Federal Register Vol. 83, No.19,

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to British Aerospace Regional Aircraft Models HP.137 Jetstream Mk.1, Jetstream Series 200, Jetstream Series 3101, and Jetstream Model 3201 airplanes. That NPRM was published in the Federal Register on October 24, 2017 (82 FR 49144), and proposed to supersede AD 2007-08-06, Amendment 39-15023 (72 FR 18565; April 13, 2007) (“AD 2007-08-06”).

Since we issued AD 2007-08-06, new part numbers have been introduced into service that allow for a change in the life limits requirements in the airworthiness limitations.

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

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

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

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

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

We reviewed British Aerospace Jetstream Series 3100 & 3200 Service Bulletin 32-JA981042, Revision No. 9, dated July 11, 2017. The service information describes airworthiness limitations for landing gear components and procedures for replacement of those components as necessary. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section of the AD.

We estimate that this AD will affect 26 products of U.S. registry. We also estimate that it would take about 2 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour.

Based on these figures, we estimate the cost of this AD on U.S. operators to be $4,420, or $170 per product.

In addition, we estimate that any necessary follow-on actions would take about 6 work-hours and require parts costing $5,000, for a cost of $5,510 per product. We have no way of determining the number of products that may need these actions.

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

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

This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to small airplanes, gliders, balloons, airships, domestic business jet transport airplanes, and associated appliances to the Director of the Policy and Innovation Division.

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

For the reasons discussed above, I certify this AD:

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

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

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

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

You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2017-0993; or in person at Docket Operations between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for Docket Operations (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

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

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Bombardier, Inc., Model DHC-8-400 series airplanes. The NPRM published in the Federal Register on June 21, 2017 (82 FR 28269) (“the NPRM”). The NPRM was prompted by reports that operation of fuselage doors was interrupted due to corrosion in certain door roller bearings. The NPRM proposed to require a one-time detailed inspection of the bearings for corrosion, and replacement if necessary. We are issuing this AD to detect and correct bearing corrosion and prevent door operation interruptions that could inhibit safe evacuation of the airplane in an emergency.

Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF-2016-18, dated June 6, 2016 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Bombardier, Inc., Model DHC-8-400 series airplanes. The MCAI states:

You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2017-0621.

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM and the FAA's response to each comment. The Air Line Pilots Association, International (ALPA) supported the NPRM.

Horizon Air requested that we change the language in paragraph (g) of the proposed AD to exclude the “Job Set-Up” and “Close Out” sections of the Accomplishment Instructions, because accomplishing those sections does not correct the unsafe condition, and requiring them restricts an operator's ability to perform other maintenance in conjunction with the requirements of the AD. Horizon Air requested that the final rule mandate only paragraph 3.B., “Procedure,” of the Accomplishment Instructions of Bombardier Service Bulletin 84-52-88, dated April 14, 2016.

We agree with the commenter's request to exclude the “Job Set-up” and “Close Out” sections of the Accomplishment Instructions of Bombardier Service Bulletin 84-52-88, dated April 14, 2016, because they are not required to address the unsafe condition identified in this AD. We have revised paragraph (g) of this AD to require only accomplishment of paragraph 3.B., “Procedure,” of the Accomplishment Instructions of Bombardier Service Bulletin 84-52-88, dated April 14, 2016.

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

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

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

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

Bombardier has issued Service Bulletin 84-52-88, dated April 14, 2016. This service information describes procedures for identification of corrosion in fuselage door bearings, replacement if necessary, and CIC application. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

We estimate that this AD affects 143 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

We estimate the following costs to do any necessary replacements that would be required based on the results of the inspection. We have no way of determining the number of aircraft that might need this replacement:

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

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

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

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

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

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

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

3. Will not affect intrastate aviation in Alaska; and

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

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

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to remove AD 2017-07-02, Amendment 39-18840 (82 FR 15120, March 27, 2017) and add a new AD. AD 2017-07-02 applied to Sikorsky Model 269D and Model 269D Configuration A helicopters with a KAflex engine side drive shaft part number (P/N) SKCP2738-7 and KAflex pulley side drive shaft P/N SKCP2738-5 installed. AD 2017-07-02 required reducing the life limit of the drive shafts and performing several inspections of the drive shafts within 25 hours time-in-service (TIS). AD 2017-07-02 also specified replacing the drive shaft assemblies as an optional terminating action for the requirements of the AD. AD 2017-07-02 was prompted by four incidents involving failure of the engine side drive shaft. The actions required by AD 2017-07-02 were intended to prevent failure of the drive shaft, loss of rotor drive, and subsequent loss of control of the helicopter.

The NPRM published in the Federal Register on September 22, 2017 (82 FR 44353) to provide the public an opportunity to comment on proposed requirements with longer intervals. The NPRM proposed to retain the requirements of AD 2017-07-02 and repeat some of the inspections every 100 hours TIS or 400 hours TIS. Repeating these inspections is necessary to detect and prevent the unsafe condition.

We gave the public the opportunity to participate in developing this AD, but we did not receive any comments on the NPRM.

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

We reviewed Appendix B to Sikorsky S-330 Model 269D Helicopter Basic Handbook of Maintenance Instructions No. CSP-D-2, dated February 1, 1993, and revised October 15, 2014; and Appendix B to Sikorsky S-333 Model 269D Config. “A” Helicopter Basic Handbook of Maintenance Instructions No. CSP-D-9, dated July 20, 2001, and revised October 15, 2014. This service information specifies repetitive inspection procedures, overhaul and retirement schedules, and weight and balance procedures. The Airworthiness Limitations section, which is included in this service information, contains the life limits for drive shaft assembly P/Ns SKCP2738-5 and SKCP2738-7.

We also reviewed Sikorsky 269D Helicopter Alert Service Bulletin DB-052, Basic Issue, dated January 16, 2014, for Sikorsky Model 269D and Model 269D Configuration A helicopters. This service information distributes the service life reduction information and implements a new 1,200-hour overhaul inspection for drive shaft assembly P/Ns SKCP2738-3, SKCP2738-5, and SKCP2738-7.

The Sikorsky service information specifies a drive shaft assembly service life of 3,000 hours TIS with a 1,200 hour overhaul inspection for Model 269D Configuration A helicopters, while this AD specifies a service life of 1,200 hours TIS.

The Sikorsky service information specifies different inspection procedures if there is spline engagement interference or resistance while inspecting the drive shaft alignment. This AD specifies replacing both the engine side and pulley side drive shafts if there is any spline engagement interference or resistance.

The Sikorsky service information specifies inspecting the working fastener condition without any specific succeeding action regarding the inspection. This AD specifies replacing both the engine side and pulley side drive shafts if there is any joint movement.

The Sikorsky service information specifies returning the drive shaft assembly to Sikorsky if there is fretting dust or red metallic residue at a joint. This AD specifies replacing both the engine side and pulley side drive shafts if there is any fretting corrosion.

We estimate that this AD will affect 18 helicopters of U.S. Registry. We estimate that operators may incur the following costs in order to comply with this AD.

Removing the engine side and pulley side drive shafts that have reached the new life limit will take about 4 work-hours for a cost of $340 per helicopter. Inspecting the lower pulley to engine alignment using the belt alignment tool will take about 0.5 work-hour for an estimated cost of $43 per helicopter and $774 for the U.S. fleet per inspection cycle. Adjusting the engine elevation alignment will take about 0.5 work-hour for an estimated cost of $43 per helicopter. Inspecting the drive shaft alignment by checking spline engagement will take about 1 work-hour for a cost of $85 per helicopter and $1,530 for the U.S. fleet per inspection cycle. Inspecting the drive shafts for damage will take about 1 work-hour for an estimated cost of $85 per helicopter and $1,530 for the U.S. fleet per inspection cycle. Inspecting the joints will take about 1 work-hour for an estimated cost of $85 per helicopter and $1,530 for the U.S. fleet per inspection cycle. Replacing the engine side and pulley side drive shafts, if required, will take about 8 work-hours and parts will cost about $20,000, for an estimated cost of $20,680 per helicopter.

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

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

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

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

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

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

(3) Will not affect intrastate aviation in Alaska to the extent that a regulatory distinction is required, and

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

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

Section 701 of the Bipartisan Budget Act of 2015, Public Law 114-74 (Nov. 2, 2015) (“BBA”), 28 U.S.C. 2461 note, substantially revised the prior provisions of the Federal Civil Monetary Penalties Inflation Adjustment Act of 1990, Public Law 101-410 (the “Inflation Adjustment Act”), and substituted a different statutory formula for calculating inflation adjustments on an annual basis.

In accordance with the provisions of the BBA, on June 30, 2016 (81 FR 42491), the Department of Justice published an interim rule to adjust for inflation the civil monetary penalties assessed or enforced by components of the Department after August 1, 2016, with respect to violations occurring after November 2, 2015, the date of enactment of the BBA. Readers may refer to the Supplementary Information (also known as the preamble) of the Department's 2016 interim rule for additional background information regarding the statutory authority for adjustments of civil monetary penalty amounts to take account of inflation and the Department's past implementation of inflation adjustments.

The BBA also provides for agencies to adjust their civil penalties on January 15 of each year to account for inflation during the preceding year, rounded to the nearest dollar. Accordingly, on February 3, 2017 (82 FR 9131), the Department published a final rule to adjust for inflation the civil monetary penalties assessed or enforced by components of the Department after that date, with respect to violations occurring after November 2, 2015.

As required, the Department is publishing this final rule to adjust the civil penalties that were most recently adjusted as of February 3, 2017. Under the statutory formula, the adjustments made by this rule are based on the Bureau of Labor Statistics' Consumer Price Index for October 2017. The OMB Memorandum for the Heads of Executive Departments and Agencies M-18-03 (Dec. 15, 2017), https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.pdf (last visited Jan. 1, 2018), instructs that the applicable inflation factor for this adjustment is 1.02041. Accordingly, this rule adjusts the civil penalty amounts in 28 CFR 85.5 by applying this inflation factor mechanically to each of the civil penalty amounts listed (rounded to the nearest dollar).

Example:

• In 2016, the Program Fraud Civil Remedies Act penalty was increased to $10,781 in accordance with the adjustment requirements of the BBA.

• For 2017, where the applicable inflation factor was 1.01636, the existing penalty of $10,781 was multiplied by 1.01636 and revised to $10,957 (rounded to the nearest dollar).

• For this final rule in 2018, where the applicable inflation factor is 1.02041, the existing penalty of $10,957 is multiplied by 1.02041 and revised to $11,181 (rounded to the nearest dollar).

This rule adjusts for inflation civil monetary penalties within the jurisdiction of the Department of Justice for purposes of the Inflation Adjustment Act, as amended. Other agencies are responsible for the inflation adjustments of certain other civil monetary penalties that the Department's litigating components bring suit to collect. The reader should consult the regulations of those other agencies for inflation adjustments to those penalties.

Under this rule, the adjusted civil penalty amounts are applicable only to civil penalties assessed after January 29, 2018, with respect to violations occurring after November 2, 2015, the date of enactment of the BBA.

The penalty amounts set forth in the existing table in 28 CFR 85.5 are applicable to civil penalties assessed after August 1, 2016, and on or before the effective date of this rule, with respect to violations occurring after November 2, 2015. Civil penalties for violations occurring on or before November 2, 2015, and assessments made on or before August 1, 2016, will continue to be subject to the civil monetary penalty amounts set forth in the Department's regulations in 28 CFR parts 20, 22, 36, 68, 71, 76, and 85 as such regulations were in effect prior to August 1, 2016 (or as set forth by statute if the amount had not yet been adjusted by regulation prior to August 1, 2016).

The BBA provides that, for each annual adjustment made after the initial adjustments of civil penalties in 2016, the head of an agency shall adjust the civil monetary penalties each year notwithstanding 5 U.S.C. 553. Accordingly, this rule is being issued as a final rule without prior notice and public comment, and without a delayed effective date.

Only those entities that are determined to have violated Federal law and regulations would be affected by the increase in the civil penalty amounts made by this rule. A Regulatory Flexibility Act analysis is not required for this rule because publication of a notice of proposed rulemaking was not required. See 5 U.S.C. 603(a).

This final rule has been drafted in accordance with Executive Order 12866, “Regulatory Planning and Review,” section 1(b), The Principles of Regulation, and in accordance with Executive Order 13563, “Improving Regulation and Regulatory Review,” section 1, General Principles of Regulation. Executive Orders 12866 and 13563 direct agencies, in certain circumstances, 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).

The Department of Justice has determined that this rule is not a “significant regulatory action” under Executive Order 12866, “Regulatory Planning and Review,” section 3(f), and, accordingly, this rule has not been reviewed by the Office of Management and Budget. This final rule implements the BBA by making an across-the-board adjustment of the civil penalty amounts in 28 CFR 85.5 to account for inflation since the adoption of the Department's final rule published on February 3, 2017.

This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.

This regulation meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988.

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

This rule is not a major rule as defined by the Congressional Review Act, 5 U.S.C. 804. It will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.

Accordingly, for the reasons set forth in the preamble, chapter I of Title 28 of the Code of Federal Regulations is amended as follows:

A. Background: Kentucky Regulatory Program: Section 503(a) of the Act permits a State to assume primacy for the regulation of surface coal mining and reclamation operations on non-Federal and non-Indian lands within its borders by demonstrating that its program includes, among other things, State laws and regulations that govern surface coal mining and reclamation operations in accordance with the Act and consistent with the Federal regulations. See 30 U.S.C. 1253(a)(1) and (7). On the basis of these criteria, the Secretary of the Interior conditionally approved the Kentucky program effective May 18, 1982. You can find background information on the Kentucky program, including the Secretary's findings, the disposition of comments, and conditions of approval of the Kentucky program in the May 18, 1982, Federal Register (47 FR 21404). You can also find later actions concerning Kentucky's program and program amendments at 30 CFR 917.11, 917.12, 917.13, 917.15, 917.16, and 917.17.

B. Background: Kentucky Bonding Program: The following is a description of the bonding program implemented by Kentucky and approved by OSMRE in 1986. Permittees are required to furnish a performance bond that covers the area of land upon which the operator will initiate and conduct surface coal mining and reclamation operations. The amount of the bond should be sufficient to assure completion of the reclamation plan. Kentucky's program included two options to post bond: (1) Post a full-cost bonding (performance bond covering the entire cost of reclamation); or (2) participate in a voluntary bond pool (VBP) and post a reduced permit-specific performance bond. The VBP, an alternative bonding system (ABS), was limited to qualified applicants and required membership fees and production fees that were used to supplement the reduced permit-specific performance bonds posted for surface mining operations. Generally, the second option was used by smaller operators that would otherwise have difficulty posting a full-cost bond due to limited financial resources.

1. Permit-Specific Bonds for Non-VBP Members: If an applicant/permittee elected not to participate or did not qualify to become a member of the VBP, the permittee was required to submit an adequate “full-cost” bond using a basic bond rate of $2500/acre to which several site factors (difficulty of mining, geologic/hydrologic concerns, permanent structures, etc.) were added as additional rates per acre if necessary. Over 90% of Kentucky permits were not part of the VBP.

2. Alternative Bonding System: In lieu of requiring all permittees to submit permit-specific performance bonds covering the full cost of permit-specific reclamation for coal mining operations, we approved a request from Kentucky to implement an ABS as provided for in 30 CFR 800.11(e). The requirements of § 800.11(e) provide that an alternative system to the permit-specific bond requirements could be authorized if the following two conditions are met: (1) The ABS would assure sufficient money is available to complete the reclamation plan for any areas which may be in default at any time and (2) the ABS provides a substantial economic incentive for the permittee to comply with all reclamation provisions. Kentucky's ABS created the VBP. We announced approval of Kentucky's ABS in the July 18, 1986, Federal Register (51 FR 26002).

a. ABS—Voluntary Bond Pool Fund Membership: Participation in the Kentucky bond pool was voluntary, limited to qualified participants, and required application for membership. Bond pool members, herein referred to as VBP members, were permitted to post a performance bond to cover the costs of reclamation under the Kentucky program that was less than the estimated full cost of reclamation if the member qualified for participation in the bond pool and paid the required fees to the VBP's supplemental fund. The VBP fund would then be used to supplement the reduced operator bond in the event of operator default on reclamation. Acceptance into the VBP was based on the applicant's financial standing and reclamation compliance record.

Applicants for membership in the VBP qualified for an “A,” “B,” or “C” rating, based on length of time the applicant had held a permit under the same permittee name and the type of compliance rating, “excellent” or “acceptable,” the permittee had exhibited. The rating method also considered such things as number and seriousness of violations for which the applicant had been cited, applicant's abatement of violations, timely payment of penalties, and the applicant's bonding experiences. Other membership restrictions applied based on ownership and control by, of, or with the applicant.

Membership fees and tonnage fees were collected from VBP members and placed in an interest-bearing account. The fees were used for the following purposes: (1) To reclaim permit areas covered by the fund in the event of bond forfeiture (after permit-specific bonds were used); (2) to cover administrative costs of the fund; (3) to fund audits and actuarial studies required for the fund; and (4) to cover operating and legal expenses of the bond pool commission. Less than 10% of Kentucky permits were in the VBP.

b. ABS—Voluntary Bond Pool Commission: Kentucky created a voluntary bond pool commission consisting of seven members that was responsible for: Reviewing membership applications and ratings; notifying members of the tonnage fee required; revoking or reinstating membership; employing a certified public accountant to audit the VBP fund; authorizing necessary expenditures from the fund; and reporting yearly to the governor on the financial status of the fund. The VBP fund was administered by the Natural Resources and Environmental Protection Cabinet, now known as the Kentucky Energy and Environment Cabinet (the cabinet).

c. ABS—Permit-Specific Performance Bond for VBP Members: VBP members were required to provide reduced permit-specific bond amounts as follows: For each acre or fraction thereof in the proposed permit area, a basic bond rate of $500/acre was required for “A” rated members; $1,500/acre for “B” rated members; and $2,000/acre for “C” rated members. Other site factors (for difficulty of mining, geologic/hydrologic concerns, permanent structures, etc.) were added as additional rates/acre to the basic bond amount to determine the final bond amount. For each acre of prime farmland, $1,500 additional bond was required. A permit would not be issued to a VBP member until the permit-specific bond was posted.

d. ABS—Membership Fees and Tonnage Fees: Membership fees and production fees (per ton) were paid to the fund by VBP members. Membership fees were based on ratings as follows: $1,000 for A-rated members, $2,000 for B-rated members, and $2,500 for C-rated members. Tonnage fees were based on the amount of coal produced as follows: $.08 cents per ton of coal extracted by surface mining and $.01 cent per ton of coal extracted by underground mining. If the VBP fund reached $7 million, VBP members who had made 36 or more monthly payments into the VBP fund were notified that tonnage fees would be suspended. Tonnage fees were reinstated when the VBP fund fell below $5 million. These minimum and maximum dollar numbers could be raised under certain circumstances.

A review conducted by OSMRE and Kentucky resulted in a report entitled “National Priority Oversight Evaluation of Adequacy of Kentucky Reclamation Performance Bond Amounts dated January 4, 2011.” The review concluded that reclamation performance bonds in Kentucky were not always sufficient to complete the reclamation required in the approved permit. Bond forfeiture studies determined that a majority of forfeited permits did not always have sufficient bond to complete the reclamation to permanent program standards. Consequently, on May 1, 2012, in accordance with 30 CFR 733.12(b), we sent a letter to the cabinet (referred to as a 733 Notice) stating that we had reason to believe that Kentucky was not implementing, administering, enforcing, and maintaining the reclamation bond provisions of its approved program in a manner that ensured the amount of the performance bond for each surface coal mining and reclamation operation was “sufficient to assure the completion of the reclamation plan if the work had to be performed by the regulatory authority in the event of forfeiture,” as required by section 509(a) of SMCRA. As stated in the letter, our review indicated that from 2008 to 2011, bond forfeiture proceeds were insufficient to complete the approved reclamation plan for 51 of the 61 permits for which bond were forfeited in Kentucky. As a result, we required Kentucky to take immediate and long-term steps to ensure bond amounts are adequate to complete reclamation in the event of forfeiture.

Kentucky responded to the 733 Notice by taking action and sending us statutory and regulatory provisions on three different occasions. Kentucky sent us information on September 28, 2012, (Administrative Record No. KY-2000-01); July 5, 2013, (Administrative Record No. KY-2000-02); and December 3, 2013, (Administrative Record No. KY-2000-03). We announced receipt of the September 28, 2012, submission on February 20, 2013, in the Federal Register (78 FR 11796), (Administrative Record No. KY-2000-01d). We combined that submission with the July 5, 2013, and December 3, 2013, submissions and announced them collectively in the Federal Register on March 26, 2015, (Administrative Record No. KY-2000-04b). Public comments were received but no hearing was requested.

Emergency Kentucky Administrative Regulations (KARs) were submitted by Kentucky in 2012 that immediately increased minimum bond rates and effected other changes. The Governor signed House bill 66 (H.B. 66) on March 22, 2013, which provided substantive changes to Kentucky's bonding program. H.B. 66 established a bonding program that provides, among other things, creation of a new land reclamation bond-pool for members; creation of a commission to oversee the pool; changes regarding permit-specific bonds; transition provisions for members and assets of the old bond pool; and clarification that the pool shall not be used for long-term treatment of substandard water discharges and subsidence. The Kentucky Revised Statutes (KRSs), which codify the legislative provisions of H.B. 66, and the permanent KARs to administer the provisions, were later submitted.

This amendment includes: 7 emergency regulations; 11 repealed KRSs related to the old bond pool (VBP); 8 new KRSs; 3 amended KRSs; 3 repealed permanent KARs; 4 new permanent KARs; and 4 amended KARs.

Through the action of the Governor and the legislative action by the Assembly, Kentucky changed the bonding program in the following manner by: (1) Increasing bonding rates for ABS permit-specific bonds by approximately 60%; (2) requiring all permittees to participate in the Kentucky Reclamation Guaranty Fund (KRGF) at the time of conversion, unless they opt-out; (3) eliminating the classification standards and associated fees for bond pool members that were used under the old system; (4) establishing new membership and production fees; (5) requiring the Kentucky Reclamation Guaranty Fund Commission (KRGFC) to make recommendations to the cabinet regarding the KRGF's solvency; (6) increasing the supplemental assurance amounts for KRGF members; (7) requiring actuarial reviews annually for three years, then bi-annually instead of every three years as previously required; (8) changing the manner in which bonds are released for old VBP members; (9) requiring bond to be posted for the treatment of long-term treatment pollutional discharges for estimated costs covering 20 years; and (10) implementing other bonding changes.

Descriptions of the substantive changes to the Kentucky program resulting in the changes above are noted in the Findings section that follows.

Section 509(a), along with 30 CFR 800.14(b) “require that the amount of performance bond shall be sufficient to assure the completion of the reclamation plan if the work had to be performed by the regulatory authority in the event of forfeiture.” Section 509(c), along with 30 CFR 800.11(e), provides that an alternative system to full-cost performance bond may be approved if it will achieve the purposes of the bonding program. To gain approval, (1) a bonding program must assure that the regulatory authority will have available sufficient money to complete the reclamation plan for any areas which may be in default at any time; and (2) must provide a substantial economic incentive for the permittee to comply with all reclamation provisions. We reviewed the emergency KARs; statutory language of H.B. 66, its corresponding KRSs; and permanent KARs collectively to determine whether or not the bonding program/system as a whole is able to meet reclamation obligations. Below are our findings of the substantive changes to Kentucky's bonding program.

Seven emergency regulations were submitted to us for approval. Two of the emergency regulations repealed other administrative regulations (405 KAR 10:011E and 405 KAR 10:201E); four created new regulations (405 KAR 10:015E, 405 KAR 10:070E, 405 KAR 10:080E, and 405 KAR 10:090E); and one amended an already existing administrative regulation (405 KAR 10:001). Three of these emergency regulations were later replaced by nearly identical permanent (ordinary) regulations (405 KAR 10:001, 405 KAR 10:015, and 405 KAR 10:090). We are not issuing findings on the three emergency provisions that were replaced because the emergency provisions are no longer in place, and we are making a finding on the nearly identical permanent ones. We are issuing findings on the other four emergency regulations because they involved the repeal or relocation of administrative regulations or they involved matters related to the transition to the new bonding system.

The following four emergency regulations remove or relocate certain administrative regulations due to changes in the bonding regulations:

KAR 10:011E, Repeal of 405 KAR 10:010, and KAR 10:020; 405 KAR 10:010, General requirements for performance bond and liability insurance (sections 1 through 5) and 405 KAR 10:020, Amount and duration of performance bond (sections 1 through 9) : The emergency regulation repealed these performance bond and liability insurance regulations and the amount and duration of the performance bond regulations and relocated them into the new administrative regulation at 10:015, with the exception of section 4 of 405 KAR 10:010, which was relocated to 405 KAR 10:030.

OSMRE Finding: We find that the relocation of provisions from one regulation to another is a non-substantive change. The change documents the relocation of these provisions into the new program; therefore, 405 KAR 10:011E is approved.

KAR 10:201E, Repeal of 10:200, Kentucky bond pool (sections 1 through 9): The emergency regulation repealed the VBP regulations from Kentucky's program.

OSMRE Finding: Because we are approving, with exceptions, the new bonding system amendments proposed by Kentucky, we find that the repeal of the VBP regulations is not inconsistent with SMCRA or the Federal regulations. Therefore, 405 KAR 10:201E is hereby approved.

The following two emergency regulations specifically addressed matters related to the transition from the old bonding system to the new one and were not entirely duplicated in the permanent administrative regulations:

405 KAR 10.070E, Kentucky Reclamation Guaranty Fund (sections 1 through 6): In addition to establishing the new bond pool entitled the KRGF and creating the KRGFC, this regulation addressed the initial capitalization of the KRGF (transfer of assets and one-time assessments) and the terms and conditions in which these assessments were paid. It also provided the terms in which former VBP members report coal mined and sold until and after January 1, 2014. The following provisions were not included in the permanent regulations at 405 KAR 10:070: Section 2, Initial Capitalization; section 3(3) related to member production records and reporting; and section 6(b) related to a required monthly production report.

OSMRE Finding: The portions of this regulation that were promulgated in emergency format only, and were not converted to permanent regulations at 405 KAR 10:070, addressed the capitalization of a bond pool and forms required to document production under the old system and have no direct Federal counterparts. We find that these provisions are not inconsistent with section 509(c) of SMCRA or with the Federal regulations at § 800.11(e), and are hereby approved.

405 KAR 10:080E: Full-cost bonding (sections 1 through 4): In addition to allowing permittees to elect not to participate in the KRGF (opt-out) and to provide full-cost reclamation bonds for coal mine surface disturbances, this regulation also included provisions pertaining to members with permits issued prior to July 1, 2013. It provided the terms and conditions in which the permittee would make such election. This provision was not included in the permanent regulation at 405 KAR 10:080.

OSMRE Finding: This regulation provided that permittees make an election regarding participation in the KRGF by a specific date. This was a one-time event and facilitated the transition to the new bonding system. We find there are no direct Federal counterparts. However, the provisions are not inconsistent with section 509(c) of SMCRA or with the Federal regulations at § 800.11(e), and are hereby approved.

On March 11, 2013, H.B. 66 was passed by the legislature and enacted on March 22, 2013, when it was signed by the Governor. H.B. 66 included 14 sections and resulted in the following: 8 KRSs being added; 3 KRSs being amended; and 11 KRSs being repealed as described below:

H.B. 66 Section 1—KRS 350.500. Definitions for KRS 350.500 to 350.521: This is a new chapter that provides the H.B. 66 definitions of actuarial soundness, date of the establishment of the new KRGF, the KRGFC, and VBP fund.

OSMRE Finding: There are no comparable Federal regulations that define actuarial soundness, prescribe an effective date of a bond pool or fund, or establish a commission to govern a bond pool. However, the establishment of a bond pool is consistent with the provisions of 30 CFR 800.11(e). Therefore, we find that the proposed definitions are not inconsistent with section 509(c) of SMCRA and with the Federal regulations at 30 CFR 800.11(e), and they are hereby approved.

H.B. 66 Section 2—KRS 350.503. Kentucky reclamation guaranty fund: This is a new chapter that establishes the KRGF, which is assigned to the cabinet. The KRGF is an interest-bearing reclamation account designed to cover the excess costs of reclamation for coal mining sites when the permit-specific performance bond is inadequate. This chapter does not apply to permits forfeited prior to January 1, 2014, except for obligations that may arise from the forfeiture of bonds prior to that date which were secured by the VBP. Funds are also used to compensate the cabinet for costs incurred in performance of the following duties: Administering the fund; procuring audits and actuarial studies; and operating and necessary legal expenses of the KRGFC. The KRGF cannot be used for the long-term treatment of substandard water discharges or to repair subsidence damage and is exempt from the requirements applicable to insurers.

OSMRE Finding: There is no counterpart in SMCRA or the Federal regulations that establishes a bond fund system such as the one established under H.B. 66. However, as we noted previously, section 509(c) of SMCRA and 30 CFR 800.11(e) provide for the establishment of an ABS if the system (1) assures the regulatory authority will have available sufficient money to complete the reclamation plan for any areas in default at any time and (2) provides an economic incentive for the permittee to comply with all reclamation provisions. Because the changes to Kentucky's bonding program noted above have only recently been established, we have no new data to suggest that there will not be sufficient funding to address land reclamation obligations or that the KRGFC or the cabinet will not fulfill their obligation to take measures to ensure the solvency of the KRGF. Kentucky's system provides an economic incentive to reclaim in KRS 350.130(3) because it requires the submission of permit-specific performance bonds and provides that no person shall be eligible to receive another permit or begin another operation until the person has reimbursed the KRGF for any money from the KRGF that was used to reclaim that person's operation. Therefore, we are approving the changes to the program because they establish an ABS that combines the use of permit-specific bonds and a bond pool to address land reclamation needs.

We note that the KRGF restricts its ABS coverage to land reclamation costs and is not intended to cover the cost of treating pollutional discharges. The cost of treating pollutional discharges needs to be adequately addressed, e.g., covered under full-cost, site-specific bonds or an alternative financial mechanism that generates an income stream capable of addressing these discharges in perpetuity. Kentucky proposes to require operators to post site-specific bonds to cover the costs of long-term treatment of substandard water discharges. Our finding on this proposal is included in findings of “C. Kentucky Administration Regulations (KARs), Section 8 of 405 KAR 10:015.”

H.B. 66 Section 3—KRS 350.506. Reclamation Guaranty Fund Commission—Membership—Bylaws—Meetings—Conflicts of Interest—Applicability of Executive Branch Code of Ethics: This is a new section that creates the KRGFC that is attached to the cabinet. This chapter provides the composition of the KRGFC membership, the terms and conditions of membership appointments, and the establishment of bylaws, official domicile, meeting frequency, member stipend, and attendance requirements. Further, it addresses limits on direct or indirect financial interests of the members, membership immunity from civil or criminal proceedings, and ethics terms.

OSMRE Finding: There are no comparable Federal regulations that address the creation or management of bond pools. However, there is nothing in these provisions that is inconsistent with section 509(c) of SMCRA or with the Federal regulations at 30 CFR 800.11(e), and they are hereby approved.

H.B. 66 Section 4—KRS 350.509. Duties of commission: This is a new chapter that outlines the responsibilities of the KRGFC, which include reviewing, recommending, and promulgating regulations necessary to perform the following duties: Monitor and maintain the KRGF, establish a structure for processing claims and making payments; establish the mechanisms for the review of the viability of the KRGF; set a schedule for penalties for late payment or failure to pay fees and assessments, review and assign classification of mine types for fee assessments; establish a structure for the payment of fees and assessments, authorize expenditures from the KRGF, notify the permittees of suspension/reinstatement of fees; take action against permittees to recover funds if necessary, and conduct investigations and issue subpoenas on behalf of the KRGFC to verify reporting, payment, and other activities of permittees participating in the fund.

In addition, the KRGFC is also responsible for employing a certified public accountant to perform an annual audit of the KRGF for the first five years of the operations of the KRGF, then every two years or more frequently as deemed necessary by the KRGFC. The results of the audit shall be reported to the KRGFC and the Governor. Also, the KRGFC is responsible for employing a qualified actuary to perform an actuarial study annually for the first three years of the operations of the KRGF. Thereafter, the KRGFC must have actuarial studies performed every two years or more frequently as deemed necessary by the KRGFC. Results of these studies must be reported to the KRGFC and to the Governor. The KRGFC is responsible to report to the Governor and the Interim Joint Committee on Natural Resources and Environment no later than December 31 of each year as to the financial status of the KRGFC.

OSMRE Finding: There are no comparable Federal regulations that address the management of bond pools. With the exception of one provision discussed below, there is nothing in these provisions that is inconsistent with section 509(c) of SMCRA or with the Federal regulations at 30 CFR 800.11(e), and they are hereby approved.

We are approving the requirement to conduct annual actuarial studies for the first three years of the implementation of the KRGF. However, as proposed, beginning in year four, actuarial studies would be required only bi-annually or more frequently as deemed necessary by the commission. Given the reliance upon the actuarial study for the adjustment of fee rates (established in Section 7), the immaturity of the KRGF, the provisions of the bonding program that have not been approved, and the rapidly changing nature of the current coal mining industry, we believe it is premature to approve a two-year lapse between actuarial evaluations. We are concerned that a two-year time period may not sufficiently ensure that needed adjustments to maintain the solvency of the KRGF are recommended and implemented in a timely matter. Therefore, we are deferring our decision on the bi-annual review provision of H.B. 66 until such time as we are able to evaluate the stability of the KRGF over its initial years of implementation. After our receipt and review of the actuarial study based upon the third full year of operation of the fund, we will reconsider our deferral and determine whether to: (1) Approve the bi-annual actuarial study requirement; (2) require that the studies continue to be performed annually; or (3) take other appropriate action.

H.B. 66 Section 5—KRS 350.512. Office of the Reclamation Guaranty Fund—Duties of executive director: This is a new chapter that establishes an Office of the Reclamation Guaranty Fund (ORGF), appoints an executive director to manage its affairs, and describes the responsibilities of the executive director. The responsibilities of the executive director include collecting and depositing all fees submitted by permittees into the fund; assessing permit eligibility of permittees for late payment or nonpayment of fees; compiling information about permittees for use by the commission in assigning or revising classifications and fees; paying monies out of the fund as authorized; reporting to the commission on the status of the fund and the activities of the fund's executive director; and performing other administrative functions as necessary.

OSMRE Finding: There are no comparable Federal regulations that address the management of bond pools. However, there is nothing in these provisions that is inconsistent with section 509(c) of SMCRA or with the Federal regulations at 30 CFR 800.11(e) and they are hereby approved.

H.B. 66 Section 6—KRS 350.515. Mandatory participation in fund—Initial capitalization—One-time assessments—Full-cost bond in lieu of participation: This is a new chapter that mandates that all surface coal mining permittees be participants in the KRGF, unless the permittee elects to provide full-cost bond. Member entities are given the option to provide financial assurance in one of two ways: (1) Provide full-cost bonds based on a reclamation cost estimate that reflects potential reclamation costs to the cabinet; or (2) participate in the KRGF, which includes assessment of fees noted in KRS 350.518 below.

In addition, this chapter also provides for the initial capitalization of the KRGF consisting of the following sources of funds: (1) Transfer of the assets and liabilities of the VBP fund; (2) a one-time start-up assessment for all current permittees as of July 1, 2013, in the amount of $1,500; and (3) a one-time $10 per active permitted acre assessment. Entities entering the KRGF after July 1, 2013, must pay a one-time assessment of $10,000 to the fund. No individual permit may be issued until the one-time assessments are paid. Members of the former VBP are exempt from the one-time start-up assessment and active permitted acre assessment. If an applicant opts out and elects to provide a full-cost bond, the applicant shall not be subject to these assessments.

OSMRE Finding: Maintaining adequate resources is essential to the success and compliance of any bond pool. The transfer of funds from the existing bond pool and the assessment of start-up fees will assist in the initial capitalization of a new bond pool. Provided the permits previously covered by the transferred funds are adequately covered by the new pool, there is nothing in these provisions that is inconsistent with section 509(c) of SMCRA or with the Federal regulations at 30 CFR 800.11(e), and they are hereby approved.

H.B. 66 Section 7—KRS 350.518. Permittee to submit permit-specific bond under KRS 350.060(11)—Tonnage fees—Assignment of mine type classification—inclusion of future permits of existing classification—Inclusion of future permits of existing voluntary bond pool fund members—Permit-specific penal bond—Administrative regulations—Suspension of permit for arrearage in fees—Distribution of penalties collected under KRS 350.990(1)—Rights and remedies: This is a new chapter that provides the following provisions related to the KRGF that apply to each member permittee: (1) Each member must submit a permit-specific bond; and (2) each member must pay a tonnage fee (production fee) of $.0757 per ton for surface coal mining operations (including auger and highwall mining) and $.0357 per ton for underground coal mining. If the permit consists of a combination of surface and underground mining operations, the operator must pay a fee in accordance with the predominant method of coal extraction.

This chapter also contains special provisions for permits that were subject to the VBP as follows: (1) These permits are excluded from the one-time start-up assessment/fee; (2) these permits are subject to the new tonnage fees, instead of the tonnage fees which had been previously established (prior to July 1, 2013); (3) these permits will continue to receive subsidization of the reclamation bonding authorized under these new statutes and new permanent regulations; and (4) the KRGF will continue to provide coverage for existing bonds previously issued under the VBP. This chapter also provides the criteria that members of the VBP as of July 1, 2013, must meet in order to be included in the KRGF. It also specifies a maximum allowable increase in the total amount of bonds issued to any one member of the VBP. This chapter provides that administrative regulations will be promulgated by the KRGFC to address the reporting and payment of fees (see administrative regulations section that follows). It also provides that a permit will be suspended if the permittee is in arrearage in the payment of any fees and sets out the remedies to address the suspension. It also provides the manner in which penalties collected shall be deposited and applied.

In addition, if an entity was not a participant in the VBP as of March 22, 2013, a permit may be considered for inclusion in the VBP if the entity and entity's owners can meet eligibility standards established in permanent regulations promulgated by the KRGFC.

These provisions make clear that the KRGFC must make changes to the rates set forth in these sections and other sections in an amount sufficient to maintain actuarial soundness of the fund in accordance with the actuarial studies performed.

OSMRE Finding: We find that these provisions are consistent with section 509(c) of SMCRA and with the Federal regulations at 30 CFR 800.11, and are hereby approved. However, subsection (4) requires some further explanation. It states that:

We note that paragraph (b) will always result in a total greater than paragraph (a) and, therefore, renders the provision at paragraph (a) meaningless. Nevertheless, the introductory paragraph, coupled with paragraph (b), is consistent with section 509(c) of SMCRA and the Federal regulations at 30 CFR 800.11, and they are therefore approved.

H.B. 66 Section 8—KRS 350.521. Forfeiture of bonds for permits covered by fund—Use of additional moneys when bond insufficient to cover estimated reclamation cost: This is a new chapter that provides that bonds for permits covered by the fund forfeited after January 1, 2014, must be placed in the KRGF. It also provides that in the event that a forfeited bond and the cost estimate prepared by the cabinet indicates the bond is insufficient to reclaim the permit to the requirements of KRS Chapter 350, any outstanding permit-specific performance bond for reclamation on the forfeited permit must be used first before any additional monies necessary to reclaim the permit area are approved by the cabinet and withdrawn from available funds in the KRGF. It also provides the manner in which the request from the cabinet and transfer shall occur, and provides that the commission, its members, and employees must not be named a party to any forfeiture action.

OSMRE Finding: We find that this provision sets forth a procedure that is typical of an ABS that employs both site-specific performance bonds and a bond pool. We find that it is consistent with section 509(c) of SMCRA and with the Federal regulations at 30 CFR 800.11(e) and is hereby approved.

H.B. 66 Section 9—KRS 12.020. Enumeration of departments, program cabinets, and administrative bodies: This chapter is amended to add the ORGF within the Department of Natural Resources (DNR) to the list of departments, program cabinets and their departments, and the respective major bodies.

OSMRE Finding: This change was included in H.B. 66, but the revised statute was not submitted for approval. We find this change does not require our approval because it is not part of the State regulatory program.

H.B. 66 Section 10—KRS 350.595. Application for inclusion under Abandoned Mine Land Enhancement Program—Coverage under Kentucky reclamation guaranty fund: This chapter is amended to provide that an applicant who desires to remine property which is classified as abandoned mine land under KRS 350.560, may apply to the KRGFC instead of the VBP Commission for authorization to use bond pool funds under the Abandoned Mine Land Enhancement Program. It also adds appropriate references or deletes references related to the VBP.

OSMRE Finding: This change is needed to acknowledge the dissolution of the old VBP commission and its replacement by the KRGFC. We find that it is not inconsistent with SMCRA or the Federal regulations and is hereby approved.

H.B. 66 Section 11—KRS 350.990. Penalties: This chapter is amended to require that civil penalty monies assessed pursuant to this chapter be deposited in the State Treasury, except those penalty monies collected in excess of $800,000 in any fiscal year. Fifty percent of the excess monies are required to be deposited in the KRGF (rather than the VBP) and fifty percent in a supplemental fund. The supplemental fund is comprised of the interest from the deposit of forfeited bonds and may be used to supplement forfeited bonds that are inadequate to complete reclamation plans. It removes the $16 million base amount below which the VBP could not be allowed to fall to ensure solvency of the fund.

OSMRE Finding: This change identifies the manner in which funds collected from civil penalties must be distributed. The $16 million base amount for the VBP is no longer required because the VBP bonding system was replaced. Under the KRGF, required actuarial studies and the KRGFC will establish the financial needs of the KRGF to ensure the solvency of the fund and assure sufficient money is available to complete the reclamation plan for any areas covered by the KRGF which may be in default at any time. As such, it is not required to establish an amount, such as $16 million, as a floor for the KRGF. There is nothing in these provisions that is inconsistent with section 509(c) of SMCRA or with the Federal regulations at 30 CFR 800.11(e), and they are approved.

H.B. 66 Section 12—KRS 350.700 to 350.755: The following chapters are repealed due to the abolishment of the VBP:

OSMRE Finding: Removal of the identified chapters involving the VBP is consistent with the newly established KRGF. However, it is our understanding that, consistent with the title, H.B. 66 was intended to also repeal KRS 350.715, Pool administrator. Because the repeal of KRS 350.715 was not specifically submitted for approval, this chapter remains in effect and cannot be removed until the repeal is submitted for approval.

H.B. 66 Section 13—(no corresponding KRS chapter because a revised statute is not necessary): This section provides that the assets and liabilities of the VBP be immediately transferred to the KRGF. Any records, files and documents associated with the activities of the VBP must also be transferred. The affairs of the VBP must be wound up, and the cabinet will have disposition over placement or transfer of any personnel of the VBP. No existing contract shall be impaired.

OSMRE Finding: This provision involves the initial capitalization of the new bonding system and administratively and financially concludes the old bonding system. We find that this transfer of funds and records is needed for establishment and proper implementation of the KRGF, and that it is not inconsistent with section 509(c) of SMCRA or with the Federal regulations at 30 CFR 800.11(e). It is hereby approved.

H.B. 66 Section 14—(no corresponding KRS chapter because a revised statute is not necessary): This section provides for the immediate implementation of the provisions of the bill.

OSMRE Findings: We find that section 14 is not inconsistent with SMCRA or the Federal regulations and is therefore approved.

This portion of the program amendment includes additions and changes to current administrative regulations addressing Kentucky's bonding program. These regulations involve the repeal of three regulations; the addition of four new regulations; and amendments to four regulations as described below:

405 KAR 10:001. Definitions for 405 KAR Chapter 10 (section 1): This regulation is amended to add the definition of the following terms: Acquisition; active acre; actuarial soundness; dormancy fee; coal mined and sold; final disposition; full-cost bonding; Kentucky Reclamation Guaranty Fund; Office of the Reclamation Guaranty Fund (ORGF); opt-out; member, non-production fee; and acquisition as it relates to criteria for identifying land historically used for cropland. The definitions of bond pool, bond pool administrator, and bond pool commission have been deleted. Bond pool and bond pool administrator have been replaced with definitions of KRGF and the ORGF.

OSMRE Finding: There are no comparable Federal definitions for the definitions mentioned above. These changes are not inconsistent with section 509 of SMCRA and with the Federal regulations at 30 CFR part 800 and are hereby approved.

405 KAR 10:015, General bonding provisions (sections 1 through 12): This is a new regulation that combines two repealed sections (405 KAR 10:010 and 405 KAR 10:020 mentioned above as part of the Emergency Regulations) and incorporates parts of 405 KAR 10:030 (addressed below). It consolidates into one regulation all current existing bonding criteria, types of bonds, bonding methods, terms and conditions of bonds, and new calculation protocols. It also contains a protocol for bond calculation for demolition and disposal costs for materials used in mining operations at preparation plants. In addition, it provides for the calculation of costs associated with mine sites that have been identified as producers of substandard effluent discharges requiring long-term treatment. For clarity, we note that Section 1, Bonding Requirements; Section 4, Bonding Methods; Section 5, Substitution of Bonds; Section 9, Period of Liability; and Section 10, Adjustment of Amount, were unaffected by these changes. Substantive changes are included below.

Section 2(9) provides that for any existing permits with permit-specific bonds posted by the VBP members, prior to the establishment of the KRGF, the permit-specific bond would be released in its entirety upon successful completion of Phase I bond release requirements, while permit-specific bonds posted by these members on new permits after the establishment of the KRGF, will be released in equal percentages at each reclamation phase, which is different than the release provisions for full-cost bond permits. The Phase 1 bond release for VBP members' permit-specific bond was formerly included in the now repealed statute at KRS 350.735(3). We announced our approval of this provision, along with the other statutory portions of the VBP, in the July 18, 1986, Federal Register document. (51 FR 26002).

OSMRE Finding: We find the phase-by-phase release of equal portions of the new permit-specific bonds posted after the establishment of the KRGF ensures that two-thirds of the permit-specific bond, coupled with any moneys needed from the KRGF, will remain available for reclamation after Phase I bond release. These provisions are not inconsistent with section 519(c) of SMCRA and with the Federal regulations at 30 CFR 800.40(c), and are hereby approved. Inasmuch as permit-specific bonds in existence prior to the creation of the KRGF were posted according to the approved program at the time, the grandfather provision maintaining the release of these bonds in their entirety, upon successful completion of Phase I bond release requirements, remains approved.

Section 3(2)(c) adds to the list of approvable bonds the following types of bonds: Those filed pursuant to the provisions of the KRGF; those filed by VBP members; or a combination of both. Section 3(3) provides that permit-specific bonds associated with the VBP prior to its repeal are deemed valid and convey the same legal rights as bonds issued by the KRGF.

OSMRE Finding: The types of bonds allowed under section 3(2)(c) are not inconsistent with the Federal regulations since bond pools and their related bonds are permissible under 30 CFR 800.11(e). With regard to section 3(3), we find that because the bonds approved under the VBP were valid when issued, Kentucky may continue to recognize their validity after the creation of the KRGF. We are approving section 3(3) because it is consistent with section 509 of SMCRA and with the Federal regulations at 30 CFR part 800.

Sections (6)(1) and (6)(4) make clear, by cross-references, that the new provision at 405 KAR 10:080, which is being approved in this decision and addresses full-cost bonding estimates prepared by permittees, does not apply to the determination of bond amounts for KRGF participants.

OSMRE Finding: These cross-references are not inconsistent with SMCRA and the Federal regulations at 30 CFR 800.11 and 800.14 and are hereby approved.

Section 6(2) allows the cabinet to use the reclamation costs submitted in the permit application to establish the bond amount required, if those costs are higher than the reclamation costs calculated by the cabinet.

OSMRE Finding: While there is no direct Federal counterpart to this revision, erring on the side of the higher bond amount calculation is consistent with the Federal requirements at 30 CFR 800.14(a), which governs the determination of the bond amount. Therefore, section 6(2) is hereby approved.

Section 6(3) requires the cabinet to review bond amounts established in the regulations at a minimum of every two years to determine if those amounts are adequate after consideration of the impacts of inflation and increases in reclamation costs.

OSMRE Finding: This revision is no less effective than the Federal regulation at 30 CFR 800.15(a), which allows the regulatory authority to specify periodic times or to set a schedule for reevaluating and adjusting the bond amount. Therefore, section 6(3) is hereby approved.

Section 6(4) requires full-cost bonding participants to provide a cost estimate that reflects the cost of reclamation to the cabinet in accordance with full-cost bonding regulations at section 405 KAR 10:080.

OSMRE Finding: We find that this provision is consistent with the Federal regulations at 30 CFR 800.14, and is hereby approved.

Section 7 increases minimum bond amounts to $75,000 for the entire surface area under one permit, $75,000 per increment for incrementally bonded permits, $50,000 for a permit or increment operating on previously mined areas, and $10,000 for underground mines that have only underground operations (no surface facilities).

OSMRE Finding: We find the proposed changes at 405 KAR 10:015 section 7 are no less effective than the Federal requirements at 30 CFR 800.14(b), which mandate a minimum bond amount of $10,000 for the entire area under one permit, and are hereby approved.

Section 8 establishes new, increased bond amounts that vary depending upon the type of area being affected (i.e., coal refuse area, preparation plants, and mining areas) as follows:

• $2,500 per acre and each fraction thereof for coal haul roads, other mine access roads, and mine management areas.

• $7,500 per acre and each fraction thereof for refuse disposal areas.

• $10,000 per acre and each fraction thereof for an embankment sediment control pond. Each pond must be measured separately if the pond is located off-bench downstream of the proposed mining or storage area. The cabinet also may apply this rate to partial embankment structures as deemed necessary to meet the requirements of section 6(1) of 405 KAR 10:015.

• $3,500 per acre and each fraction thereof for coal preparation plants. In addition, the bond amount must include the costs associated with demolition and disposal of concrete, masonry, steel, timber, and other materials associated with surface coal mining and reclamation operations.

• $2,000 per acre and each fraction thereof for operations on previously mined areas.

• $3,500 per acre and each fraction thereof for all areas not otherwise addressed in 405 KAR 10:015 section 8.

OSMRE Findings: Because all of the changes, summarized above to bonding rates, identified in sections 8(1) through 8(6), constitute increases in bond amounts, they are not inconsistent with the Federal requirements at 30 CFR 800.14, which govern the determination of bond amounts, and are hereby approved.

However, by approving the sections identified above, we do not conclude, in this decision, that Kentucky has satisfied all of the concerns we set forth in the May 1, 2012, letter issued pursuant to 30 CFR 733.12(b) with regard to the sufficiency of the bond amounts. That determination will be made subsequent to this decision during review of the solvency of the revised bonding system.

Section 8(7)(a) provides that for permits with substandard drainage that require long-term treatment, the cabinet must calculate and the permittee must post an additional bond amount based on the annual treatment cost provided by the permittee, multiplied by 20 years. Section (8)(7)(b) provides that the cost estimate is subject to the verification and acceptance by the cabinet. Kentucky may use its own estimate for annual treatment costs if it cannot verify the accuracy of the permittee's estimate. Section (8)(7)(c), provides that in lieu of posting this additional bond amount, the permittee may submit a satisfactory reclamation and remediation plan for the areas producing the substandard drainage.

Both SMCRA and the Federal regulations require that operators post bonds that are sufficient in amount to guarantee the completion of all reclamation, if that reclamation must be completed by the regulatory authority. See, for example, 30 CFR 800.13(a)(1), which states that performance bond liability must be for the duration of the surface coal mining and reclamation operation and for a period which is equal to the operator's period of extended responsibility for successful revegetation provided in 30 CFR 816.116/817.116 or until achievement of the reclamation requirements of the Act, regulatory programs, and permit, whichever is later. A permit may not be issued if, after sufficient study, analysis, and planning, water pollution is anticipated. Abatement of any unanticipated water pollution is an element of reclamation, and the treatment obligation may extend to perpetuity. Neither SMCRA nor its implementing regulations allow regulatory authorities to set arbitrary time limits as multipliers for calculating bond amounts. Kentucky has not demonstrated that a 20-year multiplier will result in an adequate bond. As such, we find 405 KAR 10:015 8(7)(a) is less stringent than section 509 of SMCRA, 30 U.S.C. 1259, and less effective than the Federal regulations at 30 CFR part 800, and we are not approving it. Because section 8(7)(b) refers to the water treatment calculation in 8(7)(a) that is not being approved, we are also not approving 8(7)(b).

In addition, the allowance of a land reclamation-based remediation plan in lieu of posting an adequate bond for long-term pollutional drainage treatment is unacceptable. Neither SMCRA nor its implementing regulations provide any exceptions to the requirement to post a bond that is fully adequate to cover the cost of reclamation, including water treatment.

We have approved other financial mechanisms under 30 CFR 800.11(e) that are capable of generating an income stream to address unanticipated discharges in perpetuity, e.g., treatment trusts or annuities. Treatment trusts and annuities are types of financial instruments capable of generating revenue for the purpose of maintaining treatment for these discharges. See, for example, Federal Register document dated March 2, 2007, addressing the approval of Tennessee's use of treatment trusts. (72 FR 9616). We recommend that Kentucky avail itself of these alternative financial mechanisms to ensure adequate funds are available to fully cover the cost of reclamation. Because this provision at 405 KAR 10:015 8(7)(c) is less stringent than section 509 of SMCRA, and less effective than the Federal regulations at 30 CFR part 800, we are not approving it.

Section 11 includes the supplemental assurance requirements previously located at 405 KAR 16:020 (see summary of 16:020 in D. Kentucky Administrative Regulations Affected by the Bonding Regulations below) and increases the supplemental assurance amount from $50,000 to $150,000.

OSMRE Finding: Supplemental assurance funds are required when alternative distance limits or additional pits are approved. While these provisions have no Federal counterparts, we find that, because the increases in supplemental assurance amounts provide additional assurances that reclamation will be completed, the changes are not inconsistent with the Federal regulations at 30 CFR part 800, and are hereby approved.

405 KAR 10:070. Kentucky reclamation guaranty fund (sections 1 through 5): This is a new regulation and provides information related to the operation and sources of revenue for the KRGF, classification of permits, reporting and payment of fees, and penalties. Permittees will automatically be considered participants in the KRGF unless they affirmatively chose to opt-out of the KRGF and post full cost performance bonds. These regulations require that permittees comply with reporting requirements, maintain production records, provide initial assessments, pay fees, comply with penalty provisions, and complete and submit required forms.

OSMRE Finding: We find that this provision sets forth components that are needed for the orderly establishment, monitoring, maintenance, and enforcement, where necessary, of an ABS. Therefore, we further find this provision to be consistent with section 509(c) of SMCRA and with the Federal regulations at 30 CFR 800.11(e), and is hereby approved.

We note however, that the establishment of a bond pool, particularly in a declining coal market, brings inherent risks to participating permittees and to Kentucky. As the number of bond pool members and the amount of coal produced in Kentucky declines, the production fees placed on coal being produced will need to rise correspondingly to maintain a financially sound and stable bond pool. By exercising its discretion to establish this bond pool, Kentucky is accepting these risks.

405 KAR 10:080. Full-cost bonding (sections 1 through 4): This is a new regulation and provides that members have the option to provide full-cost bonds in lieu of maintaining membership in the KRGF (i.e., they may opt-out of the KRGF) and the manner in which a permittee shall make such declaration. These sections provide for the calculation of bonding estimates, the forms required to submit such estimates, the requirement for a registered professional engineer to certify estimates, and the requirement to submit a bond once the reclamation estimate has been accepted. A member with permits issued prior to July 1, 2013, that has made the decision to opt-out is required to post full-cost reclamation bonds with the Department before April 30, 2014, on all permits held by the member.

OSMRE Finding: This regulation is not inconsistent with SMCRA and the Federal regulations at 30 CFR 800.11 and 800.14, and is hereby approved.

405 KAR 10:090. Production fee (section 1): This is a new regulation and provides information on production fees, the amount of the fees, and the schedule that payments are to be remitted.

OSMRE Finding: There are no comparable Federal regulations that prescribe production fees to be imposed on permittees. We find that these changes are not inconsistent with SMCRA or its implementing Federal regulations, and are hereby approved.

We again note that the establishment of a bond pool, particularly in a declining coal market, brings inherent risks to participating permittees and to Kentucky. As the number of bond pool members and the amount of coal produced in Kentucky declines, the production fees placed on coal being produced will need to rise correspondingly to maintain a financially sound and stable bond pool. By exercising its discretion to establish this bond pool, Kentucky is accepting these risks.

These regulations are affected by the bonding regulations and involve the amendment of four regulations as described below:

405 KAR 8:010. General provisions for permits (Sections 1 through 26): This regulation has been amended to provide the Division of Mine Permits 30 working days after the notice of administrative completeness to review minor revisions on full-cost bonding operations. The original provisions allowed for 15 working days.

OSMRE Finding: We find that these changes are not inconsistent with SMCRA and the Federal regulations at 30 CFR 774.13(b)(1), and are hereby approved.

405 KAR 10:030. General requirements for liability insurance (sections 1 through 3): This regulation has been amended. Prior to this revision the regulation included general requirements for the types, terms, and conditions of performance bonds and liability insurance. With this revision, all references to performance bonds have been removed from sections 1 through 3, and now only requirements for liability insurance are included (former sections 4 and 5 have been renumbered as sections 2 and former section 5 has been moved to section 3). Requirements for performance bonds have been moved to 405 KAR 10:015 as noted above. Also, two forms are specified as requirements related to liability insurance coverage: (1) Certificate of Liability Insurance, and (2) Notice of Cancellation, Nonrenewal or Change of Liability Insurance.

OSMRE Finding: These changes are non-substantive in nature, not inconsistent with the Federal requirements at 30 CFR 800.60, and are hereby approved.

405 KAR 12:020. Enumeration of departments, program cabinets, and administrative bodies: This section has been amended to include the Office of the Reclamation Guaranty Fund to the list of Offices within the Department of Natural Resources.

OSMRE Finding: This change was mentioned in H.B. 66 but does not require our approval because it is not part of the State program.

405 KAR 16:020. Contemporaneous reclamation (sections 1 through 5): This regulation has been amended. A new section is included (Section 1, Definitions) and defines the term “completed reclamation.” Subsequently, other sections have been renumbered. Other changes include adding references to the new section, 405 KAR 10:015, and removing the section involving Supplemental Assurance. Regulatory information about supplemental assurance has been relocated to 405 KAR 10:015, noted above.

OSMRE Finding: There is no comparable definition within the Federal regulations. We find, however, that this section is not inconsistent with the Federal regulations and is hereby approved.

We asked for public comments on the amendment and received responses from three entities: The Surety & Fidelity Association of America (TSFAA) on February 21, 2013, (Administrative Record No. KY-2000-06a); the Appalachian Mountain Advocates (AMA) on March 22, 2013, (Administrative Record No. KY-2000-06c); and the Kentucky Coal Association (KCA) on March 22, 2013, (Administrative Record No. 2000-06b) and April 21, 2015, (Administrative Record No 2000-06d). No public hearing was requested. The following summarizes the comments that were received.

TSFAA: TSFAA cited financial concerns over the surety bond increases listed at 405 KAR 10:015 in that an operator who qualified at the lower amount may not be able to qualify at the higher amount. TSFAA suggests an increase in the stringency of enforcement activities relative to contemporaneous reclamation as required in the statutes and regulations. The consequent sizeable bond amounts likely could be avoided if the operator engages in contemporaneous reclamation. Strengthening enforcement and inspection activities should be the first means to addressing the sufficiency of bonds before considering increases in bond amounts. TSFAA is concerned that the bond issued may also extend to the long-term, if not perpetual, obligation of water treatment. TSFAA suggests that Kentucky establish the necessary framework whereby a trust could be established in lieu of a bond with respect to water treatment obligations.

OSMRE's Response: Both SMCRA and the Federal regulations require that operators post bonds that are sufficient in amount to guarantee the completion of all reclamation, if that reclamation must be completed by the regulatory authority. Kentucky's amendments were submitted, and are being approved, with exceptions, because they are designed to improve the bonding program. If surety bonds are not available in these higher amounts, operators must obtain one of several other forms of bonding. While strengthening enforcement and inspection activities may be a laudable goal, its achievement is not a substitute for the requirement for a permittee to post an adequate bond.

The Surety & Fidelity Association of America (TSFAA) also stated:

We agree with this comment.

AMA: The AMA is concerned that long-term pollutional discharges would allow permittees to post a bond that would not cover the full cost of reclamation. The AMA believes that the amendment to 405 KAR 10:015 section 8(7)(a) properly mandates additional bond amounts but would allow permittees to escape their duty if they submit a remediation plan for areas with inadequate drainage. The AMA also believes that there is no evidence that land reclamation techniques are effective at eliminating long-term acid mine drainage; the regulations fail to clearly require an increase in the bond amount to reflect the added cost of land remediation techniques; and the amendment's assumption of a 20-year time frame for ongoing treatment costs is arbitrary and capricious.

OSMRE's Response: We share the AMA's concerns. As set forth in the finding above, we are not approving the 20-year multiplier in 405 KAR 10:015 section 8(7)(a), and the provision at 405 KAR 10:015 section 8(7)(c), which allows a permittee to submit a land reclamation and remediation plan for areas producing substandard drainage in lieu of bond.

KCA: The KCA commented on March 22, 2013, and April 21, 2015, stating it believes the amendment submission should render the Kentucky program fully consistent with the SMCRA statute and implementing regulations and should be approved by OSMRE. Furthermore, the KCA submits that these program revisions successfully address the alleged program deficiencies identified in the 733 Notice. Upon approval of the amendment, KCA urges that the 733 proceedings be terminated.

OSMRE's Response: For the reason specified in our finding with respect to 405 KAR 10:015, Section 8, we are not terminating the 733 proceedings at this time.

Under 30 CFR 732.17(h)(11)(i) and section 503(b) of SMCRA, on April 21, 2015, we requested comments on the amendments from various Federal agencies with an actual or potential interest in the Kentucky program (Administrative Record No. KY-2000-05 (a-g). In a letter dated May 13, 2015, (Administrative Record No. KY-2000-06b), the Mine Safety and Health Administration responded that it did not have any comments. No other Federal agency comments were received.

Under 30 CFR 732.17(h)(11)(ii), we are required to get a written concurrence from EPA for those provisions of the program amendment that relate to air or water quality standards issued under the authority of the Clean Water Act (33 U.S.C. 1251 et seq.) or the Clean Air Act (42 U.S.C. 7401 et seq.). None of the revisions that Kentucky proposed to make in this amendment pertain to air or water quality standards. Therefore, we did not ask EPA to concur on the amendment, but requested comment on April 21, 2013. The EPA responded in a letter dated May 6, 2015, (Administrative Record No. KY-2000-06e) acknowledging OSMRE's efforts to collaborate with the EPA on improvements to the effectiveness and consistency of regulatory programs and efforts to reduce the environmental impacts of surface coal mine operations. They did not provide any comments specific to the amendment.

Based on the above findings, we are approving, Kentucky's amendment that was submitted September 28, 2012, with the following two exceptions:

1. We are deferring our decision on the bi-annual actuarial review provision of H.B. 66 until such time as we are able to evaluate the stability of the KRGF over its first three full years of implementation. Following receipt and review of the third actuarial study, we will reconsider our deferral and determine whether to: (1) Approve the bi-annual actuarial study requirement; (2) require that the studies continue to be performed annually; or (3) take other appropriate action.

2. We are not approving 405 KAR 10:015 8(7), that allows for a posting of a financial performance bond covering a specified period of time and allows a permittee to submit a land reclamation and remediation plan for areas producing substandard drainage in lieu of bond. We are requiring Kentucky to take one of the following actions within 60 days following publication of this document: (1) Notify us how Kentucky will require operators to address financial assurances for the treatment of post-mining discharges, potentially in perpetuity, under its currently approved program, given that we are not approving 10:015 8(7); or (2) submit an amendment to its approved program, or a written description of an amendment, together with a timetable for enactment that is consistent with established administrative or legislative procedures in Kentucky, that requires operators to provide sufficient financial assurances for the treatment of post-mining discharges for as long as such discharges continue to exist.

To implement this decision, we are amending the Federal regulations at 30 CFR part 917, which codify decisions concerning the Kentucky program. In accordance with the Administrative Procedure Act, this rule will take effect 30 days after date of publication. Section 503(a) of SMCRA requires that a State program demonstrate that such State has the capability of carrying out the provisions of the Act and meeting its purposes. SMCRA requires consistency of State and Federal standards.

This rule does not have takings implications. This determination is based on the analysis performed for the counterpart Federal regulation.

Pursuant to Office of Management and Budget (OMB) Guidance dated October 12, 1993, the approval of state program amendments is exempted from OMB review under Executive Order 12866.

The Department of the Interior has reviewed this rule as required by Section 3(a) of Executive Order 12988. The Department determined that this Federal Register document meets the criteria of Section 3 of Executive Order 12988, which is intended to ensure that the agency review its legislation and proposed regulations to eliminate drafting errors and ambiguity; that the agency write its legislation and regulations to minimize litigation; and that the agency's legislation and regulations provide a clear legal standard for affected conduct rather than a general standard, and promote simplification and burden reduction. Because Section 3 focuses on the quality of Federal legislation and regulations, the Department limited its review under this Executive Order to the quality of this Federal Register document and to changes to the Federal regulations. The review under this Executive Order did not extend to the language of the State regulatory program or to the program amendment that the State of Kentucky drafted.

This rule is not a “[p]olicy that [has] Federalism implications” as defined by Section 1(a) of Executive Order 13132 because it does not have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Instead, this rule approves an amendment to the Kentucky program submitted and drafted by that State. OSMRE reviewed the submission with fundamental federalism principles in mind as set forth in Sections 2 and 3 of the Executive Order and with the principles of cooperative federalism set forth in SMCRA. See, e.g., 30 U.S.C. 1201(f). As such, pursuant to Section 503(a)(1) and (7) (30 U.S.C. 1253(a)(1) and (7)), OSMRE reviewed the program amendment to ensure that it is “in accordance with” the requirements of SMCRA and “consistent with” the regulations issued by the Secretary pursuant to SMCRA.

In accordance with Executive Order 13175, we have evaluated the potential effects of this rule on Federally recognized Indian tribes and have determined that the rule does not have substantial direct effects 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. The basis for this determination is that our decision is on a State regulatory program and does not involve a Federal regulation involving Indian Lands.

Executive Order 13211 of May 18, 2001, requires agencies to prepare a Statement of Energy Effects for a rule that is (1) considered significant under Executive Order 12866, and (2) likely to have a significant adverse effect on the supply, distribution, or use of energy. Because this rule is exempt from review under Executive Order 12866 and is not expected to have a significant adverse effect on the supply, distribution, or use of energy, a Statement of Energy Effects is not required.

This rule does not require an environmental impact statement because section 702(d) of SMCRA (30 U.S.C. 1292(d)) provides that agency decisions on proposed State regulatory program provisions do not constitute major Federal actions within the meaning of section 102(2)(C) of the National Environmental Policy Act (42 U.S.C. 4332(2)(C)).

This rule does not contain information collection requirements that require approval by OMB under the Paperwork Reduction Act (44 U.S.C. 3507 et seq.).

The Department of the Interior certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). The State submittal, which is the subject of this rule, is based upon counterpart Federal regulations for which an economic analysis was prepared and certification made that such regulations would not have a significant economic effect upon a substantial number of small entities. In making the determination as to whether this rule would have a significant economic impact, the Department relied upon data and assumptions for the counterpart Federal regulations.

This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule: (a) Does not have an annual effect on the economy of $100 million; (b) will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; and (c) does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. This determination is based upon the fact that the Kentucky submittal, which is the subject of this rule, is based upon counterpart Federal regulations for which an analysis was prepared and a determination made that the Federal regulation was not considered a major rule.

This rule will not impose an unfunded mandate on State, local, or tribal governments or the private sector of $100 million or more in any given year. This determination is based upon the fact that the Kentucky submittal, which is the subject of this rule, is based upon counterpart Federal regulations for which an analysis was prepared and a determination made that the Federal regulation did not impose an unfunded mandate.

For the reasons set out in the preamble, 30 CFR part 917 is amended as set forth below:

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

On November 14, 2017, we published a NPRM entitled, “Drawbridge Operation Regulation; China Basin, Mission Creek, San Francisco, CA” in the Federal Register (82 FR 218). We received no comments on this rule.

The Coast Guard is issuing this rule under authority 33 U.S.C. 499. The 3rd Street Bridge, across China Basin, Mission Creek, mile 0.0, at San Francisco, California, is a single leaf bascule bridge which provides 3 feet of vertical clearance at mean high water in the closed position and unlimited vertical clearance in the open position. According to the Coast Guard Drawbridge Operation Regulations in 33 CFR 117.149 the draw shall open on signal if at least one hour notice is given.

The owner of the bridge, the City of San Francisco, has submitted a request to the Coast Guard to keep the bridge in the closed-to-navigation position for 18 months to complete critical mechanical and structural rehabilitation of the bridge.

China Basin, Mission Creek, is 0.64 miles in length with the 3rd Street Bridge at the mouth of the basin. Approximately 35 recreational vessels are moored upstream of the bridge and require the drawspan to open in order to depart the basin into San Francisco Bay. There are no commercial vessels that regularly use the waterway. The City of San Francisco has indicated that they will assist vessel owners in China Basin, Mission Creek, to find alternate moorings during the closure period. Vessels able to transit the bridge, while in the closed-to-navigation position, can continue to do so during the closure period.

Under this temporary final rule the draw need not open for the passage of vessels from 6 a.m. on February 28, 2018, until 11 p.m. on September 30, 2019.

If necessary, during this temporary final rule period, the draw shall open on signal if at least 45 days notice is given.

The Coast Guard provided a comment period of 30 days and no comments were received. As a result, no changes have been made to the rule as proposed.

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 protesters.

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, it 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 limited number of vessels impacted and the ability of those vessel owners, located upstream of the bridge, to receive assistance from the City of San Francisco in finding alternate moorings while the bridge is in the closed-to-navigation position.

The Regulatory Flexibility Act of 1980 (RFA), 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 rule. 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 bridge 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, above.

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

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

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

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

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have made a determination that this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This rule simply promulgates the operating regulations or procedures for drawbridges. This action is categorically excluded from further review, under figure 2-1, paragraph (32)(e), of the Instruction.

A Record of Environmental Consideration and a Memorandum for the Record are not required for this rule.

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

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 117 as follows:

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

On October 10, 2017, we published a NPRM entitled “Drawbridge Operation Regulation; Pequonnock River, Bridgeport, Connecticut,” in the Federal Register (82 FR 46948). We received three comments on this rule that are discussed in Section IV.

The Coast Guard is issuing this rule under authority 33 U.S.C. 499.

The Metro-North Peck Bridge, mile 0.3, across the Pequonnock River at Bridgeport, Connecticut, has a vertical clearance of 26 feet at Mean High Water and 32 feet at Mean Low Water when the span is in the closed position. Vertical clearance is 65 feet when draw is open. Horizontal clearance is 105 feet. Waterway users include recreational and a limited number of small commercial vessels. The drawbridge operating regulations are listed at 33 CFR 117.219(b).

The bridge is a component of the Northeast Corridor, which supports Metro-North, Amtrak, and freight rail service. 211 Metro-North commuter trains alone cross the bridge daily. The owner of the bridge, the Metro-North Railroad, requested a change to require a minimum of four hours of advance notice to better facilitate the orderly flow of rail traffic while satisfying the reasonable needs of navigation. The Metro-North Railroad also requested to increase the number of hours the bridge need not open, except for emergencies, from 2 hours and 40 minutes to a total of 8 hours per day with exceptions for weekends, holidays, and emergencies, and to extend the allowable delay to an opening when a train is approaching the bridge from seven to fifteen minutes. Allowing the bridge owner to require such notice will allow for more efficient and economical operation of the bridge. The bridge has not received any requests for an opening in the past four years.

The Coast Guard believes this change balances the needs of land-based and marine traffic as it will enhance railroad traffic flow without significantly impacting vessel traffic.

The Coast Guard received three comments in response to the NPRM. No changes in the regulatory text were made in response to the comments. One comment inquired whether the phone number for the bridge will be available other than by viewing the number posted as the bridge. Bridge openings can be requested by calling the Metro-North 24 hour Operations Control Center (OCC) at 212-340-2050. Metro-North will contact local waterway users directly to advise them of the number and the amended regulation.

A second comment asked how the amended regulation will be communicated to the maritime community. Metro-North will contact local waterway users directly and the Coast Guard will publish notice of the amended regulation and the phone number for the bridge in the Coast Guard's Local Notice to Mariners.

A third comment noted that, with exceptions for weekends, holidays and emergencies, the time that the bridge need not open daily, except for emergencies, has increased from 2 hours and 40 minutes to a total of 8 hours. This comment asked whether this increase will have any impact. The additional 5 hours and 20 minutes that the bridge need not open daily is not expected to have a significant impact. The bridge has not received any requests for an opening in the past four years and there are no businesses located upstream of the bridge hosting either vessels or barges that would need an opening of the draw as a routine matter. Metro-North will continue to fully maintain and open the bridge as needed to keep the bridge in operable condition.

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 protesters.

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

The Coast Guard has determined this rule is not a significant regulatory action. There have been no requested openings for vessel for the past four years. The 26 foot vertical clearance available at Mean High Water when the bridge is in the closed position is sufficient to allow a majority of traffic to pass without an opening.

The Regulatory Flexibility Act of 1980 (RFA), 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 rule. 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 bridge 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, above.

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

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

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

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

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 expenditure, we do discuss the effects of this rule elsewhere in this preamble.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This rule simply promulgates the operating regulations or procedures for drawbridges. Normally such actions are categorically excluded from further review, under Table 1, L49 of DHS Instruction Manual 023-01-001-01, Rev. 01. A preliminary Record of Environmental Consideration and a Memorandum for the Record are not required for this rule. We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

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

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 117 as follows:

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable. We must establish this safety zone by February 3, 2018 and lack sufficient time to provide a reasonable comment period and then consider those comments before issuing the rule. It is also contrary to the public interest as it would delay the safety measures necessary to protect life and property from the possible hazards associated with the fireworks display launched from the waterway. The impacts on navigation are expected to be minimal as the safety zone will only be in effect for a short duration. The Coast Guard will notify the public and maritime community that the safety zone will be in effect and of its enforcement periods via Broadcast Notice to Mariners (BNM) and Marine Safety Information Bulletin (MSIB).

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 the safety zone is necessary to respond to potential hazards associated with a fireworks display.

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Sector New Orleans (COTP) has determined that a temporary safety zone is necessary to provide for the safety of life and vessels transiting the area where the fireworks will be launched. The fireworks display is scheduled to take place from 10 p.m. through 11:20 p.m. on February 3, 2018, on the navigable waters of the Lower Mississippi River at New Orleans, LA.

This rule establishes a safety zone from 10 p.m. to 11:20 p.m. on February 3, 2018. The safety zone would cover all navigable waters of the Lower Mississippi River (LMR) between Mile Marker (MM) 95.6 and MM 96.6 Above Head of Passes (AHP) in New Orleans, LA. 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. A designated representative is a commissioned, warrant, or petty officer of the U.S. Coast Guard assigned to units under the operational control of USCG Sector New Orleans. Vessels requiring entry into this safety zone must request permission from the COTP or a designated representative. They may be contacted on VHF-FM Channel 16 or 67. Persons and vessels permitted to enter this safety zone must transit at their slowest safe speed and comply with all lawful directions issued by the COTP or the designated representative.

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

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 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-year of the safety zone. This safety zone will restrict vessel traffic from entering or transiting within a one mile area of navigable waterway of the LMR between MM 95.6.0 and 96.6 AHP in New Orleans, LA. Moreover, the Coast Guard will issue Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone, and the rule allows vessels to seek permission to enter the zone.

The Regulatory Flexibility Act of 1980 (RFA), 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 proposed rule would not have a significant economic impact on a substantial number of small entities.

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

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone lasting one hour and twenty minutes on one mile of navigable waters between MM 95.6 and 96.6 AHP of the LMR. 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 (REC) supporting this determination is available in the docket where indicated under ADDRESSES.

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

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

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

Each State has a SIP containing the control measures and strategies to attain and maintain the National Ambient Air Quality Standards (NAAQS). The SIP is extensive, containing such elements as air pollution control regulations, emission inventories, monitoring networks, attainment demonstrations, and enforcement mechanisms.

Before formally adopting required control measures and strategies, each State must provide the public with an opportunity to comment on them. The States then submit these measures and strategies to EPA as requested SIP revisions on which EPA must formally act.

When these control measures and strategies are approved by EPA, after notice and comment rulemaking, they are incorporated into the Federally-approved SIP and identified in title 40 of the Code of Federal Regulations, part 52 (Approval and Promulgation of Implementation Plans) (40 CFR part 52). The actual State regulations approved by EPA are not reproduced in their entirety in 40 CFR part 52, but are “incorporated by reference,” which means that EPA has approved a given State regulation with a specific effective date. This format allows both EPA and the public to know which measures are contained in a given SIP and to help determine whether the State is enforcing the regulations.

The SIP is periodically revised as necessary to address the unique air pollution problems in the State. Therefore, EPA from time to time takes action on State SIP submissions containing new and/or revised regulations and other materials; if approved, they become part of the SIP. On May 22, 1997 (62 FR 27968), EPA revised the procedures for incorporating by reference federally approved SIPs, as a result of consultations between EPA and the Office of the Federal Register (OFR).

As a result, EPA began the process of developing the following: (1) A revised SIP document for each State that would be incorporated by reference under the provisions of title 1 CFR part 51; (2) a revised mechanism for announcing EPA approval of revisions to an applicable SIP and updating both the IBR document and the CFR; and (3) a revised format of the “Identification of plan” sections for each applicable subpart to reflect these revised IBR procedures. The description of the revised SIP document, IBR procedures, and “Identification of plan” format are discussed in further detail in the May 22, 1997, Federal Register document.

The Federally-approved regulations, source-specific requirements, and nonregulatory provisions (entirely or portions of) submitted by each State agency and approved by EPA have been organized into a “SIP compilation.” The SIP compilation contains the updated regulations, source-specific requirements, and nonregulatory provisions approved by EPA through previous rulemaking actions in the Federal Register.

Each SIP compilation contains three parts approved by EPA: Part one contains regulations; part two contains source-specific requirements; and part three contains nonregulatory provisions. Each State's SIP compilation contains a table of identifying information for each of these three parts. In this action, EPA is publishing the tables summarizing the applicable SIP requirements for Massachusetts. The effective dates in the tables indicate the date of the most recent revision of each regulation. The EPA Region 1 Office has the primary responsibility for updating the compilation and ensuring its accuracy.

EPA's Region 1 Office developed and will maintain the compilation for Massachusetts. A copy of the full text of Massachusetts' regulatory and source-specific compilations will also be maintained at NARA.

To better serve the public, EPA revised the organization of the “Identification of plan” section and included additional information to clarify which provisions are the enforceable elements of the SIP.

The revised Identification of plan section contains five subsections: (a) Purpose and scope; (b) Incorporation by reference; (c) EPA-approved regulations; (d) EPA-approved source-specific requirements; and (e) EPA-approved nonregulatory provisions such as transportation control measures, statutory provisions, control strategies, and monitoring networks.

All revisions to the applicable SIP become federally enforceable as of the effective date of the revisions to paragraphs (c), (d), or (e) of the applicable Identification of Plan section found in each subpart of 40 CFR part 52.

To facilitate enforcement of previously-approved SIP provisions and provide a smooth transition to the new SIP compilation, EPA has retained the original Identification of plan section, previously appearing in the CFR as the first or second section of part 52 for each State subpart. After an initial two-year period, EPA will review its experience with the new table format and will decide whether or not to retain the Identification of plan appendices for some further period.

Today's rule constitutes a record keeping exercise to ensure that all revisions to the State programs and accompanying SIP that have already occurred are accurately reflected in 40 CFR part 52. State SIP revisions are controlled by EPA regulations at 40 CFR part 51. When EPA receives a formal SIP revision request, the Agency must publish proposed rulemaking in the Federal Register and provide for public comment before approval.

EPA has determined that today's rule falls under the “good cause” exemption in section 553(b)(3)(B) of the Administrative Procedures Act (APA) which, upon finding “good cause,” authorizes agencies to dispense with public participation and section 553(d)(3) which allows an agency to make a rule effective immediately, thereby avoiding the 30-day delayed effective date otherwise provided for in the APA. Today's rule simply codifies provisions which are already in effect as a matter of law in Federal and approved State programs. Accordingly, we find that public comment is “unnecessary” and “contrary to the public interest” under section 553 of the APA, since the codification of the revised format for denoting IBR of the State materials into the SIP only reflects existing law and since immediate notice in the CFR benefits the public by removing outdated citations from the CFR.

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 Massachusetts Regulations described in amendments to 40 CFR part 52 set forth below. EPA has made, and will continue to make, these documents generally available electronically through www.regulations.gov and/or in hard copy at the appropriate EPA office (see the ADDRESSES section of this preamble for more information).

Under Executive Order 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011), this action is not a “significant regulatory action” and is therefore not subject to review by the Office of Management and Budget. This rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866. Because the agency has made a “good cause” finding that this action is not subject to notice-and-comment requirements under the Administrative Procedure Act or any other statute as indicated in the SUPPLEMENTARY INFORMATION section above, it is not subject to the regulatory flexibility provisions of the Regulatory Flexibility Act (5 U.S.C 601 et seq.), or to sections 202 and 205 of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4). In addition, this action does not significantly or uniquely affect small governments or impose a significant intergovernmental mandate, as described in sections 203 and 204 of UMRA. This rule also does not have a substantial direct effect on one or more Indian Tribes, on the relationship between the Federal government and Indian Tribes, or on the distribution of power and responsibilities between the Federal government and Indian Tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant. This rule does not involve technical standards; thus the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. The rule also does not involve special consideration of environmental justice related issues as required by Executive Order 12898 (59 FR 7629, February 16, 1994). In issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct, as required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996). EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1998) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This rule does not impose an information collection burden under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). EPA's compliance with these statutes and Executive Orders for the underlying rules are discussed in previous actions taken on the State's rules.

The Congressional Review Act (5 U.S.C. 801 et seq.), as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. Section 808 allows the issuing agency to make a rule effective sooner than otherwise provided by the CRA if the agency makes a good cause finding that notice and public procedure is impracticable, unnecessary or contrary to the public interest. Today's action simply codifies provisions which are already in effect as a matter of law in Federal and approved State programs. 5 U.S.C. 808(2). As stated previously, EPA has made such a good cause finding, including the reasons therefore, and established an effective date of January 29, 2018. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. This rule is not a “major rule” as defined by 5 U.S.C. 804(2).

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

Part 52 of chapter I, title 40, Code of Federal Regulations, is amended as follows:

I. Background

On May 8, 2017, the Maryland Department of the Environment (MDE) submitted on behalf of the State of Maryland a formal revision, requesting EPA's approval for the SIP of its NNSR Certification for the 2008 Ozone Standard (Revision 17-01). The SIP revision is in response to EPA's final 2008 8-hour ozone NAAQS Findings of Failure to Submit for NNSR requirements. See 82 FR 9158 (February 3, 2017). Specifically, Maryland is certifying that its existing NNSR program, covering the Baltimore Nonattainment Area (which includes Anne Arundel, Baltimore, Carroll, Harford, and Howard Counties and the city of Baltimore), the Philadelphia-Wilmington-Atlantic City Nonattainment Area (which includes Cecil County in Maryland), and the Washington, DC Nonattainment Area (which includes Calvert, Charles, Frederick, Montgomery, and Prince Georges Counties in Maryland) for the 2008 8-hour ozone NAAQS, is at least as stringent as the requirements at 40 CFR 51.165, as amended by the final rule titled “Implementation of the 2008 National Ambient Air Quality Standards for Ozone: State Implementation Plan Requirements” (SIP Requirements Rule), for ozone and its precursors.1 See 80 FR 12264 (March 6, 2015).

Acronyms and Abbreviations. A number of acronyms and abbreviations are used in this preamble. While this list may not be exhaustive, to ease the reading of this preamble and for reference purposes, the following terms and acronyms are defined:

Organization of this Document. The information in this preamble is organized as follows:

The statutory authority for this action is provided by sections 112, 301 and 307(d)(7)(B) of the Clean Air Act (CAA) (42 U.S.C. 7412, 7601 and 7607(d)(7)(B)).

Categories and entities potentially regulated by this action include, but are not limited to, businesses or government agencies that operate any of the following: Hazardous waste treatment, treatment storage and disposal facilities (TSDF); Resource Conservation and Recovery Act (RCRA) exempt hazardous wastewater treatment facilities; nonhazardous wastewater treatment facilities other than publicly-owned treatment works; used solvent recovery plants; RCRA exempt hazardous waste recycling operations; and used oil re-refineries.

To determine whether your facility is affected, you should examine the applicability criteria in 40 Code of Federal Regulations (CFR) 63.680 of subpart DD. If you have any questions regarding the applicability of any aspect of these NESHAP, please contact the appropriate person listed in the preceding FOR FURTHER INFORMATION CONTACT section of this preamble.

The docket number for this final action regarding the NESHAP for the OSWRO source category is Docket ID No. EPA-HQ-OAR-2012-0360.

In addition to being available in the docket, an electronic copy of this document will also be available on the internet. Following signature by the EPA Administrator, the EPA will post a copy of this final action at https://www.epa.gov/stationary-sources-air-pollution/site-waste-and-recovery-operations-oswro-national-emission. Following publication in the Federal Register, the EPA will post the Federal Register version and key technical documents on this same website.

Under CAA section 307(b)(1), judicial review of this final action is available only by filing a petition for review in the U.S. Court of Appeals for the District of Columbia Circuit (the Court) by March 30, 2018. Under CAA section 307(d)(7)(B), only an objection to this final rule that was raised with reasonable specificity during the period for public comment can be raised during judicial review. Note, under CAA section 307(b)(2), the requirements established by this final rule may not be challenged separately in any civil or criminal proceedings brought by the EPA to enforce these requirements.

This section also provides a mechanism for the EPA to reconsider the rule “[i]f the person raising an objection can demonstrate to the Administrator that it was impracticable to raise such objection within [the period for public comment] or if the grounds for such objection arose after the period for public comment (but within the time specified for judicial review) and if such objection is of central relevance to the outcome of the rule.” Any person seeking to make such a demonstration should submit a Petition for Reconsideration to the Office of the Administrator, U.S. EPA, Room 3000, EPA WJC West Building, 1200 Pennsylvania Ave. NW, Washington, DC 20460, with a copy to both the person(s) listed in the preceding FOR FURTHER INFORMATION CONTACT section, and the Associate General Counsel for the Air and Radiation Law Office, Office of General Counsel (Mail Code 2344A), U.S. EPA, 1200 Pennsylvania Ave. NW, Washington, DC 20460.

On March 18, 2015, the EPA promulgated a final rule amending the OSWRO NESHAP based on the RTR conducted for the OSWRO source category (80 FR 14248). In that final rule, the EPA also amended the OSWRO NESHAP to revise provisions related to emissions during periods of startup, shutdown, and malfunction; to add requirements for electronic reporting of performance testing; to add monitoring requirements for PRDs; to revise routine maintenance provisions; to clarify provisions for open-ended valves and lines and for some performance test methods and procedures; and to make several minor clarifications and corrections. After publication of the final rule, the EPA received a petition for reconsideration submitted jointly by Eastman Chemical Company and the American Chemical Council (ACC) (dated May 18, 2015). This petition sought reconsideration of two of the amended provisions of the OSWRO NESHAP: (1) The equipment leak provisions for connectors, and (2) the requirement to continuously monitor PRDs on containers.

The EPA considered the petition and granted reconsideration of the PRD monitoring requirement in letters to the petitioners dated February 8, 2016. In separate letters to the petitioners dated May 5, 2016, the Administrator denied reconsideration of the equipment leak provisions for connectors and explained the reasons for the denial in these letters. These letters are available in the OSWRO NESHAP amendment rulemaking docket. The EPA also published a Federal Register notice on May 16, 2016 (81 FR 30182), informing the public of these responses to the petition.

On May 18, 2015, ACC filed a petition for judicial review of the OSWRO NESHAP RTR challenging numerous provisions in the final rule, including the issues identified in the petition for administrative reconsideration. American Chemistry Council v. EPA, U.S. Court of Appeals for the DC Circuit, Case No. 15-1146. In 2016, the EPA and ACC reached an agreement to resolve that case. Specifically, the parties agreed to a settlement under which ACC agrees it will dismiss its petition for review of the 2015 final rule if the EPA reconsiders certain PRD provisions and signs a proposed and final rule in accordance with an agreed-upon schedule. The settlement agreement was finalized on June 15, 2017.

As a result of our reconsideration, the Agency proposed and requested comment on revised monitoring requirements for PRDs on containers in a notice of proposed rule reconsideration published in the Federal Register on August 7, 2017 (82 FR 36713). We received public comments from seven parties. Copies of all comments submitted are available at the EPA Docket Center Public Reading Room. Comments are also available electronically through http://www.regulations.gov by searching Docket ID No. EPA-HQ-OAR-2012-0360.

In this document, the EPA is finalizing the revised monitoring requirements, as proposed in the August 7, 2017 (82 FR 36713), document. In addition, in this document we are making one clerical correction and we are clarifying the information needed to meet the reporting requirements in the event a PRD on a container releases hazardous air pollutants (HAP) to the atmosphere. Section III of this preamble summarizes the history of OSWRO monitoring requirements for PRDs on containers, explains how the proposed and final regulatory language differs, summarizes key public comments received on the proposed notice of reconsideration, presents the EPA's responses to these comments, and explains our rationale for the rule revisions published here. Additional comments and EPA's responses to those comments are included in the Summary of Public Comments and Responses on Proposed Rule, in the docket for this rulemaking (Docket No. EPA-HQ-OAR-2012-0360).

This action finalizes the EPA's reconsideration and amendment of the continuous monitoring requirements that apply to PRDs on containers. This issue is discussed in detail in the following sections of this preamble.

In the March 18, 2015, amendments to 40 CFR part 63, subpart DD, the EPA changed the compliance monitoring requirement for PRDs. Since the rule does not distinguish between PRDs on stationary process equipment and those on containers, the monitoring requirements applied to all PRDs. These revised compliance monitoring provisions included requirements to conduct additional PRD monitoring continuously to identify a pressure release, to record the time and duration of each pressure release and to notify operators immediately when a pressure release occurs. The EPA received a petition objecting to these additional continuous monitoring requirements for PRDs on containers and requesting reconsideration. In 40 CFR part 63, subpart DD, containers are, by definition, portable units that hold material. The petitioners' concern was that because containers are portable, frequently moved around OSWRO facilities, and are received from many different off-site locations, it would be difficult, if not impossible, to design and implement a monitoring system for containers that would meet the 2015 rule requirements. When the OSWRO NESHAP were finalized in 2015, the EPA was not aware of equipment meeting the definition of a PRD on containers in the OSWRO industry, and any potential issues associated with the PRD monitoring requirements were not considered for this equipment.

In response to the petition, the EPA reevaluated the PRD monitoring requirements in the 2015 rule as they pertain to containers, considering the other requirements that apply to containers and their PRDs, and the PRD data submitted to the EPA by ACC and the Environmental Technology Council (ETC). Following this evaluation, on August 7, 2017, we proposed to revise the monitoring requirements to exclude PRDs on OSWRO containers from the continuous monitoring and related requirements of 40 CFR 63.691(c)(3)(i). This proposed revision was based on our determination that the PRD inspection and monitoring requirements already included in the OSWRO NESHAP are effective and sufficient. Our review of information provided by ACC and ETC showed that the emissions potential from PRDs on containers at OSWRO facilities is low. Additionally, continuous monitoring of these PRDs, as contemplated by 40 CFR 63.691(c)(3)(i), would be both costly and difficult.

In this action, the EPA is finalizing the revised container PRD monitoring requirements as proposed on August 7, 2017. We are also correcting a clerical error in the proposed regulatory text of 40 CFR 63.691(c)(3) to refer to § 63.680(e)(1)(i) through (iii). In addition, we are revising the regulatory text in CFR 63.691(c)(3)(ii) to clarify that monitoring data are not required to be used in the calculation of HAP emitted during a pressure release event for containers.

The proposed language of 40 CFR 63.691(c)(3)(ii) states that if there is a PRD release to the atmosphere, the owner or operator must calculate and report the HAP emitted, and the calculation may be based on “data from the pressure relief device monitoring alone or in combination with process parameter monitoring data and process knowledge.” We acknowledged at proposal that it would be difficult, if not impossible, to design and implement a monitoring system for containers that would meet the 2015 rule requirements (82 FR at 36715). In recognition of this, we examined whether it would be appropriate to require calculating and reporting of HAP emitted during a PRD pressure release event, and we determined that facility owners/operators would still be able to provide this information through knowledge of the container contents and the weight or volume of the contents before and after the event. It was not our intention to require monitoring data in addition to such process knowledge. Therefore, we have revised the regulatory language of 40 CFR 63.691(c)(3)(ii) accordingly to clarify that monitoring data are not required to be used in the calculation of HAP emitted during a pressure release event for containers.

The following is a summary of the key comments received in response to our August 2017 proposal and our responses to these comments. Additional comments and our responses can be found in the comment summary and response document available in the docket for this action (EPA-HQ-OAR-2012-0360).

Comment: Three commenters expressed support for the proposed removal of the continuous monitoring requirements added to the OSWRO NESHAP in 2015 for PRDs on containers. These commenters noted that data in the record indicate container releases are extremely rare and do not justify imposing additional regulatory burdens. Two of these commenters also stated that with the additional container data gathered by the Agency, the EPA has correctly concluded that it would be “difficult if not impossible, to design and implement a monitoring system for containers that would meet the 2015 rule requirements.” One of the commenters added that the significant cost burdens associated with the monitoring requirements to address the small likelihood of a container PRD release is unsupportable.

In contrast, one commenter stated that the EPA cannot remove monitoring requirements (i.e., the continuous monitoring requirements of the 2015 rule) that are needed to assure compliance with the prohibition on releases from container PRDs. The commenter stated that the proposed monitoring exemption is equivalent to an unlawful malfunction exemption from the standards. The commenter also stated that the EPA has not shown, or supported with evidence, that visual inspections will catch problems with PRDs on containers. The commenter further stated that the EPA did not provide evidence that it is not possible to design a monitoring system for container PRDs and suggests that some other continuous monitoring, such as fenceline monitoring, could be done if monitoring is not possible for individual PRDs.

Response: We are finalizing, as proposed, provisions providing that PRDs on containers are not subject to the continuous monitoring requirements at 40 CFR 63.691(c)(3)(i), and we have not added any other container inspection or monitoring requirements. We have determined that the PRD inspection and monitoring requirements in 40 CFR part 63, subpart PP that apply to containers at OSWRO facilities and are already incorporated into the requirements of the OSWRO NESHAP are effective and sufficient. Depending on the size of the container, the vapor pressure of the container contents, and how the container is used (i.e., temporary storage and/or transport of the material versus waste stabilization), the rule requires the OSWRO owners or operators to follow the requirements for either Container Level 1, 2, or 3 control requirements, as specified in the Container NESHAP at 40 CFR part 63, subpart pp. Each control level specifies requirements to ensure the integrity of the container and its ability to contain its contents (e.g., requirements, to meet U.S. Department of Transportation (DOT) regulations on packaging hazardous materials for transportation, or vapor tightness as determined by EPA Method 21, or no detectable leaks as determined by EPA Method 27); requirements for covers and closure devices (which include pressure relief valves as that term is defined in the Container NESHAP at 40 CFR 63.921); and inspection and monitoring requirements for containers and their covers and closure devices pursuant to the Container NESHAP at 40 CFR 63.926. The inspection and monitoring requirements for containers at 40 CFR 63.926, which are already incorporated into the OSWRO NESHAP by 40 CFR 63.688, require that unless the container is emptied within 24 hours of its receipt at the OSWRO facility, the OSWRO owner/operator is required on or before they sign the shipping manifest accepting a container to visually inspect the container and its cover and closure devices (which include PRDs). If a defect of the container, cover, or closure device is identified, the Container NESHAP specify the time period within which the container must be either emptied or repaired. The Container NESHAP require subsequent annual inspections of the container, its cover, and closure devices in the case where a container remains at the facility and has been unopened for a period of 1 year or more. Therefore, the PRD continuous monitoring requirements in the 2015 OSWRO NESHAP at 40 CFR 63.691(c)(3)(i) are in addition to the requirements to inspect and monitor container PRDs (as closure devices) already in the OSWRO NESHAP per the requirements of the subpart PP Container NESHAP at 40 CFR 63.688.

In addition to the NESHAP requirements, nearly all OSWRO containers are subject to DOT regulatory requirements to ensure their safe design, construction, and operation while in transport, and which also limit the potential for air emissions due to leaks, spills, explosions, etc. The DOT regulations at 49 CFR part 178, Specifications for Packagings or 49 CFR part 179, Specifications for Tank Cars, prescribe specific design, manufacturing, and testing requirements for containers that will be transported by motor vehicles. Additionally, 49 CFR part 180, Continuing Qualification and Maintenance of Packagings, includes requirements for periodic inspections, testing, and repair of containers, which would minimize the chance of an atmospheric release from a PRD. All containers that bring RCRA hazardous waste on-site are subject to these DOT requirements, and any PRDs on those containers would similarly be subject to these requirements. Most OSWRO facilities are also subject to weekly RCRA inspection requirements in § 264.15(b)(4) and § 265.15(b)(4), as well as daily RCRA inspection requirements in § 264.174 and § 265.174. These RCRA inspection requirements apply to owners or operators of all hazardous waste facilities. Therefore, including comparable requirements in the OSWRO NESHAP would substantially overlap with existing requirements.

The data provided by ACC and ETC indicated that almost every facility reported that they unload their containers daily, so if a release from such a PRD on a container were to occur, the facility would likely detect it during the unloading that happens on a daily basis. We understand, based on our review of PRD data provided by ACC and ETC, that PRD releases from containers are rare, the emissions potential from these container PRDs is low, and the additional monitoring requirements for PRDs on the containers that would be required under the 2015 OSWRO NESHAP would be difficult and costly relative to the low emissions potential. In addition, alternative forms of continuous monitoring for container PRDs, such as fenceline monitoring or similar static systems, would not be appropriate for measuring emissions specifically from PRDs on containers, because the inventory of container units at the facilities is dynamic and the units are moved around the facilities' property.

Removing the continuous monitoring requirements from PRDs on containers is not equivalent to an unlawful malfunction exemption. This action does not alter the OSWRO NESHAP's prohibition on releases to the atmosphere from all PRDs at 40 CFR 63.691(c)(3). Therefore, malfunctions that cause PRD releases are not exempt from regulation. Additionally, the EPA determined that the monitoring is sufficient after considering the monitoring and inspection requirements already applicable to these containers, including the inspection requirements in 40 CFR part 63, subpart PP, as described above, while also evaluating other monitoring options and the low risk of release from these units.

Comment: Several commenters provided responses to the EPA's requests for comments related to imposing additional inspection requirements for containers. These requests included whether the EPA should impose more frequent inspections for any filled or partially-filled OSWRO container that remains on-site longer than 60 days; whether any additional inspection requirements should apply to all containers or only apply to larger containers; and whether to also incorporate into the OSWRO NESHAP the inspection requirements of Air Emission Standards for Equipment Leaks in 40 CFR part 264, subpart BB, and 40 CFR part 265, subpart BB, and RCRA and Air Emission Standards for Tanks, Surface Impoundments, and Containers in 40 CFR part 264, subpart CC, and 40 CFR part 265, subpart CC. Three commenters stated that they do not believe additional inspections of container PRDs are necessary for any containers. The commenters noted that facilities are already required to meet the inspection and monitoring requirements of 40 CFR part 63, subpart PP, and most are also subject to the inspection requirements of 40 CFR parts 264 and 265, subparts BB and CC. For larger containers, such as tank cars and rail cars, one of these commenters pointed out that DOT or Federal Railroad Administration inspection, testing and repair requirements would apply. These commenters also noted that most facilities subject to the OSWRO NESHAP are already subject to the RCRA subparts BB and CC inspections requirements. The commenters stated that any of the additional inspection requirements contemplated by the EPA would only overlap with the requirements of existing rules and would not provide any additional benefits.

Response: Considering the responses to our requests for comment regarding including additional inspection requirements for containers, we are not adding any other container inspection or monitoring requirements to the OSWRO NESHAP. As noted above, in the proposal we explained the basis for our proposed conclusion that the container PRD inspection and monitoring requirements already incorporated into the OSWRO NESHAP would be effective and sufficient to ensure compliance with the proposed container PRD requirements. No new information has been provided to suggest that additional inspection or monitoring requirements are needed.

For the reasons provided above, as well as in the preamble for the proposed rule and in the comment summary and response document available in the docket, we are finalizing our proposal that PRDs on OSWRO containers will not be subject to the continuous monitoring requirements at 40 CFR 63.691(c)(3)(i). For the reasons provided above, we are making the correction and clarification noted in section III.B in the final rule.

We estimate that 49 existing sources will be affected by the revised monitoring requirements being finalized in this action.

We are finalizing revised requirements for PRD monitoring on containers on the basis that the inspection and monitoring requirements in 40 CFR part 63, subpart PP incorporated into the OSWRO NESHAP are effective and sufficient. We project that the final standard will not result in any change in emissions compared to the 2015 OSWRO NESHAP.

When the OSWRO NESHAP were finalized in 2015, the EPA was not aware of equipment meeting the definition of a PRD on containers in the OSWRO industry, and costs associated with the PRD release event prohibition and continuous monitoring requirements were not estimated for this equipment. Therefore, the capital and annualized costs in the 2015 final rule were underestimated, as these costs were not included. To determine the impacts of the 2015 final rule, considering the continuous monitoring requirements for PRDs on containers based on the data now available to the EPA from ACC and ETC, we estimated costs and potential emission reductions associated with wireless PRD monitors for containers. Using vendor estimates for wireless PRD monitor costs, we estimate the average per facility capital costs of continuous wireless container PRDs monitoring to be approximately $570,000, and the estimated industry (49 facilities) capital costs of continuous wireless container PRD monitoring would be approximately $28 million. The total annualized costs of continuous wireless container PRD monitoring per facility (assuming a 15-year equipment life and a 7-percent interest rate) are estimated to be approximately $85,000 and approximately $4.2 million for the industry. Therefore, by removing the requirement to monitor PRDs on containers continuously, we estimate the impact of this final rule to be an annual reduction of $4.2 million. Cost information, including wireless PRD monitor costs, is available in the docket for this action.

We performed a national economic impact analysis for the 49 OSWRO facilities affected by this revised rule. The national costs under this final rule, accounting for the data provided by ACC and the ETC, are $1.3 million in capital costs in 2018, or $200,000 in total annualized costs.1 Over 15 years, this is an estimated present value of total costs of $1.9 million, or equivalent annualized costs of $200,000 per year.2 These costs constitute a $28 million reduction in the capital cost or a $4.2 million reduction in total annualized costs compared to the revised baseline costs of the requirements as written in the 2015 rule, which include costs of continuous PRD monitoring.3 Over 15 years, the present value of cost savings are estimated at $39 million, or $4.3 million per year in equivalent annualized cost savings, compared to the revised baseline.4 More information and details of this analysis are provided in the technical document, “Final Economic Impact Analysis for the Reconsideration of the 2015 NESHAP: Off-Site Waste and Recovery Operations,” which is available in the docket for this action.

We project that this final standard will not result in any change in emissions compared to the existing OSWRO NESHAP.

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

This action is not a significant regulatory action and was, therefore, not submitted to the Office of Management and Budget (OMB) for review.

This action is considered an Executive Order 13771 deregulatory action. Details on the estimated cost savings of this final rule can be found in the EPA's analysis of the potential costs and benefits associated with this action.

This action does not impose any new information collection burden under the PRA. OMB has previously approved the information collection activities contained in the existing regulations at 40 CFR part 63, subpart DD, under the provisions of the PRA, 44 U.S.C. 3501 et seq. and has assigned OMB control number 1717.11. The final amendments removed continuous monitoring requirements for PRDs on containers, and these final amendments do not affect the estimated information collection burden of the existing rule. You can find a copy of the Information Collection Request in the docket at Docket ID No. EPA-HQ-OAR-2012-0360 for this rule.

I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. In making this determination, the impact of concern is any significant adverse economic impact on small entities. An agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, has no net burden, or otherwise has a positive economic effect on the small entities subject to the rule. This rule relieves regulatory burden by reducing compliance costs associated with monitoring PRDs on containers. The Agency has determined that of the 28 firms that own the 49 facilities in the OSWRO source category, two firms, or 7 percent, can be classified as small firms. The cost to sales ratio of the reconsidered cost of the monitoring requirements for these two firms is significantly less than 1 percent. In addition, this action constitutes a burden reduction compared to the re-estimated costs of the 2015 rule as promulgated. We have, therefore, concluded that this action does not have a significant impact on a substantial number of small entities. For more information, see the “Final Economic Impact Analysis for the Reconsideration of the 2015 NESHAP: Off-Site Waste and Recovery Operations” which is available in the rulemaking docket.

This action does not contain an unfunded mandate of $100 million or more as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local, or tribal governments, or on the private sector.

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.

This action does not have tribal implications as specified in Executive Order 13175. This action will not have substantial direct effects on tribal governments, on the relationship between the federal government and Indian tribes, or on the distribution of power and responsibilities between the federal government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this action.

This action is not subject to Executive Order 13045 because it is not economically significant as defined in Executive Order 12866, and because the EPA does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. The EPA's risk assessments for the 2015 final rule (Docket ID No. EPA-HQ-OAR-2012-0360) demonstrate that the current regulations are associated with an acceptable level of risk and provide an ample margin of safety to protect public health and prevent adverse environmental effects. This final action does not alter those conclusions.

This action is not subject to Executive Order 13211 because it is not a significant regulatory action under Executive Order 12866.

This rulemaking does not involve technical standards.

The EPA believes that this action does not have disproportionately high and adverse human health or environmental effects on minority populations, low-income populations, and/or indigenous peoples, as specified in Executive Order 12898 (59 FR 7629, February 16, 1994). In the 2015 final rule, the EPA determined that the current health risks posed by emissions from this source category are acceptable and provide an ample margin of safety to protect public health and prevent adverse environmental effects. To gain a better understanding of the source category and near source populations, the EPA conducted a proximity analysis for OSWRO facilities prior to proposal in 2014 to identify any overrepresentation of minority, low income, or indigenous populations. This analysis gave an indication of the prevalence of subpopulations that might be exposed to air pollution from the sources. We revised this analysis to include four additional OSWRO facilities that the EPA learned about after proposal for the 2015 rule. The EPA determined that the final rule would not have disproportionately high and adverse human health or environmental effects on minority, low income, or indigenous populations. The revised proximity analysis results and the details concerning its development are presented in the memorandum titled, Updated Environmental Justice Review: Off-Site Waste and Recovery Operations RTR, available in the docket for this action (Docket Document ID No. EPA-HQ-OAR-2012-0360-0109). This final action does not alter the conclusions made in the 2015 final rule regarding this analysis.

This action is subject to the CRA, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

For the reasons stated in the preamble, the Environmental Protection Agency (EPA) is amending title 40, chapter I, of the Code of Federal Regulations (CFR) as follows:

On November 2, 2015, the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Sec. 701 of Pub. L. 114-74) (the 2015 Act) became law.

The 2015 Act requires agencies to:

1. Adjust the level of civil monetary penalties for inflation with an initial “catch-up” adjustment through an interim final rulemaking in 2016;

2. Make subsequent annual adjustments for inflation beginning in 2017; and

3. Report annually in Agency Financial Reports on these inflation adjustments.

The purpose of these adjustments is to further the policy goals of the underlying statutes.

As required by the 2015 Act, the BLM issued an interim final rule that adjusted the level of civil monetary penalties in BLM regulations with the initial “catch-up” adjustment (RIN 1004-AE46, 81 FR 41,860), which was published on June 28, 2016, and became effective on July 28, 2016. On January 19, 2017, the BLM published a final rule (RIN 1004-AE49, 82 FR 6,307) updating the civil penalty amounts to the 2017 annual adjustment levels.

OMB issued Memorandum M-18-03 on December 15, 2017 (Implementation of Penalty Inflation Adjustments for 2018, Pursuant to the 2015 Act) explaining agency responsibilities for identifying applicable penalties and calculating the annual adjustment for 2018 in accordance with the 2015 Act.

In accordance with the 2015 Act and OMB Memorandum M-18-03, the BLM has identified applicable civil monetary penalties in its regulations and calculated the annual adjustment. A civil monetary penalty is any assessment with a dollar amount that is levied for a violation of a Federal civil statute or regulation, and is assessed or enforceable through a civil action in Federal court or an administrative proceeding. A civil monetary penalty does not include a penalty levied for violation of a criminal statute, nor does it include fees for services, licenses, permits, or other regulatory review. The calculated annual inflation adjustments are based on the percentage change between the Consumer Price Index for all Urban Consumers (CPI-U) for the October preceding the date of the adjustment, and the prior year's October CPI-U. Consistent with guidance in OMB Memorandum M-18-03, the BLM divided the October 2017 CPI-U by the October 2016 CPI-U to calculate the multiplier. In this case, October 2017 CPI-U (246.663)/October 2016 CPI-U (241.729) = 1.02041. OMB Memorandum M-18-03 confirms that this is the proper multiplier. (OMB Memorandum M-18-03 at 1 and n.4.)

The 2015 Act requires the BLM to adjust the civil penalty amounts in 43 CFR 3163.2. To accomplish this, BLM multiplied the current penalty amounts in 43 CFR 3163.2 subparagraph (b)(2) and paragraphs (d), (e), and (f) by the multiplier set forth in OMB Memorandum M-18-03 (1.02041) to obtain the adjusted penalty amounts. The 2015 Act requires that the resulting amounts be rounded to the nearest $1.00 at the end of the calculation process.

Due to an error, the current penalty amount in 43 CFR 3163.2(b)(1) of $1,031 reflects the initial “catch-up” adjustment published on June 28, 2016, rather than the 2017 annual adjusted amount of $1,048. The correct adjusted penalty amount in 43 CFR 3163(b)(1) of $1,069 was calculated by multiplying the 2017 annual adjusted amount ($1,048) by the multiplier set forth in OMB Memorandum M-18-03 (1.02041).

The adjusted penalty amounts will take effect immediately upon publication of this rule. Pursuant to the 2015 Act, the adjusted civil penalty amounts apply to civil penalties assessed after the date the increase takes effect, even if the associated violation predates such increase. This final rule adjusts the following civil penalties:

In accordance with the 2015 Act, agencies must adjust civil monetary penalties “notwithstanding Section 553 of the Administrative Procedure Act” (2015 Act at § 4(b)(2)). The BLM is promulgating this 2018 inflation adjustment for civil penalties as a final rule pursuant to the provisions of the 2015 Act and OMB guidance. A proposed rule is not required because the 2015 Act expressly exempts the annual inflation adjustments from the notice and comment requirements of the Administrative Procedure Act. In addition, since the 2015 Act does not give the BLM any discretion to vary the amount of the annual inflation adjustment for any given penalty to reflect any views or suggestions provided by commenters, it would serve no purpose to provide an opportunity for public comment on this rule.

Executive Order (E.O.) 12866 provides that the Office of Information and Regulatory Affairs (OIRA) in the OMB will review all significant rules. OIRA has determined that this rule is not significant. (See OMB Memorandum M-18-03 at 3).

E.O. 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the Nation's regulatory system to promote predictability and to reduce uncertainty and the use of the best, most innovative, and least burdensome tools for achieving regulatory ends. E.O. 13563 directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 13563 emphasizes further that regulations must be based on the best available science, and that the rulemaking process must allow for public participation and an open exchange of ideas. We have developed this rule in a manner consistent with these requirements to the extent permitted by the 2015 Act.

E.O. 13771 of January 30, 2017, directs federal agencies to reduce the regulatory burden on regulated entities and control regulatory costs. E.O. 13771, however, applies only to significant regulatory actions, as defined in Section 3(f) of E.O. 12866. OIRA has determined that agency regulations exclusively implementing the annual adjustment are not significant regulatory actions under E.O. 12866, provided they are consistent with OMB Memorandum M-18-03 (See OMB Memorandum M-18-03 at 3). Therefore, E.O. 13771 does not apply to this final rule.

The Regulatory Flexibility Act (RFA) requires an agency to prepare a regulatory flexibility analysis for all rules unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. The RFA applies only to rules for which an agency is required to first publish a proposed rule. See 5 U.S.C. 603(a) and 604(a). The 2015 Act expressly exempts these annual inflation adjustments from the requirement to publish a proposed rule for notice and comment (see 2015 Act at § 4 (b)(2)). Because the final rule in this case does not include publication of a proposed rule, the RFA does not apply to this final rule.

This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule:

(a) Will not have an annual effect on the economy of $100 million or more;

(b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; and

(c) Will not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises.

This rule will potentially affect individuals and companies who conduct operations on oil and gas leases on Federal or Indian lands. The BLM believes that the vast majority of potentially affected entities will be small businesses as defined by the Small Business Administration (SBA). However, the BLM does not believe the rule will pose a significant economic impact on the industry, including any small entities, for two reasons. First, any lessee can avoid being assessed civil penalties by operating in compliance with BLM rules and regulations. Second, even though most of the entities potentially affected are small businesses as defined by the SBA, the adjusted penalties and potential increase in penalty receipts are small in comparison to the $16 billion value of oil, natural gas and natural gas liquids produced from Federal and Indian leases in FY 2016.

This rule does not impose an unfunded mandate on State, local, or tribal governments, or the private sector of more than $100 million per year. The rule does not have a significant or unique effect on State, local, or tribal governments or the private sector. Therefore, a statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq.) is not required.

This rule does not effect a taking of private property or otherwise have takings implications under E.O. 12630. Therefore, a takings implication assessment is not required.

Under the criteria in section 1 of E.O. 13132, this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement. Therefore, a federalism summary impact statement is not required.

This rule complies with the requirements of E.O. 12988. Specifically, this rule:

(a) Meets the criteria of section 3(a) requiring that all regulations be reviewed to eliminate errors and ambiguity and be written to minimize litigation; and

(b) Meets the criteria of section 3(b)(2) requiring that all regulations be written in clear language and contain clear legal standards.

The Department of the Interior strives to strengthen its government-to-government relationship with Indian tribes through a commitment to consultation with Indian tribes and recognition of their right to self-governance and tribal sovereignty. We have evaluated this rule under the Department's consultation policy and under the criteria in E.O. 13175 and have determined that it has no substantial direct effects on federally recognized Indian tribes and that consultation under the Department's tribal consultation policy is not required.

This rule does not contain information collection requirements, and a submission to OMB under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.) is not required. We may not conduct or sponsor, and you are not required to respond to, a collection of information unless it displays a currently valid OMB control number.

A detailed statement under the National Environmental Policy Act of 1969 (NEPA) is not required because, as a regulation of an administrative nature, the rule is covered by a categorical exclusion (see 43 CFR 46.210(i)). We have also determined that the rule does not involve any of the extraordinary circumstances listed in 43 CFR 46.215 that would require further analysis under NEPA.

This rule is not a significant energy action under the definition in E.O. 13211. Therefore, a Statement of Energy Effects is not required.

For the reasons given in the preamble, the BLM amends Chapter II of Title 43 of the Code of Federal Regulations as follows: