Federal Register Vol. 83, No.192,

Federal Register Volume 83, Issue 192 (October 3, 2018)

Page Range49769-49985
FR Document

83_FR_192
Current View
Page and SubjectPDF
83 FR 49957 - Temporary Emergency Committee of the Board of Governors; Sunshine Act MeetingPDF
83 FR 49976 - Sunshine Act Meetings; Unified Carrier Registration Plan Board of DirectorsPDF
83 FR 49973 - Surface Transportation Project Delivery Program; Ohio Department of Transportation Audit ReportPDF
83 FR 49951 - Agency Information Collection Activities; Comment Request; Unemployment Insurance (UI) Trust Fund Activities ReportsPDF
83 FR 49953 - Agency Information Collection Activities; Comment Request; Resource Justification Model (RJM)PDF
83 FR 49952 - Agency Information Collection Activities; Comment Request; Unemployment Insurance (UI) Title XII Advances and Voluntary Repayment ProcessPDF
83 FR 49954 - Advisory Committee on Veterans' Employment, Training and Employer Outreach (ACVETEO): MeetingPDF
83 FR 49872 - Approval and Promulgation of Implementation Plans; California; South Coast Serious Area Plan for the 2006 PM2.5PDF
83 FR 49921 - Proposed Information Collection Request; Comment Request; Collection of Information on Anaerobic Digestion Facilities Processing Wasted Food To Support EPA's Sustainable Food Management ProgramsPDF
83 FR 49965 - MIAX EMERALD, LLC; Notice of Filing of Application for Registration as a National Securities Exchange Under Section 6 of the Securities Exchange Act of 1934PDF
83 FR 49957 - Notice of Applications for Deregistration Under Section 8(f) of the Investment Company Act of 1940PDF
83 FR 49908 - Advisory Committee on Supply Chain Competitiveness: Notice of Public MeetingsPDF
83 FR 49916 - Agency Information Collection Activities; Comment Request; State Survey on Activities Supported on Student Support and Academic Enrichment Grants (Title IV, Part A)PDF
83 FR 49799 - Owner-Participant Changes to Guaranteed Benefits and Asset AllocationPDF
83 FR 49906 - Agency Information Collection Activities: Proposed Collection; Comment Request: Uniform Grant Application Package for Discretionary Grant ProgramsPDF
83 FR 49943 - Royalty Policy Committee Establishment; Request for NominationsPDF
83 FR 49769 - Revision of Freedom of Information Act RegulationsPDF
83 FR 49915 - U.S. Purse Seine Fishery in the Western and Central Pacific Ocean; Extension of Public Scoping PeriodPDF
83 FR 49928 - Formations of, Acquisitions by, and Mergers of Bank Holding CompaniesPDF
83 FR 49929 - Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding CompanyPDF
83 FR 49912 - Endangered and Threatened Species; Take of Anadromous FishPDF
83 FR 49977 - Commercial Driver's License (CDL): Application for Exemption; U.S. Custom Harvesters, Inc. (USCHI)PDF
83 FR 49979 - Reports, Forms, and Record Keeping Requirements, Agency Information Collection Activity Under OMB ReviewPDF
83 FR 49965 - Agency Information Collection Activities: Proposed Request and Comment RequestPDF
83 FR 49915 - Availability of the Final Integrated City of Norfolk Coastal Storm Risk Management Feasibility Study Report/Environmental Impact Statement, Norfolk, VAPDF
83 FR 49910 - Stainless Steel Bar From Brazil, India, Japan, and Spain: Continuation of Antidumping Duty Order (India) and Revocation of Antidumping Duty Orders (Brazil, Japan, and Spain)PDF
83 FR 49909 - Certain Frozen Warmwater Shrimp From India: Notice of Final Results of Antidumping Duty Changed Circumstances ReviewPDF
83 FR 49956 - Nuclear Criticality Safety Standards for Nuclear Materials Outside Reactor CoresPDF
83 FR 49928 - Notice of Availability of the Federal Housing Finance Agency Information Quality GuidelinesPDF
83 FR 49935 - Citizen Petitions and Petitions for Stay of Action Subject to Section 505(q) of the Federal Food, Drug, and Cosmetic Act; Draft Guidance for Industry; AvailabilityPDF
83 FR 49933 - Selection of the Appropriate Package Type Terms and Recommendations for Labeling Injectable Medical Products Packaged in Multiple-Dose, Single-Dose, and Single-Patient-Use Containers for Human Use; Guidance for Industry; AvailabilityPDF
83 FR 49955 - Meeting of the Advisory Committee on Reactor Safeguards (ACRS) Subcommittee on Regulatory Policies and PracticesPDF
83 FR 49944 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Update With Changes, of a Previously Approved Collection Which Expires November, 2018: Department of Justice Equitable Sharing Agreement and CertificationPDF
83 FR 49908 - Membership of the Performance Review Board for EDA, NTIA, BIS and MBDAPDF
83 FR 49913 - Submission for OMB Review; Comment RequestPDF
83 FR 49913 - Proposed Information Collection; Comment Request; Atlantic Highly Migratory Species Tournament Registration and ReportingPDF
83 FR 49911 - Proposed Information Collection; Comment Request; Vessel Monitoring System Requirements Under the Western and Central Pacific Fisheries ConventionPDF
83 FR 49869 - White Collar Exemption Regulations; Public Listening SessionPDF
83 FR 49936 - Agency Information Collection Request. 60-Day Public Comment RequestPDF
83 FR 49932 - Atopic Dermatitis: Timing of Pediatric Studies During Development of Systemic Drugs; Guidance for Industry; AvailabilityPDF
83 FR 49969 - Advisory Committee on International Economic Policy; Notice of Open MeetingPDF
83 FR 49922 - Agency Information Collection Activities: Comment RequestPDF
83 FR 49969 - Public HearingPDF
83 FR 49969 - Notice of Determinations; Culturally Significant Objects Imported for Exhibition-Determinations: “Contesting Modernity: Informalism in Venezuela, 1955-1975” ExhibitionPDF
83 FR 49969 - Notice of Determinations; Culturally Significant Objects Imported for Exhibition-Determinations: “The Orléans Collection” ExhibitionPDF
83 FR 49964 - Submission for OMB Review; Comment RequestPDF
83 FR 49962 - Submission Collection; Comment RequestPDF
83 FR 49959 - Submission for OMB Review; Comment RequestPDF
83 FR 49930 - Privacy Act of 1974; Matching ProgramPDF
83 FR 49937 - National Heart, Lung, and Blood Institute; Notice of Closed MeetingsPDF
83 FR 49937 - National Institute of Mental Health; Notice of Closed MeetingsPDF
83 FR 49938 - National Heart, Lung, and Blood Institute; Notice of Closed MeetingPDF
83 FR 49836 - Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year 2019 Rates; Quality Reporting Requirements for Specific Providers; Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs (Promoting Interoperability Programs) Requirements for Eligible Hospitals, Critical Access Hospitals, and Eligible Professionals; Medicare Cost Reporting Requirements; and Physician Certification and Recertification of Claims; CorrectionPDF
83 FR 49832 - Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities (SNF) Final Rule for FY 2019, SNF Value-Based Purchasing Program, and SNF Quality Reporting Program; CorrectionPDF
83 FR 49920 - Notice of Application: Eastern Shore Natural Gas CompanyPDF
83 FR 49917 - Notice of Filing: Kendall K. HelmPDF
83 FR 49919 - Notice of Availability of Draft Environmental Assessment: KEI (Maine) Power Management (III) LLCPDF
83 FR 49918 - Combined Notice of Filings #1PDF
83 FR 49917 - Combined Notice of FilingsPDF
83 FR 49918 - Beaver City Corp; Notice of Intent To File License Application, Filing of Pre-Application Document, and Approving Use of the Traditional Licensing ProcessPDF
83 FR 49951 - Notice of Lodging of Proposed Consent Decree Under the Comprehensive Environmental Response, Compensation and Recovery ActPDF
83 FR 49929 - Proposed Revised Vaccine Information Materials for Meningococcal ACWY and DTaP (Diphtheria, Tetanus, Pertussis) VaccinesPDF
83 FR 49946 - September 11th Victim Compensation Fund: Compensation of ClaimsPDF
83 FR 49940 - Agency Information Collection Activities; Extension, Without Change, of a Currently Approved Collection: H-2 Petitioner's Employment Related or Fee Related NotificationPDF
83 FR 49938 - Agency Information Collection Activities; Extension, Without Change, of a Currently Approved Collection: Application for T Nonimmigrant Status; Application for Immediate Family Member of T-1 Recipient; and Declaration of Law Enforcement Officer for Victim of Trafficking in Persons, Form I-914 and Supplements A and BPDF
83 FR 49959 - Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of Designation of Longer Period for Commission Action on Proposed Rule Change To Make Permanent Rule 11.24, Which Sets Forth the Exchange's Pilot Retail Price Improvement ProgramPDF
83 FR 49960 - Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Order Approving a Proposed Rule Change, as Modified by Amendment Nos. 1 and 3, To Permit the Listing and Trading of Options That Overlie the Mini-SPX Index and the Russell 2000 IndexPDF
83 FR 49962 - Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Order Approving a Proposed Rule Change, as Modified by Amendment Nos. 1 and 2, To Permit the Listing and Trading of Options That Overlie the Mini-SPX Index and the Russell 2000 IndexPDF
83 FR 49945 - Notice of Lodging of Proposed Consent Decree Under the Clean Air ActPDF
83 FR 49939 - Agency Information Collection Activities; Extension, Without Change, of a Currently Approved Collection; Application To Adjust Status From Temporary to Permanent ResidentPDF
83 FR 49957 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Section 902.04 of the NYSE Listed Company Manual To Apply a $50,000 Fee Cap per Transaction for Issuances of Additional Shares by Closed End FundsPDF
83 FR 49905 - Notice of Request for an Extension of a Currently Approved Information CollectionPDF
83 FR 49776 - Irish Potatoes Grown in Certain Designated Counties in Idaho, and Malheur County, Oregon; Modification of Handling RegulationsPDF
83 FR 49914 - South Atlantic Fishery Management Council (Council); Public MeetingsPDF
83 FR 49927 - Open Commission Meeting, Wednesday, September 26, 2018PDF
83 FR 49926 - Information Collection Being Submitted for Review and Approval to the Office of Management and BudgetPDF
83 FR 49924 - Information Collection Being Reviewed by the Federal Communications CommissionPDF
83 FR 49923 - Information Collection Being Reviewed by the Federal Communications CommissionPDF
83 FR 49971 - Petition for Exemption; Summary of Petition Received; Rolls-Royce plcPDF
83 FR 49897 - Air Plan Approval; Indiana; Negative Declarations for Commercial and Industrial Solid Waste Incineration and Sewage Sludge Incineration Units for Designated Facilities and PollutantsPDF
83 FR 49870 - Air Plan Approval; California; Feather River Air Quality Management DistrictPDF
83 FR 49921 - Underground Injection Control Program; Hazardous Waste Injection Restrictions; Petition for Exemption Reissuance-Class I Hazardous Waste Injection; Phillips 66 Company, Borger, TexasPDF
83 FR 49944 - Filing of Plats of Survey: Oregon/WashingtonPDF
83 FR 49971 - Consensus Standards, Light-Sport AircraftPDF
83 FR 49941 - Record of Decision for the Final Environmental Impact Statement for the Na Pua Makani Wind Energy Project, Oahu, HIPDF
83 FR 49931 - Announcement of Intent To Issue an OPDIV-Initiated Supplement to BCFS Health and Human Services Under the Standing Funding Opportunity Announcement Number HHS-2017-ACF-ORR-ZU-1132, Residential (Shelter) Services for Unaccompanied ChildrenPDF
83 FR 49900 - Oklahoma: Proposed Authorization of State Hazardous Waste Management Program RevisionPDF
83 FR 49894 - Approval and Promulgation of Implementation Plans; Texas; Interstate Transport Requirements for the 1997 Ozone National Ambient Air Quality StandardsPDF
83 FR 49981 - Privacy Act of 1974; Department of Transportation, Office of the Secretary of Transportation; DOT/ALL 26; Department of Transportation Insider Threat ProgramPDF
83 FR 49826 - Approval of Kansas Air Quality State Implementation Plans; Construction Permits and Approvals ProgramPDF
83 FR 49784 - Airworthiness Directives; General Electric Company CF34-8E EnginesPDF
83 FR 49907 - Notice of New Fee SitesPDF
83 FR 49780 - Airworthiness Directives; The Boeing Company AirplanesPDF
83 FR 49786 - Airworthiness Directives; BAE Systems (Operations) Limited AirplanesPDF
83 FR 49789 - Airworthiness Directives; Dassault Aviation AirplanesPDF
83 FR 49791 - Airworthiness Directives; Airbus Helicopters Deutschland GmbH HelicoptersPDF
83 FR 49806 - Significant New Use Rules on Certain Chemical SubstancesPDF
83 FR 49903 - Significant New Use Rules on Certain Chemical SubstancesPDF
83 FR 49857 - Real Estate AppraisalsPDF
83 FR 49980 - Request OMB Clearance for Agency Request for Reinstatement of a Previously Approved Information Collection: Foreign Air Carrier Application for Statement of AuthorizationPDF
83 FR 49793 - Airworthiness Directives; Airbus SAS AirplanesPDF

Issue

83 192 Wednesday, October 3, 2018 Contents Agricultural Marketing Agricultural Marketing Service RULES Modification of Handling Regulations: Irish Potatoes Grown in Certain Designated Counties in Idaho, and Malheur County, OR, 49776-49780 2018-21480 Agriculture Agriculture Department See

Agricultural Marketing Service

See

Food and Nutrition Service

See

Forest Service

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 49905-49906 2018-21481
Centers Disease Centers for Disease Control and Prevention NOTICES Proposed Revised Vaccine Information Materials for Meningococcal ACWY and DTaP Vaccines, 49929-49930 2018-21491 Centers Medicare Centers for Medicare & Medicaid Services RULES Medicare Programs: Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year 2019 Rates; Correction, 49836-49856 2018-21500 Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities (SNF) Final Rule for FY 2019, SNF Value-Based Purchasing Program, and SNF Quality Reporting Program; Correction, 49832-49836 2018-21499 NOTICES Privacy Act; Matching Programs, 49930-49931 2018-21506 Children Children and Families Administration NOTICES Funding Announcements: BCFS Health and Human Services, 49931-49932 2018-21454 Commerce Commerce Department See

Economic Development Administration

See

Industry and Security Bureau

See

International Trade Administration

See

Minority Business Development Agency

See

National Oceanic and Atmospheric Administration

See

National Telecommunications and Information Administration

NOTICES Performance Review Board Membership, 49908 2018-21526
Council Inspectors Council of the Inspectors General on Integrity and Efficiency RULES Revision of Freedom of Information Act Regulations, 49769-49776 2018-21548 Defense Department Defense Department See

Engineers Corps

Economic Development Economic Development Administration NOTICES Performance Review Board Membership, 49908 2018-21526 Education Department Education Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: State Survey on Activities Supported on Student Support and Academic Enrichment Grants, 49916-49917 2018-21552 Employment and Training Employment and Training Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Resource Justification Model, 49953-49954 2018-21563 Unemployment Insurance Title XII Advances and Voluntary Repayment Process, 49952-49953 2018-21562 Unemployment Insurance Trust Fund Activities Reports, 49951-49952 2018-21564 Energy Department Energy Department See

Federal Energy Regulatory Commission

Engineers Engineers Corps NOTICES Environmental Impact Statements; Availability, etc.: City of Norfolk Coastal Storm Risk Management, 49915-49916 2018-21537 Environmental Protection Environmental Protection Agency RULES Air Quality State Implementation Plans; Approvals and Promulgations: Kansas; Construction Permits and Approvals Program, 49826-49832 2018-21434 Significant New Use Rules on Certain Chemical Substances, 49806-49826 2018-21194 PROPOSED RULES Air Quality State Implementation Plans; Approvals and Promulgations: California; Feather River Air Quality Management District, 49870-49872 2018-21467 California; South Coast Serious Area Plan for the 2006 Fine Particulate Matter National Ambient Air Quality Standards, 49872-49894 2018-21560 Indiana; Negative Declarations for Commercial and Industrial Solid Waste Incineration and Sewage Sludge Incineration Units for Designated Facilities and Pollutants, 49897-49899 2018-21468 Texas; Interstate Transport Requirements for the 1997 Ozone National Ambient Air Quality Standards, 49894-49897 2018-21448 Significant New Use Rules on Certain Chemical Substances, 49903-49904 2018-21191 State Hazardous Waste Management Program: Oklahoma, 49900-49903 2018-21449 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Anaerobic Digestion Facilities Processing Wasted Food to Support EPA's Sustainable Food Management Programs, 49921-49922 2018-21556 Underground Injection Control Programs: Hazardous Waste Injection Restrictions; Petition for Exemption Reissuance—Class I Hazardous Waste Injection; Phillips 66 Company; Borger, TX, 49921 2018-21461 Export Import Export-Import Bank NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 49922-49923 2018-21513 2018-21517 Federal Aviation Federal Aviation Administration RULES Airworthiness Directives: Airbus Helicopters Deutschland GmbH Helicopters, 49791-49793 2018-21342 Airbus SAS Airplanes, 49793-49799 2018-20348 BAE Systems (Operations) Limited Airplanes, 49786-49789 2018-21344 Dassault Aviation Airplanes, 49789-49791 2018-21343 General Electric Company CF34-8E Engines, 49784-49786 2018-21378 The Boeing Company Airplanes, 49780-49784 2018-21346 NOTICES Consensus Standards: Light-Sport Aircraft, 49971-49973 2018-21458 Petitions for Exemptions; Summaries: Rolls-Royce plc, 49971 2018-21469 Federal Communications Federal Communications Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 49923-49927 2018-21476 2018-21477 2018-21475 Meetings: Commission Meeting, 49927-49928 2018-21478 Federal Energy Federal Energy Regulatory Commission NOTICES Applications: Eastern Shore Natural Gas Co., 49920-49921 2018-21498 Combined Filings, 49917-49919 2018-21494 2018-21495 Environmental Assessments; Availability, etc.: KEI (Maine) Power Management (III) LLC, 49919-49920 2018-21496 Filings: Kendall K. Helm, 49917 2018-21497 License Applications: Beaver City Corp., 49918 2018-21493 Federal Highway Federal Highway Administration NOTICES Surface Transportation Project Delivery Program: Ohio Department of Transportation Audit Report, 49973-49976 2018-21565 Federal Housing Finance Agency Federal Housing Finance Agency NOTICES Information Quality Guidelines, 49928 2018-21533 Federal Motor Federal Motor Carrier Safety Administration NOTICES Applications: Commercial Drivers License; U.S. Custom Harvesters, Inc., 49977-49979 2018-21541 Meetings; Sunshine Act, 49976-49977 2018-21622 Federal Reserve Federal Reserve System NOTICES Changes in Bank Control Notices: Acquisitions of Shares of a Bank or Bank Holding Company, 49929 2018-21543 Formations of, Acquisitions by, and Mergers of Bank Holding Companies, 49928-49929 2018-21544 Fish Fish and Wildlife Service NOTICES Environmental Impact Statements; Availability, etc.: Na Pua Makani Wind Energy Project, Oahu, HI, 49941-49943 2018-21457 Food and Drug Food and Drug Administration NOTICES Guidance: Atopic Dermatitis: Timing of Pediatric Studies During Development of Systemic Drugs, 49932-49933 2018-21519 Citizen Petitions and Petitions for Stay of Action, 49935-49936 2018-21532 Selection of the Appropriate Package Type Terms and Recommendations for Labeling Injectable Medical Products Packaged in Multiple-Dose, Single-Dose, and Single-Patient-Use Containers for Human Use, 49933-49934 2018-21531 Food and Nutrition Food and Nutrition Service NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Uniform Grant Application Package for Discretionary Grant Programs, 49906-49907 2018-21550 Forest Forest Service NOTICES New Fee Sites, 49907-49908 2018-21355 Health and Human Health and Human Services Department See

Centers for Disease Control and Prevention

See

Centers for Medicare & Medicaid Services

See

Children and Families Administration

See

Food and Drug Administration

See

National Institutes of Health

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 49936-49937 2018-21520
Homeland Homeland Security Department See

U.S. Citizenship and Immigration Services

Industry Industry and Security Bureau NOTICES Performance Review Board Membership, 49908 2018-21526 Interior Interior Department See

Fish and Wildlife Service

See

Land Management Bureau

NOTICES Requests for Nominations: Royalty Policy Committee, 49943-49944 2018-21549
International Trade Adm International Trade Administration NOTICES Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Frozen Warmwater Shrimp from India, 49909-49910 2018-21535 Stainless Steel Bar from Brazil, India, Japan, and Spain, 49910-49911 2018-21536 Meetings: Advisory Committee on Supply Chain Competitiveness, 49908-49909 2018-21553 Justice Department Justice Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Equitable Sharing Agreement and Certification, 49944-49945 2018-21528 Proposed Consent Decree under the Clean Air Act, 49945-49946 2018-21484 Proposed Consent Decrees: CERCLA, 49951 2018-21492 September 11th Victim Compensation Fund: Compensation of Claims, 49946-49951 2018-21490 Labor Department Labor Department See

Employment and Training Administration

See

Veterans Employment and Training Service

See

Wage and Hour Division

Land Land Management Bureau NOTICES Plats of Survey: Oregon/Washington, 49944 2018-21459 Minority Business Minority Business Development Agency NOTICES Performance Review Board Membership, 49908 2018-21526 National Credit National Credit Union Administration PROPOSED RULES Real Estate Appraisals, 49857-49869 2018-20946 National Highway National Highway Traffic Safety Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 49979-49980 2018-21540 National Institute National Institutes of Health NOTICES Meetings: National Heart, Lung, and Blood Institute, 49937-49938 2018-21501 2018-21503 2018-21505 National Institute of Mental Health, 49937 2018-21504 National Oceanic National Oceanic and Atmospheric Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 49913 2018-21525 Agency Information Collection Activities; Proposals, Submissions, and Approvals: Atlantic Highly Migratory Species Tournament Registration and Reporting, 49913-49914 2018-21524 Vessel Monitoring System Requirements under the Western and Central Pacific Fisheries Convention, 49911-49912 2018-21523 Endangered and Threatened Species: Takes of Anadromous Fish, 49912-49913 2018-21542 Environmental Impact Statements; Availability, etc.: U.S. Purse Seine Fishery in the Western and Central Pacific Ocean, 49915 2018-21547 Meetings: South Atlantic Fishery Management Council, 49914-49915 2018-21479 National Telecommunications National Telecommunications and Information Administration NOTICES Performance Review Board Membership, 49908 2018-21526 Nuclear Regulatory Nuclear Regulatory Commission NOTICES Guidance: Nuclear Criticality Safety Standards for Nuclear Materials Outside Reactor Cores, 49956 2018-21534 Meetings: Advisory Committee on Reactor Safeguards Subcommittee on Regulatory Policies and Practices, 49955-49956 2018-21530 Pension Benefit Pension Benefit Guaranty Corporation RULES Owner-participant Changes to Guaranteed Benefits and Asset Allocation, 49799-49806 2018-21551 Postal Service Postal Service NOTICES Meetings; Sunshine Act, 49957 2018-21625 Securities Securities and Exchange Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 49959-49960, 49962, 49964 2018-21509 2018-21510 2018-21511 Applications: Deregistration, 49957 2018-21554 MIAX Emerald, LLC, 49965 2018-21555 Self-Regulatory Organizations; Proposed Rule Changes: Cboe BYX Exchange, Inc., 49959 2018-21487 Cboe BZX Exchange, Inc., 49962-49964 2018-21485 Cboe EDGX Exchange, Inc., 49960-49962 2018-21486 New York Stock Exchange, LLC, 49957-49959 2018-21482 Social Social Security Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 49965-49969 2018-21539 State Department State Department NOTICES Culturally Significant Objects Imported for Exhibition: Contesting Modernity: Informalism in Venezuela, 1955-1975 Exhibition, 49969 2018-21514 The Orleans Collection Exhibition, 49969 2018-21512 Meetings: Advisory Committee on International Economic Policy, 49969 2018-21518 Susquehanna Susquehanna River Basin Commission NOTICES Public Hearing, 49969-49971 2018-21515 Transportation Department Transportation Department See

Federal Aviation Administration

See

Federal Highway Administration

See

Federal Motor Carrier Safety Administration

See

National Highway Traffic Safety Administration

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Foreign Air Carrier Application for Statement of Authorization, 49980-49981 2018-20494 Privacy Act; Systems of Records, 49981-49985 2018-21441
U.S. Citizenship U.S. Citizenship and Immigration Services NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Application for T Nonimmigrant Status; Application for Immediate Family Member of T-1 Recipient; and Declaration of Law Enforcement Officer for Victim of Trafficking in Persons, Form I-914 and Supplements A and B, 49938-49939 2018-21488 Application to Adjust Status from Temporary to Permanent Resident, 49939-49940 2018-21483 H-2 Petitioner's Employment Related or Fee Related Notification, 49940-49941 2018-21489 Veterans Employment Veterans Employment and Training Service NOTICES Meetings: Advisory Committee on Veterans' Employment, Training and Employer Outreach, 49954-49955 2018-21561 Wage Wage and Hour Division PROPOSED RULES Meetings: White Collar Exemption Regulations; Public Listening Session, 49869-49870 2018-21521 Reader Aids

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83 192 Wednesday, October 3, 2018 Rules and Regulations COUNCIL OF THE INSPECTORS GENERAL ON INTEGRITY AND EFFICIENCY 5 CFR Part 9800 RIN 3219-AA01 Revision of Freedom of Information Act Regulations AGENCY:

Council of the Inspectors General on Integrity and Efficiency.

ACTION:

Interim final rule.

SUMMARY:

The Council of the Inspectors General on Integrity and Efficiency (CIGIE) is issuing this interim final rule to amend its regulations under the Freedom of Information Act (FOIA) to incorporate certain changes made to FOIA by the FOIA Improvement Act of 2016. The rule also implements changes in accordance with the Inspector General Empowerment Act of 2016.

DATES:

This interim final rule is effective October 3, 2018. Written comments may be submitted by November 2, 2018.

ADDRESSES:

You may submit comments by any of the following methods:

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

Email: [email protected]

Fax: (202) 254-0162.

Mail: Atticus J. Reaser, General Counsel, Council of the Inspectors General on Integrity and Efficiency, 1717 H Street NW, Suite 825, Washington, DC 20006.

Hand Delivery/Courier: Council of the Inspectors General on Integrity and Efficiency, 1717 H Street NW, Suite 825, Washington, DC 20006.

FOR FURTHER INFORMATION CONTACT:

Atticus J. Reaser, General Counsel, CIGIE, (202) 292-2600.

SUPPLEMENTARY INFORMATION:

Background Information

This rule amends CIGIE's regulations under the Freedom of Information Act (FOIA) to incorporate certain changes made to FOIA, 5 U.S.C. 552, by the FOIA Improvement Act of 2016, Public Law 114-185, 130 Stat. 538 (June 30, 2016). The FOIA Improvement Act requires all agencies to review and update their FOIA regulations in accordance with its provisions. CIGIE is making changes to its regulations accordingly, including highlighting the electronic availability of records, notifying requesters of their right to seek assistance from the FOIA Public Liaison and the Office of Government Information Services, changing the time limit for appeals, and describing limitations on assessing search fees if the response time is delayed.

Additionally, on December 16, 2016, the Inspector General Empowerment Act of 2016, Public Law 114-317, 130 Stat. 1595 (IGEA) was signed into law by the President thereby amending the Inspector General Act of 1978, as amended, 5 U.S.C. app., (Inspector General Act) and expanding CIGIE's records maintenance responsibilities to include maintenance of the records of CIGIE's Integrity Committee (IC) by CIGIE's Chairperson. IC records were previously maintained pursuant to the Inspector General Act by the Federal Bureau of Investigation (FBI). To conform to the IGEA and meet its obligations thereunder, CIGIE is amending its regulations implementing FOIA to reflect that CIGIE has a centralized FOIA program and requesters should no longer submit FOIA requests for IC-related records to the FBI.

In addition, CIGIE is restructuring its regulations under FOIA to more closely conform to the format recommended by the Department of Justice Office of Information Policy. Accordingly, due to the restructuring and number of changes, CIGIE is reissuing its FOIA regulations in their entirety.

In 2008, Congress established CIGIE as an independent entity within the executive branch to address integrity, economy, and effectiveness issues that transcend individual Government agencies; and increase the professionalism and effectiveness of personnel by developing policies, standards, and approaches to aid in the establishment of a well-trained and highly skilled workforce in the offices of the Inspectors General (OIG). CIGIE's membership is comprised of all Inspectors General whose offices are established under section 2 or section 8G of the Inspector General Act (i.e., those Inspectors General that are Presidentially-appointed/Senate-confirmed and those that are appointed by agency heads) as well as the Controller of the Office of Federal Financial Management, a designated official of the FBI, the Director of the Office of Government Ethics, the Special Counsel of the Office of Special Counsel, the Deputy Director of the Office of Personnel Management, the Deputy Director for Management of the Office of Management and Budget (OMB), and the Inspectors General for the Intelligence Community, Central Intelligence Agency, Library of Congress, Capitol Police, Government Publishing Office, Government Accountability Office, and Architect of the Capitol. The Deputy Director for Management of OMB serves as the Executive Chairperson of CIGIE.

Administrative Procedure Act

Pursuant to 5 U.S.C. 553(d)(3), CIGIE has found that good cause exists for waiving the general notice of proposed rulemaking and public comment procedures as to these amendments and for issuing this interim final rule without a delayed effective date. The notice and comment procedures are being waived because most of the revisions are being made in accordance with the mandates of the FOIA Improvement Act of 2016 and the IGEA and CIGIE is not exercising discretion on substantive matters in issuing these revisions.

Executive Orders 12866 and 13563

In promulgating this rule, CIGIE has adhered to the regulatory philosophy and the applicable principles of regulation set forth in section 1 of Executive Order 12866, Regulatory Planning and Review. OMB has determined that this rule is not “significant” under Executive Order 12866.

Regulatory Flexibility Act

These regulations will not have a significant economic impact on a substantial number of small entities. Therefore, a regulatory flexibility analysis as provided by the Regulatory Flexibility Act, as amended, is not required.

Paperwork Reduction Act

These regulations impose no additional reporting and recordkeeping requirements. Therefore, clearance by OMB is not required.

Federalism (Executive Order 13132)

This rule does not have Federalism implications, as set forth in Executive Order 13132. 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.

List of Subjects in 5 CFR Part 9800

Administrative practice and procedure, Freedom of Information, Privacy.

Accordingly, for the reasons set forth in the preamble, 5 CFR part 9800 is revised to read as follows: PART 9800—FREEDOM OF INFORMATION ACT REGULATIONS Sec. 9800.101 General provisions. 9800.102 Requirements for making FOIA requests. 9800.103 Consultations, referrals, and coordination. 9800.104 Timing of responses to requests. 9800.105 Responses to requests. 9800.106 Confidential commercial information. 9800.107 Administrative appeals. 9800.108 Preservation of records. 9800.109 Fees. 9800.110 Public reading room. 9800.111 Other rights and services. Authority:

Section 11 of the Inspector General Act of 1978, as amended, 5 U.S.C. app.; Section 3 of the Inspector General Empowerment Act of 2016, Pub. L. 114-317, 130 Stat. 1595; 5 U.S.C. 301, 552, 552a; 31 U.S.C. 9701.

§ 9800.101 General provisions.

(a) In general. This part contains the rules that the Council of the Inspectors General on Integrity and Efficiency (CIGIE) follows in processing requests for records under the Freedom of Information Act (FOIA), 5 U.S.C. 552. These rules should be read in conjunction with the text of FOIA and the Uniform Freedom of Information Fee Schedule and Guidelines published by the Office of Management and Budget (OMB Guidelines). Requests made by individuals for records about themselves under the Privacy Act of 1974, 5 U.S.C. 552a, are processed under part 9801 as well as under this part.

(b) Centralized system. CIGIE has a centralized system for processing FOIA requests, with one office receiving and coordinating the processing of all FOIA requests made to CIGIE.

(c) Authority to grant or deny requests. The Executive Director of CIGIE, or designee, is authorized to grant or deny any requests for records that are maintained by CIGIE. For purposes of any request for records maintained by the CIGIE Integrity Committee (IC) established under section 11(d) of the Inspector General Act of 1978, as amended, 5 U.S.C. app. (Inspector General Act), the designees are the IC Chairperson and IC Vice Chairperson.

§ 9800.102 Requirements for making FOIA requests.

(a) Requests generally. (1) A request for CIGIE records under FOIA must be made in writing. The request must be sent by:

(i) Regular mail addressed to: FOIA Officer, Council of the Inspectors General on Integrity and Efficiency, 1717 H Street NW, Suite 825, Washington, DC 20006; or

(ii) By fax sent to the FOIA Officer at (202) 254-0162; or

(iii) By email to [email protected].

(2) For the quickest handling, both the request letter and envelope or any fax cover sheet or email subject line should be clearly marked “FOIA Request.” Whether sent by mail, fax, email, or other prescribed electronic method, a FOIA request will not be considered to have been received by CIGIE until it reaches the FOIA office.

(3) A requester who is making a request for records about himself or herself, as a parent or guardian of a minor, or as the guardian of someone determined by a court to be incompetent, must comply with the verification of identity provisions set forth in part 9801.

(4) Where a request for records pertains to another individual, a requester may receive greater access by submitting either a notarized authorization signed by that individual or a declaration made in compliance with the requirements set forth in 28 U.S.C. 1746 by that individual authorizing disclosure of the records to the requester, or by submitting proof that the individual is deceased (e.g., a copy of a death certificate or an obituary). As an exercise of administrative discretion, CIGIE can require a requester to supply additional information if necessary to verify that a particular individual has consented to disclosure.

(b) Description of records sought. Requesters must describe the records sought in sufficient detail to enable CIGIE personnel to locate them with a reasonable amount of effort. To the extent possible, requesters should include specific information that may assist CIGIE in identifying the requested records, such as the date, title or name, author, recipient, subject matter of the record, case number, file designation, or reference number. In general, requesters should include as much detail as possible about the specific records or the types of records that they are seeking. Before making their requests, requesters may contact CIGIE's FOIA Public Liaison to discuss the records they are seeking and to receive assistance in describing the records. If after receiving a request CIGIE determines that it does not reasonably describe the records sought, CIGIE will inform the requester what additional information is needed to perfect the request or why the request is otherwise insufficient. CIGIE will toll the processing of the request when it notifies the requester that additional information is needed or that the request is otherwise insufficient. CIGIE may toll one time for this purpose. Requesters who are attempting to reformulate or modify such a request may discuss their request with CIGIE's FOIA Public Liaison. If the requester does not provide the additional information within 30 days, the request will be closed.

(c) Preferred format. Requests may specify the preferred form or format (including electronic formats) for the records sought. CIGIE will accommodate the request if the record is readily reproducible in that form or format.

(d) Requester contact information. Requesters must provide contact information, such as a telephone number, email address, and/or mailing address, to assist CIGIE in communicating with requester and providing released records.

§ 9800.103 Consultations, referrals, and coordination.

(a) In general. When reviewing records located by CIGIE in response to a request, CIGIE will determine whether another agency of the Federal Government is better able to determine whether the record is exempt from disclosure under FOIA. As to any such record, CIGIE will proceed in one of the following ways:

(1) Consultation. When records originated with CIGIE, but contain within them information of interest to another agency or office of the Federal Government, CIGIE will typically consult with that other agency prior to making a release determination.

(2) Referral. (i) When CIGIE believes that a different agency of the Federal Government is best able to determine whether to disclose the record, CIGIE typically will refer the responsibility for responding to the request regarding that record to that agency. Ordinarily, the agency that originated the record will be presumed to be best able to make the disclosure determination. However, if CIGIE and the originating agency jointly agree that the former is in the best position to respond regarding the record, then the record may be handled as a consultation.

(ii) Whenever CIGIE refers any part of the responsibility for responding to a request to another agency, it will document the referral, maintain a copy of the record that it refers, and notify the requester of the referral and inform the requester of the name(s) of the agency to which the record was referred, including that agency's FOIA contact information.

(3) Coordination. The standard referral procedure is not appropriate where disclosure of the identity of the agency to which the referral would be made could harm an interest protected by an applicable exemption, such as the exemptions that protect personal privacy or national security interests. For example, if CIGIE, in responding to a request for records on a living third party, locates within its files records originating with a law enforcement agency, and if the existence of that law enforcement interest in the third party was not publicly known, then to disclose that law enforcement interest could cause an unwarranted invasion of the personal privacy of the third party. Similarly, if CIGIE locates within its files material originating with an Intelligence Community agency, and the involvement of that agency in the matter is classified and not publicly acknowledged, then to disclose or give attribution to the involvement of that Intelligence Community agency could cause national security harms. In such instances, to avoid harm to an interest protected by an applicable exemption, CIGIE will coordinate with the originating agency to seek its views on the disclosability of the record. The release determination for the record that is the subject of the coordination will then usually be conveyed to the requester by CIGIE.

(b) Timing of responses to received consultations and referrals. All consultations and referrals received by CIGIE will be handled according to the date that the first agency received the perfected FOIA request.

(c) Agreements regarding consultations and referrals. CIGIE may establish agreements with other agencies to eliminate the need for consultations or referrals with respect to particular types of records.

(d) Classified information. On receipt of any request involving classified information, CIGIE must determine whether the information is currently and properly classified in accordance with applicable classification rules. Whenever a request involves a record containing information that has been classified or may be appropriate for classification by another agency under any applicable Executive order concerning the classification of records, CIGIE must refer the responsibility for responding to the request regarding that information to the agency that classified the information, or that should consider the information for classification. Whenever CIGIE's record contains information that has been derivatively classified (for example, when it contains information classified by another agency), CIGIE must refer the responsibility for responding to that portion of the request to the agency that classified the underlying information.

§ 9800.104 Timing of responses to requests.

(a) In general. Ordinarily, CIGIE will have 20 days (excepting Saturdays, Sundays, and legal public holidays) from when a request is received to determine whether to grant or deny the request and will respond to requests according to their order of receipt in each track as addressed in paragraph (b) of this section. In determining which records are responsive to a request, CIGIE ordinarily will include only records in its possession as of the date on which it begins its search for them. If any other date is used, CIGIE will inform the requester of that date.

(b) Multitrack processing. (1) CIGIE processes requests using a multitrack processing system. There are four processing tracks: An expedited track, if the request qualifies; a simple track for relatively simple requests; a complex track for more complex and lengthy requests; and a remanded track, when a FOIA appeal is granted. After CIGIE assigns a request to a track for processing, CIGIE will notify the requester of that assignment.

(2) CIGIE may provide requesters in its complex track with an opportunity to limit the scope of their requests to qualify for faster processing within the specified limits of the simple track.

(c) Unusual circumstances. Whenever the statutory time limit for processing a request cannot be met because of “unusual circumstances,” as defined in FOIA, and CIGIE extends the time limit on that basis, CIGIE will, before expiration of the 20-day period to respond, notify the requester in writing of the unusual circumstances involved and of the date by which processing of the request can be expected to be completed. Where the extension exceeds 10 working days, CIGIE will, as described by FOIA, provide the requester with an opportunity to modify the request or arrange an alternative time period for processing. CIGIE will make available its designated FOIA contact and its FOIA Public Liaison for this purpose. CIGIE will also alert requesters to the availability of the Office of Government Information Services to provide dispute resolution services.

(d) Aggregating requests. For the purposes of satisfying unusual circumstances under FOIA, CIGIE may aggregate requests in cases where it reasonably appears that multiple requests, made either by a requester or by a group of requesters acting in concert, constitute a single request that would otherwise involve unusual circumstances. CIGIE will not aggregate multiple requests that involve unrelated matters.

(e) Expedited processing. (1) Requests and appeals will be processed on an expedited basis whenever it is determined that they involve:

(i) Circumstances in which the lack of expedited processing could reasonably be expected to pose an imminent threat to the life or physical safety of an individual;

(ii) An urgency to inform the public about an actual or alleged Federal Government activity, if made by a person who is primarily engaged in disseminating information;

(iii) The loss of substantial due process rights; or

(iv) A matter of widespread and exceptional media interest in which there exist possible questions about the government's integrity that affect public confidence.

(2) A request for expedited processing may be made at any time.

(3) A requester who seeks expedited processing must submit a statement, certified to be true and correct, explaining in detail the basis for making the request for expedited processing. For example, under paragraph (e)(1)(ii) of this section, a requester who is not a full-time member of the news media must establish that the requester is a person whose primary professional activity or occupation is information dissemination, though it need not be the requester's sole occupation. Such a requester also must establish a particular urgency to inform the public about the government activity involved in the request—one that extends beyond the public's right to know about government activity generally. The existence of numerous articles published on a given subject can be helpful in establishing the requirement that there be an “urgency to inform” the public on the topic. As a matter of administrative discretion, CIGIE may waive the formal certification requirement.

(4) CIGIE will notify the requester within 10 calendar days of the receipt of a request for expedited processing of its decision whether to grant or deny expedited processing. If expedited processing is granted, the request will be given priority, placed in the processing track for expedited requests, and will be processed as soon as practicable. If a request for expedited processing is denied, any appeal of that decision will be acted on expeditiously.

§ 9800.105 Responses to requests.

(a) In general. CIGIE will, to the extent practicable, communicate with requesters having access to the internet using electronic means, such as email.

(b) Acknowledgments of requests. CIGIE will acknowledge the request in writing and assign it an individualized tracking number if it will take longer than 10 working days to process. CIGIE will include in the acknowledgment a brief description of the records sought to allow requesters to more easily keep track of their requests.

(c) Grants of requests. Once CIGIE makes a determination to grant a request in full or in part, it will notify the requester in writing. CIGIE also will inform the requester of any fees charged under § 9800.109 and will disclose the requested records to the requester promptly upon payment of any applicable fees. CIGIE will inform the requester of the availability of the FOIA Public Liaison to offer assistance.

(d) Adverse determinations of requests. When CIGIE makes an adverse determination denying a request in any respect, it will notify the requester of that determination in writing. Adverse determinations, or denials of requests, include decisions that: The requested record is exempt, in whole or in part; the request does not reasonably describe the records sought; the information requested is not a record subject to FOIA; the requested record does not exist, cannot be located, or has been destroyed; or the requested record is not readily reproducible in the form or format sought by the requester. Adverse determinations also include denials involving fees or fee waiver matters or denials of requests for expedited processing.

(e) Content of denial. The denial will include:

(1) The name and title or position of the person responsible for the denial;

(2) A brief statement of the reasons for the denial, including any FOIA exemption applied by CIGIE in denying the request;

(3) An estimate of the volume of any records or information withheld, such as the number of pages or some other reasonable form of estimation, although such an estimate is not required if the volume is otherwise indicated by deletions marked on records that are disclosed in part or if providing an estimate would harm an interest protected by an applicable exemption; and

(4) A statement that the denial may be appealed under § 9800.107 and a description of the requirements set forth therein.

(5) A statement notifying the requester of the assistance available from the FOIA Public Liaison and the dispute resolution services offered by the Office of Government Information Services.

(f) Markings on released documents. Markings on released documents must be clearly visible to the requester. Records disclosed in part will be marked to show the amount of information deleted and the exemption under which the deletion was made unless doing so would harm an interest protected by an applicable exemption. The location of the information deleted will also be indicated on the record, if technically feasible.

(g) Use of record exclusions. (1) In the event that CIGIE identifies records that may be subject to exclusion from the requirements of FOIA pursuant to 5 U.S.C. 552(c), CIGIE will confer with the Department of Justice Office of Information Policy (OIP) to obtain approval to apply the exclusion.

(2) Should CIGIE invoke an exclusion, it will maintain an administrative record of the process of invocation and approval of the exclusion by OIP.

§ 9800.106 Confidential commercial information.

(a) Definitions—(1) Confidential commercial information means commercial or financial information obtained by CIGIE from a submitter that may be protected from disclosure under Exemption 4 of FOIA, 5 U.S.C. 552(b)(4).

(2) Submitter means any person or entity, including a corporation, State, or foreign government, but not including another Federal Government entity, that provides information either directly or indirectly to the Federal Government.

(b) Designation of confidential commercial information. A submitter of confidential commercial information must use good faith efforts to designate by appropriate markings, either at the time of submission or within a reasonable time thereafter, any portion of its submission that it considers to be protected from disclosure under Exemption 4. These designations shall expire 10 years after the date of the submission unless the submitter requests and provides justification for a longer designation period.

(c) When notice to submitters is required. (1) CIGIE will promptly provide written notice to a submitter of confidential commercial information whenever records containing such information are requested under FOIA if, after reviewing the request, the responsive records, and any appeal by the requester, CIGIE determines that it may be required to disclose the records, provided:

(i) The requested information has been designated in good faith by the submitter as information considered protected from disclosure under Exemption 4; or

(ii) CIGIE has a reason to believe that the requested information may be protected from disclosure under Exemption 4, but has not yet determined whether the information is protected from disclosure under that exemption or any other applicable exemption.

(2) The notice will either describe the commercial information requested or include a copy of the requested records or portions of records containing the information. In cases involving a voluminous number of submitters, notice may be made by posting or publishing the notice in a place or manner reasonably likely to accomplish it.

(d) Exceptions to submitter notice requirements. The notice requirements of this section will not apply if:

(1) CIGIE determines that the information is exempt under FOIA;

(2) The information has been lawfully published or has been officially made available to the public;

(3) Disclosure of the information is required by a statute other than FOIA or by a regulation issued in accordance with the requirements of Executive Order 12600; or

(4) The designation made by the submitter under paragraph (b) of this section appears obviously frivolous, except that, in such a case, CIGIE will give the submitter written notice of any final decision to disclose the information and must provide that notice within a reasonable number of days prior to a specified disclosure date.

(e) Opportunity to object to disclosure. (1) CIGIE will specify a reasonable time period within which the submitter must respond to the notice referenced above. If a submitter has any objections to disclosure, it should provide CIGIE a detailed written statement that specifies all grounds for withholding the particular information under any exemption of FOIA. To rely on Exemption 4 as basis for nondisclosure, the submitter must explain why the information constitutes a trade secret or commercial or financial information that is privileged or confidential.

(2) A submitter who fails to respond within the time period specified in the notice shall be considered to have no objection to disclosure of the information. Information received by CIGIE after the date of any disclosure decision shall not be considered by CIGIE. Any information provided by a submitter under this part may itself be subject to disclosure under FOIA.

(f) Analysis of objections. CIGIE will consider a submitter's objections and specific grounds for nondisclosure in deciding whether to disclose the requested information.

(g) Notice of intent to disclose. Whenever CIGIE decides to disclose information over the objection of a submitter, CIGIE will provide the submitter written notice, which will include:

(1) A statement of the reasons why each of the submitter's disclosure objections was not sustained;

(2) A description of the information to be disclosed; and

(3) A specified disclosure date, which will be a reasonable time subsequent to the notice.

(h) Notice of FOIA lawsuit. Whenever a requester files a lawsuit seeking to compel the disclosure of confidential commercial information, CIGIE will promptly notify the submitter.

(i) Requester notification. CIGIE will notify a requester whenever it provides the submitter with notice and an opportunity to object to disclosure; whenever it notifies the submitter of its intent to disclose the requested information; and whenever a submitter files a lawsuit to prevent the disclosure of the information.

§ 9800.107 Administrative appeals.

(a) Appeals of adverse determinations. A requester may appeal a determination denying a FOIA request in any respect to the CIGIE Chairperson c/o Office of General Counsel, Council of the Inspectors General on Integrity and Efficiency, 1717 H Street NW, Suite 825, Washington, DC 20006. The appeal must be in writing, and must be submitted either by:

(1) Regular mail sent to the address listed in this subsection, above; or

(2) By fax sent to the FOIA Officer at (202) 254-0162; or

(3) By email to [email protected]

(b) Submission and content. The Office of General Counsel must receive the appeal within 90 calendar days of the date of the letter denying the request. For the quickest possible handling, the appeal letter and envelope or any fax cover sheet or email subject line should be clearly marked “FOIA Appeal.” The appeal letter must clearly identify the CIGIE determination (including the assigned FOIA request number, if known) being appealed.

(c) Adjudication of appeals. (1) The CIGIE Chairperson or designee will act on all appeals under this section.

(2) An appeal ordinarily will not be adjudicated if the request becomes a matter of FOIA litigation.

(3) On receipt of any appeal involving classified information, CIGIE will take appropriate action to ensure compliance with applicable classification rules.

(d) Decisions on appeals. Ordinarily, CIGIE will have 20 days (excepting Saturdays, Sundays, and legal public holidays) from receipt of the appeal to issue an appeal decision. 5 U.S.C. 552(a)(6)(A)(ii). CIGIE will provide its decision on an appeal in writing. A decision that upholds CIGIE's determination in whole or in part will contain a statement that identifies the reasons for the affirmance, including any FOIA exemptions applied. The decision will provide the requester with notification of the statutory right to file a lawsuit and will inform the requester of the dispute resolution services offered by the Office of Government Information Services of the National Archives and Records Administration as a non-exclusive alternative to litigation. If CIGIE's decision is remanded or modified on appeal, CIGIE will notify the requester of that determination in writing. CIGIE will then further process the request in accordance with that appeal determination and will respond directly to the requester.

(e) Engaging in dispute resolution services provided by the Office of Government Information Services. Mediation is a voluntary process. If CIGIE agrees to participate in the mediation services provided by the Office of Government Information Services, it will actively engage as a partner to the process in an attempt to resolve the dispute.

(f) When appeal is required. Before seeking review by a court of CIGIE's adverse determination, a requester generally must first submit a timely administrative appeal.

§ 9800.108 Preservation of records.

CIGIE will preserve all correspondence pertaining to the requests that it receives under this part, as well as copies of all requested records, until disposition or destruction is authorized pursuant to title 44 of the United States Code and the relevant approved records retention schedule. Records shall not be disposed of or destroyed while they are the subject of a pending request, appeal, or lawsuit under FOIA.

§ 9800.109 Fees.

(a) In general. CIGIE will charge for processing requests under FOIA in accordance with the provisions of this section and with the OMB Guidelines. To resolve any fee issues that arise under this section, CIGIE may contact a requester for additional information. CIGIE will ensure that searches, review, and duplication are conducted in the most efficient and the least expensive manner. CIGIE ordinarily will collect all applicable fees before sending copies of records to a requester. Requesters must pay fees by check or money order made payable to the Treasury of the United States.

(b) Definitions. For purposes of this section:

(1) Commercial use request is a request that asks for information for a use or a purpose that furthers a commercial, trade, or profit interest, which can include furthering those interests through litigation. CIGIE's decision to place a requester in the commercial use category will be made on a case-by-case basis based on the requester's intended use of the information. CIGIE will notify requester if requester is placed in the commercial use category.

(2) Direct costs are those expenses that an agency incurs in searching for and duplicating (and, in the case of commercial use requests, reviewing) records to respond to a FOIA request. For example, direct costs include the salary of the employee performing the work (i.e., the basic rate of pay for the employee, plus 16 percent of that rate to cover benefits) and the cost of operating computers and other electronic equipment, such as photocopiers and scanners. Direct costs do not include overhead expenses, such as the costs of space, and of heating or lighting a facility.

(3) Duplication is reproducing a copy of a record, or of the information contained in it, necessary to respond to a FOIA request. Copies can take the form of paper, audiovisual materials, or electronic records, among others.

(4) Educational institution is any school that operates a program of scholarly research. A requester in this fee category must show that the request is made in connection with the requester's role at the educational institution. CIGIE may seek assurance from the requester that the request is in furtherance of scholarly research and will advise requesters of their placement in this category.

(5) Noncommercial scientific institution is an institution that is not operated on a “commercial” basis, as defined in paragraph (b)(1) of this section, and that is operated solely for the purpose of conducting scientific research the results of which are not intended to promote any particular product or industry. A requester in this category must show that the request is authorized by and is made under the auspices of a qualifying institution and that the records are sought to further scientific research and are not for a commercial use. CIGIE will notify requester if requester is placed in the noncommercial scientific institution category.

(6) Representative of the news media is any person or entity that actively gathers information of potential interest to a segment of the public, uses its editorial skills to turn the raw materials into a distinct work, and distributes that work to an audience. The term “news” means information that is about current events or that would be of current interest to the public. Examples of news media entities include television or radio stations that broadcast “news” to the public at large and publishers of periodicals that disseminate “news” and make their products available through a variety of means to the general public, including news organizations that disseminate solely on the internet. A request for records supporting the news-dissemination function of the requester will not be considered to be for a commercial use. “Freelance” journalists who demonstrate a solid basis for expecting publication through a news media entity will be considered as a representative of the news media. A publishing contract would provide the clearest evidence that publication is expected; however, CIGIE will also consider a requester's past publication record in making this determination. CIGIE will notify requester if requester is placed in the representative of the news media category.

(7) Review is the examination of a record located in response to a request to determine whether any portion of it is exempt from disclosure. Review time includes processing any record for disclosure, such as doing all that is necessary to prepare the record for disclosure, including the process of redacting the record and marking the appropriate exemptions. Review costs are properly charged even if a record ultimately is not disclosed. Review time also includes time spent both obtaining and considering any formal objection to disclosure made by a confidential commercial information submitter under § 9800.106, but it does not include time spent resolving general legal or policy issues regarding the application of exemptions.

(8) Search is the process of looking for and retrieving records or information responsive to a request. Search time includes page-by-page or line-by-line identification of information within records and the reasonable efforts expended to locate and retrieve information from electronic records.

(c) Charging fees. In responding to FOIA requests, CIGIE will charge the following fees unless a waiver or reduction of fees has been granted under paragraph (k) of this section. Because the fee amounts provided below already account for the direct costs associated with a given fee type, CIGIE will not add any additional costs to charges calculated under this section.

(1) Search. (i) Requests made by educational institutions, noncommercial scientific institutions, or representatives of the news media are not subject to search fees. Search fees will be charged for all other requesters, subject to the restrictions of paragraph (d) of this section. CIGIE may properly charge for time spent searching even if they do not locate any responsive records or if they determine that the records are entirely exempt from disclosure.

(ii) For each quarter hour spent by personnel searching for requested records, including electronic searches that do not require new programming, the fees will be as follows: Professional—$10.00; and clerical/administrative—$4.75.

(iii) Requesters will be charged the direct costs associated with conducting any search that requires the creation of a new computer program to locate the requested records. Requesters will be notified of the costs associated with creating such a program and must agree to pay the associated costs before the costs may be incurred.

(iv) For requests that require the retrieval of records stored by an agency at a Federal records center operated by National Archives and Records Administration, additional costs will be charged in accordance with the Transactional Billing Rate Schedule established by National Archives and Records Administration.

(2) Duplication. Duplication fees will be charged to all requesters, subject to the restrictions of paragraph (d) of this section. CIGIE will honor a requester's preference for receiving a record in a particular form or format where it is readily reproducible by CIGIE in the form or format requested. Where photocopies are supplied, CIGIE will provide one copy per request at a cost of five cents per page. For copies of records produced on tapes, disks, or other media, CIGIE will charge the direct costs of producing the copy, including operator time. Where paper documents must be scanned to comply with a requester's preference to receive the records in an electronic format, the requester shall pay the direct costs associated with scanning those materials. For other forms of duplication, CIGIE shall charge the direct costs.

(3) Review. Review fees shall be charged to requesters who make commercial use requests. Review fees shall be assessed in connection with the initial review of the record, i.e., the review conducted by CIGIE to determine whether an exemption applies to a particular record or portion of a record. No charge will be made for review at the administrative appeal stage of exemptions applied at the initial review stage. However, if a particular exemption is deemed to no longer apply, any costs associated with CIGIE's re-review of the records in order to consider the use of other exemptions may be assessed as review fees. Review fees shall be charged at the same rates as those charged for a search under paragraph (c)(1)(ii) of this section.

(d) Restrictions on charging fees. (1) No search fees will be charged for requests by educational institutions (unless the records are sought for a commercial use), noncommercial scientific institutions, or representatives of the news media.

(2) If CIGIE fails to comply with FOIA's time limits in which to respond to a request, it may not charge search fees, or, in the instances of requests from requesters described in paragraph (d)(1) of this section, may not charge duplication fees, except as described in paragraphs (d)(2)(i) through (iii) of this section.

(i) If CIGIE has determined that unusual circumstances, as defined by FOIA, apply and CIGIE provided timely written notice to the requester in accordance with FOIA, a failure to comply with the time limit will be excused for an additional 10 days.

(ii) If CIGIE has determined that unusual circumstances as defined by FOIA apply, and more than 5,000 pages are necessary to respond to the request, CIGIE may charge search fees, or, in the case of requesters described in paragraph (d)(1) of this section, may charge duplication fees if the following steps are taken. CIGIE will have provided timely written notice of unusual circumstances to the requester in accordance with FOIA and CIGIE will have discussed with the requester via written mail, email, or telephone (or made not less than three good-faith attempts to do so) how the requester could effectively limit the scope of the request in accordance with 5 U.S.C. 552(a)(6)(B)(ii). If this exception is satisfied, CIGIE may charge all applicable fees incurred in the processing of the request.

(iii) If a court has determined that exceptional circumstances exist, as defined by FOIA, a failure to comply with the time limits will be excused for the length of time provided by the court order.

(3) No search or review fees will be charged for a quarter-hour period unless more than half of that period is required for search or review.

(4) Except for requesters seeking records for a commercial use, CIGIE will provide without charge:

(i) The first 100 pages of duplication (or the cost equivalent for other media); and

(ii) The first two hours of search.

(5) When, after first deducting the 100 free pages (or its cost equivalent) and the first two hours of search, a total fee calculated under paragraph (c) of this section is $25.00 or less for any request, no fee will be charged.

(e) Notice of anticipated fees in excess of $25.00. (1) When CIGIE determines or estimates that the fees to be assessed in accordance with this section will exceed $25.00, CIGIE will notify the requester of the actual or estimated amount of the fees, including a breakdown of the fees for search, review, or duplication, unless the requester has indicated a willingness to pay fees as high as those anticipated. If only a portion of the fee can be estimated readily, CIGIE will advise the requester accordingly. If the requester is a noncommercial use requester, the notice will specify that the requester is entitled to the statutory entitlements of 100 pages of duplication at no charge and, if the requester is charged search fees, two hours of search time at no charge, and will advise the requester whether those entitlements have been provided.

(2) In cases in which a requester has been notified that the actual or estimated fees exceed $25.00, the request shall not be considered received and further work will not be completed until the requester commits in writing to pay the actual or estimated total fee, or designates some amount of fees the requester is willing to pay, or in the case of a noncommercial use requester who has not yet been provided with the requester's statutory entitlements, designates that the requester seeks only that which can be provided by the statutory entitlements. The requester must provide the commitment or designation in writing, and must, when applicable, designate an exact dollar amount the requester is willing to pay. CIGIE is not required to accept payments in installments.

(3) If the requester has indicated a willingness to pay some designated amount of fees, but CIGIE estimates that the total fee will exceed that amount, CIGIE shall toll the processing of the request when it notifies the requester of the estimated fees in excess of the amount the requester has indicated a willingness to pay. CIGIE will inquire whether the requester wishes to revise the amount of fees the requester is willing to pay or modify the request. Once the requester responds, the time to respond will resume from where it was at the date of the notification.

(4) CIGIE will make available their FOIA Public Liaison or other FOIA professional to assist any requester in reformulating a request to meet the requester's needs at a lower cost.

(f) Charges for other services. Although not required to provide special services, if CIGIE chooses to do so as a matter of administrative discretion, the direct costs of providing the service shall be charged. Examples of such services include certifying that records are true copies, providing multiple copies of the same document, or sending records by means other than first class mail.

(g) Charging interest. CIGIE may charge interest on any unpaid bill starting on the 31st day following the date of billing the requester. Interest charges shall be assessed at the rate provided in 31 U.S.C. 3717 and will accrue from the billing date until payment is received by CIGIE. CIGIE will follow the provisions of the Debt Collection Act of 1982, Public Law 97-365, 96 Stat. 1749, as amended, and its administrative procedures, including the use of consumer reporting agencies, collection agencies, and offset.

(h) Aggregating requests. When CIGIE reasonably believes that a requester or a group of requesters acting in concert is attempting to divide a single request into a series of requests for the purpose of avoiding fees, CIGIE may aggregate those requests and charge accordingly. CIGIE may presume that multiple requests of this type made within a 30-day period have been made to avoid fees. For requests separated by a longer period, CIGIE will aggregate them only where there is a reasonable basis for determining that aggregation is warranted in view of all the circumstances involved. Multiple requests involving unrelated matters will not be aggregated.

(i) Advance payments. (1) For requests other than those described in paragraph (i)(2) or (3) of this section, CIGIE will not require the requester to make an advance payment before work is commenced or continued on a request. Payment owed for work already completed (i.e., payment before copies are sent to a requester) is not an advance payment.

(2) When CIGIE determines or estimates that a total fee to be charged under this section will exceed $250.00, it may require that the requester make an advance payment up to the amount of the entire anticipated fee before beginning to process the request. CIGIE may elect to process the request prior to collecting fees when it receives a satisfactory assurance of full payment from a requester with a history of prompt payment.

(3) Where a requester has previously failed to pay a properly charged FOIA fee to CIGIE or another agency within 30 days of the billing date, CIGIE may require that the requester pay the full amount due, plus any applicable interest on that prior request, and CIGIE may require that the requester make an advance payment of the full amount of any anticipated fee before CIGIE begins to process a new request or continues to process a pending request or any pending appeal. Where CIGIE has a reasonable basis to believe that a requester has misrepresented the requester's identity to avoid paying outstanding fees, it may require that the requester provide proof of identity.

(4) In cases in which CIGIE requires advance payment, the request shall not be considered received and further work will not be completed until the required payment is received. If the requester does not pay the advance payment within 30 days after the date of CIGIE's fee determination, the request will be closed.

(j) Other statutes specifically providing for fees. The fee schedule of this section does not apply to fees charged under any statute that specifically requires an agency to set and collect fees for particular types of records. In instances where records responsive to a request are subject to a statutorily-based fee schedule program, CIGIE shall inform the requester of the contact information for that program.

(k) Requirements for waiver or reduction of fees. (1) Requesters may seek a waiver of fees by submitting a written application demonstrating how disclosure of the requested information is in the public interest because it is likely to contribute significantly to public understanding of the operations or activities of the government and is not primarily in the commercial interest of the requester.

(2) CIGIE will furnish records responsive to a request without charge or at a reduced rate when it determines, based on all available information, that disclosure of the requested information is in the public interest because it is likely to contribute significantly to public understanding of the operations or activities of the government and is not primarily in the commercial interest of the requester. In deciding whether this standard is satisfied CIGIE will consider the factors described in paragraphs (k)(2)(i) through (iii) of this section.

(i) Disclosure of the requested information would shed light on the operations or activities of the government. The subject of the request must concern identifiable operations or activities of the Federal Government with a connection that is direct and clear, not remote or attenuated.

(ii) Disclosure of the requested information would be likely to contribute significantly to public understanding of those operations or activities. This factor is satisfied when the following criteria are met:

(A) Disclosure of the requested records must be meaningfully informative about government operations or activities. The disclosure of information that already is in the public domain, in either the same or a substantially identical form, would not be meaningfully informative if nothing new would be added to the public's understanding.

(B) The disclosure must contribute to the understanding of a reasonably broad audience of persons interested in the subject, as opposed to the individual understanding of the requester. A requester's expertise in the subject area as well as the requester's ability and intention to effectively convey information to the public must be considered. CIGIE will presume that a representative of the news media will satisfy this consideration.

(iii) The disclosure must not be primarily in the commercial interest of the requester. To determine whether disclosure of the requested information is primarily in the commercial interest of the requester, CIGIE will consider the following criteria:

(A) CIGIE must identify whether the requester has any commercial interest that would be furthered by the requested disclosure. A commercial interest includes any commercial, trade, or profit interest. Requesters must be given an opportunity to provide explanatory information regarding this consideration.

(B) If there is an identified commercial interest, CIGIE must determine whether that is the primary interest furthered by the request. A waiver or reduction of fees is justified when the requirements of paragraphs (k)(2)(i) and (ii) of this section are satisfied and any commercial interest is not the primary interest furthered by the request. CIGIE ordinarily will presume that when a news media requester has satisfied the requirements of paragraphs (k)(2)(i) and (ii) of this section, the request is not primarily in the commercial interest of the requester. Disclosure to data brokers or others who merely compile and market government information for direct economic return will not be presumed to primarily serve the public interest.

(3) Where only some of the records to be released satisfy the requirements for a waiver of fees, a waiver will be granted for those records.

(4) Requests for a waiver or reduction of fees should be made when the request is first submitted to CIGIE and should address the criteria referenced above. A requester may submit a fee waiver request at a later time so long as the underlying record request is pending or on administrative appeal. When a requester who has committed to pay fees subsequently asks for a waiver of those fees and that waiver is denied, the requester shall be required to pay any costs incurred up to the date the fee waiver request was received.

§ 9800.110 Public reading room.

CIGIE maintains an electronic public reading room on its website, http://www.ignet.gov, which contains the records that FOIA requires be regularly made available for public inspection and copying, as well as additional records of interest to the public. CIGIE is responsible for determining which of its records must be made publicly available, for identifying additional records of interest to the public that are appropriate for public disclosure, and for posting and indexing such records. CIGIE must ensure that its website of posted records and indices is reviewed and updated on an ongoing basis. CIGIE's FOIA Public Liaison can assist individuals in locating records at CIGIE.

§ 9801.111 Other rights and services.

Nothing in this part shall be construed to entitle any person, as of right, to any service or to the disclosure of any record to which such person is not entitled under FOIA.

Dated: September 26, 2018. Michael E. Horowitz, Chairperson of the Council of the Inspectors General on Integrity and Efficiency.
[FR Doc. 2018-21548 Filed 10-2-18; 8:45 am] BILLING CODE 6820-C9-P
DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 945 [Doc. No. AMS-SC-17-0077; SC18-945-1 FR] Irish Potatoes Grown in Certain Designated Counties in Idaho, and Malheur County, Oregon; Modification of Handling Regulations AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Final rule.

SUMMARY:

This final rule implements a recommendation from the Idaho-Eastern Oregon Potato Committee (Committee) to revise the varietal classifications that determine the size requirements for Irish potatoes grown in certain designated counties of Idaho, and Malheur County, Oregon. As provided under section 8e of the Agricultural Marketing Agreement Act of 1937, this modification also applies to all imported long type Irish potatoes. This final rule also makes administrative revisions to the subpart headings to bring the language into conformance with the Office of Federal Register requirements.

DATES:

Effective November 2, 2018.

FOR FURTHER INFORMATION CONTACT:

Barry Broadbent, Marketing Specialist, or Gary D. Olson, Regional Manager, Northwest Marketing Field Office, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA; Telephone: (503) 326-2724, Fax: (503) 326-7440, or Email: [email protected] or [email protected]

Small businesses may request information on complying with this regulation by contacting Richard Lower, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: (202) 720-8938, or Email: [email protected]

SUPPLEMENTARY INFORMATION:

This final rule, pursuant to 5 U.S.C. 553, amends regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This final rule is issued under Marketing Agreement No. 98 and Order No. 945, as amended (7 CFR part 945), regulating the handling of Irish potatoes grown in certain designated counties in Idaho, and Malheur County, Oregon. Part 945 (referred to as the “Order”) is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Committee locally administers the Order and is comprised of potato producers and handlers operating within the production area.

Section 8e of the Act provides that whenever certain specified commodities, including potatoes, are regulated under a Federal marketing order, imports of these commodities into the United States are prohibited unless they meet the same or comparable grade, size, quality, or maturity requirements as those in effect for the domestically produced commodities.

The Department of Agriculture (USDA) is issuing this final rule in conformance with Executive Orders 13563 and 13175. This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review. Additionally, because this final rule does not meet the definition of a significant regulatory action, it does not trigger the requirements contained in Executive Order 13771. See OMB's Memorandum titled “Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017, titled `Reducing Regulation and Controlling Regulatory Costs' ” (February 2, 2017).

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This final rule is not intended to have retroactive effect.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. A handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

There are no administrative procedures which must be exhausted prior to any judicial challenge to the provisions of import regulations issued under section 8e of the Act.

Under the terms of the Order, fresh market shipments of Idaho-Eastern Oregon potatoes are required to be inspected and are subject to minimum grade, size, quality, maturity, pack, and container requirements. This final rule revises the varietal classifications that determine the size requirements for potatoes handled under the Order. As required under section 8e of the Act, the revisions to the Order's varietal classifications will also be applied to imported long type potatoes.

At its meeting on November 8, 2017, the Committee unanimously recommended revising the varietal classifications that determine the size requirements for U.S. No. 2 grade potatoes. Sections 945.51 and 945.52 provide authority for the establishment and modification of grade, size, quality, and maturity regulations applicable to the handling of potatoes.

Section 945.341 establishes minimum grade, size, quality, maturity, pack, and container requirements for potatoes handled subject to the Order. The Order's handling regulations currently have two different size requirements for U.S. No. 2 grade potatoes. The requirements are applied based upon the varietal classification of the subject potato. Prior to this action, the varietal classifications that determine which of the different size requirements are applicable are designated as “round varieties” in § 945.341(a)(2)(i) and as “all other varieties” in § 945.341(a)(2)(ii).

This final rule removes the designation “round varieties” in § 945.341(a)(2)(i) to make the size requirements in that paragraph applicable to all U.S. No. 2 grade potatoes, unless otherwise specified. In addition, this final rule changes the designation for “all other varieties” in § 945.341(a)(2)(ii) to “Russet types,” maintaining the larger size requirements for “Russet types” only.

Committee members reported that the Idaho-Eastern Oregon potato industry has been producing and shipping an increasing number of non-traditional potato varieties, such as oblong, fingerling, and banana potatoes. Prior to this final rule, the size requirements contained in the handling regulations did not adequately differentiate between the various types of potatoes to effectively regulate the unique varieties that are now being marketed from the production area. Without a clear distinction, there existed the potential to inhibit orderly marketing of such potatoes by requiring them to adhere to size requirements that were never intended to be applied to that type or variety. Designating potatoes as “round varieties” and “all other varieties” was appropriate when the regulations were initially established, but potatoes from the production area are now segmented into two different market sectors: Russet type potatoes and all other non-Russet varieties. The characteristics of each of these market sectors continues to need different minimum size requirements. However, with the previous size requirement classifications in the handling regulations, some varieties of potatoes were being required to meet size requirements that did not match their natural characteristics or their intended market outlet.

For example, Russet varieties are primarily utilized as baked potatoes or are peeled and further prepared by the consumer as products such as french fries, potato salad, or mashed potatoes. The Committee intends for the size requirements for these potatoes to be greater than for other varieties of potatoes and those size requirements match the likely utilization of such potatoes. Non-Russet type potatoes are typically marketed fresh and are prepared and consumed whole. These types, while predominantly round varieties, include unique varieties that could not be described as “round” but are also not comparable to Russet types. Requiring non-Russet type potatoes to meet size requirements intended for potatoes used for baking or french fries puts those potatoes at a marketing disadvantage.

The Committee believes that potato size is a significant consideration of potato buyers. Providing potato buyers with the sizes desired by their customers for the type of potato that is being marketed is important to promoting potato sales. The size requirements intended to facilitate orderly marketing should not unintentionally inhibit a market segment, even if that segment is a minor one. Modifying the size requirement classifications to meet the intent of the Committee will help facilitate the growth of the emerging market for unique potato varieties. This change is expected to improve the marketing of Idaho-Eastern Oregon potatoes and enhance overall returns to handlers and producers.

This final rule relaxes the current handling regulations for non-round potatoes that are also not Russet type. Such potatoes will be subject to the smaller size requirements that have been, and will continue to be, applied to round varieties of potatoes. The Committee believes that, while these potatoes represent a small market segment relative to the total output from the production area, the market is expected to grow, and the Order's handling regulations should be responsive to it.

Section 8e mandates the regulation of certain imported commodities whenever those same commodities are regulated by a domestic marketing order. Irish potatoes are one of the commodities specifically covered by section 8e in the Act. In addition, section 8e stipulates that whenever two or more such marketing orders regulating the same agricultural commodity produced in different areas are concurrently in effect, imports must comply with the provisions of the order which regulates the commodity produced in the area with which the imported commodity is in the “most direct competition.” 7 CFR 980.1(a)(2)(iii) contains the determination that imports of long type potatoes during each month of the year are in most direct competition with potatoes of the same type produced in the area covered by the Order.

Minimum grade, size, quality, and maturity requirements for potatoes imported into the United States are currently in effect under § 980.1. Section 980.1(b)(2) stipulates that, through the entire year, the grade, size, quality, and maturity requirements of the Order applicable to potatoes of all long types shall be the respective grade, size, quality, and maturity requirements for imported potatoes of all long types. Therefore, this action relaxes the minimum size requirements for imports of non-round U.S. No. 2 grade long type potatoes, other than Russet types, accordingly.

This final rule also allows potato importers to respond to the changing demands of domestic consumers. The domestic market's increasing preference for unique potato varieties applies to imported potatoes as well as to domestically produced potatoes. In addition, the higher prices that the unique potatoes are expected to command will also apply to imported product. Thus, importers are expected to benefit along with domestic producers and handlers by increased sales of U.S. No. 2 grade potatoes and increased total revenue.

Final Regulatory Flexibility Analysis

Pursuant to the requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) has considered the economic impact of this rule on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf. Import regulations issued under the Act are based on those established under Federal marketing orders.

There are approximately 32 handlers of Idaho-Eastern Oregon potatoes who are subject to regulation under the Order and about 450 potato producers in the regulated area. In addition, there are approximately 255 importers of all types of potatoes, many of which import long types, who are subject to regulation under the Act. Small agricultural service firms, which include potato handlers and importers, are defined by the Small Business Administration (SBA) as those having annual receipts of less than $7,500,000, and small agricultural producers are defined as those whose annual receipts are less than $750,000 (13 CFR 121.201).

During the 2016-2017 fiscal period, the most recent full year of statistics available, 37,449,300 hundredweight of Idaho-Eastern Oregon potatoes were inspected under the Order and sold into the fresh market. Based on information provided by the National Agricultural Statistics Service, the average producer price for the 2016 Idaho potato crop was $6.75 per hundredweight. Multiplying $6.75 by the shipment quantity of 37,449,300 hundredweight yields an annual crop revenue estimate of $252,782,775. The average annual fresh potato revenue for each of the 450 producers is therefore calculated to be $561,740 ($252,782,775 divided by 450), which is less than the SBA threshold of $750,000. Consequently, on average, most of the Idaho-Eastern Oregon potato producers may be classified as small entities.

In addition, based on information reported by USDA's Market News Service, the average f.o.b. shipping point price for the 2016-2017 Idaho potato crop was $11.79 per hundredweight. Multiplying $11.79 by the shipment quantity of 37,449,300 hundredweight yields an annual crop revenue estimate of $441,527,247. The average annual fresh potato revenue for each of the 32 handlers is therefore calculated to be $13,797,726 ($441,527,247 divided by 32), which is above the SBA threshold of $7,500,000 for agricultural service firms. Therefore, most of the Idaho-Eastern Oregon potato handlers would be classified as large entities.

Further, based on information from USDA's Foreign Agricultural Service (FAS), potato importers imported 11,157,190 hundredweight of potatoes into the U.S. in 2016 (the most recent full year for which statistics are available). FAS also reported the total value of potato imports for 2016 to be $212,331,000. The average annual revenue of the estimated 255 potato importers is therefore calculated to be $832,670 ($212,331,000 divided by 255), which is significantly less than the SBA threshold of $7,500,000. Consequently, on average, most of the entities importing potatoes into the U.S. may be classified as small entities.

This final rule revises the varietal classifications that determine the size requirements for U.S. No. 2 grade potatoes handled under the Order. Specifically, this action removes the designation “round varieties” in § 945.341(a)(2)(i) to make the size requirements in that paragraph applicable to all U.S. No. 2 grade potatoes, unless otherwise specified. In addition, this final rule changes the designation for “all other varieties” in § 945.341(a)(2)(ii) to “Russet types,” maintaining the larger size requirements that have been applied to all non-round varieties, but will now only apply them to “Russet types.”

Pursuant to section 8(e) of the Act, this revision to the Order's varietal classifications that determine the size requirements for U.S. No. 2 grade potatoes will also be applied to imported long type Irish potatoes.

This action was recommended by the Committee to ensure that the size profile of non-round, non-Russet type U.S. No. 2 grade potatoes will consistently be a size preferred by consumers. This change is expected to improve the marketability of Idaho-Eastern Oregon potatoes and increase returns to handlers and producers. Authority for this final rule is provided in §§ 945.51 and 945.52 of the Order.

At the November 8, 2017, meeting, the Committee discussed the impact of this change on handlers and producers. The change to the varietal classifications that determine the size requirements is a relaxation in regulation. The regulatory change is expected to have a positive, or neutral, impact on industry participants.

The Committee relied on the opinions of producers and handlers familiar with the industry to draw its conclusions regarding the recommended handling regulation change. The Committee received anecdotal evidence from industry members at the November 8, 2017, meeting that there is some confusion in the industry with regards to which size requirements apply to which varieties of potatoes and that some varieties are being inspected and sized to requirements that were not intended by the Committee. The change to the size requirements clarifies which size requirements are applicable to which potatoes.

This change is expected to lead to increased revenue for handlers and producers. Prior to this action, non-round potato varieties that are not Russet type are required to conform to the larger size requirements, even though the Committee does not believe that this meets its intent with regards to the handling regulation. Better defining the distinct classifications of potatoes will allow more of the non-round, non-Russet type potatoes to enter the market, thereby allowing the sale of potatoes that would have otherwise been restricted. The benefits derived from this action are not expected to be disproportionately greater or less for small handlers or producers than for larger entities.

The Committee discussed alternatives to this change. One consideration was making no change at all to the current regulation. Another alternative was to further differentiate between various varieties and types of potatoes in the handling regulations. There was some discussion of adding another classification. After consideration of all the alternatives, the Committee decided that the changes effectuated by this action will provide the greatest amount of benefit to the industry with the least amount of burden to producers and handlers.

Further, the Committee's meeting was widely publicized throughout the potato industry, and all interested persons were invited to attend the meeting and participate in Committee deliberations. Like all Committee meetings, the November 8, 2017, meeting was a public meeting, and all entities, both large and small, were able to express their views on this issue.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Order's information collection requirements have been previously approved by OMB and assigned OMB No. 0581-0178, Vegetable and Specialty Crops. No changes in those requirements are necessary as a result of this action. Should any changes become necessary, they would be submitted to OMB for approval.

This final rule imposes no additional reporting or recordkeeping requirements on either small or large potato handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

As noted in the initial regulatory flexibility analysis, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this final rule.

AMS is committed to complying with the E-Government Act, to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

A proposed rule concerning this action was published in the Federal Register on May 9, 2018 (83 FR 21188). A copy of the proposed rule was provided to the handlers by the Committee. Finally, the proposal was made available through the internet by USDA and the Office of the Federal Register. A 60-day comment period ending July 9, 2018, was provided to allow interested persons to respond to the proposal.

One comment was received. The commenter questioned why the proposed change would only apply to the Order's production area and not to all potato growing regions. Marketing orders only regulate the production area as defined in each respective order. Therefore, this change can only apply to the handling of potatoes in the Order's production area as defined in § 945.4. The commenter did not otherwise address the merits of the proposal. Accordingly, no changes will be made to the rule as proposed, based on the comment received.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any questions about the compliance guide should be sent to Richard Lower at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

In accordance with section 8e of the Act, the United States Trade Representative has concurred with the issuance of this final rule.

After consideration of all relevant material presented, including the information and recommendation submitted by the Committee and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 945

Marketing agreements, Potatoes, Reporting and recordkeeping requirements.

For the reasons set forth above, 7 CFR part 945 is amended as follows:

PART 945—IRISH POTATOES GROWN IN CERTAIN DESIGNATED COUNTIES IN IDAHO, AND MALHEUR COUNTY, OREGON 1. The authority citation for part 945 continues to read as follows: Authority:

7 U.S.C. 601-674.

[Subpart Redesignated as Subpart A].

2. Redesignate “Subpart—Order Regulating Handling” as “Subpart A—Order Regulating Handling”.

[Subpart Redesignated as Subpart B and Amended]

3. Redesignate “Subpart—Rules and Regulations” as subpart B and revise the heading to read as follows: Subpart B—Administrative Requirements

[Subpart Redesignated as Subpart C]

4. Redesignate “Subpart—Assessment Rates” as “Subpart C—Assessment Rates”.

[Subpart Redesignated as Subpart D and Amended]

5. Redesignate “Subpart—Handling Regulations” as subpart D and revise the heading to read as follows: Subpart D—Handling Requirements 6. In § 945.341, revise paragraphs (a)(2)(i) and (ii) to read as follows:
§ 945.341 Handling regulation.

(a) * * *

(2) Size—(i) All varieties, except Russet types. 17/8 inches minimum diameter, unless otherwise specified on the container in connection with the grade.

(ii) Russet types. 2 inches minimum diameter, or 4 ounces minimum weight: Provided, That at least 40 percent of the potatoes in each lot shall be 5 ounces or heavier.

Dated: September 27, 2018. Bruce Summers, Administrator, Agricultural Marketing Service.
[FR Doc. 2018-21480 Filed 10-2-18; 8:45 am] BILLING CODE 3410-02-P
DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2017-0905; Product Identifier 2017-NM-090-AD; Amendment 39-19424; AD 2018-19-23] RIN 2120-AA64 Airworthiness Directives; The Boeing Company Airplanes AGENCY:

Federal Aviation Administration (FAA), DOT.

ACTION:

Final rule.

SUMMARY:

We are superseding Airworthiness Directive (AD) 2013-01-02, which applied to certain The Boeing Company Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, 747SR, and 747SP series airplanes; and Model 757-200, 757-200PF, and 757-300 series airplanes. AD 2013-01-02 required replacing the control switches of certain cargo doors. This AD requires replacement of certain cargo door control switches with a new, improved switch; installation of an arm switch in certain cargo doors; operational and functional tests; and applicable on-condition actions. This AD also adds airplanes to the applicability. This AD was prompted by reports of uncommanded cargo door operation. We are issuing this AD to address the unsafe condition on these products.

DATES:

This AD is effective November 7, 2018.

The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of November 7, 2018.

ADDRESSES:

For service information identified in this final rule, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; internet https://www.myboeingfleet.com. You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2017-0905.

Examining the AD Docket

You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2017-0905; or in person at Docket Operations between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this final rule, the regulatory evaluation, any comments received, and other information. The address for Docket Operations (phone: 800-647-5527) is Docket Operations, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT:

Susan L. Monroe, Aerospace Engineer, Cabin Safety and Environmental Systems Section, FAA, Seattle ACO Branch, 2200 South 216th St., Des Moines, WA 98198; phone and fax: 206-231-3570; email: [email protected]

SUPPLEMENTARY INFORMATION: Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2013-01-02, Amendment 39-17316 (78 FR 4051, January 18, 2013) (“AD 2013-01-02”). AD 2013-01-02 applied to certain The Boeing Company Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, 747SR, and 747SP series airplanes; and Model 757-200, 757-200PF, and 757-300 series airplanes. The NPRM published in the Federal Register on October 6, 2017 (82 FR 46722). The NPRM was prompted by reports of uncommanded cargo door operation. The NPRM proposed to require replacement of certain cargo door control switches with a new, improved switch; installation of an arm switch in certain cargo doors; operational and functional tests; and applicable on-condition actions. The NPRM also proposed to add airplanes to the applicability. We are issuing this AD to prevent failures of the cargo door control switch from allowing uncommanded movement of the cargo door, which, if not corrected, could lead to injuries to persons and damage to the airplane.

Comments

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.

Support for the NPRM

FedEx Express and United Airlines (UAL) stated they had no technical objection to the NPRM.

Request To Withdraw the NPRM

Three commenters requested that the NPRM be withdrawn. Virgin Atlantic Airlines (VAA) and Deutsche Lufthansa AG (DLH) pointed out there have been no reported failures of the cargo door control switches or incidents of uncommanded door operation at VAA or DLH since AD 2013-01-02 was issued. United Parcel Service (UPS) stated that the NPRM appears to be based on a single event of an otherwise reliable cargo door switch configuration, based on industry data that show no significant number of unscheduled removals reported since AD 2013-01-02 was issued. DLH commented that the operational area of the cargo door is a safety critical area that requires the operator to verify that the area is safe and clear, whether an additional arm switch is present or not. All commenters stated that the repetitive inspections required by AD 2013-01-02 should remain in place and that accomplishing the actions in Boeing Special Attention Service Bulletin 747-52-2307, dated May 23, 2017; and Boeing Special Attention Service Bulletin 747-52-2308, dated June 5, 2017; should be an optional terminating action for the inspections.

We disagree with the commenters' request because our risk analysis indicates that the actions mandated by AD 2013-01-02 were inadequate to mitigate the unsafe condition. Although VAA and DLH have had no new incidents, there have been multiple reports of uncommanded cargo door operation within the affected fleets. Therefore, existing procedures for door operation have not been adequate to prevent the unsafe condition. We are mandating the actions in this AD because an unsafe condition exists, which is likely to exist or develop on other products of the same type design. We have not changed this AD in this regard.

Request To Specify Compliance Times Using Flight Cycles

UPS requested that we specify compliance times in terms of flight cycles rather than calendar time because cargo door operation is based on flight cycles. UPS also stated that the compliance interval for both Model 747 and 757 fleets should be the same because the operation of the cargo door control switch is the same across both models. UPS recommended replacing the cargo door control switches every 3,000 flight cycles.

We disagree with the commenter's request because we have not confirmed a causal relationship between switch failure and operating cycles. In developing the compliance time in this AD, we have considered the safety implications, parts availability, and normal maintenance schedules for the timely installation of the cargo door control switches. Further, the compliance time in this AD corresponds with the manufacturer's recommended compliance time for each model. If we receive additional data that justify a different compliance time, we may consider further rulemaking on this issue. In addition, under the provisions of paragraph (j) of this AD, we will consider requests for approval of alternative compliance times if sufficient data are submitted to substantiate that the change would provide an acceptable level of safety. We have not changed this AD in this regard.

Request To Include Latest Service Information Revision

AAL, Delta Airlines (DAL), and FedEx Express requested that we refer to Boeing Special Attention Service Bulletin 757-52-0093, Revision 2, dated November 14, 2017, instead of Boeing Special Attention Service Bulletin 757-52-0093, Revision 1, dated April 21, 2017, which is referenced in the NPRM. DAL stated that the revised service information allows alternatives to Alodine 1200 and 1200S. AAL noted that paragraphs (c)(4) and (g)(4) of the proposed AD would no longer be necessary as the new service information addresses those issues. AAL also requested that we provide credit for Boeing Special Attention Service Bulletin 757-52-0093, Revision 1, dated April 21, 2017.

We agree with the commenters' request. Boeing Special Attention Service Bulletin 757-52-0093, Revision 2, dated November 14, 2017, provides minor corrections, and there is no effect on airplanes on which earlier revisions were done. Boeing Special Attention Service Bulletin 757-52-0093, Revision 2, dated November 14, 2017, also adds variable numbers NP901 through NP904 inclusive to the effectivity. We had referred to those variable numbers in paragraphs (c)(4) and (g)(4) of the proposed AD. Therefore, we have made the following changes to this AD:

• Changed paragraphs (c)(3) and (g)(3) of this AD to refer to Boeing Special Attention Service Bulletin 757-52-0093, Revision 2, dated November 14, 2017.

• Removed paragraphs (c)(4) and (g)(4) of the proposed AD.

• Changed this AD to provide credit for certain actions done before the effective date of this AD using Boeing Special Attention Service Bulletin 757-52-0093, Revision 1, dated April 21, 2017 (reference paragraph (i)(3) of this AD).

Request To Extend Compliance Time

Multiple commenters requested that we extend the compliance times in the proposed AD. DLH requested we extend the compliance time on the Model 747 airplanes from 35 months to 72 months because there have been no recorded cargo door control switch failures since AD 2013-01-02 was issued. American Airlines (AAL) requested that for the requirement to replace the cargo door control switches on Model 757 airplane cargo doors 1 and 2, we extend the compliance time from 24 months to 36 months. AAL explained that new cargo door control switches will have already been installed as part of compliance with AD 2013-01-02, and proposed accomplishing a functional check of the cargo door control switch every 12 months until cargo door control switches are replaced in accordance with Boeing Special Attention Service Bulletin 757-52-0093, Revision 2, dated November 14, 2017.

We disagree with extending the compliance times in this AD because we have determined that the replacements required by AD 2013-01-02 are inadequate, and that new, improved switches are necessary to address the unsafe condition. In developing the compliance times in this AD, we have considered the safety implications, parts availability, and normal maintenance schedules for the timely installation of the cargo door control switches. Further, the compliance times in this AD correspond with the manufacturer's recommended compliance time for each model. If we receive additional data that justify different compliance times, we may consider further rulemaking on this issue. In addition, under the provisions of paragraph (j) of this AD, we will consider requests for approval of alternative compliance times if sufficient data are submitted to substantiate that the change would provide an acceptable level of safety. We have not changed this AD in this regard.

Request for Relief Due to Parts Availability

Cathay requested a non-specific extension of the compliance times due to parts availability issues. Cathay stated that paragraphs (g)(1) and (g)(2) of the proposed AD would require accomplishment of applicable actions in accordance with Boeing Special Attention Service Bulletin 747-52-2307, dated May 23, 2017; and Boeing Special Attention Service Bulletin 747-52-2308, dated June 5, 2017. Cathay noted that both service bulletins specify a compliance time of 35 months after the “original issue date of the service bulletin” (e.g., May 23, 2017; and June 5, 2017, respectively). The commenter stated it had received information from Boeing that certain parts were not ready for delivery due to issues during validation of Boeing Special Attention Service Bulletin 747-52-2307, dated May 23, 2017. The commenter also stated that Boeing Special Attention Service Bulletin 747-52-2308, dated June 5, 2017, has not been validated.

Regarding Cathay's comment that certain compliance times are relative to the issue dates of Boeing Special Attention Service Bulletin 747-52-2307, dated May 23, 2017; and Boeing Special Attention Service Bulletin 747-52-2308, dated June 5, 2017, we agree to clarify the required compliance times. Paragraph (g) of this AD states “Except as required by paragraph (h) of this AD,” and paragraph (h) of this AD specifies that certain compliance times are relative to the “effective date of this AD,” rather than the “original issue date of this service bulletin.” Therefore, the compliance times in this AD are based on the effective date of this AD instead of the issue date of applicable service bulletins.

The Boeing Company has completed the validation process for all applicable service information. Revised and validated service information for the Model 747 airplanes is now available. This AD references the revised service information as the appropriate source of service information for affected Boeing Model 747 series airplanes. In addition, Boeing has informed us that parts are currently available for compliance with this AD.

We have changed paragraphs (c)(1) and (g)(1) of this AD to refer to Boeing Special Attention Service Bulletin 747-52-2307, Revision 1, dated May 2, 2018; and paragraphs (c)(2) and (g)(2) of this AD to reference Boeing Special Attention Service Bulletin 747-52-2308, Revision 1, dated June 18, 2018. We have also changed paragraph (h) of this AD to refer to Boeing Special Attention Service Bulletin 747-52-2307, Revision 1, dated May 2, 2018; and Boeing Special Attention Service Bulletin 747-52-2308, Revision 1, dated June 18, 2018. We have also changed this AD to provide credit for certain actions done before the effective date of this AD using Boeing Special Attention Service Bulletin 747-52-2307, dated May 23, 2017, or Boeing Special Attention Service Bulletin 747-52-2308, dated June 5, 2017, as applicable (reference paragraphs (i)(1) and (i)(2) of this AD).

Since parts and revised service information are available, and since the compliance times are based on the effective date of this AD, rather than the service information, we have not changed the compliance times in this AD in this regard. However, under the provisions of paragraph (j) of this AD, we will consider requests for approval of alternative compliance times if sufficient data are submitted to substantiate that the change would provide an acceptable level of safety.

Request To Remove Replacement Requirement for Certain Airplanes

Boeing requested we revise the language in paragraph (g)(4) of the proposed AD to remove the requirement to replace the nose cargo door control switch from the Model 757 airplane requirements because Model 757 airplanes do not have a nose cargo door.

We agree with the commenter's request for the reasons provided by the commenter. As stated previously, paragraph (g)(4) of the proposed AD is not retained in this AD. The actions for Model 757 airplanes, which are required by paragraph (g)(3) of this AD, are specified in Boeing Special Attention Service Bulletin 757-52-0093, Revision 2, dated November 14, 2017, which does not reference nose cargo door switches.

Conclusion

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

• Are consistent with the intent that was proposed in the NPRM for addressing 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.

Related Service Information Under 1 CFR Part 51

We reviewed the following Boeing service information.

• Boeing Special Attention Service Bulletin 747-52-2307, Revision 1, dated May 2, 2018; and Boeing Special Attention Service Bulletin 747-52-2308, Revision 1, dated June 18, 2018. The service information describes procedures for replacement of the nose, forward, and aft cargo door control switches with new, improved switches; installation of an arm switch in the forward and aft cargo doors; a nose cargo door normal operation test; forward and aft cargo door open and close functional tests; and applicable on-condition actions. These documents are distinct since they apply to different airplanes in different configurations.

• Boeing Special Attention Service Bulletin 757-52-0093, Revision 2, dated November 14, 2017. This service information describes procedures for replacement of the forward and aft cargo door control switches with new, improved switches; installation of an arm switch in the forward and aft cargo doors; an operational test of the No. 1 and No. 2 cargo doors; repetitive functional tests of the No. 1 and No. 2 cargo doors; and applicable on-condition actions.

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

Costs of Compliance

We estimate that this AD affects 584 airplanes of U.S. registry. We estimate the following costs to comply with this AD:

Estimated Costs Action Labor cost Parts cost Cost per product Cost on U.S. operators Replacement (Boeing Special Attention Service Bulletin 747-52-2307) (14 airplanes) 78 work-hours × $85 per hour = $6,630 $12,874 $19,504 $273,056. Replacement (Boeing Special Attention Service Bulletin 747-52-2308) (94 airplanes) 24 work-hours × $85 per hour = $2,040 980 3,020 283,880. Replacement (Boeing Special Attention Service Bulletin 757-52-0093) (476 airplanes) 51 work-hours × $85 per hour = $4,335 10,626 14,961 7,121,436. Repetitive Test (Boeing Special Attention Service Bulletin 757-52-0093) (476 airplanes) 3 work-hours × $85 per hour = $255 per test cycle 0 255 per test cycle 121,380 per test cycle.

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

Authority for This Rulemaking

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 and associated appliances to the Director of the System Oversight Division.

Regulatory Findings

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, 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.

List of Subjects in 14 CFR Part 39

Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

Adoption of the Amendment

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

PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

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

§ 39.13 [Amended]
2. The FAA amends § 39.13 by removing Airworthiness Directive (AD) 2013-01-02, Amendment 39-17316 (78 FR 4051, January 18, 2013), and adding the following new AD: 2018-19-23 The Boeing Company: Amendment 39-19424; Docket No. FAA-2017-0905; Product Identifier 2017-NM-090-AD. (a) Effective Date

This AD is effective November 7, 2018.

(b) Affected ADs

This AD replaces AD 2013-01-02, Amendment 39-17316 (78 FR 4051, January 18, 2013) (“AD 2013-01-02”).

(c) Applicability

This AD applies to The Boeing Company airplanes; certificated in any category; as identified in paragraphs (c)(1), (c)(2), and (c)(3) of this AD.

(1) Model 747-8F and 747-8 series airplanes as identified in Boeing Special Attention Service Bulletin 747-52-2307, Revision 1, dated May 2, 2018.

(2) Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, 747SR, and 747SP series airplanes, as identified in Boeing Special Attention Service Bulletin 747-52-2308, Revision 1, dated June 18, 2018.

(3) Model 757-200, 757-200PF, 757-200CB, and -300 series airplanes, as identified in Boeing Special Attention Service Bulletin 757-52-0093, Revision 2, dated November 14, 2017.

(d) Subject

Air Transport Association (ATA) of America Code 52, Doors.

(e) Unsafe Condition

This AD was prompted by reports of uncommanded cargo door operation. We are issuing this AD to prevent failures of the cargo door control switch from allowing uncommanded movement of the cargo door, which if not corrected, could lead to injuries to persons and damage to the airplane.

(f) Compliance

Comply with this AD within the compliance times specified, unless already done.

(g) Required Actions

Except as required by paragraph (h) of this AD: Do the applicable actions specified in paragraphs (g)(1), (g)(2), and (g)(3) of this AD.

(1) For airplanes identified in Boeing Special Attention Service Bulletin 747-52-2307, Revision 1, dated May 2, 2018: At the applicable time specified in paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 747-52-2307, Revision 1, dated May 2, 2018, do all applicable actions identified as “RC” (required for compliance) in, and in accordance with, the Accomplishment Instructions of Boeing Special Attention Service Bulletin 747-52-2307, Revision 1, dated May 2, 2018.

(2) For airplanes identified in Boeing Special Attention Service Bulletin 747-52-2308, Revision 1, dated June 18, 2018: At the applicable time specified in paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 747-52-2308, Revision 1, dated June 18, 2018, do all applicable actions identified as RC in, and in accordance with the Accomplishment Instructions of Boeing Special Attention Service Bulletin 747-52-2308, Revision 1, dated June 18, 2018.

(3) For airplanes identified in Boeing Special Attention Service Bulletin 757-52-0093, Revision 2, dated November 14, 2017: At the applicable times specified in paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 757-52-0093, Revision 2, dated November 14, 2017, do all applicable actions identified as RC in, and in accordance with, the Accomplishment Instructions of Boeing Special Attention Service Bulletin 757-52-0093, Revision 2, dated November 14, 2017.

(h) Exception to Service Information

Where Boeing Special Attention Service Bulletin 747-52-2307, Revision 1, dated May 2, 2018; Boeing Special Attention Service Bulletin 747-52-2308, Revision 1, dated June 18, 2018; and Boeing Special Attention Service Bulletin 757-52-0093, Revision 2, dated November 14, 2017; specify a compliance time after “the original issue date of this service bulletin,” this AD requires compliance within the specified compliance time after the effective date of this AD.

(i) Credit for Previous Actions

(1) This paragraph provides credit for the actions specified in paragraph (g)(1) of this AD if those actions were performed before the effective date of this AD using Boeing Special Attention Service Bulletin 747-52-2307, dated May 23, 2017.

(2) This paragraph provides credit for the actions specified in paragraph (g)(2) of this AD if those actions were performed before the effective date of this AD using Boeing Special Attention Service Bulletin 747-52-2308, dated June 5, 2017.

(3) This paragraph provides credit for the actions specified in paragraph (g)(3) of this AD if those actions were performed before the effective date of this AD using Boeing Special Attention Service Bulletin 757-52-0093, dated May 5, 2016; or Boeing Special Attention Service Bulletin 757-52-0093, Revision 1, dated April 21, 2017.

(j) Alternative Methods of Compliance (AMOCs)

(1) The Manager, Seattle ACO Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in paragraph (k) of this AD. Information may be emailed to: [email protected]

(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Seattle ACO Branch, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.

(4) For service information that contains steps that are labeled as RC, the provisions of paragraphs (j)(4)(i) and (j)(4)(ii) of this AD apply.

(i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. If a step or substep is labeled “RC Exempt,” then the RC requirement is removed from that step or substep. An AMOC is required for any deviations to RC steps, including substeps and identified figures.

(ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.

(k) Related Information

For more information about this AD, contact Susan L. Monroe, Aerospace Engineer, Cabin Safety and Environmental Systems Section, FAA, Seattle ACO Branch, 2200 South 216th St., Des Moines, WA 98198; phone and fax: 206-231-3570; email: [email protected]

(l) Material Incorporated by Reference

(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.

(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.

(i) Boeing Special Attention Service Bulletin 747-52-2307, Revision 1, dated May 2, 2018.

(ii) Boeing Special Attention Service Bulletin 747-52-2308, Revision 1, dated June 18, 2018.

(iii) Boeing Special Attention Service Bulletin 757-52-0093, Revision 2, dated November 14, 2017.

(3) For The Boeing Company service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; internet https://www.myboeingfleet.com.

(4) You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.

(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

Issued in Des Moines, Washington, on September 14, 2018. John P. Piccola, Acting Director, System Oversight Division, Aircraft Certification Service.
[FR Doc. 2018-21346 Filed 10-2-18; 8:45 am] BILLING CODE 4910-13-P
DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0142; Product Identifier 2018-NE-04-AD; Amendment 39-19368; AD 2018-17-14] RIN 2120-AA64 Airworthiness Directives; General Electric Company CF34-8E Engines AGENCY:

Federal Aviation Administration (FAA), DOT.

ACTION:

Final rule.

SUMMARY:

We are adopting a new airworthiness directive (AD) for certain General Electric Company (GE) CF34-8E turbofan engines. This AD was prompted by a report from GE regarding a quality escape of nonconforming thrust reverser fire seals. This AD requires a one-time inspection of the gap between the core cowl seal and the pylon seal of the thrust reverser for correct gap width, and replacement of the seals, if needed. We are issuing this AD to address the unsafe condition on these products.

DATES:

This AD is effective November 7, 2018.

ADDRESSES:

For service information identified in this final rule, contact General Electric Company, 1 Neumann Way, Cincinnati, OH 45215; telephone 513-552-3272; email: [email protected] You may view this service information at the FAA, Engine and Propeller Standards Branch, 1200 District Avenue, Burlington, MA 01803. For information on the availability of this material at the FAA, call 781-238-7759. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0142.

Examining the AD Docket

You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0142; or in person at Docket Operations between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this final rule, the regulatory evaluation, any comments received, and other information. The address for Docket Operations (phone: 800-647-5527) is U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC, 20590.

FOR FURTHER INFORMATION CONTACT:

David Bethka, Aerospace Engineer, ECO Branch, FAA, 1200 District Avenue, Burlington, MA 01803; phone: 781-238-7129; fax: 781-238-7199; email: [email protected]

SUPPLEMENTARY INFORMATION: Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain GE CF34-8E turbofan engines. The NPRM published in the Federal Register on April 17, 2018 (83 FR 16794). The NPRM was prompted by a report from the manufacturer about a fire seal gap quality escape on GE CF34-8E turbofan engines. Some thrust reverser fire seals, installed on thrust reverser part numbers (P/Ns) 15G0002-013, 15G0002-014, 15G0003-013, and 15G0003-014, were shipped from a supplier with nonconforming seal gaps. The NPRM proposed to require a one-time inspection of the gap between the core cowl seal and the pylon seal of the thrust reverser for correct gap width, and replacement of the thrust reverser fire seals, if needed. We are issuing this AD to address the unsafe condition on these products.

Comments

We gave the public the opportunity to participate in developing this final rule. The following presents the comments received on the NPRM and the FAA's response to each comment.

Request To Change the Applicability

Two commenters, Horizon Air and Republic Airline, requested that we limit the applicability of this AD to a specific group of GE CF34-8E turbofan engine thrust reverser halves that are known to have a fire seal gap nonconformance. A change of applicability from all GE CF34-8E turbofan engines to only the known group of affected thrust reverser halves would reduce the inspection burden on operators.

We agree. We changed the applicability of this AD to list only the affected half thrust reverser P/Ns and serial numbers. We also updated the number of affected thrust reverser assemblies and estimated costs.

Request To Change Required Actions

Horizon Air requested that we change the required actions of this AD to replace “all GE CF34-8E turbofan engines” with “all thrust reversers listed in paragraph (c).”

We agree. We reworded the required actions of this AD to indicate that these actions are only required for GE CF34-8E turbofan engines with affected half thrust reversers installed.

Conclusion

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

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

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

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

Related Service Information

We reviewed GE CF34-8E Service Bulletin (SB) 78-0066 R01, dated June 20, 2018. The SB describes procedures for measuring the width of the RTV filled gap between the thrust reverser fire seals at the 12 o'clock core cowl seal and pylon seal installed on thrust reverser P/Ns 15G0002-013, 15G0002-014, 15G0003-013, and 15G0003-014, and replacing with parts eligible for installation, if needed.

Costs of Compliance

We estimate that this AD affects 194 thrust reverser assemblies installed on airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

Estimated Costs Action Labor cost Parts cost Cost per
  • product
  • Cost on U.S.
  • operators
  • Inspection 0.25 work-hours × $85 per hour = $21.25 $0 $21.25 $4,122.50

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

    On-Condition Costs Action Labor cost Parts cost Cost per
  • product
  • Remove and replace thrust reverser fire seals 2.75 work-hours × $85 per hour = $233.75 $3,228 $3,461.75
    Authority for This Rulemaking

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

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

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

    Regulatory Findings

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

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

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

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

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

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

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    Adoption of the Amendment

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

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): 2018-17-14 General Electric Company: Amendment 39-19368 Docket No. FAA-2018-0142; Product Identifier 2018-NE-04-AD. (a) Effective Date

    This AD is effective November 7, 2018.

    (b) Affected ADs

    None.

    (c) Applicability

    This AD applies to General Electric Company (GE) CF34-8E turbofan engines with:

    (1) Left-hand (LH) half thrust reverser, part number (P/N) 15G0002-013, or LH half thrust reverser P/N 15G0002-014, with the following serial numbers (S/Ns): HRD00659 to HRD00662, HRD00675 to HRD00678, HRD00680, HRD00681, HRD00694 to HRD00697, HRD00711, HRD00831, HRD00856, HRD00878 to HRD00895, HRD01025, HRD01040, HRD01047, HRD01050 to HRD01057, HRD01059 to HRD01089, HRD01104, HRD01105, HRD01108, HRD01111 to HRD01116, HRD01118 to HRD01121, HRD01123, HRD01124, HRD01126, HRD01162, HRD01185 to HRD01198, HRD01201, HRD01202, or HRD01226 to HRD01243, installed.

    (2) Right-hand (RH) half thrust reverser, P/N 15G0003-013, or RH half thrust reverser P/N 15G0003-014, with the following S/Ns: HRD00669 to HRD00678, HRD00680, HRD00681, HRD00703 to HRD00707, HRD00722, HRD00825, HRD00919, HRD00922, HRD01018, HRD01022, HRD01023, HRD01027 to HRD01033, HRD01035, HRD01036, HRD01038, HRD01039, HRD01041 to HRD01046, HRD01048, HRD01049, HRD01059 to HRD01079, HRD01081, HRD01082, HRD01084 to HRD01092, HRD01100, HRD01117, HRD01140, HRD01146, HRD01162, HRD01185 to HRD01187, HRD01189 to HRD01198, HRD01201, HRD01202, HRD01210, or HRD01213 to HRD01223, installed.

    (d) Subject

    Joint Aircraft System Component (JASC) Code 7830, Thrust Reverser.

    (e) Unsafe Condition

    This AD was prompted by a report from GE regarding a quality escape of nonconforming thrust reverser fire seal gaps. We are issuing this AD to inspect for nonconforming thrust reverser fire seal gaps that could result in a fire outside the fire zone. The unsafe condition, if not addressed, could result in an uncontrolled fire, damage to the engine, and damage to the airplane.

    (f) Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (g) Required Actions

    (1) For all half thrust reversers listed in paragraph (c) of this AD, before the half thrust reverser accumulates 8,000 flight hours after the effective date of this AD, perform the following one-time inspection, and, if needed, replace the core cowl seal and pylon seal.

    (i) Measure the width of the RTV filled gap between thrust reverser fire seals at the junction between 12 o'clock core cowl seal and pylon seal, at the following half thrust reverser locations: LH half thrust reverser, P/N 15G0002-013; LH half thrust reverser, P/N 15G0002-014; RH half thrust reverser, P/N 15G0003-013; and RH half thrust reverser P/N 15G0003-014.

    (ii) If the gap width between the 12 o'clock core cowl seal and the pylon seal is greater than 1 mm, replace both seals with parts eligible for installation to form a new gap of 1 mm or less, prior to returning to service.

    (2) You may refer to GE CF34-8E Service Bulletin 78-0066 R01, dated June 20, 2018, for guidance on inspecting and replacing the thrust reverser fire seals.

    (h) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, ECO Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in paragraph (i) of this AD. You may email your request to: [email protected]

    (2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local Flight Standards District Office/Certificate Holding District Office.

    (i) Related Information

    For more information about this AD, contact David Bethka, Aerospace Engineer, ECO Branch, FAA, 1200 District Avenue, Burlington, MA 01803; phone: 781-238-7129; fax: 781-238-7199; email: [email protected]

    (j) Material Incorporated by Reference

    None.

    Issued in Burlington, Massachusetts, on September 26, 2018. Karen M. Grant, Acting Manager, Engine and Propeller Standards Branch, Aircraft Certification Service.
    [FR Doc. 2018-21378 Filed 10-2-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0511; Product Identifier 2017-NM-145-AD; Amendment 39-19425; AD 2018-19-24] RIN 2120-AA64 Airworthiness Directives; BAE Systems (Operations) Limited Airplanes AGENCY:

    Federal Aviation Administration (FAA), Department of Transportation (DOT).

    ACTION:

    Final rule.

    SUMMARY:

    We are adopting a new airworthiness directive (AD) for all BAE Systems (Operations) Limited Model 4101 airplanes. This AD was prompted by a determination that inspection requirements for a number of maintenance tasks are incorrect. This AD requires a one-time detailed inspection of a certain fuselage frame and repair, if necessary, and a revision of the maintenance or inspection program, as applicable, to incorporate new or revised maintenance instructions and airworthiness limitations. We are issuing this AD to address the unsafe condition on these products.

    DATES:

    This AD is effective November 7, 2018.

    The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of November 7, 2018.

    ADDRESSES:

    For service information identified in this final rule, contact BAE Systems (Operations) Limited, Customer Information Department, Prestwick International Airport, Ayrshire, KA9 2RW, Scotland, United Kingdom; telephone +44 1292 675207; fax +44 1292 675704; email [email protected]s.com; internet http://www.baesystems.com/Businesses/RegionalAircraft/index.htm. You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0511.

    Examining the AD Docket

    You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0511; or in person at Docket Operations between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this final rule, the regulatory evaluation, any comments received, and other information. The address for Docket Operations (phone: 800-647-5527) is U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.

    FOR FURTHER INFORMATION CONTACT:

    Todd Thompson, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3228.

    SUPPLEMENTARY INFORMATION:

    Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all BAE Systems (Operations) Limited Model 4101 airplanes. The NPRM published in the Federal Register on June 14, 2018 (83 FR 27721). The NPRM was prompted by a determination that inspection requirements for a number of maintenance tasks are incorrect. The NPRM proposed to require a one-time detailed inspection of a certain fuselage frame and repair, if necessary, and a revision of the maintenance or inspection program, as applicable, to incorporate new or revised maintenance instructions and airworthiness limitations.

    We are issuing this AD to address cracking in fuselage frame 90, which could cause it to fail and thereby compromise the structural integrity of the aircraft pressure hull. We are also issuing this AD to address fatigue damage of various airplane structures, which could result in reduced structural integrity of the airplane.

    The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2017-0187, dated September 22, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all BAE Systems (Operations) Limited Model 4101 airplanes. The MCAI states:

    Maintenance instructions for BAE Jetstream 4100 aeroplanes, which are approved by EASA, are defined in BAE Systems (Operations) Ltd Jetstream 4100 Service Bulletin (SB) J41-51-001, which references certain Aircraft Maintenance Manual (AMM) tasks. These instructions have been identified as mandatory for continued airworthiness.

    Failure to accomplish these instructions could result in an unsafe condition.

    CAA UK [Civil Aviation Authority United Kingdom] issued AD 005-02-2002 [which corresponds to FAA AD 2005-15-11, Amendment 39-14200 (70 FR 43025, July 26, 2005) (“AD 2005-15-11”)] to require operators to comply with the inspection instructions as referenced in SB J41-51-001 at original issue.

    Since that [CAA UK ] AD was issued, BAE Systems (Operations) Ltd have determined that the inspection requirements for a number of maintenance tasks are incorrect. Consequently, existing inspection items 52-20-013, 53-10-006, 53-10-025, 53-10-029 and 53-10-079 will be amended in Chapter 05 of the AMM. Compliance periods for these changes are given in BAE Systems (Operations) Ltd SB J41-51-001 (now at Revision 4) and BAE Systems (Operations) Ltd Alert SB J41-A53-058. Those fatigue inspections detailed in SB J41-51-001, at Revision 3 or earlier, have now been incorporated into Chapter 05 of the AMM. To avoid duplication these tasks are deleted from SB J41-51-001 at Revision 4.

    For the reason described above, this [EASA] AD retains the requirements of CAA UK AD 005-02-2002, which is superseded, and requires accomplishment of the actions specified in BAE Systems (Operations) Ltd Jetstream 4100 SB J41-51-001 Revision 4 and Alert SB J41-A53-058 (hereafter collectively referred to as `the SB' in this [EASA] AD).

    The actions include a one-time detailed inspection of fuselage frame 90 for cracking or fatigue damage and repair if necessary, and revision of the maintenance or inspection program, as applicable, to incorporate new or revised maintenance instructions and airworthiness limitations. This AD was prompted by a determination that it is possible for cracks in fuselage frame 90 to exceed the critical length for failure in less time than the current inspection interval, and by a determination that inspection requirements for a number of maintenance tasks involving certain airworthiness limitations are incorrect. The unsafe condition is cracking in fuselage frame 90, which could cause it to fail and thereby compromise the structural integrity of the aircraft pressure hull; and fatigue damage of various airplane structures, which could result in reduced structural integrity of the airplane.

    You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0511.

    Comments

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

    Conclusion

    We reviewed the relevant data and determined that air safety and the public interest require adopting this final rule 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 addressing the unsafe condition; and

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

    Related Service Information Under 1 CFR Part 51

    BAE Systems (Operations) Limited has issued the following service information.

    • Service Bulletin J41-51-001, Revision 4, dated July 11, 2017. This service information describes new inspections and revisions to existing inspection requirements and thresholds.

    • Alert Service Bulletin J41-A53-058, dated December 6, 2016. This service information describes procedures for a detailed inspection for cracking or fatigue damage of fuselage frame 90.

    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.

    Costs of Compliance

    We estimate that this AD affects 4 airplanes of U.S. registry.

    We estimate the following costs to comply with this AD:

    Estimated Costs Action Labor cost Parts cost Cost per
  • product
  • Cost on U.S.
  • operators
  • Inspection 2 work-hours × $85 per hour = $170 $0 $170 $680

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

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

    Authority for This Rulemaking

    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 and associated appliances to the Director of the System Oversight Division.

    Regulatory Findings

    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.

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    Adoption of the Amendment

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

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): 2018-19-24 BAE Systems (Operations) Limited: Amendment 39-19425; Docket No. FAA-2018-0511; Product Identifier 2017-NM-145-AD. (a) Effective Date

    This AD is effective November 7, 2018.

    (b) Affected ADs

    This AD affects AD 2005-15-11, Amendment 39-14200 (70 FR 43025, July 26, 2005) (“AD 2005-15-11”).

    (c) Applicability

    This AD applies to all BAE Systems (Operations) Limited Model 4101 airplanes, certificated in any category, all manufacturer serial numbers.

    (d) Subject

    Air Transport Association (ATA) of America Code 05, Time Limits/Maintenance Checks.

    (e) Reason

    This AD was prompted by a determination that it is possible for cracks in fuselage frame 90 to exceed the critical length for failure in less time than the current inspection interval; and a determination that inspection requirements for a number of maintenance tasks involving certain airworthiness limitations are incorrect. We are issuing this AD to address cracking in fuselage frame 90, which could cause it to fail and thereby compromise the structural integrity of the aircraft pressure hull. We are also issuing this AD to address fatigue damage of various airplane structures, which could result in reduced structural integrity of the airplane.

    (f) Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (g) Inspection

    At the compliance times specified in paragraphs (g)(1) and (g)(2) of this AD, as applicable: Do a detailed inspection of fuselage frame 90 for cracking or fatigue damage, in accordance with the Accomplishment Instructions of BAE Systems (Operations) Limited Alert Service Bulletin J41-A53-058, dated December 6, 2016. If any cracking or fatigue damage is found: Before further flight, repair using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or the European Aviation Safety Agency (EASA); or BAE Systems (Operations) Limited's EASA Design Organization Approval (DOA).

    (1) For airplanes with 6,300 flight cycles or fewer since Structural Significant Items (SSI) 53-10-029 (Maintenance Planning Document (MPD) 531029-DVl-10010-1) was last accomplished: Within 6,600 flight cycles after the last accomplishment of SSI 53-10-029 (MPD 531029-DVl-10010-1), or within 6 months after the effective date of this AD, whichever is later.

    (2) For airplanes with more than 6,300 flight cycles since SSI 53-10-029 (MPD 531029-DVl-10010-1) was last accomplished: Within 300 flight cycles or 4.5 months, whichever is earlier, since the last accomplishment of SSI 53-10-029 (MPD 531029-DVl-10010-1), or within 6 months after the effective date of this AD, whichever is later.

    (h) Maintenance or Inspection Program Revisions

    Within 90 days after the effective date of this AD: Revise the maintenance or inspection program, as applicable, by incorporating the maintenance tasks and associated thresholds and intervals described in, and in accordance with, the Accomplishment Instructions of BAE Systems (Operations) Limited Service Bulletin J41-51-001, Revision 4, dated July 11, 2017. The initial compliance times for new or revised tasks are at the applicable times specified in BAE Systems (Operations) Limited Service Bulletin J41-51-001, Revision 4, dated July 11, 2017, or within 6 months after the effective date of this AD, whichever is later.

    (i) No Alternative Actions and Intervals

    After the maintenance or inspection program has been revised as required by paragraph (h) of this AD, no alternative actions (e.g., inspections) or intervals may be used unless the actions or intervals are approved as an alternative method of compliance (AMOC) in accordance with the procedures specified in paragraph (l)(1) of this AD.

    (j) Terminating Action for Requirements of AD 2005-15-11

    Accomplishment of the actions required by paragraph (h) of this AD terminates all requirements of AD 2005-15-11.

    (k) No Reporting Requirement

    Although the Accomplishment Instructions of BAE Systems (Operations) Limited Alert Service Bulletin J41-A53-058, dated December 6, 2016, specify to submit certain information to the manufacturer, this AD does not include that requirement.

    (l) Other FAA AD Provisions

    The following provisions also apply to this AD:

    (1) Alternative Methods of Compliance (AMOCs): The Manager, International Section, Transport Standards Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the International Section, send it to the attention of the person identified in paragraph (m)(2) of this AD. Information may be emailed to: 9-ANM-116-AMOC-[email protected] Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

    (2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or EASA; or BAE Systems (Operations) Limited's EASA DOA. If approved by the DOA, the approval must include the DOA-authorized signature.

    (m) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2017-0187, dated September 22, 2017, for related information. This MCAI may be found in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0511.

    (2) For more information about this AD, contact Todd Thompson, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3228.

    (n) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.

    (2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.

    (i) BAE Systems (Operations) Limited Alert Service Bulletin J41-A53-058, dated December 6, 2016.

    (ii) BAE Systems (Operations) Limited Service Bulletin J41-51-001, Revision 4, dated July 11, 2017.

    (3) For service information identified in this AD, contact BAE Systems (Operations) Limited, Customer Information Department, Prestwick International Airport, Ayrshire, KA9 2RW, Scotland, United Kingdom; telephone +44 1292 675207; fax +44 1292 675704; email [email protected]; internet http://www.baesystems.com/Businesses/RegionalAircraft/index.htm.

    (4) You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.

    (5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Des Moines, Washington, on September 14, 2018. John P. Piccola, Acting Director, System Oversight Division, Aircraft Certification Service.
    [FR Doc. 2018-21344 Filed 10-2-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0394; Product Identifier 2018-NM-036-AD; Amendment 39-19441; AD 2018-20-07] RIN 2120-AA64 Airworthiness Directives; Dassault Aviation Airplanes AGENCY:

    Federal Aviation Administration (FAA), Department of Transportation (DOT).

    ACTION:

    Final rule.

    SUMMARY:

    We are adopting a new airworthiness directive (AD) for all Dassault Aviation Model MYSTERE-FALCON 50 airplanes. This AD was prompted by a determination that more restrictive maintenance requirements and airworthiness limitations are necessary. This AD requires revising the maintenance or inspection program, as applicable, to incorporate new and more restrictive maintenance requirements and airworthiness limitations. We are issuing this AD to address the unsafe condition on these products.

    DATES:

    This AD is effective November 7, 2018.

    The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of November 7, 2018.

    ADDRESSES:

    For service information identified in this final rule, contact Dassault Falcon Jet Corporation, Teterboro Airport, P.O. Box 2000, South Hackensack, NJ 07606; telephone 201-440-6700; internet http://www.dassaultfalcon.com. You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0394.

    Examining the AD Docket

    You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0394; or in person at Docket Operations between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this final rule, the regulatory evaluation, any comments received, and other information. The address for Docket Operations (phone: 800-647-5527) is U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.

    FOR FURTHER INFORMATION CONTACT:

    Tom Rodriguez, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3226.

    SUPPLEMENTARY INFORMATION: Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Dassault Aviation Model MYSTERE-FALCON 50 airplanes. The NPRM published in the Federal Register on May 11, 2018 (83 FR 21953). The NPRM was prompted by a determination that more restrictive maintenance requirements and airworthiness limitations are necessary. The NPRM proposed to require revising the maintenance or inspection program, as applicable, to incorporate new and more restrictive maintenance requirements and airworthiness limitations.

    We are issuing this AD to address reduced structural integrity of the airplane.

    The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2018-0026, dated January 30, 2018 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Dassault Aviation Model MYSTERE-FALCON 50 airplanes. The MCAI states:

    The airworthiness limitations and certification maintenance instructions for the Dassault Mystère Falcon 50 aeroplanes, which are approved by EASA, are currently defined and published in the Dassault Mystère Falcon 50 Aircraft Maintenance Manual (AMM) chapter 5-40. These instructions have been identified as mandatory for continued airworthiness.

    Failure to accomplish these instructions could result in an unsafe condition [i.e, reduced structural integrity of the airplane].

    Consequently, EASA issued [EASA] AD 2016-0067 [which corresponds to FAA AD 2017-09-03, Amendment 39-18865 (82 FR 21467, May 9, 2017)] to require accomplishment of the maintenance tasks, and implementation of the airworthiness limitations, as specified in Dassault Mystère Falcon 50 AMM chapter 5-40 Revision 23.

    Since that [EASA] AD was issued, Dassault issued Revision 24 of the Dassault Mystère Falcon 50 AMM chapter 5-40, which introduces new and more restrictive maintenance requirements and/or airworthiness limitations. For the reason described above, this [EASA] AD retains the requirements of EASA AD 2016-0067, which is superseded, and requires accomplishment of the actions specified in Revision 24 of the Dassault Mystère Falcon 50 AMM chapter 5-40 * * * .

    You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0394.

    Comments

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

    Conclusion

    We reviewed the relevant data and determined that air safety and the public interest require adopting this final rule 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 addressing the unsafe condition; and

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

    Related Service Information Under 1 CFR Part 51

    Dassault Aviation has issued Chapter 5-40, Airworthiness Limitations, DGT 113872, Revision 24, dated July 2017, of the Dassault Falcon 50/50EX Maintenance Manual. This service information describes instructions applicable to airworthiness and safe life limitations. 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.

    Costs of Compliance

    We estimate that this AD affects 250 airplanes of U.S. registry.

    We estimate the following costs to comply with this AD:

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

    Authority for This Rulemaking

    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 and associated appliances to the Director of the System Oversight Division.

    Regulatory Findings

    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.

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    Adoption of the Amendment

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

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): 2018-20-07 Dassault Aviation: Amendment 39-19441; Docket No. FAA-2018-0394; Product Identifier 2018-NM-036-AD. (a) Effective Date

    This AD is effective November 7, 2018.

    (b) Affected ADs

    This AD affects AD 2010-26-05, Amendment 39-16544 (75 FR 79952, December 21, 2010) (“AD 2010-26-05”); AD 2012-02-18, Amendment 39-16941 (77 FR 12175, February 29, 2012) (“AD 2012-02-18”); and AD 2017-09-03, Amendment 39-18865 (82 FR 21467, May 9, 2017) (“AD 2017-09-03”).

    (c) Applicability

    This AD applies to Dassault Aviation Model MYSTERE-FALCON 50 airplanes, certificated in any category, all manufacturer serial numbers.

    (d) Subject

    Air Transport Association (ATA) of America Code 05, Time limits/maintenance checks.

    (e) Reason

    This AD was prompted by a determination that more restrictive maintenance requirements and airworthiness limitations are necessary. We are issuing this AD to address reduced structural integrity of the airplane.

    (f) Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (g) Revision of Maintenance or Inspection Program

    Within 90 days after the effective date of this AD, revise the maintenance or inspection program, as applicable, to incorporate the information specified in Chapter 5-40, Airworthiness Limitations, DGT 113872, Revision 24, dated July 2017, of the Dassault Falcon 50/50EX Maintenance Manual. The initial compliance times for doing the tasks are at the time specified in Chapter 5-40, Airworthiness Limitations, DGT 113872, Revision 24, dated July 2017, of the Dassault Falcon 50/50EX Maintenance Manual, or within 90 days after the effective date of this AD, whichever occurs later.

    (h) No Alternative Actions or Intervals

    After the maintenance or inspection program has been revised as required by paragraph (g) of this AD, no alternative actions (e.g., inspections) or intervals may be used unless the actions or intervals are approved as an alternative method of compliance (AMOC) in accordance with the procedures specified in paragraph (j)(1) of this AD.

    (i) Terminating Actions for Other ADs

    (1) Accomplishing the actions required by paragraph (g) of this AD terminates all requirements of AD 2017-09-03.

    (2) Accomplishing the actions required by paragraph (g) of this AD terminates all requirements of AD 2010-26-05 and AD 2012-02-18 for the Dassault Aviation Model MYSTERE-FALCON 50 airplanes specified in those ADs.

    (j) Other FAA AD Provisions

    The following provisions also apply to this AD:

    (1) Alternative Methods of Compliance (AMOCs): The Manager, International Section, Transport Standards Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the International Section, send it to the attention of the person identified in paragraph (k)(2) of this AD. Information may be emailed to: [email protected]. Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

    (2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or the European Aviation Safety Agency (EASA); or Dassault Aviation's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.

    (k) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2018-0026, dated January 30, 2018, for related information. This MCAI may be found in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0394.

    (2) For more information about this AD, contact Tom Rodriguez, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3226.

    (l) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.

    (2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.

    (i) Chapter 5-40, Airworthiness Limitations, DGT 113872, Revision 24, dated July 2017, of the Dassault Falcon 50/50EX Maintenance Manual.

    (ii) Reserved.

    (3) For service information identified in this AD, contact Dassault Falcon Jet Corporation, Teterboro Airport, P.O. Box 2000, South Hackensack, NJ 07606; telephone 201-440-6700; internet http://www.dassaultfalcon.com.

    (4) You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.

    (5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Des Moines, Washington, on September 21, 2018. John P. Piccola, Acting Director, System Oversight Division, Aircraft Certification Service.
    [FR Doc. 2018-21343 Filed 10-2-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0517; Product Identifier 2017-SW-098-AD; Amendment 39-19443; AD 2018-20-09] RIN 2120-AA64 Airworthiness Directives; Airbus Helicopters Deutschland GmbH Helicopters AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Final rule.

    SUMMARY:

    We are adopting a new airworthiness directive (AD) for Airbus Helicopters Deutschland GmbH (Airbus Helicopters) Model MBB-BK 117 C-2 and MBB-BK 117 D-2 helicopters. This AD requires altering and re-identifying the overhead panel shock mount assembly (shock mount). This AD was prompted by the manufacturer's stress recalculations. The actions of this AD are intended to correct an unsafe condition on these products.

    DATES:

    This AD is effective November 7, 2018.

    The Director of the Federal Register approved the incorporation by reference of certain documents listed in this AD as of November 7, 2018.

    ADDRESSES:

    For service information identified in this final rule, contact Airbus Helicopters, 2701 N Forum Drive, Grand Prairie, TX 75052; telephone (972) 641-0000 or (800) 232-0323; fax (972) 641-3775; or at http://www.helicopters.airbus.com/website/en/ref/Technical-Support_73.html. You may review the referenced service information at the FAA, Office of the Regional Counsel, Southwest Region, 10101 Hillwood Pkwy., Room 6N-321, Fort Worth, TX 76177. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0517.

    Examining the AD Docket

    You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0517; or in person at Docket Operations between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the European Aviation Safety Agency (EASA) AD, any incorporated-by-reference service information, the economic evaluation, any comments received, and other information. The street address for Docket Operations (phone: 800-647-5527) is U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.

    FOR FURTHER INFORMATION CONTACT:

    Matt Fuller, Senior Aviation Safety Engineer, Safety Management Section, Rotorcraft Standards Branch, FAA, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone (817) 222-5110; email [email protected].

    SUPPLEMENTARY INFORMATION: Discussion

    On June 7, 2018, at 83 FR 26387, the Federal Register published our notice of proposed rulemaking (NPRM), which proposed to amend 14 CFR part 39 by adding an AD that would apply to Airbus Helicopters Model MBB-BK 117 C-2 and Model MBB-BK 117 D-2 helicopters with an overhead panel shock mount assembly part number (P/N) B246M2035102 or P/N B246M2036101 installed. The NPRM proposed to require installing a retaining plate on the shock mount and re-identifying the shock mount by changing the last three digits of the P/N to -966. The NPRM also proposed prohibiting the installation of shock mount P/N B246M2035102 and P/N B246M2036101 on any helicopter. The proposed requirements were intended to prevent failure of a shock mount, which could result in detachment of the overhead panel and injury to occupants during an emergency landing.

    The NPRM was prompted by AD No. 2017-0026, dated February 14, 2017, issued by EASA, which is the Technical Agent for the Member States of the European Union, to correct an unsafe condition for Airbus Helicopters Model MBB-BK 117 C-2, MBB-BK117 C-2e, MBB-BK 117 D-2, and MBB-BK117 D-2m helicopters. EASA advises that a recent stress calculation identified that the shock mount may not withstand certification crash loads. EASA states that this condition, if not corrected, could lead to the overhead panel disconnecting during an emergency landing and injuring occupants. Accordingly, the EASA AD requires modifying and re-identifying the shock mounts.

    Comments

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

    FAA's Determination

    These helicopters have been approved by the aviation authority of Germany and are approved for operation in the United States. Pursuant to our bilateral agreement with Germany, EASA, its technical representative, has notified us of the unsafe condition described in the EASA AD. We are issuing this AD because we evaluated all information provided by EASA and determined the unsafe condition exists and is likely to exist or develop on other helicopters of these same type designs and that air safety and the public interest require adopting the AD requirements as proposed.

    Differences Between This AD and the EASA AD

    The EASA AD applies to Model MBB-BK117 D-2m helicopters, whereas this AD does not since the Model MBB-BK117 D-2m is not FAA type-certificated. This AD also does not include the Model MBB-BK117 C-2(e) in the applicability section because it is a marketing designation and not an FAA type-certificated model. However, this AD applies to those helicopters, as they are Model MBB-BK117 C-2 helicopters. The EASA AD specifies particular helicopter serial numbers (S/Ns) that may not be required to complete some of the requirements of the AD since the specified S/Ns were manufactured with shock mounts not affected by the unsafe condition. This AD does not specify particular S/Ns.

    Related Service Information Under 1 CFR Part 51

    Airbus Helicopters has issued Alert Service Bulletin (ASB) MBB-BK117 C-2-24A-015 for Model MBB-BK117 C-2 helicopters and ASB MBB-BK117 D-2-24A-004 for Model MBB-BK117 D-2 helicopters, both Revision 0 and dated September 14, 2016. This service information contains procedures for altering the shock mounts by installing retaining plates and re-identifying the shock mounts by changing the last three digits of the P/N to -966.

    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.

    Costs of Compliance

    We estimate that this AD affects 144 helicopters of U.S. Registry. We estimate that operators may incur the following costs in order to comply with this AD. Labor costs are estimated at $85 per work-hour.

    Installing retaining plates and re-identifying the four shock mounts takes about 3 work-hours and parts cost about $184 for a total estimated cost of $439 per helicopter and $63,216 for the U.S. fleet.

    According to Airbus Helicopter's service information, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage by Airbus Helicopters. Accordingly, we have included all costs in our cost estimate.

    Authority for This Rulemaking

    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 helicopters identified in this rulemaking action.

    Regulatory Findings

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

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

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

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

    (3) Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction; and

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

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

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    Adoption of the Amendment

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

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): 2018-20-09 Airbus Helicopters Deutschland GmbH: Amendment 39-19443; Docket No. FAA-2018-0517; Product Identifier 2017-SW-098-AD. (a) Applicability

    This AD applies to Model MBB-BK 117 C-2 and Model MBB-BK 117 D-2 helicopters, certificated in any category, with an overhead panel shock mount assembly part number (P/N) B246M2035102 or P/N B246M2036101 installed.

    Note 1 to paragraph (a) of this AD:

    Helicopters with an MBB-BK117 C-2e designation are Model MBB-BK117 C-2 helicopters.

    (b) Unsafe Condition

    This AD defines the unsafe condition as failure of an overhead panel shock mount assembly (shock mount). This condition could result in detachment of the overhead panel and injury to occupants during an emergency landing.

    (c) Effective Date

    This AD becomes effective November 7, 2018.

    (d) Compliance

    You are responsible for performing each action required by this AD within the specified compliance time unless it has already been accomplished prior to that time.

    (e) Required Actions

    (1) Within 300 hours time-in-service:

    (i) Install a retaining plate on each shock mount by following the Accomplishment Instructions, paragraphs 3.B.2.1. through 3.B.2.4, of Airbus Helicopters Alert Service Bulletin (ASB) MBB-BK117 C-2-24A-015, Revision 0, dated September 14, 2016 (ASB MBB-BK117 C-2-24A-015), or ASB MBB-BK117 D-2-24A-004, Revision 0, dated September 14, 2016 (ASB MBB-BK117 D-2-24A-004), as applicable to your model helicopter.

    (ii) Re-identify shock mount P/N B246M2035102 as P/N B246M2035966 and shock mount P/N B246M2036101 as P/N B246M2036966 using permanent ink. When the ink is dry, apply varnish over the P/N.

    (iii) Re-install each shock mount.

    (2) After the effective date of this AD, do not install a shock mount P/N B246M2035102 or P/N B246M2036101 on any helicopter.

    (f) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Safety Management Section, Rotorcraft Standards Branch, FAA, may approve AMOCs for this AD. Send your proposal to: Matt Fuller, Senior Aviation Safety Engineer, Safety Management Section, Rotorcraft Standards Branch, FAA, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone (817) 222-5110; email [email protected].

    (2) For operations conducted under a 14 CFR part 119 operating certificate or under 14 CFR part 91, subpart K, we suggest that you notify your principal inspector, or lacking a principal inspector, the manager of the local flight standards district office or certificate holding district office, before operating any aircraft complying with this AD through an AMOC.

    (g) Additional Information

    The subject of this AD is addressed in European Aviation Safety Agency (EASA) AD No. 2017-0026, dated February 14, 2017. You may view the EASA AD on the internet at http://www.regulations.gov in Docket No. FAA-2018-0517.

    (h) Subject

    Joint Aircraft Service Component (JASC) Code: 2400, Electrical Power System.

    (i) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the incorporation by reference of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.

    (2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.

    (i) Airbus Helicopters Alert Service Bulletin (ASB) MBB-BK117 C-2-24A-015, Revision 0, dated September 14, 2016.

    (ii) Airbus Helicopters ASB MBB-BK117 D-2-24A-004, Revision 0, dated September 14, 2016.

    (3) For Airbus Helicopters service information identified in this AD, contact Airbus Helicopters, 2701 N Forum Drive, Grand Prairie, TX 75052; telephone (972) 641-0000 or (800) 232-0323; fax (972) 641-3775; or at http://www.helicopters.airbus.com/website/en/ref/Technical-Support_73.html.

    (4) You may view this service information at FAA, Office of the Regional Counsel, Southwest Region, 10101 Hillwood Pkwy., Room 6N-321, Fort Worth, TX 76177. For information on the availability of this material at the FAA, call (817) 222-5110.

    (5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call (202) 741-6030, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Fort Worth, Texas, on September 24, 2018. Lance T. Gant, Director, Compliance & Airworthiness Division, Aircraft Certification Service.
    [FR Doc. 2018-21342 Filed 10-2-18; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2018-0497; Product Identifier 2017-NM-140-AD; Amendment 39-19418; AD 2018-19-18] RIN 2120-AA64 Airworthiness Directives; Airbus SAS Airplanes AGENCY:

    Federal Aviation Administration (FAA), Department of Transportation (DOT).

    ACTION:

    Final rule.

    SUMMARY:

    We are adopting a new airworthiness directive (AD) for certain Airbus SAS Model A300 B4-603, B4-620, and B4-622 airplanes; Model A300 B4-600R series airplanes; Model A300 C4-605R Variant F airplanes; and Model A300 F4-605R airplanes. This AD was prompted by reports of cracking on a certain frame (FR) angle fitting. This AD requires, depending on airplane configuration, a modification of certain angle fitting attachment holes; repetitive inspections for cracking of certain holes of the internal lower angle fitting web, certain holes of the internal lower angle fitting horizontal splicing, the aft bottom panel, and a certain junction area; and related investigative and corrective actions if necessary. We are issuing this AD to address the unsafe condition on these products.

    DATES:

    This AD is effective November 7, 2018.

    The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of November 7, 2018.

    The Director of the Federal Register approved the incorporation by reference of a certain other publication listed in this AD as of December 19, 2005 (70 FR 69056, November 14, 2005).

    ADDRESSES:

    For service information identified in this final rule, contact Airbus SAS, Airworthiness Office—EAW, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email [email protected]; internet http://www.airbus.com. You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0497.

    Examining the AD Docket

    You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0497; or in person at Docket Operations between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this final rule, the regulatory evaluation, any comments received, and other information. The address for Docket Operations (phone: 800-647-5527) is U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.

    FOR FURTHER INFORMATION CONTACT:

    Dan Rodina, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3225.

    SUPPLEMENTARY INFORMATION:

    Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Airbus SAS Model A300 B4-603, B4-620, and B4-622 airplanes; Model A300 B4-600R series airplanes; Model A300 C4-605R Variant F airplanes; and Model A300 F4-605R airplanes. The NPRM published in the Federal Register on June 4, 2018 (83 FR 25590). The NPRM was prompted by reports of cracking on the FR47 angle fitting. The NPRM proposed to require, depending on airplane configuration, a modification of certain angle fitting attachment holes; repetitive inspections for cracking of certain holes of the internal lower angle fitting web, certain holes of the internal lower angle fitting horizontal splicing, the aft bottom panel, and the FR47/Rib 1 junction area; and related investigative and corrective actions if necessary.

    We are issuing this AD to address cracking of the FR47 angle fitting, which could result in reduced structural integrity of the airplane.

    The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2017-0210, dated October 24, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus SAS Model A300 B4-603, B4-620, and B4-622 airplanes; Model A300 B4-600R series airplanes; Model A300 C4-605R Variant F airplanes; and Model A300 F4-605R airplanes. The MCAI states:

    Prompted by cracks found on the Frame (FR) 47 angle fitting, Airbus issued SB [Service Bulletin] A300-57-6049, SB A300-57-6050, and SB A300-57-6086.

    These cracks, if not detected and corrected, could affect the structural integrity of the centre wing box (CWB) of the aeroplane.

    Consequently, DGAC [Direction Générale de l'Aviation Civile] France published AD 94-241-170, AD 1999-147-279, AD 2000-533-328 and AD F-2004-159 (EASA approval 2004-9779), each AD superseding the previous one, to require repetitive high frequency eddy current (HFEC) rotating probe inspections of the FR47 internal lower angle fitting.

    After DGAC France AD F-2004-159 was issued, cracks were reportedly found on the horizontal flange of FR47 internal corner angle fitting during accomplishment of routine maintenance structural inspection and modification in accordance with the instructions of Airbus SB A300-57-6050. Prompted by these findings, Airbus reviewed and amended the inspection programme for the internal lower angle fitting flange (horizontal face).

    Consequently, EASA issued AD 2012-0092 [which corresponds to FAA AD 2014-20-18, Amendment 39-17991 (79 FR 65879, November 6, 2014) (“AD 2014-20-18”)], retaining the requirements of DGAC France AD F-2004-159, which was superseded, and requiring additional repetitive inspections of the CWB lower panel through the ultrasonic method and, depending on findings, re-installation of removed fasteners in transition fit instead of interface.

    In addition, DGAC France had previously issued AD F-2005-124 (EASA approval 2005-6071) to require the same inspections for A300 F4-608ST aeroplanes, in accordance with Airbus SB A300-57-9001 and SB A300-57-9002.

    Following the discovery of numerous cracks during the accomplishment of SB A300-57-6049 and SB A300-57-6089 inspections, Airbus developed in a first step a new (recommended) modification (Airbus SB A300-57-6113) and defined, for post-mod aeroplanes, new inspections, and published SB A300-57-6119, which included new inspection methods (ultrasonic/radiographic) with new inspection thresholds and intervals.

    Consequently, EASA issued AD 2016-0198, retaining the requirements of EASA AD 2012-0092, which was superseded, to require repetitive inspections for post-SB A300-57-6113 aeroplanes.

    Since EASA AD 2016-0198 was issued, Airbus revised in a second step the inspection programme for A300-600 pre-SB 57-6113 and A300-600ST aeroplanes, reducing inspection thresholds and intervals. At this opportunity, the existing ultrasonic inspection for A300-600 aeroplanes has been added for A300-600ST aeroplanes.

    For the reasons described above, this new [EASA] AD retains the requirements of EASA AD 2016-0198 for A300-600 aeroplanes and of DGAC France AD F-2005-124 for A300-600ST aeroplanes, which are both superseded, and requires [modification through cold expansion of certain angle fitting attachment holes and] repetitive inspections [for cracking of certain holes of the internal lower angle fitting web, certain holes of the internal lower angle fitting horizontal splicing, the aft bottom panel, and the FR47/Rib 1 junction area, and applicable related investigative and corrective actions] with new compliance times and intervals. This [EASA] AD is applicable to both A300-600 and A300-600ST aeroplanes * * *.

    Related investigative actions include a rotating probe inspection for cracking. Corrective actions include replacing damaged fasteners, reaming and drilling holes, installing the next nominal fastener for oversized bore holes, and repairing cracks. You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0497.

    Comments

    We gave the public the opportunity to participate in developing this final rule. The following presents the comments received on the NPRM and the FAA's response to each comment.

    Request To Refer to New Service Information

    FedEx Express requested that we revise paragraphs (j), (k), and (m)(2) of the proposed AD to refer to Airbus Service Bulletin A300-57-6086, Revision 7, dated March 26, 2018, rather than Airbus Service Bulletin A300-57-6086, Revision 6, dated July 4, 2017. FedEx Express noted that the service information had been updated since the NPRM was released.

    We agree with the request. Airbus Service Bulletin A300-57-6086, Revision 7, dated March 26, 2018, removes one airplane from the effectivity and adds clarification on reporting related to ultrasonic inspections. All actions remain unchanged. We have revised paragraphs (j), (k), and (m)(2) of this AD to refer to Airbus Service Bulletin A300-57-6086, Revision 7, dated March 26, 2018. We have also revised paragraph (p) of this AD to provide credit for certain actions performed in accordance with Airbus Service Bulletin A300-57-6086, Revision 6, dated July 4, 2017.

    Request To Allow Previously Approved Alternative Methods of Compliance (AMOCs)

    FedEx Express requested that we revise the proposed AD to allow AMOCs previously approved for AD 2014-20-18 as AMOCs for the corresponding provisions of this AD.

    We agree with the commenter's request. We have revised paragraph (q)(1) of this AD to note that AMOCs previously approved for AD 2014-20-18 are approved as AMOCs for the corresponding provisions of this AD.

    Request To Allow Reporting Through Alternative Method

    FedEx Express requested that paragraph (n) of the proposed AD be revised to allow operators to determine the method or form they use for reporting inspection results. FexEx Express noted that they believe reporting is needed, but do not currently have the capability to use the Airbus online reporting system.

    We acknowledge the commenter's request, but disagree that we need to change this AD regarding this issue. Paragraph (n) of this AD allows reporting in accordance with the instructions of the applicable service information. This allows operators to use alternative methods of reporting, including mail, fax, and email. Therefore, a change to this AD is unnecessary.

    Conclusion

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

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

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

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

    Related Service Information Under 1 CFR Part 51

    Airbus SAS has issued the following service information.

    • Service Bulletin A300-57-6049, Revision 8, dated July 4, 2017. This service information describes procedures for HFEC rotating probe inspections for cracking of certain holes of the internal lower angle fitting web.

    • Service Bulletin A300-57-6086, Revision 7, dated March 26, 2018. This service information describes procedures for HFEC rotating probe inspections for cracking of certain holes in the internal lower angle fitting horizontal splicing (left-hand and right-hand sides) and for ultrasonic inspections for cracking of the aft bottom panel.

    • Service Bulletin A300-57-6119, Revision 00, dated April 25, 2016. This service information describes procedures for ultrasonic and radiographic inspections for cracking of the FR47/Rib 1 junction area.

    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.

    Costs of Compliance

    We estimate that this AD affects 65 airplanes of U.S. registry.

    We estimate the following costs to comply with this AD:

    Estimated Costs for Required Actions Labor cost Parts cost Cost per product Cost on U.S. operators Up to 727 work-hours × $85 per hour = Up to $61,795 Up to $3,370 Up to $65,165 Up to $4,235,725 per inspection cycle.

    We estimate that it would take about 1 work-hour per product to comply with the reporting requirement in this AD. The average labor rate is $85 per hour. Based on these figures, we estimate the cost of reporting the inspection results on U.S. operators to be $5,525, or $85 per product.

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

    Paperwork Reduction Act

    A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number. The control number for the collection of information required by this AD is 2120-0056. The paperwork cost associated with this AD has been detailed in the Costs of Compliance section of this document and includes time for reviewing instructions, as well as completing and reviewing the collection of information. Therefore, all reporting associated with this AD is mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at 800 Independence Ave. SW, Washington, DC 20591, ATTN: Information Collection Clearance Officer, AES-200.

    Authority for This Rulemaking

    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 and associated appliances to the Director of the System Oversight Division.

    Regulatory Findings

    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.

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    Adoption of the Amendment

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

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

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

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): 2018-19-18 Airbus SAS: Amendment 39-19418; Docket No. FAA-2018-0497; Product Identifier 2017-NM-140-AD. (a) Effective Date

    This AD is effective November 7, 2018.

    (b) Affected ADs

    This AD affects AD 2014-20-18, Amendment 39-17991 (79 FR 65879, November 6, 2014) (“AD 2014-20-18”).

    (c) Applicability

    This AD applies to Airbus SAS Model A300 B4-603, A300 B4-620, A300 B4-622, A300 B4-605R, A300 B4-622R, A300 C4-605R Variant F, and A300 F4-605R airplanes, certificated in any category, all manufacturer serial numbers, except airplanes on which Airbus Modification 12171 or 12249 has been embodied in production, or on which Airbus Service Bulletin A300-57-6069 has been embodied in service.

    (d) Subject

    Air Transport Association (ATA) of America Code 57, Wings.

    (e) Reason

    This AD was prompted by reports of cracking on the frame (FR) 47 angle fitting. We are issuing this AD to detect and correct cracking of the FR47 angle fitting, which could result in reduced structural integrity of the airplane.

    (f) Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (g) Definitions

    For the purposes of this AD, the definitions in paragraphs (g)(1) through (g)(6) apply.

    (1) Group 1 airplanes are those airplanes on which Airbus Service Bulletin A300-57-6113, Revision 00, dated April 25, 2016, has not been incorporated as of the effective date of this AD.

    (2) Group 2 airplanes are those airplanes on which Airbus Service Bulletin A300-57-6113, Revision 00, dated April 25, 2016, has been incorporated as of the effective date of this AD.

    (3) The average flight time (AFT) for the inspection threshold is defined as the flight hours (FH) divided by the flight cycles (FC), counted from the first flight of the airplane.

    (4) The AFT for the inspection interval is defined as the FH divided by the FC, counted from the date of the last inspection required by paragraph (i), (j), (k), or (l) of this AD, as applicable.

    (5) For airplanes on which Airbus modification 10155 has been embodied, the thresholds for the inspections required by paragraphs (i), (j), and (k) of this AD are counted from the first flight of the airplane.

    (6) For airplanes on which Airbus modification 10155 has not been embodied, the thresholds for the inspections required by paragraphs (i), (j), and (k) of this AD are counted since the date on which Airbus Service Bulletin A300-57-6050 was embodied on the airplane.

    (h) Modification

    For all airplanes on which Airbus modification 10155 has not been embodied: Before exceeding 15,100 FC or 38,900 FH, whichever occurs first after first flight of the airplane; or within the “grace periods” defined in paragraph 1.B.(4), “Accomplishment Timescale,” of Airbus Service Bulletin A300-57-6050, Revision 3, dated May 31, 2001; whichever occurs later, modify the angle fitting attachment holes of the wing center box by cold expansion, including doing a rotating probe inspection for cracking, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A300-57-6050, Revision 3, dated May 31, 2001. Where paragraph 1.B.(4), “Accomplishment Timescale,” of Airbus Service Bulletin A300-57-6050, Revision 3, dated May 31, 2001, specifies “grace periods” relative to the receipt of the service bulletin, count the “grace periods” from December 19, 2005 (the effective date of AD 2005-23-08 (70 FR 69056, November 14, 2005)). If any crack is found during any inspection: Before further flight, repair using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or the European Aviation Safety Agency (EASA); or Airbus SAS's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.

    (i) Internal Lower Angle Fitting (Vertical Face) Web Inspections

    For Group 1 airplanes: Before exceeding the applicable threshold specified in figure 1 to paragraph (i) of this AD, or within 12 months after the effective date of this AD, whichever occurs later, do a high frequency eddy current (HFEC) rotating probe inspection for cracking of holes H, I, K, L M, N, U, V, W, X, and Y of the internal lower angle fitting web (left-hand and right-hand sides), in accordance with the Accomplishment Instructions of Airbus Service Bulletin A300-57-6049, Revision 8, dated July 4, 2017. Repeat the inspection thereafter at intervals not to exceed those specified in figure 1 to paragraph (i) of this AD.

    ER03OC18.000 (j) Internal Lower Angle Fitting (Horizontal Face) Inspections

    For Group 1 airplanes: Before exceeding the applicable threshold specified in figure 2 to paragraph (j) of this AD, or within 12 months after the effective date of this AD, whichever occurs later, do an HFEC rotating probe inspection for cracking of holes A, B, C, D, E, F, G, P, Q, S, and T (adjacent to hole G) of the internal lower angle fitting horizontal splicing (left-hand and right-hand sides), in accordance with the Accomplishment Instructions of Airbus Service Bulletin A300-57-6086, Revision 7, dated March 26, 2018. Repeat the inspection thereafter at intervals not to exceed those specified in figure 2 to paragraph (j) of this AD.

    ER03OC18.001 (k) Aft Bottom Panel Inspections

    For Group 1 airplanes: Before exceeding the applicable thresholds specified in figure 3 to paragraph (k) of this AD, or within 12 months after the effective date of this AD, whichever occurs later, do an ultrasonic inspection for cracking of the aft bottom panel, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A300-57-6086, Revision 7, dated March 26, 2018. Repeat the inspection thereafter at intervals not to exceed those specified in figure 3 to paragraph (k) of this AD.

    ER03OC18.002 (l) FR47/Rib 1 junction area inspections

    For Group 2 airplanes: Before exceeding the applicable thresholds specified in figure 4 to paragraph (l) of this AD, do ultrasonic and radiographic inspections for cracking of the FR47/Rib 1 junction area, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A300-57-6119, Revision 00, dated April 25, 2016. Repeat the inspections thereafter at intervals not to exceed those specified in figure 4 to paragraph (l) of this AD. Count the threshold compliance times from the date on which Airbus Service Bulletin A300-57-6113, Revision 00, dated April 25, 2016, was embodied on the airplane.

    ER03OC18.003 (m) Related Investigative and Corrective Actions

    If, during any inspection required by paragraph (i), (j), (k), or (l) of this AD, any crack is found: Before further flight, accomplish all applicable related investigative and corrective actions in accordance with the Accomplishment Instructions of the service information specified in paragraphs (m)(1) through (m)(3) of this AD, as applicable. Where the service information specified in paragraphs (m)(1) through (m)(3) of this AD specifies to contact Airbus for instructions, before further flight, obtain instructions approved by the Manager, International Section, Transport Standards Branch, FAA; or EASA; or Airbus SAS's EASA DOA and accomplish those instructions accordingly. If approved by the DOA, the approval must include the DOA-authorized signature.

    (1) If the inspection was done as specified in paragraph (i) of this AD: Airbus Service Bulletin A300-57-6049, Revision 8, dated July 4, 2017.

    (2) If the inspection was done as specified in paragraph (j) or (k) of this AD: Airbus Service Bulletin A300-57-6086, Revision 7, dated March 26, 2018.

    (3) If the inspection was done as specified in paragraph (l) of this AD: Airbus Service Bulletin A300-57-6119, Revision 00, dated April 25, 2016.

    (n) Reporting

    At the applicable time specified in paragraph (n)(1) or (n)(2) of this AD: Report the results of the inspections required by paragraphs (i), (j), (k), and (l) of this AD to Airbus Service Bulletin Reporting Online Application on Airbus World (https://w3.airbus.com/), or submit the results to Airbus in accordance with the instructions of the applicable service information specified in paragraphs (i), (j), (k), or (l) of this AD. The report must include the inspection results, a description of any discrepancies found, the airplane serial number, and the number of flight cycles and flight hours on the airplane.

    (1) If the inspection was done on or after the effective date of this AD: Submit the report within 30 days after the inspection.

    (2) If the inspection was done before the effective date of this AD: Submit the report within 30 days after the effective date of this AD.

    (o) Terminating Action for AD 2014-20-18

    Accomplishment of the action required by paragraph (h) of this AD and the initial inspections required by paragraphs (i) and (j), and (k) of this AD terminates all requirements of AD 2014-20-18.

    (p) Credit for Previous Actions

    (1) This paragraph provides credit for actions specified in paragraph (h) of this AD, if those actions were performed before December 19, 2005 (the effective date of AD 2005-23-08 (70 FR 69056, November 14, 2005)), using Airbus Service Bulletin A300-57-6050, Revision 02, dated February 10, 2000.

    (2) This paragraph provides credit for actions specified in paragraphs (j), (k), and (m)(2) of this AD, if those actions were performed before the effective date of this AD using Airbus Service Bulletin A300-57-6086, Revision 6, dated July 4, 2017.

    (q) Other FAA AD Provisions

    The following provisions also apply to this AD:

    (1) Alternative Methods of Compliance (AMOCs): The Manager, International Section, Transport Standards Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the International Section, send it to the attention of the person identified in paragraph (r)(2) of this AD. Information may be emailed to: [email protected]

    (i) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.

    (ii) AMOCs previously approved for AD 2014-20-18 are approved as AMOCs for the corresponding provisions of this AD.

    (2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or EASA; or Airbus SAS's EASA DOA. If approved by the DOA, the approval must include the DOA-authorized signature.

    (3) Paperwork Reduction Act Burden Statement: A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB Control Number. The OMB Control Number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to be approximately 1 work-hour per response, including the time for reviewing instructions, completing and reviewing the collection of information. All responses to this collection of information are mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at: 800 Independence Ave. SW, Washington, DC 20591, Attn: Information Collection Clearance Officer, AES-200.

    (4) Required for Compliance (RC): Except as required by paragraph (m) of this AD: If any service information contains procedures or tests that are identified as RC, those procedures and tests must be done to comply with this AD; any procedures or tests that are not identified as RC are recommended. Those procedures and tests that are not identified as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the procedures and tests identified as RC can be done and the airplane can be put back in an airworthy condition. Any substitutions or changes to procedures or tests identified as RC require approval of an AMOC.

    (r) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2017-0210, dated October 24, 2017, for related information. This MCAI may be found in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0497.

    (2) For more information about this AD, contact Dan Rodina, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3225.

    (3) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (s)(5) and (s)(6) of this AD.

    (s) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.

    (2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.

    (3) The following service information was approved for IBR on November 7, 2018.

    (i) Airbus Service Bulletin A300-57-6049, Revision 8, dated July 4, 2017.

    (ii) Airbus Service Bulletin A300-57-6086, Revision 7, dated March 26, 2018.

    (iii) Airbus Service Bulletin A300-57-6119, Revision 00, dated April 25, 2016.

    (4) The following service information was approved for IBR on December 19, 2005 (70 FR 69056, November 14, 2005).

    (i) Airbus Service Bulletin A300-57-6050, Revision 03, dated May 31, 2001. This document contains the effective pages specified in paragraphs (s)(4)(i)(A), (s)(4)(i)(B), (s)(4)(i)(C), and (s)(4)(i)(D) of this AD.

    (A) Pages 1, 4, 10A through 11, 75, and 76 are identified as Revision 03, dated May 31, 2001.

    (B) Pages 2, 8, 9, 17 through 32, 41, 42, 57, 58, 61 through 63, and 77 are identified as Revision 02, dated February 10, 2000.

    (C) Pages 3, 5 through 7, 10, 12, 33, 34, 37, 38, 47, 59, and 60 are identified as Revision 01, dated May 31, 1999.

    (D) Pages 13 through 16, 35, 36, 39, 40, 43 through 46, 48 through 56, and 64 through 74 are identified as original, dated September 9, 1994.

    (ii) Reserved.

    (5) For service information identified in this AD, contact Airbus SAS, Airworthiness Office—EAW, Rond-Point Emile Dewoitine No: 2, 31700 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email [email protected]; internet http://www.airbus.com.

    (6) You may view this service information at the FAA, Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.

    (7) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Des Moines, Washington, on September 10, 2018. Michael Kaszycki, Acting Director, System Oversight Division, Aircraft Certification Service.
    [FR Doc. 2018-20348 Filed 10-2-18; 8:45 am] BILLING CODE 4910-13-P
    PENSION BENEFIT GUARANTY CORPORATION 29 CFR Parts 4001, 4022, 4043, and 4044 RIN 1212-AB24 Owner-Participant Changes to Guaranteed Benefits and Asset Allocation AGENCY:

    Pension Benefit Guaranty Corporation.

    ACTION:

    Final rule.

    SUMMARY:

    The Pension Benefit Guaranty Corporation (PBGC) is amending its regulations on guaranteed benefits and asset allocation. These amendments incorporate statutory changes to the rules for participants with certain ownership interests in a plan sponsor.

    DATES:

    Effective Date: This rule is effective November 2, 2018.

    Applicability: Like the provisions of the Pension Protection Act of 2006 (PPA 2006) that this rule incorporates, the amendments in this final rule are applicable to plan terminations—

    (A) under section 4041(c) of the Employee Retirement Income Security Act of 1974 (ERISA) with respect to which notices of intent to terminate are provided under section 4041(a)(2) of ERISA after December 31, 2005, and

    (B) under section 4042 of ERISA with respect to which notices of determination are provided under that section after December 31, 2005.

    FOR FURTHER INFORMATION CONTACT:

    Samantha M. Lowen ([email protected]), Attorney, Regulatory Affairs Division, Office of the General Counsel, Pension Benefit Guaranty Corporation, 1200 K Street NW, Washington, DC 20005-4026; 202-326-4400, extension 3786. (TTY users may call the Federal relay service toll-free at 800-877-8339 and ask to be connected to 202-326-4400, extension 3786.)

    SUPPLEMENTARY INFORMATION: Executive Summary Purpose of the Regulatory Action

    This final rule is necessary to conform the regulations of PBGC to current law and practice. PBGC is incorporating statutory changes affecting guaranteed benefits and asset allocation when a plan has one or more participants with certain ownership interests in the plan sponsor. PBGC's legal authority for this action comes from sections 4002(b)(3), 4022, and 4044 of ERISA. Section 4002(b)(3) authorizes PBGC to issue regulations to carry out the purposes of title IV of ERISA. Sections 4022 and 4044 authorize PBGC to prescribe regulations regarding the determination of guaranteed benefits and the allocation of assets within priority categories, respectively.

    Major Provisions

    This final rule amends PBGC's benefit payment regulation by replacing the guarantee limitations applicable to substantial owners with a new limitation applicable to majority owners.1 Additionally, this final rule amends PBGC's asset allocation regulation by prioritizing funding of all other benefits in priority category 4 ahead of those benefits that would be guaranteed but for the new limitation. The rulemaking also clarifies that plan administrators may continue to use the simplified calculation in the existing rule to estimate benefits funded by plan assets. Finally, it provides new examples to aid in implementation.

    1 In this preamble, substantial owners and majority owners are referred to interchangeably as “owner-participants.”

    Background

    PBGC administers the pension insurance program under title IV of ERISA. ERISA sections 4022 and 4044 cover PBGC's guarantee of plan benefits and allocation of plan assets, respectively, under terminated single-employer plans. Special provisions within these sections apply to “owner-participants,” who have certain ownership interests in their plan sponsors. PPA 2006 made changes to these provisions. PBGC has been operating in accordance with the amended provisions since they became effective, but had not yet updated its regulations nor issued guidance on implementation. With this rulemaking, PBGC is increasing transparency into its operations and is clarifying for plan administrators the impact of the statutory changes.

    Before PPA 2006, the owner-participant provisions applied to any participant who was a “substantial owner” at any time within the 60 months preceding the date on which the determination was made. Section 4021(d) of ERISA defines a substantial owner as an individual who owns the entire interest in an unincorporated trade or business, or a partner or shareholder who owns more than 10 percent of the partnership or corporation. PPA 2006 revised the owner-participant provisions, in large part, by making them applicable to “majority owners” instead of substantial owners. Section 4022(b)(5)(A) of ERISA defines a majority owner as an individual who owns the entire interest in an unincorporated trade or business, or a partner or shareholder who owns 50 percent or more of the entity.

    On March 7, 2018 (at 83 FR 9716), PBGC published a proposed rule to amend parts 4001, 4022, 4041, 4043, and 4044 to incorporate statutory changes to the rules for participants with certain ownership interests in a plan sponsor. PBGC received no comments on the proposed rule.

    The final regulation is the same as the proposed regulation with two exceptions discussed below: PBGC is adding clarifying language to § 4022.26 of the benefit payment regulation, concerning PPA 2006 bankruptcy terminations; and PBGC is not making the proposed amendment to its regulation on Termination of Single-Employer Plans (29 CFR part 4041).

    Guaranteed Benefits Before and After PPA 2006

    ERISA section 4022 imposes several limitations on PBGC's guarantee of plan benefits, including the “phase-in limitation.” As the name of this limitation suggests, PBGC's guarantee of a plan's benefits is phased in over a specified time period. Before PPA 2006, this time period was drastically different for owner-participants and for all other participants; the benefits of owner-participants were phased in over 30 years, whereas the benefits of non-owner-participants were phased in over five years. In addition, the extent to which an owner-participant's benefit was phased in was unique to each owner-participant and based on the number of years he or she was an active participant in the plan; whereas the extent to which all other participants' benefits were phased in was based on the number of years a plan provision—specifically, one that increased benefits—was in effect before the plan terminated.

    PPA 2006 greatly simplified the method for determining PBGC's guarantee of owner-participants' benefits by eliminating the 30-year phase-in and making the five-year phase-in of benefit increases applicable to owner-participants and non-owner-participants alike. PPA 2006 then applies a separate, additional limitation—the “owner-participant limitation”—to an owner-participant's otherwise guaranteed benefit. This owner-participant limitation is similar to the five-year phase-in limitation on benefit increases, as it is calculated based on a plan's age; however, it is based on the length of time the original plan was in existence, regardless of whether the plan increased benefits, and the phase-in period is 10 years. The owner-participant limitation bears little resemblance to the 30-year phase-in limitation, and the calculations are much simpler. This final rule incorporates these changes to PBGC's benefit payment regulation.

    Phase-in Limitation

    Before this rulemaking, §§ 4022.25 and 4022.26 of PBGC's benefit payment regulation provided the procedures for calculating the five-year phase-in of benefit increases for non-owner-participants and the 30-year phase-in of all benefits for owner-participants, respectively. Section 4022.25 provided, generally, that benefit increases (as defined in § 4022.2) of non-owner-participants were phased in by the greater of $20 or 20 percent of the increase for each full year the increase was effective. Section 4022.26 provided the much more complicated procedures for calculating the guaranteed benefits of owner-participants—based on a 30-year phase-in—before PPA 2006; different procedures applied depending on whether or not there had been any benefit increases. As explained above, PPA 2006 eliminated the 30-year phase-in limitation and made the five-year phase-in of benefit increases applicable to all participants, including owner-participants. Accordingly, PBGC is amending the benefit payment regulation by removing the distinction between owner-participants and all other participants under § 4022.25, and PBGC is amending § 4022.26 by replacing the 30-year phase-in limitation with a new “owner-participant limitation,” as discussed next.

    Owner-Participant Limitation

    PPA 2006 provided a new formula for determining PBGC's guarantee of an owner-participant's benefit. Under this owner-participant limitation, an owner-participant's guaranteed benefit is limited to the product of the owner-participant's otherwise-guaranteed benefit and a fraction, not to exceed one. The numerator of this fraction equals the number of years that the plan was in existence (from the later of its effective date or adoption date), and the denominator equals 10.

    Compared to the 30-year phase-in under the old statute, which had been implemented at § 4022.26 of the benefit payment regulation, the owner-participant limitation is much simpler to calculate and generally provides a much more generous guarantee. Before PPA 2006, PBGC needed to make individualized determinations about the length of time each substantial owner was an active participant in a plan over a 30-year period. Additionally, a substantial owner needed to have been an active participant for at least 30 years in order for his or her benefit to be fully guaranteed (to the extent that other limitations on PBGC's guarantee did not apply). Under PPA 2006, PBGC needs only to calculate a single fraction, based on the age of the plan, and then to multiply the benefit of each majority owner under the plan by that same fraction. In addition, all majority owners' benefits are now fully guaranteed (to the extent that other limitations on PBGC's guarantee do not apply) once a plan has been in existence for 10 years.

    Consistent with these statutory changes, PBGC is amending the benefit payment regulation by replacing references to “substantial owner” with “majority owner” and by revising § 4022.26 to provide the formula for calculating the owner-participant limitation, in the place of the 30-year phase-in limitation. In addition to the revisions described in the proposed rule, PBGC is adding language to § 4022.26 to clarify that in a PPA 2006 bankruptcy termination, the length of time that the plan was in existence is measured from the later of the effective date or the adoption date of the plan to the bankruptcy filing date.2

    2See “Related Regulatory Amendments” section below.

    Asset Allocation in Priority Category 4 Before and After PPA 2006

    ERISA section 4044 prescribes the method for allocating a terminated single-employer plan's assets to its benefit liabilities. Under section 4044, plan assets must be allocated to six priority categories (PC1 through PC6, with PC1 being the highest) into which all plan benefits are sorted. Benefits affected by the owner-participant limitation are assigned to priority category 4 (PC4). PPA 2006 changed the method for allocating assets within PC4 when there are benefits affected by the owner-participant limitation.

    PC4 includes three kinds of benefits: (1) Guaranteed benefits, other than employee contributions and benefits that could have been in pay status three or more years before a plan's termination (or before the plan sponsor's bankruptcy filing date, for plans subject to ERISA section 4022(g)); (2) benefits that would be guaranteed but for the aggregate limit of ERISA section 4022B; and (3) benefits that would be guaranteed but for the owner-participant limitation (based on substantial ownership before PPA 2006 and majority ownership after PPA 2006).3 If a plan's assets are sufficient to cover all PC4 benefits or are insufficient to cover any PC4 benefits, the PPA 2006 changes for owner-participants have no bearing on the allocation; however, if assets are sufficient to cover some, but not all, PC4 benefits (i.e., if assets are “exhausted in PC4”), the allocation rules differ before and after PPA 2006.

    3 Strictly speaking, this description applies to benefits in “net PC4,” given that “PC4” (or, more accurately, “gross PC4”) technically includes the three kinds of benefits listed, as well as all benefits in higher priority categories. Without using the terms “gross” or “net,” PBGC's asset allocation regulation makes this distinction at paragraph (c) of § 4044.10 (“[t]he value of each participant's basic-type benefit or benefits in a priority category shall be reduced by the value of the participant's benefit of the same type that is assigned to a higher priority category”). Nevertheless, PBGC recognizes that colloquial descriptions of benefits in a given priority category usually refer to the net benefits in that category, and this preamble follows that common usage, unless otherwise indicated.

    Before PPA 2006, if assets were exhausted in PC4, then assets were to be allocated pro rata among all three kinds of PC4 benefits. Under PPA 2006, if assets are exhausted in PC4, then assets must first be allocated to the first two PC4 groups; only if assets cover all benefits in these two groups will any assets be allocated to benefits that would be guaranteed but for the majority-owner limitation. In accordance with these statutory changes, PBGC is amending the asset allocation regulation by prioritizing other PC4 benefits to those affected by the majority-owner limitation.

    Calculation of Estimated Benefits

    In a distress termination, § 4022.61 of the benefit payment regulation—implementing section 4041(c)(3)(D) of ERISA—requires plan administrators to limit benefit payments to estimates of the amounts that PBGC is expected to pay, in order to minimize potential overpayments and exhaustion of plan assets before PBGC becomes trustee and is able to assume benefit payments. As trustee, PBGC pays each participant the greater of his or her guaranteed benefit or asset-funded benefit.4 Accordingly, § 4022.61 requires plan administrators to limit benefits in pay status to the greater of each participant's estimated guaranteed benefit or estimated asset-funded benefit, beginning on the proposed termination date.5

    4 A participant's asset-funded benefit is essentially the portion of the participant's plan benefit that plan assets are sufficient to fund when assets are allocated according to the distribution rules of ERISA section 4044.

    5 PBGC's benefit payment regulation does not currently include the term “estimated asset-funded benefit”; the term “estimated title IV benefit” is used instead. As discussed later in this preamble, PBGC is replacing the term “estimated title IV benefit” with “estimated asset-funded benefit.” Consistent with the terminology change, this preamble refers to estimated asset-funded benefits and not to estimated title IV benefits, except where otherwise indicated.

    Estimated Guaranteed Benefits

    A participant's estimated guaranteed benefit is determined as of the proposed termination date and is the portion of the participant's plan benefit (viz., the benefit to which the participant would be entitled under the terms of the plan if the plan did not terminate) that does not exceed the estimated legal limits of PBGC's guarantee. Section 4022.62 of the benefit payment regulation prescribes the method for estimating PBGC's guarantee limitations and for calculating a participant's estimated guaranteed benefit.

    As discussed above, the changes under PPA 2006 greatly affected the calculation of guaranteed benefits of owner-participants. Therefore, in order to ensure that administrators of plans with owner-participants understand how to accurately estimate these benefits in distress terminations, PBGC must update the calculation procedures.

    Section 4022.62 provides two methods for calculating estimated guaranteed benefits. One method—given at paragraph (c)—applies to non-owner-participants, while the other—given at paragraph (d)—applies to owner-participants. Both methods' calculations use the amount calculated under paragraph (b) as a starting point. Paragraph (b) estimates a participant's benefit that would be guaranteed before application of any phase-in limitation. Paragraph (c) estimates the effect of the five-year phase-in limitation on the paragraph (b) amount. Paragraph (d) estimates the effect of the 30-year phase-in limitation applicable to owner-participants before PPA 2006 on the paragraph (b) amount.

    In order to reflect the changes to PBGC's guarantee limitations for owner-participants under PPA 2006, PBGC is revising paragraph (d) in its entirety. As revised, paragraph (d) no longer estimates the effect of the 30-year phase-in limitation on the paragraph (b) amount; rather, paragraph (d) estimates the effect of the owner-participant limitation (using the n /10 ratio that PPA 2006 introduced) on the paragraph (c) amount. The revised paragraph (d) uses the paragraph (c) amount instead of the paragraph (b) amount because the five-year phase-in limitation is now applicable to all participants (including majority owners).

    Estimated Asset-Funded Benefits

    A participant's estimated asset-funded benefit is the portion of the participant's plan benefit that plan assets are expected to be sufficient to fund through PC4, based on estimated plan assets and benefits in each priority category. Section 4022.63 of the benefit payment regulation prescribes two methods for calculating estimated asset-funded benefits; one applies to non-owner-participants and the other applies to owner-participants. Essentially, § 4022.63 provides that a non-owner-participant's estimated asset-funded benefit equals his or her estimated PC3 benefit and that an owner-participant's estimated asset-funded benefit equals the greater of his or her estimated PC3 benefit or estimated PC4 benefit. The PPA 2006 changes for owner-participants have no bearing on estimated PC3 benefits; however, the PPA 2006 change to asset allocation had the potential to affect the calculation of estimated PC4 benefits, which are payable only to owner-participants.

    An owner-participant's estimated PC4 benefit equals the product of what would be his or her estimated guaranteed benefit if the participant were not an owner-participant and the “PC4 funding ratio.” The PC4 funding ratio is calculated one of two ways, depending on whether a plan has any benefits in PC3 (viz., whether a plan has benefits that were or could have been in pay status three years before the proposed termination date). If a plan has no PC3 benefits, the PC4 funding ratio essentially equals the estimated amount of plan assets divided by the estimated amount of vested benefits under the plan.6 If a plan has PC3 benefits, the PC4 funding ratio essentially equals the estimated amount of plan assets minus the present value of all benefits in pay status, all divided by the estimated amount of vested benefits not in pay status.7

    6 The PC4 funding ratio excludes assets and benefits that are attributable to employee contributions. See 29 CFR 4022.63(d)(2).

    7See note 5.

    By calculating and then using a plan's PC4 funding ratio, an administrator is able to estimate the amount of assets available to fund all benefits in PC4. This ratio does not distinguish between owner-participants' benefits and all other benefits in PC4, as this distinction was not necessary before PPA 2006, when assets were to be allocated equally among the three kinds of PC4 benefits. As a result, while the PC4 funding ratio is a useful tool for estimating assets available to fund all benefits in PC4 (including those of substantial owners before PPA 2006), it does not account for the requirement under PPA 2006 to fund the benefits of majority owners only if assets remain after funding all other benefits in PC4.

    Under PPA 2006, continued use of the PC4 funding ratio is more likely to result in an inflated estimate of assets available to fund a majority owner's benefit. While this potential overestimation increases the likelihood that a majority owner's estimated benefit will exceed his or her actual benefit entitlement, it has no bearing on—in particular, it does not reduce—the estimated benefits of other participants. This is because the PC4 ratio is used only when calculating the estimated asset-funded benefit of an owner-participant. As stated above, the estimated asset-funded benefits of non-owner-participants equal the participants' estimated PC3 benefits. Because PC3 benefits receive higher allocation priority than PC4 benefits, the estimated asset-funded benefit of any non-owner-participant will not be affected by the allocation of assets in PC4.

    Even without any potential harm to other participants, the concern remains for potentially overpaying majority owners who receive estimated benefits. Weighed against this concern is consideration of the potential burden on plan administrators that more robust estimation procedures would impose. Modifying the PC4 funding ratio to account for the funding prioritization of other PC4 benefits ahead of those of majority owners would require additional calculations that would undermine the requirement of administrators to “estimate” asset-funded benefits, as opposed to performing more precise calculations outright. Moreover, far fewer participants are likely to be majority owners, compared to the number likely to have been substantial owners before PPA 2006. This is because majority owners must have an ownership interest of at least 50 percent and because the majority-owner limitation does not apply to any plan that existed for at least 10 years before terminating.

    Having weighed the concerns and chiefly recognizing the limited number of cases where a plan will have one or more majority owners as well as assets sufficient to fund some, but not all, benefits in PC4, PBGC is leaving its estimated asset-funded benefit provisions at § 4022.63 substantively unchanged, with the sole exception of revising Example 2 under paragraph (e). Example 2 illustrates how to calculate the estimated asset-funded benefit of an owner-participant and describes the related calculation of the owner-participant's estimated guaranteed benefit under § 4022.62. The revisions to Example 2 reflect the changes to § 4022.62 discussed above.

    Related Regulatory Amendments

    PBGC is making conforming amendments to its regulations on Terminology and Reportable Events and Certain Other Notification Requirements.

    The final rule retains the long-standing definition of “majority owner” in § 4041.2 of PBGC's regulation on Termination of Single-Employer Plans for the limited purposes of that part. The changes in PPA 2006, including adding a definition of “majority owner” to section 4022(b)(5)(A) of ERISA, were aimed at other purposes. PBGC is retaining its definition of majority owner in § 4041.2 so that the individuals who are permitted to elect an alternative treatment of their benefits are not changed.8

    8 Section 4041.21(b)(2) of PBGC's regulation on Termination of Single-Employer Plans provides that a majority owner may forgo a portion of his or her benefit to the extent needed to allow an underfunded plan to terminate in a standard termination.

    PBGC is correcting paragraph (e) of § 4022.62, which currently provides that in a PPA 2006 bankruptcy termination, “bankruptcy filing date” is substituted for “proposed termination date” in paragraph (c) of § 4022.62, by making the substitution applicable to both paragraph (c) (applicable to non-owner-participants) and paragraph (d) (applicable to owner-participants) of § 4022.62. It is clear from the preamble to the final rule that added paragraph (e) that PBGC intended, consistent with PPA 2006, to have the applicable “bankruptcy filing date” substituted when calculating the estimated benefits of all participants, regardless of ownership status.9

    9See 76 FR 34590, 34596 (June 14, 2011) (“[t]he final regulation provides that for any PPA 2006 bankruptcy termination, those estimated benefits [calculated under 29 CFR 4022.62-4022.63] are based on the rules described above relating to the bankruptcy filing date”).

    In addition, PBGC is adding language to the revised § 4022.26 to clarify that in a PPA 2006 bankruptcy termination, the length of time that the plan was in existence is measured from the later of the effective date or the adoption date of the plan to the bankruptcy filing date. This new language mirrors the application of ERISA section 4022(g) elsewhere in the benefit payment regulation. Section 4022(g) provides that in a PPA 2006 bankruptcy termination, PBGC is to treat the bankruptcy filing date as the plan's termination date when applying ERISA section 4022.

    ERISA section 4022(b)(5)(B) specifies that the numerator of the n /10 fraction used in calculating an owner-participant's guaranteed benefit is the number of years from the later of the effective or adoption date of the plan to the plan's termination date. Therefore, as Section 4022(g) requires, this final rule provides that “bankruptcy filing date” is substituted for “termination date” in the formula for calculating a majority owner's guaranteed benefit in a PPA 2006 bankruptcy termination.

    By contrast, ERISA section 4022(b)(5)(A) provides that the 60-month time period for determining majority-owner status ends on “the date the determination is being made.” The statute is unclear as to whether the Section 4022(g) substitution rule should apply if PBGC generally treats the date of determination as the plan's termination date. This rulemaking clarifies that the time period for determining whether a participant is a majority owner—viz., the time period prescribed in ERISA section 4022(b)(5)(A) as “the 60-month period ending on the date the determination is being made”—ends on the plan's termination date, even in a PPA 2006 bankruptcy termination. This is consistent with PBGC's valuation of a plan's assets and liabilities as of the plan's termination date, and PBGC's determination of the liable controlled group as of that date. It is also consistent with PBGC's interpretation of Section 4022(g) in its final rule on PPA 2006 bankruptcy terminations.10 Section 4022(g) serves to limit PBGC's guarantee of benefits to a participant's accrued plan benefit at the bankruptcy filing date. Substituting the bankruptcy filing date for the termination date in applying the owner-participant guarantee limitation furthers this purpose; substituting the bankruptcy filing date for the termination date in determining majority-owner status does not.

    10See 76 FR 34590, 34595-96 (June 14, 2011) (noting that an overly broad interpretation of section 4022(g) or the similar section 4044(e) of ERISA would present some anomalies).

    Amendments Unrelated to PPA 2006

    PBGC is making minor, non-substantive changes to the examples not involving owner-participants at §§ 4022.62 and 4022.63 of the benefit payment regulation, in order to improve readability. Additionally, PBGC is correcting two clerical errors that were made when PBGC previously amended the regulation; the first duplicated paragraph (f) of § 4022.62, and the second duplicated the designation of paragraph (c)(1) of § 4022.63. Lastly, PBGC is replacing the term “estimated title IV benefit” with “estimated asset-funded benefit” at § 4022.63.

    The use of the term “estimated title IV benefit” at § 4022.63 of the benefit payment regulation is confusing, in light of the definition of “title IV benefit” at § 4001.2 of the terminology regulation. Section 4001.2 provides, generally, that a participant's title IV benefit equals the greater of his or her guaranteed benefit or asset-funded benefit. Given this definition, one might assume that the estimated title IV benefit equals the greater of the estimate of a participant's guaranteed benefit or the estimate of a participant's asset-funded benefit; however, § 4022.63 provides that the estimated title IV benefit is essentially an estimate of a participant's asset-funded benefit (through PC4) only. Accordingly, PBGC is renaming the “estimated title IV benefit” referred to in § 4022.63 as the “estimated asset-funded benefit.” This term only appears in § 4022.63; the change does not require any conforming amendments elsewhere in PBGC's regulations.

    Compliance With Rulemaking Guidelines Executive Orders 12866, 13563, and 13771

    PBGC has determined that this rulemaking is not a “significant regulatory action” under Executive Order 12866 and, accordingly, that the provisions of Executive Order 13771 do not apply. Because this rulemaking is not a significant regulatory action, OMB has not reviewed this final rule. Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. If a regulatory action is significant under Executive Order 12866, Executive Order 13771 imposes additional requirements on the agency.

    Although this is not a significant regulatory action under Executive Order 12866, PBGC has examined the economic implications of this final rule. PBGC has concluded that because the key aspects of this final rule merely incorporate statutory changes that have been effective since 2006, neither the public nor PBGC will assume any additional costs due to this regulatory action. Moreover, because PBGC has been following the statute as amended in 2006, and not the inconsistent provisions in its regulations, this rule improves the transparency of PBGC operations to the public and provides helpful guidance to plan administrators. By leaving unchanged the estimated asset-funded benefit calculation procedures under § 4022.63, PBGC enables plan administrators to continue to rely confidently on these relatively simple procedures, rather than creating more complex procedures that could have been contemplated in light of the statutory changes. Finally, the revisions to the examples at §§ 4022.62 and 4022.63 will assist plan administrators in complying with the law. Accordingly, this final rule will result in a net benefit to the public.

    Regulatory Flexibility Act

    Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), federal agencies must comply with additional requirements when engaging in certain rulemaking activities that are subject to notice and public comment. An agency must satisfy these requirements if a final rule is likely to have a significant economic impact on a substantial number of small entities. Unless an agency determines that a final rule is not likely to have a significant economic impact on a substantial number of small entities, section 603 of the Regulatory Flexibility Act requires that the agency present an initial regulatory flexibility analysis at the time of the publication of the final rule. The agency's analysis must describe the impact of the rule on small entities, and the agency must seek public comment on the impact. Small entities include small businesses, organizations, and governmental jurisdictions.

    For purposes of the Regulatory Flexibility Act, with respect to this final rule, PBGC considers a small entity to be a plan with fewer than 100 participants. This criterion is consistent with certain requirements in title I of ERISA 11 and the Internal Revenue Code,12 as well as the definition of a small entity that the Department of Labor (DOL) has used for purposes of the Regulatory Flexibility Act.13 While some large employers maintain both small and large plans, most small plans are maintained by small employers. In light of this, PBGC believes that assessing the impact of the final rule on small plans is an appropriate substitute for evaluating the effect on small entities. Notably, the definition of small entity considered appropriate for this purpose differs from the definition of small business—based on size standards—at 13 CFR 121.201, which the Small Business Administration promulgated pursuant to the Small Business Act. Therefore, PBGC requested public comment on the appropriateness of the size standard used in evaluating the impact of the proposed rule on small entities. PBGC did not receive any such comments.

    11 See, e.g., ERISA section 104(a)(2), which permits the Secretary of Labor to prescribe simplified annual reports for pension plans that cover fewer than 100 participants.

    12 See, e.g., Code section 430(g)(2)(B), which permits single-employer plans with 100 or fewer participants to use valuation dates other than the first day of the plan year.

    13 See, e.g., DOL's final rule on Prohibited Transaction Exemption Procedures, 76 FR 66637, 66644 (Oct. 27, 2011).

    PBGC certifies under section 605(b) of the Regulatory Flexibility Act that this final rule will not have a significant economic impact on a substantial number of small entities. This certification is based on the fact that this final rule is not likely to have a significant economic impact on any entity, regardless of size. This is because nearly all aspects of this final rule will merely incorporate statutory changes that have been effective for more than a decade, while, as discussed in the context of Executive Order 12866 above, the remaining few will provide clarity on the accurate estimation of benefits required by law, at no additional cost to the public.

    List of Subjects 29 CFR Part 4001

    Business and industry, Employee benefit plans, Pension insurance.

    29 CFR Parts 4022 and 4043

    Employee benefit plans, Pension insurance, Reporting and recordkeeping requirements.

    29 CFR Part 4044

    Employee benefit plans, Pension insurance.

    In consideration of the foregoing, PBGC is amending 29 CFR parts 4001, 4022, 4043, and 4044 as follows:

    PART 4001—TERMINOLOGY 1. The authority citation for part 4001 continues to read as follows: Authority:

    29 U.S.C. 1301, 1302(b)(3).

    2. In § 4001.2: a. Add in alphabetical order a definition for “Majority owner”; and b. Remove the definition of “Substantial owner”.

    The addition reads as follows:

    § 4001.2 Definitions.

    Majority owner means, with respect to a contributing sponsor of a single-employer plan, an individual who owns, directly or indirectly (taking into account the constructive ownership rules of section 414(b) and (c) of the Code)—

    (1) The entire interest in an unincorporated trade or business;

    (2) 50 percent or more of the capital interest or the profits interest in a partnership; or

    (3) 50 percent or more of either the voting stock of a corporation or the value of all of the stock of a corporation.

    PART 4022—BENEFITS PAYABLE IN TERMINATED SINGLE-EMPLOYER PLANS 3. The authority citation for part 4022 continues to read as follows: Authority:

    29 U.S.C. 1302, 1322, 1322b, 1341(c)(3)(D), and 1344.

    § 4022.2 [Amended]
    4. In § 4022.2 introductory text: a. Remove the words “guaranteed benefit” and add in their place the words “guaranteed benefit, majority owner”; and b. Remove the words “substantial owner,”. 5. Amend § 4022.24 by revising paragraphs (a) and (b) to read as follows:
    § 4022.24 Benefit increases.

    (a) Scope. This section applies to all benefit increases, as defined in § 4022.2, that have been in effect for less than five years preceding the termination date.

    (b) General rule. Benefit increases described in paragraph (a) of this section are guaranteeable only to the extent provided in § 4022.25.

    § 4022.25 [Amended]
    6. In § 4022.25: a. Amend the section heading by removing the words “for participants other than substantial owners”; and b. Amend paragraph (a) by removing the words “with respect to participants other than substantial owners”. 7. Revise § 4022.26 to read as follows:
    § 4022.26 Benefit guarantee for participants who are majority owners.

    (a) Scope. This section applies to the guarantee of all benefits described in subpart A of this part (subject to the limitations in § 4022.21) with respect to participants who are majority owners at the termination date or who were majority owners at any time within the five-year period preceding that date.

    (b) Formula. Benefits provided by a plan are guaranteed to the extent provided in the following formula: The amount of the participant's benefit that PBGC would otherwise guarantee under section 4022 of ERISA and this part if the participant were not a majority owner, multiplied by a fraction not to exceed one, the numerator of which is the number of full years from the later of the effective date or the adoption date of the plan to the termination date, and the denominator of which is 10.

    (c) PPA 2006 bankruptcy termination. In a PPA 2006 bankruptcy termination, “bankruptcy filing date” is substituted for “termination date” in paragraph (b) of this section.

    8. In § 4022.62: a. Amend paragraphs (a) and (c) introductory text by removing the four instances of the word “substantial” and adding in their place the word “majority”; b. Revise paragraph (d); c. Amend paragraph (e) by removing the words “paragraph (c)” and adding in their place the words “paragraphs (c) and (d)”; d. Remove the first paragraph (f); and e. Revise remaining paragraph (f).

    The revisions read as follows:

    § 4022.62 Estimated guaranteed benefit.

    (d) Estimated guaranteed benefit payable with respect to a majority owner. For benefits payable with respect to each participant who is a majority owner, the estimated guaranteed benefit is the benefit to which he or she would be entitled under paragraph (c) of this section but for his or her status as a majority owner, multiplied by a fraction, not to exceed one, the numerator of which is the number of full years from the later of the effective date or the adoption date of the plan to the proposed termination date and the denominator of which is 10.

    (f) Examples. This section is illustrated by the following examples. (For an example addressing issues specific to a PPA 2006 bankruptcy termination, see § 4022.25(f).)

    (1) Example 1—(i) Facts. A participant who is not a majority owner retired on December 31, 2011, at age 60 and began receiving a benefit of $600 per month. On January 1, 2009, the plan had been amended to allow participants to retire with unreduced benefits at age 60. Previously, a participant who retired before age 65 was subject to a reduction of 1/15 for each year by which his or her actual retirement age preceded age 65. On January 1, 2012, the plan's benefit formula was amended to increase benefits for participants who retired before January 1, 2012. As a result, the participant's benefit was increased to $750 per month. There have been no other pertinent amendments. The proposed termination date is December 15, 2012.

    (ii) Estimated guaranteed benefit. (A) No reduction is required under § 4022.61(b) or (c) because the participant's benefit does not exceed either the participant's accrued benefit at normal retirement age or the maximum guaranteeable benefit. (Post-retirement benefit increases are not considered as increasing accrued benefits payable at normal retirement age.)

    (B) The amendment as of January 1, 2009, resulted in a “new benefit” because the reduction in the age at which the participant could receive unreduced benefits increased the participant's benefit entitlement at actual retirement age by 5/15, which is more than the 20-percent increase threshold under paragraph (c)(2)(i) of this section. The amendment of January 1, 2012, which increased the participant's benefit to $750 per month, is a “benefit improvement” because it is an increase in the amount of benefit for persons in pay status. (No percentage test applies in determining whether an increase in a pay status benefit is a benefit improvement.)

    (C) The multiplier for computing the amount of the estimated guaranteed benefit is taken from the third row of Table I of this section (because the last new benefit had been in effect for three full years as of the proposed termination date) and column (c) (because there was a benefit improvement within the one-year period preceding the proposed termination date). This multiplier is 0.55. Therefore, the amount of the participant's estimated guaranteed benefit is $412.50 (0.55 × $750) per month.

    (2) Example 2—(i) Facts. A participant who is not a majority owner terminated employment on December 31, 2010. On January 1, 2012, she reached age 65 and began receiving a benefit of $250 per month. She had completed three years of service at her termination of employment and was fully vested in her accrued benefit. The plan's vesting schedule had been amended on July 1, 2008. Under the schedule in effect before the amendment, a participant with five years of service was 100 percent vested. There have been no other pertinent amendments. The proposed termination date is December 31, 2012.

    (ii) Estimated guaranteed benefit. No reduction is required under § 4022.61(b) or (c) because the participant's benefit does not exceed either her accrued benefit at normal retirement age or the maximum guaranteeable benefit. The plan's change of vesting schedule created a new benefit for the participant. Because the amendment was in effect for four full years before the proposed termination date, the second row of Table I of this section is used to determine the applicable multiplier for estimating the amount of the participant's guaranteed benefit. Because the participant did not receive any benefit improvement during the 12-month period ending on the proposed termination date, column (b) of the table is used. Therefore, the multiplier is 0.80, and the amount of the participant's estimated guaranteed benefit is $200 (0.80 × $250) per month.

    (3) Example 3—(i) Facts. A participant who is a majority owner retired before the proposed termination date of April 30, 2012. The plan was in effect for seven full years as of the proposed termination date. On the proposed termination date he was entitled to receive a benefit of $2,000 per month. No reduction of this benefit is required under § 4022.61(b) or (c).

    (ii) Estimated guaranteed benefit. Paragraph (d) of this section is used to compute the amount of the estimated guaranteed benefit of majority owners. Consequently, the amount of this participant's estimated guaranteed benefit is $1,400 ($2,000 × 7/10) per month.

    (4) Example 4—(i) Facts. A participant who is a majority owner retired before the proposed termination date of April 30, 2012. The plan was in effect for 12 full years as of the proposed termination date. On the proposed termination date he was entitled to receive a benefit of $2,000 per month. No reduction of this benefit is required under § 4022.61(b) or (c).

    (ii) Estimated guaranteed benefit. Paragraph (d) of this section is used to compute the amount of the estimated guaranteed benefit of majority owners. Since the plan was in effect for more than 10 years as of the proposed termination date, the amount of this participant's estimated guaranteed benefit is $2,000 per month.

    9. In § 4022.63: a. Revise the section heading; b. Amend paragraph (a) by removing the two instances of the word “substantial” and adding in their place the word “majority” and by removing the three instances of the words “estimated title IV benefit” and adding in their place the words “estimated asset-funded benefit”; c. Amend paragraph (b) introductory text by removing the two instances of the word “substantial” and adding in their place the word “majority” and by removing the words “estimated title IV benefits” and adding in their place the words “estimated asset-funded benefits”; d. Amend paragraph (c)(1) by removing the two instances of the word “substantial” and adding in their place the word “majority” and by removing the two instances of the words “estimated title IV benefit” and adding in the place of each the words “estimated asset-funded benefit”; e. Amend paragraph (d) introductory text by removing the two instances of the word “substantial” and adding in their place the word “majority” and by removing the two instances of the words “estimated title IV benefit” and adding in the place of each the words “estimated asset-funded benefit”; f. Amend paragraph (d)(1) and by removing the two instances of the word “substantial” and adding in their place the word “majority”; and g. Revise paragraph (e).

    The revisions read as follows:

    § 4022.63 Estimated asset-funded benefit.

    (e) Examples. This section is illustrated by the following examples:

    (1) Example 1—(i) Facts. (A) A participant who is not a majority owner was eligible to retire 3.5 years before the proposed termination date. The participant retired two years before the proposed termination date with 20 years of service. Her final five years' average salary was $45,000, and she was entitled to an unreduced early retirement benefit of $1,500 per month payable as a single life annuity. This retirement benefit does not exceed the limitation in § 4022.61(b) or (c).

    (B) On the participant's benefit commencement date, the plan provided for a normal retirement benefit of 2 percent of the final five years' salary times the number of years of service. Five years before the proposed termination date, the percentage was 1.5 percent. The amendments improving benefits were put into effect 3.5 years before the proposed termination date. There were no other amendments during the five-year period.

    (C) The participant's estimated guaranteed benefit computed under § 4022.62(c) is $1,500 per month times 0.90 (the factor from column (b) of Table I in § 4022.62(c)(2)), or $1,350 per month. It is assumed that the plan meets the conditions set forth in paragraph (b) of this section, and the plan administrator is therefore required to estimate the asset-funded benefit.

    (ii) Estimated asset-funded benefit. (A) For a participant who is not a majority owner, the amount of the estimated asset-funded benefit is the estimated priority category 3 benefit computed under paragraph (c) of this section. This amount is computed by multiplying the participant's benefit under the plan as of the later of the proposed termination date or the benefit commencement date by the ratio of the normal retirement benefit under the provisions of the plan in effect five years before the proposed termination date and the normal retirement benefit under the plan provisions in effect on the proposed termination date.

    (B) Thus, the numerator of the ratio is the benefit that would be payable to the participant under the normal retirement provisions of the plan five years before the proposed termination date, based on her age, service, and compensation on her benefit commencement date. The denominator of the ratio is the benefit that would be payable to the participant under the normal retirement provisions of the plan in effect on the proposed termination date, based on her age, service, and compensation as of the earlier of her benefit commencement date or the proposed termination date. Since the only different factor in the numerator and denominator is the salary percentage, the amount of the estimated asset-funded benefit is $1,125 (0.015/0.020 × $1,500) per month. This amount is less than the estimated guaranteed benefit of $1,350 per month. Therefore, in accordance with § 4022.61(d), the benefit payable to the participant is $1,350 per month.

    (iii) PPA 2006 bankruptcy termination. In a PPA 2006 bankruptcy termination, the methodology would be the same, but “bankruptcy filing date” would be substituted for “proposed termination date” each place that “proposed termination date” appears in the example, and the numbers would change accordingly.

    (2) Example 2—(i) Facts. (A) A participant who is a majority owner retired on the proposed termination date of October 31, 2012. The original plan had been in effect for seven full years as of the proposed termination date. Under the provisions of the plan in effect five years before the proposed termination date, the participant is entitled to a single life annuity of $500 per month. The plan was amended to increase benefits three full years before the proposed termination date. Under these plan amendments, the participant is entitled to a single life annuity of $1,000 per month.

    (B) The participant's estimated guaranteed benefit computed under § 4022.62(d) is $455 per month ($1,000 × 0.65 × 7/10).

    (C) It is assumed that all of the conditions in paragraph (b) of this section have been met. Plan assets equal $2 million. The present value of all benefits in pay status is $1.5 million based on applicable PBGC interest rates. There are no employee contributions and the present value of all vested benefits that are not in pay status is $0.75 million based on applicable PBGC interest rates.

    (ii) Estimated asset-funded benefit. (A) Paragraph (d) of this section provides that the amount of the estimated asset-funded benefit payable with respect to a participant who is a majority owner is the higher of the estimated priority category 3 benefit computed under paragraph (c) of this section or the estimated priority category 4 benefit computed under paragraph (d) of this section.

    (B) Under paragraph (c) of this section, the participant's estimated priority category 3 benefit is $500 ($1,000 × $500/$1,000) per month.

    (C) Under paragraph (d) of this section, the participant's estimated priority category 4 benefit is the estimated guaranteed benefit computed under § 4022.62(c) (i.e., as if the participant were not a majority owner) multiplied by the priority category 4 funding ratio. Since the plan has priority category 3 benefits, the ratio is determined under paragraph (d)(2)(i) of this section. The numerator of the ratio is plan assets minus the present value of benefits in pay status. The denominator of the ratio is the present value of all vested benefits that are not in pay status. The participant's estimated guaranteed benefit under § 4022.62(c) is $1,000 per month times 0.65 (the factor from column (b) of Table I in § 4022.62(c)(2)), or $650 per month. Multiplying $650 by the category 4 funding ratio of 2/3 (($2 million−$1.5 million)/$0.75 million) produces an estimated category 4 benefit of $433.33 per month.

    (D) Because the estimated category 4 benefit so computed is less than the estimated category 3 benefit so computed, the estimated category 3 benefit is the estimated asset-funded benefit. Because the estimated category 3 benefit so computed is greater than the estimated guaranteed benefit of $455 per month, in accordance with § 4022.61(d), the benefit payable to the participant is the estimated priority category 3 benefit of $500 per month.

    PART 4043—REPORTABLE EVENTS AND CERTAIN OTHER NOTIFICATION REQUIREMENTS 10. The authority citation for part 4043 continues to read as follows: Authority:

    29 U.S.C. 1083(k), 1302(b)(3), 1343.

    11. In § 4043.2: a. Amend the introductory text by removing the words “single-employer plan, and substantial owner” and by adding in their place the words “and single-employer plan”. b. Add in alphabetical order a definition for “Substantial owner”.

    The addition reads as follows:

    § 4043.2 Definitions.

    Substantial owner means a substantial owner as defined in section 4021(d) of ERISA.

    PART 4044—ALLOCATION OF ASSETS IN SINGLE-EMPLOYER PLANS 12. The authority citation for part 4044 continues to read as follows: Authority:

    29 U.S.C. 1301(a), 1302(b)(3), 1341, 1344, 1362.

    § 4044.2 [Amended]
    13. In § 4044.2(a): a. Remove the words “irrevocable commitment” and add in their place the words “irrevocable commitment, majority owner”; and b. Remove the words “substantial owner,”. 14. Amend § 4044.10 by revising paragraph (e) to read as follows:
    § 4044.10 Manner of allocation.

    (e) Allocating assets within priority categories. Except for priority categories 4 and 5, if the plan assets available for allocation to any priority category are insufficient to pay for all benefits in that priority category, those assets shall be distributed among the participants according to the ratio that the value of each participant's benefit or benefits in that priority category bears to the total value of all benefits in that priority category. If the plan assets available for allocation to priority category 4 are insufficient to pay for all benefits in that category, the assets shall be allocated, first, to the value of all participants' nonforfeitable benefits that would be assigned to priority category 4 other than those impacted by the majority-owner limitation under § 4022.26 of this chapter. If assets available for allocation to priority category 4 are sufficient to fully satisfy the value of those other benefits, the remaining assets shall then be allocated to the value of the benefits that would be guaranteed but for the majority-owner limitation. These remaining assets shall be distributed among the majority owners according to the ratio that the value of each majority owner's benefit that would be guaranteed but for the majority-owner limitation bears to the total value of all benefits that would be guaranteed but for the majority-owner limitation. If the plan assets available for allocation to priority category 5 are insufficient to pay for all benefits in that category, the assets shall be allocated, first, to the value of each participant's nonforfeitable benefits that would be assigned to priority category 5 under § 4044.15 after reduction for the value of benefits assigned to higher priority categories, based only on the provisions of the plan in effect at the beginning of the five-year period immediately preceding the termination date. If assets available for allocation to priority category 5 are sufficient to fully satisfy the value of those benefits, assets shall then be allocated to the value of the benefit increase under the oldest amendment during the five-year period immediately preceding the termination date, reduced by the value of benefits assigned to higher priority categories (including higher subcategories in priority category 5). This allocation procedure shall be repeated for each succeeding plan amendment within the five-year period until all plan assets available for allocation have been exhausted. If an amendment decreased benefits, amounts previously allocated with respect to each participant in excess of the value of the reduced benefit shall be reduced accordingly. In the subcategory in which assets are exhausted, the assets shall be distributed among the participants according to the ratio that the value of each participant's benefit or benefits in that subcategory bears to the total value of all benefits in that subcategory.

    § 4044.14 [Amended]
    15. In § 4044.14, remove the word “phase-in” and add the word “guarantee” in its place and remove the word “substantial” and add the word “majority” in its place.

    Issued in Washington, DC.

    William Reeder, Director, Pension Benefit Guaranty Corporation.
    [FR Doc. 2018-21551 Filed 10-2-18; 8:45 am] BILLING CODE 7709-02-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 9 and 721 [EPA-HQ-OPPT-2018-0627; FRL-9983-82] RIN 2070-AB27 Significant New Use Rules on Certain Chemical Substances AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Direct final rule.

    SUMMARY:

    EPA is promulgating significant new use rules (SNURs) under the Toxic Substances Control Act (TSCA) for 26 chemical substances which were the subject of premanufacture notices (PMNs). The chemical substances are subject to Orders issued by EPA pursuant to sections 5(e) and 5(f) of TSCA. This action requires persons who intend to manufacture (defined by statute to include import) or process any of these 26 chemical substances for an activity that is designated as a significant new use by this rule to notify EPA at least 90 days before commencing that activity. The required notification initiates EPA's evaluation of the intended use within the applicable review period. Persons may not commence manufacture or processing for the significant new use until EPA has conducted a review of the notice, made an appropriate determination on the notice, and has taken such actions as are required with that determination.

    DATES:

    This rule is effective on December 3, 2018. For purposes of judicial review, this rule shall be promulgated at 1 p.m. (e.s.t.) on October 17, 2018.

    Written adverse comments on one or more of these SNURs must be received on or before November 2, 2018 (see Unit VI. of the SUPPLEMENTARY INFORMATION). If EPA receives written adverse comments, on one or more of these SNURs before November 2, 2018, EPA will withdraw the relevant sections of this direct final rule before its effective date.

    For additional information on related reporting requirement dates, see Units I.A., VI., and VII. of the SUPPLEMENTARY INFORMATION.

    ADDRESSES:

    Submit your comments, identified by docket identification (ID) number EPA-HQ-OPPT-2018-0627, by one of the following methods:

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

    Mail: Document Control Office (7407M), Office of Pollution Prevention and Toxics (OPPT), Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001.

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

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

    FOR FURTHER INFORMATION CONTACT:

    For technical information contact: Kenneth Moss, Chemical Control Division (7405M), Office of Pollution Prevention and Toxics, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001; telephone number: (202) 564-9232; email address: [email protected]

    For general information contact: The TSCA-Hotline, ABVI-Goodwill, 422 South Clinton Ave., Rochester, NY 14620; telephone number: (202) 554-1404; email address: [email protected]

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

    You may be potentially affected by this action if you manufacture, process, or use the chemical substances contained in this rule. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

    • Manufacturers or processors of one or more subject chemical substances (NAICS codes 325 and 324110), e.g., chemical manufacturing and petroleum refineries.

    This action may also affect certain entities through pre-existing import certification and export notification rules under TSCA. Chemical importers are subject to the TSCA section 13 (15 U.S.C. 2612) import certification requirements promulgated at 19 CFR 12.118 through 12.127 and 19 CFR 127.28. Chemical importers must certify that the shipment of the chemical substance complies with all applicable rules and orders under TSCA. Importers of chemicals subject to these SNURs must certify their compliance with the SNUR requirements. The EPA policy in support of import certification appears at 40 CFR part 707, subpart B. In addition, any persons who export or intend to export a chemical substance that is the subject of this rule on or after November 2, 2018 are subject to the export notification provisions of TSCA section 12(b) (15 U.S.C. 2611(b)) (see § 721.20), and must comply with the export notification requirements in 40 CFR part 707, subpart D.

    B. What should I consider as I prepare my comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through regulations.gov or email. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD-ROM that you mail to EPA, mark the outside of the disk or CD-ROM as CBI and then identify electronically within the disk or CD-ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

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

    II. Background A. What action is the Agency taking?

    1. Direct Final Rule. EPA is promulgating these SNURs using direct final rule procedures. These SNURs will require persons to notify EPA at least 90 days before commencing the manufacture or processing of a chemical substance for any activity designated by these SNURs as a significant new use. Receipt of such notices obligates EPA to assess risks that may be associated with the significant new uses under the conditions of use and, if appropriate, to regulate the proposed uses before they occur.

    2. Proposed Rule. In addition to this Direct Final Rule, elsewhere in this issue of the Federal Register, EPA is issuing a Notice of Proposed Rulemaking for this rule. If EPA receives no adverse comment, the Agency will not take further action on the proposed rule and the direct final rule will become effective as provided in this action. If EPA receives adverse comment on one or more of SNURs in this action by November 2, 2018 (see Unit VI. of the SUPPLEMENTARY INFORMATION), the Agency will publish in the Federal Register a timely withdrawal of the specific SNURs that the adverse comments pertain to, informing the public that the actions will not take effect. EPA would then address all adverse public comments in a response to comments document in a subsequent final rule, based on the proposed rule.

    B. What is the Agency's authority for taking this action?

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

    C. Applicability of General Provisions

    General provisions for SNURs appear in 40 CFR part 721, subpart A. These provisions describe persons subject to the rule, recordkeeping requirements, exemptions to reporting requirements, and applicability of the rule to uses occurring before the effective date of the rule. Provisions relating to user fees appear at 40 CFR part 700. According to § 721.1(c), persons subject to these SNURs must comply with the same SNUN requirements and EPA regulatory procedures as submitters of PMNs under TSCA section 5(a)(1)(A). In particular, these requirements include the information submission requirements of TSCA section 5(b) and 5(d)(1), the exemptions authorized by TSCA section 5(h)(1), (h)(2), (h)(3), and (h)(5), and the regulations at 40 CFR part 720. Once EPA receives a SNUN, EPA must either determine that the significant new use is not likely to present an unreasonable risk of injury or take such regulatory action as is associated with an alternative determination before the manufacture or processing for the significant new use can commence. If EPA determines that the significant new use is not likely to present an unreasonable risk, EPA is required under TSCA section 5(g) to make public, and submit for publication in the Federal Register, a statement of EPA's findings.

    III. Significant New Use Determination

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

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

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

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

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

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

    To determine what would constitute a significant new use for the 26 chemical substances that are the subject of these SNURs, EPA considered relevant information about the toxicity of the chemical substances, likely human exposures and environmental releases associated with possible uses, and the four bulleted TSCA section 5(a)(2) factors listed in this unit.

    IV. Substances Subject to This Rule

    EPA is establishing significant new use and recordkeeping requirements for 26 chemical substances in 40 CFR part 721, subpart E. In this unit, EPA provides the following information for each chemical substance:

    • PMN number.

    • Chemical name (generic name, if the specific name is claimed as CBI).

    • Chemical Abstracts Service (CAS) Registry number (if assigned for non-confidential chemical identities).

    • Basis for the TSCA section 5(e) or 5(f) Order.

    • Information identified by EPA that would help characterize the potential health and/or environmental effects of the chemical substance in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use designated by the SNUR.

    This information may include testing required in a TSCA section 5(e) Order to be conducted by the PMN submitter, as well as testing not required to be conducted but which would also help characterize the potential health and/or environmental effects of the PMN substance. Any recommendation for information identified by EPA was made based on EPA's consideration of available screening-level data, if any, as well as other available information on appropriate testing for the chemical substance. Further, any such testing identified by EPA that includes testing on vertebrates was made after consideration of available toxicity information, computational toxicology and bioinformatics, and high-throughput screening methods and their prediction models. EPA also recognizes that whether testing/further information is needed will depend on the specific exposure and use scenario in the SNUN. EPA encourages all SNUN submitters to contact EPA to discuss any potential future testing. See Unit VIII. for more information.

    • CFR citation assigned in the regulatory text section of this rule.

    The regulatory text section of these rules specifies the activities designated as significant new uses. Certain new uses, including exceedance of production volume limits (i.e., limits on manufacture volume) and other uses designated in this rule, may be claimed as CBI. Unit IX. discusses a procedure companies may use to ascertain whether a proposed use constitutes a significant new use.

    These rules include 26 PMN substances that are subject to Orders under TSCA section 5(e)(1)(A) or section 5(f)(3)(A). Each Order is based on one or more of the findings in TSCA section 5(a)(3)(A) or section 5(a)(3)(B): There is insufficient information to permit a reasoned evaluation; in the absence of sufficient information to permit a reasoned evaluation, the activities associated with the PMN substances may present unreasonable risk to health or the environment; the substance is or will be produced in substantial quantities, and enters or may reasonably be anticipated to enter the environment in substantial quantities or there is or may be significant (substantial) human exposure to the substance; presents an unreasonable risk of injury to health or environment. Those Orders require protective measures to limit exposures or otherwise mitigate the potential unreasonable risk. The SNURs identify as significant new uses any manufacturing, processing, use, distribution in commerce, or disposal that does not conform to the restrictions imposed by the underlying Orders, consistent with TSCA section 5(f)(4).

    Where EPA determined that the PMN substance presents or may present an unreasonable risk of injury to human health via inhalation exposure, the underlying TSCA section 5(e) or 5(f) Order required, among other things, that potentially exposed employees wear specified respirators unless actual measurements of the workplace air show that air-borne concentrations of the PMN substance are below a New Chemical Exposure Limit (NCEL) that is established by EPA to provide adequate protection to human health. In addition to the actual NCEL concentration, the comprehensive NCELs provisions in TSCA section 5(e) Orders, which are modeled after Occupational Safety and Health Administration (OSHA) Permissible Exposure Limits (PELs) provisions, include requirements addressing performance criteria for sampling and analytical methods, periodic monitoring, respiratory protection, and recordkeeping. However, no comparable NCEL provisions currently exist in 40 CFR part 721, subpart B, for SNURs. Therefore, for these cases, the individual SNURs in 40 CFR part 721, subpart E, will state that persons subject to the SNUR who wish to pursue NCELs as an alternative to the § 721.63 respirator requirements may request to do so under § 721.30. EPA expects that persons whose § 721.30 requests to use the NCELs approach for SNURs that are approved by EPA will be required to comply with NCELs provisions that are comparable to those contained in the corresponding TSCA section 5(e) Order for the same chemical substance.

    PMN Number: P-10-366

    Chemical name: Carbon nanomaterial (generic).

    CAS number: Not available.

    Effective date of TSCA section 5(e) Order: May 11, 2017.

    Basis for TSCA section 5(e) Order: The PMN states that the generic (non-confidential) use of the substance will be in printing applications. EPA identified concerns for pulmonary toxicity and carcinogenicity based on analogy to carbon black. The Order was issued under TSCA sections 5(e)(1)(A)(i), based on a finding that the available information is insufficient to permit a reasoned evaluation of the human health and environmental effects of the PMN substance. The Order was also issued under TSCA section 5(e)(l)(A)(ii)(I), based on a finding that in the absence of sufficient information to permit a reasoned evaluation, the substance may present an unreasonable risk of injury to human health and the environment. To protect against these risks, the Order requires:

    1. Submission to EPA of certain health testing and material characterization data before exceeding a specified confidential production volume;

    2. Use of personal protective equipment where there is a potential for dermal exposure;

    3. Use of a National Institute for Occupational Safety and Health (NIOSH) certified air purifying, tight-fitting full-face respirator equipped with N100, P-100, or R-100 filter with an Assigned Protection Factor (APF) of at least 50 where there is a potential for inhalation exposure;

    4. No release of the PMN substance to surface waters;

    5. Use of the PMN substance only for the confidential uses specified in the Order;

    6. Limit the manufacture, processing and use of the PMN substance to industrial uses;

    7. No processing or use of the powder form of the PMN substance outside of the site of manufacture/processing; and

    8. No processing or use of the PMN substance in the liquid resin form using an application method that generates a vapor, mist, or aerosol.

    The SNUR designates as a “significant new use” the absence of these protective measures.

    Potentially useful information: EPA has determined that certain information about the health effects of the PMN substance may be potentially useful to characterize the effects of the PMN substance in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use that will be designated by this SNUR. The submitter has agreed not to exceed certain time limits without performing specific physical-chemical property tests and characterization and pulmonary effects testing. EPA has also determined that the results of a carcinogenicity study would help characterize the potential health effects caused by the PMN substance. Although the Order does not require this test, the Order's restrictions will remain in effect until the Order is modified or revoked by EPA based on submission of this or other relevant information.

    CFR citation: 40 CFR 721.11149.

    PMN Number: P-14-627

    Chemical name: Cyclic amide (generic).

    CAS number: Not available.

    Effective date of TSCA section 5(e) Order: November 16, 2017.

    Basis for TSCA section 5(e) Order: The PMN states that the use of the substance will be in dispersions for industrial coatings (e.g., polyurethane, acrylic, epoxy), coating for consumer and professional use, adhesives and sealants, solvent-borne industrial coatings silicon wafer cleaning in microelectronics in clean rooms, photoresist stripping in microelectronics in clean rooms, coatings for microelectronics (e.g., casting of polymer films) in clean rooms, reaction medium for polymerization, polymer coatings for industrial and professional applications (e.g., wire enamel, non-stick and friction reduction coating) membranes, solvent for chemical synthesis reactions (e.g., pharmaceuticals), formulation of inks, industrial cleaner (e.g., cleaner for wind turbine, oil rigs, large engines), solvent for cleaning industrial reactors, wax inhibitors (in hydrocarbon lines), petrochemical extraction processes, paint stripper, solvents for production and formulation of fertilizer, solvent for production and formulation of active ingredients for agriculture, and solvent for formulation of active ingredients for agriculture-end use pesticide products. Based on test data on the PMN substance, EPA identified concerns for developmental and reproductive toxicity, skin irritation, and systemic toxicity. The Order was issued under TSCA sections 5(a)(3)(B)(ii)(I) and 5(e)(l)(A)(ii)(I) based on a finding that in the absence of sufficient information to permit a reasoned evaluation, the substance may present an unreasonable risk of injury to health. The Order was also issued under TSCA sections 5(a)(3)(B)(ii)(II) and 5(e)(1)(A)(ii)(II), based on a finding that the substance either enters or may reasonably be anticipated to enter the environment in substantial quantities, or there is or may be significant (or substantial) human exposure to the substance. To protect against these risks, the Order requires:

    1. Use of personal protective where there is a potential for dermal exposures;

    2. Refraining from domestic manufacture of the PMN substance in the United States (i.e., import only);

    3. Import the PMN substance only according to the terms specified in the Order;

    4. Use of the PMN substance only for the uses and concentrations specified in the Order;

    5. Establishment and use of a hazard communication program, including human health precautionary statements on each label and in the Safety Data Sheet (SDS);

    6. Processing and use of the PMN substance only for uses specified in the Order; and

    7. No use of the PMN substance in hand held spray applications that generate a vapor, mist, or aerosol.

    The SNUR designates as a “significant new use” the absence of these protective measures.

    Potentially useful information: EPA has determined that certain information about the fate of the PMN substance may be potentially useful to characterize the health effects of the PMN substance in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use that will be designated by this SNUR. Although the Order does not require these tests, the Order's restrictions will remain in effect until the Order is modified or revoked by EPA based on submission of this or other relevant information.

    CFR citations: 40 CFR 721.11150.

    PMN Number: P-15-114

    Chemical name: 2-Butanone 1,1,1,3,4,4,4-heptafluoro-3-(trifluoromethyl)-.

    CAS number: 756-12-7.

    Effective date of TSCA section 5(e) Order: December 13, 2017.

    Basis for TSCA section 5(e) Order: The PMN states that the use of the substance will be as a dielectric medium for medium and high voltage power generation/distribution equipment and heat transfer. Based on analysis of test data on the PMN substance, EPA identified concerns for irritation of eyes, skin, lungs, and mucous membranes. The Order was issued under TSCA sections 5(a)(3)(B)(ii)(I) and 5(e)(l)(A)(ii)(I) of TSCA, based on a finding that in the absence of sufficient information to permit a reasoned evaluation, the substance may present an unreasonable risk of injury to health and the environment. To protect against these risks, the Order requires:

    1. Use of personal protective equipment where there is a potential for dermal exposure;

    2. Establishment and use of a hazard communication program, label containers of the PMN substance with the statement: “contains a dielectric fluid which should not be mixed or used in conjunction with sulfur hexafluoride (SF6)” and provide SDS and worker training in accordance with the provisions of the Hazard Communication Program section;

    3. No manufacture of the PMN substance beyond a confidential annual production volume (which includes import) specified in the Order;

    4. No use other than as a dielectric medium for medium and high voltage power generation/distribution equipment and heat transfer as described in the Order; and

    5. No release of the PMN substance resulting in surface water concentrations that exceed 180 parts per billion (ppb).

    The SNUR designates as a “significant new use” the absence of these protective measures.

    Potentially useful information: EPA has determined that certain information about the environmental and health effects of the PMN substance may be potentially useful to characterize the effects of the PMN substance in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use that will be designated by this SNUR. EPA has determined that the results of specific chronic aquatic toxicity and pulmonary effects testing would help characterize the potential environmental and health effects of the PMN substance. Although the Order does not require this information, the Order's restrictions remain in effect until the Order is modified or revoked by EPA based on submission of this or other relevant information.

    CFR citation: 40 CFR 721.11151.

    PMN Number: P-15-320

    Chemical names: Propanenitrile, 2,3,3,3 tetrafluoro- 2-(trifluoromethyl)-.

    CAS number: 42532-60-5.

    Effective date of TSCA section 5(e) Order: October 18, 2017.

    Basis for TSCA section 5(e) Order: The PMN states that the use of the substance will be as a dielectric medium for medium and high voltage power generation and distribution equipment. Based on analysis of test data on the PMN substance, EPA identified concerns for neurotoxicity and irritation of eyes, skin, lungs, and mucous membranes. The Order was issued under TSCA sections 5(a)(3)(B)(ii)(I) and 5(e)(l)(A)(ii)(I) of TSCA, based on a finding that in the absence of sufficient information to permit a reasoned evaluation, the substance may present an unreasonable risk of injury to health. To protect against these risks, the Order requires:

    1. Establishment and use of a hazard communication program, label containers of the PMN substance with the statement: “contains a dielectric fluid which should not be mixed or used in conjunction with sulfur hexafluoride (SF6)” and provide SDS and worker training in accordance with the provisions of the Hazard Communication Program section; and

    2. Manufacturing, processing, or use as a dielectric medium for medium and high voltage power generation and distribution equipment as described in the PMN.

    The SNUR designates as a “significant new use” the absence of these protective measures.

    Potentially useful information: EPA has determined that certain information about the health effects of the PMN substance may be potentially useful to characterize the effects of the PMN substance in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use that will be designated by this SNUR. EPA has determined that the results of specific pulmonary effects testing would help characterize the potential health effects of the PMN substance. Although the Order does not require this test, the Order's restrictions remain in effect until the Order is modified or revoked by EPA based on submission of this or other relevant information.

    CFR citation: 40 CFR 721.11152.

    PMN Number: P-15-734

    Chemical name: Polymeric sulfide (generic).

    CAS number: Not available.

    Effective date of TSCA section 5(e) Order: October 11, 2017.

    Basis for TSCA section 5(e) Order: The PMN states that the use of the substance will be for wastewater heavy metals removal. Based on physical/chemical properties of the PMN substance, EPA identified concerns for severe skin irritation, corrosion, neurotoxicity, developmental toxicity, and reproductive toxicity. The Order was issued under TSCA sections 5(a)(3)(B)(ii)(I) and 5(e)(l)(A)(ii)(I) of TSCA, based on a finding that in the absence of sufficient information to permit a reasoned evaluation, the substance may present an unreasonable risk of injury to health and the environment. The Order was also issued under TSCA sections 5(a)(3)(B)(ii)(II) and 5(e)(l)(A)(ii)(II), based on a finding that the substance is or will be produced in substantial quantities and that the substance either enters or may reasonable be anticipated to enter the environment in substantial quantities, or there is or may be significant (or substantial) human exposure to the chemical substance. To protect against these risks, the Order requires:

    1. Submission of certain health testing on the PMN substance prior to exceeding the confidential production volume limit specified in the Order;

    2. Use of personal protective equipment where there is a potential for dermal exposure;

    3. No modification of the manufacturing, processing, or use activities of the PMN substance that result in inhalation exposure to workers;

    4. Use of the PMN substance only for wastewater heavy metal removal as specified in the Order;

    5. No release of the PMN substance resulting in surface water concentrations that exceed 2 ppb; and

    6. Establishment and use of a hazard communication program, including human health precautionary statements on each label and in the SDS.

    The SNUR designates as a “significant new use” the absence of these protective measures.

    Potentially useful information: EPA has determined that certain information about the environmental and health effects of the PMN substance may be potentially useful to characterize the effects of the PMN substance in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use that will be designated by this SNUR. The submitter has agreed not to exceed a certain confidential production volume limit without performing reproductive/developmental toxicity testing and acute aquatic toxicity testing.

    CFR citation: 40 CFR 721.11153.

    PMN Numbers: P-16-356 and P-16-357

    Chemical name: Quaternary ammonium salts (generic).

    CAS numbers: Not available.

    Effective date of TSCA section 5(e) Order: February 27, 2018.

    Basis for TSCA section 5(e) Order: The PMNs state that the generic (non-confidential) use of the substances will be as wellbore additives. EPA has identified concerns for irritation for the substances based on the pH and concerns for lung effects based on the surfactant properties. Based on analogy to cationic surfactants, EPA has identified ecotoxicity hazard concerns. The Order was issued under TSCA sections 5(a)(3)(B)(ii)(I) and 5(e)(1)(A)(ii)(I), based on a finding that in the absence of sufficient information to permit a reasoned evaluation, the substances may present an unreasonable risk of injury to health and the environment. The Order was also issued under TSCA sections 5(a)(3)(B)(ii)(II) and 5(e)(1)(A)(ii)(II), based on a finding that the substances will be produced in substantial quantities and that the substances may reasonably be anticipated to enter the environment in substantial quantities and there may be significant human exposure to the PMN substances. To protect against these risks, the Order requires:

    1. Use of personal protective equipment where there is potential for dermal exposure;

    2. Establishment and use of a hazard communication program, including human health precautionary statements on each label and in the SDS;

    3. Refrain from manufacturing, processing or using the PMN substances in a manner that generates a vapor, mist, or aerosol; and

    4. No use of the PMN substances other than the confidential use described in the Order.

    The SNUR designates as a “significant new use” the absence of these protective measures.

    Potentially useful information: EPA has determined that certain information about the health and environmental effects of the PMN substances may be potentially useful to characterize the effects of the PMN substances in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use that will be designated by this SNUR. EPA has determined that the results of specific pulmonary effects testing would help characterize the potential health effects of the PMN substances and results of acute aquatic toxicity testing would help characterize the potential environmental effects of the PMN substances. Although the Order does not require this test, the Order's restrictions remain in effect until the Order is modified or revoked by EPA based on submission of this or other relevant information.

    CFR citation: 40 CFR 721.11154.

    PMN Number: P-16-375

    Chemical name: Alkyl methacrylates, polymer with olefins (generic).

    CAS number: Not available.

    Effective date of TSCA section 5(e) Order: October 17, 2017.

    Basis for TSCA section 5(e) Order: The PMN states that the generic (non-confidential) use of the substance will be as a binder for seal application. Based on physical/chemical properties of the PMN substance, EPA identified concerns for lung toxicity. The Order was issued under TSCA sections 5(a)(3)(B)(ii)(I) and 5(e)(l)(A)(ii)(I) of TSCA, based on a finding that in the absence of sufficient information to permit a reasoned evaluation, the substance may present an unreasonable risk of injury to health and the environment. To protect against these risks, the Order requires:

    1. Refraining from domestic manufacture of the PMN substance in the United States (i.e., import only); and

    2. Import of the PMN substance according to the confidential molecular weight parameters specified in the Order.

    The SNUR designates as a “significant new use” the absence of these protective measures.

    Potentially useful information: EPA has determined that certain information about the health and environmental effects of the PMN substance may be potentially useful to characterize the effects of the PMN substance in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use that will be designated by this SNUR. EPA has determined that the results of specific pulmonary effects testing and fate testing would help characterize the potential health effects of the PMN substance and results of acute aquatic toxicity testing would help characterize the potential environmental effects of the PMN substance. Although the Order does not require these tests, the Order's restrictions remain in effect until the Order is modified or revoked by EPA based on submission of this or other relevant information.

    CFR citation: 40 CFR 721.11155.

    PMN Number: P-16-386

    Chemical name: Hexanedioic acid, 1,6-bis(3,5,5-trimethylhexyl) ester.

    CAS number: 20270-50-2.

    Effective date of TSCA section 5(e) Order: October 12, 2017.

    Basis for TSCA section 5(e) Order: The PMN states that the substance will be used as a seal swell agent for motor formulations and gear oil lubricants. Based on analysis of an analogous compound, EPA has identified concerns for solvent neurotoxicity, liver and kidney effects, and concern for developmental toxicity based on analysis of testing for a potential degradant of the PMN substance. The Order was issued under TSCA sections 5(a)(3)(B)(ii)(I) and 5(e)(1)(A)(ii)(I), based on a finding that in the absence of sufficient information to permit a reasoned evaluation, the substance may present an unreasonable risk of injury to health. To protect against these risks, the Order requires:

    1. Submit to EPA certain toxicity testing prior to manufacturing 1,545,000 kilograms of the PMN substance;

    2. Use of personal protective equipment where there is a potential for dermal exposure;

    3. Establishment and use of a hazard communication program, including human health precautionary statements on each label and in the SDS; and

    4. Use of the PMN substance only for the use specified in the Order.

    The SNUR designates as a “significant new use” the absence of these protective measures.

    Potentially useful information: EPA has determined that certain information about the health effects of the PMN substance may be potentially useful to characterize the effects of the PMN substance in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use that will be designated by this SNUR. The submitter has agreed not to exceed the 1,545,000 kilogram production volume limit without performing specific target organ/reproductive/developmental toxicity testing.

    CFR citation: 40 CFR 721.11156.

    PMN Number: P-16-396

    Chemical name: Alkylaminium hydroxide (generic).

    CAS number: Not available.

    Effective date of TSCA section 5(e) Order: December 19, 2017.

    Basis for TSCA section 5(e) Order: The PMN states that the generic (non-confidential) use of the PMN substance will be as a specialty chemical for processing additive. Based on structural alerts and analysis of analogue data, EPA identified concerns for neurotoxicity, developmental and reproductive toxicity and irritation. EPA also identified concerns for lung effects based on surfactant properties and corrosivity and concern for reproductive and developmental toxicity based on analogue data from large quaternary ammonium compounds. The Order was issued under TSCA sections 5(a)(3)(B)(ii)(I) and 5(e)(1)(A)(ii)(I), based on a finding that in the absence of sufficient information to permit a reasoned evaluation, the substance may present an unreasonable risk of injury to health. To protect against these risks, the Order requires:

    1. Submission of certain health testing on the PMN substance prior to exceeding the confidential production volume limit as specified in the Order;

    2. Use of personal protective equipment where there is a potential for dermal exposure;

    3. Establishment and use of a hazard communication program, including human health precautionary statements on each label and in the SDS;

    4. No manufacturing, processing, or use of the PMN substance as a solid or powder;

    5. Use of the PMN substance only for the confidential uses specified in the Order; and

    6. No use of the PMN substance in application methods that generate a dust, vapor, mist, or aerosol.

    The SNUR designates as a “significant new use” the absence of these protective measures.

    Potentially useful information: EPA has determined that certain information about the health effects of the PMN substance may be potentially useful to characterize the effects of the PMN substance in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use that will be designated by this SNUR. The submitter has agreed not to exceed a certain production volume limit without performing reproductive/developmental toxicity testing.

    CFR citation: 40 CFR 721.11157.

    PMN Numbers: P-16-572 and P-16-573

    Chemical name: Polyamine polyacid adducts (generic).

    CAS numbers: Not available.

    Effective date of TSCA section 5(e) Order: September 27, 2017.

    Basis for TSCA section 5(e) Order: The PMNs state that the generic (non-confidential) use of the substances will be as adhesives for coatings. Based on physical chemical properties of the PMN substances, EPA identified potential concerns for lung toxicity and aquatic/terrestrial toxicity if the PMN substances are manufactured in such a manner that they are amine terminated. The Order was issued under TSCA sections 5(a)(3)(B)(i) and 5(e)(1)(A)(i), based on a finding that the available information is insufficient to permit a reasoned evaluation of the health and environmental effects for the PMN substances. The Order was also issued under TSCA sections 5(a)(3)(B)(ii)(I) and 5(e)(l)(A)(ii)(I) of TSCA, based on a finding that in the absence of sufficient information to permit a reasoned evaluation, the substances may present an unreasonable risk of injury to human health and the environment. To protect against these risks, the Order requires:

    1. Manufacture of the PMN substances in a manner that they are not amine terminated in order to maintain water solubility levels below 1 ppb.

    The SNUR designates as a “significant new use” the absence of this protective measure.

    Potentially useful information: EPA has determined that certain information about the physical-chemical properties and health effects of the PMN substances may be potentially useful to characterize the effects of the PMN substances in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use that will be designated by this SNUR. EPA has determined that the results of specific physical-chemical property tests and target organ toxicity testing would help characterize the potential health effects of the PMN substances. Although the Order does not require these tests, the Order's restrictions remain in effect until the Order is modified or revoked by EPA based on submission of this or other relevant information.

    CFR citations: 40 CFR 721.11158.

    PMN Numbers: P-17-24 and P-17-25

    Chemical names: Aromatic isocyanate, polymer with alkyloxirane polymer with oxirane ether with alkyldiol (2:l), and alkyloxirane polymer with oxirane ether with alkyltriol (3:l) (generic) (P-17-24) and aromatic isocyanate polymer with alkyloxirane, alkyloxirane polymer with oxirane ether with alkanetriol and oxirane (generic) (P-17-25).

    CAS numbers: Not available.

    Effective date of TSCA section 5(f) Order: October 31, 2017.

    Basis for TSCA section 5(f) Order: The PMN states that the generic (non-confidential) use of the substances will be as urethane components. EPA identified concerns for oncogenicity based on physical chemical properties of the PMN substances, mutagenicity based on data for analogous chemicals, and respiratory and dermal sensitization and lung and mucous membrane irritation based on the isocyanate moiety. The Order was issued under sections 5(a)(3)(A) and 5(f)(1) of TSCA, based on a finding that the substances present an unreasonable risk of injury to human health. To protect against these risks, the Order requires:

    1. Use of personal protective equipment where there is a potential for dermal exposure;

    2. No manufacturing, processing, or use of the PMN substances in application methods that generate a vapor, dust, mist, or aerosol;

    3. No use of the PMN substances in a consumer product; and

    4. Establishment and use of a hazard communication program, including human health precautionary statements on each label and in the SDS.

    The SNUR designates as a “significant new use” the absence of these protective measures.

    CFR citation: 40 CFR 721.11159 and 40 CFR 721.11160.

    PMN Number: P-17-148

    Chemical name: Oils, Hedychium Flavescens.

    CAS number: 1902936-65-5.

    Effective date of TSCA section 5(e) Order: December 15, 2017.

    Basis for TSCA section 5(e) Order: The PMN states that the substance will be used as an odoriferous component of fragrance compounds. Based on test data on PMN constituents, EPA has identified concerns for oncogenicity, developmental toxicity, liver, kidney, and male reproductive effects. EPA also identified concern for sensitization based on submitted test data on the PMN mixture. The Order was issued under TSCA sections 5(a)(3)(B)(ii)(I) and 5(e)(1)(A)(ii)(II), based on a finding that in the absence of sufficient information to permit a reasoned evaluation, the substance may present an unreasonable risk on injury to health. To protect against these risks, the Order requires:

    1. Use of personal protective equipment where there is a potential for dermal exposures;

    2. Use of a NIOSH-certified respirator with an APF of at least 50 where there is a potential for inhalation exposures;

    3. Establishment and use of a hazard communication program, including human health precautionary statements on each label and in the SDS;

    4. Refraining from domestic manufacture of the PMN substance in the United States (i.e., import only);

    5. Not manufacture the PMN substance beyond an annual production volume of 70 kilograms;

    6. Not manufacture, process, or use the PMN substance in any manner or method that generates mist or aerosol; and

    7. Not use the PMN substance other than as an odoriferous component of fragrance compounds.

    The SNUR designates as a “significant new use” the absence of these protective measures.

    Potentially useful information: EPA has determined that certain information about the health effects of the PMN substance may be potentially useful to characterize the effects of the PMN substance in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use that will be designated by this SNUR. EPA has determined that the results of specific skin absorption, and chronic toxicity/carcinogenicity testing would help characterize the potential health effects of the PMN substance. Although the Order does not require these tests, the Order's restrictions remain in effect until the Order is modified or revoked by EPA based on submission of this or other relevant information.

    CFR citation: 40 CFR 721.11161.

    PMN Number: P-17-174

    Chemical name: Alkyltriethosysilylpolysiloxane (generic).

    CAS number: Not available.

    Effective date of TSCA section 5(e) Order: November 28, 2017.

    Basis for TSCA section 5(e) Order: The PMN states that the generic (non-confidential) use of the substance will be as a plastic additive. Based on analysis of test data on analogous alkoxysilanes, EPA identified concerns for lung effects, irritation, developmental toxicity, and neurotoxicity. The Order was issued under TSCA sections 5(a)(3)(B)(ii)(I) and 5(e)(l)(A)(ii)(I) of TSCA, based on a finding that in the absence of sufficient information to permit a reasoned evaluation, the substance may present an unreasonable risk of injury to health. To protect against these risks, the Order requires:

    1. Submission to EPA of certain health testing before manufacturing (including import) the aggregate confidential volume identified in the Order;

    2. Use of personal protective equipment where there is a potential for dermal exposure;

    3. No manufacturing or use of the PMN substance in application methods that generate a vapor, mist, or aerosol;

    4. Refraining from domestic manufacture of the PMN substance in the United States (i.e., import only);

    5. Establishment and use of a hazard communication program, including human health precautionary statements on each label and in the SDS.

    The SNUR designates as a “significant new use” the absence of these protective measures.

    Potentially useful information: EPA has determined that certain information about the health effects of the PMN substance may be potentially useful to characterize the effects of the PMN substance in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use that will be designated by this SNUR. The submitter has agreed not to exceed a confidential production volume limit without performing specific target organ toxicity testing.

    CFR citation: 40 CFR 721.11162.

    PMN Numbers: P-17-200 and P-17-204

    Chemical names: 1,3-bis(substitutedbenzoyl)benzene (generic) (P-17-200) and 1,4-bis(substitutedbenzoyl)benzene (generic) (P-17-204).

    CAS numbers: Not available.

    Effective date of TSCA section 5(e) Order: December 18, 2017.

    Basis for TSCA section 5(e) Order: The PMNs state that the use of the substances will be as monomers for high performance polymers. Based on analysis of test data on analogous chemical bisphenol A and predictions for polyphenols, EPA identified potential concerns for irritation to the eyes, lungs, and mucous membranes, liver and kidney effects, reproductive and developmental toxicity, sensitization, neurotoxicity, and aquatic/terrestrial toxicity. The Order was issued under TSCA sections 5(a)(3)(B)(ii)(I) and 5(e)(l)(A)(ii)(I) of TSCA, based on a finding that in the absence of sufficient information to permit a reasoned evaluation, the substances may present an unreasonable risk of injury to the health and the environment. To protect against these risks, the Order requires:

    1. Use of personal protective equipment where there is a potential for dermal exposure;

    2. Use of a NIOSH certified respirator with an APF of at least 50 where there is a potential for inhalation exposure;

    3. Establishment and use of a hazard communication program, including human health precautionary statements on each label and in the SDS;

    4. Manufacture (including import) the PMN substances only in the form of a solid;

    5. Refraining from domestic manufacture of the PMN substances in the United States (i.e., import only);

    6. No manufacture (including import), processing, or use of the PMN substances with greater than 0.1% of the particle size distribution less than 10 microns;

    7. No use other than as chemical intermediates;

    8. No release of the PMN substances into the waters of the United States without application of an on-site wastewater treatment that reduces the concentration of PMN substances in wastewater below the limit of detection of 0.03 ppm, using the on-site wastewater treatment system with activated carbon adsorption; and

    9. Disposal of the PMN substances by incineration.

    The SNURs designate as a “significant new use” the absence of these protective measures.

    Potentially useful information: EPA has determined that certain information about the environmental and health effects of the PMN substances may be potentially useful to characterize the effects of the PMN substances in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use that will be designated by these SNURs. EPA has also determined that the results of specific reproductive toxicity testing, skin sensitization, and chronic aquatic toxicity testing would help characterize the potential human and environmental effects of the PMN substances. Although the Order does not require these tests, the Order's restrictions remain in effect until the Order is modified or revoked by EPA based on submission of this or other relevant information.

    CFR citation: 40 CFR 721.11163 and 40 CFR 721.11164.

    PMN Number: P-17-205

    Chemical name: Bis(fluorobenzoyl)benzene (generic).

    CAS number: Not available.

    Effective date of TSCA section 5(e) Order: December 18, 2017.

    Basis for TSCA section 5(e) Order: The PMN states that the generic (non-confidential) use of the substance will be as a monomer for high performance polymers. Based on physical/chemical properties of the PMN substance (as described in the New Chemical Program's PBT category at 64 FR 60194; November 4, 1999) and test data on structurally similar substances, the PMN substance is a potentially persistent, bioaccumulative, and toxic (PBT) chemical. EPA has identified concern for eye irritation based on test data for an analogous chemical. Concerns for liver, kidney, blood effects and carcinogenicity were identified based on test data available for benzophenone. Based on experimental data of an analogous chemical, EPA has identified environmental hazard concerns. The Order was issued under TSCA sections 5(a)(3)(B)(ii)(I) and 5(e)(1)(A)(ii)(I), based on a finding that in the absence of sufficient information to permit a reasoned evaluation, the PMN substance may present an unreasonable risk of injury to health and the environment. To protect against these risks, the Order requires:

    1. Use of personal protective equipment where there is a potential for dermal exposure;

    2. Establishment and use of a hazard communication program, including human health precautionary statements on each label and in the SDS;

    3. Refraining from domestic manufacture of the PMN substance in the United States (i.e., import only);

    4. Manufacture of the PMN substance only in the form of a solid;

    5. No manufacture of the PMN substance with greater than 0.1% of the particle size distribution less than 10 microns;

    6. No use other than as a chemical intermediate;

    7. Disposal of the PMN substance by incineration; and

    8. No release of the PMN without application of an on-site wastewater treatment that reduces the concentration of the PMN in wastewater below the limit of detection of 0.03 ppm.

    The SNUR designates as a “significant new use” the absence of these protective measures.

    Potentially useful information: EPA has determined that certain information about the environmental and health effects of the PMN substance may be potentially useful to characterize the effects of the PMN substance in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use that will be designated by this SNUR. EPA has also determined that the results of biodegradability testing, bioaccumulation testing, specific reproductive and developmental toxicity testing, and chronic aquatic toxicity testing would help characterize the potential human and environmental effects of the PMN substance. Although the Order does not require these tests, the Order's restrictions remain in effect until the Order is modified or revoked by EPA based on submission of this or other relevant information.

    CFR citation: 40 CFR 721.11165.

    PMN Number: P-17-251

    Chemical name: 1-H-Benz[DE] isoquinoline-1,3 (2H)-dione-2-(-alkyl-)-(-alkyl-amino-) (generic).

    CAS number: Not available.

    Effective date of TSCA section 5(e) Order: December 13, 2017.

    Basis for TSCA section 5(e) Order: The PMN states that the specific (non-confidential) use of the substance will be as tracer dye. Based on the physical/chemical properties of the PMN substance and data for structurally analogous chemical substances, EPA has identified concerns for mutagenicity and ocular irritation. The Order was issued under TSCA sections 5(a)(3)(B)(ii)(I) and 5(e)(l)(A)(ii)(II), based on finding that in the absence of sufficient information to permit a reasoned evaluation, the PMN substance may present an unreasonable risk of injury to health. To protect against these risks, the Order requires:

    1. Use of personal protective equipment where there is a potential for exposure;

    2. Establishment and use of a hazard communication program, including human health precautionary statements on each label and in the SDS;

    3. Refraining from domestic manufacture of the PMN substance in the United States (i.e., import only); and

    4. No import, processing, or use of the PMN substance at a concentration greater than 0.4%.

    The SNUR designates as a “significant new use” the absence of these protective measures.

    Potentially useful information: EPA has determined that certain information about the health effects of the PMN substance may be potentially useful to characterize the effects of the PMN substance in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use that will be designated by this SNUR. EPA has determined that the results of specific skin absorption testing and genetic toxicology testing would help characterize the potential health effects of the PMN substance. Although the Order does not require this test, the Order's restrictions remain in effect until the Order is modified or revoked by EPA based on submission of this or other relevant information.

    CFR citation: 40 CFR 721.11166.

    PMN Number: P-17-296

    Chemical name: Siloxanes and Silicones, di-Me, hydrogen-terminated, reaction products with acrylic acid and 2-ethyl-2-[(2-propen-1-yloxyl)methyl]-1,3-propanediol, polymers with chlorotrimethylsilane-iso-Pr alc.-sodium reaction products.

    CAS number: 2014386-23-1.

    Effective date of TSCA section 5(e) Order: November 14, 2017.

    Basis for TSCA section 5(e) Order: The PMN states that the use of the substance will be as a component of release coating mixture for paper and film. Based on analogy to acrylates, EPA identified concerns for dermal and respiratory sensitization, mutagenicity, oncogenicity, developmental toxicity, and irritation to all tissues. The Order was issued under TSCA sections 5(a)(3)(B)(ii)(I) and 5(e)(l)(A)(ii)(I) of TSCA, based on a finding that in the absence of sufficient information to permit a reasoned evaluation, the substance may present an unreasonable risk of injury to health. To protect against these risks, the Order requires:

    1. Use of personal protective equipment where there is a potential for dermal exposure;

    2. Use of a NIOSH certified respirator with an APF of at least 1,000 if used in a manner that generates a spray, mist, or aerosol and there is a potential for inhalation exposure;

    3. Establishment and use of a hazard communication program, including human health precautionary statements on each label and in the SDS; and

    4. Refraining from domestic manufacture of the PMN substance in the United States (i.e., import only).

    The SNUR designates as a “significant new use” the absence of these protective measures.

    Potentially useful information: EPA has determined that certain information about the health effects of the PMN substance may be potentially useful to characterize the effects of the PMN substance in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use that will be designated by this SNUR. EPA has determined that the results of specific reproductive/developmental toxicity testing, skin sensitization and genetic toxicology testing would help characterize the potential health effects of the PMN substance. Although the Order does not require these tests, the Order's restrictions remain in effect until the Order is modified or revoked by EPA based on submission of this or other relevant information.

    CFR citation: 40 CFR 721.11167.

    PMN Numbers: P-17-308 and P-17-309

    Chemical names: 2-Pentanone, 2,2',2”-[O,O',O”-(ethenylsilylidyne)trioxime] (P-17-308) and 2-Pentanone, 2,2',2”- [O,O',O”-(methylsilylidyne)trioxime] (P-17-309).

    CAS numbers: 58190-62-8 (P-17-308) and 37859-55-5 (P-17-309).

    Effective date of TSCA section 5(e) Order: October 30, 2017.

    Basis for TSCA section 5(e) Order: The PMNs state that the use of the substances will be as crosslinkers for silicone sealants used in automotive and large appliance (white goods) manufacture and for silicone sealants used in auto repair shops. Based on hazard determination and available qualitative risk information, EPA has identified concerns for irritation, corrosion, sensitization; systemic effects to spleen, liver and bone marrow; developmental, reproductive, blood, and kidney toxicity; neurotoxicity, mutagenicity and oncogenicity. The Order was issued under TSCA sections 5(a)(3)(B)(ii)(I) and 5(e)(1)(A)(ii)(I), based on a finding that in the absence of sufficient information to permit a reasoned evaluation, the substances may present an unreasonable risk of injury to health. To protect against these risks, the Order requires:

    1. Submission to EPA of certain toxicity testing on P-17-308 before manufacturing the aggregate confidential production volume identified in the Order;

    2. Provide personal protective equipment where there is a potential for dermal exposure;

    3. Establishment and use of a hazard communication program, including human health precautionary statements on each label and in the SDS;

    4. Refraining from domestic manufacture of the PMN substances in the United States (i.e., import only); and

    5. Not process or use the PMN substances in any application that creates vapor, mist or aerosol.

    The SNURs designate as a “significant new use” the absence of these protective measures.

    Potentially useful information: EPA has determined that certain information about the health effects of the PMN substances may be potentially useful to characterize the effects of the PMN substances in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use that will be designated by these SNURs. The submitter has agreed not to exceed a confidential production volume limit without performing reproductive/developmental toxicity testing and skin sensitization testing on P-17-308.

    CFR citation: 40 CFR 721.11168 and 40 CFR 721.11169.

    PMN Number: P-17-321

    Chemical name: Naphthalene trisulfonic acid sodium salt (generic).

    CAS number: Not available.

    Effective date of TSCA section 5(e) Order: October 25, 2017.

    Basis for TSCA section 5(e) Order: The PMN states that the generic (non-confidential) use of the substance will be for monitoring of oil/gas well performance. Based on physical/chemical properties of the PMN substance and analysis of test data on analogous chemicals, EPA identified concerns for developmental toxicity and interference with blood clotting via chelation of nutrient metals, dermal and lung irritation, and sensitization. The Order was issued under TSCA sections 5(a)(3)(B)(ii)(I) and 5(e)(l)(A)(ii)(I) of TSCA, based on a finding that in the absence of sufficient information to permit a reasoned evaluation, the substance may present an unreasonable risk of injury to health. To protect against these risks, the Order requires:

    1. Submission to EPA of certain toxicity testing before manufacturing (including import) the confidential aggregate volume identified in the Order;

    2. Use of personal protective equipment where there is a potential for dermal exposure and a NIOSH certified respirator with an APF of at least 50 where there is a potential for inhalation exposure;

    3. No manufacturing, processing, or use of the PMN substance in any manner that generates a vapor, mist, or aerosol;

    4. No manufacture (including import) or processing of the PMN substance beyond the confidential annual production volume specified in the Order; and

    5. Establishment and use of a hazard communication program, including human health precautionary statements on each label and in the SDS.

    The SNUR designates as a “significant new use” the absence of these protective measures.

    Potentially useful information: EPA has determined that certain information about the health effects of the PMN substance may be potentially useful to characterize the effects of the PMN substance in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use that will be designated by this SNUR. The submitter has agreed not to exceed a confidential production volume limit without performing reproductive/developmental toxicity testing and skin sensitization testing.

    CFR citation: 40 CFR 721.11170.

    PMN Number: P-17-327

    Chemical name: Polymer of aliphatic dicarboxylic acid and dicyclo alkane amine (generic).

    CAS number: Not available.

    Effective date of TSCA section 5(e) Order: October 18, 2017.

    Basis for TSCA section 5(e) Order: The PMN states that the use of the PMN substance will be for injection molding of special applications and in compounding. Based on physical/chemical properties of the PMN substance, there are no significant concerns for the PMN substance as described in the PMN submission. However, if the PMN substance is made differently, there could be concern for lung toxicity. The Order was issued under TSCA sections 5(a)(3)(B)(ii)(I) and 5(e)(l)(A)(ii)(I) of TSCA, based on a finding that in the absence of sufficient information to permit a reasoned evaluation, the substance may present an unreasonable risk of injury to health. To protect against these risks, the Order requires:

    1. Manufacture (which under TSCA includes importing) the PMN substance to have an average molecular weight of no greater than 10,000 Daltons.

    The SNUR designates as a “significant new use” the absence of these protective measures.

    Potentially useful information: EPA has determined that certain information about the health effects of the PMN substance may be potentially useful to characterize the effects of the PMN substance in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use that will be designated by this SNUR. EPA has also determined that the results of specific acute toxicity and pulmonary effects testing would help characterize the potential health effects of the PMN substance. Although the Order does not require these tests, the Order's restrictions remain in effect until the Order is modified or revoked by EPA based on submission and review of this or other relevant information.

    CFR citation: 40 CFR 721.11171.

    PMN Number: P-17-330

    Chemical name: Hexanedioic acid, polymer with trifunctional polyol, 1,1'-methylenebis [isocyanatobenzene], and 2,2′-oxybis [ethanol] (generic).

    CAS number: Not available.

    Effective date of TSCA section 5(e) Order: November 13, 2017.

    Basis for TSCA section 5(e) Order: The PMN states that the use of the substance will be as a polyurethane which is cured and used in a sprocket for water treatment. Based on physical/chemical properties of the PMN substance, EPA identified concerns for irritation to the eye, skin, respiratory tract, and gastrointestinal tract and for potential dermal and respiratory sensitization. The Order was issued under TSCA sections 5(a)(3)(B)(ii)(I) and 5(e)(l)(A)(ii)(I) of TSCA, based on a finding that in the absence of sufficient information to permit a reasoned evaluation, the substance may present an unreasonable risk of injury to health. To protect against these risks, the Order requires:

    1. Use of personal protective equipment where there is a potential for dermal exposure;

    2. Establishment and use of a hazard communication program, including human health precautionary statements on each label and in the SDS;

    3. No manufacture, processing, or use of the PMN substance in any manner that generates a dust, mist, or aerosol; and

    4. No use of the PMN substance in a consumer product or for commercial uses when the sealable goods or service could introduce the PMN material into a consumer setting.

    The SNUR designates as a “significant new use” the absence of these protective measures.

    Potentially useful information: EPA has determined that certain information about the health effects of the PMN substance may be potentially useful to characterize the effects of the PMN substance in support of a request by the PMN submitter to modify the Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use that will be designated by this SNUR. EPA has also determined that the results of specific skin sensitization testing would help characterize the potential health effects of the PMN substance. Although the Order does not require this test, the Order's restrictions remain in effect until the Order is modified or revoked by EPA based on submission and review of this or other relevant information.

    CFR citations: 40 CFR 721.11172.

    V. Rationale and Objectives of the Rule A. Rationale

    During review of the PMNs submitted for the chemical substances that are subject to these SNURs, EPA concluded that for all 26 chemical substances, regulation was warranted under TSCA section 5(e) or section 5(f), pending the development of information sufficient to make reasoned evaluations of the health or environmental effects of the chemical substances. The basis for such findings is outlined in Unit IV. Based on these findings, TSCA section 5(e) or 5(f) Orders requiring the use of appropriate exposure controls were negotiated with the PMN submitters.

    The SNURs identify as significant new uses any manufacturing, processing, use, distribution in commerce, or disposal that does not conform to the restrictions imposed by the underlying Orders, consistent with TSCA section 5(f)(4).

    B. Objectives

    EPA is issuing these SNURs for specific chemical substances which have undergone premanufacture review because the Agency wants to achieve the following objectives with regard to the significant new uses designated in this rule:

    • EPA will receive notice of any person's intent to manufacture or process a listed chemical substance for the described significant new use before that activity begins.

    • EPA will have an opportunity to review and evaluate data submitted in a SNUN before the notice submitter begins manufacturing or processing a listed chemical substance for the described significant new use.

    • EPA will be able to either determine that the prospective manufacture or processing is not likely to present an unreasonable risk, or to take necessary regulatory action associated with any other determination, before the described significant new use of the chemical substance occurs.

    • EPA will identify as significant new uses any manufacturing, processing, distribution in commerce, use, or disposal that does not conform to the restrictions imposed by the underlying Orders, consistent with TSCA section 5(f)(4).

    Issuance of a SNUR for a chemical substance does not signify that the chemical substance is listed on the TSCA Chemical Substance Inventory (TSCA Inventory). Guidance on how to determine if a chemical substance is on the TSCA Inventory is available on the internet at http://www.epa.gov/opptintr/existingchemicals/pubs/tscainventory/index.html.

    VI. Direct Final Procedures

    EPA is issuing these SNURs as a direct final rule. The effective date of this rule is December 3, 2018 without further notice, unless EPA receives written adverse comments before November 2, 2018.

    If EPA receives written adverse comments on one or more of these SNURs before November 2, 2018, EPA will withdraw the relevant sections of this direct final rule before its effective date.

    This rule establishes SNURs for a number of chemical substances. Any person who submits adverse comments must identify the chemical substance and the new use to which it applies. EPA will not withdraw a SNUR for a chemical substance not identified in the comment.

    VII. Applicability of the Significant New Use Designation

    To establish a significant new use, EPA must determine that the use is not ongoing. The chemical substances subject to this rule have undergone premanufacture review. In cases where EPA has not received a notice of commencement (NOC) and the chemical substance has not been added to the TSCA Inventory, no person may commence such activities without first submitting a PMN. Therefore, for chemical substances for which an NOC has not been submitted EPA concludes that the designated significant new uses are not ongoing.

    When chemical substances identified in this rule are added to the TSCA Inventory, EPA recognizes that, before the rule is effective, other persons might engage in a use that has been identified as a significant new use. However, TSCA section 5(e) or 5(f) Orders have been issued for all of the chemical substances, and the PMN submitters are prohibited by the TSCA section 5(e) and 5(f) Orders from undertaking activities which will be designated as significant new uses. The identities of 20 of the 26 chemical substances subject to this rule have been claimed as confidential and EPA has received no post-PMN bona fide submissions (per §§ 720.25 and 721.11) for a chemical substance covered by this action. Based on this, the Agency believes that it is highly unlikely that any of the significant new uses described in the regulatory text of this rule are ongoing.

    Therefore, EPA designates October 3, 2018 as the cutoff date for determining whether the new use is ongoing. The objective of EPA's approach has been to ensure that a person could not defeat a SNUR by initiating a significant new use before the effective date of the direct final rule.

    Persons who begin commercial manufacture or processing of the chemical substances for a significant new use identified as of that date will have to cease any such activity upon the effective date of the final rule. To resume their activities, these persons will have to first comply with all applicable SNUR notification requirements and wait until EPA has conducted a review of the notice, made an appropriate determination on the notice, and has taken such actions as are required with that determination.

    VIII. Development and Submission of Information

    EPA recognizes that TSCA section 5 does not require developing any particular new information (e.g., generating test data) before submission of a SNUN. There is an exception: Development of test data is required where the chemical substance subject to the SNUR is also subject to a rule, order or consent agreement under TSCA section 4 (see TSCA section 5(b)(1)).

    In the absence of a TSCA section 4 test rule covering the chemical substance, persons are required only to submit information in their possession or control and to describe any other information known to or reasonably ascertainable by them (see 40 CFR 720.50). However, upon review of PMNs and SNUNs, the Agency has the authority to require appropriate testing. Unit IV. lists required or recommended testing for all of the listed SNURs. Descriptions of tests are provided for informational purposes. EPA strongly encourages persons, before performing any testing, to consult with the Agency pertaining to protocol selection. Furthermore, pursuant to TSCA section 4(h), which pertains to reduction of testing in vertebrate animals, EPA encourages consultation with the Agency on the use of alternative test methods and strategies (also called New Approach Methodologies, or NAMs), if available, to generate the recommended test data. EPA encourages dialog with Agency representatives to help determine how best the submitter can meet both the data needs and the objective of TSCA section 4(h).

    In certain of the TSCA section 5(e) Orders for the chemical substances regulated under this rule, EPA has established production or time limits in view of the lack of data on the potential health and environmental risks that may be posed by the significant new uses or increased exposure to the chemical substances. These limits cannot be exceeded unless the PMN submitter first submits the results of toxicity tests that would permit a reasoned evaluation of the potential risks posed by these chemical substances. The SNURs contain the same limits as the TSCA section 5(e) Orders. Exceeding these limits is defined as a significant new use. Persons who intend to exceed the limit must notify the Agency by submitting a SNUN at least 90 days in advance of commencement of non-exempt commercial manufacture or processing.

    Any request by EPA for the triggered and pended testing described in the Orders was made based on EPA's consideration of available screening-level data, if any, as well as other available information on appropriate testing for the PMN substances. Further, any such testing request on the part of EPA that includes testing on vertebrates was made after consideration of available toxicity information, computational toxicology and bioinformatics, and high-throughput screening methods and their prediction models.

    Potentially useful information identified in Unit IV. may not be the only means of addressing the potential risks of the chemical substance. However, submitting a SNUN without any test data may increase the likelihood that EPA will take action under TSCA section 5(e), particularly if satisfactory test results have not been obtained from a prior PMN or SNUN submitter. EPA recommends that potential SNUN submitters contact EPA early enough so that they will be able to conduct the appropriate tests.

    SNUN submitters should be aware that EPA will be better able to evaluate SNUNs which provide detailed information on the following:

    • Human exposure and environmental release that may result from the significant new use of the chemical substances.

    • Information on risks posed by the chemical substances compared to risks posed by potential substitutes.

    IX. Procedural Determinations

    By this rule, EPA is establishing certain significant new uses which have been claimed as CBI subject to Agency confidentiality regulations at 40 CFR part 2 and 40 CFR part 720, subpart E. Absent a final determination or other disposition of the confidentiality claim under 40 CFR part 2 procedures, EPA is required to keep this information confidential. EPA promulgated a procedure to deal with the situation where a specific significant new use is CBI, at § 721.1725(b)(1).

    Under these procedures a manufacturer or processor may request EPA to determine whether a proposed use would be a significant new use under the rule. The manufacturer or processor must show that it has a bona fide intent to manufacture or process the chemical substance and must identify the specific use for which it intends to manufacture or process the chemical substance. If EPA concludes that the person has shown a bona fide intent to manufacture or process the chemical substance, EPA will tell the person whether the use identified in the bona fide submission would be a significant new use under the rule. Since most of the chemical identities of the chemical substances subject to these SNURs are also CBI, manufacturers and processors can combine the bona fide submission under the procedure in § 721.1725(b)(1) with that under § 721.11 into a single step.

    If EPA determines that the use identified in the bona fide submission would not be a significant new use, i.e., the use does not meet the criteria specified in the rule for a significant new use, that person can manufacture or process the chemical substance so long as the significant new use trigger is not met. In the case of a production volume trigger, this means that the aggregate annual production volume does not exceed that identified in the bona fide submission to EPA. Because of confidentiality concerns, EPA does not typically disclose the actual production volume that constitutes the use trigger. Thus, if the person later intends to exceed that volume, a new bona fide submission would be necessary to determine whether that higher volume would be a significant new use.

    X. SNUN Submissions

    According to § 721.1(c), persons submitting a SNUN must comply with the same notification requirements and EPA regulatory procedures as persons submitting a PMN, including submission of test data on health and environmental effects as described in 40 CFR 720.50. SNUNs must be submitted on EPA Form No. 7710-25, generated using e-PMN software, and submitted to the Agency in accordance with the procedures set forth in 40 CFR 720.40 and 721.25. E-PMN software is available electronically at http://www.epa.gov/opptintr/newchems.

    XI. Economic Analysis

    EPA has evaluated the potential costs of establishing SNUN requirements for potential manufacturers and processors of the chemical substances subject to this rule. EPA's complete economic analysis is available in the docket under docket ID number EPA-HQ-OPPT-2018-0627.

    XII. Statutory and Executive Order Reviews A. Executive Order 12866

    This action establishes SNURs for several new chemical substances that were the subject of PMNs and TSCA section 5(e) or 5(f) Orders. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled Regulatory Planning and Review” (58 FR 51735, October 4, 1993).

    B. Paperwork Reduction Act (PRA)

    According to PRA (44 U.S.C. 3501 et seq.), an agency may not conduct or sponsor, and a person is not required to respond to a collection of information that requires OMB approval under PRA, unless it has been approved by OMB and displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in title 40 of the CFR, after appearing in the Federal Register, are listed in 40 CFR part 9, and included on the related collection instrument or form, if applicable. EPA is amending the table in 40 CFR part 9 to list the OMB approval number for the information collection requirements contained in this action. This listing of the OMB control numbers and their subsequent codification in the CFR satisfies the display requirements of PRA and OMB's implementing regulations at 5 CFR part 1320. This Information Collection Request (ICR) was previously subject to public notice and comment prior to OMB approval, and given the technical nature of the table, EPA finds that further notice and comment to amend it is unnecessary. As a result, EPA finds that there is “good cause” under section 553(b)(3)(B) of the Administrative Procedure Act (5 U.S.C. 553(b)(3)(B)) to amend this table without further notice and comment.

    The information collection requirements related to this action have already been approved by OMB pursuant to PRA under OMB control number 2070-0012 (EPA ICR No. 574). This action does not impose any burden requiring additional OMB approval. If an entity were to submit a SNUN to the Agency, the annual burden is estimated to average between 30 and 170 hours per response. This burden estimate includes the time needed to review instructions, search existing data sources, gather and maintain the data needed, and complete, review, and submit the required SNUN.

    Send any comments about the accuracy of the burden estimate, and any suggested methods for minimizing respondent burden, including through the use of automated collection techniques, to the Director, Collection Strategies Division, Office of Environmental Information (2822T), Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001. Please remember to include the OMB control number in any correspondence, but do not submit any completed forms to this address.

    C. Regulatory Flexibility Act (RFA)

    On February 18, 2012, EPA certified pursuant to RFA section 605(b) (5 U.S.C. 601 et seq.), that promulgation of a SNUR does not have a significant economic impact on a substantial number of small entities where the following are true:

    1. A significant number of SNUNs would not be submitted by small entities in response to the SNUR.

    2. The SNUR submitted by any small entity would not cost significantly more than $8,300.

    A copy of that certification is available in the docket for this action.

    This action is within the scope of the February 18, 2012 certification. Based on the Economic Analysis discussed in Unit XI. and EPA's experience promulgating SNURs (discussed in the certification), EPA believes that the following are true:

    • A significant number of SNUNs would not be submitted by small entities in response to the SNUR.

    • Submission of the SNUN would not cost any small entity significantly more than $8,300.

    Therefore, the promulgation of the SNUR would not have a significant economic impact on a substantial number of small entities.

    D. Unfunded Mandates Reform Act (UMRA)

    Based on EPA's experience with proposing and finalizing SNURs, State, local, and Tribal governments have not been impacted by these rulemakings, and EPA does not have any reasons to believe that any State, local, or Tribal government will be impacted by this action. As such, EPA has determined that this action does not impose any enforceable duty, contain any unfunded mandate, or otherwise have any effect on small governments subject to the requirements of UMRA sections 202, 203, 204, or 205 (2 U.S.C. 1501 et seq.).

    E. Executive Order 13132

    This action will not have a substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999).

    F. Executive Order 13175

    This action does not have Tribal implications because it is not expected to have substantial direct effects on Indian Tribes. This action does not significantly nor uniquely affect the communities of Indian Tribal governments, nor does it involve or impose any requirements that affect Indian Tribes. Accordingly, the requirements of Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), do not apply to this action.

    G. Executive Order 13045

    This action is not subject to Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because this is not an economically significant regulatory action as defined by Executive Order 12866, and this action does not address environmental health or safety risks disproportionately affecting children.

    H. Executive Order 13211

    This action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001), because this action is not expected to affect energy supply, distribution, or use and because this action is not a significant regulatory action under Executive Order 12866.

    I. National Technology Transfer and Advancement Act (NTTAA)

    In addition, since this action does not involve any technical standards, NTTAA section 12(d) (15 U.S.C. 272 note), does not apply to this action.

    J. Executive Order 12898

    This action does not entail special considerations of environmental justice related issues as delineated by Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

    XIII. Congressional Review Act

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

    List of Subjects 40 CFR Part 9

    Environmental protection, Reporting and recordkeeping requirements.

    40 CFR Part 721

    Environmental protection, Chemicals, Hazardous substances, Reporting and recordkeeping requirements.

    Dated: September 14, 2018. Jeffery T. Morris, Director, Office of Pollution Prevention and Toxics.

    Therefore, 40 CFR parts 9 and 721 are amended as follows:

    PART 9—[AMENDED] 1. The authority citation for part 9 continues to read as follows: Authority:

    7 U.S.C. 135 et seq., 136-136y; 15 U.S.C. 2001, 2003, 2005, 2006, 2601-2671; 21 U.S.C. 331j, 346a, 348; 31 U.S.C. 9701; 33 U.S.C. 1251 et seq., 1311, 1313d, 1314, 1318, 1321, 1326, 1330, 1342, 1344, 1345 (d) and (e), 1361; E.O. 11735, 38 FR 21243, 3 CFR, 1971-1975 Comp. p. 973; 42 U.S.C. 241, 242b, 243, 246, 300f, 300g, 300g-1, 300g-2, 300g-3, 300g-4, 300g-5, 300g-6, 300j-1, 300j-2, 300j-3, 300j-4, 300j-9, 1857 et seq., 6901-6992k, 7401-7671q, 7542, 9601-9657, 11023, 11048.

    2. In § 9.1, add the following sections in numerical order under the undesignated center heading “Significant New Uses of Chemical Substances” to read as follows:
    § 9.1 OMB approvals under the Paperwork Reduction Act. 40 CFR citation OMB control No. *    *    *    *    *     Significant New Uses of Chemical Substances *    *    *    *    *     721.11149 2070-0012 721.11150 2070-0012 721.11151 2070-0012 721.11152 2070-0012 721.11153 2070-0012 721.11154 2070-0012 721.11155 2070-0012 721.11156 2070-0012 721.11157 2070-0012 721.11158 2070-0012 721.11159 2070-0012 721.11160 2070-0012 721.11161 2070-0012 721.11162 2070-0012 721.11163 2070-0012 721.11164 2070-0012 721.11165 2070-0012 721.11166 2070-0012 721.11167 2070-0012 721.11168 2070-0012 721.11169 2070-0012 721.11170 2070-0012 721.11171 2070-0012 721.11172 2070-0012 *    *    *    *    *    
    PART 721—[AMENDED] 3. The authority citation for part 721 continues to read as follows: Authority:

    15 U.S.C. 2604, 2607, and 2625(c).

    4. Add § 721.11149 to subpart E to read as follows:
    § 721.11149 Carbon nanomaterial (generic).

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance identified generically as carbon nanomaterial (P-10-366) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section. The requirements of this section do not apply to quantities of the substance after they have been reacted (cured), incorporated or embedded into a polymer matrix that itself has been completely reacted (cured), embedded in a permanent solid polymer, metal, glass, or ceramic form, or completely embedded in an article as defined at 40 CFR 720.3(c).

    (2) The significant new uses are:

    (i) Protection in the workplace. Requirements as specified in § 721.63(a)(1), (a)(2)(i)(ii), (a)(3), (a)(4), (a)(5) (respirators must provide a National Institute for Occupational Safety and Health certified air purifying, tight-fitting full-face respirator equipped with N100, P-100, or R-100 filter with an Assigned Protection Factor of at least 50), (a)(6)(particulate), (when determining which persons are reasonable likely to be exposed as required for § 721.63(a)(1) and (4) engineering control measures (e.g., enclosure or confinement of the operation, general and local ventilation) or administrative control measures (e.g., workplace policies and procedures) shall be considered and implemented to prevent exposures, where feasible), and (c).

    (ii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80(k), (l), (q), and (y)(1)(when the substance is in liquid resin form). It is a significant new use to process or use the powder form of the substance outside of the site of manufacture or processing.

    (iii) Release to water. Requirements as specified in § 721.90(a)(1), (b)(1), and (c)(1).

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (e), (i), and (k) are applicable to manufacturers, importers, and processors of this substance.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    (3) Determining whether a specific use is subject to this section. The provisions of § 721.1725(b)(1) apply to paragraph (a)(2)(ii) of this section.

    5. Add § 721.11150 to subpart E to read as follows:
    § 721.11150 Cyclic amide (generic).

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance identified generically as cyclic amide (P-14-627) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section.

    (2) The significant new uses are:

    (i) Protection in the workplace. Requirements as specified in § 721.63(a)(1), (a)(2)(i)(butyl or silver shield gloves), (a)(2)(iv), (a)(3)(when determining which persons are reasonably likely to be exposed as required for § 721.63(a)(1), engineering control measures (e.g., enclosure or confinement of the operation, general and local ventilation shall be considered and implemented to prevent exposure, where feasible), (b)(concentration set at 1.0%), and (c).

    (ii) Hazard communication. Requirements as specified in § 721.72(a) through (e)(concentration set at 1.0%), (f), (g)(1)(i), (ix), (g)(2)(i), (ii), (iii), (v), and (g)(5). Alternative hazard and warning statements that meet the criteria of the Globally Harmonized System and OSHA Hazard Communication Standard may be used.

    (iii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80(f) and (k)(dispersions for industrial coatings (e.g., polyurethane, acrylic, epoxy), coating for consumer and professional use, adhesives and sealants, solvent-borne industrial coatings silicon wafer cleaning in microelectronics in clean rooms, photoresist stripping in microelectronics in clean rooms, coatings for microelectronics (e.g., casting of polymer films) in clean rooms, reaction medium for polymerization, polymer coatings for industrial and professional applications (e.g., wire enamel, non-stick and friction reduction coating) membranes, solvent for chemical synthesis reactions (e.g., pharmaceuticals), formulation of inks, industrial cleaner (e.g., cleaner for wind turbine, oil rigs, large engines), solvent for cleaning industrial reactors, wax inhibitors (in hydrocarbon lines), petrochemical extraction processes, paint stripper, solvents for production and formulation of fertilizer, solvent for production and formulation of active ingredients for agriculture, and solvent for formulation of active ingredients for agriculture-end use pesticide product). It is a significant new use to import the substance other than in containers of 55 gallons or more when the concentration is greater than 5% by weight for any product either intended for sale or distribution for “consumer” use, including for use in “consumer products”, or both intended for “commercial use” and rnade available to consumers for retail purchase of any kind. It is a significant new use to use in hand held spray applications that generate a vapor, mist, or aerosol.

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (i).

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    (3) Determining whether a specific use is subject to this section. The provisions of § 721.1725(b)(1) apply to paragraph (a)(2)(iii) of this section.

    6. Add § 721.11151 to subpart E to read as follows:
    § 721.11151 2-Butanone 1,1,1,3,4,4,4-heptafluoro-3-(trifluoromethyl)-.

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance identified as 2-Butanone 1,1,1,3,4,4,4-heptafluoro-3-(trifluoromethyl)- (P-15-114, CAS No 756-12-7) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section.

    (2) The significant new uses are:

    (i) Protection in the workplace. Requirements as specified in § 721.63(a)(1), (a)(2), and (a)(3)(when determining which persons are reasonable likely to be exposed as required for § 721.63(a)(1), engineering control measures (e.g., enclosure or confinement of the operation, general and local ventilation) or administrative control measures (e.g., workplace policies and procedures) shall be considered and implemented to prevent exposures, where feasible), (b)(concentration set at 1.0%), and (c).

    (ii) Hazard communication. Requirements as specified in § 721.72(a) through (d), (f), (g)(1)(i), (g)(2)(i)(v), (g)(3)(ii)(harmful to fish), (g)(4)(iii), and (g)(5). It is a significant new use unless containers of the PMN substance are labeled with the statement: “contains a dielectric fluid which should not be mixed or used in conjunction with sulfur hexafluoride (SF6)”. Alternative hazard and warning statements that meet the criteria of the Globally Harmonized System and OSHA Hazard Communication Standard may be used.

    (iii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80(t). It is a significant new use to use the substance other than as a dielectric medium for medium and high voltage power generation/distribution equipment and heat transfer.

    (iv) Release to water. Requirements as specified in § 721.90(a)(4), (b)(4), and (c)(4) where N = 180.

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (i) and (k) are applicable to manufacturers, importers, and processors of this substance.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    (3) Determining whether a specific use is subject to this section. The provisions of § 721.1725(b)(1) apply to paragraph (a)(2)(iii) of this section.

    7. Add § 721.11152 to subpart E to read as follows:
    § 721.11152 Propanenitrile, 2,3,3,3 tetrafluoro- 2-(trifluoromethyl)-.

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance identified as propanenitrile, 2,3,3,3 tetrafluoro- 2-(trifluoromethyl)- (P-15-320, CAS No 42532-60-5) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section.

    (2) The significant new uses are:

    (i) Hazard communication. Requirements as specified in § 721.72(a) through (e)(concentration set at 1%), (f), and (g)(5). It is a significant new use unless containers of the PMN substance are labeled with the statement: “contains a dielectric fluid which should not be mixed or used in conjunction with sulfur hexafluoride (SF6)”). Alternative hazard and warning statements that meet the criteria of the Globally Harmonized System and OSHA Hazard Communication Standard may be used.

    (ii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80. It is a significant new use to use the substance other than as a dielectric medium for medium and high voltage power generation and distribution equipment.

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (c) and (f) through (i) are applicable to manufacturers, importers, and processors of this substance.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    8. Add § 721.11153 to subpart E to read as follows:
    § 721.11153 Polymeric sulfide (generic).

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance generically identified as polymeric sulfide (P-15-734) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section.

    (2) The significant new uses are:

    (i) Protection in the workplace. Requirements as specified in § 721.63(a)(1), (a)(2)(i), (a)(3), (when determining which persons are reasonable likely to be exposed as required for § 721.63(a)(1), engineering control measures (e.g., enclosure or confinement of the operation, general and local ventilation) or administrative control measures (e.g., workplace policies and procedures) shall be considered and implemented to prevent exposures, where feasible), (b)(concentration set at 1%), and (c).

    (ii) Hazard communication. Requirements as specified in § 721.72(a) through (e)(concentration set at 1%), (f), (g)(1)(i), (vi), (ix), (neurotoxicity), (g)(2)(i), (iii), (v), (g)(3)(i), (ii), and (g)(5). Alternative hazard and warning statements that meet the criteria of the Globally Harmonized System and OSHA Hazard Communication Standard may be used.

    (iii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80(k)(wastewater heavy metal removal) and (q). It is a significant new use to manufacture, process, or use the substance in any manner that results in inhalation exposure to workers.

    (iv) Release to water. Requirements as specified in § 721.90(a)(4), (b)(4), and (c)(4) where N = 2.

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (i) and (k) are applicable to manufacturers, importers, and processors of this substance.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    (3) Determining whether a specific use is subject to this section. The provisions of § 721.1725(b)(1) apply to paragraph (a)(2)(iii) of this section.

    9. Add § 721.11154 to subpart E to read as follows:
    § 721.11154 Quaternary ammonium salts (generic).

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substances identified generically as quaternary ammonium salts (PMN P-16-356 and P-16-357) are subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section. The requirements of this section do not apply to quantities of the substances after they have been reacted (cured).

    (2) The significant new uses are:

    (i) Protection in the workplace. Requirements as specified § 721.63(a)(1), (a)(2)(i), (a)(3), (when determining which persons are reasonably likely to be exposed as required for § 721.63(a)(1), engineering control measures (e.g., enclosure or confinement of the operation, general and local ventilation) or administrative control measures (e.g., workplace policies and procedures) shall be considered and implemented to prevent exposure where feasible), (b)(concentration set at 1.0%), and (c).

    (ii) Hazard communication. Requirements as specified in § 721.72(a) through (e)(concentration set at 1.0%), (f), (g)(1)(i), (ii), (neurotoxicity), (g)(2)(i), (iii), (v), (g)(3)(i), (ii), and (g)(5). Alternative hazard and warning statements that meet the criteria of the Globally Harmonized System and OSHA Hazard Communication Standard may be used.

    (iii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80(k). It is a significant new use to manufacture, process, or use the substances in any manner way that results in generation of a vapor, mist or aerosol.

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (i).

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    10. Add § 721.11155 to subpart E to read as follows:
    § 721.11155 Alkyl methacrylates, polymer with olefins (generic).

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance generically identified as alkyl methacrylates, polymer with olefins (P-16-375) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section.

    (2) The significant new uses are:

    (i) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80(f). It is a significant new use to import the substance other than according to the confidential molecular weight parameters specified in the Order for the substance.

    (ii) [Reserved]

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (c) and (i) are applicable to manufacturers, importers, and processors of this substance.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    (3) Determining whether a specific use is subject to this section. The provisions of § 721.1725(b)(1) apply to paragraph (a)(2)(i) of this section.

    11. Add § 721.11156 to subpart E to read as follows:
    § 721.11156 Hexanedioic acid, 1,6-bis(3,5,5-trimethylhexyl) ester.

    (a) Chemical substance and significant new uses subject to reporting. (1) the chemical substance identified as hexanedioic acid, 1,6-bis(3,5,5-trimethylhexyl) ester (PMN P-16-386, CAS No 20270-50-2) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section.

    (2) The significant new uses are:

    (i) Protection in the workplace. Requirements as specified in § 721.63(a)(1), (a)(3), (when determining which persons are reasonably likely to be exposed as required for § 721.63(a)(1), engineering control measures (e.g., enclosure or confinement of the operation, general and local ventilation shall be considered and implemented to prevent exposure, where feasible), (a)(6)(v), (vi), (particulate), (b)(concentration set at 1%), and (c).

    (ii) Hazard communication. Requirements as specified in § 721.72(a) through (e)(concentration set at 1%), (f), (g)(1)(iii), (iv), (ix), (g)(2)(i), (ii), (iii), (v), and (g)(5). Alternative hazard and warning statements that meet the criteria of the Globally Harmonized System and OSHA Hazard Communication Standard may be used.

    (iii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80(k)(motor oil formulations and gear oil lubricants) and (p)(1,545,000 kilograms).

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (i).

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    11. Add § 721.11157 to subpart E to read as follows:
    § 721.11157 Alkylaminium hydroxide (generic).

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance identified generically as alkylaminium hydroxide (P-16-396) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section.

    (2) The significant new uses are:

    (i) Protection in the workplace. Requirements as specified in § 721.63(a)(1), (a)(2)(i), (ii), (iii), (iv), (a)(3), (when determining which persons are reasonably likely to be exposed as required for § 721.63(a)(1), engineering control measures (e.g., enclosure or confinement of the operation, general and local ventilation) or administrative control measures (e.g., workplace policies and procedures) shall be considered and implemented to prevent exposures, where feasible), (b)(concentration set at 1%), and (c).

    (ii) Hazard communication. Requirements as specified in § 721.71(a) through (e) (concentration set at 1.0%), (f), (g)(1)(i), (ii), (iii), (vi), (ix), (eye damage), (g)(2)(i), (ii), (iii), (v), and (g)(5). Alternative hazard and warning statements that meet the criteria of the Globally Harmonized System and OSHA Hazard Communication Standard may be used.

    (iii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80(k), (q), (v)(1), (2), (w)(1), (2), (x)(1), (x)(2), (y)(1), and (y)(2).

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (i) are applicable to manufacturers, importers, and processors of this substance.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    (3) Determining whether a specific use is subject to this section. The provisions of § 721.1725(b)(1) apply to paragraph (a)(2)(iii) of this section.

    12. Add § 721.11158 to subpart E to read as follows:
    § 721.11158 Polyamine polyacid adducts (generic).

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substances generically identified as polyamine polyacid adducts (P-16-572 and P-16-573) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section.

    (2) The significant new uses are:

    (i) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80. It is a significant new to use to manufacture the substances in any manner other than they are not amine terminated in order to maintain water solubility levels below 1 part per billion.

    (ii) [Reserved]

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (c) and (i) are applicable to manufacturers, importers, and processors of these substances.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    13. Add § 721.11159 to subpart E to read as follows:
    § 721.11159 Aromatic isocyanate, polymer with alkyloxirane polymer with oxirane ether with alkyldiol (2:l) and alkyloxirane polymer with oxirane ether with alkyltriol (3:l) (generic).

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance generically identified as aromatic isocyanate, polymer with alkyloxirane polymer with oxirane ether with alkyldiol (2:l) and alkyloxirane polymer with oxirane ether with alkyltriol (3:l) (P-17-24) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section. The requirements of this section do not apply to quantities of the substance after they have been reacted (cured).

    (2) The significant new uses are:

    (i) Protection in the workplace. Requirements as specified in § 721.63(a)(1), (a)(2)(i), (iv), (a)(3), (a)(6)(v), (vi), (particulate), (when determining which persons are reasonable likely to be exposed as required for § 721.63(a)(1), engineering control measures (e.g., enclosure or confinement of the operation, general and local ventilation) or administrative control measures (e.g., workplace policies and procedures) shall be considered and implemented to prevent exposures, where feasible), (b)(concentration set at 0.1%), and (c).

    (ii) Hazard communication. Requirements as specified in § 721.72(a) through (e)(concentration set at 0.1%), (f), (g)(1)(i), (ii), (asthma), (g)(2)(i), (ii), (iii), (v), and (g)(5). Alternative hazard and warning statements that meet the criteria of the Globally Harmonized System and OSHA Hazard Communication Standard may be used.

    (iii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80(o). It is a significant new use to manufacture, process, or use the substance in any manner that results in generation of a vapor, mist or aerosol.

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (i) are applicable to manufacturers, importers, and processors of this substance.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    14. Add § 721.11160 to subpart E to read as follows:
    § 721.11160 Aromatic isocyanate polymer with alkyloxirane, alkyloxirane polymer with oxirane ether with alkanetriol and oxirane (generic).

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance generically identified as aromatic isocyanate polymer with alkyloxirane, alkyloxirane polymer with oxirane ether with alkanetriol and oxirane (P-17-25) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section.

    (2) The significant new uses are:

    (i) Protection in the workplace. Requirements as specified in § 721.63(a)(1), (a)(2)(i), (iv), (a)(3), (a)(6)(v), (vi), (particulate), (when determining which persons are reasonable likely to be exposed as required for § 721.63(a)(1), engineering control measures (e.g., enclosure or confinement of the operation, general and local ventilation) or administrative control measures (e.g., workplace policies and procedures) shall be considered and implemented to prevent exposures, where feasible), (b)(concentration set at 0.1%), and (c).

    (ii) Hazard communication. Requirements as specified in § 721.72(a) through (e)(concentration set at 0.1%), (f), (g)(1)(i), (ii), (asthma), (g)(2)(i), (ii), (iii), (v), and (g)(5). Alternative hazard and warning statements that meet the criteria of the Globally Harmonized System and OSHA Hazard Communication Standard may be used.

    (iii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80(o). It is a significant new use to manufacture, process, or use the substance in any manner that results in generation of a vapor, mist or aerosol.

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (i) are applicable to manufacturers, importers, and processors of this substance.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    15. Add § 721.11161 to subpart E to read as follows:
    § 721.11161 Oils, Hedychium Flavescens.

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance identified as oils, hedychium flavescens, (PMN P-17-148, CAS No 1902936-65-5) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section.

    (2) The significant new uses are:

    (i) Protection in the workplace. Requirements as specified in § 721.63(a)(1), (a)(2)(i), (iii), (iv), (a)(3), (a)(4), (when determining which persons are reasonably likely to be exposed as required for § 721.63(a)(1) and (4), engineering control measures (e.g., enclosure or confinement of the operation, general and local ventilation) or administrative control measures (e.g., workplace policies and procedures) shall be considered and implemented to prevent exposure, where feasible), (a)(5)(respirators must provide a National Institute for Occupational Safety and Health (NIOSH) assigned protection factor of at least 50), (a)(6)(v), (vi), (b)(concentration set at 1%), and (c).

    (ii) Hazard communication. Requirements as specified in § 721.72(a) through (d), (f), (g)(1)(iv), (vi), (vii), (ix), (respiratory sensitization), (g)(2)(i), (ii), (iii), (iv), (v), and (g)(5). Alternative hazard and warning statements that meet the criteria of the Globally Harmonized System and OSHA Hazard Communication Standard may be used.

    (iii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80(f), (k)(odoriferous component of fragrance compounds) and (s)(70 kilograms). It is a significant new use to manufacture, process, or use the substance in any manner that generates a mist or aerosol.

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (i) are applicable to manufacturers and processors of this substance.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    16. Add § 721.11162 to subpart E to read as follows:
    § 721.11162 Alkyltriethosysilylpolysiloxane (generic).

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance generically identified as alkyltriethosysilylpolysiloxane (P-17-174) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section. The requirements of this section do not apply to quantities of the substance after they have been reacted (cured).

    (2) The significant new uses are:

    (i) Protection in the workplace. Requirements as specified in § 721.63(a)(1), (a)(2)(i), (a)(3), (when determining which persons are reasonable likely to be exposed as required for § 721.63 (a)(1), engineering control measures (e.g., enclosure or confinement of the operation, general and local ventilation) or administrative control measures (e.g., workplace policies and procedures) shall be considered and implemented to prevent exposures, where feasible), and (c).

    (ii) Hazard communication. Requirements as specified in § 721.72(a) through (e)(concentration set at 1.0%), (f), (g)(1)(i), (ix), (neurotoxicity), (g)(2)(i), (v), and (g)(5). Alternative hazard and warning statements that meet the criteria of the Globally Harmonized System and OSHA Hazard Communication Standard may be used.

    (iii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80(f) and (q). It is a significant new use to manufacture or use the substance in any manner that results in generation of a vapor, mist or aerosol.

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (i) are applicable to manufacturers, importers, and processors of this substance.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    (3) Determining whether a specific use is subject to this section. The provisions of § 721.1725(b)(1) apply to paragraph (a)(2)(iii) of this section.

    17. Add § 721.11163 to subpart E to read as follows:
    § 721.11163 1,3-Bis(substitutedbenzoyl)benzene.

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance generically identified as 1,3-bis(substitutedbenzoyl)benzene (P-17-200) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section. The requirements of this section do not apply to quantities of the PMN substance after they have been completely reacted (cured) or incorporated into a polymer matrix.

    (2) The significant new uses are:

    (i) Protection in the workplace. Requirements as specified in § 721.63(a)(1), (a)(2)(i), (iii), (iv), (a)(3), (a)(4), (a)(5)(respirators must provide a National Safety Institute for Occupational Safety and Health assigned protection factor of at least 50), (when determining which persons are reasonable likely to be exposed as required for § 721.63(a)(1) and (4), engineering control measures (e.g., enclosure or confinement of the operation, general and local ventilation) or administrative control measures (e.g., workplace policies and procedures) shall be considered and implemented to prevent exposures, where feasible), (b)(concentration set at 1.0%), and (c).

    (ii) Hazard communication. Requirements as specified in § 721.72(a) through (e)(concentration set at 1.0%), (f), (g)(1)(i), (iii), (iv), (vi), (ix), (sensitization), (irritation to the eyes, lungs, and mucous membranes), (g)(2)(i), (ii), (iii), (iv), (v), (g)(3)(i), (ii), (g)(4)(i), (water release restriction apply), and (g)(5). Alternative hazard and warning statements that meet the criteria of the Globally Harmonized System and OSHA Hazard Communication Standard may be used.

    (iii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80(f), (g), (w)(3), and (w)(4). It is a significant new use to manufacture, process, or use of the PMN substance with greater than 0.1% of the particle size distribution less than 10 microns.

    (iv) Disposal requirements. Requirements as specified in § 721.85(a)(1), (b)(1), and (c)(1).

    (v) Release to water. Requirements as specified in § 721.90(a)(2)(iv), (b)(2)(iv), and (c)(2)(iv). The concentration in released wastewater must be less than 0.03 ppm.

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (k) are applicable to manufacturers, importers, and processors of this substance.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    18. Add § 721.11164 to subpart E to read as follows:
    § 721.11164 1,4-Bis(substitutedbenzoyl)benzene (generic).

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance identified as 1,4-bis(substitutedbenzoyl)benzene (P-17-204) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section. The requirements of this section do not apply to quantities of the PMN substance after they have been completely reacted (cured) or incorporated into a polymer matrix.

    (2) The significant new uses are:

    (i) Protection in the workplace. Requirements as specified in § 721.63(a)(1), (a)(2)(i), (iii), (iv), (a)(3), (a)(4), (a)(5)(respirators must provide a National Safety Institute for Occupational Safety and Health assigned protection factor of at least 50), (when determining which persons are reasonable likely to be exposed as required for § 721.63(a)(1), engineering control measures (e.g., enclosure or confinement of the operation, general and local ventilation) or administrative control measures (e.g., workplace policies and procedures) shall be considered and implemented to prevent exposures, where feasible), (b)(concentration set at 1.0%), and (c).

    (ii) Hazard communication. Requirements as specified in § 721.72(a) through (e)(concentration set at 1.0%), (f), (g)(1)(i), (iii), (iv), (vi), (ix), (sensitization), (irritation to the eyes, lungs, and mucous membranes), (g)(2)(i), (ii), (iii), (iv), (v), (g)(3)(i), (ii), (g)(4)(i), (water release restriction apply), and (g)(5). Alternative hazard and warning statements that meet the criteria of the Globally Harmonized System and OSHA Hazard Communication Standard may be used.

    (iii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80(f), (g), (w)(3) and (4). It is a significant new use to manufacture, process, or use of the PMN substance with greater than 0.1% of the particle size distribution less than 10 microns.

    (iv) Disposal requirements. Requirements as specified in § 721.85(a)(1), (b)(1), and (c)(1).

    (v) Release to water. Requirements as specified in § 721.90(a)(2)(iv), (b)(2)(iv), and (c)(2)(iv). The concentration in released wastewater must be less than 0.03 ppm.

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (k) are applicable to manufacturers, importers, and processors of this substance.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    19. Add § 721.11165 to subpart E to read as follows:
    § 721.11165 bis(fluorobenzoyl)benzene (generic).

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance generically identified as bis(fluorobenzoyl)benzene (P-17-205) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section. The requirements of this section do not apply to quantities of the PMN substance after they have been completely reacted (cured) or incorporated into a polymer matrix.

    (2) The significant new uses are:

    (i) Protection in the workplace. Requirements as specified in § 721.63(a)(1), (a)(2)(iii), (a)(3), (when determining which persons are reasonably likely to be exposed as required for § 721.63(a)(1), engineering control measures (e.g., enclosure or confinement of the operation, general and local ventilation shall be considered and implemented to prevent exposure, where feasible), (b)(concentration set at 1.0%), and (c).

    (ii) Hazard communication. Requirements as specified in § 721.72(a) through (e)(concentration set at 1%), (f), (g)(1)(iv), (vii), (eye irritation), (g)(2)(i), (ii), (iii), (g)(3)(i), (ii), (g)(4)(i), (water release restriction apply), and (g)(5). Alternative hazard and warning statements that meet the criteria of the Globally Harmonized System and OSHA Hazard Communication Standard may be used.

    (iii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80(f), (g), (w)(3), and (w)(4). It is a significant new use to manufacture, process, or use of the PMN substance with greater than 0.1% of the particle size distribution less than 10 microns.

    (iv) Disposal. Requirements as specified in § 721.85(a)(1), (b)(1), and (c)(1).

    (v) Release to water. Requirements as specified in § 721.90(a)(2)(iv), (b)(2)(iv), and (c)(2)(iv). The concentration in released wastewater must be less than 0.03 ppm.

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Record keeping requirements as specified in § 721.125(a) through (k) are applicable to manufacturers and processors of this substance.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    20. Add § 721.11166 to subpart E to read as follows:
    § 721.11166 1-H-Benz[DE] isoquinoline-1,3 (2H)-dione-2-(-alkyl-)-(-alkyl-amino-) (generic).

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance generically identified as 1-H-Benz[DE] isoquinoline-1,3 (2H)-dione-2-(-alkyl-)-(-alkyl-amino-) (P-17-251) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section.

    (2) The significant new uses are:

    (i) Protection in the workplace. Requirements as specified in § 721.63(a)(1), (a)(2)(i), (iii), (iv), (a)(3), (when determining which persons are reasonably likely to be exposed as required as § 721.63(a)(1) engineering control measures (e.g., enclosure or confinement of the operation, general and local ventilation shall be considered and implemented to prevent exposure, where feasible), (a)(6)(v), (vi), (particulate), and (c).

    (ii) Hazard communication. Requirements as specified in § 721.72(a) through (d), (f), (g)(1)(acute toxicity, mutagenicity, eye irritation), (g)(2)(i), (ii), (v), and (g)(5). Alternative hazard and warning statements that meet the criteria of the Globally Harmonized System and OSHA Hazard Communication Standard may be used.

    (iii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80(f). It is a significant new use to import, process, or use the PMN substance at a concentration greater than 0.4%.

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (i) are applicable to manufacturers and processors of this substance.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    21. Add § 721.11167 to subpart E to read as follows:
    § 721.11167 Siloxanes and Silicones, di-Me, hydrogen-terminated, reaction products with acrylic acid and 2-ethyl-2-[(2-propen-1-yloxyl)methyl]-1,3-propanediol, polymers with chlorotrimethylsilane-iso-Pr alc.-sodium reaction products.

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance identified as siloxanes and silicones, di-Me, hydrogen-terminated, reaction products with acrylic acid and 2-ethyl-2-[(2-propen-1-yloxyl)methyl]-1,3-propanediol, polymers with chlorotrimethylsilane-iso-Pr alc.-sodium reaction products (P-17-296, CAS No. 2014386-23-1) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section. The requirements of this section do not apply to quantities of the PMN substance after they have been completely reacted (cured).

    (2) The significant new uses are:

    (i) Protection in the workplace. Requirements as specified in § 721.63(a)(1), (a)(2)(i), (ii), (iii), (a)(3), (a)(4), (a)(5), (respirators must provide a National Institute for Occupational Safety and Health assigned protection factor of at least 1,000 and are required for any process generating a spray, mist, or aerosol), (when determining which persons are reasonable likely to be exposed as required for § 721.63(a)(1), engineering control measures (e.g., enclosure or confinement of the operation, general and local ventilation) or administrative control measures (e.g., workplace policies and procedures) shall be considered and implemented to prevent exposures, where feasible), (a)(6)(v), (vi), (particulate), (b)(concentration set at 1%), and (c).

    (ii) Hazard communication. Requirements as specified in § 721.72(a) through (e)(concentration set at 1%), (f), (g)(1)(i), (sensitization) (iv), (vii), (ix), (g)(2)(i), (ii), (iii), (iv), (v), and (g)(5). Alternative hazard and warning statements that meet the criteria of the Globally Harmonized System and OSHA Hazard Communication Standard may be used.

    (iii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80(f).

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (i) are applicable to manufacturers, importers, and processors of this substance.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    22. Add § 721.11168 to subpart E to read as follows:
    § 721.11168 2-Pentanone, 2,2′,2″-[O,O′,O″-(ethenylsilylidyne)trioxime].

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance 2-pentanone, 2,2′,2″-[O,O′,O″-(ethenylsilylidyne)trioxime] (PMN P-17-308, CAS No. 58190-62-8) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section. The requirements of this section do not apply to quantities of the substance after they have been completely reacted (cured).

    (2) The significant new uses are:

    (i) Protection in the workplace. Requirements as specified in § 721.63(a)(1), (a)(2)(i), (a)(3), (when determining which persons are reasonably likely to be exposed as required for § 721.63(a)(1), engineering control measures (e.g., enclosure or confinement of the operation, general and local ventilation) or administrative control measures (e.g., workplace policies and procedures) shall be considered and implemented to prevent exposure, where feasible), (b)(concentration set at 1.0%), and (c).

    (ii) Hazard communication. Requirements as specified in § 721.72(a) through (e)(concentration set at 1.0%), (f), (g)(1)(i), (iii), (iv), (vi), (vii), (viii), (ix), (g)(2)(i), (iii), (v), and (g)(5). Alternative hazard and warning statements that meet the criteria of the Globally Harmonized System, and OSHA Hazard Communication Standard may be used.

    (iii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80(f) and (q). It is a significant new use to process or use the substance involving a method that generates a vapor, mist, or aerosol.

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping as specified in § 721.125(a) through (i) are applicable to manufacturers and processors of this substance.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    (3) Determining whether a specific use is subject to this section. The provisions of § 721.1725(b)(1) apply to paragraph (a)(2)(iii) of this section.

    23. Add § 721.11169 to subpart E to read as follows:
    § 721.11169 2-Pentanone, 2,2′,2″- [O,O′,O″-(methylsilylidyne)trioxime].

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance 2-pentanone, 2,2′,2″- [O,O′,O″-(methylsilylidyne)trioxime] (PMN P-17-309, CAS No. 37859-55-5) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section. The requirements of this section do not apply to quantities of the substance after they have been completely reacted (cured).

    (2) The significant new uses are:

    (i) Protection in the workplace. Requirements as specified in § 721.63(a)(1), (a)(2)(i), (a)(3), (when determining which persons are reasonably likely to be exposed as required for § 721.63(a)(1), engineering control measures (e.g., enclosure or confinement of the operation, general and local ventilation) or administrative control measures (e.g., workplace policies and procedures) shall be considered and implemented to prevent exposure, where feasible), (b)(concentration set at 1%), and (c).

    (ii) Hazard communication. Requirements as specified in § 721.72(a) through (e)(concentration set at 1%), (f), (g)(1)(i), (iii), (iv), (vi), (vii), (viii), (ix), (g)(2)(i), (iii), (v), and (g)(5). Alternative hazard and warning statements that meet the criteria of the Globally Harmonized System, and OSHA Hazard Communication Standard may be used.

    (iii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80(f) and (q). It is a significant new use to process or use the substance involving a method that generates a vapor, mist, or aerosol.

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping as specified in § 721.125(a) through (i) are applicable to manufacturers and processors of this substance.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    (3) Determining whether a specific use is subject to this section. The provisions of § 721.1725(b)(1) apply to paragraph (a)(2)(iii) of this section.

    24. Add § 721.11170 to subpart E to read as follows:
    § 721.11170 Naphthalene trisulfonic acid sodium salt (generic).

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance identified generically as naphthalene trisulfonic acid sodium salt (P-17-321) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section.

    (2) The significant new uses are:

    (i) Protection in the workplace. Requirements as specified in § 721.63(a)(1), (a)(2)(i), (iv), (a)(3), (a)(4), (a)(5)(respirators must provide a National Institute for Occupational Safety and Health assigned protection factor of at least 50), (when determining which persons are reasonable likely to be exposed as required for § 721.63(a)(1), engineering control measures (e.g., enclosure or confinement of the operation, general and local ventilation) or administrative control measures (e.g., workplace policies and procedures) shall be considered and implemented to prevent exposures, where feasible), (b)(concentration set at 1.0%), and (c).

    (ii) Hazard communication. Requirements as specified in § 721.72(a) through (e)(concentration set at 1.0%), (f), (g)(1)(i), (ii), (iv), (ix), (g)(2)(i), (ii), (iii), (iv), (v), and (g)(5). Alternative hazard and warning statements that meet the criteria of the Globally Harmonized System and OSHA Hazard Communication Standard may be used.

    (iii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80(q) and (t). It is a significant new use to manufacture, process, or use the substance in any manner that generates a vapor, mist, or aerosol.

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (i) are applicable to manufacturers, importers, and processors of this substance.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    (3) Determining whether a specific use is subject to this section. The provisions of § 721.1725(b)(1) apply to paragraph (a)(2)(iii) of this section.

    25. Add § 721.11171 to subpart E to read as follows:
    § 721.11171 Polymer of aliphatic dicarboxylic acid and dicyclo alkane amine (generic).

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance identified generically as polymer of aliphatic dicarboxylic acid and dicyclo alkane amine (P-17-327) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section. The requirements of this section do not apply to quantities of the substance after they have been reacted (cured).

    (2) The significant new uses are:

    (i) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80. It is a significant new use to manufacture (includes import) the substance to have an average molecular weight of greater than 10,000 Daltons.

    (ii) [Reserved]

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (c) and (i) are applicable to manufacturers, importers, and processors of this substance.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    26. Add § 721.11172 to subpart E to read as follows:
    § 721.11172 Hexanedioic acid, polymer with trifunctional polyol, 1,1′-methylenebis [isocyanatobenzene], and 2,2′-oxybis [ethanol] (generic).

    (a) Chemical substance and significant new uses subject to reporting. (1) The chemical substance identified generically as hexanedioic acid, polymer with trifunctional polyol, 1,1′-methylenebis [isocyanatobenzene], and 2,2′-oxybis [ethanol] (P-17-330) is subject to reporting under this section for the significant new uses described in paragraph (a)(2) of this section. The requirements of this section do not apply to quantities of the substance after they have been reacted (cured).

    (2) The significant new uses are:

    (i) Protection in the workplace. Requirements as specified in § 721.63(a)(1), (a)(2)(i), (ii), (iii), (iv), (a)(3), (when determining which persons are reasonable likely to be exposed as required for § 721.63(a)(1), engineering control measures (e.g., enclosure or confinement of the operation, general and local ventilation) or administrative control measures (e.g., workplace policies and procedures) shall be considered and implemented to prevent exposures, where feasible), and (c).

    (ii) Hazard communication. Requirements as specified in § 721.72(a) through (d), (f), (g)(1)(i), (eye and respiratory irritation), (g)(2)(i), (ii), (iii), (v), and (g)(5). Alternative hazard and warning statements that meet the criteria of the Globally Harmonized System and OSHA Hazard Communication Standard may be used.

    (iii) Industrial, commercial, and consumer activities. Requirements as specified in § 721.80. It is a significant new use to manufacture, process, or use the substance for consumer use or for commercial uses that could introduce the substance into a consumer setting. It is a significant new use to manufacture, process, or use the substance in any manner that generates a dust, mist, or aerosol.

    (b) Specific requirements. The provisions of subpart A of this part apply to this section except as modified by this paragraph (b).

    (1) Recordkeeping. Recordkeeping requirements as specified in § 721.125(a) through (i) are applicable to manufacturers, importers, and processors of this substance.

    (2) Limitations or revocation of certain notification requirements. The provisions of § 721.185 apply to this section.

    [FR Doc. 2018-21194 Filed 10-2-18; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R07-OAR-2017-0512; FRL-9984-66—Region 7] Approval of Kansas Air Quality State Implementation Plans; Construction Permits and Approvals Program AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Final rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is taking final action to approve revisions to the Kansas State Implementation Plan (SIP) and the Clean Air Act (CAA) 112(l) program. Specifically, these revisions implement the revised National Ambient Air Quality Standards (NAAQS) for fine particulate matter; clarify and refine applicable criteria for sources subject to the Kansas minor New Source Review permitting program; update the construction permitting program fee structure and schedule; and make minor revisions and corrections. Approval of these revisions ensures consistency between the State and federally-approved rules and ensures Federal enforceability of the State's rules.

    DATES:

    This final rule is effective on November 2, 2018.

    ADDRESSES:

    The EPA has established a docket for this action under Docket ID No. EPA-R07-OAR-2017-0512. All documents in the docket are listed on the https://www.regulations.gov website. Although listed in the index, some information is not publicly available, i.e., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the internet and will be publicly available only in hard copy form. Publicly available docket materials are available through https://www.regulations.gov or please contact the person identified in the FOR FURTHER INFORMATION CONTACT section for additional information.

    FOR FURTHER INFORMATION CONTACT:

    Deborah Bredehoft, Environmental Protection Agency, Air Planning and Development Branch, 11201 Renner Boulevard, Lenexa, Kansas 66219 at (913) 551-7164, or by email at [email protected]

    SUPPLEMENTARY INFORMATION:

    Throughout this document “we,” “us,” and “our” refer to EPA. This section provides additional information by addressing the following:

    I. Background II. What is being addressed in this document? III. What Part 52 revision is EPA approving? IV. What 112(l) revision is EPA approving? V. Have the requirements for approval of a SIP revision been met? VI. EPA's Response to Comments VII. What action is EPA taking? VIII. Incorporation by Reference IX. Statutory and Executive Order Reviews I. Background

    EPA received Kansas's SIP submission on December 5, 2016. On September 21, 2017, EPA proposed in the Federal Register approval of the SIP submission. See 82 FR 44131. In conjunction with the September 21, 2017 notice of proposed rulemaking (NPR), EPA issued a direct final rule (DFR) approving the same SIP submission. See 82 FR 44103. However, in the DFR, EPA stated that if EPA received adverse comments by October 23, 2017, the action would be withdrawn and not take effect. EPA received adverse comments prior to the close of the comment period, and therefore, EPA withdrew in the Federal Register, the DFR on November 17, 2017. See 82 FR 54300.

    This final rule action will include the updated docket, address comments received, and finalize the approval of Kansas's SIP submission.

    II. What is being addressed in this document?

    EPA is taking final action to approve revisions to the Kansas SIP and CAA 112(l) program submitted by the State of Kansas on December 5, 2016. The SIP submission requests revisions to Kansas Administrative Regulation (K.A.R.) 28-19-300 that include: implementation of the New Source Review permitting component of section 110(a)(2)(C) for the 1997 and 2006 PM2.5 NAAQS, pursuant to EPA's NSR PM2.5 Implementation Rule (2008 NSR Rule) (73 FR 28321, May 16, 2008); and clarification of and refining applicability criteria for sources subject to the minor New Source Review permitting program. Specific revisions include: (1) Eliminating the requirements for all Title IV Acid Rain sources to obtain construction permits that would not have otherwise been required; (2) clarifying the construction review requirements for sources emitting hazardous air pollutants, or sources subject to standards promulgated by the EPA; (3) eliminating the requirement for sources to obtain an approval solely due to being subject to standards promulgated by the EPA without regard to emissions for insignificant activities; and making minor revisions and corrections. The SIP submission also includes the following revisions to K.A.R. 28-19-304: (1) Updating the construction permitting program fee structure from an estimated capital cost mechanism to one based on complexity of source and permit type and (2) updating the fee schedule to bring in sufficient revenue to adequately administer the Kansas Air Quality Act.

    III. What Part 52 revision is EPA approving?

    EPA is approving requested revisions to the Kansas SIP relating to the following:

    • Construction Permits and Approvals. Kansas Administrative Regulations 28-19-300. Applicability; and

    • Construction Permits and Approvals. Kansas Administrative Regulations 28-19-304. Fees.

    EPA has conducted analysis on the State's revisions and has found that the revisions ensure consistency between the State and federally-approved rules and ensures Federal enforceability of the State's rules. Additional information on the EPA's analysis can be found in the Technical Support Document (TSD) included in this docket.

    IV. What 112(l) revision is EPA approving?

    EPA is also taking final action to approve a portion of K.A.R. 28-19-300 under the CAA 112(l) program pursuant to 40 CFR part 63, subpart E, as requested by the State of Kansas on April 19, 2017. The State of Kansas is requesting that the applicable portions of K.A.R. 28-19-300 pertaining to limiting the potential-to-emit of hazardous air pollutants (HAPs) be approved under CAA 112(l) and 40 CFR part 63, subpart E, in addition to being approved under the SIP.1 Specifically, K.A.R. 28-19-300(a)(2) and (3) as well as K.A.R. 28-19-300(b)(4) through (6) are also approved under CAA section 112(l) because they require permits or approvals for hazardous air pollutants that may limit the potential-to-emit of hazardous air pollutants by establishing permit conditions that are federally-enforceable.

    1 State Implementation Plan provisions approved under section 110 of the Clean Air Act are for criteria pollutants. Provisions related to hazardous air pollutants are approved under section 112 of the Clean Air Act.

    V. Have the requirements for approval of a SIP revision been met?

    The State submission has met the public notice requirements for SIP submissions in accordance with 40 CFR 51.102. The submission also satisfied the completeness criteria of 40 CFR part 51, appendix V. The State provided public notice of this SIP revision from August 11, 2016, to October 13, 2016, and received one comment letter. The SIP revision was not further revised by the State based on public comment prior to its submission to EPA. In addition, as explained above and in more detail in the technical support document which is part of this docket, the revision meets the substantive SIP requirements of the CAA, including section 110 and the implementing regulations.

    VI. EPA's Response to Comments

    The public comment period on EPA's proposed rule opened September 21, 2017, the date of its publication in the Federal Register, and closed on October 23, 2017. During this period, EPA received adverse comments, which are addressed below.

    Comment 1:

    The commenter stated that SIPs are required to have legally enforceable procedures to prevent the construction or modification of a source that would violate the control strategy or interfere with attainment or maintenance of the NAAQS. 40 CFR 51.160(a). The commenter is specifically concerned about the EPA approval of a new emissions threshold, in K.A.R. 28-19-300(a)(1)(G), of 10 tons per year of directly emitted PM2.5 without additional analysis by the State on whether the emissions threshold would allow sources to construct or modify, resulting in interference with attainment or maintenance of the NAAQS or a violation of the control strategy, as required by 40 CFR 51.160(a) and (b). Further, the commenter is concerned regarding applicability of the minor NSR rules for modifications of existing sources based on increases in potential to emit (PTE). The commenter is concerned that the actual emissions increase of PM2.5 could be much greater than 10 tons per year and would not trigger minor NSR permitting requirements. According to the commenter, the revisions will essentially exempt minor modifications from permitting requirements at existing major sources, and only major modifications under the Prevention of Significant Deterioration (PSD) or nonattainment NSR programs will obtain review for impacts on the NAAQS.

    The commenter asserts that States are required to have NSR programs that include, but are not limited to, major NSR and PSD programs pursuant to section 110(a)(2)(C) of the CAA. The commenter is concerned that Kansas' 10 ton per year PM2.5 applicability emissions threshold could allow for increased deterioration in air quality over PSD baseline concentrations. Thus, the commenter believes that the EPA cannot approve such a SIP revision without a demonstration that the SIP revision will not cause or contribute to a violation of the applicable PSD increment pursuant to section 110(l) of the CAA and 40 CFR 51.166(a)(2).

    For these reasons, the commenter believes that the EPA must disapprove the 10 ton per year PM2.5 applicability emission thresholds for Kansas's minor NSR permitting program.

    Response 1:

    In this SIP revision, Kansas is modifying its regulations to implement the fine particulate matter standard by clarifying and refining the applicability criteria for sources subject to the Kansas minor New Source Review permitting program. Kansas's addition of the 10 ton per year threshold for directly emitted PM2.5 in the minor source New Source Review program requires a facility to obtain a construction permit for directly emitted PM2.5 is consistent with the previously approved approach of using a potential-to-emit (or the increase in the potential-to-emit) basis EPA considers a 10 ton per year threshold for direct PM2.5 to be reasonable because the State is consistent with the significant emission rates 2 included in EPA's PSD preconstruction permitting program.3

    2See 73 FR 28332.

    3 40 CFR 52.21(b)(23)(i).

    Prior to this action, Kansas used the threshold value of 25 tons per year or PM10 threshold value of 15 tons per year (K.A.R. 28-19-300(1)(A)) to evaluate direct PM2.5. With this rulemaking, Kansas has created a separate threshold for directly emitted PM2.5 of 10 tons per year.

    Although Kansas's minor New Source Review permitting program did not previously include a direct PM2.5 threshold value, Kansas does have overarching infrastructure to implement PM2.5 throughout the State. Such infrastructure, as previously stated, includes a SIP approved major source New Source Review program and a monitoring network consistent with EPA's monitoring regulations. In fact, based on a review of certified design values from the 2005-2007 to 2014-2016 timeframes, Kansas has been continuously monitoring attainment for both the annual and 24-hour PM2.5 NAAQS EPA believes that the addition of the direct PM2.5 threshold in the Kansas Minor New Source Review permitting program strengthens Kansas's air quality regulations.

    The commenter also stated that the EPA must disapprove such a high minor NSR PM2.5 applicability emission threshold as the program could interfere with attainment and maintenance of the NAAQS. As stated above, prior to this action, Kansas did not have a specific minor source threshold for directly emitted PM2.5. Therefore, the PM2.5 threshold value would have been the same as the PM threshold value of 25 tons per year (K.A.R. 28-19-300-(1)(A)). As discussed above, even at this higher threshold value, the PM2.5 NAAQS was protected.

    Furthermore, in the EPA's previously referenced Technical Support Document 4 for the 2012 PM2.5 infrastructure SIP, the EPA stated that “[w]ith respect to smaller sources that meet the criteria listed in KAR 28-19-300(b) “Construction Permits and Approvals,” Kansas has a SIP-approved permitting program.” It further states that in the Technical Support Document, “[i]f the [Air Permitting Section] staff determines that air contaminant emissions from a source will interfere with attainment or maintenance of the NAAQS, it cannot issue an approval to construct or modify that source (KAR 28-19-301(d) “Construction Permits and Approvals; Application and Issuance”). This authority is granted by [Kansas Statutes Annotated] 65-3008.” EPA later stated its belief “that the Kansas SIP meets the requirements of section 110(a)(2)(C) for the 2012 annual PM2.5 NAAQS.”

    4 Pages 5 and 6 of the Technical Support Document found in docket number: EPA-R07-OAR-2016-0313-0004.

    Based upon all the above factors, the EPA believes that this action does not relax the SIP and that the air quality will be maintained with the addition of the PM2.5 threshold value requiring facilities to obtain a construction permit.

    Comment 2:

    The commenter stated that by removing the term “affected source” from K.A.R. 28-19-300(a)(2) of the currently-approved Kansas SIP, the EPA is significantly relaxing the Kansas minor New Source Review permitting rules. “Affected source” is defined in K.A.R. 28-19-200 of the EPA-approved SIP as “a stationary source that includes one or more affected units subject to emission reduction requirements or limitations under title IV of the Federal clean air act, 42 U.S.C. 7401 et seq., `acid deposition control.' ” The commenter is concerned that the revised permitting rules for modifications of construction permits will increase the potential-to-emit of an electrical generating unit (EGU) to the level of a PSD major modification significance level or greater, when historically, the permitting rules required permits for modifications at any EGU.

    The commenter stated that all modifications at most EGUs were subject to Kansas' minor NSR permitting program pursuant to K.A.R. 28-19-300(a)(2) of the currently-approved Kansas SIP, irrespective of the tons per year emission thresholds defining minor NSR applicability in K.A.R. 28-19-300(a)(1).

    The commenter was concerned that modifications at existing EGUs will go entirely unreviewed unless such modifications are a major modification under PSD or nonattainment NSR permitting. The commenter further stated that the Kansas Department of Health and Environment (KDHE) has not submitted any assessment of impacts on the NAAQS or on other requirements of the CAA to support approval of such a significant SIP relaxation, pursuant to section 110(l) of the CAA and thus, EPA must disapprove the revisions to K.A.R. 28-19-300 that remove the provision in K.A.R. 28-19-300(a)(2).

    Response 2:

    Kansas has a long-standing interpretation that was articulated in a 2015 technical guidance document.5 The guidance states “[K.A.R. 28-19-300] was originally written in 1993. The purpose of this guidance document is to ensure that the rule is consistently applied in accordance with the original intent of the regulation.” The document further states KDHE's interpretation that “K.A.R. 28-19-300(a)(2) does not require a permit for a modification to an Acid Rain Source solely due to the unit already being an Acid Rain Source, although requirements for construction permits or approvals can be triggered by emission increases above permit or approval thresholds, requirements of K.A.R. 28-19-350, or other permit or approval triggers.” Thus, KDHE has interpreted K.A.R. 28-19-300(a)(2) to only apply to constructions or modifications that result in emission increases. KDHE did not intend to require Title IV acid rain sources to obtain construction permits for any modification, including modifications that result in emission decreases. Therefore, this SIP revision is an administrative change to align the Federally-approved SIP with Kansas's current practices. Additionally, the CAA does not require construction permits for every modification at acid rain sources. Because Kansas's monitoring network is currently monitoring attainment for all NAAQS, the EPA does not believe this revision will cause air quality to degrade in Kansas.

    5 Kansas Technical Guidance Document—BOA 2015-01.

    Comment 3:

    The commenter stated that Kansas has changed the requirements for preconstruction approval to only apply to “construction,” “modification,” or “reconstruction” of such sources subject to New Source Performance Standards (NSPS), National Emission Standards for Hazardous Air Pollutants (NESHAPs), or Maximum Achievable Control Technology (MACT) as those terms are defined in 40 CFR parts 60, 61, and 63, respectively. The commenter further focused on the terms “modification” and “modify” and expressed concern that this change in the definition of “modification” will significantly reduce the number of sources subject to Kansas preconstruction approval and significantly decreases the likelihood that Kansas will identify a modified source as potentially contributing to air pollution within the State and require a minor NSR permit pursuant to K.A.R. 28-19-300(b)(2) and 28-19-300(a)(5). Specifically, the commenter stated that the definition of “modification” under 40 CFR parts 60, 61, and 63 is much less inclusive than the definition of “modification” as that term is used in Kansas' minor NSR rules. Thus, the commenter asserts, with the proposed revisions to K.A.R. 28-19-300(b)(3), the large majority of modifications at existing sources subject to NSPS, NESHAPs, or MACT standards will no longer need to receive KDHE approval prior to construction, and the public will lose KDHE's preconstruction evaluation of whether a modified source should still be required to obtain a preconstruction permit pursuant to K.A.R. 28-19-300(b)(2) and 28-19-300(a)(5) despite being exempt under K.A.R. 28-19-300(a). The commenter believes that this reflects a significant relaxation in Kansas' minor NSR permitting rules. Therefore, the commenter believes that the EPA must disapprove the revisions to K.A.R. 28-19-300 that revises and relaxes K.A.R. 28-19-300(b)(3).

    Response 3:

    EPA disagrees with the commenter that Kansas definition of “modification” represents a relaxation in Kansas' permitting rules. The revision to the definition simply excludes modifications which do not increase emissions at or above the listed thresholds. Kansas had a 2015 technical guidance document 6 which states that Kansas's intent was to require a construction approval if the proposed project “includes construction or modification that will cause an increase in emissions in an amount equal to or in excess of any of these listed thresholds.” 7 Within Kansas's public hearing statement from October 13, 2016, it was stated that the proposed change is being done to “eliminate the requirement for sources to obtain an approval solely due to being subject to standards promulgated by the EPA without regard to emissions for insignificant activities.” Due to Kansas's long-standing interpretation, the EPA believes that this revision will not result in air quality degradation and thus will not result in a relaxation in how Kansas has applied the SIP rules. The EPA has concluded that this revision to Kansas SIP will not interfere with attainment of the NAAQS or with any other requirement of the Act.

    6 Kansas Technical Guidance Document—BOA 2015-01.

    7 Page 5 of Construction Permits and Approvals, K.A.R. 28-19-300, Technical Guidance Document—BOA 2015-01.

    Comment 4:

    The commenter is concerned that the revisions to K.A.R. 28-19-300(a)(2) and K.A.R. 28-19-300(b)(3) will relax the SIP. The commenter further expressed other concerns: (1) With respect to the minor NSR program, the applicability to the minor NSR permitting program in Kansas will be whittled down to just those new sources and modifications to existing sources that increase the PTE to emissions levels at or above the tons per year thresholds in K.A.R. 28-19-300(a)(1) which are the same as the PSD significance emission levels; 8 (2) several new and revised NAAQS have been promulgated since the EPA's initial 1995 9 approval of this section, and there has been no analysis as to whether the emission applicability thresholds in Kansas' minor NSR permitting program are adequate to ensure that no new or modified source will be constructed if it would interfere with attainment or maintenance of the NAAQS or violate the control strategy; (3) if EPA's determination that the tons per year emissions thresholds are “de minimis” under PSD permitting, it does not address EPA's obligation to ensure that Kansas' minor NSR program will not interfere with attainment or maintenance of the NAAQS. The commenter stated that the NSR program was intended to be a basic backstop on threats to attaining and maintaining the NAAQS and thus is an important component of the SIP and the EPA cannot approve exemptions from such a minor NSR program unless it is shown that the exemptions are truly de minimis to the purposes of that program; and (4) EPA has previously required minor NSR programs to use much smaller emission thresholds for applicability than the major modification significant impact levels. The commenter referenced a 2012 Montana Federal Register action10 regarding a “de minimis” increase to Montana's minor NSR program where EPA received and reviewed CAA section 110(l) and 193 demonstrations.

    8 40 CFR 52.21(b)(23)(i).

    9 50 FR 36361-36364 (July 17, 1995)

    10 77 FR 7531-7534.

    For these reasons, the commenter believes that the EPA cannot approve these Kansas minor NSR revisions without evaluating and demonstrating to the public that Kansas' minor NSR program, as revised, will still meet the mandates of section 110(a)(2)(C) and 40 CFR 51.160.

    Response 4:

    EPA does not believe the proposed changes constitute a relaxation to Kansas's SIP. As noted by the commenter, these thresholds, with the exception of PM2.5, were approved into the SIP in 1995. Even though Kansas did not provide any modeling to support this action, with the exception of the 2008 lead ambient air quality standard, Kansas is designated attainment or unclassifiable for all ambient air quality standards, including the 2012 PM2.5 standard. EPA views this action as the State's effort to ensure consistency between the State's regulations, which use the major NSR significance levels as minor NSR applicability thresholds, and the EPA's significance levels for specific pollutants, such as PM2.5.

    The proposed revisions are to Kansas's minor source NSR program and States are allowed discretion in how they develop their own minor source NSR program. With regard to the commenter's assertion that there was no analysis as to whether the emissions applicability thresholds in Kansas' minor NSR permitting program are adequate to ensure it will not interfere with attainment or maintenance of the NAAQS, the EPA reviews the State's minor NSR program routinely as part of the `infrastructure' SIPs. For instance, as recently as September 9, 2016,11 the EPA stated that “[i]f the [Air Permitting Section] staff determines that air contaminant emissions from a source will interfere with attainment or maintenance of the NAAQS, it cannot issue an approval to construct or modify that source.” EPA further stated that “EPA is proposing to approve Kansas' infrastructure SIP for the 2012 annual PM2.5 NAAQS with respect to the general requirements in section 110(a)(2)(C) to include the program in the SIP that regulates the modification and construction of any stationary source as necessary to assure that the NAAQS are achieved.” 12

    11 81 FR 62373.

    12 EPA-R07-OAR-2016-0313-0003.

    With respect to the commenter's assertion that the State's minor NSR program needs to comply with CAA 110(a)(2)(C) and 40 CFR 51.160 as a backstop, in the same September 9, 2016 TSD,13 the EPA has also determined that the State has in place the ability to regulate NSR to comply with CAA 110(a)(2)(C). See the Technical Support Document associated with that rulemaking and EPA's response to Comment 1.

    13 81 FR 62373.

    With regard to the commenter's reference to Montana's SIP revision, EPA approval of one de minimis exemption threshold level in Montana does not preclude the approval of a different threshold in another State. Each State's universe of minor NSR sources, topography, meteorology, and ambient air quality conditions are unique and influence the types of exemptions that would not interfere with the minor NSR program's ability to meet the applicable Federal requirements. See, e.g., June 29, 2018, 83 FR 30553 (Arkansas' SIP revision).

    In response to the comment that EPA cannot approve exemptions without proving the exemptions are “de minimis,” the minor NSR SIP rules do not preclude EPA from approving exemptions from a minor NSR program, provided that the proposed revisions to the Kansas minor NSR program are approvable and do not result in a violation of the control strategy or interfere with the attainment or maintenance of a national standard. The CAA at section 110(a)(2)(C) requires regulation of the modification or construction of any stationary source within the area as necessary (emphasis added) to assure that the standards are achieved. As such, the CAA at section 110(a)(2)(C) and the minor NSR SIP rules found at 40 CFR 51.160 through 51.165, as well as case law,14 allow exemptions from a minor NSR permitting program. In cases such as this, where the minor NSR SIP is being revised, the State must also demonstrate that the revisions meet the requirements of CAA section 110(l). Similar to the provisions of the Act and rules discussed above, section 110(l) requires that EPA cannot approve revisions to the Kansas minor NSR SIP unless EPA finds that the changes would not interfere with any applicable requirement concerning attainment and reasonable further progress, as well as any other applicable statutory requirement. The clear reading of the Act and the EPA rules are that EPA can approve exemptions to the Kansas minor NSR SIP program as long as it finds these exemptions will not interfere with attainment or maintenance of a NAAQS or other control strategy. See, e.g., June 29, 2018, 83 FR 30553 (approving Arkansas' SIP revision).

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

    For these reasons and those outlined in the EPA's responses to comments 2 and 3 above, the EPA is approving the SIP revisions.

    Comment 5:

    EPA failed to address the March 28, 2017 Executive Order on promoting energy independence and economic growth. This order requires EPA to assess whether this new regulation imposes burdens on the energy sector or economic growth in general. The commenter asserts that requiring construction permits for sources will cause an impact in the energy sector and impose economic burdens on regulated facilities.

    Response 5:

    Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve State actions, provided that they meet the criteria of the CAA. The EPA cannot consider disapproving a SIP submission or require any changes based on the March 28, 2017, executive order.

    VII. What action is EPA taking?

    EPA is taking final action to amend the Kansas SIP and CAA 112(l) program by approving the State's request to amend K.A.R. 28-19-300 Construction Permits and Approvals—Applicability and to amend the Kansas SIP by approving K.A.R. 28-19-304 Construction Permits and Approvals—Fees. Approval of these revisions will ensure consistency between State and federally approved rules. EPA has determined that these changes will not adversely impact air quality.

    VIII. Incorporation by Reference

    In this document, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with the requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of the Kansas Regulations described in the amendments to 40 CFR part 52 set forth below. EPA has made, and will continue to make, these materials generally available through www.regulations.gov and at the EPA Region 7 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

    Therefore, these materials have been approved by EPA for inclusion in the State implementation plan, have been incorporated by reference by EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of EPA's approval, and will be incorporated by reference in the next update to the SIP compilation.15

    15 62 FR 27968 (May 22, 1997).

    IX. Statutory and Executive Order Reviews

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

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

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

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

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

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

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

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

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

    • Is not subject to requirements of the National Technology Transfer and Advancement Act (NTTA) because this rulemaking does not involve technical standards; and

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

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

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

    Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by December 3, 2018. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

    List of Subjects in 40 CFR Part 52

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

    Dated: September 26, 2018. James B. Gulliford, Regional Administrator, Region 7.

    For the reasons stated in the preamble, EPA amends 40 CFR part 52 as set forth below:

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

    42 U.S.C. 7401 et seq.

    Subpart R Kansas 2. Amend § 52.870 by revising the table entries in paragraph (c) for “K.A.R. 28-19-300” and “K.A.R 28-19-304” to read as follows:
    § 52.870 Identification of plan.

    (c) * * *

    EPA-Approved Kansas Regulations Kansas citation Title State
  • effective
  • date
  • EPA approval
  • date
  • Explanation
    Kansas Department of Health and Environment Ambient Air Quality Standards and Air Pollution Control *         *         *         *         *         *         * Construction Permits and Approvals K.A.R. 28-19-300 Applicability 11/18/2016 11/3/2018, [Insert Federal Register citation] *         *         *         *         *         *         * K.A.R. 28-19-304 Fees 11/18/2016 11/3/2018, [Insert Federal Register citation] *         *         *         *         *         *         *
    [FR Doc. 2018-21434 Filed 10-2-18; 8:45 am] BILLING CODE 6560-50-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Parts 411, 413, and 424 [CMS-1696-CN] RIN 0938-AT24 Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities (SNF) Final Rule for FY 2019, SNF Value-Based Purchasing Program, and SNF Quality Reporting Program; Correction AGENCY:

    Centers for Medicare & Medicaid Services (CMS), HHS.

    ACTION:

    Final rule; correction.

    SUMMARY:

    This document corrects technical errors in the final rule that appeared in the August 8, 2018 Federal Register (83 FR 39162) entitled “Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities (SNF) Final Rule for FY 2019, SNF Value-Based Purchasing Program, and SNF Quality Reporting Program.”

    DATES:

    The corrections in this document are effective October 1, 2018.

    FOR FURTHER INFORMATION CONTACT:

    John Kane, (410) 786-0557.

    SUPPLEMENTARY INFORMATION:

    I. Background

    In FR Doc. 2018-16570 of August 8, 2018 (83 FR 39162 through 39290), there were a number of technical errors that are identified and corrected in Correction of Errors section (section IV. of this correction notice). The provisions in this correcting document are effective as if they had been included in the document that appeared in the August 8, 2018 Federal Register (83 FR 39162 through 39290) (hereinafter referred to as the FY 2019 SNF PPS final rule).

    Accordingly, the corrections in this document are effective October 1, 2018.

    II. Summary of Errors A. Summary of Errors in the Preamble

    On pages 39170 through 39172, 39222, 39285 and 39287, we made inadvertent technical errors. Specifically, in Tables 6 and 7 on pages 39170 through 39172 of the FY 2019 SNF PPS final rule, we made errors in copying values into the “total rate” column of the tables used in the final rule preamble, so the numbers in this column did not accurately reflect the total case-mix adjusted federal per diem rates. On page 39222, we made a typographical error in Table 27 in the MDS item number reference (column 2) associated with one of the conditions and extensive services used for NTA classification. Additionally, in Table 45 on page 39285 of the FY 2019 SNF PPS final rule, we misordered the ownership labels in the table as “Government, Profit, Non-Profit”, instead of “Profit, Non-Profit, Government.” Finally, on page 39287, we inadvertently typed “urban rural West South Central region,” when we intended to state “rural West South Central region.”

    The corrections to these errors are found in section IV. of this document.

    B. Summary of Errors in and Corrections to Tables Posted on the CMS Website

    We are correcting the wage indexes in Tables A and B setting forth the wage indexes for urban areas based on CBSA labor market areas (Table A) and the wage indexes for rural areas based on CBSA labor market areas (Table B), which are available exclusively on the CMS website at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html. As discussed in the FY 2019 SNF PPS final rule (83 FR 39172 through 39178), in developing the wage index to be applied to SNFs under the SNF PPS, we use the updated, pre-reclassified, pre-rural floor hospital inpatient PPS (IPPS) wage data, exclusive of the occupational mix adjustment. For FY 2019, the updated, unadjusted, pre-reclassified, pre-rural floor IPPS wage data used under the SNF PPS are for cost reporting periods beginning on or after October 1, 2014 and before October 1, 2015 (FY 2015 cost report data), as discussed in the final rule entitled, “Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year 2019 Rates; Quality Reporting Requirements for Specific Providers; Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs (Promoting Interoperability Programs) Requirements for Eligible Hospitals, Critical Access Hospitals, and Eligible Professionals; Medicare Cost Reporting Requirements; and Physician Certification and Recertification of Claims” (83 FR 41144, 41364) (hereinafter referred to as the FY 2019 IPPS final rule). In calculating the wage index under the FY 2019 IPPS final rule, we made inadvertent errors related to the calculation of the wage index. These errors are identified, discussed and corrected in the correction notice entitled, “Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year 2019 Rates; Quality Reporting Requirements for Specific Providers; Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs (Promoting Interoperability Programs) Requirements for Eligible Hospitals, Critical Access Hospitals, and Eligible Professionals; Medicare Cost Reporting Requirements; and Physician Certification and Recertification of Claims; Correction.” Among the errors discussed there, the two errors that affect the unadjusted, pre-reclassified, pre-rural floor IPPS wage data, and thereby affect the SNF PPS wage data were errors in the wage data collected from the Medicare cost reports of one hospital (CMS Certification Number (CCN) 100044—CBSA 38940 Port St. Lucie, Florida) and the mistaken inclusion of a Critical Access Hospital (CAH) in the wage data (CCN 060016—CBSA 06 Colorado). Finally, in constructing Table A, we made errors in copying values into the “wage index” column of the table posted to the CMS website.

    Given these errors, we are republishing the wage indexes in Tables A and B accordingly on the CMS website at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html.

    III. Waiver of Proposed Rulemaking and Delayed Effective Date

    Under 5 U.S.C. 553(b) of the Administrative Procedure Act (APA), the agency is required to publish a notice of the proposed rule in the Federal Register before the provisions of a rule take effect. Similarly, section 1871(b)(1) of the Act requires the Secretary to provide for notice of the proposed rule in the Federal Register and provide a period of not less than 60 days for public comment. In addition, section 553(d) of the APA, and section 1871(e)(1)(B)(i) of the Act mandate a 30-day delay in effective date after issuance or publication of a rule. Sections 553(b)(B) and 553(d)(3) of the APA provide for exceptions from the notice and comment and delay in effective date APA requirements; in cases in which these exceptions apply, sections 1871(b)(2)(C) and 1871(e)(1)(B)(ii) of the Act provide exceptions from the notice and 60-day comment period and delay in effective date requirements of the Act as well.

    Section 553(b)(B) of the APA and section 1871(b)(2)(C) of the Act authorize an agency to dispense with normal rulemaking requirements for good cause if the agency makes a finding that the notice and comment process are impracticable, unnecessary, or contrary to the public interest. In addition, both section 553(d)(3) of the APA and section 1871(e)(1)(B)(ii) of the Act allow the agency to avoid the 30-day delay in effective date where such delay is contrary to the public interest and an agency includes a statement of support.

    We believe that this correcting document does not constitute a rule that would be subject to the notice and comment or delayed effective date requirements. This document corrects technical errors in the FY 2019 SNF PPS final rule and in the tables referenced in the final rule, but does not make substantive changes to the policies or payment methodologies that were adopted in the final rule. As a result, this correction notice is intended to ensure that the information in the FY 2019 SNF PPS final rule accurately reflects the policies adopted in that final rule.

    In addition, even if this were a rule to which the notice and comment procedures and delayed effective date requirements applied, we find that there is good cause to waive such requirements. Undertaking further notice and comment procedures to incorporate the corrections in this document into the final rule or delaying the effective date would be contrary to the public interest because it is in the public's interest for providers to receive appropriate payments in as timely a manner as possible, and to ensure that the FY 2019 SNF PPS final rule and the tables referenced in the final rule accurately reflect our methodologies, payment rates, and policies. Furthermore, such procedures would be unnecessary, as we are not making substantive changes to our payment methodologies or policies, but rather, we are simply implementing correctly the methodologies and policies that we previously proposed, requested comment on, and subsequently finalized. This correcting document is intended solely to ensure that the FY 2019 SNF PPS final rule and the tables referenced in the final rule accurately reflect these methodologies and policies. Therefore, we believe we have good cause to waive the notice and comment and effective date requirements.

    IV. Correction of Errors

    In FR Doc. 2018-16570 of August 8, 2018 (83 FR 39162), make the following corrections:

    1. On pages 39170 through 39171, TABLE 6—RUG-IV Case-Mix Adjusted Federal Rates and Associated Indexes—Urban is corrected to read as follows:

    Table 6—RUG-IV Case-Mix Adjusted Federal Rates and Associated Indexes—Urban RUG-IV category Nursing index Therapy index Nursing
  • component
  • Therapy
  • component
  • Non-case mix therapy comp Non-case mix component Total rate
    RUX 2.67 1.87 $484.44 $255.57 $92.60 $832.61 RUL 2.57 1.87 466.30 255.57 92.60 814.47 RVX 2.61 1.28 473.56 174.94 92.60 741.10 RVL 2.19 1.28 397.35 174.94 92.60 664.89 RHX 2.55 0.85 462.67 116.17 92.60 671.44 RHL 2.15 0.85 390.10 116.17 92.60 598.87 RMX 2.47 0.55 448.16 75.17 92.60 615.93 RML 2.19 0.55 397.35 75.17 92.60 565.12 RLX 2.26 0.28 410.05 38.27 92.60 540.92 RUC 1.56 1.87 283.05 255.57 92.60 631.22 RUB 1.56 1.87 283.05 255.57 92.60 631.22 RUA 0.99 1.87 179.63 255.57 92.60 527.80 RVC 1.51 1.28 273.97 174.94 92.60 541.51 RVB 1.11 1.28 201.40 174.94 92.60 468.94 RVA 1.10 1.28 199.58 174.94 92.60 467.12 RHC 1.45 0.85 263.09 116.17 92.60 471.86 RHB 1.19 0.85 215.91 116.17 92.60 424.68 RHA 0.91 0.85 165.11 116.17 92.60 373.88 RMC 1.36 0.55 246.76 75.17 92.60 414.53 RMB 1.22 0.55 221.36 75.17 92.60 389.13 RMA 0.84 0.55 152.41 75.17 92.60 320.18 RLB 1.50 0.28 272.16 38.27 92.60 403.03 RLA 0.71 0.28 128.82 38.27 92.60 259.69 ES3 3.58 649.56 $18.00 92.60 760.16 ES2 2.67 484.44 18.00 92.60 595.04 ES1 2.32 420.94 18.00 92.60 531.54 HE2 2.22 402.80 18.00 92.60 513.40 HE1 1.74 315.71 18.00 92.60 426.31 HD2 2.04 370.14 18.00 92.60 480.74 HD1 1.60 290.30 18.00 92.60 400.90 HC2 1.89 342.92 18.00 92.60 453.52 HC1 1.48 268.53 18.00 92.60 379.13 HB2 1.86 337.48 18.00 92.60 448.08 HB1 1.46 264.90 18.00 92.60 375.50 LE2 1.96 355.62 18.00 92.60 466.22 LE1 1.54 279.42 18.00 92.60 390.02 LD2 1.86 337.48 18.00 92.60 448.08 LD1 1.46 264.90 18.00 92.60 375.50 LC2 1.56 283.05 18.00 92.60 393.65 LC1 1.22 221.36 18.00 92.60 331.96 LB2 1.45 263.09 18.00 92.60 373.69 LB1 1.14 206.84 18.00 92.60 317.44 CE2 1.68 304.82 18.00 92.60 415.42 CE1 1.50 272.16 18.00 92.60 382.76 CD2 1.56 283.05 18.00 92.60 393.65 CD1 1.38 250.39 18.00 92.60 360.99 CC2 1.29 234.06 18.00 92.60 344.66 CC1 1.15 208.66 18.00 92.60 319.26 CB2 1.15 208.66 18.00 92.60 319.26 CB1 1.02 185.07 18.00 92.60 295.67 CA2 0.88 159.67 18.00 92.60 270.27 CA1 0.78 141.52 18.00 92.60 252.12 BB2 0.97 176.00 18.00 92.60 286.60 BB1 0.90 163.30 18.00 92.60 273.90 BA2 0.70 127.01 18.00 92.60 237.61 BA1 0.64 116.12 18.00 92.60 226.72 PE2 1.50 272.16 18.00 92.60 382.76 PE1 1.40 254.02 18.00 92.60 364.62 PD2 1.38 250.39 18.00 92.60 360.99 PD1 1.28 232.24 18.00 92.60 342.84 PC2 1.10 199.58 18.00 92.60 310.18 PC1 1.02 185.07 18.00 92.60 295.67 PB2 0.84 152.41 18.00 92.60 263.01 PB1 0.78 141.52 18.00 92.60 252.12 PA2 0.59 107.05 18.00 92.60 217.65 PA1 0.54 97.98 18.00 92.60 208.58

    2. On pages 39171 through 39172, TABLE 7—RUG-IV Case-Mix Adjusted Federal Rates and Associated Indexes—Rural is corrected to read as follows:

    Table 7—RUG-IV Case-Mix Adjusted Federal Rates and Associated Indexes—Rural RUG-IV Nursing index Therapy index Nursing
  • component
  • Therapy
  • component
  • Non-case mix therapy comp Non-case Mix component Total rate
    RUX 2.67 1.87 $462.82 $294.71 $94.31 $851.84 RUL 2.57 1.87 445.48 294.71 94.31 834.50 RVX 2.61 1.28 452.42 201.73 94.31 748.46 RVL 2.19 1.28 379.61 201.73 94.31 675.65 RHX 2.55 0.85 442.02 133.96 94.31 670.29 RHL 2.15 0.85 372.68 133.96 94.31 600.95 RMX 2.47 0.55 428.15 86.68 94.31 609.14 RML 2.19 0.55 379.61 86.68 94.31 560.60 RLX 2.26 0.28 391.75 44.13 94.31 530.19 RUC 1.56 1.87 270.41 294.71 94.31 659.43 RUB 1.56 1.87 270.41 294.71 94.31 659.43 RUA 0.99 1.87 171.61 294.71 94.31 560.63 RVC 1.51 1.28 261.74 201.73 94.31 557.78 RVB 1.11 1.28 192.41 201.73 94.31 488.45 RVA 1.10 1.28 190.67 201.73 94.31 486.71 RHC 1.45 0.85 251.34 133.96 94.31 479.61 RHB 1.19 0.85 206.27 133.96 94.31 434.54 RHA 0.91 0.85 157.74 133.96 94.31 386.01 RMC 1.36 0.55 235.74 86.68 94.31 416.73 RMB 1.22 0.55 211.47 86.68 94.31 392.46 RMA 0.84 0.55 145.61 86.68 94.31 326.60 RLB 1.50 0.28 260.01 44.13 94.31 398.45 RLA 0.71 0.28 123.07 44.13 94.31 261.51 ES3 3.58 620.56 $19.23 94.31 734.10 ES2 2.67 462.82 19.23 94.31 576.36 ES1 2.32 402.15 19.23 94.31 515.69 HE2 2.22 384.81 19.23 94.31 498.35 HE1 1.74 301.61 19.23 94.31 415.15 HD2 2.04 353.61 19.23 94.31 467.15 HD1 1.60 277.34 19.23 94.31 390.88 HC2 1.89 327.61 19.23 94.31 441.15 HC1 1.48 256.54 19.23 94.31 370.08 HB2 1.86 322.41 19.23 94.31 435.95 HB1 1.46 253.08 19.23 94.31 366.62 LE2 1.96 339.75 19.23 94.31 453.29 LE1 1.54 266.94 19.23 94.31 380.48 LD2 1.86 322.41 19.23 94.31 435.95 LD1 1.46 253.08 19.23 94.31 366.62 LC2 1.56 270.41 19.23 94.31 383.95 LC1 1.22 211.47 19.23 94.31 325.01 LB2 1.45 251.34 19.23 94.31 364.88 LB1 1.14 197.61 19.23 94.31 311.15 CE2 1.68 291.21 19.23 94.31 404.75 CE1 1.50 260.01 19.23 94.31 373.55 CD2 1.56 270.41 19.23 94.31 383.95 CD1 1.38 239.21 19.23 94.31 352.75 CC2 1.29 223.61 19.23 94.31 337.15 CC1 1.15 199.34 19.23 94.31 312.88 CB2 1.15 199.34 19.23 94.31 312.88 CB1 1.02 176.81 19.23 94.31 290.35 CA2 0.88 152.54 19.23 94.31 266.08 CA1 0.78 135.21 19.23 94.31 248.75 BB2 0.97 168.14 19.23 94.31 281.68 BB1 0.90 156.01 19.23 94.31 269.55 BA2 0.70 121.34 19.23 94.31 234.88 BA1 0.64 110.94 19.23 94.31 224.48 PE2 1.50 260.01 19.23 94.31 373.55 PE1 1.40 242.68 19.23 94.31 356.22 PD2 1.38 239.21 19.23 94.31 352.75 PD1 1.28 221.88 19.23 94.31 335.42 PC2 1.10 190.67 19.23 94.31 304.21 PC1 1.02 176.81 19.23 94.31 290.35 PB2 0.84 145.61 19.23 94.31 259.15 PB1 0.78 135.21 19.23 94.31 248.75 PA2 0.59 102.27 19.23 94.31 215.81 PA1 0.54 93.60 19.23 94.31 207.14

    5. On page 39222, in Table 27, column 2, line 29, the reference “MDS Item M0300X1” is corrected to read “MDS Item M0300D1.”

    6. On page 39285, TABLE 45—Impact to the SNF PPS for FY 2019 is corrected to read as follows:

    Table 45—Impact to the SNF PPS for FY 2019 Number of
  • facilities
  • FY 2019
  • Update wage data
  • (%)
  • Total change
  • (%)
  • Group: Total 15,471 0.0 2.4 Urban 11,042 0.0 2.4 Rural 4,429 0.1 2.5 Hospital-based urban 498 0.0 2.4 Freestanding urban 10,544 0.0 2.4 Hospital-based rural 555 0.0 2.4 Freestanding rural 3,874 0.2 2.6 Urban by region: New England 790 −0.7 1.7 Middle Atlantic 1,481 0.0 2.4 South Atlantic 1,869 −0.1 2.3 East North Central 2,127 −0.4 2.0 East South Central 555 −0.2 2.2 West North Central 920 −0.4 2.0 West South Central 1,346 0.3 2.7 Mountain 527 −0.8 1.6 Pacific 1,421 1.0 3.4 Outlying 6 −0.5 1.9 Rural by region: New England 134 −0.7 1.6 Middle Atlantic 215 0.1 2.5 South Atlantic 494 0.1 2.5 East North Central 931 0.1 2.5 East South Central 523 −0.3 2.1 West North Central 1,074 0.3 2.7 West South Central 734 1.0 3.5 Mountain 229 0.2 2.6 Pacific 95 −0.5 1.9 Ownership: Profit 10,887 0.0 2.4 Non-Profit 3,570 −0.1 2.3 Government 1,014 0.0 2.4 Note: The Total column includes the 2.4 percent market basket increase required by section 53111 of the BBA 2018. Additionally, we found no SNFs in rural outlying areas.

    7. On page 39287, bottom of the page, column 2, line 6 and 7 the phrase “urban rural West South Central region” is corrected to read “rural West South Central region.”

    Dated: September 27, 2018. Ann C. Agnew, Executive Secretary to the Department, Department of Health and Human Services.
    [FR Doc. 2018-21499 Filed 9-28-18; 4:15 pm] BILLING CODE 4120-01-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Parts 412, 413, 424, and 495 [CMS-1694-CN2] RIN 0938-AT27 Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year 2019 Rates; Quality Reporting Requirements for Specific Providers; Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs (Promoting Interoperability Programs) Requirements for Eligible Hospitals, Critical Access Hospitals, and Eligible Professionals; Medicare Cost Reporting Requirements; and Physician Certification and Recertification of Claims; Correction AGENCY:

    Centers for Medicare & Medicaid Services (CMS), HHS.

    ACTION:

    Final rule; correction.

    SUMMARY:

    This document corrects technical and typographical errors in the final rule that appeared in the August 17, 2018 issue of the Federal Register titled “Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year 2019 Rates; Quality Reporting Requirements for Specific Providers; Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs (Promoting Interoperability Programs) Requirements for Eligible Hospitals, Critical Access Hospitals, and Eligible Professionals; Medicare Cost Reporting Requirements; and Physician Certification and Recertification of Claims”.

    DATES:

    The corrections in this document are effective October 1, 2018.

    FOR FURTHER INFORMATION CONTACT:

    Donald Thompson and Michele Hudson, (410) 786-4487.

    SUPPLEMENTARY INFORMATION:

    I. Background

    In FR Doc. 2018-16766 of August 17, 2018 (83 FR 41144) there were a number of technical and typographical errors that are identified and corrected by the Correction of Errors section of this correcting document. The provisions in this correcting document are effective as if they had been included in the document that appeared in the August 17, 2018 Federal Register. Accordingly, the corrections are effective October 1, 2018.

    II. Summary of Errors A. Summary of Errors in the Preamble

    On page 41144, under FOR FURTHER INFORMATION CONTACT section, we are correcting the names of the contacts for Medicare Promoting Interoperability Program issues.

    On page 41151, in our discussion regarding Changes to the Hospital Readmissions Reduction Program under “Summary of Cost and Benefits”, we made errors in the impact figures.

    On pages 41200, 41219, 41236, and 41313, we made a technical error in using the term “primary” rather than “principal” when in describing certain diagnosis codes or conditions.

    On page 41254, we inadvertently omitted a base MS-DRG group to which the listed thoracoscopic procedures of pericardium and pleura may be assigned. Specifically, we are correcting the list of MS-DRGs on page 41254 to include MS-DRGs 166, 167, and 168 (Other Respiratory System O.R. Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 4 (Diseases and Disorders of the Respiratory System), consistent with the MS-DRGs to which other approaches for procedures involving drainage or extirpation of matter from the pleura are assigned.

    On page 41299, we made a technical error in describing which ICD-10-PCS procedure codes will be used to identify cases involving the use of KYMRIAH and YESCARTA that are eligible for new technology add-on payments in FY 2019. Specifically, cases involving the use of KYMRIAH and YESCARTA that are eligible for new technology add-on payments will be identified by either of the ICD-10-PCS procedure codes listed in the final rule (XW033C3 or XW043C3) rather than requiring the combination of both ICD-10-PCS procedure codes.

    On page 41311, we made a typographical error in describing which National Drug Code (NDC) will be used to identify cases involving VABOMERETM that are eligible for new technology add-on payments in FY 2019. Specifically, we are correcting the NDC code of 65293-0009-01, which erroneously was missing an extra digit. In addition, we were made aware after the final rule that NDC 70842-0120-01 can also be used to identify cases of VABOMERETM. Therefore, cases involving the use of VABOMERETM that are eligible for new technology add-on payments in FY 2019 will be identified with either of the following NDCs: 65293-0009-01 and 70842-0120-01.

    On page 41320, we made a typographical error in describing which ICD-10-PCS procedure codes will be used to identify cases involving the remedē® SystemTM that are eligible for new technology add-on payments in FY 2019. Specifically, we are correcting the ICD-10-PCS procedure code 05H43MZ (Insertion of neurostimulator lead into left innominate vein, percutaneous approach), which had erroneously contained an extra digit.

    On page 41334, we made a technical error in describing which ICD-10-PCS procedure codes will be used to identify cases involving ZEMDRITM that are eligible for new technology add-on payments in FY 2019. Specifically, cases involving the use of ZEMDRITM that are eligible for new technology add-on payments will be identified by either of the ICD-10-PCS procedure codes listed in the final rule (XW033G4 or XW043G4) rather than requiring the combination of both ICD-10-PCS procedure codes.

    On page 41342, we made a technical error in describing which ICD-10-PCS procedure codes will be used to identify cases involving GIAPREZATM that are eligible for new technology add-on payments in FY 2019. Specifically, cases involving the use of GIAPREZATM that are eligible for new technology add-on payments will be identified by either of the ICD-10-PCS procedure codes listed in the final rule (XW033H4 or XW043H4) rather than requiring the combination of both ICD-10-PCS procedure codes.

    On page 41348, we made a typographical error in stating the applicant's estimated cost of the Sentinel® Cerebral Protection System. Specifically, we stated that the applicant estimated the cost is $2,400, when we should have stated the cost is $2,800.

    On page 41362, we made a technical error in describing which ICD-10-PCS procedure codes will be used to identify cases involving AndexXaTM that are eligible for new technology add-on payments in FY 2019. Specifically, cases involving the use of AndexXaTM that are eligible for new technology add-on payments will be identified by either of the ICD-10-PCS procedure codes listed in the final rule (XW03372 or XW04372) rather than requiring the combination of both ICD-10-PCS procedure codes.

    On pages 41364, 41365, 41368, and 41375, in our discussion of the wage indexes, we are correcting the number of hospitals with critical access hospital (CAH) status removed from the FY 2019 wage index, the number of hospitals used for the FY 2019 wage index, the number of hospital occupational mix surveys used for the FY 2019 wage index, and the values for the FY 2019 national average hourly wage (unadjusted for occupational mix), the FY 2019 occupational mix adjusted national average hourly wage, and the FY 2019 national average hourly wages for the occupational mix nursing subcategories, due to inadvertent errors related to the following:

    • The inclusion of a CAH in the wage data (CMS Certification Number (CCN) 060016).

    • Wage data collected from the Medicare cost reports of one hospital (CCN 100044).

    • Occupational Mix data collected from one hospital (CCN 010001).

    On page 41406, we are correcting a typographical error in our reference to the discussion of the comments received on the proposed methodology for Factor 3.

    On page 41415, in our discussion regarding Methodology for Calculating Factor 3 for FY 2019, we are correcting a technical error in the calculation of the CCR ceilings for FY 2014 and FY 2015 and the number of hospitals above the ceiling in each of those years.

    On page 41432, in our discussion regarding Regulatory Background of Hospital Readmissions Reduction Program, we made a typographical error in referencing the fiscal year in which the calculation of the proportion of “dually eligible” Medicare beneficiaries used to stratify hospitals into peer groups will begin.

    On page 41436, in our discussion regarding Identification of Aggregate Payments for Each Condition/Procedure and All Discharges, we inadvertently omitted language regarding which MedPAR data is included in the program calculations.

    On page 41446, we made a technical error in the heading for section IV.I.2.c. by inadvertently stating the incorrect number of measure removal proposals that we were finalizing in the FY 2019 IPPS/LTCH PPS final rule for the Hospital Value-Based Purchasing (VBP) Program.

    On page 41452, we made an error in the date of publication of a reference.

    On page 41469, in the table entitled “Previously Adopted and Newly Displayed Performance Standards for the FY 2021 Program Year: Safety, Clinical Outcomes, and Efficiency and Cost Reduction Domains,” we inadvertently did not display several of the numbers in the benchmark column to 3 decimal places.

    On page 41488, in our discussion regarding analysis of Hospital-Acquired Condition Reduction Program, we made a technical error in referencing hospital's National Healthcare Safety Network (NHSN) Healthcare-Associated Infection (HAI) measures.

    On pages 41528 and 41529, we corrected the MS-LTC-DRG budget neutrality factor due to an error in the MS-LTC-DRG weights resulting from the inadvertent inclusion of an all-inclusive rate provider.

    On pages 41536 and 41537, due to the changes in the MS-LTC-DRG weights resulting from the correction to the MS-LTC-DRG budget neutrality factor (described previously) and the corrections in the LTCH PPS wage index referenced above and discussed in greater detail below, we made conforming changes to the budget neutrality adjustment factor for the cost of the elimination of the 25-percent threshold policy for FY 2019 and the area wage budget neutrality factor.

    On page 41556, in our discussion regarding claims-based-readmission measures, the National Quality Forum (NQF) number for the MORT-30-CABG measure was inadvertently listed as NQF #2515, which is the NQF number for the READM-30-CABG measure.

    On page 41558, in our discussion finalizing our proposals to remove the mortality measures, we inadvertently referenced the FY 2020 payment determination twice.

    On page 41576, in the table entitled “Summary of Hospital IQR Program Measures Newly Finalized for Removal,” an entry under “Claims-Based Coordination of Care Measures” inadvertently included an “A” in the short name for the Pneumonia Readmission measure.

    On page 41579, in the table entitled “Measures for the FY 2021 Payment Determination,” we inadvertently omitted the entry for the FY 2021 payment determination for MORT-30-CABG. In the same table, we made a typographical error by inadvertently including an asterisk at the end of Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following Acute Ischemic Stroke (MORT-30-STK). In the same table, we made a typographical error by inadvertently listing the incorrect NQF number for STK-06, Discharged on Statin Medication measure. In the same table, we inadvertently excluded the word “Venous” from the full measure name of VTE-2, Intensive Care Unit Venous Thromboembolism Prophylaxis.

    On page 41599, in our discussion of Social Risk Factors in the Hospital Inpatient Quality Reporting (IQR) Program, we inadvertently used the term “measures” instead of “methods”.

    On page 41672, in our discussion regarding the electronic reporting of electronic clinical quality measures (eCQMs) for CY 2019, we incorrectly referred to the Spring 2017 version of the CQM electronic specifications as the most recent version. A more recent version of the specifications was issued after the proposed rule was published, which is the 2018 eCQM specifications update (published in May 2018).

    B. Summary of Errors in the Addendum

    As discussed in section II.D. of this correcting document, we made several technical errors with regard to the calculation of Factor 3 of the uncompensated care payment methodology. Factor 3 is used to determine the total amount of the uncompensated care payment a hospital is eligible to receive for a fiscal year. This amount is then used to calculate the amount of the interim uncompensated care payments a hospital receives per discharge. Per discharge uncompensated care payments are included when determining total payments for purposes of all of the budget neutrality factors and the final outlier threshold. As a result, the revisions made to address these technical errors regarding the calculation of Factor 3 directly affected the calculation of total payments and required the recalculation of all the budget neutrality factors and the final outlier threshold.

    Because of the errors related to the wage data for the three hospitals (CCNs 010001, 060016 and 100044) as discussed in section II.A. of this correcting document, we recalculated the FY 2019 national average hourly wages unadjusted for occupational mix and adjusted for occupational mix which resulted in the recalculation of the final FY 2019 IPPS wage indexes and the geographic adjustment factors (GAFs) (which are computed from the wage index). The final FY 2019 IPPS wage data are used in the calculation of the wage index budget neutrality adjustment when comparing total payments using the final FY 2018 IPPS wage index data to total payments using the final FY 2019 IPPS wage index data. Additionally, the final FY 2019 IPPS wage index data are used when determining total payments for purposes of the rest of the budget neutrality factors (except for the MS-DRG reclassification and recalibration budget neutrality factor) and the final outlier threshold. In addition, the final FY 2019 IPPS wage index data are used to calculate the FY 2019 LTCH PPS wage index values, certain budget neutrality factors, and the LTCH PPS standard Federal payment rate in the FY 2019 IPPS/LTCH PPS final rule.

    We also made inadvertent errors related to the status of four providers reclassified from urban to rural under section 1886(d)(8)(E) of the Act (codified in the regulations under § 412.103 and hereinafter referred to as § 412.103). Specifically, the reclassification status in the FY 2019 IPPS/LTCH PPS final rule did not properly reflect the application of urban to rural reclassification under § 412.103 for four providers (CCNs 050025, 050573, 120001 and 120002). We note, provider 050573 was approved by the MGCRB for reclassification (as already reflected in the FY 2019 IPPS/LTCH final rule) in addition to its urban to rural reclassification under § 412.103. Additionally, the final FY 2019 IPPS wage index with reclassification is used when determining total payments for purposes of all budget neutrality factors (except for the MS-DRG reclassification and recalibration budget neutrality factor and the wage index budget neutrality adjustment factor) and the final outlier threshold.

    Due to the correction of the combination of errors listed previously (revisions to Factor 3 of the uncompensated care payment methodology, the correction to the final FY 2019 IPPS wage index data adjusted for occupational mix and the correction to the geographic reclassification status of four hospitals), we recalculated all IPPS budget neutrality adjustment factors, the fixed-loss cost threshold, the final wage indexes (and GAFs), and the national operating standardized amounts and capital Federal rate. (We note there was no change to the rural community hospital demonstration program budget neutrality adjustment or the operating outlier adjustment factor resulting from the correction of this combination of errors.) Therefore, we made conforming changes to the following:

    • On pages 41715 and 41727, the MS-DRG reclassification and recalibration budget neutrality adjustment factor.

    • On page 41716, the following budget neutrality adjustments:

    ++ Wage index budget neutrality adjustment.

    ++ Reclassification hospital budget neutrality adjustment.

    ++ Rural floor budget neutrality adjustment.

    • On page 41723, the calculation of the outlier fixed-loss cost threshold, total operating Federal payments, total operating outlier payments, and the outlier adjustment to the capital Federal rate.

    • On pages 41724 through 41725, the table titled “Changes From FY 2018 Standardized Amounts to the FY 2019 Standardized Amounts”.

    On page 41722, we are also correcting inadvertent technical errors in the figures reported for the covered charges and cases by quarter in the periods used to calculate the charge inflation factor. Specifically, we erroneously presented figures based on total charges for the applicable periods listed in the table rather than the covered charges and the case counts were not correctly aligned with the corresponding quarter. We note that although there were technical errors in the figures as presented in the table and the corresponding discussion on page 41722, the correct figures were used for the outlier calculations in the final rule. In addition, on page 41723, we are correcting technical errors in the description of the formula showing total outlier payments as a percentage of total operating Federal payments.

    On pages 41727 through 41729, in our discussion of the determination of the Federal hospital inpatient capital-related prospective payment rate update, due to the recalculation of the GAFs, we have made conforming corrections to the increase in the capital Federal rate, the GAF/DRG budget neutrality adjustment factors, the capital Federal rate, and the outlier threshold (as discussed previously), along with certain statistical figures (for example, percent change) in the accompanying discussions. Also, as a result of these errors we have made conforming corrections in the tables showing the comparison of factors and adjustments for the FY 2018 capital Federal rate and FY 2019 capital Federal rate and the proposed FY 2019 capital Federal rate and final FY 2019 capital Federal rate.

    On pages 41730 through 41731, 41733, 41736 and 41737, due to corrections in the LTCH PPS wage index discussed previously, we are making conforming corrections to the following:

    • The area wage level adjustment budget neutrality factor.

    • The fixed-loss amount for FY 2019 LTCH PPS standard Federal payment rate discharges and the high-cost outlier (HCO) threshold.

    • The budget neutrality adjustment factor for the cost of the elimination of the 25-percent threshold policy for FY 2019 and the FY 2019 LTCH PPS standard Federal payment rate.

    • The fixed-loss amount for FY 2019 site neutral payment rate discharges and the high-cost outlier (HCO) threshold (based on the corrections to the IPPS fixed-loss amount discussed previously).

    On pages 41738 and 41739, we are making conforming corrections to the figures used in the example of computing the adjusted LTCH PPS Federal prospective payment for FY 2019.

    On pages 41740 and 41741, we are making conforming corrections to the following:

    • National adjusted operating standardized amounts and capital standard Federal payment rate (which also include the rates payable to hospitals located in Puerto Rico) in Tables 1A, 1B, 1C, and 1D as a result of the conforming corrections to certain budget neutrality factors and the outlier threshold (as described previously). We are also correcting a typographical error in the update factor presented in the column heading for a hospital that submitted quality data and is a meaningful EHR user.

    • LTCH PPS standard Federal payment rate in Table 1E as a result of the correction to the LTCH PPS wage index values (as discussed previously).

    C. Summary of Errors in the Appendices

    On pages 41742, 41744 through 41751, and 41763 through 41765 in our regulatory impact analyses, we made conforming corrections to the factors, values, and tables and accompanying discussion of the changes in operating and capital IPPS payments for FY 2019 and the effects of certain IPPS budget neutrality factors as a result of the technical errors that lead to conforming changes in our calculation of the operating and capital IPPS budget neutrality factors, outlier threshold, final wage indexes, operating standardized amounts, and capital Federal rate (as described in sections II.A. and II.B. of this correcting document).

    In particular, we made changes to the following tables:

    • On pages 41744 through 41746, the table titled “Table I—Impact Analysis of Changes to the IPPS for Operating Costs for FY 2019”.

    • On pages 41748 through 41749, the table titled “FY 2019 IPPS Estimated Payments Due To Rural Floor With National Budget Neutrality”.

    • On pages 41750 through 41751, the table titled “Table II—Impact Analysis of Changes for FY 2019 Acute Care Hospital Operating Prospective Payment System [Payments per discharge]”.

    • On pages 41764 through 41765, the table titled “Table III—Comparison of Total Payments per Case [FY 2018 payments compared to FY 2019 payments]”.

    On pages 41753 through 41755, we are correcting the discussion of the “Effects of the Changes to Medicare DSH and Uncompensated Care Payments for FY 2019” for purposes of the Regulatory Impact Analysis in Appendix A of the FY 2019 IPPS/LTCH PPS final rule, including the table titled “MODELED UNCOMPENSATED CARE PAYMENTS FOR ESTIMATED FY 2019 DSHs BY HOSPITAL TYPE: MODEL UCP $ (IN MILLIONS) * FROM FY 2018 to FY 2019” on pages 41753 and 41754, in light of the corrections discussed in section II.D. of this correcting document.

    On page 41756, in our discussion of the effects of changes under the FY 2019 Hospital Value-Based Purchasing (VBP) Program that appears in Appendix A, we are correcting an inadvertent reference to the word “proposed” in the heading for section I.H.6.a in the first column at the bottom of the page and in line 1 of the last paragraph of the second column at the bottom of the page.

    On pages 41758 through 41759, in table entitled “Estimated Proportion of Hospitals in the Worst-Performing Quartile (>75th Percentile) of the Total HAC Scores for the FY 2019 HAC Reduction Program”, we inadvertently included incorrect data.

    On pages 41766 and 41768 through 41769, we made conforming corrections to the LTCH PPS area wage level budget neutrality factor, the budget neutrality adjustment factor for the cost of the elimination of the 25-percent threshold policy for FY 2019, and the LTCH PPS standard Federal payment rate as described in section II.B. of this correcting document.

    On pages 41768 through 41770, we are making conforming corrections to “Table IV—Impact of Payment Rate and Policy Changes to LTCH PPS Payments for Standard Payment Rate Cases for FY 2019” and the corresponding summary text. We are also correcting the inadvertent mislabeling of the Pacific and Mountain rows in that table.

    D. Summary of Errors in and Corrections to Files and Tables Posted on the CMS Website

    We are correcting the errors in the following IPPS tables that are listed on pages 41739 through 41740 of the FY 2019 IPPS/LTCH PPS final rule and are available on the internet on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2019-IPPS-Final-Rule-Home-Page.html. The tables that are available on the internet have been updated to reflect the revisions discussed in this correcting document.

    Table 2—Case-Mix Index and Wage Index Table by CCN-FY 2019. The wage data errors (as discussed in section II.A. of this correcting document) related to the three hospitals (CCNs 010001, 060016, and 100044) required the recalculation of the FY 2019 national average hourly wages unadjusted for occupational mix and adjusted for occupational mix which resulted in recalculating the FY 2019 wage indexes. Additionally, for the four providers (CCNs 050025, 050573, 120001, and 120002) for which we are applying urban to rural reclassification under § 412.103 (as discussed in section II.B. of this correcting document), we are correcting the values where applicable in the columns titled “FY 2019 Wage Index”, “Reclassified/Redesignated CBSA”, “Hospital Reclassified as Rural Under Section 1886(d)(8)(E) of the Act (§ 412.103)” and “Dual Status 412.103 and MGCRB/LUGAR”. Also, the revisions to Factor 3 of the uncompensated care payment methodology and recalculation of the FY 2019 wage index necessitated the recalculation of the rural floor budget neutrality factor (as discussed in section II.B. of this correcting document). Therefore, we are correcting the values in the column titled “FY 2019 Wage Index” for all hospitals. Additionally, for the two hospitals (CCNs 010001 and 100044) for which we inadvertently used the incorrect wage and occupational mix data (as discussed in section II.A. of this correcting document), we are correcting the average hourly wages in the columns titled “Average Hourly Wage FY 2019” and “3-Year Average Hourly Wage (2017, 2018, 2019)”. Furthermore, we are deleting provider 060016 from the wage index and Table 2 since it is a CAH (as discussed in section II.A. of this correcting document).

    Table 3.—Wage Index Table by CBSA—FY 2019. The correction of the wage data errors (as discussed in section II.A. of this correcting document) related to the three hospitals (CCNs 010001, 060016, and 100044) required the recalculation of the FY 2019 national average hourly wage adjusted for occupational mix which resulted in recalculating the FY 2019 wage indexes. Also, the revisions to Factor 3 of the uncompensated care payment methodology, recalculation of the FY 2019 wage index, and correction of the reclassification errors discussed in section II.B. of this correcting document necessitated the recalculation of the rural floor budget neutrality factor (as discussed in section II.B. of this correcting document). Therefore, we are making corresponding changes to the wage indexes and GAFs of all CBSAs listed in Table 3. Specifically, we are correcting the values and flags in the columns titled “Wage Index”, “Reclassified Wage Index”, “GAF”, “Reclassified GAF”, “Pre-Frontier and/or Pre-Rural Floor Wage Index” and “Eligible for Rural Floor Wage Index”. Also, we are making changes to reflect the application of urban to rural reclassification under § 412.103 for the four providers (CCNs 050025, 050573, 120001 and 120002) discussed in section II.B. of this correcting document. Specifically, we are correcting the values and flags in the columns titled “Wage Index”, “Reclassified Wage Index”, “GAF”, “Reclassified GAF”, “Pre-Frontier and/or Pre-Rural Floor Wage Index” and “Eligible for Rural Floor Wage Index”. Additionally, for the 3 CBSAs (06, 20020, and 38940) where the three hospitals (CCNs 010001, 060016, and 100044) for which there were wage data errors are located (as discussed in section II.A. of this correcting document), we are correcting the average hourly wages in the columns titled “FY 2019 Average Hourly Wage” and “3-Year Average Hourly Wage (2017, 2018, 2019)”.

    Table 4.—List of Counties Eligible for the Out-Migration Adjustment under Section 1886(d)(13) of the Act—FY 2019. The correction of the wage data errors related to the three hospitals (CCNs 010001, 060016, and 100044), as discussed in section II.A. of this correcting document, required the recalculation of the FY 2019 national average hourly wage adjusted for occupational mix which resulted in recalculating the FY 2019 wage indexes. Also, the revisions to Factor 3 of the uncompensated care payment methodology, recalculation of the FY 2019 wage indexes, and correction of the reclassification errors discussed in section II.B. of this correcting document necessitated the recalculation of the rural floor budget neutrality factor (as discussed in section II.B. of this correcting document). Also, we are making changes to reflect the application of urban to rural reclassification under § 412.103 for the four providers (CCNs 050025, 050573, 120001 and 120002), as discussed in section II.B. of this correcting document. Therefore, we are making corresponding changes to the eligible counties and out migration values listed in Table 4. Specifically, we are correcting the list of counties and values in the columns titled “FIPS County Code”, “County Name”, “State”, “State Code”, “Fiscal Year Begin of Adjustment” and “FY 2019 Out Migration”.

    Table 18.—FY 2019 Medicare DSH Uncompensated Care Payment Factor 3. We are correcting this table to reflect revisions to the Factor 3 calculations for purposes of determining uncompensated care payments for the FY 2019 IPPS/LTCH PPS final rule for the following reasons:

    • To reflect mergers where data for the merged hospital were not combined with the data for the surviving hospital.

    • To correct the projected DSH eligibility for a SCH that now has CAH status, and therefore is no longer included in Table 18.

    • To correct a provider's Factor 3 that was inadvertently calculated using the methodology for all-inclusive rate providers.

    • To correct the Factor 3s that were computed for hospitals whose FY 2014 or FY 2015 cost report in the June 2018 extract of Healthcare Cost Report Information System (HCRIS) inadvertently omitted amended uncompensated care cost data that had been reported by the hospital on an amended Worksheet S-10 in a timely manner per Change Request (CR) 10378 issued on December 1, 2017, or where the FY 2014 or FY 2015 cost report for a DSH eligible hospital had inadvertently been uploaded into HCRIS without making the calculation modifications described in Transmittal 11, and to reflect the cost-to-charge ratio (CCR) trim changes resulting from the inclusion of the inadvertently omitted data.

    We are revising Factor 3 for all hospitals to correct these errors. We are also revising the amount of the total uncompensated care payment calculated for each DSH-eligible hospital. The total uncompensated care payment that a hospital receives is used to calculate the amount of the interim uncompensated care payments the hospital receives per discharge. We also corrected the per discharge interim uncompensated care payment for all hospitals to reflect the 2017 discharges as shown on the FY 2019 IPPS Impact File. We also corrected the per discharge interim uncompensated care payment calculated for a merged hospital to reflect the discharges for the subsumed hospital. Per discharge uncompensated care payments are included when determining total payments for purposes of all of the budget neutrality factors and the final outlier threshold. As a result, these corrections to the uncompensated care payments impacted the calculation of all the budget neutrality factors as well as the outlier fixed-loss cost threshold. These corrections will be reflected in Table 18 and the Medicare DSH Supplemental Data File. In section IV.C. of this correcting document, we have made corresponding revisions to the discussion of the “Effects of the Changes to Medicare DSH and Uncompensated Care Payments for FY 2019” for purposes of the Regulatory Impact Analysis in Appendix A of the FY 2019 IPPS/LTCH PPS final rule to reflect the corrections discussed previously.

    We are also correcting the errors in the following LTCH PPS tables that are listed on 41739 through 41740 of the FY 2019 IPPS/LTCH PPS final rule and are available on the internet on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/LongTermCareHospitalPPS/index.html under the list item for regulation number CMS-1694-F. The tables that are available on the internet have been updated to reflect the revisions discussed in this correcting document.

    Table 11.—MS-LTC-DRGs, Relative Weights, Geometric Average Length of Stay, Short-Stay Outlier (SSO) Threshold for Discharges Occurring from October 1, 2018 through September 30, 2019 under the LTCH PPS. We are correcting this table to reflect the revisions to the MS-LTC-DRG relative weights, geometric average length-of-stay, and short-stay outlier threshold due to the inadvertent inclusion of an all-inclusive rate provider as discussed in section II.A. of this correcting document.

    Table 12A.—LTCH PPS Wage Index for Urban Areas for Discharges Occurring from October 1, 2018 through September 30, 2019. We are correcting this table to reflect the revisions to the LTCH PPS wage index values discussed in section II.A. of this correcting document.

    Table 12B.—LTCH PPS Wage Index for Rural Areas for Discharges Occurring from October 1, 2018 through September 30, 2019. We are correcting this table to reflect the revisions to the LTCH PPS wage index values discussed in section II.A. of this correcting document.

    III. Waiver of Proposed Rulemaking, 60-Day Comment Period, and Delay in Effective Date

    Under 5 U.S.C. 553(b) of the Administrative Procedure Act (APA), the agency is required to publish a notice of the proposed rulemaking in the Federal Register before the provisions of a rule take effect. Similarly, section 1871(b)(1) of the Act requires the Secretary to provide for notice of the proposed rulemaking in the Federal Register and provide a period of not less than 60 days for public comment. In addition, section 553(d) of the APA, and section 1871(e)(1)(B)(i) of the Act mandate a 30-day delay in effective date after issuance or publication of a rule. Sections 553(b)(B) and 553(d)(3) of the APA provide for exceptions from the notice and comment and delay in effective date APA requirements; in cases in which these exceptions apply, sections 1871(b)(2)(C) and 1871(e)(1)(B)(ii) of the Act provide exceptions from the notice and 60-day comment period and delay in effective date requirements of the Act as well. Section 553(b)(B) of the APA and section 1871(b)(2)(C) of the Act authorize an agency to dispense with normal rulemaking requirements for good cause if the agency makes a finding that the notice and comment process are impracticable, unnecessary, or contrary to the public interest. In addition, both section 553(d)(3) of the APA and section 1871(e)(1)(B)(ii) of the Act allow the agency to avoid the 30-day delay in effective date where such delay is contrary to the public interest and an agency includes a statement of support.

    We believe that this correcting document does not constitute a rule that would be subject to the notice and comment or delayed effective date requirements. The document corrects technical and typographical errors in the preamble, addendum, payment rates, tables, and appendices included or referenced in the FY 2019 IPPS/LTCH PPS final rule, but does not make substantive changes to the policies or payment methodologies that were adopted in the final rule. As a result, this correcting document is intended to ensure that the information in the FY 2019 IPPS/LTCH PPS final rule accurately reflects the policies adopted in that document.

    In addition, even if this were a rule to which the notice and comment procedures and delayed effective date requirements applied, we find that there is good cause to waive such requirements. Undertaking further notice and comment procedures to incorporate the corrections in this document into the final rule or delaying the effective date would be contrary to the public interest because it is in the public's interest for providers to receive appropriate payments in as timely a manner as possible, and to ensure that the FY 2019 IPPS/LTCH PPS final rule accurately reflects our methodologies and policies. Furthermore, such procedures would be unnecessary, as we are not making substantive changes to our methodologies or policies, but rather, we are simply implementing correctly the methodologies and policies that we previously proposed, requested comment on, and subsequently finalized. This correcting document is intended solely to ensure that the FY 2019 IPPS/LTCH PPS final rule accurately reflects these methodologies and policies. Therefore, we believe we have good cause to waive the notice and comment and effective date requirements.

    IV. Correction of Errors

    In FR Rule Doc. 2018-16766 of August 17, 2018 (83 FR 41144), we are making the following corrections:

    A. Corrections of Errors in the Preamble

    1. On page 41144, third column, sixth and seventh full paragraph, the contact information “Elizabeth Holland, (410) 786-1309, Promoting Interoperability Programs. Clinical Quality Measure Related Issues. Kathleen Johnson, (410) 786-3295 and Steven Johnson (410) 786-3332, Promoting Interoperability Programs Nonclinical Quality Measure Related Issues.” is corrected to read “Jessica Wright, (410) 786-3838, Medicare Promoting Interoperability Program”.

    2. On page 41151, second column, second bulleted paragraph,

    a. Line 13, the figure “2,610” is corrected to read “2,599”.

    b. Line 19, the figure “$566” is corrected to read “$550”.

    3. On page 41200, between the untitled tables, first column, first full paragraph, line 27, the phrase “primary and secondary diagnoses” is corrected to read “principal and secondary diagnoses”.

    4. On page 41219, middle of the page, third column, partial paragraph, line 13, the phrase “primary and secondary diagnoses” is corrected to read “principal and secondary diagnoses”.

    5. On page 41236, lower half of the page, third column, first partial paragraph, line 2, the phrase “primary diagnosis” is corrected to read “principal diagnosis”.

    6. On page 41254, lower two-thirds of the page, first column, partial paragraph, lines 12 through 17, the phrase “MS-DRGs 163, 164, and 165 (Major Chest Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 4 (Diseases and Disorders of the Respiratory System);” to read “MS-DRGs 163, 164, and 165 (Major Chest Procedures with MCC, with CC, and without CC/MCC, respectively) and MS-DRGs 166, 167, and 168 (Other Respiratory System O.R. Procedures with MCC, with CC, and without CC/MCC, respectively) in MDC 4 (Diseases and Disorders of the Respiratory System);”.

    7. On page 41299, second column, first partial paragraph, lines 2 through 7, the sentence “Cases involving KYMRIAH and YESCARTA that are eligible for new technology add-on payments will be identified by ICD-10-PCS procedure codes XW033C3 and XW043C3.” is corrected to read “Cases involving KYMRIAH and YESCARTA that are eligible for new technology add-on payments will be identified by either of the following ICD-10-PCS procedure codes: XW033C3 (Introduction of engineered autologous chimeric antigen receptor T-cell immunotherapy into peripheral vein, percutaneous approach, new technology group 3) or XW043C3 (Introduction of engineered autologous chimeric antigen receptor T-cell immunotherapy into central vein, percutaneous approach, new technology group 3).”

    8. On page 41311, second column, first partial paragraph, lines 46 through 51, the phrase “FY 2019 cases involving the use of VABOMERETM that are eligible for the FY 2019 new technology add-on payments will be identified by the NDC of 65293-009-01 (VABOMERETM Meropenem-Vaborbactam Vial).” is corrected to read “FY 2019 cases involving the use of VABOMERETM that are eligible for the FY 2019 new technology add-on payments will be identified by the NDC of 65293-0009-01 (VABOMERETM Meropenem-Vaborbactam Vial).”

    9. On page 41313, first column, first partial paragraph, line 8, the phrase “primary diagnosis” is corrected to read “principal diagnosis”.

    10. On page 41320, second column, first partial paragraph, line 15, the code “05H043MZ” is corrected to read “05H43MZ”.

    11. On page 41334, second column, first full paragraph, lines 20 through 24, the sentence “Cases involving ZEMDRITM that are eligible for new technology add-on payments will be identified by ICD-10-PCS procedure codes XW033G4 and XW043G4.” is corrected to read “Cases involving ZEMDRITM that are eligible for new technology add-on payments will be identified by either of the following ICD-10-PCS procedure codes: XW033G4 (Introduction of Plazomicin anti-infective into peripheral vein, percutaneous approach, new technology group 4) or XW043G4 (Introduction of Plazomicin anti-infective into central vein, percutaneous approach, new technology group 4).”

    12. On page 41342, second column, first partial paragraph, lines 3 and 4, the phrase “identified by ICD-10-PCS procedure codes XW033H4 and XW043H4.” is corrected to read “identified by either of the following ICD-10-PCS procedure codes: XW033H4 (Introduction of synthetic human angiotensin II into peripheral vein, percutaneous approach, new technology group 4) or XW043H4 (Introduction of synthetic human angiotensin II into central vein, percutaneous approach, new technology group 4).”

    13. On page 41348, second column, first full paragraph, line 17, the figure “$2,400” is corrected to read “$2,800”.

    14. On page 41362, first column, first partial paragraph, lines 4 through 7, the phrase “eligible for new technology add-on payments will be identified by ICD-10-PCS procedure codes XW03372 and XW04372.” is corrected to read “eligible for new technology add-on payments will be identified by either of the following ICD-10-PCS procedure codes: XW03372 (Introduction of Andexanet alfa, factor Xa inhibitor reversal agent into peripheral vein, percutaneous approach, new technology group 2) or XW04372 (Introduction of Andexanet alfa, factor Xa inhibitor reversal agent into central vein, percutaneous approach, new technology group 2).”

    15. On page 41364, third column, first partial paragraph—

    a. Line 10, the figure “3” is corrected to read “4”.

    b. Line 18, the figure “11” is corrected to read “12”.

    c. Line 21, the figure “3” is corrected to read “4”.

    d. Line 23, the figure “3,283” is corrected to read “3,282”.

    e. Lines 23 through 24, the figure “(3,260 + 28 − 2 − 3 = 3,283)” is corrected to read “(3,260 + 28 − 2 − 4 = 3,282)”.

    16. On page 41365—

    a. Second column, third full paragraph, last line, the figure “$42.997789358” is corrected to read “$42.998002633”.

    b. Third column, first partial paragraph, line 32, the figure “$42.997789358” is corrected to read “$42.998002633”.

    17. On page 41368, third column, first partial paragraph, line 21, the figure “3,283” is corrected to read “3,282”.

    18. On page 41375—

    a. Second column—

    i. First partial paragraph—

    A. Line 2, the figure “3,283” is corrected to read “3,282”.

    B. Line 3, the figure “3,114” is corrected to read “3,113”.

    C. Lines 6 and 7, the parenthetical figures “(3,114/3,283)” are corrected to read “(3,113/3,282)”.

    D. Last line, the figure “$42.955567020” is corrected to read “$42.955981146”.

    ii. Following the first full paragraph the untitled table is corrected to read as follows:

    Final unadjusted
  • national average
  • hourly wage
  • Final occupational mix adjusted
  • national average
  • hourly wage
  • $42.998002633 $42.955981146

    b. Third column,

    i. Top of the column (before the first full paragraph), the untitled table is corrected to read as follows:

    Occupational mix nursing subcategory Average
  • hourly wage
  • National RN $41.65745883 National LPN and Surgical Technician 24.73751208 National Nurse Aide, Orderly, and Attendant 16.96596364 National Medical Assistant 18.13187187 National Nurse Category 35.03615689

    ii. First full paragraph, line 4, the figure “$35.04005228” is corrected to read “$35.03615689”.

    19. On page 41406, second column, first full paragraph, line 30, the term “Facto” is corrected to read “Factor”.

    20. On page 41415, third column—

    a. Second full paragraph,

    i. Line 26, the phrase “5 hospitals” is corrected to read “16 hospitals”.

    ii. Line 28, the figure “1.031” is corrected to read “1.032”.

    iii. Line 30, the figure “0.93” is corrected to read “0.929”.

    b. Fourth full paragraph, line 10, the phrase “14 hospitals” is corrected to read “25 hospitals”.

    21. On page 41432, first column, first partial paragraph, lines 2 and 3, the phrase “FY 2018” is corrected to read “FY 2019”.

    22. On page 41436, second column, last bulleted paragraph, the sentence, “March 2018 update of the FY 2017 MedPAR files to identify claims within FY 2017” is corrected to read “March 2018 update of the FY 2017 MedPAR file to identify claims within FY 2017 with discharge dates that are on or before June 30, 2017.”

    23. On page 41446, third column, section heading “c. Removal of Ten Measures From the Hospital VBP Program” is corrected to read “c. Removal of Four Measures From the Hospital VBP Program”.

    24. On page 41452, third column, footnote paragraph (footnote 241), the date “(August 20, 2017)” is corrected to read “(August 30, 2017)”.

    25. On page 41469, table titled “Previously Adopted and Newly Displayed Performance Standards for the FY 2021 Program Year: Safety, Clinical Outcomes, and Efficiency and Cost Reduction Domains”, under “Safety Domain”, the entries in the “Benchmark” column for the CAUTI, CLABSI, MRSA Bacteremia, and Colon and Abdominal Hysterectomy SSI measures are corrected to read to three decimal places as follows:

    Measure short name Achievement threshold Benchmark Safety Domain CAUTI 0.774 0.000 CLABSI 0.687 0.000 CDI 0.748 0.067 MRSA Bacteremia 0.763 0.000 Colon and Abdominal Hysterectomy SSI • 0.754
  • • 0.726
  • • 0.000
  • • 0.000
  • 26. On page 41488, first column, last paragraph, line 7, the phrase “HAI data” is corrected to read “HAI measure”.

    27. On page 41528, third column, last paragraph, line 29, the figure “0.9931052” is corrected to read “0.9935905”.

    28. On page 41529, first column, first full paragraph, line 7, the figure “0.9931052” is corrected to read “0.9935905”.

    29. On page 41536, third column—

    a. First bulleted paragraph, line 2, the figure “0.990884” is corrected to read “0.990878”.

    b. Second bulleted paragraph, line 2, the figure “0.990741” is corrected to read “0.990737”.

    30. On page 41537—

    a. Second column, last paragraph, last line, the figure “0.990741” is corrected to read “0.990737”.

    b. Third column, second full paragraph—

    i. Line 6, the figure “0.990884” is corrected to read “0.990878”.

    ii. Lines 13, the figure “0.990884” is corrected to read “0.990878”.

    31. On page 41556, third column, last bulleted paragraph, line 4, the parenthetical phrase (NQF # 2515) is corrected to read “(NQF # 2558)”.

    32. On page 41558, second column, last paragraph, line 7, the phrase “FYs 2020, 2021, and 2020” is corrected to read “FYs 2020, 2021, and 2022”

    33. On page 41576, in the table titled “SUMMARY OF HOSPITAL IQR PROGRAM MEASURES NEWLY FINALIZED FOR REMOVAL,” under the “Claims-Based Coordination of Care Measures”, first column (Short name), the fifth entry “READM-30-PNA” is corrected to read “READM-30-PN”.

    34. On page 41579, table titled “MEASURES FOR THE FY 2021 PAYMENT DETERMINATION,” under “Claims-Based Mortality Measures”, the following entries are corrected by:

    a. Removing the inadvertently included asterisk at the end of the full measure name for MORT-30-STK; and

    b. Adding a row to the table to include an entry for MORT-30-CABG, which was inadvertently omitted, such that the table will read as follows:

    Claims-Based Mortality Measures MORT-30-CABG Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following Coronary Artery Bypass Graft (CABG) Surgery 2558 MORT-30-STK Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate Following Acute Ischemic Stroke N/A

    35. On page 41579, table titled “MEASURES FOR THE FY 2021 PAYMENT DETERMINATION,” under “EHR-Based Clinical Process of Care Measures (that is, Electronic Clinical Quality Measures (eCQMs))”, third column (NQF #), line 11, for the entry for STK-06, the NQF number “0438” is corrected to read “0439” as follows:

    STK-06 Discharged on Statin Medication 0439

    36. On page 41579, table titled “MEASURES FOR THE FY 2021 PAYMENT DETERMINATION,” under “EHR-Based Clinical Process of Care Measures (that is, Electronic Clinical Quality Measures (eCQMs))”, second column (Measure Name), the last line down, the measure name for the entry for VTE-2 is corrected from “Intensive Care Unit Thromboembolism Prophylaxis” to reflect the complete measure name “Intensive Care Unit Venous Thromboembolism Prophylaxis.”

    VTE-2 Intensive Care Unit Venous Thromboembolism Prophylaxis 0372

    37. On page 41599, third column,

    a. Third full paragraph, lines 4 and 5, the phrase “disparity measures” is corrected to read “disparity methods”.

    b. Last paragraph, line 9, the phrase “disparity measures” is corrected to read “disparity methods”.

    38. On page 41672, first column, fourth paragraph, lines 9 through 11, the phrase “Spring 2017 version of the CQM electronic specifications” is corrected to read “2018 eCQM specifications update (published in May 2018)”.

    B. Correction of Errors in the Addendum

    1. On page 41715, third column, fourth full paragraph, lines 3 and 8, the figure “0.997192” is corrected to read “0.997190”.

    2. On page 41716—

    a. First column, fourth full paragraph, line 9, the figure “1.000748” is corrected to read “1.000746”.

    b. Second column, second full paragraph, line 11, the figure “0.985932” is corrected to read “0.985335”.

    c. Third column, second full paragraph, line 3, the figure “0.993142” is corrected to read “0.993911”.

    3. On page 41722—

    a. Middle of the page, the untitled table is corrected to read as follows:

    Quarter Covered charges
  • (April 1, 2016,
  • through
  • March 31, 2017)
  • Cases
  • (April 1, 2016,
  • through
  • March 31, 2017)
  • Covered charges
  • (April 1, 2017,
  • through
  • March 31, 2018)
  • Cases
  • (April 1, 2017,
  • through
  • March 31, 2018)
  • April-June $135,512,389,540 2,415,120 $141,310,805,358 2,407,887 July-September 132,339,957,018 2,356,775 136,951,808,593 2,319,109 October-December 138,602,493,305 2,413,871 141,939,083,023 2,363,685 January-March 150,230,629,335 2,559,371 120,924,791,134 1,983,155 Total 556,685,469,198 9,745,137 541,126,488,108 9,073,836

    b. Bottom of the page, first column,

    i. First paragraph,

    ii. Lines 5, the figures “$57,448 ($559,839,156,948/9,745,137)” are corrected to read “$57,124 ($556,685,469,198/9,745,137)”.

    iii. Lines 9 through 10, the figures “$59,939.96 ($543,885,328,430/9,073,836)” are corrected to read “$59,636 ($541,126,488,108/9,073,836)”.

    iv. Lines 13 through 14, the figures “4.3 percent (1.04338)” are corrected to read “4.4 percent (1.04396)”.

    v. Line 14, the figures “8.9 percent (1.08864)” are corrected to read “9.0 percent (1.08986)”.

    4. On page 41723, first column—

    a. Third full paragraph—

    i. Line 5, the figure “$25,769” is corrected to read “$25,743”.

    ii. Line 7, the figure “$88,484,589,041” is corrected to read “$88,485,100,546”.

    iii. Line 8, the figure “$4,755,375,555” is corrected to read “$4,755,311,111”.

    iv. Lines 12 through 13, the parenthetical phrase “(($88,484,589,041/$93,239,964,596) × 100 = 5.1 percent)” is corrected to read “((1 − ($88,485,100,546/$93,240,411,657)) × 100 = 5.1 percent)”.

    v. Last line, the figure “$25,769” is corrected to read “$25,743”.

    c. Following the sixth full paragraph, the untitled table is corrected to read as follows:

    Operating
  • standardized
  • amounts
  • Capital
  • Federal
  • rate
  • National 0.948999 0.949417

    5. On pages 41724 through 41725, the table titled “CHANGES FROM FY 2018 STANDARDIZED AMOUNTS TO THE FY 2019 STANDARDIZED AMOUNTS”, is corrected to read as follows:

    Changes From FY 2018 Standardized Amounts to the FY 2019 Standardized Amounts Hospital submitted quality
  • data and is a
  • meaningful EHR user
  • Hospital submitted quality
  • data and is NOT a
  • meaningful EHR user
  • Hospital did NOT submit
  • quality data and is a
  • meaningful EHR user
  • Hospital did NOT submit
  • quality data and is NOT a
  • meaningful EHR user
  • FY 2018 Base Rate after removing:
  • 1. FY 2018 Geographic Reclassification Budget Neutrality (0.987985)
  • 2. FY 2018 Operating Outlier Offset (0.948998)
  • If Wage Index is Greater Than 1.0000:
  • Labor (68.3%): $4,059.36
  • Nonlabor (30.4%): $1,884.07
  • If Wage Index is Greater Than 1.0000:
  • Labor (68.3%): $4,059.36
  • Nonlabor (30.4%): $1,884.07
  • If Wage Index is Greater Than 1.0000:
  • Labor (68.3%): $4,059.36
  • Nonlabor (30.4%): $1,884.07
  • If Wage Index is Greater Than 1.0000:
  • Labor (68.3%): $4,059.36.
  • Nonlabor (30.4%): $1,884.07.
  • If Wage Index is less Than or Equal to 1.0000:
  • Labor (62%): $3,684.92
  • Nonlabor (38%): $2,258.50
  • If Wage Index is less Than or Equal to 1.0000:
  • Labor (62%): $3,684.92
  • Nonlabor (38%): $2,258.50
  • If Wage Index is less Than or Equal to 1.0000:
  • Labor (62%): $3,684.92
  • Nonlabor (38%): $2,258.50
  • If Wage Index is less Than or Equal to 1.0000:
  • Labor (62%): $3,684.92.
  • Nonlabor (38%): $2,258.50.
  • FY 2019 Update Factor 1.0135 0.99175 1.00625 0.9845. FY 2019 MS-DRG Recalibration Budget Neutrality Factor 0.99719 0.99719 0.99719 0.99719. FY 2019 Wage Index Budget Neutrality Factor 1.000746 1.000746 1.000746 1.000746. FY 2019 Reclassification Budget Neutrality Factor 0.985335 0.985335 0.985335 0.985335. FY 2019 Operating Outlier Factor 0.948999 0.948999 0.948999 0.948999. FY 2019 Rural Demonstration Budget Neutrality Factor 0.999467 0.999467 0.999467 0.999467. Adjustment for FY 2019 Required under Section 414 of Public Law 114-10 (MACRA) 1.005 1.005 1.005 1.005. National Standardized Amount for FY 2019 if Wage Index is Greater Than 1.0000; Labor/Non-Labor Share Percentage (68.3/31.7) Labor: $3,856.27
  • Nonlabor: $1,789.81
  • Labor: $3,773.51
  • Nonlabor: $1,751.40
  • Labor: $3,828.68
  • Nonlabor: $1,777.01
  • Labor: $3,745.93.
  • Nonlabor: $1,738.60.
  • National Standardized Amount for FY 2019 if Wage Index is Less Than or Equal to 1.0000; Labor/Non-Labor Share Percentage (62/38) Labor: $3,500.57
  • Nonlabor: $2,145.51
  • Labor: $3,425.44
  • Nonlabor: $2,099.47
  • Labor: $3,475.53
  • Nonlabor: $2,130.16
  • Labor: $3,400.41.
  • Nonlabor: $2,084.12.
  • 6. On page 41727—

    a. First column, second full paragraph, line 13, the figure “0.997192” is corrected to read, “0.997190”.

    b. Second column, second full paragraph, line 6, the figure “1.27 percent” is corrected to read “1.20 percent”.

    7. On page 41728, third column—

    a. Second full paragraph, line 12, the figure “0.9986” is corrected to read “0.9980”.

    b. Third full paragraph, line 14, the figure “0.9975” is corrected to read “0.9969”.

    8. On page 41729—

    a. Top of the page—

    i. First column—

    A. First full paragraph—

    1. Line 2, the figure “0.9975” is corrected to read “0.9969”.

    2. Line 4, the figure “0.9986” is corrected to read “0.9980”.

    ii. Second column—

    B. First full paragraph—

    1. Line 8, the figure “$459.72” is corrected to read “$459.41”.

    2. Line 17, the figure “0.9975” is corrected to read “0.9969”.

    3. Third column, first paragraph—

    a. Line 14, the figure “0.25” is corrected to read “0.31”.

    b. Line 20, the figure “1.27” is corrected to read “1.20”.

    b. Middle of page,

    i. The table titled “COMPARISON OF FACTORS AND ADJUSTMENTS: FY 2018 CAPITAL FEDERAL RATE AND FY 2019 CAPITAL FEDERAL RATE” is corrected to read as follows:

    Comparison of Factors and Adjustments: FY 2018 Capital Federal Rate and FY 2019 Capital Federal Rate FY 2018 FY 2019 Change Percent
  • change
  • Update Factor 1 1.0130 1.0140 1.014 1.40 GAF/DRG Adjustment Factor 1 0.9987 0.9969 0.9969 −0.31 Outlier Adjustment Factor 2 0.9483 0.9494 1.0012 0.12 Capital Federal Rate $453.95 $459.41 1.0120 3 1.20 1 The update factor and the GAF/DRG budget neutrality adjustment factors are built permanently into the capital Federal rates. Thus, for example, the incremental change from FY 2018 to FY 2019 resulting from the application of the 0.9969 GAF/DRG budget neutrality adjustment factor for FY 2019 is a net change of 0.9969 (or −0.31percent). 2 The outlier reduction factor is not built permanently into the capital Federal rate; that is, the factor is not applied cumulatively in determining the capital Federal rate. Thus, for example, the net change resulting from the application of the FY 2019 outlier adjustment factor is 0.9494/0.9483 or 1.0012 (or 0.12 percent). 3 Percent change may not sum due to rounding.

    ii. The table titled “COMPARISON OF FACTORS AND ADJUSTMENTS: PROPOSED FY 2019 CAPITAL FEDERAL RATE AND FINAL FY 2019 CAPITAL FEDERAL RATE” is corrected to read as follows:

    Comparison of Factors and Adjustments: Proposed FY 2019 Capital Federal Rate and Final FY 2019 Capital Federal Rate Proposed FY 2019 Final FY 2019 Change Percent
  • change *
  • Update Factor 1.0120 1.0140 1.0020 0.20 GAF/DRG Adjustment Factor 0.9997 0.9969 0.9972 −0.28 Outlier Adjustment Factor 0.9494 0.9494 0.0000 0.00 Capital Federal Rate $459.78 $459.41 0.9992 −0.0008 * Percent change may not sum due to rounding.

    c. Bottom of page, second column, first partial paragraph, last line, the figure, “$25,769” is corrected to read “$25,743”.

    9. On page 41730, third column, last paragraph, line 21, the figure “0.999713.” is corrected to read “0.999215”.

    10. On page 41731, first column, first partial paragraph—

    a. Line 3, the figure “0.990884” is corrected to read “0.990878”.

    b. Lines 10 and 11, the mathematical phrase “$41,579.65 (calculated as $41,415.11 × 1.0135 × 0.999713× 0.990884)” is corrected to read “$41,558.68 (calculated as $41,415.11 × 1.0135 × 0.999215 × 0. 990878)”.

    c. Lines 18 through 20, “$40,759.12 (calculated as $41,415.11 × 0.9935 × 0.999713× 0.990884)” is corrected to read “$40,738.57 (calculated as $41,415.11 × 0.9935 × 0.999215 × 0. 990878)”.

    11. On page 41733, second column, last paragraph,

    a. Line 6, the figure “0.999713” is corrected to read “0.999215”.

    b. Line 11, the figure “0.999713” is corrected to read “0.999215“.

    12. On page 41736, second column—

    a. Third full paragraph—

    i. Line 26, the figure, “$27,124” is corrected to read “$27,121”.

    ii. Line 32, the figure, “$27,124” is corrected to read “$27,121”.

    iii. Last line, the figure, “$27,124” is corrected to read “$27,121”.

    b. Last partial paragraph, last line, the figure, “$27,124” is corrected to read “$27,121”.

    13. On page 41737—

    a. Second column, last paragraph, line 8, the figure, “$25,769” is corrected to read “$25,743”.

    b. Third column—

    i. First partial paragraph, last line, the figure, “$25,769” is corrected to read “$25,743”.

    ii. Third full paragraph, line 3, the figure, “$25,769” is corrected to read “$25,743”.

    14. On page 41738, third column, last paragraph, line 26, the figure “$41,579.65” is corrected to read “$41,558.68”.

    15. On page 41739, top of page—

    a. Second column, second partial paragraph, last line, the figure “$41,579.65” is corrected to read “$41,558.68”.

    b. Third column, first partial paragraph, line 13, the parenthetical figure “($41,189.62)” is corrected to read “($41,190.33)”.

    c. Untitled table, the table is corrected to read as follows:

    Unadjusted LTCH PPS Standard Federal Prospective Payment Rate $41,558.68 Labor-Related Share × 0.660 Labor-Related Portion of the LTCH PPS Standard Federal Payment Rate = $27,428.73 Wage Index (CBSA 16974) 1.0511 Wage-Adjusted Labor Share of LTCH PPS Standard Federal Payment Rate = $28,830.34 Nonlabor-Related Portion of the LTCH PPS Standard Federal Payment Rate ($41,558.68 x 0.340) + $14,129.95 Adjusted LTCH PPS Standard Federal Payment Amount = $42,960.29 MS-LTC-DRG 189 Relative Weight × 0.9588 Total Adjusted LTCH PPS Standard Federal Prospective Payment = $41,190.33

    16. On page 41740, bottom of the page, the table titled “TABLE 1A— NATIONAL ADJUSTED OPERATING STANDARDIZED AMOUNTS, LABOR/NONLABOR [(68.3 percent labor share/31.7 percent nonlabor share if wage index is greater than 1)—FY 2019]” is corrected to read as follows:

    Table 1A—National Adjusted Operating Standardized Amounts, Labor/Nonlabor [(68.3 percent labor share/31.7 percent nonlabor share if wage index is greater than 1)—FY 2019] Hospital submitted quality data
  • and is a meaningful
  • EHR user
  • (update = 1.35 percent)
  • Labor Nonlabor Hospital submitted quality data
  • and is NOT a meaningful
  • EHR user
  • (update = −0.825 percent)
  • Labor Nonlabor Hospital did NOT submit quality data and is a meaningful
  • EHR user
  • (update = 0.625 percent)
  • Labor Nonlabor Hospital did NOT submit quality data and is NOT a meaningful
  • EHR user
  • (update = −1.55 percent)
  • Labor Nonlabor
    $3,856.27 $1,789.81 $3,773.51 $1,751.40 $3,828.68 $1,777.01 $3,745.93 $1,738.60

    17. On page 41741—

    a. Top of the page—

    i. The table titled “TABLE 1B—NATIONAL ADJUSTED OPERATING STANDARDIZED AMOUNTS, LABOR/NONLABOR [(62 percent labor share/38 percent nonlabor share if wage index is less than or equal to 1)—FY 2019]” is corrected to read as follows:

    Table 1B—National Adjusted Operating Standardized Amounts, Labor/Nonlabor [(62 percent labor share/38 percent nonlabor share if wage index is less than or equal to 1)—FY 2019] Hospital submitted quality data
  • and is a meaningful
  • EHR user
  • (update = 1.35 percent)
  • Labor Nonlabor Hospital submitted quality data
  • and is NOT a meaningful
  • EHR user
  • (update = −0.825 percent)
  • Labor Nonlabor Hospital did NOT submit quality data and is a meaningful
  • EHR user
  • (update = 0.625 percent)
  • Labor Nonlabor Hospital did NOT submit quality data and is NOT a meaningful
  • EHR user
  • (update = −1.55 percent)
  • Labor Nonlabor
    $3,500.57 $2,145.51 $3,425.44 $2,099.47 $3,475.53 $3,475.53 $3,400.41 $2,084.12

    ii. The table titled “Table 1C—ADJUSTED OPERATING STANDARDIZED AMOUNTS FOR HOSPITALS IN PUERTO RICO, LABOR/NONLABOR [(National: 62 percent labor share/38 percent nonlabor share because wage index is less than or equal to 1)—FY 2019]” is corrected to read as follows:

    Table 1C—Adjusted Operating Standardized Amounts for Hospitals in Puerto Rico, Labor/Nonlabor [(National: 62 percent labor share/38 percent nonlabor share because wage index is less than or equal to 1)—FY 2019] Standardized amount Rates if wage index is greater than 1 Labor Nonlabor Rates if wage index is less than or equal to 1 Labor Nonlabor National 1 Not Applicable Not Applicable $3,500.57 $2,145.51 1 For FY 2019, there are no CBSAs in Puerto Rico with a national wage index greater than 1.

    b. Middle of the page—

    i. The table titled “Table 1D—CAPITAL STANDARD FEDERAL PAYMENT RATE [FY 2019]” is corrected to read as follows:

    Table 1D—Capital Standard Federal Payment Rate [FY 2019] Rate National $459.41

    ii. The table titled “Table 1E—LTCH PPS STANDARD FEDERAL PAYMENT RATE [FY 2019]” is corrected to read as follows:

    Table 1E—LTCH PPS Standard Federal Payment Rate [FY 2019] Full update
  • (1.35 percent)
  • Reduced update *
  • (−0.65 Percent)
  • Standard Federal Rate $41,558.68 $40,738.57 * For LTCHs that fail to submit quality reporting data for FY 2019 in accordance with the LTCH Quality Reporting Program (LTCH QRP), the annual update is reduced by 2.0 percentage points as required by section 1886(m)(5) of the Act.
    C. Corrections of Errors in the Appendices

    1. On page 41742—

    a. Second column, second full paragraph—

    i. Line 1, the figure “3,256” is corrected to read “3,255”.

    ii. Line 7, the figure “1,398” is corrected to read “1,399”.

    2. On pages 41744 through 41746, the table and table notes for the table titled “TABLE I—IMPACT ANALYSIS OF CHANGES TO THE IPPS FOR OPERATING COSTS FOR FY 2019” are corrected to read as follows:

    TABLE I—Impact Analysis of Changes to the IPPS for Operating Costs for FY 2019 Number of
  • hospitals 1
  • Hospital rate update and adjustment under MACRA FY 2019 weights and DRG changes with
  • application of recalibration budget
  • neutrality
  • FY 2019 wage data with
  • application of wage budget neutrality
  • FY 2019 MGCRB
  • reclassifications
  • Rural floor with
  • application of
  • national rural floor budget
  • neutrality
  • Application of the frontier wage index and
  • outmigration
  • adjustment
  • All FY 2019
  • changes
  • (1) 2 (2) 3 (3) 4 (4) 5 (5) 6 (6) 7 (7) 8 All Hospitals 3,255 1.8 0 0 0 0 0.1 2.4 By Geographic Location: Urban hospitals 2,483 1.8 0 0 −0.1 0 0.1 2.5 Large urban areas 1,302 1.8 0.1 0 −0.8 0 0 2.4 Other urban areas 1,181 1.8 0 0 0.6 0 0.2 2.5 Rural hospitals 772 1.5 −0.3 −0.1 1.2 −0.1 0.1 1.2 Bed Size (Urban): 0-99 beds 644 1.7 −0.5 0.1 −0.8 0.2 0.2 1.7 100-199 beds 763 1.8 0 0 −0.1 0.2 0.2 2.2 200-299 beds 433 1.8 0 0 0.1 0 0.1 2.3 300-499 beds 424 1.8 0.1 0 0 −0.1 0.1 2.5 500 or more beds 219 1.8 0.1 0 −0.2 0 0 2.9 Bed Size (Rural): 0-49 beds 305 1.4 −0.5 0 0.2 −0.1 0.2 0.9 50-99 beds 274 1.3 −0.4 0 0.7 −0.1 0.2 1.1 100-149 beds 108 1.6 −0.5 −0.1 0.9 −0.1 0 1.2 150-199 beds 45 1.7 −0.1 −0.2 2 −0.2 0.3 1.4 200 or more beds 40 1.7 0.1 −0.2 2.3 −0.2 0 1.5 Urban by Region: New England 113 1.8 0.1 −0.5 2.7 2.4 0.1 4.7 Middle Atlantic 310 1.8 0.2 0 0.2 −0.3 0.1 2.3 South Atlantic 401 1.8 0 −0.1 −0.6 −0.3 0 2 East North Central 386 1.8 0.1 −0.2 −0.5 −0.3 0.1 2 East South Central 147 1.8 0 0 −0.5 −0.3 0 2.1 West North Central 158 1.8 −0.1 0 −0.9 −0.3 0.6 2.1 West South Central 379 1.8 0 0.2 −0.8 −0.3 0 2.3 Mountain 164 1.7 −0.1 −0.7 0.4 0.6 0.3 2.2 Pacific 374 1.8 −0.1 0.8 0.1 0.2 0.1 3.3 Puerto Rico 51 1.8 0 −1.2 −1.3 0.1 0.1 0.7 Rural by Region: New England 20 1.5 0.1 −0.5 1.5 −0.2 0 0.9 Middle Atlantic 53 1.5 −0.2 −0.1 0.6 −0.1 0.1 1.4 South Atlantic 122 1.6 −0.2 −0.2 1.7 −0.1 0.1 1.2 East North Central 114 1.5 −0.3 0.1 0.9 −0.1 0 1.1 East South Central 150 1.7 −0.1 −0.2 2.5 −0.3 0.1 1.8 West North Central 94 1.3 −0.5 0 0.1 0 0.2 0.9 West South Central 145 1.5 −0.3 0.2 1.3 −0.3 0.2 1.5 Mountain 51 1.3 −1.1 −0.4 −0.1 −0.1 0.8 0.8 Pacific 23 1.4 −0.4 −0.2 0.8 −0.1 0 1 By Payment Classification: Urban hospitals 2,264 1.8 0 0 −0.6 0.1 0.1 2.3 Large urban areas 1,317 1.8 0.1 0 −0.7 0 0 2.4 Other urban areas 947 1.8 0 0 −0.4 0.2 0.2 2.1 Rural areas 991 1.7 −0.1 0 2.1 −0.2 0.1 2.7 Teaching Status: Nonteaching 2,156 1.7 −0.1 0 0.1 0.1 0.1 2.1 Fewer than 100 residents 849 1.8 0 0 −0.2 −0.1 0.2 2.2 100 or more residents 250 1.8 0.2 0 0.1 −0.1 0 3.1 Urban DSH: Non-DSH 520 1.8 −0.3 −0.2 −0.2 −0.1 0.2 2 100 or more beds 1,462 1.8 0.1 0 −0.6 0.1 0.1 2.3 Less than 100 beds 367 1.7 −0.2 0.3 −0.6 0.2 0.1 1.9 Rural DSH: SCH 255 1.2 −0.6 −0.1 0 0 0 0.7 RRC 382 1.7 0 0.1 2.4 −0.3 0.1 3.1 100 or more beds 33 1.8 0 −0.6 1.6 −0.4 0.1 2.9 Less than 100 beds 236 1.6 −0.3 0 0.7 −0.2 0.3 1.5 Urban teaching and DSH: Both teaching and DSH 805 1.8 0.1 0 −0.7 0 0.1 2.4 Teaching and no DSH 89 1.9 −0.1 −0.1 −0.5 −0.1 0 2.3 No teaching and DSH 1,024 1.8 0 0.1 −0.4 0.3 0.1 2.2 No teaching and no DSH 346 1.8 −0.3 −0.2 −0.6 −0.1 0.2 1.7 Special Hospital Types: RRC 327 1.8 0 0.2 2.7 −0.3 0.2 3.4 SCH 311 1.1 −0.5 0.1 −0.1 0 0 0.8 MDH 140 1.5 −0.5 −0.1 0.7 0 0 1.2 SCH and RRC 134 1.4 −0.2 −0.2 0.3 0 0.1 1.2 MDH and RRC 16 1.5 −0.4 0 0.8 −0.1 0 1.1 Type of Ownership: Voluntary 1,898 1.8 0 0 0.1 0 0.1 2.4 Proprietary 856 1.8 0 −0.1 −0.1 0 0.1 2.1 Government 501 1.7 0 0.2 −0.2 −0.1 0 2.5 Medicare Utilization as a Percent of Inpatient Days: 0-25 602 1.8 0.1 −0.1 −0.4 −0.1 0 2.3 25-50 2,138 1.8 0 0 0 0 0.1 2.5 50-65 421 1.7 −0.2 −0.1 0.5 0.3 0.1 1.7 Over 65 73 1.1 0.5 −0.1 −0.4 −0.2 0.1 2.5 FY 2019 Reclassifications by the Medicare Geographic Classification Review Board: All Reclassified Hospitals 859 1.8 0 0.1 2.4 −0.3 0 2.8 Non-Reclassified Hospitals 2,396 1.8 0 0 −1.1 0.1 0.1 2.2 Urban Hospitals Reclassified 588 1.8 0 0.1 2.5 −0.3 0 3.1 Urban Non-reclassified Hospitals 1,835 1.8 0 0 −1.2 0.1 0.1 2.3 Rural Hospitals Reclassified Full Year 271 1.5 −0.2 −0.1 2.1 −0.2 0.1 1.5 Rural Non-reclassified Hospitals Full Year 454 1.4 −0.5 −0.1 −0.4 −0.1 0.2 0.8 All Section 401 Reclassified Hospitals 266 1.7 0 0.1 2.5 −0.3 0.1 3.4 Other Reclassified Hospitals (Section 1886(d)(8)(B)) 47 1.7 −0.2 −0.1 2.8 −0.3 0 1.5 1 Because data necessary to classify some hospitals by category were missing, the total number of hospitals in each category may not equal the national total. Discharge data are from FY 2017, and hospital cost report data are from reporting periods beginning in FY 2016 and FY 2015. 2 This column displays the payment impact of the hospital rate update and other adjustments, including the 1.35 percent adjustment to the national standardized amount and the hospital-specific rate (the estimated 2.9 percent market basket update reduced by 0.8 percentage point for the multifactor productivity adjustment and the 0.75 percentage point reduction under the Affordable Care Act), and the 0.5 percent adjustment to the national standardized amount required under section 414 of the MACRA. 3 This column displays the payment impact of the changes to the Version 36 GROUPER, the changes to the relative weights and the recalibration of the MS-DRG weights based on FY 2017 MedPAR data in accordance with section 1886(d)(4)(C)(iii) of the Act. This column displays the application of the recalibration budget neutrality factor of 0.997190 in accordance with section 1886(d)(4)(C)(iii) of the Act. 4 This column displays the payment impact of the update to wage index data using FY 2015 cost report data and the OMB labor market area delineations based on 2010 Decennial Census data. This column displays the payment impact of the application of the wage budget neutrality factor, which is calculated separately from the recalibration budget neutrality factor, and is calculated in accordance with section 1886(d)(3)(E)(i) of the Act. The wage budget neutrality factor is 1.000746. 5 Shown here are the effects of geographic reclassifications by the Medicare Geographic Classification Review Board (MGCRB). The effects demonstrate the FY 2019 payment impact of going from no reclassifications to the reclassifications scheduled to be in effect for FY 2019. Reclassification for prior years has no bearing on the payment impacts shown here. This column reflects the geographic budget neutrality factor of 0.985335. 6 This column displays the effects of the rural floor and expiration of the imputed floor. The Affordable Care Act requires the rural floor budget neutrality adjustment to be 100 percent national level adjustment. The rural floor budget neutrality factor applied to the wage index is 0.993911. 7 This column shows the combined impact of the policy required under section 10324 of the Affordable Care Act that hospitals located in frontier States have a wage index no less than 1.0 and of section 1886(d)(13) of the Act, as added by section 505 of Public Law 108-173, which provides for an increase in a hospital's wage index if a threshold percentage of residents of the county where the hospital is located commute to work at hospitals in counties with higher wage indexes. These are not budget neutral policies. 8 This column shows the estimated change in payments from FY 2018 to FY 2019.

    3. On page 41746, lower half of page, second column, third paragraph, line 6, the figure “0.997192” is corrected to read “0.997190”.

    4. On page 41747—

    a. Top half of page, second column, first partial paragraph, line 19, the figure “1.000748” is corrected to read “1.000746”.

    b. Lower half of page, third column, first partial paragraph—

    i. First line, the figure “0.985932” is corrected to read “0.985335”.

    ii. Line 11, “which will experience no change” is corrected to read, “which will experience a 0.1 percent decrease”.

    5. On page 41748, top of page—

    a. First column, second full paragraph—

    i. Line 6, the figure “0.993142” is corrected to read “0.993911”.

    ii. Line 7, the figure “0.69 percent” is corrected to read “0.61 percent”.

    b. Second column, first full paragraph—

    i. Line 1, the figure “263” is corrected to read “253”.

    ii. Line 5, the figure “0.993142” is corrected to read “0.993911”.

    iii. Line 7, the figure “0.2” is corrected to read “0.1”.

    iv. Line 22, the figure “2.5” is corrected to read “2.4”.

    v. Line 30, the figure “$121 million” is corrected to read “$123 million”.

    6. On pages 41748 and 41749, the table titled “FY 2019 IPPS ESTIMATED PAYMENTS DUE TO RURAL FLOOR WITH NATIONAL BUDGET NEUTRALITY” is corrected to read as follows:

    FY 2019 IPPS Estimated Payments Due to Rural Floor With National Budget Neutrality State Number of
  • hospitals
  • Number of
  • hospitals that
  • would receive
  • the rural floor
  • Percent change
  • in payments
  • due to
  • application of rural floor
  • with budget
  • neutrality
  • Difference
  • (in $ millions)
  • (1) (2) (3) (4) Alabama 84 2 −0.3 $−5 Alaska 6 3 0.1 0 Arizona 56 33 1.3 26 Arkansas 45 0 −0.3 −3 California 297 59 0.4 42 Colorado 45 9 0.7 9 Connecticut 30 8 1.3 21 Delaware 6 0 −0.3 −2 Washington, DC 7 0 −0.3 −2 Florida 168 7 −0.3 −20 Georgia 101 0 −0.3 −8 Hawaii 12 6 −0.1 0 Idaho 14 0 −0.3 −1 Illinois 125 2 −0.3 −14 Indiana 85 0 −0.3 −7 Iowa 34 0 −0.3 −3 Kansas 51 0 −0.2 −2 Kentucky 64 0 −0.3 −5 Louisiana 90 0 −0.3 −5 Maine 17 0 −0.3 −2 Massachusetts 56 29 3.3 123 Michigan 94 0 −0.3 −14 Minnesota 49 0 −0.2 −6 Mississippi 59 0 −0.3 −3 Missouri 72 0 −0.2 −6 Montana 13 1 −0.2 −1 Nebraska 23 0 −0.3 −2 Nevada 22 3 0.4 3 New Hampshire 13 8 2.4 14 New Jersey 64 0 −0.4 −16 New Mexico 24 2 −0.2 −1 New York 149 16 −0.3 −21 North Carolina 84 0 −0.3 −9 North Dakota 6 3 0.4 1 Ohio 130 7 −0.3 −11 Oklahoma 79 2 −0.3 −4 Oregon 34 1 −0.2 −2 Pennsylvania 150 3 −0.3 −17 Puerto Rico 51 11 0.1 0 Rhode Island 11 0 −0.4 −1 South Carolina 54 6 −0.1 −1 South Dakota 17 0 −0.2 −1 Tennessee 90 6 −0.3 −7 Texas 310 13 −0.3 −18 Utah 31 0 −0.3 −2 Vermont 6 0 −0.2 0 Virginia 74 1 −0.2 −6 Washington 48 3 −0.3 −7 West Virginia 29 2 −0.2 −1 Wisconsin 66 5 −0.3 −5 Wyoming 10 2 0 0

    7. On pages 41750 and 41751, the table titled “TABLE II—IMPACT ANALYSIS OF CHANGES FOR FY 2019 ACUTE CARE HOSPITAL OPERATING PROSPECTIVE PAYMENT SYSTEM [Payments per discharge]” is corrected to read as follows:

    Table II—Impact Analysis of Changes for FY 2019 Acute Care Hospital Operating Prospective Payment System [Payments per discharge] Number of
  • hospitals
  • Estimated
  • average
  • FY 2018
  • payment per
  • discharge
  • Estimated
  • average
  • FY 2019
  • payment per
  • discharge
  • FY 2019
  • changes
  • (1) (2) (3) (4) All Hospitals 3,255 12,172 12,463 2.4 By Geographic Location: Urban hospitals 2,483 12,508 12,819 2.5 Large urban areas 1,302 12,986 13,302 2.4 Other urban areas 1,181 12,049 12,355 2.5 Rural hospitals 772 9,193 9,307 1.2 Bed Size (Urban): 0-99 beds 644 9,945 10,113 1.7 100-199 beds 763 10,399 10,623 2.2 200-299 beds 433 11,384 11,650 2.3 300-499 beds 424 12,606 12,917 2.5 500 or more beds 219 15,449 15,893 2.9 Bed Size (Rural): 0-49 beds 305 7,826 7,897 0.9 50-99 beds 274 8,746 8,843 1.1 100-149 beds 108 9,150 9,256 1.2 150-199 beds 45 9,667 9,805 1.4 200 or more beds 40 10,734 10,899 1.5 Urban by Region: New England 113 13,491 14,131 4.7 Middle Atlantic 310 14,099 14,429 2.3 South Atlantic 401 11,145 11,372 2 East North Central 386 11,830 12,072 2 East South Central 147 10,517 10,742 2.1 West North Central 158 12,266 12,524 2.1 West South Central 379 11,310 11,574 2.3 Mountain 164 12,938 13,218 2.2 Pacific 374 15,773 16,289 3.3 Puerto Rico 51 9,117 9,185 0.7 Rural by Region: New England 20 12,613 12,728 0.9 Middle Atlantic 53 9,137 9,265 1.4 South Atlantic 122 8,497 8,598 1.2 East North Central 114 9,444 9,551 1.1 East South Central 150 8,142 8,285 1.8 West North Central 94 10,019 10,112 0.9 West South Central 145 7,844 7,958 1.5 Mountain 51 11,139 11,226 0.8 Pacific 23 12,734 12,858 1 By Payment Classification: Urban hospitals 2,264 12,276 12,557 2.3 Large urban areas 1,317 12,974 13,290 2.4 Other urban areas 947 11,325 11,559 2.1 Rural areas 991 11,833 12,155 2.7 Teaching Status: Nonteaching 2,156 10,059 10,267 2.1 Fewer than 100 residents 849 11,616 11,866 2.2 100 or more residents 250 17,680 18,220 3.1 Urban DSH: Non-DSH 520 10,533 10,748 2 100 or more beds 1,462 12,643 12,939 2.3 Less than 100 beds 367 9,220 9,397 1.9 Rural DSH: SCH 255 10,239 10,313 0.7 RRC 382 12,516 12,901 3.1 100 or more beds 33 13,322 13,711 2.9 Less than 100 beds 236 7,300 7,410 1.5 Urban teaching and DSH: Both teaching and DSH 805 13,783 14,112 2.4 Teaching and no DSH 89 11,402 11,664 2.3 No teaching and DSH 1,024 10,322 10,549 2.2 No teaching and no DSH 346 9,951 10,125 1.7 Special Hospital Types: RRC 327 12,440 12,863 3.4 SCH 311 11,126 11,219 0.8 MDH 140 7,958 8,056 1.2 SCH and RRC 134 11,502 11,640 1.2 MDH and RRC 16 10,039 10,149 1.1 Type of Ownership: Voluntary 1,898 12,323 12,624 2.4 Proprietary 856 10,658 10,879 2.1 Government 501 13,378 13,708 2.5 Medicare Utilization as a Percent of Inpatient Days: 0-25 602 14,927 15,266 2.3 25-50 2,138 11,996 12,294 2.5 50-65 421 9,817 9,985 1.7 Over 65 73 7,271 7,450 2.5 FY 2019 Reclassifications by the Medicare Geographic Classification Review Board: All Reclassified Hospitals 859 12,226 12,572 2.8 Non-Reclassified Hospitals 2,396 12,148 12,415 2.2 Urban Hospitals Reclassified 588 12,821 13,212 3.1 Urban Nonreclassified Hospitals 1,835 12,349 12,629 2.3 Rural Hospitals Reclassified Full Year 271 9,566 9,710 1.5 Rural Nonreclassified Hospitals Full Year 454 8,750 8,821 0.8 All Section 401 Reclassified Hospitals 266 13,625 14,091 3.4 Other Reclassified Hospitals (Section 1886(d)(8)(B)) 47 8,609 8,736 1.5

    8. On pages 41753 through 41754 the table titled “MODELED UNCOMPENSATED CARE PAYMENTS FOR ESTIMATED FY 2019 DSHs BY HOSPITAL TYPE: MODEL UCP $ (IN MILLIONS) * FROM FY 2018 to FY 2019” is corrected to read as follows:

    Modeled Uncompensated Care Payments for Estimated FY 2019 DSHs by Hospital Type: Model UCP $ (in Millions) * From FY 2018 to FY 2019 Number of
  • estimated
  • DSHs
  • FY 2018
  • final rule
  • CN estimated
  • UCP $
  • (in millions)
  • FY 2019
  • final rule
  • estimated
  • UCP $
  • (in millions)
  • Dollar
  • difference:
  • FY 2019-
  • FY 2018
  • (in millions)
  • Percent
  • change **
  • (1) (2) (3) (4) (5) Total 2,447 $6,767 $8,273 $1,506 22.26 By Geographic Location: Urban Hospitals 1,953 6,422 7,802 1,380 21.49 Large Urban Areas 1,046 3,847 4,706 859 22.33 Other Urban Areas 907 2,575 3,096 521 20.22 Rural Hospitals 494 345 471 126 36.64 Bed Size (Urban): 0 to 99 Beds 342 177 257 79 44.80 100 to 249 Beds 860 1,519 1,903 384 25.28 250+ Beds 751 4,726 5,642 916 19.39 Bed Size (Rural): 0 to 99 Beds 365 164 229 64 39.19 100 to 249 Beds 116 146 200 54 36.66 250+ Beds 13 34 43 8 24.33 Urban by Region: New England 91 259 279 20 7.76 Middle Atlantic 244 1,004 1,058 55 5.45 South Atlantic 320 1,343 1,769 426 31.69 East North Central 323 864 1,010 146 16.92 East South Central 133 389 477 88 22.71 West North Central 104 312 386 74 23.68 West South Central 254 981 1,423 442 45.03 Mountain 125 313 397 84 26.78 Pacific 318 874 899 25 2.88 Puerto Rico 41 82 102 20 24.47 Rural by Region: New England 9 14 17 3 19.24 Middle Atlantic 26 19 22 2 12.43 South Atlantic 88 79 116 37 47.54 East North Central 69 40 56 16 41.12 East South Central 135 93 106 13 13.78 West North Central 29 16 22 6 40.28 West South Central 106 66 102 36 53.62 Mountain 27 14 26 12 84.16 Pacific 5 4 5 1 24.85 By Payment Classification: Urban Hospitals 1,866 5,917 7,257 1,340 22.65 Large Urban Areas 1,058 3,855 4,717 862 22.37 Other Urban Areas 808 2,062 2,540 478 23.16 Rural Hospitals 581 850 1,016 166 19.54 Teaching Status: Nonteaching 1,509 2,020 2,597 578 28.62 Fewer than 100 residents 694 2,246 2,744 498 22.17 100 or more residents 244 2,501 2,931 430 17.20 Type of Ownership: Voluntary 1,447 4,137 4,895 758 18.32 Proprietary 561 1,015 1,259 244 24.05 Government 439 1,615 2,119 504 31.24 Medicare Utilization Percent: *** 0 to 25 472 2,255 2,720 464 20.60 25 to 50 1,674 4,290 5,266 977 22.77 50 to 65 262 215 276 61 28.34 Greater than 65 36 7 11 4 56.55 Source: Dobson | DaVanzo analysis of 2013-2015 Hospital Cost Reports. * Dollar UCP calculated by [0.75 * estimated section 1886(d)(5)(F) payments * Factor 2 * Factor 3]. When summed across all hospitals projected to receive DSH payments, uncompensated care payments are estimated to be $6,767 million in FY 2018 and $8,273 million in FY 2019. ** Percentage change is determined as the difference between Medicare UCP payments modeled for the FY 2019 IPPS/LTCH PPS proposed rule (column 3) and Medicare UCP payments modeled for the FY 2018 IPPS/LTCH PPS final rule correction notice (column 2) divided by Medicare UCP payments modeled for the FY 2018 final rule correction notice (column 2) times 100 percent. *** Hospitals with Missing or Unknown Medicare Utilization are not shown in table.

    9. On page 41754,

    a. Second column, first full paragraph,

    i. Line 5, the figure “36.66” is corrected to read “36.64”.

    ii. Line 8, the figure “21.48” is corrected to read “21.49”.

    b. Third column, first partial paragraph,

    i. Line 2, the figure “39.52” is corrected to read “39.19”.

    ii. Line 5, the figure “36.35” is corrected to read “36.66”

    iii. Line 7, the figure “24.35” is corrected to read “24.33”.

    iv. Line 13, the figure “44.83” is corrected to read “44.80”.

    v. Line 16, the figure “25.23” is corrected to read “25.28”.

    vi. Line 19, the figure “19.40” is corrected to read “19.39”.

    10. On page 41755, first column, second paragraph—

    a. Line 5, the figure “22.14” is corrected to read “22.17”.

    b. Line 9, the figure “17.23” is corrected to read “17.20”.

    c. Line 12, the figure “31.26” is corrected to read “31.24”.

    d. Line 12, the figure “24.06” is corrected to read “24.05”.

    e. Line 15, the figure “18.30” is corrected to read “18.32”.

    11. On page 41756, bottom of the page—

    a. First column, before the first paragraph, the section heading “a. Effects of Proposed Changes for FY 2019” is corrected to read “a. Effects of Changes for FY 2019”.

    b. Second column, last paragraph, line 1, the phrase “The proposed estimated impacts” is corrected to read “The estimated impacts”.

    12. On pages 41758 through 41759, the table titled “ESTIMATED PROPORTION OF HOSPITALS IN THE WORST-PERFORMING QUARTILE (>75th PERCENTILE) OF THE TOTAL HAC SCORES FOR THE FY 2019 HAC REDUCTION PROGRAM” is corrected to read as follows:

    Estimated Proportion of Hospitals in the Worst-Performing Quartile (>75th Percentile) of the Total HAC Scores for the FY 2019 HAC Reduction Program [By hospital characteristic] Hospital characteristic Number of
  • hospitals
  • Number of
  • hospitals in
  • the worst-
  • performing
  • quartile a
  • Percent of
  • hospitals in
  • the worst-
  • performing
  • quartile b
  • Total c 3,219 804 25.0 By Geographic Location (n = 3,201): d Urban hospitals 2,416 628 26.0 1-99 beds 622 133 21.4 100-199 beds 728 182 25.0 200-299 beds 430 119 27.7 300-399 beds 278 80 28.8 400-499 beds 145 39 26.9 500 or more beds 213 75 35.2 Rural hospitals 785 165 21.0 1-49 beds 304 68 22.4 50-99 beds 282 56 19.9 100-149 beds 116 22 19.0 150-199 beds 44 10 22.7 200 or more beds 39 9 23.1 By Safety-Net Status (n = 3,201): e Non-safety net 2,555 576 22.5 Safety-net 646 217 33.6 By DSH Percent (n = 3,201): f 0-24 1,313 292 22.2 25-49 1,507 366 24.3 50-64 198 75 37.9 65 and over 183 60 32.8 By Teaching Status (n = 3,201): g Non-teaching 2,121 484 22.8 Fewer than 100 residents 832 196 23.6 100 or more residents 248 113 45.6 By Ownership (n = 3,173): Voluntary 1,868 466 24.9 Proprietary 813 175 21.5 Government 492 145 29.5 By MCR Percent (n = 3,175): h 0-24 511 144 28.2 25-49 2,118 505 23.8 50-64 473 117 24.7 65 and over 73 15 20.5 By Region (n = 3,217): i New England 133 43 32.3 Mid-Atlantic 364 101 27.7 South Atlantic 522 133 25.5 East North Central 498 108 21.7 East South Central 299 68 22.7 West North Central 256 57 22.3 West South Central 519 114 22.0 Mountain 229 60 26.2 Pacific 397 118 29.7 Source: FY 2019 HAC Reduction Program Final Rule Results are based on CMS PSI 90 Composite data from October 2015 through June 2017 and CDC CLABSI, CAUTI, SSI, CDI, and MRSA results from January 2016 through December 2017. Hospital Characteristics are based on the FY 2019 Hospital Inpatient Prospective Payment System (IPPS) Proposed Rule Impact File. a This column is the number of non-Maryland hospitals with a Total HAC Score within the corresponding characteristic that are estimated to be in the worst-performing quartile. b This column is the percent of non-Maryland hospitals within each characteristic that are estimated to be in the worst-performing quartile. The percentages are calculated by dividing the number of non-Maryland hospitals with a Total HAC Score in the worst-performing quartile by the total number of non-Maryland hospitals with a Total HAC Score within that characteristic. c The number of non-Maryland hospitals with a FY 2019 Total HAC Score (N=3,219). Note that not all hospitals have data for all hospital characteristics. d The number of hospitals that had information for geographic location with bed size, Safety-net status, Disproportionate Share Hospital (DSH) percent, teaching status, and ownership status (n=3,201). e A hospital is considered a Safety-net hospital if it is in the top quintile for DSH percent. f The DSH patient percentage is equal to the sum of (1) the percentage of Medicare inpatient days attributable to patients eligible for both Medicare Part A and Supplemental Security Income and (2) the percentage of total inpatient days attributable to patients eligible for Medicaid but not Medicare Part A. g A hospital is considered a teaching hospital if it has an Indirect Medical Education adjustment factor for Operation PPS (TCHOP) greater than zero. h Not all hospitals had data for MCR percent (n=3,175). i Not all hospitals had data for Region (n=3,217).

    13. On page 41763—

    a. Second column, fourth bullet, the figure “0.9975” is corrected to read “0.9969”.

    b. Third column, first full paragraph, line 5, the figure “3,256” is corrected to read “3,255”.

    14. On page 41764, third column—

    a. Line 12, the figure “1.0” is corrected to read “1.1”.

    b. Line 14, the figure “3.0” is corrected to read “2.9”.

    15. On pages 41764 through 41765, the table titled “TABLE III—COMPARISON OF TOTAL PAYMENTS PER CASE [FY 2018 payments compared to FY 2019 payments]” is corrected to read as follows:

    Table III—Comparison of Total Payments per Case [FY 2018 payments compared to FY 2019 payments] Number of
  • hospitals
  • Average
  • FY 2018
  • payments/case
  • Average
  • FY 2019
  • payments/case
  • Percent
  • change
  • By Geographic Location: All hospitals 3,255 $943 $963 2.1 Large urban areas (populations over 1 million) 2,483 974 997 2.3 Other urban areas (populations of 1 million of fewer) 1,302 1,011 1,042 3.2 Urban hospitals 1,181 939 952 1.4 0-99 beds 644 789 812 3.0 100-199 beds 763 835 854 2.4 200-299 beds 433 902 922 2.2 300-499 beds 424 981 1,003 2.2 500 or more beds 219 1,170 1,197 2.3 Rural hospitals 772 666 659 −0.9 0-49 beds 305 541 556 2.6 50-99 beds 274 606 621 2.3 100-149 beds 108 677 654 −3.3 150-199 beds 45 729 706 −3.2 200 or more beds 40 808 781 −3.3 By Region: Urban by Region 2,483 974 997 2.3 New England 113 1,068 1,108 3.8 Middle Atlantic 310 1,069 1,090 2.0 South Atlantic 401 866 883 2.0 East North Central 386 938 951 1.4 East South Central 147 821 838 2.1 West North Central 158 959 977 1.9 West South Central 379 881 908 3.1 Mountain 164 1,011 1,028 1.5 Pacific 374 1,238 1,281 3.4 Puerto Rico 51 447 455 1.7 Rural by Region 772 666 660 −0.9 New England 20 922 918 −0.5 Middle Atlantic 53 639 638 −0.3 South Atlantic 122 619 610 −1.4 East North Central 114 675 671 −0.6 East South Central 150 623 606 −2.6 West North Central 94 706 704 −0.2 West South Central 145 590 588 −0.3 Mountain 51 742 752 1.2 Pacific 23 865 864 −0.5 By Payment Classification: All hospitals 3,255 943 963 2.1 Large urban areas (populations over 1 million) 1,317 1,010 1,042 3.2 Other urban areas (populations of 1 million of fewer) 947 895 919 2.6 Rural areas 991 884 875 −1.1 Teaching Status: Non-teaching 2,156 800 816 1.9 Fewer than 100 Residents 849 909 925 1.8 100 or more Residents 250 1,308 1,342 2.7 Urban DSH: Non-DSH 520 867 890 2.6 100 or more beds 1,462 984 1,013 3.0 Less than 100 beds 367 720 743 3.1 Rural DSH: Sole Community (SCH/EACH) 255 680 681 0.1 Referral Center (RRC/EACH) 382 947 931 −1.6 Other Rural: 100 or more beds 33 1,068 1,053 −1.4 Less than 100 beds 236 530 543 2.4 Urban teaching and DSH: Both teaching and DSH 805 1,055 1,087 3.1 Teaching and no DSH 89 912 934 2.4 No teaching and DSH 1,024 833 856 2.8 No teaching and no DSH 346 847 871 2.8 Rural Hospital Types: Plain Rural 178 831 831 0.0 RRC/EACH 327 968 960 −0.7 SCH/EACH 312 749 752 0.5 SCH, RRC and EACH 134 807 797 −1.3 Hospitals Reclassified by the Medicare Geographic Classification Review Board: FY2018 Reclassifications: All Urban Reclassified 588 995 1,006 1.1 All Urban Non-Reclassified 1,835 966 996 2.9 All Rural Reclassified 271 704 690 −1.8 All Rural Non-Reclassified 454 613 615 0.2 All Section 401 Reclassified Hospitals 266 1,033 1,022 −1.1 Other Reclassified Hospitals (Section 1886(d)(8)(B)) 47 651 661 1.6 Type of Ownership: Voluntary 1,898 959 976 1.8 Proprietary 856 851 871 2.3 Government 501 981 1,011 3.1 Medicare Utilization as a Percent of Inpatient Days: 0-25 601 1,076 1,104 2.6 25-50 2,139 942 961 2.1 50-65 421 774 784 1.3 Over 65 73 567 582 2.7

    16. On page 41766,

    a. First column, last paragraph,

    i. Line 4, the figure “41,579.65” is corrected to read “$41,558.68”.

    ii. Line 8, the figure “0.999713” is corrected to read “0.999215”.

    b. Second column,

    i. First partial paragraph,

    A. Line 4, the figure “0.990884” is corrected to read “0.990878”.

    B. Line 12, the figure “$40,759.12” is corrected to read “$40,738.57”.

    ii. Second full paragraph, line 14, the figure “0.999713” is corrected to read “0.999215”.

    iii. Last paragraph, line 7, the figure “0.990884” is corrected to read “0.990878”.

    17. On page 41768, first column,

    a. Line 8, the figure “41,579.65” is corrected to read “$41,558.68”.

    b. Line 9, the figure “40,759.12” is corrected to read “$40,738.57”.

    18. On pages 41768 and 41769, the table entitled “TABLE IV—IMPACT OF PAYMENT RATE AND POLICY CHANGES TO LTCH PPS PAYMENTS FOR LTCH PPS STANDARD FEDERAL PAYMENT RATE CASES FOR FY 2019”, is corrected to read as follows:

    Table IV—Impact of Payment Rate and Policy Changes to LTCH PPS Payments for LTCH PPS Standard Federal Payment Rate Cases for FY 2019 [Estimated FY 2018 payments compared to estimated FY 2019 payments] LTCH classification Number of
  • LTCHS
  • Number of
  • LTCH PPS
  • standard
  • payment rate
  • cases
  • Average FY
  • 2018 LTCH
  • PPS payment
  • per standard
  • payment rate
  • Average FY
  • 2019 LTCH
  • PPS payment
  • per standard
  • payment rate 1
  • Percent
  • change due to
  • change to the
  • annual update
  • to the
  • standard
  • federal rate 2
  • Percent
  • change due to
  • changes to
  • area wage
  • adjustment
  • with wage
  • budget
  • neutrality 3
  • Percent
  • change due to
  • all standard
  • payment rate
  • changes 4
  • (1) (2) (3) (4) (5) (6) (7) (8) All Providers 409 75,416 $46,852 $47,334 1.3 0 1.0 By Location: Rural 21 2,457 39,339 39,714 1.3 −0.1 1.0 Urban 388 72,959 47,105 47,591 1.3 0 1.0 Large 195 40,491 50,164 50,740 1.3 0 1.1 Other 193 32,468 43,291 43,664 1.3 0 0.9 By Participation Date: Before Oct. 1983 11 1,923 43,083 43,225 1.3 −0.5 0.3 Oct. 1983-Sept. 1993 42 9,632 51,709 52,481 1.3 0.2 1.5 Oct. 1993-Sept. 2002 169 31,338 45,565 45,991 1.3 0 0.9 After October 2002 187 32,523 46,877 47,347 1.3 0 1.0 By Ownership Type: Voluntary 77 10,614 48,824 49,614 1.3 0.3 1.6 Proprietary 319 63,040 46,378 46,799 1.3 −0.1 0.9 Government 13 1,762 51,945 52,739 1.3 0.0 1.5 By Region: New England 12 2,707 43,164 43,275 1.3 −0.4 0.3 Middle Atlantic 24 5,959 50,920 51,553 1.3 −0.1 1.2 South Atlantic 66 13,792 47,641 48,127 1.3 −0.1 1.0 East North Central 68 11,843 46,386 46,711 1.3 −0.3 0.7 East South Central 36 6,385 45,490 45,978 1.3 0 1.1 West North Central 28 4,412 45,951 46,428 1.3 −0.3 1.0 West South Central 120 18,361 41,402 41,785 1.3 0.2 0.9 Mountain 29 4,070 47,897 48,125 1.4 −0.5 0.5 Pacific 26 7,887 58,121 59,205 1.3 0.7 1.9 By Bed Size: Beds: 0-24 43 4,206 44,740 45,008 1.3 −0.4 0.6 Beds: 25-49 185 26,270 44,623 45,044 1.3 0 0.9 Beds: 50-74 107 20,178 47,733 48,246 1.3 0 1.1 Beds: 75-124 43 12,086 50,145 50,770 1.3 0.1 1.2 Beds: 125-199 22 7,709 47,404 47,768 1.3 −0.3 0.8 Beds: 200+ 9 4,967 47,988 48,682 1.3 0.5 1.4 1 Estimated FY 2019 LTCH PPS payments for LTCH PPS standard Federal payment rate criteria based on the payment rate and factor changes applicable to such cases presented in the preamble of and the Addendum to this final rule. 2 Percent change in estimated payments per discharge for LTCH PPS standard Federal payment rate cases from FY 2018 to FY 2019 for the annual update to the LTCH PPS standard Federal payment rate. 3 Percent change in estimated payments per discharge for LTCH PPS standard Federal payment rate cases from FY 2018 to FY 2019 for changes to the area wage level adjustment under § 412.525(c) (as discussed in section V.B. of the Addendum to this final rule). 4 Percent change in estimated payments per discharge for LTCH PPS standard Federal payment rate cases from FY 2018 (shown in Column 4) to FY 2019 (shown in Column 5), including all of the changes to the rates and factors applicable to such cases presented in the preamble and the Addendum to this final rule. We note that this column, which shows the percent change in estimated payments per discharge for all changes, does not equal the sum of the percent changes in estimated payments per discharge for the annual update to the LTCH PPS standard Federal payment rate (Column 6) and the changes to the area wage level adjustment with budget neutrality (Column 7) due to the effect of estimated changes in estimated payments to aggregate HCO payments for LTCH PPS standard Federal payment rate cases (as discussed in this impact analysis), as well as other interactive effects that cannot be isolated.

    19. On page 41769, lower two-thirds of the page—

    a. First column, last paragraph, line 13, the figure “0.999713” is corrected to read “0.999215”.

    b. Second column,

    i. First partial paragraph, line 1, the figure “0.999713” is corrected to read “0.999215”.

    ii. Last paragraph, line 16, the figure “0.9” is corrected to read “1.0”.

    c. Third column, second full paragraph, line 5, the figure “0.4” is corrected to read “0.3”.

    20. On page 41770, first column,

    a. First full paragraph, line 5, the word “Pacific” is corrected to read “Mountain”,

    b. First full paragraph, line 7, the word “Mountain” is corrected to read “Pacific”,

    c. First full paragraph, line 9, the figure “0.4” is corrected to read “0.5”,

    d. Second full paragraph, line 9, the figure “1.5” is corrected to read “1.4”.

    Dated: September 27, 2018. Wilma M. Robinson, Deputy Executive Secretary to the Department, Department of Health and Human Services.
    [FR Doc. 2018-21500 Filed 9-28-18; 4:15 pm] BILLING CODE 4120-01-P
    83 192 Wednesday, October 3, 2018 Proposed Rules NATIONAL CREDIT UNION ADMINISTRATION 12 CFR Part 722 RIN 3133-AE79 Real Estate Appraisals AGENCY:

    National Credit Union Administration (NCUA).

    ACTION:

    Notice of proposed rulemaking and request for comment.

    SUMMARY:

    The NCUA Board (Board) is inviting comment on a proposed rule to amend the agency's regulation requiring real estate appraisals for certain transactions. The proposed rule would accomplish four objectives. First, the proposed rule would increase the threshold below which appraisals would not be required for non-residential real estate transactions from $250,000 to $1,000,000. Second, the proposed rule would restructure the NCUA's appraisal regulation to clarify its requirements for the reader. Third, the proposed rule would exempt from the NCUA's appraisal regulation certain federally related transactions involving real estate where the property is located in a rural area, valued below $400,000, and no state certified or licensed appraiser is available. Finally, the proposed rule would also make certain conforming amendments to the definitions section.

    DATES:

    Comments must be received on or before December 3, 2018.

    ADDRESSES:

    You may submit comments by any of the following methods (Please send comments by one method only):

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

    NCUA website: https://www.ncua.gov/regulation-supervision/Pages/rules/proposed.aspx. Follow the instructions for submitting comments.

    Email: Address to [email protected] Include “[Your name] Comments on Proposed Rule part 722, Real Estate Appraisals” in the email subject line.

    Fax: (703) 518-6319. Use the subject line described above for email.

    Mail: Address to Gerard S. Poliquin, Secretary of the Board, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428.

    Hand Delivery/Courier: Same as mail address.

    Public Inspection: You may view all public comments on NCUA's website at https://www.ncua.gov/regulation-supervision/Pages/rules/proposed.aspx as submitted, except for those we cannot post for technical reasons. NCUA will not edit or remove any identifying or contact information from the public comments submitted. You may inspect paper copies of comments in NCUA's law library at 1775 Duke Street, Alexandria, Virginia 22314, by appointment weekdays between 9 a.m. and 3 p.m. To make an appointment, call (703) 518-6546 or send an email to [email protected].

    FOR FURTHER INFORMATION CONTACT:

    Technical information: Jeffrey Marshall, Program Officer, (703) 548-2415, Office of Examination and Insurance, or legal information: Rachel Ackman, Staff Attorney, (703) 518-6540, or John Brolin, Senior Staff Attorney, (703) 518-6540, Office of General Counsel, National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314.

    SUPPLEMENTARY INFORMATION: I. Introduction A. Background

    Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (Title XI) 1 directs each federal financial institutions regulatory agency 2 to publish appraisal regulations for federally related transactions within its jurisdiction. In 1994, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (other banking agencies) established thresholds for all real estate-related financial transactions with a transaction value 3 of $250,000 or less, as well as certain real estate-secured business loans (qualifying business loans or QBLs) with a transaction value of $1 million or less.4 Transactions below these established threshold levels were not required to have Title XI appraisals. QBLs are business loans 5 that are real estate-related financial transactions and that are not dependent on the sale of, or rental income derived from, real estate as the primary source of repayment.6

    1 12 U.S.C. 3331 et seq.

    2 “Federal financial institutions regulatory agency” means the Board of Governors of the Federal Reserve System; the Federal Deposit Insurance Corporation (FDIC); the Office of the Comptroller of the Currency, Treasury (OCC); the NCUA, and, formerly, the Office of Thrift Supervision. 12 U.S.C. 3350(6).

    3 For loans and extensions of credit, the transaction value is the amount of the loan or extension of credit. For sales, leases, purchases, investments in or exchanges of real property, the transaction value is the market value of the real property. For the pooling of loans or interests in real property for resale or purchase, the transaction value is the amount of each loan or the market value of each real property, respectively. See OCC: 12 CFR 34.42(n); Fed: 12 CFR 225.62(n); and FDIC: 12 CFR 323.2(n).

    4See 59 FR 29482 (June 7, 1994); see also OCC: 12 CFR 34.43(a)(1) and (5); Board of Governors of the Federal Reserve System: 12 CFR 225.63(a)(1) and (5); and FDIC: 12 CFR 323.3(a)(1) and (5).

    5 The other banking agencies' Title XI appraisal regulations define “business loan” to mean “a loan or extension of credit to any corporation, general or limited partnership, business trust, joint venture, pool, syndicate, sole proprietorship, or other business entity.” OCC: 12 CFR 34.42(d); Fed: 12 CFR 225.62(d); and FDIC: 12 CFR 323.2(d).

    6See OCC: 12 CFR 34.43(a)(5); Fed: 12 CFR 225.63(a)(5); and FDIC: 12 CFR 323.3(a)(5).

    Thereafter, first in 1995 and again in 2001, the NCUA promulgated rules similar to those then in effect of the other banking agencies, eventually establishing a similar Title XI appraisal threshold level for most real estate-related transactions.7 In particular, the rulemakings established that all real estate-related financial transactions with a transaction value 8 of $250,000 or less do not require appraisals.9 The NCUA did not, however, adopt the separate exemption provided in the other banking agencies' appraisal regulations for qualifying business loans with transaction values of $1 million or less.

    7See 60 FR 51889 (Oct. 4, 1995) and 66 FR 58656 (Nov. 23, 2001).

    8 Transaction value means, for loans or other extensions of credit, the amount of the loan or extension of credit, for sales, leases, purchases, and investments in or exchanges of real property, the market value of the real property interest involved; and for the pooling of loans or interests in real property for resale or purchase, the amount of the loan or market value of the real property calculated with respect to each such loan or interest in real property. 12 CFR 722.2(l).

    9 12 CFR 722.3(a)(1).

    B. The Other Banking Agencies 2017-2018 Rulemaking

    In July 2017, the other banking agencies invited comment on a notice of proposed rulemaking (2017 proposal or 2017 proposed rule) 10 that would have amended the other banking agencies' appraisal regulations promulgated pursuant to Title XI. Specifically, the 2017 proposal would have increased the monetary threshold at or below which financial institutions that are regulated by the other banking agencies (regulated institutions) would not be required to obtain appraisals in connection with commercial real estate transactions (commercial real estate appraisal threshold) from $250,000 to $400,000. The other banking agencies consulted with the NCUA throughout the rule development process and NCUA staff participated in interagency meetings and calls related to the rulemaking.

    10 82 FR 35478 (July 31, 2017).

    The 2017 proposal followed the completion in early 2017 of the regulatory review process required by the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA).11 During the EGRPRA process, the other banking agencies received numerous comments related to the Title XI appraisal regulations, including recommendations to increase the thresholds at or below which transactions are exempt from the Title XI appraisal requirements. Among other proposals developed through the EGRPRA process, the other banking agencies recommended increasing the commercial real estate appraisal threshold to $400,000.12

    11 Public Law 104-208, Div. A, Title II, section 2222, 110 Stat. 3009-414, (1996) (codified at 12 U.S.C. 3311).

    12See FFIEC, Joint Report to Congress: Economic Growth and Regulatory Paperwork Reduction Act, (March 2017), (EGRPRA Report), available at https://www.ffiec.gov/pdf/2017_FFIEC_EGRPRA_Joint-Report_to_Congress.pdf.

    In the other banking agencies' EGRPRA Report and proposed rule, they also addressed whether it would be appropriate to increase the current $250,000 threshold for transactions secured by residential real estate. The other banking agencies determined that it would not be appropriate to increase the threshold for this category of transactions at this time based on three considerations. First, the other banking agencies observed that any increase in the threshold for residential transactions would have a limited impact on burden, as appraisals would still be required for the vast majority of these transactions pursuant to rules of other federal government agencies and the standards set by the government-sponsored enterprises (GSEs).13 As reflected in the 2015 Home Mortgage Disclosure Act (HMDA) data,14 at least 90 percent of residential mortgage loan originations had loan amounts at or below the threshold, were eligible for sale to GSEs, or were insured by the Federal Housing Administration or the United States Department of Veterans Affairs. Those transactions are not subject to the Title XI appraisal regulations, but the majority of those transactions are subject to the appraisal requirements of other government agencies or the GSEs. Therefore, raising the appraisal threshold for residential transactions in the Title XI appraisal regulations would have limited impact on burden.

    13 Other federal government agencies involved in the residential mortgage market include the U.S. Department of Housing and Urban Development (HUD), the U.S. Department of Veterans Affairs, and the Rural Housing Service of the U.S. Department of Agriculture. These agencies, along with the GSEs (which are regulated by the Federal Housing Finance Agency (FHFA)), have the authority to set separate appraisal requirements for loans they originate, acquire, or guarantee, and generally require an appraisal by a certified or licensed appraiser for residential mortgages regardless of the loan amount.

    14See FFIEC, Home Mortgage Disclosure Act, www.ffiec.gov/hmda/.

    Second, the other banking agencies determined that appraisals can provide protection to consumers by helping to assure the residential purchaser that the value of the property supports the purchase price and the mortgage amount.15 The consumer protection role of appraisals is reflected in amendments made to Title XI and the Truth in Lending Act (TILA) 16 through the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act),17 governing the scope of transactions requiring the services of a state-certified or state-licensed appraiser. These include the addition of the Bureau of Consumer Financial Protection (BCFP) to the group of agencies assigned a role in the appraisal threshold-setting process for Title XI,18 and a new TILA provision requiring appraisals for loans involving “higher-risk mortgages.” 19

    15 The agencies posited in the 1994 amendments to the Title XI appraisal regulations that the timing of the appraisal may provide limited consumer protection. Changes to consumer protection regulations since 1994 now ensure that a consumer receives a copy of appraisals and other valuations used by a creditor to make a credit decision at least three business days before consummation of the transaction (for closed-end credit) or account opening (for open-end credit). See 12 CFR 1002.14 (for business or consumer credit secured by a first lien on a dwelling).

    16 15 U.S.C. 1601 et seq.

    17 Public Law 111-203, 124 Stat.1376.

    18 Dodd-Frank Act, Pub. L. 111-203, Title XIV, sec. 1473(a), 124 Stat. 2190 (2010), (codified at 12 U.S.C. 3341(b)), as discussed earlier in the Supplementary Information section.

    19 “Higher-risk mortgages” are certain mortgages with an annual percentage rate that exceeds the average prime offer rate by a specified percentage. See Dodd-Frank Act, Pub. L. 111-203, Title XIV, sec. 1471, 124 Stat. 2185 (2010), which added section 129H to TILA, (codified at 15 U.S.C. 1639h). See also Appraisals for Higher-Priced Mortgage Loans, 78 FR 78520 (Dec. 26, 2013) (interagency rule implementing appraisal requirements for higher-priced mortgage loans).

    During the EGRPRA process, the staff of the other banking agencies conferred with the BCFP regarding comments the agencies received supporting an increase in the threshold for 1-to-4 family residential transactions. BCFP staff shared the view that appraisals can provide consumer protection benefits and their concern about potential risks to consumers resulting from an expansion of the number of residential mortgage transactions that would be exempt from the Title XI appraisal requirement.

    Third, the other banking agencies considered safety and soundness concerns that could result from a threshold increase for residential transactions. As the EGRPRA Report noted, the 2008 financial crisis showed that, like other asset classes, imprudent residential mortgage lending can pose significant risks to financial institutions.

    For these reasons, the other banking agencies concluded in the EGRPRA Report that a change to the current $250,000 threshold for residential mortgage loans would not be appropriate at the present time.

    The NCUA concluded in its EGRPRA report that the agency would work with the other banking agencies to develop a proposal to increase the threshold level related to commercial real estate loans, and would consider any other recommendations developed by the other banking agencies. The NCUA, however, would still like to receive comments on whether there are other factors that should be considered in evaluating the current threshold for 1-to-4 family residential transactions and whether the threshold can and should be raised, consistent with consumer protection, safety and soundness, and reduction of unnecessary regulatory burden. The NCUA and the other banking agencies will continue to consider possibilities for relieving burden related to appraisals for residential mortgage loans, such as coordination of the agencies' Title XI appraisal regulations with the practices of HUD, the GSEs, and other federal participants in the residential real estate market.

    The comment period for the other banking agencies' 2017 proposal closed on September 29, 2017.20 The other banking agencies collectively received over 200 comments from appraisers, appraiser trade organizations, financial institutions, financial institutions trade organizations, and individuals.

    20 82 FR 35478 (July 31, 2017).

    After carefully considering the comments and conducting further analysis, the other banking agencies issued a final rule in early 2018 (2018 final rule) that increased the commercial real estate appraisal threshold with three modifications from the 2017 proposal.21 First, the other banking agencies decided to increase the commercial real estate appraisal threshold (non-QBLs) to $500,000 rather than the $400,000 proposed. Second, the 2018 final rule also made a conforming change to the section requiring state-certified appraisers to be used for federally related transactions that are commercial real estate transactions above the increased threshold. Third, the 2018 final rule changed the proposed definition of commercial real estate transaction, to no longer include construction loans secured by a single 1-to-4 family residential property, regardless of whether the loan is for initial construction only or includes permanent financing. Thus, under the 2018 final rule, a loan that is secured by a single 1-to-4 family residential property, including a loan for construction, remains subject to the $250,000 threshold.22

    21 83 FR 15019 (April 9, 2018).

    22 Residential construction loans secured by more than one 1-to-4 family residential property are considered commercial real estate transactions subject to the higher threshold.

    For real estate-related financial transactions that are exempt from the appraisal requirement because they are within the applicable thresholds or qualify for the exemption for certain existing extensions of credit,23 the other banking agencies' appraisal regulations require financial institutions to obtain an evaluation of the real property collateral that is consistent with safe and sound banking practices.24 An evaluation should contain sufficient information and analysis to support the financial institution's decision to engage in the transaction. However, evaluations need not be performed in accordance with USPAP or by certified or licensed appraisers. The NCUA and the other banking agencies have provided supervisory guidance for conducting evaluations in a safe and sound manner in the Interagency Appraisal and Evaluation Guidelines (Guidelines).25

    23 Transactions that involve an existing extension of credit at the lending institution are exempt from the Title XI appraisal requirements, but are required to have evaluations, provided that there has been no obvious and material change in market conditions or physical aspects of the property that threatens the adequacy of the institution's real estate collateral protection after the transaction, even with the advancement of new monies; or there is no advancement of new monies, other than funds necessary to cover reasonable closing costs. See OCC: 12 CFR 34.43(a)(7) and (b); Fed: 12 CFR 225.63(a)(7) and (b); FDIC: 12 CFR 323.3(a)(7) and (b).

    24See OCC: 12 CFR 34.43(b); Fed: 12 CFR 225.63(b); FDIC: 12 CFR 323.3(b).

    25 75 FR 77450 (Dec. 10, 2010).

    C. Economic Growth, Regulatory Relief, and Consumer Protection Act

    On May 24, 2018, President Trump signed the Economic Growth, Regulatory Relief, and Consumer Protection Act (the Act) into law.26 Section 103 of the Act amends Title XI to exempt from appraisal requirements certain federally related, rural real-estate transactions valued below $400,000 if no state-certified or state-licensed appraiser is available.27 The exemption provided in the Act is self-implementing so credit unions may avail themselves of the statute's exemption immediately, provided the transaction meets all of the requirements under section 103.

    26 Public Law 115-174.

    27Id at sec. 103.

    II. Legal Authority

    Title XI 28 directs each federal financial institutions regulatory agency 29 to publish appraisal regulations for federally related transactions within its jurisdiction. The purpose of Title XI is to protect federal financial and public policy interests 30 in real estate-related transactions by requiring that real estate appraisals used in connection with federally related transactions (Title XI appraisals) be performed in accordance with uniform standards, by individuals whose competency has been demonstrated, and whose professional conduct will be subject to effective supervision.31

    28 12 U.S.C. 3331 et seq.

    29 “Federal financial institutions regulatory agency” means the Board of Governors of the Federal Reserve System; the Federal Deposit Insurance Corporation (FDIC); the Office of the Comptroller of the Currency, Treasury (OCC); the NCUA, and, formerly, the Office of Thrift Supervision. 12 U.S.C. 3350(6).

    30 These interests include those stemming from the federal government's roles as regulator and deposit insurer of financial institutions that engage in real estate lending and investment, guarantor or lender on mortgage loans, and as a direct party in real estate-related financial transactions. These federal financial and public policy interests have been described in predecessor legislation and accompanying Congressional reports. See Real Estate Appraisal Reform Act of 1988, H.R. Rep. No. 100-1001, pt. 1, at 19 (1988); 133 Cong. Rec. 33047-33048 (1987).

    31 12 U.S.C. 3331.

    Title XI directs the NCUA to prescribe appropriate standards for Title XI appraisals under the NCUA's jurisdiction,32 including, at a minimum that Title XI appraisals be: (1) Performed in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP); 33 (2) written appraisals, as defined by the statute; and (3) subject to appropriate review for compliance with USPAP. All federally related transactions must have Title XI appraisals.

    32 12 U.S.C. 3339. The NCUA's Title XI appraisal regulations apply to transactions entered into by the NCUA or by federally insured credit unions. 12 CFR 722.1(b).

    33 USPAP is written and interpreted by the Appraisal Standards Board of the Appraisal Foundation. Adopted by Congress in 1989, USPAP contains generally recognized ethical and performance standards for the appraisal profession in the United States, including real estate, personal property, and business appraisals. See http://www.appraisalfoundation.org/imis/TAF/Standards/Appraisal_Standards/Uniform_Standards_of_Professional_Appraisal_Practice/TAF/USPAP.aspx?hkey=a6420a67-dbfa-41b3-9878-fac35923d2af.

    Title XI defines a “federally related transaction” as a real estate-related financial transaction that is regulated or engaged in by a federal financial institutions regulatory agency and requires the services of an appraiser.34 A real estate-related financial transaction is defined as any transaction that involves: (i) The sale, lease, purchase, investment in or exchange of real property, including interests in property, or financing thereof; (ii) the refinancing of real property or interests in real property; and (iii) the use of real property or interests in real property as security for a loan or investment, including mortgage-backed securities.35

    34 12 U.S.C. 3350(4) (defining “federally related transaction”).

    35 12 U.S.C. 3350(5).

    The NCUA has authority to determine those real estate-related financial transactions that do not require the services of a state-certified or state-licensed appraiser and are therefore exempt from the appraisal requirements of Title XI. These real estate-related financial transactions are not federally related transactions under the statutory or regulatory definitions because they are not required to have Title XI appraisals.36

    36 See 59 FR 29482 (June 7, 1994).

    The NCUA has exercised this authority by exempting several categories of real estate-related financial transactions from the Title XI appraisal requirements.37 The NCUA has determined that these categories of transactions do not require appraisals by state-certified or state-licensed appraisers in order to protect federal financial and public policy interests or to satisfy principles of safety and soundness.

    37 See 12 CFR 722.3(a).

    In 1992, Congress amended Title XI, expressly authorizing the NCUA to establish a threshold level below which an appraisal by a state-certified or state-licensed appraiser is not required in connection with federally related transactions. The NCUA may establish a threshold level that the NCUA determines, in writing, does not represent a threat to the safety and soundness of federally insured credit unions.38

    38 12 U.S.C. 3341(b). See also, Housing and Community Development Act of 1992, Public Law 102-550, section 954, 106 Stat. 3894 (amending 12 U.S.C. 3341).

    In the Dodd-Frank Act, Congress amended the threshold provision to require concurrence “from the BCFP that such threshold level provides reasonable protection for consumers who purchase 1-4 unit single-family residences.” 39 As noted above, transactions below the threshold level are exempt from the Title XI appraisal requirements and thus are not federally related transactions.

    39 Dodd-Frank Act, sec. 1473, 124 Stat. 2190 (amending 12 U.S.C. 3341(b)).

    III. Section-by-Section Analysis

    The Board is now proposing to amend part 722-Appraisals of the NCUA regulations to more clearly indicate for the reader when a written estimate of market value, an appraisal conducted by a state-licensed appraiser, or an appraisal conducted by a state-certified appraiser is required for a real estate-related financial transaction; incorporate the relevant changes in the Economic Growth, Regulatory Relief, and Consumer Protection Act; and, provide relief for appraisal requirements for non-residential real estate-related financial transactions.40 In particular, the proposal would establish a new threshold—$1,000,000 or more—for non-residential real estate-related financial transactions. The proposed new threshold for non-residential real estate-related financial transactions represents a significant increase from the current level of $250,000.

    40See 83 FR 15019 (Apr. 9, 2018); see also OCC: 12 CFR 34.43(a)(5) and (a)(13); Fed: 12 CFR 225.63(a)(5) and (a)(14); and FDIC: 12 CFR 323.3(a)(5) and (a)(13).

    Additionally, the NCUA is proposing to add or remove various definitions in support of the proposed changes and to improve clarity. Further, the NCUA proposes to substantially reorganize § 722.3 of the appraisal regulation to clarify and update requirements and make it easier for credit unions to determine when an appraisal or written estimate of market value is required. The NCUA will consult with the BCFP regarding this proposal in developing a final rule.

    Section 722.2 Definitions

    The NCUA Board is proposing various changes to the terms and definitions applicable to part 722. The proposal would also make technical non-substantive amendments to the section, including removing the individual numbering of the definitions within the section to make edits of part 722 easier in the future. The definitions in the section would continue to be listed in alphabetic order. The following definitions would be added, removed, or amended under this proposed rule:

    Complex

    The proposal would amend current § 722.2(d) to remove the current definition for complex 1- to 4-family residential property appraisal and replace it with the shorter term complex. The proposed definition for complex real estate-related financial transaction is similar to the current definition for complex 1- to 4-family residential property appraisal, but would allow the term complex to be used more broadly in conjunction with other amendments being made in proposed § 722.3, which are discussed in more detail below. Accordingly, proposed § 722.2 provides that complex, when used in regard to a real estate-related financial transaction, means a transaction in which the property to be appraised, the form of ownership, or market conditions are atypical. The proposed definition would also state that a regulated institution may presume that appraisals of 1- to 4-family residential properties are not complex unless the institution has readily available information that a given appraisal will be complex. This presumption is in the current rule and its addition to the definition of complex is not a substantive change in policy. The presumption would be moved from § 722.3(b)(3) as part of the overall restructuring of § 722.3.

    Federal Financial Institutions Regulatory Agency

    Proposed § 722.2 would add a definition for federal financial institutions regulatory agency in response to changes to Title XI under the Economic Growth, Regulatory Relief, and Consumer Protection Act.41 Consistent with the definition provided under Title XI, the proposal would define federal financial institutions regulatory agency as the Board of Governors of the Federal Reserve System; the Federal Deposit Insurance Corporation (FDIC); the Office of the Comptroller of the Currency, Treasury (OCC); the NCUA, and, formerly, the Office of Thrift Supervision.42

    41 Public Law 115-174.

    42 12 U.S.C. 3350(6).

    Real Estate or Real Property

    The proposal would amend current § 722.2(g) by adding parentheses around the words “or real property” to help clarify for the reader that the terms real estate and real property can be used interchangeably and have the same meaning for purposes of part 722. No substantive change is intended by this technical amendment. Accordingly, proposed § 722.2 provides that real estate (or real property) means an identified parcel or tract of land, including easements, rights of way, undivided or future interests and similar rights in a parcel or tract of land, but does not include mineral rights, timber rights, and growing crops, water rights and similar interests severable from the land when the transaction does not involve the associated parcel or tract of land. For consistency, the proposal uses the term real estate in place of the term real property.

    Real Estate-Related Financial Transaction

    Proposed § 722.2 would make minor, non-substantive technical amendments to the current § 722.2(h) and the definition of real estate-related financial transaction. In particular, the proposal would replace the words “real property” with the words “real estate” each place they occur within the definition for consistency. As discussed above, under the both the current rule and this proposal the terms “real property” and “real estate” have the same meaning and can be used interchangeably. Accordingly, proposed § 722.2 provides that real estate-related financial transaction means any transaction involving: The sale, lease, purchase, investment in or exchange of real estate, including interests in property, or the financing thereof; or the refinancing of real estate or interests in real estate; or the use of real estate or interests in property as security for a loan or investment, including mortgage-backed securities.

    Residential Real Estate Transaction

    The proposal would add a definition for the term residential real estate transaction to identify for the reader which federally related transactions would still be subject to the $250,000 appraisal threshold, which is discussed in more detail below. Proposed § 722.2 provides that a residential real estate transaction means a real estate-related financial transaction that is secured by a single 1- to 4-family residential property.43 Under the other banking agencies' 2018 final rule, a loan that is secured by a single 1-to-4 family residential property, including a loan for construction, remains subject to the $250,000 threshold.44 Accordingly, the NCUA is proposing to take the same approach in its appraisal regulation by including any loan for construction of a one, two, three, or four individual dwelling units, including manufactured homes permanently affixed to the underlying land as a single 1- to 4-family residential property.

    43 A 1-to-4 family residential property is a property containing one, two, three, or four individual dwelling units, including manufactured homes permanently affixed to the underlying land (when deemed to be real property under state law).

    44 Residential construction loans secured by more than one 1-to-4 family residential property would be considered commercial real estate transactions subject to the higher threshold. 83 FR 15019 (April 9, 2018).

    Staff Appraiser

    For clarity, this proposal would add a new definition for staff appraiser, which is a term currently used in § 722.5 of the regulation. Proposed § 722.2 provides that staff appraiser means a state-certified or state-licensed appraiser that is an employee of the credit union.

    Transaction Value

    Proposed § 722.2 would make minor, non-substantive technical amendments to the current § 722.2(l) and the definition of transaction value. In particular, the proposal would replace the words “real property” with the words “real estate” each place they occur within the definition for consistency. As discussed above, under both the current rule and this proposal the terms “real property” and “real estate” have the same meaning and can be used interchangeably. Accordingly, proposed § 722.2 provides that transaction value means, for loans or other extensions of credit, the amount of the loan or extension of credit; for sales, leases, purchases, and investments in or exchanges of real estate, the market value of the real estate interest involved; and for the pooling of loans or interests in real estate for resale or purchase, the amount of the loan or market value of the real estate calculated with respect to each such loan or interest in real estate.

    Section 722.3 Appraisals and Written Estimates of Market Value Requirements for Real Estate-Related Financial Transactions

    The NCUA proposes to amend current § 722.3 to increase the threshold level at or below which appraisals would not be required for certain non-residential real estate transactions, incorporate relevant changes under the Economic Growth, Regulatory Relief, and Consumer Protection Act, and reorganize the section to make it easier for credit unions to determine when an appraisal or written estimate of market value is required. Current § 722.3 provides the general requirement that all real estate-related financial transactions must have a state-certified or state-licensed appraisal unless the transaction qualifies for a listed exception. Under the current structure of the section, the NCUA believes that it is difficult for a reader to quickly determine whether a written estimate of market value is required, or whether an appraisal performed by a state-licensed or state-certified appraiser is required for certain real estate-related financial transactions. Accordingly, this proposal would reorder current § 722.3 to help the reader more readily determine: (a) Whether the real estate-related financial transaction does not require an appraisal or written estimate of market value under part 722; (b) when an appraisal required under part 722 must be prepared by a state-certified appraiser; (c) when an appraisal required under part 722 may be prepared by either a state-certified or state-licensed appraiser; and (d) when only a written estimate of market value is required.

    3(a) Real Estate-Related Financial Transactions Not Requiring an Appraisal or Written Estimate of Value Under This Part

    The NCUA is proposing to reorganize current § 722.3(a) to make it clearer upfront when no appraisal or written estimate of market value is required under part 722 for a real estate-related financial transaction. The proposal would also include language from current § 722.3(f), which merely serves as a cross reference to remind the reader that there are also Truth in Lending Act appraisal requirements under 12 CFR 1026.35 that apply to certain real estate-related financial transactions. Accordingly, proposed new § 722.3(a) states: provided the transaction is not a “higher-priced mortgage loan” under 12 CFR 1026.35, which must meet separate appraisal requirements under section 129H of the Truth in Lending Act, 15 U.S.C. 1639h, an appraisal or written estimate of market value is not required for certain real estate-related financial transaction, which are described in more detail below.

    3(a)(1)-(6)

    Proposed new § 722.3(a)(1)-(6) would incorporate and update the list of exempt transactions under current § 722.3(a)(1)-(9). As discussed in more detail below, proposed § 722.3(a)(1)-(6) would retain many of the transactions listed under current paragraph (a). But, because proposed paragraph (a) lists transactions that do not require an appraisal or written estimate of value, and current paragraph (a) includes transactions that require a written estimate of market value, the proposal would move certain provisions in current § 722.3(a) to proposed § 722.3(d). Accordingly, proposed § 722.3(a)(1)-(6) provides that an appraisal or written estimate of market value is not required for a real estate-related financial transaction under the following circumstances:

    (a)(1). The transaction involves an existing extension of credit and is not considered a new loan under Generally Accepted Accounting Principles. The proposed (a)(1) would replace the current § 722.3(a)(5). The current paragraph (a)(5) exempts an existing extension of credit provided there was no advancement of new monies, other than funds necessary to cover reasonable closing costs; or there has been no obvious and material change in market conditions or physical aspects of the property that threatens the adequacy of the credit union's real estate collateral protection after the transaction, even with the advancement of new monies. The revised paragraph (a)(1) would provide, instead, that an existing extension of credit would not require an appraisal or written estimate of market value if the transaction is not considered a new loan under Generally Accepted Accounting Principles.45 The current § 722.3(a)(5) conditions can involve significant subjectivity, may be difficult to apply in practice, and do not necessarily align with financial reporting standards. While this proposed change varies somewhat from the respective provision in the other banking agencies' rules, linking this exemption to Generally Accepted Accounting Principles should increase consistency and better achieve the objectives of this regulation. Further, the NCUA does not believe a written estimate of market value needs to be required for all modifications, workouts, or troubled debt restructurings of existing loans. Credit unions should use sound judgement in determining when a written estimate of market value, or an appraisal, is warranted to support a loan workout. The Board does not believe that linking this exemption to Generally Accepted Accounting Principles will result in any substantial change from current practice. However, the Board recognizes that there may be rare circumstances that would result in an appraisal being required under this proposed rule that would not be required under the current rule due to linking the exemption to Generally Accepted Accounting Principles. Therefore, the Board is specifically seeking comment on this proposed change, and whether the current language in the regulation should be maintained.

    45 ASC 320-20-20: Lending, committing to lend, refinancing or restructuring loans, arranging standby letters of credit, syndicating loans, and leasing activities are lending activities. A loan is a contractual right to receive money on demand or on fixed or determinable dates that is recognized as an asset in the creditor's statement of financial position. Examples include but are not limited to accounts receivable (with terms exceeding one year) and notes receivable. This definition encompasses loans accounted for as debt securities. ASC 310-20-35-9: If the terms of the new loan resulting from a loan refinancing or restructuring other than a troubled debt restructuring are at least as favorable to the lender as the terms for comparable loans to other customers with similar collection risks who are not refinancing or restructuring a loan with the lender, the refinanced loan shall be accounted for as a new loan. This condition would be met if the new loan's effective yield is at least equal to the effective yield for such loans and modifications of the original debt instrument are more than minor. Any unamortized net fees or costs and any prepayment penalties from the original loan shall be recognized in interest income when the new loan is granted. The effective yield comparison considers the level of nominal interest rate, commitment and origination fees, and direct loan origination costs and would also consider comparison of other factors where appropriate, such as compensating balance arrangements.

    The exemption provided under current paragraph (a)(1), for real estate-related financial transactions with a transaction value of $250,000 or less, would be amended and moved to proposed § 722.3(b), (c), and (d) to reflect whether an appraisal or written estimates of market value is required based on the transactions value. Specific aspects of those changes are discussed in more detail below.

    (a)(2). A lien on real estate has been taken as collateral through an abundance of caution and where the terms of the transaction as a consequence have not been made more favorable than they would have been in the absence of a lien. The proposal retains current § 722.3(a)(2) as proposed § 722.3(a)(2). The Board is not proposing any substantive changes to this provision.

    (a)(3). A lien on real estate has been taken for purposes other than the real estate's value. The proposal retains current § 722.3(a)(3) as proposed § 722.3(a)(3). The Board is not proposing any substantive changes to this provision.

    (a)(4). A lease of real estate is entered into, unless the lease is the economic equivalent of a purchase or sale of the leased real estate. The proposal retains current § 722.3(a)(4) as proposed § 722.3(a)(4). The Board is not proposing any substantive changes to this provision.

    (a)(5). The transaction involves the purchase, sale, investment in, exchange of, or extension of credit secured by, a loan or interest in a loan, pooled loans, or interests in real estate, including mortgage-backed securities, and each loan or interest in a loan, pooled loan, or real estate interest met the requirements of this regulation, if applicable, at the time of origination. The proposal would move current § 722.3(a)(6) to proposed § 722.3(a)(5). The Board is not proposing any substantive changes to this provision.

    (a)(6). The transaction either qualifies for sale to a United States government agency or United States government sponsored agency, or involves a residential real estate transaction in which the appraisal conforms to the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation appraisal standards applicable to that category of real estate. The proposal moves current § 722.3(a)(8) to proposed § 722.3(a)(6). The Board is not proposing any substantive changes to this provision.

    The proposed rule would remove the current § 722.3(a)(7). The proposal changes the appraisal and written estimate of market value requirements for real estate-related financial transactions that are fully or partially guaranteed by a U.S. government agency 46 or U.S. government sponsored agency.47 Under the current rule, any real estate-related financial transaction that is insured or guaranteed by a U.S. government agency or U.S. government-sponsored agency (regardless of whether the insurance or guarantee is for the full transaction value or only a part of the transaction value) are exempt from appraisal and written estimate of market value requirements. In contrast, under the proposed rule, there is no categorical exemption for such transactions. Instead, a real estate-related financial transaction that is insured or guaranteed by a U.S. government agency or U.S. government sponsored agency is only exempt from appraisal and written estimate of market value requirements if the transaction value is less than $1 million and the transaction is fully insured or guaranteed.

    46 United States government agency means an instrumentality of the U.S. government whose obligations are fully and explicitly guaranteed as to the timely payment of principal and interest by the full faith and credit of the U.S. government. U.S. government agency includes NCUA.

    47 United States government sponsored agency means an entity established or chartered by the U.S. government to serve public purposes specified by the U.S. Congress, but whose debt obligations are not explicitly guaranteed by the full faith and credit of the U.S. government.

    When the other banking agencies (and subsequently the NCUA) adopted current § 722.3(a)(7) in 1994, it was based on the presumption that any U.S. government agency's or sponsored agency's insurance or guarantee program would have a prudent appraisal requirement.48 The NCUA continues to believe this to be the case. The Board, however, notes it is possible that new insurance and guarantee programs could be developed, or existing ones modified, where any partial insurance or guarantee provided is small enough that the insurer/guarantor does not require an appraisal, and the uninsured or unguaranteed portion of the transaction could still be significant to the federally insured credit union or the borrower.

    48 June 1994 final rule (59 FR 29482 June 7, 1994). Federal agencies insuring or guaranteeing loans are generally required to conduct real estate appraisal programs in a manner to reduce default risk to the federal government.

    The proposed approach would better align the appraisal and written estimate of market value requirements to the potential risk to the federally insured credit union, and preserve the consumer protection benefits appraisals provide. While this proposed change varies somewhat from the respective provisions in the other banking agencies' rules, in practice the Board does not expect this change to result in a material difference in appraisal requirements or burden, given U.S. government guaranty and insurance programs currently require appraisals, with limited exceptions. However, the Board is specifically seeking comment on this proposed change, and whether the current approach in the regulation should be maintained. In particular, the Board requests commenters note if and how a credit union's current use of a U.S. government agency's or sponsored agency's insurance or guarantee program(s) would be affected by this change.

    Additional discussion on the requirements for other transactions with government insurance or guarantees are in proposed § 722.3(b), (c), and (d) and are discussed below in subsequent sections.

    As discussed, appraisal requirements for transactions that are partially or fully guaranteed by a U.S. government agency or a sponsored agency have been revised to no longer be categorical exemptions from the appraisal and written evaluation requirements of part 722. Instead, such transactions would be subject to the statutory threshold of $1 million or more. Either the credit union or the United States government agency, or sponsored agency, would need to obtain an appraisal by a state-certified appraiser.49 The Board believes that such transactions are currently required to have appraisals under the rules of the United States government agency, or sponsored agency, insuring or guaranteeing the transaction. Therefore, the Board considers this change to be clarifying and only a reflection of current industry practice.

    49 The Board notes that if the insurer/guarantor obtains the appraisal to support the transaction, the credit union need not obtain one as well.

    The proposed rule would remove the current § 722.3(a)(9). The Board is proposing to eliminate the option for a Regional Director to grant a waiver from the appraisal requirement for a category of loans meeting the definition of a member business loan. The provision was removed due to the proposal's increase for the non-residential real estate-related financial transaction appraisal threshold to the requirement of $1 million or more.

    3(b) Real Rstate-Related Financial Transactions Requiring an Appraisal by a State-Certified Appraiser

    Proposed § 722.3(b) identifies the real estate-related financial transactions for which an appraisal performed by a state-certified appraiser is required. The proposal states that an appraisal performed by a state-certified appraiser is required for any real estate-related financial transaction not exempt under paragraph (a) in which:

    3(b)(1)

    Proposed § 722.3(b)(1) requires an appraisal performed by a state-certified appraiser for transactions that are not exempt under paragraph (a) and the transaction value is $1 million or more. This would increase the threshold at which non-residential real estate-related financial transactions are exempt from appraisal requirements from $250,000 to $1 million. The Board notes this is the only provision in the proposal that necessitates an appraisal for non-residential transactions not otherwise exempt,50 as the current § 722.3(b)(2) is removed as part of the overall reorganization of § 722.3. This proposed increase in the threshold for non-residential real estate-related financial transactions would reduce regulatory burden by providing credit unions greater flexibility in commercial lending. For commercial real estate-related financial transactions with transaction values below $1 million, credit unions would be able to use their judgment, consistent with safe and sound lending practices, to determine whether to use an appraisal or a written estimate of market value. This proposed approach aligns with the other banking agencies' appraisal requirements for QBLs with a transaction value of $1 million or less.51 The proposed approach provides more flexibility, however, than the commercial real estate appraisal threshold for non-QBLs, which the other banking agencies established at $500,000 in their 2018 final rule.

    50 Unless so required to address safety and soundness concerns under current and proposed § 722.3(e).

    51See 59 FR 29482 (June 7, 1994); see also OCC: 12 CFR 34.43(a)(1) and (5); Board of Governors of the Federal Reserve System: 12 CFR 225.63(a)(1) and (5); and FDIC: 12 CFR 323.3(a)(1) and (5).

    In considering whether to propose an increased threshold for commercial real estate transactions that would require an appraisal by a state-certified appraiser, the NCUA considered the comments received through the EGRPRA process. The NCUA has also carefully considered the other banking agencies' 2017 proposed rule 52 and 2018 final rule 53 regarding real estate appraisals. The Board carefully considered whether changes to the threshold for requiring an appraisal by a state-certified appraiser would be appropriate to reduce regulatory burden, while consistent with public policy interests and safety and soundness.

    52 82 FR 35478 (July 31, 2017).

    53 83 FR 15019 (Apr. 9, 2018).

    The NCUA last modified the threshold for exempt transactions in 2001 and used the same threshold for both residential and commercial real estate.54 Given increases in commercial property values since that time, the current threshold requires credit unions to obtain Title XI appraisals on a larger proportion of commercial real estate transactions than in 2001. This increase in the number of appraisals required likely has contributed to the increased burden in time and cost described by the EGRPRA commenters.

    54 66 FR 58656 (Nov. 23, 2001).

    Based on supervisory experience and available data, the other risk mitigations incorporated into the proposal, and other regulatory requirements and supervisory expectations, the proposed increase to the threshold for requiring an appraisal by a state-certified appraiser for commercial real estate transactions would not pose a material threat to the safety and soundness of credit unions or create undue risk to the National Credit Union Share Insurance Fund (NCUSIF). A more detailed analysis supporting this conclusion is provided below in the Section Analysis of Higher Commercial Appraisal Threshold.

    (b)(2)

    Proposed § 722.3(b)(2) also requires an appraisal performed by a state-certified appraiser for a transaction that is not exempt where the transaction is complex, involves a residential real estate transaction, $250,000 or more of the transaction value is not insured or guaranteed by a U.S. government agency or U.S. government sponsored agency,55 and the transaction does not qualify for the rural area exemption in paragraph (f). This requirement is similar to the requirement in current § 722.3(b)(3) that complex residential transactions of $250,000 or more have appraisals performed by a state certified appraiser. The substantive difference between current § 722.3(b)(3) and the proposed § 722.3(b)(2) is regarding transactions that are partially insured or guaranteed by a U.S. government agency or U.S. government sponsored agency. Specifically, a complex residential real estate transaction that is partially insured or guaranteed by a U.S. government agency or U.S. government sponsored agency, but has $250,000 or more of the transaction value not insured or guaranteed, would be required to have a state-certified appraisal under the proposed rule.56 Such a transaction is exempt from appraisal requirements under the current rule.

    55 The proposal aligns all the dollar thresholds used as either the dollar amount “or more” (greater than or equal to), or “less than” the dollar amount. This was done to ensure consistency within the regulation and with the relevant statutory requirements.

    56 As noted above, if the insurer or guarantor obtained an appraisal by a state-certified appraiser, the credit union could use that to satisfy this requirement.

    The NCUA seeks comments on whether there are other factors that should be considered in evaluating the threshold for complex, residential real estate-related transactions and whether the threshold should be raised, consistent with consumer protection, safety and soundness, and reduction of unnecessary regulatory burden.

    § 722.3(c) Real Estate-Related Financial Transactions Requiring an Appraisal by Either a State-Certified or State-Licensed Appraiser

    Proposed § 722.3(c) reflects the provisions in current § 722.3(c) for when an appraisal performed by either a state-certified or state-licensed appraiser is required. Proposed § 722.3(c) includes terminology updates and clarifications and incorporates the proposed new approach to appraisal thresholds discussed above.

    3(c)(1)

    Proposed § 722.3(c)(1) would require an appraisal performed by a state-certified or state-licensed appraiser for a transaction that is not exempt where the transaction is not complex, involves a residential real estate transaction, $250,000 or more of the transaction value is not insured or guaranteed by a U.S. government agency or U.S. government sponsored agency, and the transaction does not qualify for the rural area exemption in paragraph (f). This requirement would be consistent with the current rule that non-complex residential transactions of $250,000 or more require an appraisal from either a state-certified or state-licensed appraisal. The one substantive difference, which is discussed above, is the addition of certain transactions that are partially insured or guaranteed by a U.S. government agency or U.S. government sponsored agency. For clarity, this requirement would be explicit under the current rule, instead of implicitly including this requirement through the current § 722.3(c). The Board believes the proposal more clearly indicates when an appraisal conducted by a state-licensed appraiser or a state-certified appraiser is acceptable.

    The NCUA seeks comments on whether there are other factors that should be considered in evaluating the threshold for non-complex residential real estate transactions and whether the threshold should be raised, consistent with consumer protection, safety and soundness, and reduction of unnecessary regulatory burden.

    3(c)(2)

    Proposed § 722.3(c)(2) reflects the provisions in current § 722.3(b)(3) for situations where, during the course of an appraisal performed by a state-licensed appraiser, the transaction is determined to be complex. The language of this provision was simplified so as to be clearly based on the regulation's definition of complex. While the credit union is responsible for properly applying the complex transaction definition, the NCUA maintains interpretive authority with respect to the regulatory definition.

    § 722.3(d) Real Estate-Related Financial Transactions Requiring a Written Estimate of Market Value

    Proposed § 722.3(d) reflects the provisions in current § 722.3(d) for when a written estimate of market value is required. Under proposed § 722.3(d), a written estimate of market value is required for a transaction that is (i) not fully insured or guaranteed by a U.S. government agency or U.S. government sponsored agency, (ii) not exempt under paragraph (a), and (iii) an appraisal performed by a state-certified or state-licensed appraiser has not been obtained.

    For non-residential real estate transactions with a transaction value below $250,000, the requirement would be the largely the same. For non-residential real estate transactions with a transaction value of $250,000 or more, but less than $1 million, credit unions would no longer be required to obtain an appraisal by a state-certified appraiser. Therefore, these transactions, if not fully insured or guaranteed or otherwise exempted, would need to be supported by a written estimate of market value.

    A written estimate of market value would also be required for certain transactions that are partially insured or guaranteed by a U.S. government agency or U.S. government sponsored agency. The Board does not believe, as discussed above, this proposed requirement would represent a substantial burden on credit unions. The Board, however, is seeking comment on whether the NCUA should establish a de minimis threshold for transactions. For example, if the uninsured or unguaranteed dollar amount is below a de minimis threshold amount, such as $50,000, should the transaction be exempt from written estimate of market value requirements.

    The current requirements in § 722.3(d) that the individual performing the written estimate of market value have no direct or indirect interest in the property, and be properly qualified and experienced,57 are incorporated into proposed § 722.3(d). Under proposed § 722.3(d), the independence standards for the individual performing the written estimate of market value have been amended to codify certain independence provisions in the Interagency Appraisal and Evaluations Guidelines (Guidelines). Specifically, the proposed rule incorporates the existing Guidelines that the individual performing a written estimate of market value be independent of the loan production and collection process. The Board believes that an enhanced independence requirement is an important prudential safeguard, as the proposed rule would permit non-residential real estate transactions that are less than $1 million to have a written estimate of market value instead of a state-certified or state-licensed appraisal. The proposed rule further would clarify that if independence cannot be achieved, the credit union must be able to demonstrate clearly that it has prudent safeguards to isolate its collateral valuation program from influence or interference from the loan production process.58

    57 Also see Interagency Appraisal and Evaluations Guidelines at 75 FR 77458.

    58 Guidelines at 75 FR 77457-58. See also Valuation Independence rules in Regulation Z, which apply to all creditors and cover extensions of consumer credit that are or will be secured by a consumer's principal dwelling: Fed: 12 CFR 226.42; CFPB: 12 CFR 1026.42.

    The Board notes a written estimate of market value needs to provide appropriate information to enable the institution to make a prudent decision regarding the transaction. Through the Guidelines, the NCUA has provided guidance to credit unions on the agency's safety and soundness expectations regarding when and how written estimates (evaluations) of market value should be used.59 The Guidelines indicate that credit unions should develop policies and procedures for conducting written estimates. The policies and procedures should specify situations when the credit union will still obtain an appraisal by a state-licensed or state-certified appraiser.60 Written estimates of market value may be completed by a credit union employee or by a third party.61

    59 Interagency Appraisal and Evaluations Guidelines, 75 FR 77450 (Dec. 10, 2010).

    60 Guidelines at 75 FR 77461.

    61See Interagency Advisory on Use of Evaluations in Real Estate-Related Financial Transactions, OCC Bulletin 2016-8 (March 4, 2016); Fed SR Letter 16-05 (March 4, 2016); Supervisory Expectations for Evaluations, FDIC FIL-16-2016 (March 4, 2016).

    In evaluating this proposal, the NCUA considered the impact to credit unions and borrowers. Based on information from banking agency data, the cost of third-party evaluations of commercial real estate generally ranges from $500 to over $1,500, whereas the cost of appraisals of such properties generally ranges from $1,000 to over $3,000. Non-residential real estate transactions with values above $250,000, but below $1 million (applicable transaction value range), are likely to involve smaller and less complex properties, and appraisals and evaluations on such properties would likely be at the lower end of the cost range. This third-party pricing information suggests a savings of several hundred dollars per transaction. The NCUA also notes there is a greater pool of individuals qualified to conduct written estimates of market value than state-certified appraisers, particularly in rural areas, thereby reducing the associated time and costs.

    § 722.3(f) Exemption From Appraisals of Real Property Located in Rural Areas

    Proposed § 722.3(f) incorporates a new exemption that was included in the Economic Growth, Regulatory Relief, and Consumer Protection Act, Public Law 115-174, signed on May 24, 2018. Under this provision, transactions involving real estate or an interest in real estate located in a rural area, as described in 12 CFR 1026.35(b)(2)(iv)(A) are exempt from appraisal requirements if certain conditions are met. The exemption provided in the Act is self-implementing so credit unions may avail themselves of the statute's exemption immediately, provided the transaction meets all of the requirements under section 103. However, the Board proposes to incorporate the exemption explicitly into part 722 of the regulations for easier reference and does not intent to make any substantive changes to the statutory requirement.

    The Board notes that if a transaction does not require an appraisal under proposed § 722.3(f), a written estimate of market value may still be required under § 722.3(d).

    Analysis of Higher Commercial Appraisal Threshold

    Title XI, expressly authorizes the agencies to establish a threshold level at or below which an appraisal by a state certified or state licensed appraiser is not required in connection with federally related transactions if the agencies determine in writing that the threshold does not represent a threat to the safety and soundness of financial institutions.62 The Board does not believe that increasing the threshold that non-residential real estate transactions are exempt from Title XI appraisals represents a threat to the safety and soundness of credit unions as there are several factors that inherently mitigate the risk from commercial loans in the credit union system.

    62 12 U.S.C. 3341.

    Under the Federal Credit Union Act, most credit unions are restricted to holding no more than 1.75 times the credit union's total net worth for member business loans.63 The statutory ceiling of 1.75 times net worth limits risk for credit unions granting all forms of commercial loans, of which non-residential real estate transactions are a subset. Therefore, increasing the threshold to $1 million would not pose the same safety and soundness risk to credit unions as it would to similarly situated banking organizations, which do not have the same commercial lending restrictions.

    63 Some credit unions are subject to one of several exemptions under the Federal Credit Union Act. See 12 U.S.C. 1757a(b).

    Currently, commercial loans represent only 5.7 percent of the total assets of credit unions granting commercial loans, and less than 53 percent of total net worth of those credit unions. Comparatively, commercial loans in the banking industry represent 25 percent of total assets and 267 percent of tier one capital.64

    64 For non-residential real estate transactions, the NCUA does not propose to differentiate between QBL and non-QBL commercial transactions like the other banking agencies. Based on credit union Call Report data, the NCUA estimates that $17 billion of the $57 billion of commercial real estate loans in the credit union system would meet the definition of a QBL and be subject to a $1 million appraisal threshold under the rules for banks. Setting the threshold at $1 million provides relief for credit unions and a simplified standard.

    Under the proposed rule, the increased threshold would not substantially reduce the total dollar amount of commercial real estate transactions that would be subject to appraisal requirements. The NCUA used the CoStar Comps database 65 to estimate the dollar volume and number of commercial real estate transactions that would potentially be exempted from obtaining an appraisal performed by a state-certified appraiser due to the proposed increase in the threshold. The CoStar Comps database provides sales value data on specific commercial real estate transactions. While there are some limitations regarding use of the CoStar Comps database, as detailed below, the database contains information on sales values for individual transactions. Thus, it can be used to estimate the number and percentage of transactions that would become exempt under the proposed threshold change (i.e., those commercial real estate transactions with transaction values of $250,000 or more, but less than $1 million).66

    65 The CoStar Comps database is comprised of sales data involving commercial real estate properties. The agencies have limited their analysis to arms-length completed sales, where the price is provided. The agencies have also limited the sample to properties that were financed. Owner-occupied properties and sales of coops and condominiums were excluded. The sample was also limited to existing buildings. Land includes only raw land defined as land held for development or held for investment.

    66 This same analysis could not be performed using Call Report data because transactions reported for purposes of the Call Report are either reported in groupings of large value ranges or not reported by size at all.

    The CoStar Comps database contains data for transactions involving nonresidential commercial mortgages, multifamily, and land, and is derived from sales data and reflects the total transaction amount, as opposed to the loan amount. For purposes of this analysis, the NCUA included only financed transactions and assumed a loan-to-value ratio of 85 percent for nonresidential and multifamily commercial mortgages and a loan-to-value ratio of 65 percent for raw land transactions 67 to arrive at an estimated loan amount, which would be equivalent to the “transaction value” under the appraisal regulation. While the CoStar Comps database has some limitations for the purposes of evaluating the proposed increase,68 it provides information that can be used to estimate the dollar volume and number of commercial real estate transactions that would potentially be exempted by the proposed threshold increase.

    67 The Interagency Guidelines for Real Estate Lending provides that institutions' loan-to-value limits should not exceed 85 percent for loans secured by improved property and 65 percent for loans secured by raw land. See OCC: 12 CFR part 34, subpart D, appendix A; Fed: 12 CFR part 208, appendix C; FDIC: 12 CFR part 365, subpart A, appendix A.

    68 For example, the database tends to underrepresent sales of smaller properties and transactions in rural markets, and includes transactions that are not financed by depository institutions.

    An analysis of the CoStar Comps database suggests that increasing the threshold to $1 million would significantly increase the number of commercial real estate transactions exempted from appraisal requirements. The estimated percentage of commercial properties that would be exempted from the appraisal requirement would increase from 27 percent to 66 percent if the threshold were raised from $250,000 to $1 million. However, the total dollar amount of commercial real estate transactions that would be exempted is relatively small and would not expose credit unions to undue risk. The total dollar volume of loans for commercial properties would only increase from 1.8 percent to 13 percent. Exempting an additional 39 percent of commercial real estate transactions would provide significant burden relief to credit unions, but would still cover almost 90 percent of the total dollar volume of such transactions. This incremental risk can be controlled through sound risk management practices. In particular, the Board notes that written estimates of market value would be required for such transactions not requiring an appraisal.

    The NCUA's analysis of data reported on the Call Report suggests that the threshold for requiring an appraisal conducted by a state-certified appraiser for commercial real estate transactions could be raised and be comparable to the risk that these transactions posed when the current threshold was imposed on commercial real estate transactions in 2002. According to Bank Call Report data, when the threshold for real estate-related financial transactions was raised for banks from $100,000 to $250,000 in 1994, approximately 18 percent of the dollar volume of all non-farm, non-residential (NFNR) loans reported by banks had original loan amounts of $250,000 or less. As of the fourth quarter of 2016, approximately 4 percent of the dollar volume of such loans had original loan amounts of $250,000 or less. The NCUA does not possess similar data for credit unions; however, this analysis generally suggests that a larger proportion of commercial real estate transactions now require appraisals than when the threshold was last established and, therefore, the threshold could be raised without unduly affecting the safety and soundness of credit unions.

    Also, the Board notes that many variables beyond appraisal requirements, including market conditions and various loan underwriting and credit administration practices, affect an institution's loss experience. For credit unions, the $250,000 threshold has been applicable to commercial real estate transactions since March 2002. Analysis of supervisory information concerning losses on commercial real estate transactions suggests that faulty valuations of the underlying real estate collateral have not been a material cause of losses. In the last three decades, the banking industry suffered two crises in which poorly underwritten and administered commercial real estate loans were a key feature in elevated levels of loan losses, and bank and credit union failures.69 Supervisory experience and a review of material loss reviews 70 covering those decades suggest that factors other than faulty appraisals were the cause(s) for an institution's loss experience. For example, larger acquisition, construction, and development 71 transactions were more likely to be troublesome. This is due to the lack of appropriate underwriting and administration of issues unique to larger properties, such as longer construction periods, extended “lease up” periods (the time required to lease a building after construction), and the more complex nature of the construction of such properties.

    69See, e.g., FDIC, History of the Eighties—Lessons for the Future, Chapter 3: Commercial Real Estate and the Banking Crises of the 1980s and Early 1990s, available at https://www.fdic.gov/bank/historical/history/137_165.pdf; FDIC, Office of the Inspector General, EVAL-13-002, Comprehensive Study on the Impact of the Failure of Insured Depository Institutions 50, Table 6 (January 2013), available at https://www.fdicig.gov/reports13/13-002EV.pdf.

    70 Section 38(k) of the FDI Act, as amended, provides that if the Deposit Insurance Fund incurs a “material loss” with respect to an IDI, the Inspector General of the appropriate regulator (which for the OCC is the Inspector General of the Department of the Treasury) shall prepare a report to that agency, identifying the cause of failure and reviewing the agency's supervision of the institution. 12 U.S.C. 1831o(k).

    71 Acquisition, development and construction refers to transactions that finance construction projects including land, site development, and vertical construction. This type of financing is typically recorded in the land or construction categories of the Call Report.

    Additionally, effective January 1, 2017, NCUA implemented a modernized commercial lending regulation and supervisory program.72 The regulation streamlined standards and established principles-based requirements that instill appropriate discipline. Also, the Guidelines provide regulated institutions with guidance on establishing parameters for ordering Title XI appraisals for transactions that present significant risk, even if those transactions are eligible for written estimates of market value under the regulation. Regulated institutions are encouraged to continue using a risk-focused approach when considering whether to order an appraisal for real estate-related financial transactions.

    72 12 CFR part 721.

    The NCUA believes statutory limits, combined with appropriate prudential and supervisory oversight, offset any potential risk that could occur by raising the appraisal threshold for non-residential real estate-related transactions. Therefore, the Board concludes that increasing the commercial real estate appraisal threshold to $1 million does not pose a threat to safety and soundness.

    IV. Request for Comment

    The Board invites comment on all aspects of this proposed rulemaking. Throughout the section-by-section analysis of the preamble, the Board has requested information and comments on specific amendments outlined in this proposed rule. Additionally, the NCUA Board is specifically seeking comments on whether the proposed changes achieve the intended goal of clarifying the types of transactions that require an appraisal or written estimate of market value.

    V. Regulatory Procedures A. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires that, in connection with a notice of proposed rulemaking, an agency prepare and make available for public comment an initial regulatory flexibility analysis that describes the impact of a proposed rule on small entities. A regulatory flexibility analysis is not required, however, if the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities (defined for purposes of the RFA to include credit unions with assets less than $100 million) and publishes its certification and a short, explanatory statement in the Federal Register together with the rule.

    Data currently available to the NCUA are not sufficient to estimate how many small credit unions make commercial real estate loans in amounts that fall between the current and proposed thresholds. Therefore, the NCUA cannot estimate how many small entities may be affected by the increased threshold and how significant the reduction in burden may be for such small entities. The NCUA believes, however, that the proposed threshold increase will meaningfully reduce burden for small credit unions. Accordingly, the NCUA certifies that the proposed rule will not have a significant economic impact on a substantial number of small credit unions.

    B. Paperwork Reduction Act

    Certain provisions of the proposed rule contain “collection of information” requirements within the meaning of the Paperwork Reduction Act (PRA) of 1995.73 In accordance with the requirements of the PRA, an agency may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently-valid Office of Management and Budget (OMB) control number. The OMB control number for the NCUA is 3133-0125, which will be extended, without revision. The NCUA concludes that the proposed rule does not contain any changes to the current information collections; however, the NCUA is revising the methodology for calculating the burden estimates. The information collection requirements contained in this proposed rulemaking have been submitted to OMB for review and approval under section 3507(d) of the PRA 74 and section 1320.11 of the OMB's implementing regulations.75

    73 44 U.S.C. 3501-3521.

    74 44 U.S.C. 3507(d).

    75 5 CFR part 1320.

    Title of Information Collection: Real Estate Appraisals.

    Frequency of Response: Event generated.

    Affected Public: Private Sector: Not-for-profit institutions.

    Respondents: Federally insured credit unions.

    General Description of Report: For federally related transactions, Title XI requires regulated institutions to obtain appraisals prepared in accordance with USPAP promulgated by the Appraisal Standards Board of the Appraisal Foundation. Generally, these standards include the methods and techniques used to estimate the market value of a property as well as the requirements for reporting such analysis and a market value conclusion in the appraisal. The NCUA expects credit unions to maintain records that demonstrate that appraisals used in their real estate-related lending activities comply with these regulatory requirements. For commercial real estate transactions exempted from the Title XI appraisal requirements by the proposed rule, regulated institutions would still be required to obtain an evaluation to justify the transaction amount. The NCUA estimate that the recordkeeping burden associated with evaluations would be the same as the recordkeeping burden associated with appraisals for such transactions.

    Current Action: The threshold change in the proposed rule will result in credit unions being able to use evaluations instead of appraisals for certain transactions. It is estimated that the time required to document the review of an appraisal or an evaluation is the same. While the rulemaking described in this proposed rule would not change the amount of time that federally insured credit unions spend complying with the Title XI appraisal regulation, the NCUA is using a more accurate methodology for calculating the burden of the information collections based on the experience of the NCUA and the other financial institutions regulators (OCC, FDIC, Federal Reserve). Thus, the PRA burden estimates shown here are different from those previously reported. The NCUA is (1) using the average number of loans per institution as the frequency and (2) using 5 minutes as the estimated time per response for the appraisals or evaluations.

    PRA Burden Estimates

    Estimated average time per response: 5 minutes.

    Number of Respondents: 3,449.

    Annual Frequency: 477.

    Total Estimated Annual Burden: 137,098 hours.

    The NCUA invites comments on:

    (a) Whether the collections of information are necessary for the proper performance of the agencies' functions, including whether the information has practical utility;

    (b) The accuracy of the estimates of the burden of the information collections, including the validity of the methodology and assumptions used;

    (c) Ways to enhance the quality, utility, and clarity of the information to be collected;

    (d) Ways to minimize the burden of the information collections on respondents, including through the use of automated collection techniques or other forms of information technology; and

    (e) Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.

    All comments will become a matter of public record. Comments regarding the information collection requirements of this rule should be sent to (1) Dawn Wolfgang, NCUA PRA Clearance Officer, National Credit Union Administration, 1775 Duke Street, Suite 5080, Alexandria, Virginia 22314, or Fax No. 703-519-8572, or Email at [email protected] and the (2) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for NCUA, New Executive Office Building, Room 10235, Washington, DC 20503, or email at [email protected]

    C. Executive Order 13132

    Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. In adherence to fundamental federalism principles, the NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order. This rulemaking will not have a substantial direct effect on the states, on the connection between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. The NCUA has determined that this proposal does not constitute a policy that has federalism implications for purposes of the executive order.

    D. Assessment of Federal Regulations and Policies on Families

    The NCUA has determined that this final rule will not affect family well-being within the meaning of Section 654 of the Treasury and General Government Appropriations Act, 1999.

    List of Subjects in 12 CFR Part 722

    Appraisal, Appraiser, Credit unions, Mortgages, Reporting and recordkeeping requirements, Truth in lending.

    By the National Credit Union Administration Board on September 20, 2018. Gerard Poliquin, Secretary of the Board.

    For the reasons discussed above, the NCUA Board proposes to amend 12 CFR part 722 as follows:

    PART 722—APPRAISALS 1. The authority citation for part 722 is revised to read as follows: Authority:

    12 U.S.C. 1766, 1789, and 3331 et seq. Section 722.3(a) is also issued under 15 U.S.C. 1639h.

    2. Section 722.2 is revised to read as follows:
    § 722.2 Definitions.

    Appraisal means a written statement independently and impartially prepared by a qualified appraiser setting forth an opinion as to the market value of an adequately-described property as of a specific date(s), supported by the presentation and analysis of relevant market information.

    Appraisal Foundation means the Appraisal Foundation established on November 30, 1987, as a not-for-profit corporation under the laws of Illinois.

    Appraisal Subcommittee means the Appraisal Subcommittee of the Federal Financial Institutions Examination Council.

    Complex, when used in regards to a real estate-related financial transaction, means a transaction in which the property to be appraised, the form of ownership, or market conditions are atypical. A regulated institution may presume that appraisals of 1- to 4-family residential properties are not complex unless the institution has readily available information that a given appraisal will be complex.

    Federal financial institutions regulatory agency means the Board of Governors of the Federal Reserve System; the Federal Deposit Insurance Corporation (FDIC); the Office of the Comptroller of the Currency, Treasury (OCC); the NCUA, and, formerly, the Office of Thrift Supervision.

    Federally related transaction means any real estate-related financial transaction entered into on or after August 9, 1990 that:

    (1) The National Credit Union Administration, or any federally insured credit union, engages in or contracts for; and

    (2) Requires the services of an appraiser.

    Market value means the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

    (1) Buyer and seller are typically motivated;

    (2) Both parties are well informed or well advised, and acting in what they consider their own best interests;

    (3) A reasonable time is allowed for exposure in the open market;

    (4) Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

    (5) The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

    Real estate (or real property) means an identified parcel or tract of land, including easements, rights of way, undivided or future interests and similar rights in a parcel or tract of land, but does not include mineral rights, timber rights, and growing crops, water rights and similar interests severable from the land when the transaction does not involve the associated parcel or tract of land.

    Real estate-related financial transaction means any transaction involving:

    (1) The sale, lease, purchase, investment in or exchange of real estate, including interests in property, or the financing thereof; or

    (2) The refinancing of real estate or interests in real estate; or

    (3) The use of real estate or interests in property as security for a loan or investment, including mortgage-backed securities.

    Residential real estate transaction means a real estate-related financial transaction that is secured by a single 1- to 4-family residential property.

    Staff appraiser means a State-certified or a State-licensed appraiser that is an employee of the credit union.

    State-certified appraiser means any individual who has satisfied the requirements for certification in a state or territory whose criteria for certification as a real estate appraiser currently meet the minimum criteria for certification issued by the Appraiser Qualification Board of the Appraisal Foundation. No individual shall be a state-certified appraiser unless such individual has achieved a passing grade upon a suitable examination administered by a state or territory that is consistent with and equivalent to the Uniform State Certification Examination issued or endorsed by the Appraiser Qualification Board. In addition, the Appraisal Subcommittee must not have issued a finding that the policies, practices, or procedures of a state or territory are inconsistent with title XI of FIRREA. The National Credit Union Administration may, from time to time, impose additional qualification criteria for certified appraisers performing appraisals in connection with federally related transactions within its jurisdiction.

    State-licensed appraiser means any individual who has satisfied the requirements for licensing in a state or territory where the licensing procedures comply with title XI of FIRREA and where the Appraisal Subcommittee has not issued a finding that the policies, practices, or procedures of the State or territory are inconsistent with title XI. The NCUA may, from time to time, impose additional qualification criteria for licensed appraisers performing appraisals in connection with federally related transactions within its jurisdiction.

    Tract development means a project of five units or more that is constructed or is to be constructed as a single development.

    Transaction value means:

    (1) For loans or other extensions of credit, the amount of the loan or extension of credit; and

    (2) For sales, leases, purchases, and investments in or exchanges of real estate, the market value of the real estate interest involved; and

    (3) For the pooling of loans or interests in real estate for resale or purchase, the amount of the loan or market value of the real estate calculated with respect to each such loan or interest in real estate.

    3. Section 722.3 is revised to read as follows:
    § 722.3 Appraisals and written estimates of market value requirements for real estate-related financial transactions.

    (a) Real estate-related financial transactions not requiring an appraisal or written estimate of market value under this part. Provided the transaction is not a “higher-priced mortgage loan” under 12 CFR 1026.35, which must meet separate appraisal requirements under section 129H of the Truth in Lending Act, 15 U.S.C. 1639h, an appraisal or written estimate of market value is not required for a real estate-related financial transaction in which:

    (1) The transaction involves an existing extension of credit and is not considered a new loan under generally accepted accounting principles;

    (2) A lien on real estate has been taken as collateral through an abundance of caution and where the terms of the transaction as a consequence have not been made more favorable than they would have been in the absence of a lien;

    (3) A lien on real estate has been taken for purposes other than the real estate's value;

    (4) A lease of real estate is entered into, unless the lease is the economic equivalent of a purchase or sale of the leased real estate;

    (5) The transaction involves the purchase, sale, investment in, exchange of, or extension of credit secured by, a loan or interest in a loan, pooled loans, or interests in real estate, including mortgage-backed securities, and each loan or interest in a loan, pooled loan, or real estate interest met the requirements of this regulation, if applicable, at the time of origination; or

    (6) The transaction either qualifies for sale to a United States government agency or United States government sponsored agency, or involves a residential real estate transaction in which the appraisal conforms to the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation appraisal standards applicable to that category of real estate.

    (b) Real estate-related financial transactions requiring an appraisal by a state-certified appraiser. An appraisal performed by a state-certified appraiser is required for any real estate-related financial transaction not exempt under paragraph (a) of this section in which:

    (1) The transaction value is $1,000,000 or more; or

    (2) The transaction is complex, involves a residential real estate transaction, $250,000 or more of the transaction value is not insured or guaranteed by a United States government agency or United States government sponsored agency, and the transaction does not meet the criteria in paragraph (f) of this section.

    (3) A credit union is not required to obtain an appraisal under this paragraph (b) if the United States government agency, or United States government sponsored agency, obtains an appraisal by a state-certified appraiser.

    (c) Real estate-related financial transactions requiring an appraisal by either a state-certified or state-licensed appraiser. An appraisal performed by a state-certified appraiser or a state licensed appraiser is required for any real estate-related financial transaction not exempt under paragraph (a) of this section in which:

    (1) The transaction is not complex, involves a residential real estate transaction, $250,000 or more of the transaction value is not insured or guaranteed by a United States government agency or United States government sponsored agency, and the transaction does not meet the criteria in paragraph (f) of this section.

    (2) If, during the course of an appraisal of a residential real estate transaction performed by a state-licensed appraiser, factors are identified that result in the transaction meeting the definition of complex, then the credit union may either:

    (i) Ask the state-licensed appraiser to complete the appraisal and have a state-certified appraiser approve and cosign the appraisal; or

    (ii) Engage a state-certified appraiser to complete the appraisal.

    (3) A credit union is not required to obtain an appraisal under this paragraph if the United States government agency, or United States government sponsored agency, obtains an appraisal.

    (d) Real estate-related financial transactions requiring a written estimate of market value. Unless fully insured or guaranteed by a United States government agency or United States government sponsored agency, exempt under paragraph (a) of this section, or an appraisal performed by a state-certified or state-licensed appraiser was obtained, any real estate-related financial transaction must be supported by a written estimate of market value that was performed by an individual:

    (1) Independent of the loan production and collection processes (if independence cannot be achieved, the credit union must be able to demonstrate clearly that it has prudent safeguards to isolate its collateral valuation program from influence or interference from the loan production process and collection process);

    (2) Having no direct, indirect, or prospective interest, financial or otherwise, in the property or the transaction; and

    (3) Qualified and experienced to perform such estimates of value for the type and amount of credit being considered.

    (e) Appraisals to address safety and soundness concerns. The NCUA reserves the right to require an appraisal under this subpart whenever the agency believes it is necessary to address safety and soundness concerns.

    (f) Exemption from appraisals of real estate located in rural areas.

    (1) Notwithstanding any other provision of law, an appraisal in connection with a federally related transaction involving real estate or an interest in real estate is not required if:

    (i) The real estate or interest in real estate is located in a rural area, as described in 12 CFR 1026.35(b)(2)(iv)(A);

    (ii) The transaction value is less than $400,000;

    (iii) Any party involved in the transaction that meets the definition of mortgage originator must be subject to oversight by a Federal financial institutions regulatory agency; and

    (iv) Not later than three days after the date on which the Closing Disclosure Form, made in accordance with 12 CFR parts 1024 and 1026, relating to the federally related transaction is given to the consumer, the credit union (or other party involved in the transaction that acts as the mortgage originator) or its agent, directly or indirectly:

    (A) Has contacted not fewer than three state-certified appraisers or state-licensed appraisers, as applicable, on the credit union's (or other party involved in the transaction that acts as the mortgage originator) approved appraiser list in the market area in accordance with 12 CFR part 226; and

    (B) Has documented that no state-certified appraiser or state-licensed appraiser, as applicable, was available within five business days beyond customary and reasonable fee and timeliness standards for comparable appraisal assignments, as documented by the credit union (or other party involved in the transaction that acts as the mortgage originator) or its agent.

    (2) A credit union (or other party involved in the transaction that acts as the mortgage originator) that makes a loan without an appraisal under the terms of paragraph (f)(1) of this section shall not sell, assign, or otherwise transfer legal title to the loan unless:

    (i) The loan is sold, assigned, or otherwise transferred to another party by reason of the credit union's (or mortgage originator's) bankruptcy or insolvency;

    (ii) The loan is sold, assigned, or otherwise transferred to another party regulated by a Federal financial institutions regulatory agency, so long as the loan is retained in portfolio by the other party;

    (iii) The sale, assignment, or transfer is pursuant to a merger of the credit union (or mortgage originator) with another party or the acquisition of the credit union (or mortgage originator) by another party or of another party by the credit union (or mortgage originator); or

    (iv) The sale, loan, or transfer is to a wholly owned subsidiary of the credit union (or mortgage originator), provided that, after the sale, assignment, or transfer, the loan is considered to be an asset of the credit union (or mortgage originator) under generally accepted accounting principles.

    (3)(i) For purposes of this paragraph (f), the term transaction value means the amount of a loan or extension of credit, including a loan or extension of credit that is part of a pool of loans or extensions of credit; and

    (ii) The term mortgage originator has the meaning given the term in section 103 of the Truth in Lending Act (15 U.S.C. 1602).

    (4) This paragraph (f) does not apply if:

    (i) The NCUA requires an appraisal under paragraph (e) of this section; or

    (ii) The loan is a high-cost mortgage, as defined in section 103 of the Truth in Lending Act (15 U.S.C. 1602).

    [FR Doc. 2018-20946 Filed 10-2-18; 8:45 am] BILLING CODE 7535-01-P
    DEPARTMENT OF LABOR Wage and Hour Division 29 CFR Part 541 White Collar Exemption Regulations; Public Listening Session AGENCY:

    Wage and Hour Division, Department of Labor.

    ACTION:

    Notice of public listening session.

    SUMMARY:

    The Department of Labor will conduct a public listening session to gather views on the Part 541 white collar exemption regulations. The Fair Labor Standards Act (FLSA) generally requires covered employers to pay their employees at least the federal minimum wage (currently $7.25 an hour) for all hours worked, and overtime premium pay of not less than one and one-half times the employee's regular rate of pay for any hours worked over 40 in a workweek. The FLSA exempts from both minimum wage and overtime protection “any employee employed in a bona fide executive, administrative, or professional capacity” and delegates to the Secretary of Labor the power to define and delimit these terms through regulation.

    DATES:

    The date, location, and time for the public listening session is listed below: October 17, 2018, Washington, DC, 10 a.m.-12 p.m.

    Members of the public may attend this listening session in person up to the seating capacity of the room. The Department will not attempt to achieve a consensus view in this listening session, but rather is interested in hearing the views and ideas of participants.

    ADDRESSES:

    To obtain specific location details and register to attend, please visit this link: https://www.eventbrite.com/e/overtime-rule-listening-session-tickets-50661020476.

    FOR FURTHER INFORMATION CONTACT:

    Stephen Davis, Listening Session Coordinator, Division of Regulations, Legislation, and Interpretation, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue NW, Washington, DC 20210; telephone: (202) 693-0406 (this is not a toll-free number). Copies of this notice may be obtained in alternative formats (Large Print, Braille, Audio Tape, or Disc), upon request, by calling (202) 693-0023 (not a toll-free number). TTY/TTD callers may dial toll-free (877) 889-5627 to obtain information or request materials in alternative formats.

    SUPPLEMENTARY INFORMATION:

    On July 26, 2017, the Department of Labor published a Request for Information (RFI), Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees. See 82 FR 34616. The RFI was one opportunity for the public to provide information to aid the Department in formulating a proposal to revise the white collar exemption regulations. Public listening sessions provide further opportunity for the public to provide input on issues related to the salary level test, such as:

    1. What is the appropriate salary level (or range of salary levels) above which the overtime exemptions for bona fide executive, administrative, or professional employees may apply? Why?

    2. What benefits and costs to employees and employers might accompany an increased salary level? How would an increased salary level affect real wages (e.g., increasing overtime pay for employees whose current salaries are below a new level but above the current threshold)? Could an increased salary level reduce litigation costs by reducing the number of employees whose exemption status is unclear? Could this additional certainty produce other benefits for employees and employers?

    3. What is the best methodology to determine an updated salary level? Should the update derive from wage growth, cost-of-living increases, actual wages paid to employees, or some other measure?

    4. Should the Department more regularly update the standard salary level and the total-annual-compensation level for highly compensated employees? If so, how should these updates be made? How frequently should updates occur? What benefits, if any, could result from more frequent updates?

    Dated: September 28, 2018. Robert Waterman, Senior Compliance Specialist, Division of Regulations, Legislation and Interpretation.
    [FR Doc. 2018-21521 Filed 10-2-18; 8:45 am] BILLING CODE 4510-27-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R09-OAR-2018-0559; FRL-9984-80—Region 9] Air Plan Approval; California; Feather River Air Quality Management District AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is proposing to approve a revision to the Feather River Air Quality Management District (FRAQMD) portion of the California State Implementation Plan (SIP). This revision concerns emissions of oxides of nitrogen (NOX) from natural gas-fired water heaters, small boilers, and process heaters. We are proposing to approve a local rule to regulate these emission sources under the Clean Air Act (CAA or the Act). We are taking comments on this proposal and plan to follow with a final action.

    DATES:

    Any comments must arrive by November 2, 2018.

    ADDRESSES:

    Submit your comments, identified by Docket ID No. EPA-R09-OAR-2018-0559, at https://www.regulations.gov. For comments submitted at Regulations.gov, follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. The EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (i.e. on the web, cloud, or other file sharing system). For additional submission methods, please contact the person identified in the FOR FURTHER INFORMATION CONTACT section. For the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www.epa.gov/dockets/commenting-epa-dockets.

    FOR FURTHER INFORMATION CONTACT:

    Robert Schwartz, EPA Region IX, (415) 972-3286, [email protected]

    SUPPLEMENTARY INFORMATION:

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

    Table of Contents I. The State's Submittal A. What rule did the State submit? B. Are there other versions of this rule? C. What is the purpose of the submitted rule? II. The EPA's Evaluation and Action A. How is the EPA evaluating the rule? B. Does the rule meet the evaluation criteria? C. EPA Recommendations To Further Improve the Rule D. Public comment and proposed action III. Incorporation by Reference IV. Statutory and Executive Order Reviews I. The State's Submittal A. What rule did the State submit?

    Table 1 lists the rule addressed by this proposal with the dates that it was adopted by the local air agency and submitted by the California Air Resources Board (CARB).

    Table 1—Submitted Rule Local agency Rule number Rule title Adopted Submitted FRAQMD 3.23 Natural Gas-Fired Water Heaters, Small Boilers, And Process Heaters 10/03/2016 05/08/2017

    On November 1, 2017, the EPA determined that the submittal for FRAQMD Rule 3.23 met the completeness criteria in 40 CFR part 51 Appendix V, which must be met before formal EPA review.

    B. Are there other versions of this rule?

    There are no previous versions of Rule 3.23 in the SIP.

    C. What is the purpose of the submitted rule?

    Emissions of oxides of nitrogen (NOX) contribute to ground-level ozone, smog and particulate matter, which harm human health and the environment. Section 110(a) of the CAA requires states to submit regulations that control NOX emissions. Rule 3.23 limits NOX emissions in the FRAQMD from natural gas-fired water heaters, small boilers, and process heaters rated 0.075 MM 1 to 1 MM Btu/hr 2 . The EPA's technical support document (TSD) has more information about this rule.

    1 MM = million.

    2 British thermal unit (Btu): The amount of heat required to raise the temperature of one pound of water from 59 °F to 60 °F at one atmosphere.

    II. The EPA's Evaluation and Action A. How is the EPA evaluating the rule?

    SIP rules must be enforceable (see CAA section 110(a)(2)), must not interfere with applicable requirements concerning attainment and reasonable further progress or other CAA requirements (see CAA section 110(l)), and must not modify certain SIP control requirements in nonattainment areas without ensuring equivalent or greater emissions reductions (see CAA section 193).

    Generally, SIP rules must require Reasonably Available Control Measures/Reasonably Available Control Technology (RACM/RACT) for each major source of NOX in ozone nonattainment areas classified as moderate or above (see CAA sections 182(b)(2) and 182(f)). 40 CFR 81.305 describes FRAQMD as regulating a portion of the Sacramento Metro Area nonattainment area classified as Severe for the 1997 and 2008 8-hour ozone National Ambient Air Quality Standards (NAAQS). The rest of FRAQMD is designated as unclassifiable/attainment. Rule 3.23 regulates area sources that are too small to exceed the major source threshold of 25 tons per year for Severe ozone nonattainment areas (see CAA 182(d) and (f)) and is therefore not subject to major source ozone RACT requirements. Nonetheless, FRAQMD must implement all RACM/RACT for NOX necessary to demonstrate attainment as expeditiously as practicable and to meet any reasonable further progress (RFP) requirements (CAA 172(c)(1), 40 CFR 51.912(d), 51.1112(c)).

    Guidance and policy documents that we used to evaluate enforceability, revision/relaxation and rule stringency requirements for the applicable criteria pollutants include the following:

    1. “State Implementation Plans; General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990,” 57 FR 13498 (April 16, 1992); 57 FR 18070 (April 28, 1992).

    2. “Issues Relating to VOC Regulation Cutpoints, Deficiencies, and Deviations,” EPA, May 25, 1988 (the Bluebook, revised January 11, 1990).

    3. “Guidance Document for Correcting Common VOC & Other Rule Deficiencies,” EPA Region 9, August 21, 2001 (the Little Bluebook).

    4. “State Implementation Plans; Nitrogen Oxides Supplement to the General Preamble; Clean Air Act Amendments of 1990 Implementation of Title I; Proposed Rule,” (the NOX Supplement), 57 FR 55620, November 25, 1992.

    5. “Alternative Control Techniques Document—NOX Emissions from Industrial/Commercial/Institutional (ICI) Boilers”, US EPA 453/R-94-022 (March 1994).

    6. “Alternative Control Techniques Document—NOX Emissions from Process Heaters (Revised)” (EPA-453/R-93-034 1993/09).

    7. “Determination of Reasonably Available Control Technology and Best Available Retrofit Control Technology for Industrial, Institutional, and Commercial Boilers, Steam Generators, and Process Heaters” (California Air Resources Board, July 18, 1991).

    B. Does the Rule Meet the Evaluation Criteria?

    This rule is consistent with CAA requirements and relevant guidance regarding enforceability, RACT, and SIP revisions. The TSD has more information on our evaluation.

    C. EPA Recommendations To Further Improve the Rule

    The TSD describes additional rule revisions that we recommend for the next time the local agency modifies the rule but are not currently the basis for rule disapproval.

    D. Public Comment and Proposed Action

    As authorized in section 110(k)(3) of the Act, the EPA proposes to fully approve the submitted rule because it fulfills all relevant requirements. We will accept comments from the public on this proposal until November 2, 2018. If we take final action to approve the submitted rule, our final action will incorporate this rule into the federally enforceable SIP.

    III. Incorporation by Reference

    In this rule, the EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by reference the FRAQMD rule described in Table 1 of this preamble. The EPA has made, and will continue to make, these materials available through www.regulations.gov and at the EPA Region IX Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

    IV. Statutory and Executive Order Reviews

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

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

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

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

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

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

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

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

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

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

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

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

    List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements.

    Authority:

    42 U.S.C. 7401 et seq.

    Dated: September 21, 2018. Deborah Jordan, Acting Regional Administrator, Region IX.
    [FR Doc. 2018-21467 Filed 10-2-18; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R09-OAR-2017-0490; FRL-9984-91—Region 9] Approval and Promulgation of Implementation Plans; California; South Coast Serious Area Plan for the 2006 PM2.5 NAAQS AGENCY:

    U.S. Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is proposing to approve state implementation plan (SIP) revisions submitted by California to address Clean Air Act (CAA or “Act”) requirements for the 2006 24-hour fine particulate matter (PM2.5) national ambient air quality standards (NAAQS or “standards”) in the Los Angeles-South Coast air basin (South Coast) Serious PM2.5 nonattainment area. The EPA is also proposing to approve 2017 and 2019 motor vehicle emissions budgets for transportation conformity purposes and inter-pollutant trading ratios for use in transportation conformity analyses.

    DATES:

    Any comments must arrive by November 2, 2018.

    ADDRESSES:

    Submit your comments, identified by Docket ID No. EPA-R09-OAR-2017-0490 at https://www.regulations.gov, or via email to [email protected] For comments submitted at Regulations.gov, follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. For either manner of submission, the EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (i.e., on the web, cloud, or other file sharing system). For additional submission methods, please contact the person identified in the FOR FURTHER INFORMATION CONTACT section. For the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

    FOR FURTHER INFORMATION CONTACT:

    Wienke Tax, Air Planning Office (AIR-2), EPA Region IX, (415) 947-4192, [email protected]

    SUPPLEMENTARY INFORMATION:

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

    Table of Contents I. Background II. Summary of the 2016 PM2.5 Plan III. Completeness Review of the 2016 PM2.5 Plan IV. Clean Air Act Requirements for PM2.5 Serious Area Plans V. Review of South Coast Serious Area Plan Addressing the 2006 PM2.5 NAAQS A. Emissions Inventory B. PM2.5 Precursors C. Best Available Control Measures D. Attainment Demonstration and Modeling E. Reasonable Further Progress and Quantitative Milestones F. Contingency Measures G. Major Stationary Source Control Requirements Under CAA Section 189(e) H. Motor Vehicle Emission Budgets VI. Summary of Proposed Actions and Request for Public Comment VII. Statutory and Executive Order Reviews I. Background

    On October 17, 2006, the EPA revised the 24-hour NAAQS for PM2.5, particulate matter with a diameter of 2.5 microns or less, to provide increased protection of public health by lowering the level from 65 micrograms per cubic meter (µg/m3) to 35 µg/m3.1 Epidemiological studies have shown statistically significant correlations between elevated PM2.5 levels and premature mortality. Other important health effects associated with PM2.5 exposure include aggravation of respiratory and cardiovascular disease (as indicated by increased hospital admissions, emergency room visits, absences from school or work, and restricted activity days), changes in lung function and increased respiratory symptoms. Individuals particularly sensitive to PM2.5 exposure include older adults, people with heart and lung disease, and children.2 PM2.5 can be emitted directly into the atmosphere as a solid or liquid particle (“primary PM2.5” or “direct PM2.5”) or can be formed in the atmosphere as a result of various chemical reactions among precursor pollutants such as nitrogen oxides, sulfur oxides, volatile organic compounds, and ammonia (“secondary PM2.5”).3

    1 40 CFR 50.13 and 71 FR 61144 (October 17, 2006). The EPA first established NAAQS for PM2.5 on July 18, 1997 (62 FR 38652), including annual standards of 15.0 µg/m3 based on a 3-year average of annual mean PM2.5 concentrations and 24-hour (daily) standards of 65 µg/m3 based on a 3-year average of 98th percentile 24-hour concentrations (40 CFR 50.7). In 2012, the EPA revised the annual standards to lower them to 12 µg/m3 (78 FR 3086, January 15, 2013, codified at 40 CFR 50.18). Unless otherwise noted, all references to the PM2.5 standards in this notice are to the 2006 24-hour NAAQS of 35 µg/m3 codified at 40 CFR 50.13.

    2 78 FR 3086 at 3088 (January 15, 2013).

    3 72 FR 20586, 20589 (April 25, 2007).

    Following promulgation of a new or revised NAAQS, the EPA is required by CAA section 107(d) to designate areas throughout the nation as attaining or not attaining the NAAQS. On November 13, 2009, the EPA designated the South Coast as nonattainment for the 2006 24-hour PM2.5 standards.4 This designation became effective on December 14, 2009.5 The South Coast area is also designated nonattainment for the 1997 annual and 24-hour PM2.5 standards.6 On June 2, 2014, the EPA classified the South Coast area as “Moderate” nonattainment for both the 1997 PM2.5 standards and the 2006 PM2.5 standards under subpart 4 of part D, title I of the Act.7 8 California submitted a plan addressing the Moderate area attainment planning requirements for the 2006 PM2.5 NAAQS in the South Coast on February 13, 2013, and submitted a supplement to this plan on March 4, 2015.9

    4 74 FR 58688 (November 13, 2009).

    5 40 CFR 81.305.

    6 70 FR 944 (January 5, 2005) and 40 CFR 81.305. In November 2007, California submitted the 2007 PM2.5 Plan to provide for attainment of the 1997 PM2.5 standards in the South Coast. In November 2011, the EPA approved all but the contingency measures in the 2007 PM2.5 Plan (76 FR 69928, November 9, 2011). In November 2011 and April 2013, the State submitted a revised contingency measure plan, which the EPA approved on October 29, 2013 (78 FR 64402).

    7 79 FR 31566.

    8 The EPA took this action in response to a decision of the Court of Appeals for the D.C. Circuit finding that the EPA had erred in implementing the PM2.5 NAAQS pursuant solely to the general implementation provisions of subpart 1 of Part D, Title I of the Act, without also considering the particulate matter-specific provisions of subpart 4 of Part D. Natural Resources Defense Council (NRDC) v. EPA, 706 F.3d 428 (D.C. Cir. 2013).

    9 Letter from James N. Goldstene, Executive Officer, California Air Resources Board (CARB), to Jared Blumenfeld, Regional Administrator, EPA Region IX, with attachments (transmitting 2012 PM2.5 Plan), February 13, 2013, and letter from Richard W. Corey, Executive Officer, CARB, to Jared Blumenfeld, Regional Administrator, EPA Region IX, with attachments (transmitting 2015 supplement to 2012 PM2.5 Plan), March 4, 2015.

    On January 13, 2016, the EPA published a December 22, 2015 final rule reclassifying the South Coast area as “Serious” nonattainment under subpart 4, based on the EPA's determination that the area could not practicably attain the 2006 PM2.5 standards by the December 31, 2015 attainment date.10 This reclassification became effective on February 12, 2016. The reclassification was based upon the EPA's evaluation of ambient air quality data from the 2013-2015 period, indicating that it was not practicable for certain monitoring sites within the South Coast area to show PM2.5 design values at or below the level of the 2006 PM2.5 NAAQS by December 31, 2015.11 On April 14, 2016, we partially approved and partially disapproved California's Moderate area plan for the 2006 PM2.5 NAAQS in the South Coast.12 On February 12, 2018, we determined that California had corrected the deficiencies identified in our prior partial disapproval of this plan and terminated all sanction clocks triggered by that action.13

    10 81 FR 1514 (January 13, 2016).

    11Id. at 1514; see also proposed rule, 80 FR 63640 (October 20, 2015). Air quality data for 2013-2015 indicated that the highest monitors in the South Coast area had a design value of 38 µg/m3 for the 24-hour standard.

    12 81 FR 22025 (April 14, 2016).

    13 83 FR 5923 (February 12, 2018).

    The South Coast PM2.5 nonattainment area is home to about 17 million people, has a diverse economic base, and contains one of the highest-volume port areas in the world. For a precise description of the geographic boundaries of the South Coast PM2.5 nonattainment area, see 40 CFR 81.305. The local air district with primary responsibility for developing a plan to attain the 2006 PM2.5 NAAQS in this area is the South Coast Air Quality Management District (“District” or SCAQMD). The District works cooperatively with the California Air Resources Board (CARB) in preparing these plans. Authority for regulating sources in the South Coast is split between the District, which has responsibility for regulating stationary and most area sources, and CARB, which has responsibility for regulating most mobile sources and some categories of consumer products.

    As a consequence of its reclassification as a Serious PM2.5 nonattainment area, the South Coast area became subject to a new attainment date under CAA section 188(c)(2) and the requirement to submit a Serious area plan that satisfies the requirements of part D of title I of the Act, including the requirements of subpart 4, for the 2006 PM2.5 NAAQS.14 Under subpart 4, the attainment date for an area classified as Serious is as expeditiously as practicable, but no later than the end of the tenth calendar year following designation. As explained in the EPA's final reclassification action, the Serious area plan for the South Coast must include provisions to assure that the best available control measures (BACM) for the control of direct PM2.5 and PM2.5 precursors shall be implemented no later than 4 years after the area is reclassified (CAA section 189(b)(1)(B)), and a demonstration (including air quality modeling) that the plan provides for attainment as expeditiously as practicable but no later than December 31, 2019, which is the latest permissible attainment date under CAA section 188(c)(2).15

    14 81 FR 1514, 1518 (January 13, 2016).

    15Id.

    Given the December 31, 2019 outermost attainment deadline for the South Coast area under section 188(c)(2), the EPA required the State to adopt and submit a Serious area plan for the South Coast within 18 months of the reclassification, well before the statutory SIP submission deadlines in CAA section 189(b)(2).16

    16Id.

    II. Summary of the 2016 PM2.5 Plan

    We are proposing action on portions of two California SIP submissions that address the 2006 24-hour PM2.5 NAAQS Serious area plan requirements in the South Coast. The first submission is the “Final 2016 Air Quality Management Plan (March 2017),” adopted by the SCAQMD Governing Board on March 3, 2017 (“2016 AQMP”). CARB submitted the 2016 AQMP to the EPA on April 27, 2017.17 The second submission, also submitted to the EPA on April 27, 2017, is CARB's “2016 State Strategy for the State Implementation Plan (March 2017)” (“2016 State Strategy”).18 We refer to these SIP submissions collectively as the “2016 PM2.5 Plan” or “Plan.”

    17 Letter from Richard Corey, Executive Officer, CARB, to Alexis Strauss, Acting Regional Administrator, EPA Region IX, with enclosures, April 27, 2017.

    18Id.

    The 2016 AQMP is organized into eleven chapters, each addressing a specific topic. We summarize below each of the chapters relevant to the 2006 PM2.5 NAAQS.19 Chapter 1, “Introduction,” introduces the 2016 AQMP, including its purpose, historical air quality progress in the South Coast, and the District's approach to air quality planning. Chapter 2, “Air Quality and Health Effects,” discusses current air quality in comparison with federal health-based air pollution standards. Chapter 3, “Base Year and Future Emissions,” summarizes emissions inventories, estimates current emissions by source and pollutant, and projects future emissions with and without growth. Chapter 4, “Control Strategy and Implementation,” presents the control strategy, specific measures, and implementation schedules to attain the air quality standards by the specified attainment dates. Chapter 5, “Future Air Quality,” describes the modeling approach used in the 2016 AQMP and summarizes the South Coast's future air quality projections with and without the control strategy. Chapter 6, “Federal and State Clean Air Act Requirements,” discusses specific federal and State requirements as they pertain to the South Coast, including anti-backsliding requirements for revoked standards. Chapter 11, “Public Process and Participation,” describes the District's public outreach effort associated with the development of the 2016 AQMP. A “Glossary” is provided at the end of the document, presenting definitions of commonly used terms found in the 2016 AQMP.

    19 The following chapters in the 2016 AQMP are not relevant to the 2006 PM2.5 NAAQS and were not reviewed as part of today's action: Chapter 7, “Current and Future Air Quality—Desert Nonattainment Areas,” describes the air quality status of the Coachella Valley, including emissions inventories, designations, and current and future air quality; Chapter 8, “Looking Beyond Current Requirements,” assesses the South Coast air basin's status with respect to the 2015 8-hour ozone standard of 70 ppb; Chapter 9, “Air Toxic Control Strategy,” examines the ongoing efforts to reduce health risk from toxic air contaminants, co-benefits from reducing criteria pollutants, and potential future actions; and Chapter 10, “Climate and Energy,” provides a description of current and projected energy demand and supply issues in the South Coast air basin, and the relationship between air quality improvement and greenhouse gas mitigation goals.

    The 2016 AQMP also includes numerous technical appendices, listed below:

    • Appendix I (Health Effects) presents a summary of scientific findings on the health effects of ambient air pollutants.

    • Appendix II (Current Air Quality) contains a detailed summary of the air quality in 2014, along with prior year trends, in both the South Coast and the Coachella Valley.

    • Appendix III (Base and Future Year Emission Inventory) presents the 2012 base year emissions inventory and projected emission inventories of air pollutants in future attainment years for both annual average and summer planning inventories.

    • Appendix IV-A (SCAQMD's Stationary and Mobile Source Control Measures) describes SCAQMD's proposed stationary and mobile source control measures to attain the federal ozone and PM2.5 standards.

    • Appendix IV-B (CARB's Mobile Source Strategy) describes CARB's proposed 2016 strategy to attain health-based federal air quality standards.

    • Appendix IV-C (Regional Transportation Strategy and Control Measures) describes the Southern California Association of Governments' (SCAG) “Final 2016-2040 Regional Transportation Plan/Sustainable Communities Strategy” and transportation control measures included in the 2016 PM2.5 Plan.

    • Appendix V (Modeling and Attainment Demonstrations) provides the details of the regional modeling for the attainment demonstration.

    • Appendix VI (Compliance with Other Clean Air Act Requirements) provides the District's demonstration that the 2016 AQMP complies with specific federal and California Clean Air Act requirements.

    The additional documents adopted by CARB on March 23, 2017 supplement the analysis and demonstrations adopted by the SCAQMD on March 3, 2017. In particular, the “CARB Staff Report, ARB Review of 2016 AQMP for the South Coast Air Basin and Coachella Valley,” (“CARB Staff Report”), includes in Appendix D a weight of evidence analysis for the SCAQMD's attainment demonstration for the 24-hour and annual PM2.5 NAAQS. In addition, the 2016 State Strategy discusses additional statewide measures, including mobile source measures, that will help the area reach attainment of the 2006 PM2.5 standards by the Serious area attainment date of December 31, 2019.

    We present our evaluation of the 2016 PM2.5 Plan in Section V of this proposed rule.

    III. Completeness Review of the 2016 PM2.5 Plan

    CAA sections 110(a)(1) and (2) and 110(l) require each state to provide reasonable public notice and opportunity for public hearing prior to the adoption and submission of a SIP or SIP revision to the EPA. To meet this requirement, every SIP submission should include evidence that adequate public notice was given and an opportunity for a public hearing was provided consistent with the EPA's implementing regulations in 40 CFR 51.102.

    Both the District and CARB satisfied applicable statutory and regulatory requirements for reasonable public notice and hearing prior to adoption and submission of the 2016 PM2.5 Plan. The District conducted numerous public workshops, provided a public comment period, and held a public hearing prior to the adoption of the 2016 AQMP on March 3, 2017.20 CARB provided the required public notice and opportunity for public comment prior to its March 23, 2017 public hearing and adoption of the 2016 AQMP and the 2016 State Strategy.21 Each submission includes proof of publication of notices for the respective public hearings, and transcripts for the public hearings.22 We find, therefore, that the 2016 PM2.5 Plan meets the procedural requirements for public notice and hearing in CAA sections 110(a) and 110(l).

    20 SCAQMD, Notice of Public Hearing, Proposed 2016 Air Quality Management Plan for the South Coast Air Quality Management District and Report on the Health Impacts of Particulate Matter Air Pollution in the South Coast Air Basin, December 14, 2016.

    21 CARB, “Notice of Public Meeting to Consider Adopting the 2016 Air Quality Management Plan for Ozone and PM2.5 for the South Coast Air Basin and the Coachella Valley,” March 6, 2017.

    22See Memorandum from Denise Garzaro, Clerk of the Board, SCAQMD, to Arlene Martinez, Administrative Secretary, Planning, Rule Development, and Area Sources, SUBJECT: SIP Documentation, January 24, 2017. See also California Air Resources Board, Notice of Public Meeting to Consider Adopting the 2016 Air Quality Management Plan for Ozone and PM2.5 for the South Coast Air Basin and the Coachella Valley, March 6, 2017.

    CAA section 110(k)(1)(B) requires the EPA to determine whether a SIP submission is complete within 60 days of receipt. This section also provides that any plan that the EPA has not affirmatively determined to be complete or incomplete will become complete by operation of law six months after the date of submission. The EPA's SIP completeness criteria are found in 40 CFR part 51, Appendix V. The 2016 PM2.5 Plan, which CARB submitted on April 27, 2017, became complete by operation of law on October 27, 2017.

    IV. Clean Air Act Requirements for PM2.5 Serious Area Plans A. PM2.5 Serious Area Plan Requirements

    Upon reclassification of a Moderate nonattainment area as a Serious nonattainment area under subpart 4, the CAA requires a state to submit the following Serious area SIP elements: 23

    23See 81 FR 1514 (January 13, 2016) and 81 FR 58010 (August 24, 2016).

    1. A comprehensive, accurate, current inventory of actual emissions from all sources of PM2.5 and PM2.5 precursors in the area (CAA section 172(c)(3));

    2. Provisions to assure that BACM, including best available control technology (BACT), for the control of direct PM2.5 and PM2.5 precursors shall be implemented no later than 4 years after the area is reclassified (CAA section 189(b)(1)(B));

    3. A demonstration (including air quality modeling) that the plan provides for attainment as expeditiously as practicable but no later than December 31, 2019 (CAA sections 188(c)(2) and 189(b)(1)(A));

    4. Plan provisions that require reasonable further progress (RFP) (CAA section 172(c)(2));

    5. Quantitative milestones that are to be achieved every 3 years until the area is redesignated attainment and that demonstrate RFP toward attainment by the applicable date (CAA section 189(c));

    6. Provisions to assure that control requirements applicable to major stationary sources of PM2.5 also apply to major stationary sources of PM2.5 precursors, except where a state demonstrates to the EPA's satisfaction that such sources do not contribute significantly to PM2.5 levels that exceed the standard in the area (CAA section 189(e));

    7. Contingency measures to be implemented if the area fails to meet RFP or to attain by the applicable attainment date (CAA section 172(c)(9)); and

    8. A revision to the nonattainment new source review (NSR) program to lower the applicable “major stationary source” thresholds from 100 tons per year (tpy) to 70 tpy (CAA section 189(b)(3)).24

    24 For any Serious area, the terms “major source” and “major stationary source” include any stationary source that emits or has the potential to emit at least 70 tons per year of PM10 (CAA section 189(b)(3)).

    Serious area PM2.5 plans must also satisfy: The requirements for Moderate area plans in CAA section 189(a), to the extent those requirements have not already been satisfied in the Moderate area plan submitted for the area; the general requirements applicable to all SIP submissions under section 110 of the CAA; the requirement to provide necessary assurances that the implementing agencies have adequate personnel, funding and authority under CAA section 110(a)(2)(E); and the requirements concerning enforcement provisions in CAA section 110(a)(2)(C).

    The EPA provided its preliminary interpretations of the CAA's requirements for particulate matter plans under part D, title I of the Act in the following guidance documents: (1) “State Implementation Plans; General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990” (“General Preamble”); 25 (2) “State Implementation Plans; General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990; Supplemental” (“Supplement”); 26 and (3) “State Implementation Plans for Serious PM-10 Nonattainment Areas, and Attainment Date Waivers for PM-10 Nonattainment Areas Generally; Addendum to the General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990” (“Addendum”).27

    25 57 FR 13498 (April 16, 1992).

    26 57 FR 18070 (April 28, 1992).

    27 59 FR 41998 (August 16, 1994).

    Additionally, in an August 24, 2016 final rule entitled, “Fine Particulate Matter National Ambient Air Quality Standards: State Implementation Plan Requirements” (“PM2.5 SIP Requirements Rule”),28 the EPA established regulatory requirements and provided further interpretive guidance on the statutory SIP requirements that apply to areas designated nonattainment for the PM2.5 standards. We discuss these regulatory requirements and interpretations of the Act as appropriate in our evaluation of the 2016 PM2.5 Plan in section V of this proposed rule.

    28 81 FR 58010.

    V. Review of the South Coast Serious Area Plan Addressing the 2006 PM2.5 NAAQS A. Emissions Inventory 1. Requirements for Emissions Inventories

    CAA section 172(c)(3) requires that each SIP include a comprehensive, accurate, current inventory of actual emissions from all sources of the relevant pollutant or pollutants in the nonattainment area. This base year emissions inventory should provide a state's best estimate of actual emissions from all sources of the relevant pollutants in the area, i.e., all emissions that contribute to the formation of a particular NAAQS pollutant. For the PM2.5 NAAQS, the base year inventory must include direct PM2.5 emissions, separately reported filterable and condensable PM2.5 emissions, and emissions of all chemical precursors to the formation of secondary PM2.5 nitrogen oxides (NOX), sulfur dioxide (SO2), volatile organic compounds (VOC), and ammonia (NH3).29

    29 40 CFR 51.1008.

    A state must include in its SIP submission documentation explaining how the emissions data were calculated. In estimating mobile source emissions, a state should use the latest emissions models and planning assumptions available at the time the SIP is developed. A state is also required to use the EPA's Compilation of Air Pollutant Emission Factors (“AP-42”) road dust method for calculating re-entrained road dust emissions from paved roads.30 31 The latest EPA-approved version of California's mobile source emission factor model for estimating tailpipe, brake and tire wear emissions from on-road mobile sources is EMFAC2014.32

    30 The EPA released an update to AP-42 in January 2011, which revised the equation for estimating paved road dust emissions based on an updated data regression that included new emission tests results. See 76 FR 6328 (February 4, 2011). CARB used the revised 2011 AP-42 methodology in developing on-road mobile source emissions; see https://www.arb.ca.gov/ei/areasrc/fullpdf/full7-9_2016.pdf.

    31 AP-42 is the EPA's Compilation of Air Pollutant Emission Factors, and has been published since 1972 as the primary source of the EPA's emission factor information. It contains emission factors and process information for more than 200 air pollution source categories. A source category is a specific industry sector or group of similar emitting sources. The emission factors have been developed and compiled from source test data, material balance studies, and engineering estimates.

    32 80 FR 77337 (December 14, 2015). EMFAC is short for EMission FACtor. The EPA announced the availability of the EMFAC2014 model for use in state implementation plan development and transportation conformity in California on December 14, 2015. The EPA's approval of the EMFAC2014 emissions model for SIP and conformity purposes was effective on the date of publication of the notice in the Federal Register. EMFAC2014 must be used for all new regional emissions analyses and CO, PM10 and PM2.5 hot-spot analyses that are started on or after December 14, 2017, which is the end of the grace period for EMFAC2014.

    In addition to the base year inventory submitted to meet the requirements of CAA section 172(c)(3), the State must also submit a projected attainment year inventory and emissions projections for each reasonable further progress (RFP) milestone year.33 These future emissions projections are necessary components of the attainment demonstration required under CAA section 189(a)(1) and (b)(1) and the demonstration of RFP required under section 172(c)(2).34 Emissions projections for future years (referred to in the 2016 PM2.5 Plan as “baseline inventories” or “future baseline inventories”) should account for, among other things, the ongoing effects of economic growth and adopted emissions control requirements. The SIP should include documentation to explain how the emissions projections were calculated.

    33See 40 CFR 51.1008 and 51.1012; see also U.S. EPA, “Emissions Inventory Guidance for Implementation of Ozone and Particulate Matter National Ambient Air Quality Standards (NAAQS) and Regional Haze Regulations” (July 2017), available at https://www.epa.gov/air-emissions-inventories/air-emissions-inventory-guidance-implementation-ozone-and-particulate.

    34See 40 CFR 51.1004, 51.1008, 51.1011, and 51.1012.

    2. Emissions Inventories in the 2016 PM2.5 Plan

    The annual average daily planning inventories for direct PM2.5 and all PM2.5 precursors (NOX, SOX, VOC, and ammonia) 35 for the South Coast PM2.5 nonattainment area together with documentation for the inventories are found in Chapter 3, Appendix III and Appendix V of the 2016 AQMP. Appendix V also contains additional inventory documentation specific to the air quality modeling inventories. These portions of the 2016 AQMP contain annual average daily inventories of actual emissions for the base year of 2012 and projected inventories for the future RFP baseline year of 2017 and the attainment year of 2019, as well as the post-attainment RFP year of 2020.36 The annual average daily inventory is used to evaluate sources of emissions for attainment of the 24-hour PM2.5 NAAQS.

    35 The 2016 PM2.5 Plan generally uses “sulfur oxides” or “SOX” in reference to SO2 as a precursor to the formation of PM2.5. We use “SOX” and “SO2” interchangeably throughout this notice.

    36 The 2016 PM2.5 Plan includes summer day inventories for ozone planning purposes and both a Moderate area plan and a Serious area plan for the 2012 PM2.5 NAAQS. The 2016 PM2.5 Plan therefore includes annual average and summer day inventories for all years between 2017 and 2031, except 2029.

    Future emissions forecasts are primarily based on demographic and economic growth projections provided by SCAG, the metropolitan planning organization (MPO) for the Los Angeles area. Baseline inventories reflect all district control measures adopted prior to December 2015 and CARB rules adopted by November 2015. Growth factors used to project these baseline inventories are derived mainly from data obtained from SCAG.37

    37See 2016 AQMP, Appendix III, page III-2-6.

    The emissions inventory is divided into two major source classifications: Stationary sources and mobile sources, which include on-road and non-road sources of emissions. Stationary sources include point and area sources. Point sources in the South Coast air basin that emit more than 4 tons per year (tpy) or more of VOC, NOX, SO2, or PM report annual emissions to the District. Point source emissions for the 2012 base year emissions inventory are generally based on reported data from facilities using the District's Annual Emissions Reporting (AER) program.38 Area sources include smaller emissions sources distributed across the nonattainment area. CARB and the District estimate emissions for about 400 area source categories using established inventory methods, including publicly-available emission factors and activity information. Activity data may come from national survey data such as from the Energy Information Administration or from local sources such as the Southern California Gas Company, paint suppliers, and district databases. Emission factors can be based on a number of sources including source tests, compliance reports, and the EPA's AP-42.

    38See http://www.aqmd.gov/regulations/compliance/annual-emission-reporting.

    Emissions inventories are constantly being revised and improved. Between the finalization of California's plan addressing Moderate area requirements for the 2006 PM2.5 NAAQS in the South Coast (“2012 PM2.5 Plan”) and the development of the 2016 PM2.5 Plan, the District improved and updated its emissions estimation methodologies for liquefied petroleum gas combustion sources, natural gas combustion sources, NOX emission sources subject to the District's Regional Clean Air Incentives Market (RECLAIM) program (based on 2015 program amendments), livestock waste management operations, gasoline dispensing facilities, composting operations, oil and gas production, and architectural coatings.

    On-road emissions inventories are calculated using CARB's EMFAC2014 model and the travel activity data provided by SCAG in “The 2016-2040 Regional Transportation Plan/Sustainable Communities Strategy.” 39 Re-entrained paved road dust emissions were calculated using the EPA's AP-42 road dust methodology.40

    39See http://scagrtpscs.net/Pages/FINAL2016RTPSCS.aspx.

    40See CARB, Miscellaneous Process Methodology 7.9 Entrained Road Travel, Paved Road Dust, (Revised and updated, November 2016) available at https://www.arb.ca.gov/ei/areasrc/fullpdf/full7-9_2016.pdf.

    CARB provided emission inventories for off-road equipment, including construction and mining equipment, industrial and commercial equipment, lawn and garden equipment, agricultural equipment, ocean-going vessels, commercial harbor craft, locomotives, cargo handling equipment, pleasure craft, and recreational vehicles. CARB uses several models to estimate emissions for more than one hundred off-road equipment categories.41 Aircraft emissions are developed in conjunction with the airports in the region.

    41See 2016 PM2.5 Plan, Appendix III, p. III-1-24.

    Table 1 provides a summary of the District's 2012 base year emissions estimates as annual averages, for direct PM2.5 and all PM2.5 precursors. These inventories provide the basis for the control measure analysis and the RFP and attainment demonstrations in the 2016 PM2.5 Plan. For a more detailed discussion of the inventories, see Appendix III of the 2016 AQMP.

    Table 1—South Coast 2012 Base Year Emissions [Annual average, tons/day] Direct PM2.5 NOX SO2 VOC Ammonia Stationary and Area Sources 44 70 10 212 63 On-Road Mobile Sources 14 317 2 158 18 Off-Road Mobile Sources 8 153 6 100 0 Total 66 540 18 470 81 Source: 2016 AQMP, Chapter 3, Table 3-1A. Values may not be precise due to rounding. Condensable Particulate Matter

    The PM2.5 SIP Requirements Rule states that “[t]he inventory shall include direct PM2.5 emissions, separately reported PM2.5 filterable and condensable emissions, and emissions of the scientific PM2.5 precursors, including precursors that are not PM2.5 plan precursors pursuant to a precursor demonstration under § 51.1006.” 42 On June 26, 2018, SCAQMD submitted a technical supplement containing emissions estimates for both condensable and filterable PM2.5 emissions from specified sources of direct PM2.5 in the South Coast area.43 The supplement provides filterable and condensable emissions estimates, expressed as annual average PM2.5 emissions, for all of the identified source categories for the 2012 base year, the 2017 RFP year, and the 2019 attainment year, as well as subsequent years.44

    42 40 CFR 51.1008(a)(1)(iv).

    43 Letter from Philip Fine, Deputy Executive Officer, SCAQMD, to Amy Zimpfer, Associate Director, EPA Region IX, regarding “Condensable and Filterable Portions of PM2.5 emissions in the 2016 AQMP,” June 26, 2018.

    44Id. at Appendix A.

    The 2016 PM2.5 Plan relies on several SIP-approved rules that regulate direct PM emissions as part of the PM2.5 control strategy (e.g., Rule 445 (Wood-Burning Devices), adopted March 7, 2008, most recently revised May 3, 2013; Rule 1138 (Control of Emissions from Restaurant Operations), adopted November 14, 1997; and Rule 1155 (Particulate Matter (PM) Control Devices), adopted December 4, 2009, amended May 2, 2014). As part of our action on any rules that regulate direct PM2.5 emissions, we evaluate the emissions limits in the rule to ensure that they appropriately address condensable PM, as required by 40 CFR 51.1010(e). We note that the SIP-approved version of Rule 1138 requires testing according to the District's protocol, which requires measurement of both condensable and filterable PM in accordance with SCAQMD Test Method 5.1.45 We also note that the SIP-approved version of Rule 1155 requires measurement of both condensable and filterable PM in accordance with SCAQMD Test Methods 5.1, 5.2, or 5.3 as applicable.46 47

    45See Rule 1138 (adopted November 14, 1997, approved July 11, 2001 at 66 FR 36170), paragraph (c)(1) and (g) and SCAQMD Protocol paragraph 3.1, and SCAQMD Protocol, Determination of Particulate and Volatile Organic Compound Emissions from Restaurant Operations, November 14, 1997 (available at http://yosemite.epa.gov/R9/R9Testmethod.nsf/0/3D4DEB4D21AB4AAF882570AD005DFF69/$file/SC%20Rest%20emiss.pdf).

    46See Rule 1155 (adopted December 4, 2009, revised May 2, 2014, approved into the SIP March 16, 2015 at 80 FR 13495), paragraph (e)(6).

    47See SCAQMD Test Method 5.1, Determination of Particulate Matter Emissions from Stationary Sources Using a Wet Impingement Train, March 1989; SCAQMD Test Method 5.2, Determination of Particulate Matter Emissions from Stationary Sources Using Heated Probe and Filter, March 1989; and SCAQMD Test Method 5.3, Determination of Particulate Matter Emissions from Stationary Sources Using an in-Stack Filter, October 2005.

    3. EPA's Evaluation and Proposed Action

    The emissions inventories in the 2016 PM2.5 Plan were made available to the public for comment and were subject to public hearing at both the District and State levels.48

    48See SCAQMD Board Resolution 17-2, p.3 and CARB Resolution 17-8, p. 4.

    The inventories in the 2016 PM2.5 Plan are based on the most current and accurate information available to the State and District at the time the Plan and its inventories were being developed, including the latest EPA-approved version of California's mobile source emissions model, EMFAC2014, and the EPA's most recent AP-42 methodology for paved road dust.49 The inventories comprehensively address all source categories in the South Coast and were developed consistent with the EPA's inventory guidance. In accordance with 40 CFR 51.1008(b), the 2012 base year is one of the three years for which monitored data were used for reclassifying the area to Serious, and it represents actual annual average emissions of all sources within the nonattainment area. Direct PM2.5 and all PM2.5 precursors are included in the inventories, and filterable and condensable direct PM2.5 emissions are identified separately. For these reasons, we are proposing to approve the 2012 base year emissions inventory in the 2016 PM2.5 Plan as meeting the requirements of CAA section 172(c)(3) and 40 CFR 51.1008. We are also proposing to find that the future baseline inventories in the Plan provide an adequate basis for the BACM, RFP, and attainment demonstrations in the 2016 PM2.5 Plan.

    49 CARB submitted the EMFAC2014 model to the EPA on May 21, 2015, and the EPA approved the model for use in California SIPs. 80 FR 77337 (December 14, 2015).

    B. PM2.5 Precursors 1. Requirements for the Control of PM2.5 Precursors

    The composition of PM2.5 is complex and highly variable due in part to the large contribution of secondary PM2.5 to total fine particle mass in most locations, and to the complexity of secondary particle formation processes. A large number of possible chemical reactions, often non-linear in nature, can convert gaseous SO2, NOX, VOC, and ammonia to PM2.5, making them precursors to PM2.5.50 Formation of secondary PM2.5 may also depend on atmospheric conditions, including solar radiation, temperature, and relative humidity, and the interactions of precursors with preexisting particles and with cloud or fog droplets.51

    50 EPA, Air Quality Criteria for Particulate Matter (EPA/600/P-99/002aF, October 2004), Chapter 3.

    51 EPA, Regulatory Impact Analysis for the Final Revisions to the National Ambient Air Quality Standards for Particulate Matter (EPA/452/R-12-005, December 2012), p. 2-1.

    The 2007 PM2.5 Implementation Rule contained rebuttable presumptions concerning the four PM2.5 precursors applicable to attainment plans and control measures related to those plans.52 Although the rule included presumptions that states should address SO2 and NOX emissions in their attainment plans, it also included presumptions that regulation of VOCs and ammonia was not necessary. Specifically, in 40 CFR 51.1002(c) (as effective July 1, 2007), the EPA provided, among other things, that a state was “not required to address VOC [and ammonia] as . . . PM2.5 attainment plan precursor[s] and to evaluate sources of VOC [and ammonia] emissions in the state for control measures,” unless the state or the EPA provided an appropriate technical demonstration showing that emissions from sources of these pollutants “significantly contribute” to PM2.5 concentrations in the nonattainment area.53

    52 40 CFR 51.1002(c) (as effective July 1, 2007).

    53 40 CFR 51.1002(c)(3), (4) (as effective July 1, 2007). See also 2007 PM2.5 Implementation Rule, 72 FR 20586 at 20589-97 (April 25, 2007).

    In NRDC, however, the United States Court of Appeals for the D.C. Circuit (“D.C. Circuit”) remanded the EPA's 2007 PM2.5 Implementation Rule in its entirety, including the presumptions concerning VOC and ammonia in that rule.54 Although the court expressly declined to decide the specific challenge to these presumptions concerning precursors,55 the court cited CAA section 189(e) 56 to support its observation that “[a]mmonia is a precursor to fine particulate matter, making it a precursor to both PM2.5 and PM10” and that “[f]or a PM10 nonattainment area governed by subpart 4, a precursor is presumptively regulated.” 57 Consistent with the NRDC decision, the EPA now interprets the Act to require that under subpart 4, a state must evaluate all PM2.5 precursors for regulation unless, for any given PM2.5 precursor, it demonstrates to the Administrator's satisfaction that such precursor does not contribute significantly to PM2.5 levels that exceed the NAAQS in the nonattainment area.

    54NRDC v. EPA, 706 F.3d 428 (D.C. Cir. 2013).

    55Id. at 437, n. 10.

    56 Section 189(e) of the CAA states that “[t]he control requirements applicable under plans in effect under this part for major stationary sources of PM10 shall also apply to major stationary sources of PM10 precursors, except where the Administrator determines that such sources do not contribute significantly to PM10 levels which exceed the standard in the area.”

    57 706 F.3d at 436, n. 7 (D.C. Cir. 2013).

    The provisions of subpart 4 do not define the term “precursor” for purposes of PM2.5, nor do they explicitly require the control of any specifically identified PM precursor. The statutory definition of “air pollutant,” however, provides that the term “includes any precursors to the formation of any air pollutant, to the extent the Administrator has identified such precursor or precursors for the particular purpose for which the term `air pollutant' is used.” 58 The EPA has identified SO2, NOX, VOC, and ammonia as precursors to the formation of PM2.5. Accordingly, the attainment plan requirements of subpart 4 apply to emissions of all four precursor pollutants and direct PM2.5 from all types of stationary, area, and mobile sources, except as otherwise provided in the Act (e.g., CAA section 189(e)).

    58See CAA section 302(g).

    Section 189(e) of the Act requires that the control requirements for major stationary sources of direct PM10 also apply to major stationary sources of PM10 precursors, except where the Administrator determines that such sources do not contribute significantly to PM10 levels that exceed the standard in the area. Section 189(e) contains the only express exception to the control requirements under subpart 4 (e.g., requirements for reasonably available control measures (RACM) and reasonably available control technology (RACT), BACM and BACT, most stringent measures (MSM), and NSR) for sources of direct PM2.5 and PM2.5 precursor emissions. Although section 189(e) explicitly addresses only major stationary sources, the EPA interprets the Act as authorizing it also to determine, under appropriate circumstances, that regulation of specific PM2.5 precursors from other source categories in a given nonattainment area is not necessary. For example, under the EPA's longstanding interpretation of the control requirements that apply to stationary, area, and mobile sources of PM10 precursors in the nonattainment area under CAA section 172(c)(1) and subpart 4,59 a state may demonstrate in a SIP submission that control of a certain precursor pollutant is not necessary in light of its insignificant contribution to ambient PM10 levels in the nonattainment area.60

    59 General Preamble, 57 FR 13498 at 13539-42 (April 16, 1992).

    60 Courts have upheld this approach to the requirements of subpart 4 for PM10. See, e.g., Assoc. of Irritated Residents v. EPA, et al., 423 F.3d 989 (9th Cir. 2005).

    7

    The PM2.5 SIP Requirements Rule recognizes that the treatment of PM2.5 precursors is an important issue in developing a PM2.5 attainment plan.61 The rule provides flexibility for areas where a particular PM2.5 precursor or precursors may not contribute significantly to PM2.5 levels that exceed the NAAQS. The rule provides for optional precursor demonstrations that a state may choose to submit to the EPA to establish that sources of particular precursors need not be regulated for purposes of attainment planning or in the nonattainment NSR (NNSR) permitting program for a specific nonattainment area.

    61See, e.g., 81 FR 58010 at 58017.

    We are evaluating the 2016 PM2.5 Plan in accordance with the presumption embodied within subpart 4 that all PM2.5 precursors must be addressed in the State's evaluation of potential control measures, unless the State adequately demonstrates that emissions of a particular precursor or precursors do not contribute significantly to ambient PM2.5 levels that exceed the PM2.5 NAAQS in the nonattainment area. In reviewing any determination by the State to exclude a PM2.5 precursor from the required evaluation of potential control measures, we consider both the magnitude of the precursor's contribution to ambient PM2.5 concentrations in the nonattainment area and the sensitivity of ambient PM2.5 concentrations in the area to reductions in emissions of that precursor.

    2. Evaluation of Precursors in the 2016 PM2.5 Plan

    The 2016 PM2 Plan discusses the five primary pollutants that contribute to the mass of the ambient aerosol (i.e., ammonia, NOX, SO2, VOC, and directly emitted PM2.5) and states that various combinations of reductions in these pollutants could all provide a path to clean air.62 The 2016 PM2.5 Plan assesses and presents the relative effectiveness of each ton of precursor emission reductions, considering the resulting ambient improvements in PM2.5 air quality measured in micrograms per cubic meter.63 As presented in the weight of evidence discussion in the 2016 PM2.5 Plan, trends of PM2.5 and NOx emissions suggest a direct response between lower emissions and improved air quality. The Community Multiscale Air Quality Modeling System (CMAQ) simulations in the 2016 PM2.5 Plan provide a set of response factors for direct PM2.5, NOX, SO2 and VOCs, based on improvements to ambient 24-hour PM2.5 levels resulting from reductions of each pollutant. The contribution of ammonia emissions is embedded as a component of the SO2 and NOX factors because ammonium nitrate and ammonium sulfate are the resultant particulate species formed in the atmosphere.

    62 2016 PM2.5 Plan, Appendix VI, p. VI-F-1, as well as Appendix V, p. V-5-51 and Appendix V, Attachment 8, Relative Contributions of Precursor Emissions Reductions to Simulated Controlled Future-Year 24-hour PM2.5 Concentrations.

    63 2016 PM2.5 Plan, Appendix V, Attachment 8, Relative Contributions of Precursor Emissions Reductions to Simulated Controlled Future-Year 24-hour PM2.5 Concentrations.

    The 2016 PM2.5 Plan describes how reductions in NOX, SO2, VOC and ammonia precursor emissions contribute to attainment of the PM2.5 standard in the South Coast area and contain the District's evaluation of available control measures for all four of these PM2.5 precursor pollutants, in addition to direct PM2.5, consistent with the regulatory presumptions under subpart 4. The 2016 PM2.5 Plan also contains a discussion of the control requirements applicable to major stationary sources under CAA section 189(e).64

    64 See 2016 PM2.5 Plan at Appendix VI-F. In a separate rulemaking to approve revisions to SCAQMD's nonattainment New Source Review (NNSR) program, the EPA determined that the control requirements applicable under the SCAQMD SIP to major stationary sources of direct PM2.5 also apply to major stationary sources of NOX, SO2, and VOC, and that major stationary sources of ammonia do not contribute significantly to PM2.5 levels which exceed the PM2.5 standards in the area. See 80 FR 24821 (May 1, 2015). This rulemaking addressed the control requirements of CAA section 189(e) only for NNSR purposes and not for attainment planning purposes under subpart 1 and 4 of part D, title I of the Act.

    3. Proposed Action

    Based on a review of the information provided in the 2016 PM2.5 Plan and other information available to the EPA, we agree with the State's conclusion that all four chemical precursors to PM2.5 must be regulated for purposes of attaining the 2006 PM2.5 NAAQS in the South Coast area. We discuss the state's evaluation of potential control measures for direct PM2.5, NOX, SO2, VOC and ammonia in section V.C below.

    C. Best Available Control Measures 1. Requirements for Best Available Control Measures

    For any serious PM2.5 nonattainment area, section 189(b)(1)(B) of the Act requires that a state submit provisions to assure that BACM for the control of PM2.5 and PM2.5 precursors shall be implemented no later than four years after the date the area is reclassified as a serious area. The EPA defines BACM as, among other things, the maximum degree of emissions reduction achievable for a source or source category, which is determined on a case-by-case basis considering energy, environmental, and economic impacts.65 We generally consider BACM a control level that goes beyond existing RACM-level controls, for example by expanding the use of RACM controls or by requiring preventative measures instead of remediation.66 Indeed, as implementation of BACM and BACT is required when a Moderate nonattainment area is reclassified as Serious due to its inability to attain the NAAQS through implementation of “reasonable” measures, it is logical that “best” control measures should represent a more stringent and potentially more costly level of control.67

    65 Addendum at 42010, 42013.

    66Id. at 42011, 42013.

    67Id. at 42009-42010.

    Section 189(b)(1)(B) of the Act allows states, in appropriate circumstances, to delay implementation of BACM until the date four years after reclassification. Because the EPA reclassified the South Coast area as a Serious area for the 2006 PM2.5 NAAQS effective February 12, 2016, the date four years after reclassification is February 12, 2020. In this case, however, all BACM for PM2.5 and PM2.5 precursors in the South Coast must be implemented no later than December 31, 2019, the outermost statutory attainment date for the South Coast area under section 188(c)(2).68

    68 CAA section 189(b)(1)(B) establishes an outermost deadline (“no later than four years after the date the area is reclassified”) and does not preclude an earlier implementation deadline for BACM where necessary to satisfy the attainment requirements of the Act.

    Under the PM2.5 SIP Requirements Rule, control measures that can be implemented in whole or in part by the end of the fourth year following an area's reclassification as a Serious area are considered BACM, and control measures that can only be implemented after this period but before the attainment date are considered “additional feasible measures.” 69 The EPA has defined “additional feasible measures” as “those measures and technologies that otherwise meet the criteria for BACM/BACT but that can only be implemented in whole or in part beginning 4 years after reclassification of an area, but no later than the statutory attainment date for the area.” 70 Given that the statutory attainment date is less than three years from the effective date of the reclassification of the South Coast area, additional feasible measures are not required in this particular case.

    69 40 CFR 51.1010(a)(4). “Additional feasible measures” may be necessary in certain circumstances to implement the requirements of CAA section 172(c)(6), which states that nonattainment area plans shall include enforceable emission limitations and such other control measures, means or techniques, as well as schedules and timetables for compliance, as may be necessary or appropriate to provide for attainment of the NAAQS by the applicable attainment date.

    70 40 CFR 51.1000.

    The Addendum and the PM2.5 SIP Requirements Rule discuss the following steps for determining BACM:

    1. Develop a comprehensive emission inventory of the sources of directly-emitted PM2.5 and PM2.5 precursors;

    2. Identify potential control measures;

    3. Determine whether an available control measure or technology is technologically feasible; and

    4. Determine whether an available control technology or measure is economically feasible.71

    71Addendum. at 42012-42014, and 81 FR 58010 (August 24, 2016) at 58084-58085.

    Once these analyses are complete, a state must use this information to develop enforceable control measures and submit them to the EPA for evaluation under CAA section 110. We use these steps as guidelines in our evaluation of the BACM measures and related analyses in the 2016 PM2.5 Plan.

    2. BACM Analysis in the 2016 PM2.5 Plan a. Identifying the Sources of PM2.5 and PM2.5 Precursors

    The first step in determining BACM is to develop a detailed emissions inventory of the sources of direct PM2.5 and PM2.5 precursors that can be used with modeling to determine the effects of these sources on ambient PM2.5 levels. As discussed in section V.A of this proposed rule, Chapter 3 and Appendix III of the 2016 AQMP contain the planning inventories for direct PM2.5 and all PM2.5 precursors (NOX, SO2, VOC, and ammonia) for the South Coast PM2.5 nonattainment area together with documentation to support these inventories. Based on these inventories, the District identified the following source categories as key emission sources in the South Coast nonattainment area:

    • Residential Fuel Combustion—Wood Combustion—Wood Stoves • Farming Operations—Livestock Wastes • Paved Road Dust—Paved Road Travel Dust—Local Streets • Cooking—Commercial Charbroiling • Other (Miscellaneous Processes)—Other 72

    72 This source category includes ammonia emissions from humans, pets, diapers and household ammonia use. See electronic mail from Kalam Cheung, SCAQMD, to Wienke Tax, EPA Region IX, September 29, 2017.

    • Light-Duty Passenger— Catalyst Hot Stabilized • Light-Duty Passenger—Catalyst Brake Wear • Light-Duty Trucks 2—Catalyst Hot Stabilized • Medium-Duty Trucks—Catalyst Hot Stabilized • Medium-Heavy-Duty Diesel Trucks—Diesel Hot Stabilized • Heavy-Heavy-Duty Diesel Trucks—Diesel Hot Stabilized • Commercial/Industrial Mobile Equipment—Construction and Mining.73

    73 2016 AQMP, Appendix VI, p. VI-A-14, Table VI-A-6.

    Of these 12 source categories, the District identified four categories that it has the authority to regulate: • Residential Fuel Combustion—Wood combustion—Wood stoves • Farming operations—Livestock Waste • Paved Road dust—Paved Road Travel Dust—Local Streets • Cooking—Commercial Charbroiling.74

    74Id.

    Appendix VI of the 2016 AQMP identifies the stationary, area, and mobile sources of direct PM2.5, NOX, VOC, SO2 and ammonia in the South Coast that are subject to State or District emissions control measures, or transportation control measures implemented by the SCAG. Table VI-A-6 of the 2016 AQMP lists the key source categories together with each source category's 2012 emissions levels expressed as “PM2.5-equivalent” emissions in tons per day (tpd).

    Based on this identification of stationary, area, and mobile sources of direct PM2.5, NOX, VOC, SO2 and ammonia in the South Coast, we believe the 2016 PM2.5 Plan appropriately identifies all emission sources and source categories that must be subject to evaluation for potential control measures consistent with the requirements of subpart 4.

    b. Identification and Implementation of BACM

    As part of its process for identifying candidate BACM and considering the technical and economic feasibility of additional control measures, CARB, the District and SCAG reviewed the EPA's guidance documents on BACM, guidance documents on control measures for direct PM2.5, NOX, VOC, ammonia and SO2 emissions sources, and control measures implemented in other ozone and PM2.5 nonattainment areas in California and other states. The State, District, and SCAG's evaluations of potential BACM for each source category identified above are found in Appendix IV-A, Appendix IV-B, Appendix IV-C, and Appendix VI of the 2016 AQMP. In the following sections, we review key components of the State, District, and SCAG's demonstrations concerning BACM for the identified sources of direct PM2.5, NOX, VOC, SO2 and ammonia emissions in the South Coast. We provide a more detailed evaluation of several of the District's regulations in our technical support document (TSD),75 together with recommendations for possible improvements to these rules.

    75 US EPA Region 9, Technical Support Document for the Proposed Approval of South Coast AQMD's Serious Area Plan for the 2006 PM 2.5 National Ambient Air Quality Standards (Docket Number EPA-R09-OAR-2017-0490), September 2018.

    Based on our evaluation of these demonstrations, we propose to determine that the 2016 PM2.5 Plan provides for the implementation of BACM for sources of direct PM2.5 and PM2.5 precursors as expeditiously as practicable, for the purposes of the 2006 PM2.5 NAAQS in the South Coast area in accordance with the requirements of CAA section 189(b)(1)(B) and 40 CFR 51.1010.

    i. State and District Measures for Stationary and Area Sources

    The District's BACM process and control measure evaluations are described in detail in Appendix IV-A and Appendix VI of the 2016 AQMP. For each identified source category, the District identified both its adopted control measures and potential additional control measures based on measures implemented in other areas, measures identified in EPA regulations or guidance (e.g., in control technique guidelines (CTGs), alternative control technique documents (ACTs), new source performance standards (NSPSs), or in the EPA's “Menu of Control Measures for NAAQS Implementation”), or measures identified in prior EPA rulemaking documents (e.g., recommendations in the EPA's technical support documents for prior SIP actions).7677 The District evaluated these potential additional control measures to determine whether implementation of the measures would be technologically and economically feasible in the South Coast.78 In addition, the District considered other available control options (beyond those included in other SIPs or identified in federal/state regulations or guidance), such as measures that the State or District have previously considered “beyond RACM.” The District also evaluated these potential control measures to determine whether implementation would be technologically and economically feasible in the South Coast.

    76 2016 AQMP, Appendix VI, pp. VI-A-12 to VI-A-36.

    77 The Menu of Control Measures can be found at https://www.epa.gov/air-quality-implementation-plans/menu-control-measures-naaqs-implementation.

    78 2016 AQMP, Appendix VI, pp. VI-A-32 to VI-A-40.

    Residential Wood-Burning Devices

    SCAQMD Rule 445 (“Wood-Burning Devices”), amended May 3, 2013, establishes requirements for the sale, operation, and installation of wood-burning devices within the South Coast air basin that are designed to reduce PM emissions from such devices. The EPA approved Rule 445, as amended, into the California SIP on September 26, 2013.79

    79 78 FR 59249.

    Under Rule 445, persons who manufacture, sell, or install wood-burning devices, commercial firewood sellers, and property owners or tenants who operate wood-burning devices are subject to specific requirements concerning the types of wood-burning devices that may be manufactured, sold, or installed, the types of fuels that may be burned in such devices, and labeling requirements. Rule 445 also establishes a mandatory winter wood-burning curtailment whenever the Executive Officer declares that ambient PM2.5 levels are forecasted to exceed 30 µg/m3 at specified source receptor areas.

    The District compared the requirements of Rule 445 to several rules implemented elsewhere in California that are designed to limit PM emissions from residential wood-burning devices. Based on this review, the District concludes that Rule 445 is generally equivalent to these other rules. Rule 445 does not require the removal of old wood stoves upon resale of a home, as do rules implemented in several other areas, but it does contain a categorical prohibition on the installation of any wood-burning device in new residential developments. Several other air districts prohibit or limit the installation of non-certified wood-burning devices but allow for installation of EPA-certified devices in new developments.

    Based on our evaluation of the information provided in the 2016 AQMP and additional information obtained during our review of the Plan, we agree with the SCAQMD's conclusion that Rule 445 implements BACM for the control of PM2.5 from residential wood-burning devices.

    Confined Animal Facilities and Livestock Waste

    SCAQMD Rule 1127 (“Emission Reductions from Livestock Waste”), adopted August 6, 2004, and Rule 223 (“Emission Reduction Permits for Large Confined Animal Facilities”), adopted June 2, 2006, together establish requirements to reduce emissions of ammonia, VOCs, and other pollutants emitted from confined animal facilities and related operations. The EPA approved Rule 1127 and Rule 223 into the California SIP on May 23, 2013 and July 13, 2015, respectively.80

    80 78 FR 30768 and 80 FR 39966.

    Rule 1127 applies to dairy farms with 50 or more cows, heifers, and/or calves and to manure processing operations, such as composting operations and anaerobic digesters. The rule requires operators of dairy farms and manure processing operations to use specified best management practices to reduce pollutant emissions during the removal and disposal of manure from corrals, among other things. Rule 223 applies to large confined animal facilities (LCAFs) and prohibits owners/operators of such facilities from building, altering, replacing or operating an LCAF without first obtaining a permit from the District. The permit application must include, among other things, an emissions mitigation plan that identifies the mitigation measures to be implemented at the facility. For each source category covered by the rule, owners/operators must implement a prescribed number of mitigation measures among a list of options or as approved by the District, CARB, and the EPA.

    The District compared the key requirements of Rule 1127 and Rule 223 to analogous requirements implemented in other parts of California and in Idaho. Based on this evaluation, the District concludes that Rule 1127 and Rule 223 together establish requirements for confined animal facilities and related operations that are generally equivalent to the requirements in these other areas. The District also considered several additional control methods to further reduce ammonia emissions from livestock waste, including application of acidifiers (sodium bisulfate), dietary manipulation, feed additives, manure slurry injection, and microbial/manure additives. The 2016 AQMP contains a commitment by the District to adopt in 2019 an additional ammonia control measure for livestock waste to be implemented in 2020. The proposed measure is identified in the plan as BCM-04.81

    81See 2016 AQMP, Chapter 4, Table 4-7; 2016 AQMP, Appendix IV-A, pp. IV-A-202 to IV-A-209 (describing BCM-04); and SCAQMD, Governing Board Resolution No. 17-2 (March 3, 2017), at p. 9.

    Based on our evaluation of the information provided in the 2016 AQMP and additional information obtained during our review of the Plan, we agree with the SCAQMD's conclusion that Rule 1127 and Rule 223 together implement BACM for the control of ammonia and VOCs from confined animal facilities and related operations.

    Paved and Unpaved Roads and Livestock Operations

    Rule 1186 (“PM10 Emissions from Paved and Unpaved Roads, and Livestock Operations”), amended July 11, 2008, establishes requirements to reduce the entrainment of particulate matter as a result of vehicular travel on paved and unpaved public roads and livestock operations. The EPA approved Rule 1186 into the California SIP on March 7, 2012.82

    82 77 FR 13495.

    Under Rule 1186, owners and operators of paved roads with average daily vehicle trips exceeding certain thresholds must remove visible roadway accumulation within specified periods of time and provide curbing or paved shoulders of certain widths when constructing new or widened roads. Rule 1186 also requires local government agencies that own or maintain paved roads to procure only certified street sweeping equipment for routine street sweeping; establishes requirements for owners and operators of certain unpaved roads to pave, apply chemical stabilization, or install signs to reduce vehicular speeds; and requires owners and operators of livestock operations to cease hay grinding activities during certain times of day, if visible emissions extend more than 50 feet from a hay grinding source.

    The District compared the key requirements of Rule 1186 to analogous requirements implemented in other parts of California and in Nevada. Based on this evaluation, the District concludes that Rule 1186 is generally equivalent to the requirements in these other areas. To further reduce PM2.5 emissions in areas with high vehicular activity, the District also considered several additional control techniques, such as increasing the frequency of street sweeping with certified equipment and specifying the most effective track out prevention measures. The District concludes that an increase in the required frequency of street sweeping is not economically feasible at this time because most areas in the South Coast air basin already require regular street sweeping and a requirement to conduct more frequent street sweeping would achieve only minimal emission reductions.

    Based on our evaluation of the information provided in the 2016 AQMP and additional information obtained during our review of the Plan, we agree with the SCAQMD's conclusion that Rule 1186 implements BACM for the control of PM2.5 from paved and unpaved roads and livestock operations.

    Commercial Charbroiling

    SCAQMD Rule 1138 (“Control of Emissions from Restaurant Operations”), adopted November 14, 1997, establishes control requirements to reduce PM and VOC emissions from “chain-driven” charbroilers at commercial cooking operations. The rule does not apply to “under-fired” charbroilers. EPA approved Rule 1138 into the California SIP on July 11, 2001.83

    83 66 FR 36170.

    Under Rule 1138, chain-driven charbroilers that cook more than 875 pounds of meat per week are required to be equipped and operated with a catalytic oxidizer control device that has been tested and certified by the Executive Officer to reduce PM and VOC emissions. The District compared the requirements of Rule 1138 to several rules implemented in other parts of California and in other states that are designed to limit PM and/or VOC emissions from commercial charbroilers. Based on its review of analogous regulations implemented in these other areas, the District concludes that Rule 1138 is generally equivalent to those regulations.

    Several times over the past 20 years and most recently in 2009, the District considered amending Rule 1138 to regulate PM emissions from under-fired charbroilers, but to date the District has not identified control measures for under-fired charbroilers that are both technologically and economically feasible for implementation in the South Coast. Although three other local agencies have adopted control requirements that apply to under-fired charbroilers (the Bay Area Air Quality Management District, the New York City Department of Environmental Protection, and the City of Aspen, Colorado), no commercially-available control devices for under-fired charbroilers have yet been found to meet these control requirements.84 The 2016 AQMP contains a commitment by the District to adopt a control measure in 2018 that requires controls on under-fired charbroilers by 2025. The proposed measure is identified in the Plan as BCM-01.85

    84See Technical Support Document for the Proposed Approval of South Coast AQMD's Serious Area Plan for the 2006 PM 2.5 National Ambient Air Quality Standards (Docket Number EPA-R09-OAR-2017-0490), at pp. 13-14; see also 2016 AQMP, Appendix IV-A, pp. IV-A-186 to IV-A-190.

    85See 2016 AQMP, Chapter 4, Table 4-7; Appendix IV-A, pp. IV-A-186 to IV-A-192 (describing BCM-01); and SCAQMD, Governing Board Resolution No. 17-2 (March 3, 2017), at p. 9.

    Based on our evaluation of the information provided in the 2016 AQMP and additional information obtained during our review of the Plan, we agree with the SCAQMD's conclusion that Rule 1138 and BCM-01 together implement BACM for the control of PM2.5 from commercial charbroilers.

    Consumer Products

    CARB and the SCAQMD both have well-established programs to regulate VOC emissions from consumer products used by both household and institutional consumers, including detergents; cleaning compounds; polishes; floor finishes; cosmetics; personal care products; home, lawn, and garden products; disinfectants; sanitizers; aerosol paints; and automotive specialty products. Specifically, CARB has adopted three regulations that establish VOC and reactivity limits for 129 consumer product categories.86 The first regulation (Article 1) covers the categories of antiperspirants and deodorants. The second regulation (Article 2) covers numerous categories and is simply called the “General Consumer Products Regulation.” The third regulation (Article 3) covers categories of aerosol coatings. The EPA approved amendments to these regulations into the California SIP on October 17, 2014.87

    86 These regulations are codified in the California Code of Regulations, Title 17, Division 3, Chapter 1, Subchapter 8.5—Consumer Products; Article 2—Consumer Products.

    87 79 FR 62346 (October 17, 2014).

    The SCAQMD also regulates certain categories of consumer products, including architectural coatings, wood products, solvents and degreasers, consumer paint thinners, and inks.88 For example, South Coast's implementation of Rule 1113 (“Architectural Coatings”) establishes emission limits for paints and other architectural coating products that have achieved VOC emission reductions in the South Coast area. The EPA approved Rule 1113, as amended June 3, 2011, into the California SIP on March 26, 2013.89

    88See, e.g., South Coast Rule 1107, Coating of Metal Parts and Products, approved into the SIP on November 24, 2008 (73 FR 70883); South Coast Rule 1122, Solvent Degreasers, approved into the SIP on February 8, 2006 (71 FR 6350); and South Coast Rule 1130, Graphic Arts, approved into the SIP on July 14, 2015 (80 FR 40915).

    89 78 FR 18244 (March 26, 2013).

    Based on our evaluation of the information about these programs in the 2016 AQMP, we agree with the State's and District's conclusion that these SIP-approved regulations implement BACM for the control of VOCs from consumer products.

    ii. State Measures for Mobile Sources

    The 2016 AQMP identifies light-duty passenger vehicles, light-duty trucks, medium-duty trucks, medium-heavy-duty diesel trucks, heavy-heavy-duty diesel trucks, and commercial/industrial mobile equipment (construction and mining equipment) as key mobile sources of emissions of PM2.5 and PM2.5 precursors. CARB describes the mobile source control measures that regulate PM2.5 and PM2.5 precursor emissions from these sources in Appendix VI-A, Attachment VI-A-3, and Attachment VI-C-1 of the 2016 AQMP.

    Under the CAA, the EPA is charged with establishing national emissions limits for mobile sources. States are generally preempted from establishing such limits except for California, which can establish these limits subject to EPA waiver or authorization under CAA section 209 (referred to herein as “waiver measures”). Over the years, the EPA has issued waivers (for on-road vehicles and engines measures) or authorizations (for non-road vehicle and engine measures) for many mobile source regulations adopted by CARB. California attainment and maintenance plans, including the 2016 PM2.5 Plan for the South Coast, rely on emissions reductions from implementation of the waiver measures through the use of emissions models such as EMFAC2014.

    Historically, the EPA has allowed California to take into account emissions reductions from CARB regulations for which the EPA has issued waiver or authorizations under CAA section 209, notwithstanding the fact that these regulations have not been approved as part of the California SIP. However, in response to the decision by the United States Court of Appeals for the Ninth Circuit (“Ninth Circuit”) in Committee for a Better Arvin v. EPA, the EPA has since approved mobile source regulations for which waiver authorizations have been issued as revisions to the California SIP.90

    90See, e.g., 81 FR 39424 (June 16, 2016), 82 FR 14447 (March 21, 2017), and 83 FR 23232 (May 18, 2018). See also Committee for a Better Arvin, 786 F.3d 1169 (9th Cir. 2015).

    Given the need for significant emissions reductions from mobile sources to meet the NAAQS in California nonattainment areas, CARB has been a leader in the development of stringent control measures for on-road and off-road mobile sources and fuels.91 CARB's mobile source program extends beyond regulations that are subject to the waiver or authorization process set forth in CAA section 209 to include standards and other requirements to control emissions from in-use heavy-duty trucks and buses, gasoline and diesel fuel specifications, and many other types of mobile sources. Generally, these regulations have been submitted and approved as revisions to the California SIP.92

    91 California regulations use the term “off-road” to refer to “nonroad” vehicles and engines.

    92See, e.g., the EPA's approval of standards and other requirements to control emissions from in-use heavy-duty diesel-powered trucks, at 77 FR 20308 (April 4, 2012), revisions to the California on-road reformulated gasoline and diesel fuel regulations at 75 FR 26653 (May 12, 2010), and revisions to the California motor vehicle I/M program at 75 FR 38023 (July 1, 2010).

    In addition to waiver measures, CARB has adopted operational requirements for in-use vehicles, rules that limit the amount of pollutants allowed in transportation fuels, and incentive programs that provide funding to replace or retrofit older, dirtier vehicles and equipment with cleaner technologies.93

    93 2016 AQMP, Appendix VI-A, Attachment VI-A-3, pp. VI-A-108-109.

    The EPA previously determined that California's mobile source control programs constituted BACM for PM10 purposes in the San Joaquin Valley.94 Since then, the State has adopted additional mobile source control measures including the Advanced Clean Cars (ACC) program, heavy-duty vehicle idling rules, revisions to the State's vehicle inspection and maintenance (I/M) program, in-use rules for on-road and non-road diesel vehicles, and emissions standards for non-road equipment, farm and cargo handling equipment, and recreational vehicles.95

    94 69 FR 5412 at 5419 (February 4, 2004).

    95 2016 AQMP, Appendix VI-A, Attachment VI-A-3, p. VI-A-103.

    CARB's BACM analysis provides a discussion of the measures adopted and implemented for each of the source categories identified in Table VI-A-6 of the 2016 AQMP that are not under district jurisdiction. We discuss each of these mobile source categories below.

    Light and Medium-Duty Vehicles

    This category includes light-duty passenger cars, light-duty trucks, and medium-duty trucks. The source category's base year emissions are approximately 119 tpd NOX, 129 tpd VOC, 1.7 tpd SO2, 17.1 tpd ammonia, and 8.2 tpd direct PM2.5.96

    96 2016 AQMP, Appendix III, Attachment A.

    CARB has a long history of adopting programs for reducing emissions from this source category. Light-duty and medium-duty motor vehicles are currently subject to California's “Low-Emission Vehicle III” (LEV III) standards as well as a “Zero Emission Vehicle” (ZEV) requirement. The LEV III standards are consistent, or harmonized, with the subsequently adopted national Tier 3 standards for the same vehicles. California's ZEV program, however, does not have a national counterpart and results in additional emissions reductions as it phases in a requirement that 15% of new light-duty vehicle sales consist of ZEV or partial ZEV.97 Light and medium-duty vehicles are also regulated under California's ACC program. We approved the ACC into the SIP on June 16, 2016.98 Taken as a whole, California's standards for light and medium-duty vehicles are more stringent than the federal standards.

    97 78 FR 2112 at 2119 (January 9, 2013).

    98 81 FR 39424 (June 16, 2016).

    California has also adopted regulations for gasoline fuel (California Reformulated Gasoline or “CaRFG”) that reduce emissions from light-duty and medium-duty vehicles. The EPA approved the CaRFG regulations into the California SIP on May 12, 2010.99 In our action proposing to approve CaRFG3, we noted that the EPA had previously determined that emissions reductions from CaRFG3 would be equal to or greater than the emissions reductions from the corresponding federal RFG program.100

    99 75 FR 26653 (May 12, 2010).

    100 74 FR 33196 at 33198 (July 10, 2009).

    Heavy-Duty Vehicles

    This category includes heavy-heavy-duty diesel vehicles, heavy-duty gas and diesel trucks, heavy-duty gas and diesel urban buses, school buses and motor homes. The emissions from this category are approximately 195 tpd NOX, 6.23 tpd direct PM2.5, 12.47 tpd VOC, 0.29 tpd, SO2, and 0.97 tpd ammonia.101

    101 2016 AQMP, Appendix III, Attachment A.

    California has the most stringent heavy-duty vehicle emissions control measures in the nation, including engine standards for diesel and gasoline vehicles, idling requirements, certification procedures, on-board diagnostic requirements, and verification measures for emissions control devices. Many of these control measures are subject to the CAA waiver process and have also been submitted for inclusion in and approved into the SIP.102

    102See 81 FR 39424 (June 16, 2016), 82 FR 14446 (March 21, 2017), and 83 FR 23232 (May 18, 2018).

    California has also adopted many in-use requirements to help reduce emissions from the vehicles already on the road, which may remain in use for many years. Among the most recently adopted in-use requirements are the Truck and Bus Regulation and Drayage Truck Regulation (often referred to as the “Cleaner In-Use Heavy-Duty Trucks Measure”), which became effective in 2011 and the EPA approved into the SIP in 2012.103 The Truck and Bus Regulation and Drayage Truck Regulation are designed to reduce emissions of diesel PM, NOX, and other pollutants from in-use trucks and buses and establish, among other things, phased-in PM control requirements from 2014 through 2023 based on truck engine mode year. These and other regulations applicable to heavy-duty diesel trucks (HDDTs) will continue to reduce emissions of diesel PM and NOX through the RFP and attainment planning years. For instance, model year (MY) 1994 and 1995 HDDT engines must be upgraded to meet the 2010 model year truck engine emissions standards by 2016, and MY 1996-1999 engines must be upgraded by January 1, 2020.104 The emissions reductions from these rules represent a large portion of the NOX emissions reductions upon which the Plan's RFP and attainment demonstration rely.

    103 77 FR 20308, April 4, 2012.

    104 Title 13, California Code of Regulations, Section 2025 (“Regulation to Reduce Emissions of Diesel Particulate Matter, Oxides of Nitrogen and Other Criteria Pollutants, from In-Use Heavy-Duty Diesel-Fueled Vehicles”), paragraphs (e), (f), and (g), effective December 14, 2011. See also the EPA's final rule approving CARB's Truck and Bus Rule. 77 FR 20308 at 20309-20310 (April 4, 2012).

    Finally, California has adopted regulations for diesel fuel that further reduce emissions from heavy-duty trucks. The EPA approved these diesel fuel regulations into the California SIP on May 12, 2010.105

    105See 75 FR 26653.

    Off-Road Vehicles and Engines

    This category includes off-road compression ignition (diesel) engines and equipment, small spark ignition (gasoline) off-road engines and equipment less than 25 horsepower (hp) (e.g., lawn and garden equipment), off-road large gasoline engines and equipment greater than 25 hp (e.g., forklifts, portable generators), and airport ground service equipment. The emissions from this category total approximately 66 tpd NOX, 4 tpd direct PM2.5, 51.5 tpd VOC, 0.07 tpd SO2, and 0.09 tpd ammonia.106

    106 2016 AQMP, Appendix III, Attachment A.

    As it has done for the on-road categories discussed above, CARB has adopted stringent new emissions standards subject to EPA authorization under CAA section 209(e) and in-use measures or requirements for this source category (e.g., incentives for early introduction of cleaner engines and equipment and requirements to limit vehicle idling). CARB has been regulating off-road equipment since the 1990s, and its new engine standards for off-road vehicles and engines are generally as stringent as the corresponding federal standards. For larger off-road equipment, which can have a slow turnover rate, CARB adopted an in-use off-road regulation in 2007 that requires owners of off-road equipment in the construction and other industries to retrofit or replace older engines/equipment with newer, cleaner models. The off-road regulation imposes idling limitations.107 CARB's off-road emissions control program also includes comprehensive in-use requirements for legacy fleets.108

    107Id.

    108 2016 AQMP, Appendix VI-A, p. VI-A-104, also Appendix VI-C, pp. VI-C-21 to VI-C-22.

    Title 13, Section 2449 of the California Code of Regulation (CCR), “Regulation for In-Use Off-Road Diesel-Fueled Fleets (Off-Road Regulation)” was adopted by CARB in July 2007 and requires off-road diesel vehicle fleets to reduce emissions by meeting NOX and PM fleet average standards. A provision of the Off-Road Regulation (Title 13, CCR, Section 2449.2) allows air districts to opt-in and requires the largest fleets to apply for funding to meet more stringent NOX targets. In 2008, SCAQMD developed the Surplus Off-Road Opt-In for NOX (SOON) Program. The SOON Program is designed to achieve additional NOX reductions beyond those that would be obtained from the State's In-Use Off-Road Vehicle Regulation. The program provides funding to large fleets for the purchase of commercially-available low-emission heavy-duty engines to achieve near-term reduction of NOX emissions from in-use off-road diesel vehicles. Fleets that participate in the SOON Program can apply for funding for NOX exhaust retrofits, repowers or equipment replacements. We approved the SCAQMD SOON program into the SIP on November 21, 2016.109

    109 81 FR 83154.

    iii. Local Jurisdiction Transportation Control Measures

    Transportation control measures (TCMs) are, in general, measures designed to reduce emissions from on-road motor vehicles through reductions in vehicle miles traveled (VMT) or traffic congestion. TCMs can reduce PM2.5 emissions in both the on-road motor vehicle exhaust and paved road dust source categories by reducing VMT and vehicle trips. They can also reduce vehicle exhaust emissions by relieving congestion. EPA guidance states that where mobile sources contribute significantly to PM2.5 violations, “the state must, at a minimum, address the transportation control measures listed in CAA section 108(f) to determine whether such measures are achievable in the area considering energy, environmental and economic impacts and other costs.” 110

    110 Addendum at 42013.

    Appendix IV-C, “Regional Transportation Strategy and Control Measures,” contains SCAG's BACM analysis for TCMs. Consistent with EPA guidance, SCAG addressed the TCMs listed in CAA section 108(f) following a four-step process. SCAG first reviewed ongoing implementation of TCMs in the South Coast air basin. SCAG also reviewed TCMs implemented in all other Moderate and Serious PM2.5 and PM10 nonattainment areas throughout the country (e.g., Salt Lake City, Utah; Fairbanks, Alaska; and San Joaquin Valley, California) and compared them to the TCMs being implemented in the South Coast.111 SCAG then reviewed the TCMs not being implemented in the SCAG region and provided a reasoned justification for any TCMs not implemented in the SCAG region.112 Finally, SCAG concluded that its TCM program provides a BACM level of control.

    111See 2016 AQMP, Appendix IV-C, pp. IV-C-38 and IV-C-39, Table 8.

    112See 2016 AQMP, Appendix IV-C, pp. IV-C-42 to IV-C-50, Table 9.

    TCMs in the South Coast air basin fall into three main categories: (1) Transit, intermodal facilities, and nonmotorized transportation mode facilities (i.e., bike/pedestrian facilities), (2) high occupancy vehicle (HOV) lanes, high occupancy toll (HOT) lanes, and pricing alternatives, and (3) information-based TCM strategies. Between 2012 and 2020, SCAG estimates a 23% increase in HOV, HOT and toll lanes, a 7.4% increase in operation miles of regular transit buses, a 10% increase in operation miles of rapid transit and express buses, a 38.8% increase in operation miles of transit rail, and a 40% increase in Class 1-4 bikeway miles.113 TCM funding is guaranteed through the timeframe of the 2016 PM2.5 Plan and beyond, with transportation sales tax measures through 2039 and 2040 in the four counties in the South Coast air basin.114 The county-specific sales tax revenue provides a guaranteed funding source for more than 50% of the TCM projects.115 In addition, SCAG has a standardized program for selecting cost-effective control measures.

    113See 2016 AQMP, Appendix IV-C, p. IV-C-34.

    114Id.

    115See 2016 AQMP, Appendix IV-C, p. IV-C-36.

    3. The EPA's Evaluation and Conclusion

    We have reviewed the District's determination in the 2016 AQMP that its stationary and area source control measures represent BACM for PM2.5 and PM2.5 precursors. In our review, we also considered our previous evaluations of the District's rules in connection with our approval of the SCAQMD's RACT SIP demonstration for the 2008 ozone NAAQS.116 Based on this review, we believe the District's rules provide for the implementation of BACM for stationary and area sources of PM2.5 and PM2.5 precursors.

    116 82 FR 43850 (September 20, 2017).

    With respect to mobile sources, we recognize that CARB's current program addresses the full range of mobile sources in the South Coast through regulatory programs for both new and in-use vehicles. With respect to transportation controls, we note that SCAG has adopted a program to fund cost-effective TCMs. Overall, we believe that the programs developed and administered by CARB and SCAG provide for the implementation of BACM for PM2.5 and PM2.5 precursors in the South Coast nonattainment area.

    For these reasons, we propose to find that the 2016 PM2.5 Plan provides for the implementation of BACM for all sources of direct PM2.5 and PM2.5 precursors as expeditiously as practicable, for purposes of the 2006 PM2.5 NAAQS in the South Coast area, in accordance with the requirements of CAA section 189(b)(1)(B) and 40 CFR 51.1010.

    D. Attainment Demonstration and Modeling

    Section 189(b)(1)(A) of the CAA requires that each Serious area plan include a demonstration (including air quality modeling) that the plan provides for attainment of the PM2.5 NAAQS by the applicable attainment date or, where a state is seeking an extension of the attainment date under section 188(e), a demonstration that attainment by that date is impracticable and that the plan provides for attainment by the most expeditious alternative date practicable. We discuss below our evaluation of the modeling approach in the Plan, and the control strategy in the Plan for attaining the 24-hour PM2.5 NAAQS by the most expeditious date practicable.

    Evaluation of Air Quality Modeling Approach and Results

    The EPA's PM2.5 modeling guidance 117 (“Modeling Guidance” and “Modeling Guidance Update”) recommends that a photochemical model, such as CAMx 118 or CMAQ, be used to simulate a base case, with meteorological and emissions inputs reflecting a base case year, to replicate concentrations monitored in that year. The model application to the base case year undergoes a performance evaluation to ensure that it satisfactorily agrees with concentrations monitored in that year. The model may then be used to simulate emissions occurring in other years required for a plan, namely the base year (which may differ from the base case year) and future year.119 The modeled response to the emission changes between those years is used to calculate Relative Response Factors (RRFs), which are applied to the design value in the base year to estimate the projected design value in the future year for comparison against the NAAQS. Separate RRFs are estimated for each chemical species component of PM2.5, and for each quarter of the year, to reflect their differing responses to seasonal meteorological conditions and emissions. Because each chemical species is handled separately, before applying an RRF, the base year design value must be speciated using available chemical species measurements, that is, each day's measured PM2.5 design value must be split into its species components. The Modeling Guidance provides additional detail on the recommended approach.120

    117 “Draft Modeling Guidance for Demonstrating Attainment of Air Quality Goals for Ozone, PM2.5, and Regional Haze” Memorandum from Richard Wayland, Air Quality Assessment Division, OAQPS, EPA to Regional Air Program Managers, EPA, December 3, 2014 (“Modeling Guidance”), “Guidance on the Use of Models and Other Analyses for Demonstrating Attainment of Air Quality Goals for Ozone, PM2.5, and Regional Haze,” EPA-454/B-07-002, April 2007 (“Modeling Guidance”); and “Update to the 24 Hour PM2.5 NAAQS Modeled Attainment Test,” Memorandum from Tyler Fox, Air Quality Modeling Group, OAQPS, EPA to Regional Air Program Managers, EPA, June 28, 2011 (“Modeling Guidance Update”).

    118 CAMx is a multi-scale photochemical modeling system for gas and particulate air pollution.

    119 In this section, we use the terms “base case,” “base year” or “baseline,” and “future year” as described in section 2.3 of the EPA's Modeling Guidance. The “base case” modeling simulates measured concentrations for a given time period, using emissions and meteorology for that same year. The modeling “base year” (which can be the same as the base case year) is the emissions starting point for the plan and for projections to the future year, both of which are modeled for the attainment demonstration. See Modeling Guidance at pp. 33-34. Note that CARB sometimes uses “base year” synonymously with “base case” and “reference year” instead of “base year.”

    120 Modeling Guidance Update at 43 ff.

    24-Hour PM2.5 Modeling Approach

    The CMAQ simulations were conducted for each day in the 2012 base year.121 A set of species-specific RRFs was generated for the 2019 future year simulation from the top 10% of modeled PM2.5 days. RRFs were generated for the ammonium ion, nitrate ion, sulfate ion, organic carbon, elemental carbon, sea salt, and a combined grouping of other primary PM2.5 material. Future year concentrations of each of the seven component species were calculated by applying the model-generated quarterly RRFs to the speciated 24-hour PM2.5 data for each of the five years used in the design value calculation.122 The speciation fractions used to generate 24-hour speciated PM2.5 values were determined from the “high” days.123 A weighted average of the resulting future year 98th percentile concentrations for each of the five years was used to calculate future design values for the attainment demonstration.124 Future year PM2.5 24-hour average design values were projected for 2019, the Serious area attainment deadline for the 2006 standard of 35 μg/m3.

    121 CMAQ Version 5.0.2

    122 The design value is based on a weighted average of data from 2010 to 2014.

    123 Particle bound water was determined using the EPA's regression model approximation of the Aerosol Inorganics Model (AIM) based on simulated concentrations of the ammonium, nitrate and sulfate ions (EPA, 2006). A blank mass of 0.5 μg/m3 was added to each base and future year simulation.

    124 The 32 days in each year (8 per quarter) were then reranked based on the sum of all predicted PM species to establish a new 98th percentile concentration. The 98th percentile value was determined based on the FRM sampling frequency. All the SASS sites except Fontana have a daily FRM sampling, which gives the 8th highest day as the 98th percentile. Fontana has every-three-day sampling, thus the 3rd highest day becomes the 98th percentile.

    Future Air Quality

    A simulation of 2019 baseline emissions (no additional controls) was conducted to assess future 24-hour PM2.5 levels in the South Coast air basin. The simulation used the projected emissions from 2012, which reflect all adopted control measures that will be implemented by December 31, 2019. Simulation of the 2019 baseline emissions indicates that the South Coast air basin will attain the federal 24-hour PM2.5 standard in 2019 without additional controls. The projected 2019 design value is 32.1 μg/m3 at Mira Loma, the highest site in the South Coast air basin.

    Table 2 shows future 24-hour PM2.5 air quality projections at the South Coast air basin design site (Mira Loma) and the four other PM2.5 monitoring sites equipped with comprehensive particulate species characterization. Shown in the table are the base year design values for 2012 along with projections for 2019. All of the sites are projected to meet the 24-hour PM2.5 standard by 2019 without additional reductions beyond already adopted control measures.

    Table 2—Future 24-Hour PM2.5 Air Quality Projections at Selected Monitoring Sites in the South Coast Air Basin Monitoring site location 24-hour PM 2.5
  • 98th percentile concentration total mass for base year, 2012
  • (μg/m 3)
  • 24-hour PM 2.5
  • 98th percentile concentration total mass projected for 2019
  • (μg/m 3)
  • Anaheim 25.82 23.46 Fontana 32.74 28.01 Los Angeles 30.52 27.60 Mira Loma 36.52 31.36 Rubidoux 33.16 28.27

    The EPA's regulations require that monitoring data for comparison to the NAAQS be collected using specific equipment and procedures to ensure accuracy and reliability.125 For each NAAQS, the default monitoring equipment and the required procedures for operating it are termed the Federal Reference Method (FRM); an alternative approach, termed a Federal Equivalent Method may also be used if it is demonstrated to give results comparable to an FRM monitor.

    125 40 CFR parts 53 and 58.

    Evaluation of Control Strategy

    The attainment control strategy in the 2016 PM2.5 Plan consists of state and district baseline measures that continue to achieve emission reductions between the Plan's base year of 2012 and the attainment year of 2019. With respect to baseline measures for stationary and area sources, the District identified the District rules and their projected emission levels in Appendix VI, section VI-C of the 2016 AQMP and described each of the District measures that contribute to RFP and attainment.126 The District control measures listed in this section of the Plan have been approved into the California SIP.127

    126See 2016 AQMP, Appendix VI, Table VI-C-4, p. VI-C-8.

    127See EPA Region 9's website for information on district control measures that have been approved into the California SIP, available at: https://www.epa.gov/sips-ca/epa-approved-south-coast-air-district-regulations-california-sip.

    With respect to mobile sources, the State identified the source categories and described the EMFAC2014 emission factor model used to project their future emission levels in Chapter 3 and Appendix III of the 2016 AQMP.128

    128 2016 AQMP, pages III-2-73 and Attachment D-1 to Appendix III.

    Table 3 below summarizes the emission reductions needed in the South Coast to attain the 2006 24-hour PM2.5 NAAQS by the end of 2019.

    Table 3—Summary of Direct PM2.5 and Precursor Emission Reductions Needed for the 2006 PM2.5 NAAQS Attainment Demonstration 2006 24-hour standard attainment by 2019
  • (tpd annual average)
  • PM2.5 NOX SO2 VOC NH3
    A. 2012 emissions inventory 66 540 18 470 81 B. 2019 baseline emissions inventory 64 353 17 376 74 C. 2019 controlled emissions inventory 64 353 17 376 74 D. Total emission reductions needed by attainment year (A − C) 2 187 1 94 7 Source: 2016 PM2.5 Plan, Chapter 3, and Appendix VI, Table VI-C-5.

    The Plan identifies several district and state measures that will achieve emission reductions and contribute to expeditious attainment of the 2006 PM2.5 NAAQS. These are described in the sections of this proposed rulemaking on BACM and RFP.

    In sum, the attainment demonstration in the 2016 PM2.5 Plan relies on numerous state and district baseline regulations that collectively are projected to achieve emission reductions sufficient for the South Coast area to attain the 2006 24-hour PM2.5 standard by the end of 2019.

    EPA's Evaluation and Proposed Action

    As discussed above, the 2016 PM2.5 Plan's air quality modeling demonstrates that the South Coast will attain the 2006 24-hour PM2.5 standard of 35 µg/m3 by December 31, 2019. This demonstration is based on expeditious implementation of the state's and district's BACM control strategy for stationary, area, and mobile sources in the 2016 PM2.5 Plan and ongoing reductions from state and local control measures already approved into the SIP. Based on our evaluation, we propose to determine that the 2016 PM2.5 Plan provides for attainment of the 2006 24-hour PM2.5 standards by the most expeditious date practicable, consistent with the requirements of CAA section 189(b)(1)(A) and 40 CFR 51.1011(b).

    E. Reasonable Further Progress and Quantitative Milestones 1. Requirements for Reasonable Further Progress and Quantitative Milestones

    Section 172(c)(2) of the Act states that all nonattainment area plans shall require RFP. In addition, CAA section 189(c) requires that all PM2.5 nonattainment area SIPs contain quantitative milestones to be achieved every three years until the area is redesignated to attainment and which demonstrate RFP, as defined in CAA section 171(1). Section 171(1) of the Act defines RFP as the annual incremental reductions in emissions of the relevant air pollutant as are required by part D, title I of the Act or as may reasonably be required by the Administrator for the purpose of ensuring attainment of the NAAQS by the applicable date. Neither subpart 1 nor subpart 4 of part D, title I of the Act requires that a set percentage of emissions reductions be achieved in any given year for purposes of satisfying the RFP requirement.

    RFP has historically been met by showing annual incremental emissions reductions sufficient generally to maintain at least linear progress toward attainment by the applicable deadline.129 As discussed in EPA guidance in the Addendum, requiring linear progress in reductions of direct PM2.5 and any individual precursor in a PM2.5 plan may be appropriate in situations where:

    129 Addendum at 42015.

    • The pollutant is emitted by a large number and range of sources,

    • the relationship between any individual source or source category and overall air quality is not well known,

    • a chemical transformation is involved (e.g., secondary particulate significantly contributes to PM2.5 levels over the standard), and/or

    • the emission reductions necessary to attain the PM2.5 standard are inventory-wide.130

    130Id.

    The Addendum states that requiring linear progress may be less appropriate in other situations, such as:

    • Where there are a limited number of sources of direct PM2.5 or a precursor,

    • where the relationships between individual sources and air quality are relatively well defined, and/or

    • where the emission control systems utilized (e.g., at major point sources) will result in swift and dramatic emission reductions.

    In nonattainment areas characterized by any of these latter conditions, RFP may be better represented as step-wise progress as controls are implemented and achieve significant reductions soon thereafter. For example, if an area's nonattainment problem can be attributed to a few major sources, EPA guidance states that RFP may be met by “adherence to an ambitious compliance schedule” that is likely to periodically yield significant reductions of direct PM2.5 or a PM2.5 precursor.131

    131Id.

    Plans for PM2.5 nonattainment areas should include detailed schedules for compliance with emission control measures in the area and provide corresponding annual emission reductions to be achieved by each milestone in the schedule.132 In reviewing an attainment plan under subpart 4, the EPA considers whether the annual incremental emissions reductions to be achieved are reasonable in light of the statutory objective of timely attainment. Although early implementation of the most cost-effective control measures is often appropriate, states should consider both cost-effectiveness and pollution reduction effectiveness when developing implementation schedules for control measures and may implement measures that are more effective at reducing PM2.5 earlier to provide greater public health benefits.133

    132Id. at 42016.

    133Id.

    The PM2.5 SIP Requirements Rule establishes specific regulatory requirements for purposes of satisfying the Act's RFP requirements and provides related guidance in the preamble to the rule. Specifically, under the PM2.5 SIP Requirements Rule, each PM2.5 attainment plan must contain an RFP plan that includes, at minimum, the following four components: (1) An implementation schedule for control measures; (2) RFP projected emissions for direct PM2.5 and all PM2.5 plan precursors for each applicable milestone year, based on the anticipated control measure implementation schedule; (3) a demonstration that the control strategy and implementation schedule will achieve reasonable progress toward attainment between the base year and the attainment year; and (4) a demonstration that by the end of the calendar year for each milestone date for the area, pollutant emissions will be at levels that reflect either generally linear progress or stepwise progress in reducing emissions on an annual basis between the base year and the attainment year.134

    134 40 CFR 51.1012(a).

    The preamble to the PM2.5 SIP Requirements Rule provides that emissions from one or more PM2.5 plan precursors may increase over the attainment planning period, provided the state demonstrates that reductions of direct PM2.5 combined with the aggregate reductions of PM2.5 plan precursors support expeditious attainment of the applicable PM2.5 NAAQS. This approach recognizes the fact that different precursors have different impacts on PM2.5 concentrations depending upon the atmospheric chemistry specific to each area.135

    135 81 FR 58010 at 58057 (August 24, 2016).

    Section 189(c) of the Act requires that PM2.5 attainment plans include quantitative milestones that demonstrate RFP. The purpose of the quantitative milestones is to allow periodic evaluation of the area's progress towards attainment of the PM2.5 NAAQS consistent with RFP requirements. Because RFP is an annual emission reduction requirement and the quantitative milestones are to be achieved every three years, when a state demonstrates compliance with the quantitative milestone requirement, it should also demonstrate that RFP has been achieved during each of the relevant three years. Quantitative milestones should provide an objective means to evaluate progress toward attainment meaningfully, e.g., through imposition of emissions controls in the attainment plan and the requirement to quantify those required emissions reductions. The CAA also requires states to submit, within 90 days after each milestone date, milestone reports that include technical support sufficient to document completion statistics for appropriate milestones, e.g., calculations and any assumptions made concerning emission reductions to date.136

    136 Addendum at 42016, 42017.

    The CAA does not specify the starting point for counting the three-year periods for quantitative milestones under CAA section 189(c). In the General Preamble and Addendum, the EPA interpreted the CAA to require that the starting point for the first three-year period be the due date for the Moderate area plan submission.137 In keeping with this historical approach, the EPA established December 31, 2014, as the starting point for the first 3-year period under CAA section 189(c) for the 2006 PM2.5 standards in the South Coast. This date was the due date established in the EPA's June 2, 2014 Deadline and Classification Rule for the State's submission of any additional attainment-related SIP elements necessary to satisfy the subpart 4 Moderate area requirements for the 2006 PM2.5 NAAQS in the South Coast area.138 Thus, December 31, 2017 and December 31, 2020, are the milestone dates that the Serious area plan must address, at minimum. The EPA believes that establishing December 31, 2017, as the first quantitative milestone date is an appropriate means for implementing the requirements of subpart 4 for the 2006 PM2.5 NAAQS.

    137 General Preamble at 13539, Addendum at 42016.

    138 79 FR 31566 (June 2, 2014) (final rule establishing subpart 4 moderate area classifications and deadline for related SIP submissions) (“Classification and Deadline Rule”). Although the Classification and Deadline Rule did not affect any action that the EPA had previously taken under CAA section 110(k) on a SIP for a PM2.5 nonattainment area, the EPA noted that states may need to submit additional SIP elements to fully comply with the applicable requirements of subpart 4, even for areas with previously approved PM2.5 attainment plans, and that the deadline for any such additional plan submissions was December 31, 2014. Id. at 31569.

    The PM2.5 SIP Requirements Rule also requires that Serious area attainment plans contain one additional quantitative milestone to be met in the three-year period following the Serious area attainment date.139 If the area fails to attain, this additional milestone provides the EPA with the tools necessary to monitor the area's continued progress toward attainment while the state develops a new attainment plan under CAA section 189(d).

    139 40 CFR 51.1013(a)(4).

    2. RFP Plan and Quantitative Milestones in the 2016 PM2.5 Plan

    The RFP plan and quantitative milestones are discussed in Appendix VI, section VI-C (pp. VI-C-5 to VI-C-8) of the 2016 AQMP. The Plan estimates that emissions of direct PM2.5, NOX, VOC, SO2 and ammonia will generally decline from the 2012 base year to 2019 and states that emissions of each of these pollutants will remain below the levels needed to show “generally linear progress” from 2012 to 2019, the year that the Plan projects to be the earliest practicable attainment date for the 2006 PM2.5 NAAQS.140 The Plan's emissions inventory shows that direct PM2.5, NOX, VOC, SO2 and ammonia are emitted by a large number and range of sources in the South Coast and that the emission reductions needed for each of these pollutants are inventory wide.141 Table VI-C-4 of the 2016 AQMP contains an implementation schedule for District control measures and Table VI-C-3 of the 2016 AQMP (reproduced in Table 4 below) contains RFP projected emissions for each quantitative milestone year and the attainment year. Based on these analyses, the District concludes that its adopted control strategy will achieve, for each pollutant, projected emission levels at or below the RFP, quantitative milestone, and attainment year target emission levels (see Table 5 below).142

    140 2016 AQMP, Appendix VI-C, p. VI-C-7, Tables VI-C-3 and VI-C-3A.

    141 2016 AQMP, Chapter 4 and Appendices IV-A, VI-B and VI-C.

    142 2016 AQMP, Appendix VI-C, p. VI-C-6.

    Table 4—24-Hour PM2.5 Baseline Emissions for Base and Milestone Years [Annual average tpd] Pollutant 2012 2017
  • (Quantitative
  • milestone)
  • 2019
  • (Attainment
  • deadline)
  • 2020
  • (Quantitative
  • milestone)
  • PM2.5 66.4 63.8 63.9 63.9 NOX 540 398 353 330 SO2 18.4 17.1 16.6 16.7 VOC 470 392 376 370 NH3 81.1 75.5 74.0 73.3 Source: 2016 AQMP, Appendix VI-C, Table VI-C-3.
    Table 5—Summary of 24-Hour PM2.5 RFP Calculations [Annual average tpd] Row Calculation step PM2.5 NOX SO2 VOC NH3 1 2012 base year emissions 66.4 540 18.4 470 81.1 2 Annual percent change needed to show linear progress (%) 0.55 4.9 1.4 2.9 1.2 3 2017 Target Needed to show linear progress (tpd) 64.6 406 17.1 403 76.0 4 2017 Baseline emissions (tpd) 63.8 398 17.1 392 75.5 5 Projected shortfall (tpd) 0 0 0 0 0 6 Surplus in 2017 (tpd) 0.85 8.6 0.05 10.4 0.48 7 Emissions Equivalent to 1 Year's Worth of RFP 0.36 26.7 0.25 13.5 1.0 8 2019 Baseline Emissions (tpd) 63.9 353 16.6 376 74.0 Source: 2016 AQMP, Appendix VI-C, Table VI-C-3A.

    The 2016 PM2.5 Plan documents the State's conclusion that all BACM and BACT for these pollutants are being implemented as expeditiously as practicable and identifies projected levels of direct PM2.5, NOX, VOC, ammonia, and SO2 emissions in 2017 and 2019 that reflect full implementation of the state, district, and SCAG's BACM/BACT control strategy for these pollutants.143 The BACM control strategy that provides the basis for these emissions projections is described in Chapter 4, Appendix IV, and Appendix VI of the 2016 AQMP.

    143 2016 AQMP, Appendix VI-C, pp. VI-C-5 to VI-C-11; see also evaluation of BACM/BACT in section V.C of this proposed rule.

    Direct PM2.5

    The District has several stationary and area source rules that are projected to contribute to RFP and attainment of the PM2.5 standards.144 For example, Rule 444 (Open Burning) achieved reductions of direct PM2.5 from the base year of 2012 to the 2017 RFP year. In addition, Rule 445 (Wood-Burning Devices) was amended in 2013 by lowering the mandatory winter burning curtailment program threshold for residential wood burning and extending the curtailment to the entire South Coast air basin, thereby further limiting emissions from one of the largest combustion sources of direct PM2.5 in the South Coast nonattainment area.145 These rule amendments provide part of the incremental emission reductions of direct PM2.5 from the 2012 base year to the 2017 RFP milestone year.146 Measures to control sources of direct PM2.5 are also presented in the Plan's BACM analyses and reflected in the Plan's baseline emission projections.

    144 2016 AQMP, Appendix VI-A, p. VI-A-34.

    145 2016 AQMP, Appendix III; see also 78 FR 59249 (September 26, 2013).

    146 2016 AQMP, Appendix VI-C, p. VI-C-1, Table VI-C-4.

    The Plan highlights on-road and other mobile source control measures as the primary means for achieving direct PM2.5 emission reductions. CARB's implementation of the Truck and Bus Regulation (referred to in the Plan as the “On-Road Heavy-Duty Diesel Vehicles (In-Use) Regulation”) achieved PM2.5 emissions reductions beginning in 2012.147 Lighter trucks and buses were required to replace 1995 and older engines with a 2010 MY by 2015. The 2010 MY engines include particulate filters. CARB's LEV II program includes particulate matter emissions limits by MY for 2016, and the LEV III program has stricter emission limits for 2017 and beyond. For off-road vehicles, CARB adopted the In-Use Off Road Diesel-Fueled Fleets Regulation (“Off-Road Regulation”) in 2007. The Off-Road Regulation requires owners to replace older vehicles or engines with newer, cleaner models to either (1) retire older vehicles or reduce their use, or (2) to apply retrofit exhaust controls. Off-road fleets are required to meet increasingly strict fleet average indices over time.148 These indices reflect a fleet's overall emissions rate of PM and NOX for model year and horsepower combinations. Fleets were also banned from adding Tier 0 off-road engines as of January 1, 2014.149 CARB implemented a similar ban on Tier 1 engines between January 1, 2014 (large fleets) and January 1, 2016 (small fleets).

    147 The State's quantitative milestone report for the 2017 milestone indicates that the requirement for heavier trucks to install diesel particulate filters was fully implemented by 2016. See SCAQMD, “2017 Quantitative Milestone Report for 2006 24-hour PM2.5 National Ambient Air Quality Standard,” March 2018 (“2017 QM Report”), p. 11.

    148 A fleet average index is an indicator of a fleet's overall emissions rate of particulate matter and NOx based on the horsepower and model year of each engine in the fleet.

    149 Tier 0 engines meet 1995 to 1999 emission standards, depending on engine size and horsepower. See https://www.assocpower.com/eqdata/tech/US-EPA-Tier-Chart_1995-2004.php.

    Nitrogen Oxides

    The District regulates numerous NOX emission sources such as residential space and water heating devices, stationary internal combustion engines, and various sizes of boilers, steam generators, and process heaters used in industrial settings. The 2016 AQMP identifies the following South Coast regulations as measures that achieve ongoing NOX reductions with compliance dates during the RFP and attainment years of the Plan: Rule 1111 (Reductions of NOX from Natural Gas-Fired, Fan-Type Central Furnaces), Rule 1110.2 (Emissions from Gaseous- and Liquid-Fueled Engines), Rule 1121 (Control of Nitrogen Oxides from Residential-Type, Natural Gas-Fired Water Heaters), Rule 1146 (Emission of Oxides of Nitrogen from Industrial, Institutional, Commercial Boilers, Steam Generators, and Process Heaters), Rule 1146.1 (Emission of Oxides of Nitrogen from Small Industrial, Institutional, Commercial Boilers, Steam Generators, and Process Heaters), Rule 1146.2 (Emission of Oxides of Nitrogen from Large Water Heaters and Small Boilers and Process Heaters), and Rule 1147 (NOX Reductions from Miscellaneous Sources).150151

    150 2016 AQMP, Appendix VI-C, Table VI-C-4 and p. VI-C-8.

    151 Rule 1111 was mistakenly listed as Rule 1110 in the 2016 AQMP, Appendix VI, Table VI-C-4. See 2017 QM Report at p. 6, footnote 1.

    For on-road and non-road mobile sources, which represent the largest sources of NOX emissions in the nonattainment area, the 2016 AQMP lists numerous CARB regulations and discusses the key regulations that limit emissions of direct PM2.5 as well as NOX, VOC, SO2 and ammonia from these sources.152 For example, the regulations that apply to the three largest sources of NOX in the South Coast—heavy-duty diesel trucks, light- and medium-duty passenger vehicles, and off-road equipment—are discussed in the 2016 AQMP at Appendix VI-C, Attachment VI-C-1, “California Existing Mobile Source Control Program,” and CARB's emission projections for these sources are presented in the Plan's emissions inventory.153 The Plan also shows that NOX emission levels in each milestone year and the attainment year are projected to be well below the levels needed to show generally linear progress toward attainment.

    152 2016 AQMP, Appendix IV-C, Attachment VI-C-1.

    153 2016 AQMP, Appendix IV-C, Attachment VI-C-1, pp. VI-C-19-21.

    The Truck and Bus Regulation and Drayage Truck Regulation became effective in 2011 and have rolling compliance deadlines based on truck engine model year. These and other regulations applicable to heavy-duty diesel trucks will continue to reduce emissions of diesel particulate matter and NOX through the RFP and attainment planning years.154 For example, MY 1994 and 1995 heavy-duty diesel truck engines were required to be upgraded to meet the 2010 MY truck engine emission standards by 2016, and MY 1996-1999 engines must be upgraded by January 1, 2020.155 The emission reductions from these rules represent the largest portion of the NOX emission reductions upon which the 2016 PM2.5 Plan's attainment and RFP demonstrations rely.156 Emission reductions between 2012 and 2017 were achieved through the requirements for particulate filters and cleaner engine standards.

    154 2016 AQMP, Appendix IV-C, p. VI-C-20.

    155 Title 13, California Code of Regulations, Section 2025 (“Regulation to Reduce Emissions of Diesel Particulate Matter, Oxides of Nitrogen and Other Criteria Pollutants, from In-Use Heavy-Duty Diesel-Fueled Vehicles”), paragraphs (e), (f), and (g), effective December 14, 2011. See also 77 FR 20308 at 20309-20310 (April 4, 2012) (final rule approving CARB's Truck and Bus Rule into California SIP).

    156 2016 AQMP, Appendix III, Attachment B.

    California also has the authority under the CAA to regulate light- and medium-duty vehicle engines. A key control program for these vehicles is the ACC program.157 The ACC program implements a variety of regulations including the LEV III program, with criteria pollutant emission limits for non-methane organic gases (NMOG)  158 and NOX as well as particulate matter, which phased in starting in 2014 and continues through the RFP year of 2017 and beyond.

    157See 81 FR 39424, June 16, 2016.

    158 NMOG means the combination of organic gases other than methane as calculated in 40 CFR 1066.635. Note that for this part, the organic gases are summed on a mass basis without any adjustment for photochemical reactivity.

    CARB's Cleaner In-Use Off-road Equipment regulation was first approved in 2007 to reduce PM2.5 and NOX emissions from in-use off-road heavy-duty diesel vehicles in California such as those used in construction, mining, and industrial operations. The regulation reduces emissions of PM2.5 and NOX by targeting the existing fleet and imposing idling limits, restrictions on use of older vehicles, and requirements to retrofit or replace the oldest engines. For example, Tier 0 engines could not be added to fleets after January 1, 2014, and Tier 1 engines could not be added after January 1, 2016. The regulation is phased in between January 1, 2014 and January 1, 2019.159

    159 2016 AQMP, Appendix VI-C, Attachment VI-C-1, p. VI-C-23 and VI-C-24.

    Volatile Organic Compounds

    As with other precursors, the District regulates stationary and area sources of VOC, and CARB is largely responsible for both on-road and off-road mobile sources. The 2016 AQMP highlights three stationary source VOC rules that contribute to RFP: Rule 1114 (Petroleum Refinery Coking Operations), Rule 1177 (Liquified Petroleum Gas Transfer and Dispensing), and Rule 1113 (Architectural Coatings).160

    160 The District projects that revisions to Rule 1113 that it adopted after submitting the 2016 AQMP are projected to result in an additional 0.88 tpd of VOC reductions by 2019. See 2017 QM Report, p. 8.

    As with NOX, the majority of VOC emissions reductions that occur between the base year of 2012 and the 2017 RFP year come from on-road mobile sources and other mobile sources that are under the State's jurisdiction. CARB highlights its ACC program, which reduces emission from light- and medium-duty vehicles. The ACC program has a combined NMOG plus NOx fleet average requirement that began in 2014.

    Ammonia

    With respect to ammonia, the Plan states that, while both NOX and ammonia participate in forming ammonium nitrate (i.e., secondary PM2.5), NOX emission reductions are more effective at reducing ambient PM2.5 than ammonia reductions.161 Control measures for ammonia sources are described in Appendix VI of the Plan. For example, South Coast Rules 223 and 1127, which regulate confined animal facilities and manure waste from these facilities, control ammonia, as do the District's composting measures (i.e., Rules 1133, 1133.1, 1133.2 and 1133.3). These rules and the methods they use to control ammonia emissions are discussed at length in Appendix VI-B of the 2016 AQMP, and their emission projections are presented collectively under farming operations (for confined animal feeding operations and manure) or waste disposal (for composting categories) in the Plan's emissions inventory.162 We discuss our evaluation of these rules for purposes of satisfying BACM requirements in section V.C of this proposed rule.

    161 2016 AQMP, Appendix V, p. V-6-61.

    162 2016 AQMP, Appendix IV-A, p. IV-A-98-103.

    The District ascribes the reductions in ammonia during the period from 2012 to 2017 to decreases in farming operations in the South Coast air basin, as well as reductions in emissions from mobile sources largely achieved by state regulations for on-road motor vehicles.

    Sulfur Dioxide

    Reductions of SO2 in the South Coast nonattainment area during the period from 2012 to 2017 were mainly from mobile source reductions. The majority of the SO2 reductions come from non-road mobile sources, primarily reductions from state regulation of ocean-going vessels.

    Quantitative Milestones

    The 2016 AQMP identifies a milestone date of December 31, 2017, which is the date 3 years after December 31, 2014, and a second milestone date of December 31, 2020, which is the milestone date that falls within 3 years after the applicable attainment date (December 31, 2019). The 2016 AQMP also identifies target RFP emissions levels for direct PM2.5, NOX, VOC, NH3, and SO2 for the 2017 milestone year, the 2019 attainment year, and the 2020 post-attainment year milestone, and adopted control measures to be implemented by each of these years in accordance with the control strategy in the Plan.163

    163 2016 AQMP, Appendix VI-C, pp. VI-C-6 and VI-C-7.

    3. Evaluation and Proposed Actions

    The 2016 PM2.5 Plan describes the control measures for direct PM2.5, NOX, SO2, VOC and ammonia implemented during each year of the attainment plan and demonstrates that these measures, which provide the bases for the emissions projections in the RFP plan, are being implemented as expeditiously as practicable. Additionally, the Plan contains projected RFP emission levels for direct PM2.5 and all PM2.5 precursors for the 2017 and 2020 milestone years and for the 2019 attainment year, based on the anticipated implementation schedule for the attainment control strategy. The Plan also demonstrates that the control strategy will achieve RFP toward attainment between the 2012 base year and the 2019 attainment year. Finally, the 2016 PM2.5 Plan demonstrates that, by the end of the calendar year for each milestone date for the area, emissions of direct PM2.5 and all PM2.5 precursors will be reduced at rates representing generally linear progress toward attainment. We agree with the State and District's conclusion that generally linear progress is an appropriate measure of RFP for the 2006 PM2.5 NAAQS in the South Coast area given that PM2.5 and its precursors are emitted by a large number and range of sources in the South Coast, the emission reductions needed for these pollutants are inventory wide,164 and secondary particulates contribute significantly to ambient PM2.5 levels in the South Coast area.165

    164 See generally 2016 AQMP, Appendix IV-A and B and Appendix VI-A.

    165 See 2016 AQMP, Appendix V, p. V-6-61.

    Accordingly, we propose to determine that the 2016 PM2.5 Plan requires the annual incremental reductions in emissions of direct PM2.5 and PM2.5 precursors that are necessary for ensuring attainment of the 2006 24-hour PM2.5 NAAQS by December 31, 2019, in accordance with the requirements of CAA sections 171(1) and 172(c)(2) and 40 CFR 51.1012.

    Additionally, the 2016 PM2.5 Plan identifies milestone dates that are consistent with the requirements of 40 CFR 51.1013(a)(4) and target emissions levels for direct PM2.5 and all PM2.5 precursors to be achieved by these milestone dates through implementation of the attainment control strategy. These target emission levels and associated control requirements provide for objective evaluation of the area's progress towards attainment of the 2006 PM2.5 NAAQS. We propose to determine that these quantitative milestones satisfy the requirements of CAA section 189(c) and 40 CFR 51.1013.

    On April 2, 2018, CARB submitted the “2017 Quantitative Milestone Report for the 2006 24-Hour PM2.5 National Ambient Air Quality Standards (March 2018)” (“2017 QM Report”) to the EPA.166 The 2017 QM report includes a certification from the Governor's designee that the 2017 quantitative milestones for the South Coast PM2.5 nonattainment area have been achieved and a demonstration that the adopted control strategy has been fully implemented. The 2017 QM Report also contains a demonstration of how the emissions reductions achieved to date compare to those required or scheduled to meet RFP. The State and District conclude in the 2017 QM Report that the South Coast area is on track to attain the 2006 p.m.2.5 NAAQS by the projected attainment date for the area, which is December 31, 2019. On September 7, 2018, the EPA determined that the South Coast 2017 QM Report was adequate.167

    166 Letter from Richard W. Corey, Executive Officer, CARB, to Alexis Strauss, Acting Regional Administrator, EPA Region IX, with attachment, April 2, 2018.

    167 Letter from Andrew R. Wheeler EPA, Acting Administrator, to Richard W. Corey, Executive Officer, CARB, regarding 2017 Quantitative Milestone Report for 2006 24-hour PM2.5 National Ambient Air Quality Standards, September 7, 2018.

    F. Contingency Measures 1. Requirements for Contingency Measures

    Under CAA section 172(c)(9), each SIP for a nonattainment area must include contingency measures to be implemented if an area fails to meet RFP (“RFP contingency measures”) or fails to attain the NAAQS by the applicable attainment date (“attainment contingency measures”). Under the PM2.5 SIP Requirements Rule, PM2.5 attainment plans must include contingency measures to be implemented following a determination by the EPA that the state has failed: (1) To meet any RFP requirement in the approved SIP, (2) to meet any quantitative milestone in the approved SIP, (3) to submit a required quantitative milestone report, or (4) to attain the applicable PM2.5 NAAQS by the applicable attainment date. Contingency measures must be fully adopted rules or control measures that are ready to be implemented quickly upon failure to meet RFP or failure of the area to meet the relevant NAAQS by the applicable attainment date.

    The purpose of contingency measures is to continue progress in reducing emissions while a state revises its SIP to meet the missed RFP requirement or to correct continuing nonattainment. Neither the CAA nor the EPA's implementing regulations establish a specific level of emissions reductions that implementation of contingency measures must achieve, but the EPA has taken the position that contingency measures should provide for emissions reductions equivalent to approximately one year of reductions needed for RFP. In general, we expect all actions needed to effect full implementation of the measures to occur within 60 days after EPA notifies the state of a failure to meet RFP or to attain.168

    168 General Preamble at 13512, 13543-44 and Addendum at 42014-42015.

    To satisfy the requirements of 40 CFR 51.1014, the contingency measures adopted as part of a PM2.5 attainment plan must: (1) consist of control measures for the area that are not otherwise included in the control strategy or that achieve emissions reductions not otherwise relied upon in the control strategy for the area (e.g., to meet RACM/RACT, BACM/BACT, or MSM requirements), and (2) specify the timeframe within which their requirements become effective following any of the EPA determinations specified in 40 CFR 51.1014(a).

    The Ninth Circuit recently rejected the EPA's interpretation of CAA section 172(c)(9) as allowing for early implementation of contingency measures, in a decision called Bahr v. EPA (“Bahr”).169 In Bahr, the Ninth Circuit concluded that contingency measures must take effect at the time the area fails to make RFP or attain by the applicable attainment date, not before. Thus, within the geographic jurisdiction of the Ninth Circuit, states cannot rely on early-implemented measures to comply with the contingency measure requirements under CAA section 172(c)(9).

    169Bahr v. EPA, 836 F.3d 1218, at 1235-1237 (9th Cir. 2016).

    2. Contingency Measures in the 2016 PM2.5 Plan

    The 2016 PM2.5 Plan addresses the contingency measure requirement in Chapter 4 of the 2016 AQMP and in section H of the CARB Staff Report. Chapter 4 of the 2016 AQMP addresses contingency measures for failure to attain by describing emission reductions to be achieved by an adopted measure, South Coast Rule 445 (Wood-Burning Devices). The 2016 PM2.5 Plan does not specifically address contingency measures for failure to meet RFP.

    The CARB Staff Report provides a brief statement acknowledging the recent Bahr decision and committing to work with the EPA and the District to provide additional documentation or develop any needed SIP revisions consistent with that decision.

    3. EPA's Evaluation and Proposed Action

    As explained above in Section V.E, on April 2, 2018, CARB submitted a quantitative milestone report demonstrating that the 2017 quantitative milestones in the 2016 PM2.5 Plan have been achieved, and the EPA has determined that this milestone report is adequate. Because the State and District have demonstrated that the South Coast area has met its 2017 quantitative milestones, RFP contingency measures for 2017 are no longer needed. Accordingly, we are proposing to find that the RFP contingency measure requirement for the 2017 RFP milestone year is now moot as applied to the South Coast. The sole purpose of RFP contingency measures is to provide continued progress if an area fails to meet its RFP or quantitative milestone requirements. Failure to meet RFP or quantitative milestones for 2017 would have required California to implement RFP contingency measures and to revise the 2016 PM2.5 Plan to assure that it still provided for attainment by the applicable attainment date of December 31, 2019. In this case, however, the 2017 QM Report demonstrates that actual emissions levels in 2017 were consistent with the approved 2017 RFP milestone year targets for direct PM2.5 and all precursor pollutants (NOX, SO2, VOCs, and ammonia) regulated in the 2016 PM2.5 Plan. Accordingly, RFP contingency measures for 2017 no longer have meaning or purpose, and the EPA proposes to find that the requirement for them is now moot.

    We are not proposing any action at this time on the attainment contingency measure component of the 2016 PM2.5 Plan and will act on that component through a subsequent rulemaking, as appropriate.

    G. Major Stationary Source Control Requirements Under CAA Section 189(e)

    Section 189(e) of the Act specifically requires that the control requirements applicable to major stationary sources of direct PM2.5 also apply to major stationary sources of PM2.5 precursors, except where the Administrator determines that such sources do not contribute significantly to PM2.5 levels that exceed the standards in the area.170 The control requirements applicable to major stationary sources of direct PM2.5 in a Serious PM2.5 nonattainment area include, at minimum, the requirements of a NNSR permit program meeting the requirements of CAA sections 172(c)(5) and 189(b)(3).171 As part of our January 13, 2016 final action to reclassify the South Coast area as Serious nonattainment for the 2006 PM2.5 standards, we established a deadline 18 months from the effective date of our reclassification (or August 14, 2017) for the State to submit NNSR SIP revisions addressing the requirements of CAA sections 189(b)(3) and 189(e) of the Act.172

    170 General Preamble at 13539 and 13541-42.

    171 CAA section 189(b)(1) (requiring that Serious area plans include provisions submitted to meet the requirements for Moderate areas in section 189(a)(1)).

    172 81 FR 1514, at 1515 (January 13, 2016).

    California submitted NNSR SIP revisions to address the subpart 4 requirements for Serious PM2.5 nonattainment areas on May 8, 2017.173 We are not proposing any action on this submission at this time. We will act on this submission through a subsequent rulemaking, as appropriate.

    173 Letter from Richard W. Corey, Executive Officer, CARB, to Alexis Strauss, Acting Regional Administrator, EPA Region IX, May 8, 2017. California previously submitted NNSR SIP revisions to address the subpart 4 requirements for Moderate PM2.5 nonattainment areas, and the EPA approved these SIP revisions on May 1, 2015 (80 FR 24821).

    H. Motor Vehicle Emission Budgets 1. Requirements for Motor Vehicle Emissions Budgets

    Section 176(c) of the CAA requires federal actions in nonattainment and maintenance areas to conform to the SIP's goals of eliminating or reducing the severity and number of violations of the NAAQS and achieving expeditious attainment of the standards. Conformity to the SIP's goals means that such actions will not: (1) Cause or contribute to violations of a NAAQS, (2) worsen the severity of an existing violation, or (3) delay timely attainment of any NAAQS or any interim milestone.

    Actions involving Federal Highway Administration (FHWA) or Federal Transit Administration (FTA) funding or approval are subject to the EPA's transportation conformity rule, codified at 40 CFR part 93, subpart A. Under this rule, metropolitan planning organizations (MPOs) in nonattainment and maintenance areas coordinate with state and local air quality and transportation agencies, the EPA, FHWA, and FTA to demonstrate that an area's regional transportation plans (RTP) and transportation improvement programs (TIP) conform to the applicable SIP. This demonstration is typically done by showing that estimated emissions from existing and planned highway and transit systems are less than or equal to the motor vehicle emissions budgets (“budgets” or “MVEB”) contained in all control strategy SIPs. An attainment, maintenance, or RFP SIP should include budgets for the attainment year, each required RFP milestone year, or the last year of the maintenance plan, as appropriate, for direct PM2.5 and PM2.5 precursors subject to transportation conformity analyses. Budgets are generally established for specific years and specific pollutants or precursors and must reflect all of the motor vehicle control measures contained in the attainment and RFP demonstrations.174 Under the PM2.5 SIP Requirements Rule, Serious area PM2.5 attainment plans must define appropriate quantitative milestones and include projected RFP emission levels for direct PM2.5 and all PM2.5 plan precursors in each milestone year.175

    174 40 CFR 93.118(e)(4)(v).

    175See 81 FR 58010, 58091-58092.

    PM2.5 plans should identify budgets for direct PM2.5, NOX and all other PM2.5 precursors for which on-road emissions are determined to significantly contribute to PM2.5 levels in the area for each RFP milestone year and the attainment year, if the plan demonstrates attainment. All direct PM2.5 SIP budgets should include direct PM2.5 motor vehicle emissions from tailpipes, brake wear, and tire wear. A state must also consider whether re-entrained paved road dust, unpaved road dust, or highway and transit construction dust are significant contributors and should be included in the direct PM2.5 budget.176

    176 40 CFR 93.102(b) and 93.122(f); see also conformity rule preamble at 69 FR 40004, 40031-40036 (July 1, 2004).

    For an area designated nonattainment for the 2006 PM2.5 NAAQS before January 15, 2015, the attainment plan must contain quantitative milestones to be achieved no later than 3 years after December 31, 2014, and every 3 years thereafter until the milestone date that falls within 3 years after the applicable attainment date.177 As the EPA explained in the preamble to the PM2.5 SIP Requirements Rule, it is important to include a post-attainment year quantitative milestone to ensure that, if the area fails to attain by the attainment date, the EPA can continue to monitor the area's progress toward attainment while the state develops a new attainment plan.178

    177 40 CFR 51.1013(a)(4), see also 81 FR 58010, 58058 and 58063-58064 (August 24, 2016).

    178See 81 FR 58010, 58063-58064 (August 24, 2016).

    Transportation conformity trading mechanisms are allowed under 40 CFR 93.124 where a SIP establishes appropriate mechanisms for such trades. The basis for the trading mechanism is the SIP attainment modeling that established the relative contribution of each PM2.5 precursor pollutant. The applicability of emission trading between conformity budgets for conformity purposes is described in 40 CFR 93.124(c).

    In general, only budgets in approved SIPs can be used for transportation conformity purposes. However, section 93.118(e) of the transportation conformity rule allows budgets in a SIP submission to apply for conformity purposes before the SIP submission is approved under certain circumstances. First, there must not be any other approved SIP budgets that have been established for the same year, pollutant, and CAA requirement. Second, the EPA must find that the submitted SIP budgets are adequate for transportation conformity purposes. To be found adequate, the submission must meet the conformity adequacy requirements of 40 CFR 93.118(e)(4) and (5).

    The transportation conformity rule allows for replacement of previously approved budgets by submitted motor vehicle emissions budgets that the EPA has found adequate, if the EPA has limited the duration of its prior approval to the period before it finds replacement budgets adequate.179 However, the EPA will consider a state's request to limit the duration of an MVEB approval only if the request includes the following elements:

    179 40 CFR 93.118(e)(1).

    • An acknowledgement and explanation as to why the budgets under consideration have become outdated or deficient;

    • A commitment to update the budgets as part of a comprehensive SIP update; and

    • A request that the EPA limit the duration of its approval to the time when new budgets have been found to be adequate for transportation conformity purposes.180

    180See, e.g., 67 FR 69139 (November 15, 2002), limiting our prior approval of budgets in certain California SIPs.

    2. Motor Vehicle Emissions Budgets in the 2016 PM2.5 Plan

    Consistent with the requirements of 40 CFR 51.1013(a)(4), the 2016 PM2.5 Plan identifies December 31, 2017, as the first quantitative milestone date (i.e., the date 3 years after December 31, 2014). The second quantitative milestone date is December 31, 2020, and is also the last milestone date identified in the Plan because it falls within 3 years after the December 31, 2019 attainment date for the area.181

    181 Under CAA section 188(c)(2), a Serious PM2.5 nonattainment area must attain the PM2.5 NAAQS as expeditiously as practicable but no later than the end of the tenth calendar year after the area is designated as nonattainment. Because the South Coast area was designated as nonattainment for the 2006 PM2.5 NAAQS effective December 14, 2009 (74 FR 58688, November 13, 2009), the latest permissible attainment date for the area is December 31, 2019.

    The 2016 PM2.5 Plan includes budgets for direct PM2.5, NOX, and VOC for 2017 and 2019 (RFP milestone year and projected attainment year, respectively) and for 2020 (post-attainment year quantitative milestone).182 The budgets were calculated using EMFAC2014, CARB's latest version of the EMFAC model for estimating emissions from on-road vehicles operating in California, and SCAG's latest modeled VMT and speed distributions from the 2016 Regional Transportation Plan/Sustainable Communities Strategy adopted in April of 2016. The budgets reflect annual average emissions because those emissions are linked with the District's attainment demonstration for the 24-hour PM2.5 NAAQS.

    182 2016 PM2.5 Plan, Appendix VI-D and Table VI-D-4 (for 2017, 2019, and 2020 budgets).

    The direct PM2.5 budgets include tailpipe, brake wear, and tire wear emissions as well as paved road dust, unpaved road dust, and road construction dust emissions.183 The Plan includes budgets for VOC and NOX because they are regulated precursors under the Plan. Under 40 CFR 93.102(b)(2)(v), states are not required to include budgets for SO2 and/or NH3 unless EPA or the state has made a finding that transportation-related emissions of any of these precursors within the nonattainment area are significant contributors to the PM2.5 nonattainment problem. Neither the State nor the EPA has made such a funding. The budgets included in the 2016 PM2.5 Plan are shown in Table 6 below.

    183 2016 PM2.5 Plan, Appendix VI-D,Table VI-D-3, p. VI-D-4.

    EP03OC18.004

    In the submittal letter for the 2016 PM2.5 Plan, CARB requested that we limit the duration of our approval of the budgets to the period before the effective date of the EPA's adequacy finding for any subsequently submitted budgets.184

    184 Letter from Richard W. Corey, Executive Officer, CARB, to Alexis Strauss, Acting Regional Administrator, EPA Region IX, page 3, April 27, 2017.

    We found the budgets for the 2017 RFP year and the 2019 attainment year adequate in a letter dated December 19, 2017.185 In today's action, we are proposing to approve these budgets.

    185Id.

    Conformity Trading Mechanism

    The 2016 PM2.5 Plan also includes a proposed trading mechanism for transportation conformity analyses that would allow future decreases in NOX emissions from on-road mobile sources to offset any on-road increases in PM2.5, using the ratios shown in Table 7 below.186 For the 2006 24-hour PM2.5 NAAQS the State is proposing to use the same ratios that were submitted for use with that NAAQS in the 2012 PM2.5 Plan.187

    186 2016 PM2.5 Plan, Appendix VI-D, Table VI-D-5.

    187 82 FR 22025 (April 14, 2016).

    Table 7—Trading Equivalencies for 2006 24-Hour PM2.5 NAAQS NOX VOC PM2.5 NOX 1 3.151 0.067 VOC 0.317 1 0.021 PM2.5 14.833 46.792 1 Source: 2016 PM2.5 Plan, Appendix VI-D, Table VI-D-5, and letter from Phil Fine, Deputy Executive Officer, SCAQMD, to Amy Zimpfer, Associate Director, Air Division, EPA Region 9, March 14, 2018.

    To ensure that the trading mechanism does not affect the ability of the South Coast to meet the NOX budget, the NOX emission reductions available to supplement the PM2.5 budget would only be those remaining after the NOX budget has been met.188 SCAG must clearly document the calculations used in the trading when demonstrating conformity, along with any additional reductions of NOX, PM2.5 or VOC emissions in the conformity analysis. It should be noted that the trading calculations are performed prior to the final rounding to demonstrate conformity with the budgets.

    188 2016 PM2.5 Plan, Appendix VI-D, page VI-D-5.

    The District provided a clarification as to how the trading mechanism would be implemented in a March 14, 2018 letter.189 In that letter, the District clarified that the trading mechanism identified in the 2012 AQMP for the 2006 PM2.5 24-hour NAAQS, which the EPA did not previously act on, is included in the 2016 AQMP for approval by the EPA for use by SCAG in conformity determinations for the 2006 PM2.5 NAAQS for analysis years after the attainment year of 2019. The letter also explained why these trading ratios are still appropriate for use in conformity determinations even though they are derived from modeling conducted for the 2012 AQMP.

    189 Letter from Philip Fine, Deputy Executive Officer, Planning, Rule Development, and Area Sources, SCAQMD, to Amy Zimpfer, Associate Director, Air Division, EPA Region IX, regarding trading ratios among PM2.5 precursors, March 14, 2018.

    The 2016 PM2.5 Plan also provides that SCAG, the MPO responsible for demonstrating transportation conformity, shall clearly document the calculations used in the trading, along with any additional reductions of NOX, PM2.5 or VOC emissions in the conformity analysis.

    3. EPA's Evaluation and Proposed Actions

    The EPA generally first conducts a preliminary review of budgets submitted with an attainment, RFP, or maintenance plan for adequacy, prior to acting on the plan itself, and did so with respect to the replacement PM2.5 budgets in the 2016 PM2.5 Plan. On October 18, 2017, the EPA announced the availability of the 2016 PM2.5 Plan with budgets and a 30-day public comment period. This announcement was posted on EPA's Adequacy website at: https://www.epa.gov/state-and-local-transportation/state-implementation-plans-sip-submissions-currently-under-epa. The comment period for this notification ended on November 17, 2017. We did not receive any comments during this comment period. We found the budgets adequate on December 19, 2017.190 A notice of the adequacy finding was published in the Federal Register on January 5, 2018.191

    190 Letter from Matthew J. Lakin, Acting Director, Air Division, EPA Region IX, to Richard W. Corey, Executive Officer, CARB, December 19, 2017.

    191See 83 FR 679, January 5, 2018.

    Based on the information about SO2 and ammonia emissions in the Plan and in accordance with 40 CFR 93.102(b)(2)(v), we propose to find that it is not necessary to establish motor vehicle emissions budgets for transportation-related emissions of SO2 and ammonia to attain the 2006 PM2.5 standards in the South Coast.

    For the reasons discussed in sections V.D. and V.E. of this proposed rule, we are proposing to approve the RFP and attainment demonstrations in the 2016 PM2.5 Plan. The 2017 RFP and 2019 attainment budgets, as given in Table 6 of this proposed rule, are consistent with these demonstrations, are clearly identified and precisely quantified, and meet all other applicable statutory and regulatory requirements including the adequacy criteria in 93.118(e)(4) and (5). For these reasons, the EPA proposes to approve the budgets listed in Table 6 above. We provided a more detailed discussion in our adequacy letter, which can be found in the docket for today's action.

    We are not taking action on the 2020 budgets at this time. Although the post-attainment year quantitative milestone is a required element of the Serious area plan, it is not necessary to demonstrate transportation conformity for 2020 or to use the 2020 budgets in transportation conformity determinations until such time as the area fails to attain the 2006 PM2.5 NAAQS. Additionally, the EPA has not yet started the adequacy process for the 2020 budgets. Therefore, the EPA is not taking action on the submitted budgets for 2020 in the 2016 PM2.5 Plan at this time.

    If the EPA were to either find adequate or approve the post-attainment milestone year budgets now, those budgets would have to be used in transportation conformity determinations that are made after the effective date of the adequacy finding or approval even if the South Coast area ultimately attains the PM2.5 NAAQS by the Serious area attainment date. This would mean that SCAG would be required to demonstrate conformity for the post-attainment date milestone year and all later years addressed in the conformity determination (e.g., the last year of the metropolitan transportation plan) to the post-attainment date RFP budgets rather than the budgets associated with the attainment year for the area (i.e., the budgets for 2019). The EPA does not believe that it is necessary to demonstrate conformity using these post-attainment year budgets in areas that either the EPA anticipates will attain by the attainment date or in areas that attain by the attainment date. The EPA has found adequate the budgets for the first milestone year (2017) and the attainment year (2019) for the South Coast PM2.5 nonattainment area.192

    192 Letter from Matthew J. Lakin, Acting Director, Air Division, EPA Region IX, to Richard W. Corey, Executive Officer, CARB, December 19, 2017, and 83 FR 679 (January 5, 2018).

    If the EPA determines that the South Coast area has failed to attain the 2006 PM2.5 NAAQS by the applicable attainment date, the EPA will begin the budget adequacy and approval processes for the post-attainment year (2020) budgets. If the EPA finds the 2020 budgets adequate or approves them, those budgets will have to be used in subsequent transportation conformity determinations. The EPA believes that initiating the process to act on the submitted post-attainment year MVEBs following a determination that the area has failed to attain by the Serious area attainment date ensures that transportation activities will not cause or contribute to new violations, increase the frequency or severity of any existing violations, or delay timely attainment or any required interim emission reductions or milestones in the South Coast nonattainment area, consistent with the requirements of CAA section 176(c)(1)(B).

    We have previously approved motor vehicle emissions budgets for the 1997 annual and 24-hour PM2.5 NAAQS.193 These budgets will continue to apply for the 1997 PM2.5 NAAQS in the South Coast area.

    193 76 FR 69928, at 69951 (November 9, 2011).

    The EPA has reviewed the trading mechanism described on pages VI-D-5 and VI-D-6 in Appendix VI-D of the 2016 AQMP and, given the clarification letter submitted to the EPA on March 14, 2018, finds this trading mechanism appropriate for use in transportation conformity analyses in the South Coast for the 2006 PM2.5 NAAQS. We agree with the District that these trading ratios are still appropriate for use in transportation conformity determinations even though they are derived from modeling conducted for the 2012 AQMP. We therefore propose to approve the trading mechanism as an enforceable component of the transportation conformity program for the South Coast for the 2006 PM2.5 NAAQS.

    In the submittal letter for the 2016 PM2.5 Plan, CARB requested that we limit the duration of our approval of the budgets to the period before the effective date of the EPA's adequacy finding for any subsequently submitted budgets.194 The transportation conformity rule allows us to limit the approval of budgets.195 CARB's request does not, however, contain an acknowledgement and explanation as to why the budgets under consideration will become outdated or a commitment to update the budgets as part of a comprehensive SIP update. Therefore, we are not proposing at this time to limit the duration of our approval of the submitted budgets. In order to limit the duration of our approval, we would need the information described above to determine whether such limitation is reasonable and appropriate in this case. Once CARB has provided the necessary information, we intend to review it and take appropriate action. If we propose to limit the duration of our approval of the budgets in the 2016 PM2.5 Plan, we will provide the public an opportunity to comment. The duration of our approval of the submitted budgets will not be limited until we complete such a rulemaking.

    194See letter dated April 27, 2017, from Richard W. Corey, Executive Officer, CARB, to Alexis Strauss, Acting Regional Administrator, EPA Region IX, page 3.

    195 40 CFR 93.118(e)(1).

    VI. Summary of Proposed Actions and Request for Public Comment

    Under CAA section 110(k)(3), the EPA is proposing to approve SIP revisions submitted by California to address the Act's Serious area planning requirements for the 2006 PM2.5 NAAQS in the South Coast nonattainment area. Specifically, the EPA is proposing to approve the following elements of the 2016 PM2.5 Plan:

    1. A comprehensive, accurate, current inventory of actual emissions from all sources of PM2.5 and PM2.5 precursors in the area (CAA section 172(c)(3));

    2. Provisions to assure that BACM, including BACT, for the control of direct PM2.5 and PM2.5 precursors shall be implemented no later than 4 years after the area is reclassified (CAA section 189(b)(1)(B));

    3. A demonstration (including air quality modeling) that the plan provides for attainment as expeditiously as practicable but no later than December 31, 2019 (CAA sections 188(c)(2) and 189(b)(1)(A));

    4. Plan provisions that require RFP (CAA section 172(c)(2));

    5. Quantitative milestones that are to be achieved every 3 years until the area is redesignated attainment and which demonstrate RFP toward attainment by the applicable date (CAA section 189(c)); and

    6. 2017 and 2019 motor vehicle emissions budgets, as shown in Table 6 of this proposed rule, because they are derived from an approvable RFP plan and attainment demonstration and meet the requirements of CAA section 176(c) and 40 CFR part 93, subpart A.

    The EPA is also proposing to approve the interpollutant trading mechanism provided in the 2016 PM2.5 Plan and clarified in a March 14, 2018 letter from the District for use in transportation conformity analyses for the 2006 PM2.5 NAAQS, in accordance with 40 CFR 93.124. We are not proposing any action at this time on the attainment contingency measure component of the 2016 PM2.5 Plan. Finally, the EPA is proposing to find that the requirement for contingency measures to be undertaken if the area fails to make reasonable further progress under CAA section 172(c)(9) is moot as applied to the 2017 milestone year, because the State and District have demonstrated to the EPA's satisfaction that the 2017 milestones have been met.

    We will accept comments from the public on these proposals for the next 30 days. The deadline and instructions for submission of comments are provided in the DATES and ADDRESSES sections at the beginning of this preamble.

    VII. Statutory and Executive Order Reviews

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

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

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

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

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

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

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

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

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

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

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

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

    List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Ammonia, Incorporation by reference, Intergovernmental relations, Oxides of nitrogen, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.

    Authority:

    42 U.S.C. 7401 et seq.

    Dated: September 24, 2018. Deborah Jordan, Acting Regional Administrator, Region 9.
    [FR Doc. 2018-21560 Filed 10-2-18; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R06-OAR-2008-0408; FRL-9984-28—Region 6] Approval and Promulgation of Implementation Plans; Texas; Interstate Transport Requirements for the 1997 Ozone National Ambient Air Quality Standards AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    Pursuant to the Federal Clean Air Act (CAA or the Act), the Environmental Protection Agency (EPA) is proposing to approve portions of two Texas State Implementation Plan (SIP) submittals that pertain to the good neighbor and interstate transport requirements of the CAA with respect to the 1997 ozone National Ambient Air Quality Standards (NAAQS). The good neighbor provision requires each state, in its SIP, to prohibit emissions that will significantly contribute to nonattainment, or interfere with maintenance, of a NAAQS in other states. In this action, EPA is proposing to approve the Texas SIP submittals as having met the requirements of the good neighbor provision for the 1997 ozone NAAQS in accordance with section 110 of the CAA.

    DATES:

    Written comments must be received on or before November 2, 2018.

    ADDRESSES:

    Submit your comments, identified by Docket No. EPA-R06-OAR-2008-0408, at http://www.regulations.gov or via email to [email protected] Follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. The EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (i.e. on the web, cloud, or other file sharing system). For additional submission methods, please contact Carl Young, 214-665-6645, [email protected] For the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

    Docket: The index to the docket for this action is available electronically at www.regulations.gov and in hard copy at the EPA Region 6, 1445 Ross Avenue, Suite 700, Dallas, Texas. While all documents in the docket are listed in the index, some information may be publicly available only at the hard copy location (e.g., copyrighted material), and some may not be publicly available at either location (e.g., CBI).

    FOR FURTHER INFORMATION CONTACT:

    Carl Young, 214-665-6645, [email protected] To inspect the hard copy materials, please schedule an appointment with Mr. Young or Mr. Bill Deese at 214-665-7253.

    SUPPLEMENTARY INFORMATION:

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

    I. Background A. The 1997 8-Hour Ozone NAAQS and Interstate Transport of Air Pollution

    Under section 109 of the CAA, we establish NAAQS to protect human health and public welfare. In 1997, we established new 8-hour primary and secondary ozone NAAQS of 0.08 parts per million (62 FR 38856, July 18, 1997).1 Ground level ozone is formed when nitrogen oxides (NOX) and volatile organic compounds (VOCs) react in the presence of sunlight.

    1 In 2008, we revised the 8-hour ozone NAAQS to 0.075 ppm (73 FR 16436, March 27, 2008) and in 2015 we revised the 8-hour ozone NAAQS to 0.070 ppm (80 FR 65292, October 26, 2015). This proposal pertains to the 1997 8-hour ozone NAAQS only.

    Section 110(a)(1) of the CAA requires states to submit, within three years after promulgation of a new or revised standard, SIPs meeting the applicable “infrastructure” elements set forth in Section 110(a)(2). One of these applicable infrastructure elements, CAA section 110(a)(2)(D)(i), requires SIPs to contain “good neighbor” provisions to prohibit certain adverse air quality effects on neighboring states due to interstate transport of pollution. There are four sub-elements within CAA section 110(a)(2)(D)(i). This action reviews how the first two sub-elements of the good neighbor provisions at CAA section 110(a)(2)(D)(i)(I) were addressed in the infrastructure SIP submittals from Texas for the 1997 8-hour ozone NAAQS. These sub-elements require that each SIP for a new or revised NAAQS contain adequate provisions to prohibit any emissions activity within the state from emitting air pollutants that will “contribute significantly to nonattainment” or “interfere with maintenance” of the applicable air quality standard in any other state.

    The EPA has addressed the interstate transport requirements of CAA section 110(a)(2)(D)(i)(I) with respect to the 1997 8-hour ozone NAAQS in several past regulatory actions. Most relevant to this action, we promulgated the Clean Air Interstate Rule (CAIR) in 2005 to address the requirements of the good neighbor provision for the 1997 fine particulate PM2.5 and 1997 ozone NAAQS (May 12, 2005, 70 FR 25172). While Texas was included in CAIR with respect to the 1997 PM2.5 NAAQS, we determined that Texas would not significantly contribute to nonattainment or interfere with maintenance of the 1997 ozone NAAQS in other states. However, CAIR was remanded by the D.C. Circuit in North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008), modified on reh'g, 550 F.3d 1176. The court determined that CAIR was “fundamentally flawed” and ordered EPA to “redo its analysis from the ground up.” 531 F.3d at 929.

    In 2011 we promulgated the Cross-State Air Pollution Rule (CSAPR) to address the remand of CAIR.2 CSAPR addressed the state and federal obligations under CAA section 110(a)(2)(D)(i)(I) to prohibit air pollution contributing significantly to nonattainment in, or interfering with maintenance by, any other state with regard to the 1997 8-hour ozone NAAQS and the 1997 annual PM2.5 NAAQS, as well as the 2006 24-hour PM2.5 NAAQS. To address Texas' transport obligation under CAA section 110(a)(2)(D)(i)(I) with regard to the 1997 8-hour ozone NAAQS, CSAPR established Federal Implementation Plan (FIP) requirements for affected electric generating units (EGUs) in Texas, including an emissions budget that applied to the EGUs' collective ozone-season emissions of NOX. The CSAPR budgets were to be implemented in two phases, with phase 1 to be implemented beginning with the 2012 ozone season and phase 2 to be implemented beginning with the 2014 ozone season.3 Due to litigation, phase 1 of CSAPR was not implemented until 2015 and phase 2 was set to be implemented beginning in 2017. (81 FR 13275, March 14, 2016).

    2 Federal Implementation Plans; Interstate Transport of Fine Particulate Matter and Ozone and Correction of SIP Approvals, 76 FR 48208 (August 8, 2011) (codified as amended at 40 CFR 52.38 and 52.39 and 40 CFR part 97).

    3 However, the implementation of the emissions budgets was stayed by the D.C. Circuit in December 2011 pending further litigation. The D.C. Circuit initially issued a decision in EME Ho