (Pub. L. 114-328).

    The objective of this rule is to clarify the use of FAR 52.211-7, Alternatives to Government-Unique Standards, in DoD solicitations and contracts that include military or Government-unique specifications and standards. This will encourage and permit Offerors to propose alternatives to Government-unique standards by using an existing FAR provision. The legal basis for this rule is section 875(c) of the NDAA for FY 2017 (Pub. L. 114-328).

    The rule will apply to both large and small entities to the extent that such entities receive Government solicitations containing Government-unique standards and FAR provision 52.211-7, Alternatives to Government-unique Standards. Such entities may already be familiar with this provision as it has been in place since its publication in 1998 (63 FR 68344, December 10, 1998).

    As a matter of policy, DoD discourages the use of military specifications and standards in solicitations. As stated in DoD Directive 5000.01: “When using performance-based strategies, contract requirements shall be stated in performance terms, limiting the use of military specifications and standards to Government-unique requirements only.”

    In addition, between 1994 and 2000, over 29,000 military specifications and standards were cancelled. Of those, 6,100 were canceled without replacement, and 3,500 were superseded by nongovernment standards. Moreover, DoD participates in over 120 private sector standards-developing organizations such as ASTM, ANSI, ISO and IEEE. Voluntary consensus standards adopted by DoD are also listed in the Defense Logistics Agency ASSIST database to identify the source for obtaining the adopted standards.

    Based on Federal Procurement Data System data for product service code (PSC) 5342 (hardware, weapon systems), this rule could potentially apply to approximately 757 unique entities, of which 585 are small businesses. This is based on the number of DoD contract awards in fiscal year 2016 for PSC 5342. It cannot be discerned how many of the contract awards required the use of a military specification or standard. Further, given the DoD policy of discouraging the use of military specifications and standards in solicitations, this rule would likely impact no more than 40 offerors or potential contractors (the approximate number of DoD contractors involved in major weapons systems, which are more likely to require Government specifications).

    Accordingly, DoD estimates that this rule will have limited application. However, given the fact that some small number of DoD solicitations may include a military specification or standard—generally limited to those involving a major weapons system, this rule would provide a permissive means for offerors to propose reducing regulatory burden on a given solicitation.

    This rule does not contain reporting and recordkeeping requirements, since it merely revises guidance to contracting officers for use of FAR clause 52.211-7, Alternatives to Government-unique Standards.

    As an alternative to this proposed rule, DoD could create a stand-alone DoD provision. Such a provision, however, would largely duplicate, overlap, and potentially conflict with the requirements of the existing provision at FAR 52.211-7.

    DoD does not expect this proposed rule to have a significant economic impact on small entities. The rule will have a positive impact on both large and small contractors, in that they will now be permitted to propose alternatives to Government standards using an existing FAR provision, the same provision used for other, i.e., non-DoD Government solicitations.

    The rule does not duplicate, overlap, or conflict with any other Federal rules. There are no significant alternatives that meet the requirement of the statute.

    DoD will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (DFARS Case 2017-D014), in correspondence.

    VII. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) applies. The rule contains information collection requirements. OMB has cleared this information collection requirement under OMB control number 9000-0153, titled, OMB Circular A-119; FAR Sections Affected: 52.211-7 and 53.105.

    List of Subjects in 48 CFR Part 211

    Government procurement.

    Amy G. Williams, Deputy, Defense Acquisition Regulations System.

    Therefore, 48 CFR part 211 is proposed to be amended as follows:

    PART 211—DESCRIBING AGENCY NEEDS 1. The authority citation for part 211 continues to read as follows: Authority:

    41 U.S.C. 1303 and 48 CFR chapter 1.

    2. Revise section 211.107 to read as follows:
    211.107 Solicitation provision.

    (b) Use the provision at FAR 52.211-7, Alternatives to Government-Unique Standards, in DoD solicitations that include military or Government-unique specifications and standards.

    3. Revise section 211.201 to read as follows:
    211.201 Identification and availability of specifications.

    Follow the procedures at PGI 211.201 for obtaining specifications, standards, and data item descriptions from the DLA ASSIST database, including DoD adoption notices on voluntary consensus standards.

    [FR Doc. 2018-14039 Filed 6-28-18; 8:45 am] BILLING CODE 5000-06-P
    DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Parts 212, 219, and 252 [Docket DARS-2018-0035] RIN 0750-AJ21 Defense Federal Acquisition Regulation Supplement: Inapplicability of Certain Laws and Regulations to Commercial Items (DFARS Case 2017-D010) AGENCY:

    Defense Acquisition Regulations System, Department of Defense (DoD).

    ACTION:

    Proposed rule.

    SUMMARY:

    DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to implement a section of the National Defense Authorization Act for Fiscal Year 2017 that addresses the inapplicability of certain laws and regulations to the acquisition of commercial items, including commercially available off-the-shelf items.

    DATES:

    Comments on the proposed rule should be submitted in writing to the address shown below on or before August 28, 2018, to be considered in the formation of a final rule.

    ADDRESSES:

    Submit comments identified by DFARS Case 2017-D010, using any of the following methods:

    Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for sending comments.

    Email: [email protected] Include DFARS Case 2017-D010 in the subject line of the message.

    Fax: 571-372-6094.

    Mail: Defense Acquisition Regulations System, Attn: Ms. Amy G. Williams, OUSD (AT&L) DPAP/DARS, Room 3B941, 3060 Defense Pentagon, Washington, DC 20301-3060.

    Instructions: Search for “DFARS Case 2017-D010.” Select “Comment Now” and follow the instructions provided to submit a comment. All submissions received must include the agency name and docket number or Regulatory Information Number (RIN) for this rulemaking. Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided. To confirm receipt of your comment(s), please check www.regulations.gov, approximately two to three days after submission to verify posting (except allow 30 days for posting of comments submitted by mail).

    Docket: For access to the docket to read background documents or comments received, go to: http://www.regulations.gov.

    FOR FURTHER INFORMATION CONTACT:

    Ms. Amy G. Williams, telephone 571-372-6106.

    SUPPLEMENTARY INFORMATION: I. Background

    DoD is proposing to amend the DFARS to implement section 874 of the National Defense Authorization Act for Fiscal Year 2017. Section 874—

    • Amends 10 U.S.C. 2375, Relationship of commercial item provisions to other provisions of law, to provide that—

    ○ No contract for the acquisition of a commercial item, subcontract under a contract for the procurement of a commercial item, or contract for the procurement of a commercially available off-the-shelf (COTS) item shall be subject to any law properly listed in the Federal Acquisition Regulation (FAR) pursuant to 41 U.S.C. 1906 or 1907, respectively; and

    ○ The DFARS shall include lists of defense-unique provisions of law and contract clause requirements based on Governmentwide acquisition regulations, policies, or Executive orders not expressly authorized in law, that are inapplicable to—

    The acquisition of a commercial item;

    Subcontracts for commercial items under a contract for the procurement of commercial items; or

    Contracts for the procurement of a COTS item;

    • Provides that a covered provision of law or contract clause requirement is a provision of law or contract clause requirement that the Under Secretary of Defense for Acquisition, Technology, and Logistics determines sets forth policies, procedures, requirements, or restrictions for the procurement of property or services by the Federal Government, except for a provision of law or contract clause requirement that—

    ○ Provides for civil or criminal penalties;

    ○ Requires that certain articles be bought from American sources pursuant to 10 U.S.C. 2533a; or requires that strategic materials critical to national security be bought from American sources pursuant to 10 U.S.C. 2533b; or

    ○ Specifically refers to this section and provides that, notwithstanding this section, it shall be applicable to contracts for the procurement of commercial items.

    • Provides that a covered provision of law or contract clause requirement shall be included on the list unless the Under Secretary of Defense for Acquisition, Technology, and Logistics makes a written determination that such exemption would not be in the best interest of DoD.

    • Requires the Under Secretary of Defense for Acquisition, Technology, and Logistics to ensure that, to the maximum extent practicable—

    ○ The DFARS shall not require the inclusion of contract clauses in contracts for the procurement of commercial items (including COTS items), unless such clauses are required to implement provisions of law or Executive orders applicable to such contracts, or determined to be consistent with standard commercial practice; and

    ○ The flowdown of contract clauses to subcontracts under contracts for the procurement of commercial items (including COTS items) is prohibited unless such flowdown is required to implement provisions of law or Executive orders applicable to such subcontracts; and

    • Defines the term “subcontract” to exclude agreements entered into by a contractor for the supply of commodities that are intended for use in the performance of multiple contracts with the DoD and other parties, and are not identifiable to any particular contract.

    II. Discussion and Analysis

    10 U.S.C. 2375(b)(2) limits the required review of applicability of provisions of law and contract clauses to prime contracts for commercial items to those provisions of law and contract clauses enacted after January 1, 2015. Although the subsequent paragraphs (c) and (d) relating to applicability of provisions of law and contract clauses to subcontracts for commercial items and contracts for COTS items are in all other regards parallel, the date of January 1, 2015, is not repeated in the subsequent paragraphs. DoD has interpreted the date as equally applicable to all three paragraphs, because the three paragraphs are closely inter-related. Any law or clause that is inapplicable to a contract for commercial items is also inapplicable to a contract for COTS items (which are commercial items). The COTS list builds on the list of laws and clauses inapplicable to commercial items in general. Further, laws and clauses that are inapplicable to contracts for commercial items will also be inapplicable to subcontracts for commercial items, even though there may be a few additional laws or clauses that are just inapplicable at the subcontract level.

    Therefore, as the first step toward implementation of section 874 of the NDAA for FY 2017 in the DFARS, DoD identified all new DFARS and FAR provisions and clauses published as interim or final rules after January 1, 2015; determined whether these provisions and clauses were based on statute or Executive order, and reviewed their applicability to commercial items.

    A. Governmentwide Statutes

    Since the DFARS supplements the FAR, the lists of inapplicable statutes at FAR 12.503 through 12.505 are applicable to DoD. This rule proposes language at DFARS 212.503, 212.504, and 212.505, to emphasize that the DFARS lists of statutes are in addition to the FAR lists, not in place of them.

    B. Defense-Unique Statutes

    Although the following defense-unique statutes were all enacted prior to January 1, 2015, and are therefore not covered statutes as defined in section 874, they are the basis for DFARS provisions and clauses issued after January 1, 2015, and have therefore been reviewed.

    1. The Director of Defense Procurement and Acquisition Policy, acting under authority delegated by the Under Secretary of Defense for Acquisition, Technology, and Logistics, has determined that the following statutes apply to the acquisition of commercial items, except for the acquisition of COTS items. Note that services are not COTS items, so no determination is required to exclude applicability to COTS items when acquiring services and the clause prescription and flowdown paragraph of the clause do not specify exclusion of COTS items.

    a. Section 941 of the NDAA for FY 2013 and section 1632 of NDAA for FY 2015 (DFARS Case 2013-D018, Network Penetration Reporting and Contracting of Cloud Services (80 FR 51739 and 81 FR 72986); DFARS 252.204-7008, 252.204-7009, and 252.204-7012). This rule proposes to clarify that the flowdown requirement in paragraph (m) of the clause at DFARS 252.204-7012 excludes flowdown to COTS items. Although the final rule under DFARS case 2013-D018 stated the exclusion of applicability to COTS items for all provisions and clauses under the case and the clause prescriptions were amended, the corresponding amendment to paragraph (m) of the clause at DFARS 252.204-7012 did not explicitly exclude flowdown to COTS items. This statute has been added to the proposed list at DFARS 212.505.

    b. Section 862 of the NDAA for FY 2008 (DFARS Case 2015-D021, Defense Contractors Performing Private Security Functions (80 FR 81496 and 81 FR 42559); DFARS 252.225-7039). This statute was not added to the proposed list at DFARS 212.505 because it is for the acquisition of services.

    2. The Director of Defense Procurement and Acquisition Policy, acting under authority delegated by the Under Secretary of Defense for Acquisition, Technology, and Logistics, determined that section 818(c)(3) of the NDAA for FY 2012, as amended (DFARS Case 2014-D005, Detection and Avoidance of Counterfeit Parts—Further Implementation (80 FR 63735 and 81 FR 50635); DFARS 252.246-7008) applies to the acquisition of commercial items, including COTS items.

    3. The following two statutes are currently applied in the DFARS to the acquisition of commercial items, including COTS items. However, continued application to commercial items is dependent upon a determination by the Director of Defense Procurement and Acquisition Policy, acting under authority delegated by the Under Secretary of Defense for Acquisition and Sustainment, with regard to the applicability to commercial items:

    a. Section 1611 of the NDAA for FY 2014 (10 U.S.C. 2419) (DFARS Case 2014-D009, Advancing Small Business Growth (79 FR 65917 and 80 FR 30115); DFARS 252.219-7000). The provision at DFARS 252.219-7000, Advancing Small Business Growth, is prescribed at DFARS 219.309 for use in solicitations, including solicitations using FAR part 12 procedures for acquisition of commercial items, when the estimated annual value of the contract is expected to exceed—

    • The small business size standard, if expressed in dollars, for the North American Industry Classification System (NAICS) code assigned by the contracting officer; or

    • $70 million, if the small business size standard is expressed as number of employees for the NAICS code assigned by the contracting officer.

    The provision is also listed at DFARS 212.301(f)(vii) as applicable to the acquisition of commercial items. The provision is inapplicable to subcontracts. This provision does not impose any burden on offerors, but is intended only to advise small businesses that entering into a DoD contract may eventually cause such businesses to exceed the small business size standard.

    b. Section 8123 of the DoD Appropriations Act and the same provision in subsequent annual defense appropriations acts (DFARS Case 2015-D005, Acquisition of the American Flag (80 FR 10452 and 80 FR 51748); DFARS 252.225-7006). The clause at DFARS 252.225-7006, Acquisition of the American Flag, is prescribed at 225.7002-3 for use in solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items, that are for the acquisition of the American flag, with an estimated value that exceeds the simplified acquisition threshold, unless an exception at 225.7002-2 applies. The clause is also listed at 212.301(f)(x)(C) as applicable to acquisition of commercial items. The clause does not flow down to subcontracts. Since most, if not all, flags are commercial items, this statute would be without affect if not applied to commercial items. Furthermore, this is an appropriations act restriction, which specifically prohibits the expenditure of any funds appropriated under these acts, unless the flags to be acquired are manufactured in the United States (regardless of whether the flags are commercial items).

    C. FAR and DFARS Provisions and Clauses, Issued Since January 1, 2015, Not Expressly Authorized in Law

    1. The following DFARS and FAR provisions are not required for use in solicitations for the acquisition of commercial items, including COTS items. FAR 12.301(e) provides for discretionary use of provisions and clause not required for use solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items, when their use is consistent with the limitations contained in FAR 12.302. These provisions do not apply to subcontracts. Both provisions are proposed for addition to the proposed list at DFARS 212.370. DoD welcomes comments as to whether use of these provisions in solicitations for commercial items should be prohibited, or whether their use might be appropriate for discretionary use.

    a. 252.219-7010, Notification of Competition Limited to Eligible 8(a) Concerns—Partnership Agreement (DFARS Case 2015-D017, 80 FR 58669 and 81 FR 17045), is prescribed at DFARS 219.811-3 for use in lieu of the clause at FAR 52.219-18, Notification of Competition Limited to Eligible 8(a) Concerns, in competitive solicitations and contracts when the acquisition is accomplished using the procedures of FAR 19.805 and processed in accordance with the partnership agreement cited in DFARS 219.800. It is not listed at 212.301(f) as applicable to acquisitions using FAR part 12 procedures for the acquisition of commercial items.

    This rule proposes to modify the clause prescription to specifically exclude applicability to acquisitions using FAR part 12 procedures for the acquisition of commercial items.

    b. 52.204-22, Alternative Line Item Proposals (FAR Case 2013-014, 79 FR 45408 and 82 FR 4709), is prescribed at FAR 4.1008 for use in all solicitations. However, this provision is not prescribed for use in FAR part 12. In accordance with FAR 12.301(d), notwithstanding prescriptions contained elsewhere in the FAR, when acquiring commercial items, contracting officers are only required to use those provisions and clauses prescribed in FAR part 12. This rule proposes to modify the clause prescription to specifically exclude applicability to acquisitions using FAR part 12 procedures for the acquisition of commercial items.

    2. The following DFARS and FAR provisions and clause are applicable to the acquisition of commercial items, except for COTS items. In accordance with section 874, continued applicability to commercial items is dependent upon a determination by the Director of Defense Procurement and Acquisition Policy, acting under authority delegated by the Under Secretary of Defense for Acquisition, Technology, and Logistics, with regard to the applicability to commercial items:

    a. DFARS 252.239-7009, Representation of Use of Cloud Computing, and 252.239-7010, Cloud Computing Services (DFARS Case 2013-D018, 80 FR 51739, 80 FR 81472, and 81 FR 50635), are prescribed at DFARS 239.7604 for use in solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items, for information technology services and are also listed at DFARS 212.301(f)(xvi)(A) and (B) as applicable to acquisitions of commercial items. The clause also flows down to all subcontracts that involve or may involve cloud services, including subcontracts for commercial items. This provision and clause are not listed at proposed DFARS 212.371 because this provision and clause apply to the acquisition of services, which are not COTS items.

    DoD applies this provision and clause to the acquisition of commercial items, excluding COTS items, because the harm that could result from the loss or compromise of defense information is the same under a FAR part 12 contract as it would be under any other contract. Recent high-profile breaches of Federal information show the need to ensure that information security protections are clearly, effectively, and consistently addressed in contracts. Failure to apply this provision and clause to acquisition of cloud services may cause harm to the Government which could directly impact national security. The information collection requirement for this provision and clause is approved under OMB clearance 0704-0478, Safeguarding Covered Defense Information, Cyber Incident Reporting, and Cloud Computing, in the amount of 250,850 total annual burden hours, which also includes burden hours associated with Safeguarding and cyber incident reporting.

    b. FAR 52.204-21, Basic Safeguarding of Covered Contractor Information Systems (FAR Case 2011-020, 77 FR 51496 and 82 FR 4709), is prescribed at FAR 4.1903, for use when the contractor or a subcontractor at any tier may have Federal contract information residing in or transiting through the information system. FAR 12.301(d)(3) requires use in solicitations and contracts for commercial items (except for acquisitions of COTS items), as prescribed in FAR 4.1903. Paragraph (c) of FAR 52.204-21 requires flowdown to subcontracts, including subcontracts for the acquisition of commercial items, other than COTS items, in which the contractor may have Federal contract information residing in or transiting through its information system. Flowdown to subcontracts for commercial item, other than subcontracts for COTS items, is also required at FAR 52.244-6(c)(1)(iv), if flowdown is required in accordance with FAR 52.204-21(c).

    This clause requires only a basic level of safeguarding of contractor information systems reflective of actions any prudent business person would employ. The exclusion of COTS items was incorporated in the final rule in response to public comments. This clause does not impose any information collection burden on contractors.

    c. FAR 52.222-62, Paid Sick Leave Under Executive Order 13706 (FAR Case 2017-001, 81 FR 91627, interim rule), is prescribed at FAR 22.2110, for use in solicitations and contracts that include the clause 52.222-6, Construction Wage Rate Requirements, or 52.222-41, Service Contract Labor Standards, where work is to be performed, in whole or in part, in the United States. Use of the clause when using part 12 procedures for the acquisition of commercial items is provided at FAR 52.212-5(c)(9). The clause flows down to all subcontracts, regardless of dollar value, that are subject to the Service Contract Labor Standards statute or the Wage Rate Requirements (Construction) statute and are also to be performed in whole or in part in the United States. Flowdown to commercial subcontracts (excluding COTS items) is provided at FAR 52.212-5(e)(1)(xix) and 52.244-6(c).

    This rule implements Executive Order 13706, which does not exempt contracts for the acquisition of commercial items. The implementing regulations by the Department of Labor were issued on September 30, 2016 (81 FR 67598). The rule applies to contracts that are covered by the Service Contract Labor Standards statute or the Wage Rate Requirements (Construction) statute, and meet or exceed the thresholds specified in those statutes. However, since these statutes do not apply to contracts for acquisition of supplies, the rule does not cover acquisitions of COTS items.

    The Executive Order seeks to increase efficiency and cost savings in the work performed by parties who contract with the Government by ensuring that employees on those contracts can earn up to 7 days or more of paid sick leave annually. The Executive order was first implemented in Department of Labor regulations (81 FR 67598), which OIRA declared to be an economically significant rule and a major rule. Most of the costs associated with this rule are transfer costs from employers to employees. The information collection requirements associated with the Department of Labor final rule were cleared under OMB clearances 1235-0018, 1235-0021, 1235-0029. The FAR rule does not impose any additional burdens.

    3. The following DFARS and FAR provisions and clause are applicable to the acquisition of commercial items, including COTS items. In accordance with section 874, continued applicability to commercial items is dependent upon a determination by the Director of Defense Procurement and Acquisition Policy, acting under authority delegated by the Under Secretary of Defense for Acquisition, Technology, and Logistics, with regard to the applicability to commercial items:

    a. DFARS 252.213-7000, Notice to Prospective Suppliers on Use of Past Performance Information Retrieval System—Statistical Reporting in Past Performance Evaluation (DFARS Case 2014-D015, 80 FR 4848 and 80 FR 30117), is prescribed at DFARS 213.106-2-70, in competitive solicitations for supplies when using FAR part 13 simplified acquisition procedures, including competitive solicitations using FAR part 12 procedures for the acquisition of commercial item and acquisitions values at less than or equal to $1 million under the authority at FAR subpart 13.5 procedures. This provision is also listed at DFARS 212.301(f)(v) as applicable to solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items. There is no flowdown because this is a provision.

    DoD developed and deployed the Past Performance Information Retrieval System—Statistical Reporting (PPIRS- SR) module to fill the need for past performance data on lower dollar value contracts. This objective data on past performance will assist contracting officers in making better-informed best value award decisions on small dollar value acquisitions for supplies, while also eliminating the burden of collecting subjective past performance information on contractors for smaller dollar value contracts. This benefit is equally applicable, whether or not the items to be acquired are commercial. There is no information collection burden on offerors.

    b. DFARS 252.229-7014, Taxes—Foreign Contracts in Afghanistan, and 252.229-7015, Taxes—Foreign Contracts in Afghanistan (North Atlantic treaty Organization Status of Forces Agreement) (DFARS Case 2014-D003, 79 FR 35715 and 80 FR 81467), are prescribed at 229.402-70 (k) and (l), respectively.

    • DFARS 252.229-7014, Taxes—Foreign Contracts in Afghanistan, is for use in solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items, with performance in Afghanistan, unless the clause at 252.229-7015 is used.

    • DFARS 252.229-7015, Taxes—Foreign Contracts in Afghanistan (North Atlantic Treaty Organization Status of Forces Agreement), is for use instead of the clause at 252.229-7014, Taxes—Foreign Contracts in Afghanistan, in solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items, with performance in Afghanistan awarded on behalf of the North Atlantic Treaty Organization (NATO), which are governed by the NATO Status of Forces Agreement (SOFA), if approval from the Director, Defense Procurement and Acquisition Policy, Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics, has been obtained prior to each use.

    These clause are also listed at DFARS 212.301(f)(xiii) as applicable to solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items. Both clauses flow down to all subcontracts, including subcontracts for commercial items.

    The objective of these clauses is to exempt DoD contracts performed in Afghanistan from payment liability for Afghan taxes pursuant to the bilateral security agreement between Afghanistan and the United States and the North Atlantic Treaty Organization (NATO) Status of Forces Agreement (SOFA). DoD applies these two clauses to solicitations and contracts for the acquisition of commercial items, including COTS items, for contracts performed in Afghanistan. Not applying this guidance to contracts for the acquisition of commercial items, including COTS items, would result in DoD paying unnecessary taxes, reducing the funds available for pursuing the war effort in Afghanistan. These clauses do not impose any information collection burden on offerors or contractors.

    c. FAR 52.223-11, Ozone-Depleting Substances and High Global Warming Potential Hydrofluorocarbons; FAR 52.223-12, Maintenance, Service, Repair, or Disposal of Refrigeration Equipment and Air Conditioner; FAR 52.223-20, Aerosols; and FAR 52.223-21, Foams (FAR Case 2014-026, 80 FR 26883 and 81 FR 30429), are prescribed at FAR 23.804(a) for use as follows:

    (1) FAR 52.223-11, Ozone-Depleting Substances and High Global Warming Potential Hydrofluorocarbons, in solicitations and contracts for—

    (i) Refrigeration equipment (in product or service code (PSC) 4110);

    (ii) Air conditioning equipment (PSC 4120);

    (iii) Clean agent fire suppression systems/equipment (e.g., installed room flooding systems, portable fire extinguishers, aircraft/tactical vehicle fire/explosion suppression systems) (in PSC 4210);

    (iv) Bulk refrigerants and fire suppressants (in PSC 6830);

    (v) Solvents, dusters, freezing compounds, mold release agents, and any other miscellaneous chemical specialty that may contain ozone-depleting substances or high global warming potential hydrofluorocarbons (in PSC 6850);

    (vi) Corrosion prevention compounds, foam sealants, aerosol mold release agents, and any other preservative or sealing compound that may contain ozone-depleting substances or high global warming potential hydrofluorocarbons (in PSC 8030);

    (vii) Fluorocarbon lubricants (primarily aerosols) (in PSC 9150); and

    (viii) Any other manufactured end products that may contain or be manufactured with ozone-depleting substances.

    (2) FAR 52.223-12, Maintenance, Service, Repair, or Disposal of Refrigeration Equipment and Air Conditioners, in solicitations and contracts that include the maintenance, service, repair, or disposal of—

    (i) Refrigeration equipment, such as refrigerators, chillers, or freezers; or

    (ii) Air conditioners, including air conditioning systems in motor vehicles.

    (3) FAR 52.223-20, Aerosols, in solicitations and contracts—

    (i) For products that may contain high global warming potential hydrofluorocarbons as a propellant, or as a solvent; or

    (ii) That involve maintenance or repair of electronic or mechanical devices.

    (4) FAR 52.223-21, Foams, in solicitations and contracts for—

    (i) Products that may contain high global warming potential hydrofluorocarbons or refrigerant blends containing hydrofluorocarbons as a foam blowing agent, such as building foam insulation or appliance foam insulation; or

    (ii) Construction of buildings or facilities. A majority of the acquisitions involving high GWP HFCs involve the acquisition of commercial items. Applicability of the requirements to commercial items is necessary to be effective. The information collection requirements associated with this case are covered under OMB clearance 9000-0191, High Global Warming Potential Hydrofluorocarbons, in the amount of 25,376 total annual burden hours.

    d. FAR 52.223-22, Public Disclosure of Greenhouse Gas Emissions and Reduction Goals—Representation (FAR Case 2015-024, 81 FR 33192 and 81 FR 83092), is prescribed for use at FAR 23.804(b). The provision at 52.223-22, Public Disclosure of Greenhouse Gas Emissions and Reduction Goals—Representation, is required only when 52.204-7, System for Award Management, is included in the solicitation (see 52.204-8, Annual Representations and Certifications).

    The information obtained from these representations will assist agencies in developing strategies to engage with offerors to reduce supply chain emissions, as directed in Executive Order 13693, Planning for Federal Sustainability in the Next Decade. In response to the proposed rule, one respondent remarked that the rule should not exclude commercial item or COTS item vendors from the disclosure requirements, because then the benefits of the rule would be “sub-optimal.”

    The Federal Acquisition Regulatory Council determined that the rule would apply to acquisitions of commercial items, including commercially available off-the-shelf (COTS) items, if the contractor has been awarded contracts of more than $7.5 million in goods and services during the prior Government fiscal year. The FAR Council considered (i) The benefits of the policy in furthering Administration goals; (ii) the extent to which the benefits of the policy would be reduced if exemptions are provided; and (iii) the burden on contractors if the policy is applied to these categories of spend. By developing an inventory of contractor greenhouse gas (GHG) management practices, the Government can more fully understand the current state of activity by companies doing business with the Government and work with contractors over time to develop appropriate strategies to reduce supply chain emissions. GHG reporting is becoming increasingly commonplace in the commercial marketplace. If an exclusion were provided to sellers of commercial items and COTS, a large number of contractors that sell in both the commercial and Federal marketplace would be exempted and the rule would fail at providing the type of information and insight that is needed to help agencies assess supplier GHG management practices. With respect to the third factor, the FAR Council sought to minimize burden associated with the disclosure requirement. Specifically, the disclosure will apply only to major Federal suppliers who have been awarded contracts totaling more than $7.5 million in goods and services in the prior Government fiscal year. Based on fiscal year (FY) 2015 data, the FAR Council estimated this requirement would cover approximately 5,500 unique entities, including about 2,700 small businesses. This represents approximately 3.5 percent of total entities that did business with the Federal Government in FY 2015, and 2.6 percent of small businesses. The FAR Council projected a minimal paperwork burden associated with the disclosure, approximately .25 hours per response for annual reporting for the 5,500 contractor, or 1,375 hours (OMB clearance 9000-0194, Public Disclosure of Greenhouse Gas Emissions and Reduction Goals). Accordingly, the FAR Council determined that it would not be in the best interest of the Government to exclude application of the rule for acquisitions, or sellers, of commercial items or COTS.

    D. Limitation on Inclusion of Contract Clauses in Contracts for the Procurement of Commercial Items

    Section 874(b) requires that the Under Secretary of Defense for Acquisition, Technology, and Logistics (now Under Secretary of Defense for Acquisition and Sustainment) shall ensure that the DFARS does not require inclusion of contract clauses in contracts for the procurement of commercial items or contracts for the procurement of COTS items, unless those clauses are required to implement provisions of law or executive orders applicable to such contracts, or determined to be consistent with standard commercial practice. This requirement is essentially the same as the requirement at 41 U.S.C. 3307, which is implemented at FAR 12.301(a). Since the DFARS supplements the FAR, FAR 12.301(a) is already applicable to DoD.

    E. Prohibition of Flowdown of Certain Contract Clauses to Subcontracts Under Contracts for the Procurement of Commercial Items, Including COTS Items

    Currently, FAR clauses 52.212-5, 52.244-6, and DFARS clause 52.244-7000, require flowdown of certain clauses to subcontracts for commercial items, but allow the contractor to flow down “a minimal number of additional clauses necessary to satisfy its contractual obligations.” One of the respondents to the proposed rule under DFARS Case 2011-D056, Solicitation Provisions and Contract Clauses for the Acquisition of Commercial Items, (Proprietary Industries Association) commented back in May of 2012 that this allowance of a minimal number of necessary clauses was being abused by contractors, who were overloading commercial item subcontracts “with whatever flowdown clauses they felt were even remotely deemed necessary, regardless of any harmful consequences to the Governments commercial item acquisition process.” We now have a statutory prohibition on such discretionary overloading of commercial item subcontracts (although still providing “to the maximum extent practicable). This rule proposes that any discretion to impose flowdown of clauses that are not based on statute or Executive order shall rest with the Government, not with the contractors. They will be prohibited from flowing down FAR or DFARS clauses to commercial items, unless flow down is specifically required in the FAR or DFARS. A contractor can, of course, still impose its own requirements on subcontractors, but cannot just flow down FAR and DFARS clauses as a whole. DoD invites specific comment on the extent to which FAR and DFARS clauses are flowed down to subcontracts on an optional basis and the expected burden reduction that may result from this prohibition.

    F. Definition of “Subcontract”

    10 U.S.C. 2375(c)(3) provides a definition of “subcontract” that includes transfers of commercial items between divisions, subsidiaries, or affiliates, of a contractor or subcontractor, but excludes supplier agreements entered into by a contractor for the supply of commodities that are intended for use in the performance of multiple contracts with DoD and other parties and are not identifiable to any particular contract. This definition is similar to the definition of “subcontract” at FAR 44.101, which states that the subcontract is “entered into by a subcontractor to furnish supplies or services for performance of a prime contract or subcontract,” but is more explicit in the exclusion of supplier agreements that are not associated with a single contract. This definition has been added to the clause at DFARS 252.244-7000 and each DFARS clause that requires flowdown to subcontracts for the acquisition of commercial items, with specified applicability to the flowdown paragraph of the clause. In general, the clauses now clearly exclude flowdown to supplier agreements that are not identifiable to any particular contract.

    However, DoD has determined that the provisions of section 818 of Public Law 112-81 for the prohibitions against counterfeit and suspect counterfeit electronic items and the requirements for systems to detect such parts must flow down to all levels of the supply chain without exception for any contractual instrument that could be used to acquire electronic parts. Therefore, with regard to the DFARS clauses 252.246-7007, Contractor Counterfeit Electronic Part Detection and Avoidance System, and 252.246-7008, Sources of Electronic Parts, the flowdown has been modified to include flowdown to contractual instruments other than subcontracts (such supplier agreements), because electronic commodity types are often acquired from suppliers through supplier agreements that do not meet the new definition of “subcontract.” Exempting acquisitions of such electronic parts from the DFARS 252.246-7007 and 252.246-7008 flowdown requirements would create unacceptable risks of introducing counterfeit or suspect counterfeit electronic parts into the Defense supply chain. Counterfeit electronic parts, regardless of dollar value, can seriously disrupt the DoD supply chain, cause critical failure of fielded systems, such as aircraft, ships, and other weapon systems, and endanger troops' lives.

    III. Applicability to Contracts At or Below the Simplified Acquisition Threshold (SAT) and for Commercial Items, Including Commercially Available Off-the-Shelf (COTS) Items

    This rule reviews the current applicability of defense-unique statute and Governmentwide provisions and clause, issued since January 1, 2015, not expressly authorized in law. DoD solicits public comments, especially with regard to the applicability of the two defense-unique statutes at section II.B.3 of this preamble and the FAR and DFARS provisions and clauses at section II.C.2. and II.C.3., for which the Director of Defense Procurement and Acquisition Policy is considering whether to sign a determination and finding in support of continued applicability to commercial items, or whether all commercial items or just COTS items should be exempt from a particular requirement. Please provide specific rationale for any recommendations.

    IV. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all 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). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

    V. Executive Order 13771

    This rule is not an E.O. 13771, Reducing Regulation and Controlling Regulatory Costs, regulatory action, because this rule is not significant under E.O. 12866.

    VI. Regulatory Flexibility Act

    DoD does not expect this proposed rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. However, an initial regulatory flexibility analysis has been performed and is summarized as follows:

    This proposed rule is required in order to implement section 874 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017, which amended 10 U.S.C. 2375 and required certain changes to the Defense Federal Acquisition Regulation Supplement (DFARS).

    The objective of the rule is to reduce any unnecessary burdens on contractors and subcontractors that were awarded DoD contracts or subcontracts for the acquisition of commercial items, including commercially available off-the-shelf items. The legal basis for the rule is section 874 of the NDAA for FY 2017.

    There were 29,833 unique entities awarded DoD contracts exceeding the micro-purchase threshold and using FAR part 12 procedures in FY 2016, of which 21,857 were unique small entities. DoD estimates there may be at least twice that many small entities receiving subcontracts for commercial items. Any reductions in the applicability of provisions and clauses to contracts and subcontracts for the acquisition of commercial items may be beneficial to these small entities.

    There are no projected reporting, recordkeeping, or other compliance requirements associated with this rule. The final rule may result in some reductions of reporting or recordkeeping requirements, currently approved under—

    • OMB Control Number 0704-0478, Safeguarding Covered Defense Information, Cyber Incident Reporting, and Cloud Computing.

    • OMB Control Number 9000-0191, High Global Warming Potential Hydrofluorocarbons.

    • OMB Control Number 9000-0194, Public Disclosure of Greenhouse Gas Emissions and Reduction Goals.

    The rule does not duplicate, overlap, or conflict with any other Federal rules.

    Any impacts of this rule will have a positive impact on small business entities.

    DoD invites comments from small business concerns and other interested parties on the expected impact of this rule on small entities.

    DoD will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (DFARS Case 2017-D010), in correspondence.

    VII. Paperwork Reduction Act

    The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35). However, if some of the requirements are made inapplicable to the acquisition of all commercial items, or just COTS items, then the estimated burden of the following information collection requirements could be reduced:

    • OMB Control Number 0704-0478, Safeguarding Covered Defense Information, Cyber Incident Reporting, and Cloud Computing.

    • OMB Control Number 9000-0191, High Global Warming Potential Hydrofluorocarbons.

    • OMB Control Number 9000-0194, Public Disclosure of Greenhouse Gas Emissions and Reduction Goals.

    List of Subjects in 48 CFR Parts 212, 219, and 252

    Government procurement.

    Amy G. Williams, Deputy, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 212, 219, and 252 are proposed to be amended as follows:

    1. The authority citation for parts 212, 219, and 252 continues to read as follows: Authority:

    41 U.S.C. 1303 and 48 chapter 1.

    PART 212—ACQUISITION OF COMMERCIAL ITEMS 2. Amend section 212.001 by adding the definition of “Subcontract” in alphabetical order to read as follows:
    212.001 Definitions.

    Subcontract means any contract, as defined in FAR subpart 2.1, entered into by a subcontractor to furnish supplies or services for performance of a prime contract or a subcontract. The term—

    (1) Includes a transfer of commercial items between divisions, subsidiaries, or affiliates of a contractors or subcontractor; and

    (2) Does not include agreements entered into by a contractor for the supply of commodities that are intended for use in the performance of multiple contracts with the Department of Defense and other parties and are not identifiable to any pa