Federal Register Vol. 83, No.227,

The Dodd-Frank Act provided for a substantial reorganization of the regulation of State and Federal savings associations and their holding companies.1 Beginning July 21, 2011, the transfer date established by section 311 of the Dodd-Frank Act, 12 U.S.C. 5411, the powers, duties, and functions formerly performed by the Office of Thrift Supervision (OTS) were divided between the FDIC, as to State savings associations, the Office of the Comptroller of the Currency (OCC), as to Federal savings associations, and the Board of Governors of the Federal Reserve System, as to savings and loan holding companies. Section 316(b) of the Dodd-Frank Act, 12 U.S.C. 5414(b), provides the manner of treatment for all orders, resolutions, determinations, regulations, and advisory materials, that were issued, made, prescribed, or allowed to become effective by the OTS. The section provides that, if such regulatory issuances were in effect on the day before the transfer date, they continue to be in effect and are enforceable by or against the appropriate successor agency until they are modified, terminated, set aside, or superseded in accordance with applicable law by such successor agency, by any court of competent jurisdiction, or by operation of law.

Section 316(c) of the Dodd-Frank Act, 12 U.S.C. 5414(c), further directed the FDIC and OCC to consult with one another and to publish a list of the continued OTS regulations that would be enforced by each agency. On June 14, 2011, the FDIC's Board of Directors approved a “List of OTS Regulations to be enforced by the OCC and the FDIC Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act.” This list was published by the FDIC and the OCC as a Joint Notice in the Federal Register on July 6, 2011.2

Although section 312(b)(2)(B)(i)(II) of the Dodd-Frank Act, 12 U.S.C. 5412(b)(2)(B)(i)(II), granted the OCC rulemaking authority relating to both State and Federal savings associations, nothing in the Dodd-Frank Act affected the FDIC's existing authority to issue regulations under the Federal Deposit Insurance Act (FDI Act) and other laws as the “appropriate Federal banking agency” or under similar statutory terminology. Section 312(c) of the Dodd-Frank Act, 12 U.S.C. 5412(c), amended the definition of “appropriate Federal banking agency” contained in section 3(q) of the FDI Act, 12 U.S.C. 1813(q), to add State savings associations to the list of entities for which the FDIC is designated as the “appropriate Federal banking agency.” As a result, when the FDIC acts as the designated “appropriate Federal banking agency” for State savings associations and State nonmember banks, as it does here, the FDIC is authorized to issue, modify, and rescind regulations involving such institutions.

On June 14, 2011, pursuant to this authority, the FDIC's Board of Directors reissued and redesignated certain transferred regulations of the former OTS as FDIC regulations. When these transferred OTS regulations were published as new FDIC regulations in the Federal Register on August 5, 2011,3 the FDIC specifically noted that it would evaluate the transferred OTS regulations and might later incorporate them into other FDIC rules, amend them, or rescind them, as appropriate.

The OTS regulation formerly found at 12 CFR 550.10(b)(1), which covered the fiduciary powers (also known as trust powers) of State savings associations, was transferred to the FDIC with only nominal changes and is now found in the FDIC's rules at 12 CFR part 390, subpart J (Subpart J). Subpart J provides that a State savings association must conduct its fiduciary operations in accordance with applicable State law and must exercise its fiduciary powers in a safe and sound manner.

Unlike the explicit requirement applicable to State savings associations in Subpart J, there is no express rule requiring State nonmember banks to conduct fiduciary operations in accordance with applicable State law and to exercise their fiduciary powers in a safe and sound manner. However, the FDIC has long recognized that State nonmember banks, like State savings associations, must comply with State law when exercising trust or fiduciary powers.4 This reflects a widely understood industry principle that the trust powers of State chartered institutions are granted under State law and are primarily administered by the State chartering authority.5

State nonmember banks are generally required to file an application for consent to exercise trust powers.6 Therefore, if a State nonmember bank seeks to change the nature of its current business to include trust activities, section 333.2 requires the bank to obtain the FDIC's prior written consent.7 Under section 333.101(b), however, prior written consent is not required when a State nonmember bank seeks to act as trustee or custodian of certain qualified retirement, education, and health savings accounts, or other similar accounts in which the bank's duties are essentially custodial or ministerial in nature and the acceptance of such accounts without trust powers is not contrary to applicable State law.8

Section 303.242 contains application procedures that a State nonmember bank must follow to obtain the FDIC's prior written consent before engaging in trust activities.9 Prior to granting such consent, the FDIC considers whether the bank will conduct trust operations in a safe and sound manner, consistent with State law.

On April 10, 2018, the FDIC issued a Notice of Proposed Rulemaking (NPR or Proposed Rule) entitled Transferred OTS Regulations Regarding Fiduciary Powers of State Savings Associations and Consent Requirements for the Exercise of Trust Powers.10 The NPR proposed to: (1) Rescind Subpart J in its entirety; (2) add a new section 333.3 explicitly providing that State savings associations and State nonmember banks must obtain the FDIC's prior written consent before exercising trust powers by following the procedures contained in section 303.242; (3) revise section 333.101 to provide that State savings associations, as well as State nonmember banks, are not considered to be exercising trust powers when acting as trustees or custodians for certain qualified retirement, education, and health savings accounts, or other similar accounts in which the bank's duties are essentially custodial or ministerial in nature and the acceptance of such accounts without trust powers is not contrary to applicable State law; and (4) revise section 303.242 to make its application procedures applicable to both State savings associations and State nonmember banks and incorporate a listing of documents required to be submitted with the application for consent to exercise trust powers.

The FDIC issued the NPR with a 60-day comment period that closed on June 11, 2018. The FDIC requested comments on all aspects of the Proposed Rule, including whether Subpart J should be retained and what positive or negative impacts could result from the proposed revisions to parts 333 and 303, including the impact on State savings associations not currently exercising trust powers that would need to obtain FDIC consent if they chose to do so in the future. The FDIC received no comments on the Proposed Rule. Accordingly, the FDIC is adopting the Proposed Rule largely as proposed, but without incorporating the listing of documents in section 303.242. As discussed further below, this change is intended to avoid unnecessary duplication or confusion with the existing application form and further regulatory revisions in the event of any future changes to the documentation listed on the form.

As discussed in the NPR, the FDIC concluded that the rescission of Subpart J would streamline the FDIC rules and regulations, and no comments were received on this issue. Therefore, the final rule removes and rescinds 12 CFR part 390, subpart J in its entirety.

The final rule adds a new section 333.3, unchanged from the NPR, explicitly requiring State savings associations and State nonmember banks to obtain the FDIC's prior written consent before exercising trust powers. For State nonmember banks, section 333.3 makes explicit the FDIC's existing requirement that State nonmember banks receive the FDIC's consent before initially exercising trust powers, as such an action would constitute a change in the bank's general character or business under 12 CFR 333.2. For State savings associations, Section 333.3 adds a new requirement to obtain the FDIC's prior written consent should they choose in the future to exercise trust powers granted by their State chartering authorities. In effect, section 333.3 makes the requirement to file an application consistent for both State savings associations and State nonmember banks.

The final rule, like the NPR, also revises section 333.101(b) to permit both State savings associations and State nonmember banks to act as custodians for qualifying retirement, education, and health savings accounts, or other similar accounts without being deemed to exercise trust powers, and therefore without obtaining the FDIC's prior written consent.

The final rule, like the NPR, makes the application procedures in section 303.242 applicable to both State savings associations and State nonmember banks. Accordingly, under section 303.242(a) of the final rule, neither State savings associations nor State nonmember banks are required to receive the FDIC's prior written consent to exercise trust powers when: (1) The institution received authority to exercise trust powers from its chartering authority prior to December 1, 1950; or (2) the institution continues to conduct trust activities pursuant to authority granted by its chartering authority subsequent to a charter conversion or withdrawal from membership in the Federal Reserve System. The NPR originally proposed to amend section 303.242 (c) to list specific documents typically filed as part of an application to exercise trust powers.11 Upon further consideration, the FDIC determined not to list these items in the final rule in order to avoid duplication with the items already listed in the instructions on the existing application form for consent to exercise trust powers and the need for additional, corresponding changes to section 303.242(c) to reflect any future updates to the existing form.12 Accordingly, the final rule does not change section 303.242(c), which continues to provide that the required filing shall consist of the completed application form.13

Certain provisions of the final rule contain “collection of information” requirements within the meaning of the Paperwork Reduction Act (PRA) of 1995, codified at 44 U.S.C. 3501-3521. In accordance with the PRA, the FDIC 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 this collection of information is 3064-0025.14 As required by the PRA and OMB implementing regulations (5 CFR part 1320), when the NPR was published, the FDIC submitted the information collection requirements contained in this final rulemaking to OMB for review and approval. OMB filed its Notice of Action preapproving this submission on May 16, 2018.

The final rule, like the NPR, would rescind and remove Part 390, Subpart J from Title 12 of the Code of Federal Regulations, amend Parts 303 and 333 to clarify the existing consent requirements for State nonmember banks, and incorporate references to State savings associations into those parts. These changes would not add additional burden to the FDIC's current information collection under OMB control number 3064-0025, Application for Consent to Exercise Trust Powers. However, the revision of Parts 303 and 333 to include State savings associations as potential filers would add additional burden to the FDIC's current information collection under OMB control number 3064-0025, as State savings associations would be required to complete the designated application and submit required documentation to comply with Parts 303 and 333. Currently, there are a total of forty one State savings associations. There is only one State savings association currently exercising trust powers, so there are forty State savings associations that would potentially need to seek the FDIC's consent pursuant to the proposed revisions to Parts 303 and 333 before exercising trust powers.15

In the NPR, the FDIC proposed to revise this information collection as follows:

Title: Application for Consent to Exercise Trust Powers.

OMB Number: 3064-0025.

Form Number: FDIC 6200/09.

Affected Public: Insured State nonmember banks and insured State savings associations wishing to exercise trust powers.

The FDIC did not receive any comments on its proposed revisions to this information collection. Accordingly, the information collection revisions are adopted as proposed in the NPR and replicated in the chart above.

The Regulatory Flexibility Act (RFA) 16 requires that, in connection with a final rulemaking, an agency prepare and make available for public comment a final regulatory flexibility analysis that describes the impact of the proposed rule on small entities (defined in regulations promulgated by the United States Small Business Administration to include banking organizations with total assets of less than or equal to $550 million). However, a regulatory flexibility analysis is not required if the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities and publishes its certification and a short explanatory statement in the Federal Register together with the rule.17 As discussed above and in the NPR, the FDIC has authority to issue, modify and rescind regulations as the appropriate Federal banking agency for State savings associations and State nonmember banks. In addition to the approach taken in the NPR and final rule, the FDIC also considered the alternative of maintaining the status quo, which would have retained the separate regulatory regimes for State savings associations and State non-member banks.

The final rule amends part 333 to state that both State savings associations and State nonmember banks seeking to exercise trust powers must obtain FDIC consent. The final rule is not expected to impact State nonmember banks, as it results in no substantive changes for those institutions. Prior to the final rule, State nonmember banks were subject to the longstanding interpretation that the initial exercise of trust powers granted by a chartering authority constituted a change in the character of the bank's business under 12 CFR 333.2, and thereby required the FDIC's prior written approval. The final rule clarifies this issue by explicitly stating the longstanding requirement that State nonmember banks obtain the FDIC's prior written approval before exercising trust powers for the first time.

As discussed above, the revisions to part 333 require a filing by those State savings associations that seek to exercise trust powers in the future. However, a State savings association's application for the FDIC's consent to exercise trust powers would be a one-time process that is not anticipated to create a significant economic impact. The information requested on the application form would require a State savings association to identify the type of trust power it seeks to exercise and to provide documentation that includes proof of the adoption of the FDIC's Statement of Principles of Trust Department Management, identification of the applicable trust officer, trust committee, trust counsel, servicing arrangements, proof of the requisite approvals by the appropriate State authority, a projection of the proposed trust activity's three-year performance, and a statement of its impact on the applicant.18

Based on the FDIC's supervisory experience, most of the documentation required, such as State approval, servicing arrangements, and designation of personnel to serve as appropriate trust counsel, trust officer, and trust committee directors, is based on information and resources that a State savings association applicant would already possess or have to establish in order to exercise trust powers, regardless of whether it seeks the FDIC's prior written consent. Submitting existing information is not expected to create significant, additional expenses for a State savings association seeking the FDIC's prior written consent to exercise trust powers. The FDIC estimates that it will receive relatively few applications, given the small overall number of State savings associations (40) that would be affected by the rule if they sought to exercise trust powers. In addition, no comments were received pertaining to the RFA discussion in the NPR.

For these reasons, the FDIC certifies that the final rule would not have a significant economic impact on a substantial number of small entities, within the meaning of those terms as used in the RFA. Accordingly, a regulatory flexibility analysis is not required.

The OMB has determined that the final rule is not a “major rule” within the meaning of the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).19 As required by SBREFA, the FDIC will submit the final rule and other appropriate reports to Congress and the Government Accountability Office for review.

Section 722 of the Gramm-Leach-Bliley Act 20 requires each Federal banking agency to use plain language in all of its proposed and final rules published after January 1, 2000. In the NPR, the FDIC invited comments on whether the Proposed Rule was clearly stated and effectively organized, and how the FDIC might make it easier to understand. Although no comments were received, the FDIC has sought to present the final rule in a simple and straightforward manner.

Pursuant to section 302(a) of the Riegle Community Development and Regulatory Improvement Act (RCDRIA),21 in determining the effective date and administrative compliance requirements for a new regulation that imposes additional reporting, disclosure, or other requirements on insured depository institutions, each Federal banking agency must consider, consistent with principles of safety and soundness and the public interest, any administrative burdens that such regulations would place on depository institutions, including small depository institutions, and customers of depository institutions, as well as the benefits of such regulations. In addition, section 302(b) of RCDRIA requires new regulations and amendments to regulations that impose additional reporting, disclosure, or other new requirements on insured depository institutions generally to take effect on the first day of a calendar quarter that begins on or after the date on which the regulations are published in final form.22

In accordance with these provisions, the FDIC considered any administrative burdens, as well as benefits, that the final rule would place on depository institutions and their customers in determining the effective date and administrative compliance requirements of the final rule. The final rule imposes a new requirement on State savings associations to obtain the FDIC's consent before exercising trust powers granted by State chartering authorities and, in accordance with RCDRIA and the Administrative Procedure Act,23 will be effective no earlier than the first day of the calendar quarter that is at least 30 days following the date on which the final rule is published in the Federal Register. However, as discussed above, the application primarily requires submission of pre-existing documentation and is not expected to be burdensome for depository institutions or their customers. The final rule also provides greater clarity to FDIC-supervised institutions and results in greater consistency in the application process.

Under section 2222 of the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA), the FDIC is required to review all of its regulations at least once every ten years in order to identify any outdated or otherwise unnecessary regulations imposed on insured institutions.24 The FDIC, along with the other Federal banking agencies, submitted a Joint Report to Congress on March 21, 2017 (EGRPRA Report), discussing how the review was conducted, what has been done to date to address regulatory burden, and further measures to address issues identified during the review process. As noted in the EGRPRA Report, the FDIC is continuing to streamline and clarify its regulations through the OTS rule integration process. By removing outdated or unnecessary regulations, such as Subpart J, and amending Parts 303 and 333, this rule complements other actions the FDIC has taken, separately and with the other Federal banking agencies, to further the EGRPRA mandate.

For the reasons stated in the preamble, the Federal Deposit Insurance Corporation amends 12 CFR parts 308, 333, and 390 as follows:

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by removing AD 93-14-19, Amendment 39-8644 (58 FR 41177, August 3, 1993) (“AD 93-14-19”). AD 93-14-19 applied to certain The Boeing Company Model 767-200 and -300 series airplanes. The NPRM published in the Federal Register on July 17, 2018 (83 FR 33162) (“the NPRM”). The NPRM was prompted by an updated stability and control analysis that showed the worst-case scenario of a trailing edge wedge disbond in-flight would not adversely affect the controllability of the airplane. The NPRM proposed to remove AD 93-14-19. We are issuing this AD to remove AD 93-14-19.

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.

Boeing and Delta Air Lines (DAL) stated their support for the proposed AD. United Airlines stated that it has no objection to the proposed rule.

Airline Pilots Association, International (ALPA) stated that it opposes the rescission of AD 93-14-19 because the FAA continues to issue similar ADs effective to other airplanes. ALPA also noted that the required actions of AD 93-14-19 are relatively low cost.

From these statements, we infer that ALPA was requesting that we withdraw the NPRM. We do not agree with the commenter's request. Updated stability and control data for the affected airplanes shows that damage and disbonding of the leading edge slat wedge is insufficient to be considered an airplane-level safety item. The updated data shows that there is sufficient lateral control up to stick shaker to counter any rolling moment caused by a missing or damaged slat wedge. Therefore, we have not changed this AD in this regard.

DAL asked if AD 2017-22-12, Amendment 39-19092 (82 FR 55027, November 20, 2017) (“AD 2017-22-12”), would also be considered for rescission. DAL reasoned that AD 2017-22-12 required, among other things, inspection of the same structure (the trailing edge slat wedge of the leading edge slats) on The Boeing Company Model 757 series airplanes for the same reason (disbonding of slats) as AD 93-14-19.

We agree to clarify. We do not find it appropriate to rescind AD 2017-22-12 at this time. The flight characteristics of The Boeing Company Model 757 series airplanes are different than the flight characteristics of The Boeing Company Model 767 series airplanes, and the stability and control analysis of the one model does not transfer to the other model. However, if new data indicates that the identified unsafe condition no longer exists on Model 757 airplanes, we might consider additional rulemaking at that time. We have not changed this AD in this regard.

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

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

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

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.

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.

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

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

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

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

3. Will not affect intrastate aviation in Alaska; and

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

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it establishes Class E surface airspace and amends Class D airspace and Class E airspace at Dothan Regional Airport, Dothan, AL, to support IFR operations at this airport.

The FAA published a notice of proposed rulemaking in the Federal Register (83 FR 47581, September 20, 2018) for Docket No. FAA-2018-0744 to establish Class E surface airspace, and amend Class D airspace, Class E airspace designated as an extension to a Class D surface area, and Class E airspace extending upward from 700 feet above the surface at Dothan Regional Airport, Dothan, AL. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

Class D and Class E airspace designations are published in Paragraphs 5000, 6002, 6004, and 6005, respectively of FAA Order 7400.11C dated August 13, 2018, and effective September 15, 2018, which is incorporated by reference in 14 CFR part 71.1. The Class D and Class E airspace designations listed in this document will be published subsequently in the Order.

This document amends FAA Order 7400.11C, Airspace Designations and Reporting Points, dated August 13, 2018, and effective September 15, 2018. FAA Order 7400.11C is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11C lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This amendment to Title 14 Code of Federal Regulations (14 CFR) part 71:

Amends Class D airspace at Dothan Regional Airport, Dothan, AL by recognizing the airport name change to Dothan Regional Airport (formerly Dothan Airport), and adjusting the geographic coordinates of the airport to be in concert with the FAA's aeronautical database. Also, this action makes an editorial change replacing the term “Airport/Facility Directory” with the term “Chart Supplement” in the airspace legal description;

Establishes Class E surface area airspace within a 4.7-mile radius of Dothan Regional Airport, Dothan, AL, for the safety of aircraft landing and departing the airport after the air traffic control tower closes;

Amends Class E airspace designated as an extension to a Class D surface area by adjusting the geographic coordinates of the airport and the Wiregrass VORTAC to be in concert with the FAA's aeronautical database. In addition, the part-time status is removed from this airspace description, as the airspace is continuously active; and

Amends Class E airspace extending upward from 700 feet above the surface at Dothan Regional Airport, Dothan, AL, by adjusting the geographic coordinates of the airport and the Wiregrass VORTAC to be in concert with the FAA's aeronautical database, and by recognizing the airport name change to Dothan Regional Airport (formerly Dothan Airport).

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

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

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

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

The FAA published a notice of proposed rulemaking in the Federal Register (83 FR 44248; August 30, 2018) for Docket No. FAA-2018-0194 to amend Class E airspace extending upward from 700 feet above the surface at Lac Qui Parle County Airport, Madison, MN. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

Class E airspace designations are published in paragraph 6005 of FAA Order 7400.11C, dated August 13, 2018, and effective September 15, 2018, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

This document amends FAA Order 7400.11C, Airspace Designations and Reporting Points, dated August 13, 2018, and effective September 15, 2018. FAA Order 7400.11C is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11C lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This amendment to Title 14 Code of Federal Regulations (14 CFR) part 71 modifies Class E airspace extending upward from 700 feet above the surface within a 6.4-mile radius (increased from a 6.3-mile radius) at Lac Qui Parle County Airport, Madison, MN. The segment 7.4 miles southeast of the airport will be removed due to the decommissioning of the Madison NDB and cancellation of the associated approach. This action enhances the safety and management of the standard instrument approach procedures for IFR operations at the airport.

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

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5.a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

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

Section 731 of the Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) 1 added a new section 4s to the Commodity Exchange Act (“CEA”) 2 setting forth various requirements for SDs and MSPs. Section 4s(e) of the CEA directs the Commission to adopt rules establishing minimum initial and variation margin requirements on all swaps 3 that are (i) entered into by an SD or MSP for which there is no Prudential Regulator 4 (collectively, “covered swap entities” or “CSEs”) and (ii) not cleared by a registered derivatives clearing organization (“uncleared swaps”).5 To offset the greater risk to the SD or MSP 6 and the financial system arising from the use of uncleared swaps, these requirements must (i) help ensure the safety and soundness of the SD or MSP and (ii) be appropriate for the risk associated with the uncleared swaps held as an SD or MSP.7

To this end, the Commission promulgated the CFTC Margin Rule in January 2016,8 establishing requirements for a CSE to collect and post initial margin 9 and variation margin 10 for uncleared swaps. These requirements vary based on the type of counterparty to such swaps.11 These requirements generally apply only to uncleared swaps entered into on or after the compliance date applicable to a particular CSE and its counterparty (“covered swap”).12 An uncleared swap entered into prior to a CSE's applicable compliance date for a particular counterparty (“legacy swap”) is generally not subject to the margin requirements in the CFTC Margin Rule.13

To the extent that more than one uncleared swap is executed between a CSE and its covered counterparty, the CFTC Margin Rule permits the netting of required margin amounts of each swap under certain circumstances.14 In particular, the CFTC Margin Rule, subject to certain limitations, permits a CSE to calculate initial margin and variation margin, respectively, on an aggregate net basis across uncleared swaps that are executed under the same eligible master netting agreement (“EMNA”).15 Moreover, the CFTC Margin Rule permits swap counterparties to identify one or more separate netting portfolios (i.e., a specified group of uncleared swaps the margin obligations of which will be netted only against each other) under the same EMNA, including having separate netting portfolios for covered swaps and legacy swaps.16 A netting portfolio that contains only legacy swaps is not subject to the initial and variation margin requirements set out in the CFTC Margin Rule.17 However, if a netting portfolio contains any covered swaps, the entire netting portfolio (including all legacy swaps) is subject to such requirements.18

A legacy swap may lose its legacy treatment under the CFTC Margin Rule, causing it to become a covered swap and causing any netting portfolio in which it is included to be subject to the requirements of the CFTC Margin Rule. For reasons discussed in the CFTC Margin Rule, the Commission elected not to extend the meaning of legacy swaps to include (1) legacy swaps that are amended in a material or nonmaterial manner; (2) novations of legacy swaps; and (3) new swaps that result from portfolio compression of legacy swaps.19 Therefore, and as relevant here, a legacy swap that is amended after the applicable compliance date may become a covered swap subject to the initial and variation margin requirements in the CFTC Margin Rule. In that case, netting portfolios that were intended to contain only legacy swaps and, thus, not be subject to the CFTC Margin Rule may become so subject.

In late 2017, as part of the broader regulatory reform effort following the financial crisis to promote U.S. financial stability and increase the resolvability and resiliency of U.S. global systemically important banking institutions (“U.S. GSIBs”) 20 and the U.S. operations of foreign global systemically important banking institutions (together with U.S. GSIBS, “GSIBs”), the Board, FDIC, and OCC adopted the QFC Rules. The QFC Rules establish restrictions on and requirements for uncleared qualified financial contracts 21 (collectively, “Covered QFCs”) of GSIBs, the subsidiaries of U.S. GSIBs, and certain other very large OCC-supervised national banks and Federal savings associations (collectively, “Covered QFC Entities”).22 They are designed to help ensure that a failed company's passage through a resolution proceeding—such as bankruptcy or the special resolution process created by the Dodd-Frank Act—would be more orderly, thereby helping to mitigate destabilizing effects on the rest of the financial system.23 Two aspects of the QFC Rules help achieve this goal.24

First, the QFC Rules generally require the Covered QFCs of Covered QFC Entities to contain contractual provisions explicitly providing that any default rights or restrictions on the transfer of the Covered QFC are limited to the same extent as they would be pursuant to the Federal Deposit Insurance Act (“FDI Act”)25 and Title II of the Dodd-Frank Act. Requiring these points to be stated as explicit contractual provisions in the Covered QFCs is expected to reduce the risk that the relevant limitations on default rights or transfer restrictions would be challenged by a court in a foreign jurisdiction.26

Second, the QFC Rules generally prohibit Covered QFCs from allowing counterparties to Covered QFC Entities to exercise default rights related, directly or indirectly, to the entry into resolution of an affiliate of the Covered QFC Entity (“cross-default rights”).27 This is to ensure that if an affiliate of a solvent Covered QFC Entity fails, the counterparties of that solvent Covered QFC Entity cannot terminate their contracts with it based solely on the failure of its affiliate.28

Covered QFC Entities are required to enter into amendments to certain pre-existing Covered QFCs to explicitly provide for these requirements and to ensure that Covered QFCs entered into after the applicable compliance date for the rule explicitly provide for the same.29

As noted above, the current definition of EMNA in Commission regulation 23.151 allows for certain specified permissible stays of default rights of the CSE. Specifically, consistent with the QFC Rules, the current definition provides that such rights may be stayed pursuant to a special resolution regime such as Title II of the Dodd-Frank Act, the FDI Act, and substantially similar foreign resolution regimes.30 However, the current EMNA definition does not explicitly recognize certain restrictions on the exercise of a CSE's cross-default rights required under the QFC Rules.31 Therefore, a pre-existing EMNA that is amended in order to become compliant with the QFC Rules or a new master netting agreement that conforms to the QFC Rules will not meet the current definition of EMNA, and a CSE that is a counterparty under such a master netting agreement—one that does not meet the definition of EMNA—would be required to measure its exposures from covered swaps on a gross basis, rather than aggregate net basis, for purposes of the CFTC Margin Rule.32 Further, if a legacy swap were amended to comply with the QFC Rules,33 it would become a covered swap subject to initial and variation margin requirements under the CFTC Margin Rule.34

On May 23, 2018, the Commission published a Notice of Proposed Rulemaking (“Proposal”) 35 to amend Commission regulations 23.151 and 23.161 to protect CSEs and their counterparties from being disadvantaged because their master netting agreements do not satisfy the definition of an EMNA, solely because such agreements' comply with the QFC Rules or because such agreements would have to be amended to achieve compliance. Specifically, the Commission proposed to (i) revise the definition of EMNA in Commission regulation 23.151 such that a master netting agreement that meets the requirements of the QFC Rules may be an EMNA and (ii) amend Commission regulation 23.161 such that a legacy swap will not be a covered swap under the CFTC Margin Rule if it is amended solely to conform to the QFC Rules.

The Commission requested comments on the Proposal and also solicited comments on the impact of the Proposal on small entities, the Commission's cost benefit considerations, and any anti-competitive effects of the Proposal. The comment period for the Proposal ended on July 23, 2018.

The Commission received four relevant comments in response to the Proposal—from the Institute of International Bankers (“IIB”), ISDA, Navient Corporation (“Navient”), and NEX Group plc (“NEX”), respectively.36 Though these comments raised issues unrelated to the Proposal or suggested additions that would go beyond the scope of the Proposal,37 the comments were generally supportive of the aims of the Proposal.

Navient and NEX were supportive of the Commission's Proposal in full. ISDA was supportive of the Commission's proposal to revise the definition of EMNA. IIB did not comment on this aspect of the Proposal. ISDA and IIB were appreciative of the proposal on the treatment of legacy swaps impacted by the QFC Rules, but, on balance, thought broad guidance on the treatment of amendments to legacy swaps more generally was a better alternative to the proposed limited amendment of the CFTC Margin Rule relating to the QFC Rules. Such broad guidance requested by ISDA and IIB is outside of the scope of the Proposal.

After consideration of relevant comments, the Commission is adopting this Final Rule as proposed.

Accordingly, the Commission is adding a new paragraph (2)(ii) to the definition of “eligible master netting agreement” in Commission regulation 23.151 and making other minor related changes to that definition such that a master netting agreement may be an EMNA even though the agreement limits the right to accelerate, terminate, and close-out on a net basis all transactions under the agreement and to liquidate or set-off collateral promptly upon an event of default of the counterparty to the extent necessary for the counterparty to comply with the requirements of any of the following parts of Title 12 of the Code of Federal Regulations: Part 47, subpart I of part 252, or part 382, as applicable. These enumerated provisions contain the relevant requirements that have been added by the QFC Rules.

Further, so that a legacy swap will not be a covered swap under the CFTC Margin Rule if it is amended solely to conform to the QFC Rules, the Commission is adding a new paragraph (d) to the end of Commission regulation 23.161, as shown in the rule text in this document. This addition will provide certainty to a CSE and its counterparties about the treatment of legacy swaps and any applicable netting arrangements in light of the QFC Rules. However, if, in addition to amendments required to comply with the QFC Rules, the parties enter into any other amendments, the amended legacy swap will be a covered swap in accordance with the application of the CFTC Margin Rule.

This Final Rule is consistent with amendments to the Prudential Margin Rule that the Prudential Regulators jointly published in the Federal Register on October 10, 2018.38 Making amendments to the CFTC Margin Rule that are consistent with those of the Prudential Regulators furthers the Commission's efforts to harmonize its margin regime with the Prudential Regulators' margin regime and is responsive to suggestions received as part of the Commission's Project KISS initiative.39

The Regulatory Flexibility Act (“RFA”) requires Federal agencies, in promulgating regulations, to consider whether the rules they propose will have a significant economic impact on a substantial number of small entities and, if so, to provide a regulatory flexibility analysis regarding the economic impact on those entities. In the Proposal, the Commission certified that the Proposal would not have a significant economic impact on a substantial number of small entities. The Commission requested comments with respect to the RFA and received no such comments.

As discussed in the Proposal, this Final Rule only affects certain SDs and MSPs that are subject to the QFC Rules and their covered counterparties, all of which are required to be ECPs.40 The Commission has previously determined that SDs, MSPs, and ECPs are not small entities for purposes of the RFA.41 Therefore, the Commission finds that this Final Rule will not have a significant economic impact on a substantial number of small entities, as defined in the RFA.

Accordingly, the Chairman, on behalf of the Commission, hereby certifies pursuant to 5 U.S.C. 605(b) that this Final Rule will not have a significant economic impact on a substantial number of small entities.

The Paperwork Reduction Act of 1995 (“PRA”) 42 imposes certain requirements on Federal agencies, including the Commission, in connection with their conducting or sponsoring any collection of information, as defined by the PRA. The Commission may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid Office of Management and Budget control number. As discussed in the Proposal, this Final Rule contains no requirements subject to the PRA.

The Commission received no comments with regard to its preliminary cost-benefit considerations in the Proposal. Section 15(a) of the CEA requires the Commission to consider the costs and benefits of its actions before promulgating a regulation under the CEA. Section 15(a) further specifies that the costs and benefits shall be evaluated in light of the following five broad areas of market and public concern: (1) Protection of market participants and the public; (2) efficiency, competitiveness, and financial integrity of futures markets; (3) price discovery; (4) sound risk management practices; and (5) other public interest considerations. The Commission considers the costs and benefits resulting from its discretionary determinations with respect to the section 15(a) considerations.

This Final Rule prevents certain CSEs and their counterparties from being disadvantaged because their master netting agreements do not satisfy the definition of an EMNA, solely because such agreements' comply with the QFC Rules or because such agreements would have to be amended to achieve compliance. It revises the definition of EMNA such that a master netting agreement that meets the requirements of the QFC Rules may be an EMNA and provides that an amendment to a legacy swap solely to conform to the QFC Rules will not cause that swap to be a covered swap under the CFTC Margin Rule.

The Commission notes that the consideration of costs and benefits below is based on the understanding that the markets function internationally, with many transactions involving United States firms taking place across international boundaries; with some Commission registrants being organized outside of the United States; with leading industry members typically conducting operations both within and outside the United States; and with industry members commonly following substantially similar business practices wherever located. Where the Commission does not specifically refer to matters of location, the below discussion of costs and benefits refers to the effects of this Final Rule on all activity subject to it, whether by virtue of the activity's physical location in the United States or by virtue of the activity's connection with or effect on United States commerce under CEA section 2(i).43 In particular, the Commission notes that some persons affected by this rulemaking are located outside of the United States.

The baseline against which the benefits and costs associated with this Final Rule is compared is the uncleared swaps markets as they exist today, with the QFC Rules in effect.44 With this as the baseline for this Final Rule, the following are the benefits and costs of this Proposal.

As described above, this Final Rule will allow parties whose master netting agreements satisfy the proposed revised definition of EMNA to continue to calculate initial margin and variation margin, respectively, on an aggregate net basis across uncleared swaps that are executed under that EMNA. Otherwise, a CSE that is a counterparty under a master netting agreement that complies with the QFC Rules and, thus, does not satisfy the current definition of EMNA, would be required to measure its exposures from covered swaps on a gross basis for purposes of the CFTC Margin Rule. In addition, this Final Rule allows legacy swaps to maintain their legacy status, notwithstanding that they are amended to comply with the QFC Rules. Otherwise, such swaps would become covered swaps subject to initial and variation margin requirements under the CFTC Margin Rule. This Final Rule provides certainty to CSEs and their counterparties about the treatment of legacy swaps and any applicable netting arrangements in light of the QFC Rules.

Because this Final Rule (i) will solely expand the definition of EMNA to potentially include those master netting agreements that meet the requirements of the QFC Rules and allow the amendment of legacy swaps solely to conform to the QFC Rules without causing such swaps to become covered swaps and (ii) does not require market participants to take any action to benefit from these changes, the Commission believes that this Final Rule will not impose any additional costs on market participants.

In light of the foregoing, the CFTC has evaluated the costs and benefits of this Final Rule pursuant to the five considerations identified in section 15(a) of the CEA as follows:

As noted above, this Final Rule will protect market participants by allowing them to comply with the QFC Rules without being disadvantaged under the CFTC Margin Rule. This Final Rule will facilitate market participants' use of swaps that would be affected by this Final Rule to hedge. Without this Final Rule, posting gross margin instead of net margin for those swaps would be required, which would raise transaction costs and thus likely reduce the use of such swaps for hedging.

This Final Rule will make the uncleared swap markets more efficient by allowing net margining of swap portfolios under master netting agreements that comply with the QFC Rules and, thus, do not satisfy the current EMNA definition instead of requiring the payment of gross margin under such agreements. Also, absent this Final Rule, market participants that are required to amend their EMNAs to comply with the QFC Rules and, thereafter, required to measure their exposure on a gross basis and to post margin on their legacy swaps, would be placed at a competitive disadvantage as compared to those market participants that are not so required to amend their EMNAs. Therefore, this Final Rule may increase the competitiveness of the uncleared swaps markets. In addition, this Final Rule furthers the Commission's efforts to harmonize its margin regime with the Prudential Regulators' margin regime, and therefore may improve the efficiency, competitiveness, and financial integrity of markets.

This Final Rule permits the payment of net margin instead of gross margin on portfolios of swaps affected by this Final Rule, which would reduce margining costs to those swaps transactions. Reducing the cost to transact these swaps, might lead to more trading, which could potentially improve liquidity and benefit price discovery.

This Final Rule prevents the payment of gross margin on swaps affected by this Final Rule, which does not reflect true economic counterparty credit risk for swap portfolios transacted with counterparties. Therefore, this Final Rule supports sound risk management.

The Commission has not identified an impact on other public interest considerations as a result of this Final Rule.

Section 15(b) of the CEA requires the Commission to take into consideration the public interest to be protected by the antitrust laws and endeavor to take the least anticompetitive means of achieving the purposes of the CEA, in issuing any order or adopting any Commission rule or regulation.45 The Commission believes that the public interest to be protected by the antitrust laws is generally to protect competition. The Commission requested and did not receive any comments on whether the Proposal implicated any other specific public interest to be protected by the antitrust laws.

The Commission has considered this Final Rule to determine whether it is anticompetitive and has preliminarily identified no anticompetitive effects. The Commission requested and did not receive any comments on whether the Proposal was anticompetitive and, if it is, what the anticompetitive effects are.

Because the Commission has preliminarily determined that this Final Rule is not anticompetitive and has no anticompetitive effects and received no comments on its determination, the Commission has not identified any less anticompetitive means of achieving the purposes of the CEA.

For the reasons stated in the preamble, the Commodity Futures Trading Commission amends 17 CFR part 23 as follows:

1. On November 17, 2016, the Federal Energy Regulatory Commission (Commission) issued Order No. 831 concerning offer caps in Regional Transmission Organization (RTO) and Independent System Operator (ISO) markets,1 which was published in the Federal Register on December 5, 2016. Order No. 831 amended 18 CFR 35.28 by adding new paragraph (g)(9).

2. On November 9, 2017, the Commission issued Order No. 831-A,2 which was published in the Federal Register on November 16, 2017. Order No. 831-A further revised 18 CFR 35.28(g)(9) regarding offer caps.

3. On February 15, 2018, the Commission issued Order No. 841 concerning electric storage participation in RTO/ISO markets,3 which was published in the Federal Register on March 6, 2018. Order No. 841 amended 18 CFR 35.28(g) by adding a further new paragraph, which was also numbered (g)(9).4 As a result, the regulatory text adopted in Order No. 841 incorrectly replaced—rather than added to—the regulatory text adopted in Order Nos. 831 and 831-A.

4. In this Correcting Amendment, 18 CFR 35.28(g) is corrected by restoring the regulatory text from Order Nos. 831 and 831-A as new paragraph 18 CFR 35.28(g)(11). Nothing in this Correcting Amendment is intended to alter any previous compliance requirements or effective dates established under Order Nos. 831, 831-A, or 841, nor does this Correcting Amendment affect any tariff changes previously accepted by the Commission in compliance with these orders.

In consideration of the foregoing, 18 CFR part 35 is corrected by making the following correcting amendments:

1. Pursuant to section 215 of the Federal Power Act (FPA), the Commission approves Reliability Standard TPL-007-2 (Transmission System Planned Performance for Geomagnetic Disturbance Events).1 The North American Electric Reliability Corporation (NERC), the Commission-certified Electric Reliability Organization (ERO), submitted Reliability Standard TPL-007-2 for Commission approval in response to directives in Order No. 830.2 As discussed in this final rule, we determine that Reliability Standard TPL-007-2 better addresses the risks posed by geomagnetic disturbances (GMDs) to the Bulk-Power System, particularly with respect to the potential impacts of locally-enhanced GMD events, than currently-effective Reliability Standard TPL-007-1 and complies with the Commission's directives in Order No. 830.

2. GMD events occur when the sun ejects charged particles that interact with and cause changes in the earth's magnetic fields. GMD events have the potential to cause severe, wide-spread impacts on the Bulk-Power System.3 Currently-effective Reliability Standard TPL-007-1 requires applicable entities to assess the vulnerability of their transmission systems to a “benchmark GMD event.” An applicable entity that does not meet certain performance requirements, based on the results of the benchmark GMD vulnerability assessment, must develop and implement a corrective action plan to achieve the performance requirements.

3. The improvements in Reliability Standard TPL-007-2 are responsive to the directives in Order No. 830: (1) To revise the benchmark GMD event definition, as it pertains to the required GMD vulnerability assessments and transformer thermal impact assessments, so that the definition is not based solely on spatially-averaged data; (2) to require the collection of necessary geomagnetically induced current (GIC) monitoring and magnetometer data; and (3) to include a one-year deadline for the completion of corrective action plans and two- and four-year deadlines to complete mitigation actions involving non-hardware and hardware mitigation.4 As discussed below, Reliability Standard TPL-007-2 complies with these directives and improves upon the currently-effective version of the Reliability Standard by requiring applicable entities to: (1) In addition to the benchmark GMD event requirements, conduct supplemental GMD vulnerability assessments and thermal impact assessments, which apply a new supplemental GMD event definition that does not rely solely on spatially-averaged data; (2) obtain GIC and magnetometer data; and (3) meet the Commission-directed deadlines for the development and completion of tasks in corrective action plans. Accordingly, pursuant to section 215(d)(2) of the FPA, we approve Reliability Standard TPL-007-2.5

4. In addition, as discussed in the Notice of Proposed Rulemaking, we determine that it is appropriate, pursuant to section 215(d)(5) of the FPA,6 to direct NERC to develop and submit modifications to Reliability Standard TPL-007-2 to require the development and completion of corrective action plans to mitigate assessed supplemental GMD event vulnerabilities.7 As discussed below, requiring corrective action plans for supplemental GMD event vulnerabilities is appropriate to ensure the reliability of the Bulk-Power System when confronted with locally-enhanced GMD events, just as corrective action plans are necessary to mitigate the effects of benchmark GMD events. Based on the record in this proceeding, we discern no technical barriers to either developing or complying with such a requirement. Moreover, the record supports issuance of a directive at this time notwithstanding comments in response to the NOPR advocating postponement of any directive until after the completion of additional GMD research. As discussed below, the relevant GMD research tasks are scheduled to be completed before the modified Reliability Standard must be submitted. The Commission directs NERC to submit the modified Reliability Standard for approval within 12 months from the effective date of Reliability Standard TPL-007-2.

5. We also determine that it is appropriate, pursuant to section 215(d)(5) of the FPA, to direct that NERC modify the provision in Reliability Standard TPL-007-2, Requirement R7.4 that allows applicable entities to exceed deadlines for completing corrective action plan tasks when “situations beyond the control of the responsible entity [arise].” The NOPR raised concerns regarding the appropriateness of a self-executing deadline extension and observed that it was inconsistent with guidance in Order No. 830 that extension requests be considered on a case-by-case basis.8 We recognize the point made in NERC's comments in response to the NOPR that, under NERC's proposal, “NERC and Regional Entity staff would exercise their authority to review the reasonableness of any Corrective Action Plan delay, including reviewing the `situations beyond the control of the responsible entity' that are cited as causing the delay” and that Requirement R7.4 is “not so flexible . . . as to allow entities to extend Corrective Action Plan deadlines indefinitely or for any reason whatsoever.” 9 While we generally agree with the standard of review that NERC states it will use to assess the merits of extension requests, we conclude that such assessments should be made before any time extensions are permitted. By requiring prior approval of extension requests, the modified Reliability Standard will limit the potential for unwarranted delays in implementing corrective action plans while also providing NERC with an advance and more holistic understanding of where, to whom, and for how long, extensions are granted. We expect that the extension process developed by NERC in response to our directive will be timely and efficient such that applicable entities will receive prompt responses after submitting to NERC or a Regional Entity, as appropriate, the extension request and associated information described in Requirement R7.4.10 We also direct NERC, as proposed in the NOPR, to prepare and submit a report addressing how often and why applicable entities are exceeding corrective action plan deadlines as well as the disposition of extension requests, which is due within 12 months from the date on which applicable entities must comply with the last requirement of Reliability Standard TPL-007-2. Following receipt of the report, the Commission will determine whether further action is necessary.

6. The Commission, as discussed below, also accepts the revised GMD research work plan submitted by NERC on April 19, 2018.11

7. Section 215 of the FPA requires the Commission to certify an ERO to develop mandatory and enforceable Reliability Standards, subject to Commission review and approval. Once approved, the Reliability Standards may be enforced in the United States by the ERO, subject to Commission oversight, or by the Commission independently.12

8. GMD events occur when the sun ejects charged particles that interact and cause changes in the earth's magnetic fields.13 Once a solar particle is ejected, it can take between 17 to 96 hours (depending on its energy level) to reach earth.14 A geoelectric field is the electric potential (measured in volts per kilometer (V/km)) on the earth's surface and is directly related to the rate of change of the magnetic fields.15 The geoelectric field has an amplitude and direction and acts as a voltage source that can cause GICs to flow on long conductors, such as transmission lines.16 The magnitude of the geoelectric field amplitude is impacted by local factors such as geomagnetic latitude and local earth conductivity.17 Geomagnetic latitude is the proximity to earth's magnetic north and south poles, as opposed to earth's geographic poles.18 Local earth conductivity is the ability of the earth's crust to conduct electricity at a certain location to depths of hundreds of kilometers down to the earth's mantle. Local earth conductivity impacts the magnitude (i.e., severity) of the geoelectric fields that are formed during a GMD event by, all else being equal, a lower earth conductivity resulting in higher geoelectric fields.19

9. GICs can flow in an electric power system with varying intensity depending on the various factors discussed above. As explained in the Background section of Reliability Standard TPL-007-2, “[d]uring a GMD event, geomagnetically‐induced currents (GIC) may cause transformer hot‐spot heating or damage, loss of Reactive Power sources, increased Reactive Power demand, and Misoperation(s), the combination of which may result in voltage collapse and blackout.”

10. Reliability Standard TPL-007-1 consists of seven requirements and applies to planning coordinators, transmission planners, transmission owners and generation owners who own or whose planning coordinator area or transmission planning area includes a power transformer with a high side, wye-grounded winding connected at 200 kV or higher.

11. Requirement R1 requires planning coordinators and transmission planners (i.e., “responsible entities”) to determine the individual and joint responsibilities in the planning coordinator's planning area for maintaining models and performing studies needed to complete the GMD vulnerability assessment required in Requirement R4. Requirement R2 requires responsible entities to maintain system models and GIC system models needed to complete the GMD vulnerability assessment required in Requirement R4. Requirement R3 requires each responsible entity to have criteria for acceptable system steady state voltage performance for its system during the GMD conditions described in Attachment 1 of Reliability Standard TPL-007-1. Requirement R4 requires responsible entities to conduct a GMD vulnerability assessment every 60 months using the benchmark GMD event described in Attachment 1. Requirement R5 requires responsible entities to provide GIC flow information, based on the benchmark GMD event definition, to be used in the transformer thermal impact assessments required in Requirement R6, to each transmission owner and generator owner that owns an applicable transformer within the applicable planning area. Requirement R6 requires transmission owners and generator owners to conduct thermal impact assessments on solely and jointly owned applicable transformers where the maximum effective GIC value provided in Requirement R5 is 75 Amperes per phase (A/phase) or greater. Requirement R7 requires responsible entities to develop corrective action plans if the GMD vulnerability assessment concludes that the system does not meet the performance requirements in Table 1 of Reliability Standard TPL-007-1.

12. Calculation of the benchmark GMD event, against which applicable entities must assess their facilities, is fundamental to compliance with Reliability Standard TPL-007-1. Reliability Standard TPL-007-1, Requirement R3 states that “[e]ach responsible entity, as determined in Requirement R1, shall have criteria for acceptable System steady state voltage performance for its System during the benchmark GMD event described in Attachment 1.”

13. Reliability Standard TPL-007-1, Attachment 1 states that the benchmark GMD event is composed of four elements: (1) A reference peak geoelectric field amplitude of 8 V/km derived from statistical analysis of historical magnetometer data; (2) a scaling factor to account for local geomagnetic latitude; (3) a scaling factor to account for local earth conductivity; and (4) a reference geomagnetic field time series or wave shape to facilitate time-domain analysis of GMD impact on equipment. The product of the first three elements is referred to as the regional peak geoelectric field amplitude. The benchmark GMD event defines the geoelectric field values used to compute GIC flows for a GMD vulnerability assessment, which is required in Reliability Standard TPL-007-1.20

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable and contrary to the public interest to do so. The rule must be established by November 18, 2018, to serve its purpose of providing safety during the recovery of a broken hydro-hammer associated with dredging operations. The Coast Guard was notified of the recovery operation schedule on November 18, 2018, and a safety zone must be established by November 18, 2018 to address the hazards associated with diving and equipment removal operations.

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

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Delaware Bay (COTP) has determined that potential hazards associated with emergency diving and equipment recovery operations beginning November 19, 2018, will be a safety concern for anyone within a 250-yard radius of diving and equipment recovery vessels and machinery. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone while the operations to recover the broken hydro-hammer are being conducted.

This rule establishes a temporary safety zone on November 19, 2018 through November 30, 2018, within 250 yards of vessels and machinery being used by personnel to conduct diving and equipment recovery operations, at approximately 39°49.3002′ N Latitude, −75°22.8966′ W Longitude, in the Marcus Hook Range of the Delaware River. During diving and equipment recovery operations, persons or vessels will not be permitted to enter the safety zone without obtaining permission from the COTP or the COTP's designated representative. Vessels wishing to transit the safety zone in the clear side of the main navigational channel may do so if they can make satisfactory passing arrangements with dredge NEW YORK or tug INDIAN DAWN in accordance with the Navigational Rules in 33 CFR subchapter E via VHF-FM 88 at least 1 hour prior to arrival and at 30 minutes prior to arrival to arrange safe passage. If vessels are unable to make satisfactory passing arrangements with the dredge NEW YORK or tug INDIAN DAWN, they may request permission from the COTP, or his designated representative, to enter and transit the safety zone on VHF-FM channel 16. All vessels must operate at the minimum safe speed necessary to maintain steerage and reduce wake while transiting the safety zone. The Coast Guard will issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 and Marine Safety Information Bulletin further defining specific work locations and traffic patterns.

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

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

This regulatory action determination is based on the size, location, duration, and time-of-day of the safety zone. Vessel traffic will be able to safely transit around this safety zone, which will impact a small designated area of the Delaware River. Although persons and vessels may not enter the safety zone without authorization from the COTP or a designated representative of the COTP, they may operate in the surrounding area during the enforcement period. Moreover, the Coast Guard will issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 and Marine Safety Information Bulletin about the zone, and the rule would allow vessels to seek permission to enter the zone.

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

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

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves an emergency safety zone that will prohibit persons and vessels from entering a limited area on the navigable water in the Delaware Bay, during an emergency diving and equipment recovery operation. It is categorically excluded from further review under paragraph L60(c) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01.

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

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

In 1995, Congress enacted the Digital Performance Right in Sound Recordings Act, Public Law 104-39, which created an exclusive right, subject to certain limitations, for copyright owners of sound recordings to perform publicly those sound recordings by means of certain digital audio transmissions. Among the limitations on the performance right was the creation of a statutory license for nonexempt, noninteractive digital subscription transmissions. 17 U.S.C. 114(d).

The scope of the section 114 statutory license was expanded in 1998 upon the passage of the Digital Millennium Copyright Act of 1998 (DMCA), Public Law 105-34. The DMCA created, inter alia, a statutory license for the making of an “ephemeral recording” of a sound recording by certain transmitting organizations. 17 U.S.C. 112(e). This license, among other things, allows entities that transmit performances of sound recordings to business establishments to make an ephemeral recording of a sound recording for later transmission, pursuant to the limitations set forth in section 114(d)(1)(C)(iv).

Chapter 8 of the Copyright Act requires the Judges to conduct proceedings every five years to determine the royalty rates and terms for “the activities described in section 112(e)(1) relating to the limitation on exclusive rights specified by section 114(d)(1)(C)(iv).” 17 U.S.C. 801(b)(1), 804(b)(2). Accordingly, the Judges published a notice commencing the current proceeding and requesting that interested parties submit petitions to participate. 82 FR 143 (Jan. 3, 2017).

The Judges received Petitions to Participate from Mood Media Corporation, Music Choice, David Powell, David Rahn,1 Rockbot, Inc.,2 Sirius XM Radio Inc., and SoundExchange, Inc. The Judges initiated the three-month negotiation period and directed the participants to submit written direct statements no later than May 14, 2018.

On May 4, 2018, the Judges received a joint Motion to Adopt Settlement from Mr. Rahn, Mood Media Corp., Music Choice, Sirius XM Radio Inc., and SoundExchange, Inc., (Moving Parties) stating that they had reached a settlement obviating the need for written evidentiary statements or a hearing.3

Section 801(b)(7)(A) of the Copyright Act authorizes the Judges to adopt royalty rates and terms negotiated by “some or all of the participants in a proceeding at any time during the proceeding” provided they are submitted to the Judges for approval. The Judges must provide “an opportunity to comment on the agreement” to participants and non-participants in the rate proceeding who “would be bound by the terms, rates, or other determination set by any agreement. . . .” 17 U.S.C. 801(b)(7)(A)(i). Participants in the proceeding may also “object to [the agreement's] adoption as a basis for statutory terms and rates.” Id.

The Judges “may decline to adopt the agreement as a basis for statutory terms and rates for participants that are not parties to the agreement,” only “if any participant [in the proceeding] objects to the agreement and the [Judges] conclude, based on the record before them if one exists, that the agreement does not provide a reasonable basis for setting statutory terms or rates.” 17 U.S.C. 801(b)(7)(A)(ii). Accordingly, on May 17, 2018, the Judges published a document requesting comment on the proposed rates and terms. 83 FR 22907. The Judges received no timely comments or objections in response to the May 17 document.

Having received no opposition to the proposal and finding that the agreement among the moving parties provides a reasonable basis for setting statutory terms and rates, the Judges, by this notice, adopt as final regulations the rates and terms for the making of an ephemeral recording by a business establishment service for the period January 1, 2019, through December 31, 2023.

For the reasons set forth in the preamble, the Judges amend part 384 of chapter III of title 37 of the Code of Federal Regulations as follows:

Under the Regional Haze Rule, each state was required to submit to EPA an implementation plan addressing regional haze visibility impairment for the first implementation period through 2018, and then was required to submit a progress report in the form of a SIP revision that evaluates progress towards the RPGs set for each mandatory Class I Federal area within the state and for each mandatory Class I Federal area outside the state which may be affected by emissions from within the state. 40 CFR 51.308(g). Each state is also required to submit, at the same time as the progress report, a determination of the adequacy of its existing regional haze SIP. 40 CFR 51.308(h). The first progress report SIP is due five years after submittal of the initial regional haze SIP.

On February 13, 2012, Maryland submitted the State's first regional haze SIP in accordance with the requirements of 40 CFR 51.308. The progress report SIP was submitted by Maryland, through the Maryland Department of the Environment (MDE), on August 9, 2017. On August 27, 2018 (83 FR 43571), EPA published a notice of proposed rulemaking (NPRM) in which EPA proposed approval of Maryland's regional haze 5-year progress report SIP, a report on progress made in the first implementation period towards RPGs for Class I areas outside the State that are affected by emissions from Maryland's sources. Because there are no Class I areas in Maryland, the State did not need to address progress towards RPGs for Class I areas “inside” the State. This progress report SIP also included the State's determination that its existing regional haze SIP requires no substantive revision to achieve the established regional haze visibility improvement and emissions reduction goals for 2018.

Maryland's regional haze 5-year progress report SIP submittal (2017 Progress Report) addresses the required elements for progress reports under the provisions of 40 CFR 51.308(g) and includes a determination that the State's existing regional haze SIP requires no substantive revision to achieve the established regional haze visibility improvement and emissions reduction goals for 2018 as required by 40 CFR 51.308(h).

In the NPRM, EPA proposed to approve the 2017 Progress Report because EPA found that the 2017 Progress Report addressed the elements of 40 CFR 51.308(g) regarding progress implementing the approved regional haze SIP and discussed visibility improvement in Class I areas impacted by Maryland's emissions. The detailed rationale for EPA's action is explained in the NPRM and will not be restated here. In addition, pursuant to 40 CFR 51.308(h), states are required to submit, at the same time as the progress report submission, a determination of the adequacy of their existing regional haze SIP. In the 2017 Progress Report, Maryland declared that its existing regional haze SIP required no substantive revision to achieve the RPGs for Class I areas. As explained in detail in the NPRM, EPA concluded Maryland adequately addressed 40 CFR 51.308(h) because decreasing emissions of visibility impairing pollutants and progress of regional Class I areas towards RPGs for 2018 indicate that no further revisions to Maryland's SIP are necessary for this first regional haze implementation period. Therefore, EPA concluded the 2017 Progress Report met the requirements of 40 CFR 51.308(h).

One public comment was received on the NPRM. A summary of the comment and EPA's response are provided in this section. The comment is provided in the docket for this final rulemaking action.

Comment: The commenter stated Maryland's plan does not adequately address regional haze progress, alleged that the State's electric generating units (EGUs) did not reduce sulfur dioxide (SO2) emissions by ninety percent (90%), and alleged a pulp mill and EGU in Maryland continue to emit large amounts of SO2. The commenter stated Maryland's BART (Best Available Retrofit Technology) determinations were and continue to be inadequate. The commenter stated Maryland's sulfur fuel oil limits are not low and asked EPA to compare Maryland's limits to other states.

Response: EPA reviewed Maryland's 2017 Progress Report against the requirements for progress reports in 40 CFR 51.308(g) and (h). EPA found the 2017 Progress Report evaluated progress towards the RPGs and determined that the existing Maryland regional haze SIP is adequate to meet those RPGs because the 2017 Progress Report showed decreasing emissions of visibility impairing pollutants and significant progress of regional Class I areas to meeting or exceeding RPGs for 2018. Maryland's 2017 Progress Report documented emission reductions from point source, non-road, on-road, and area source sectors. Thus, EPA agreed with Maryland's determination that no further revisions to Maryland's SIP are necessary for this first regional haze implementation period.

40 CFR 51.308(g)(1) requires progress reports to contain a description of the status of implementation of all measures included in the implementation plan for achieving RPGs for Class I areas. One implementation measure that is required to be described in the progress report is the implementation of BART. As stated in the NPRM and in the 2017 Progress Report, Maryland discussed the implementation of BART at EGUs and at Holcim Cement and Luke Pulp and Paper Mill. The adequacy of these measures as BART was determined by EPA when EPA approved the Maryland regional haze SIP in 2012. 77 FR 39938 (July 6, 2012). Nothing in the CAA or in 40 CFR 51.308(g) or (h) requires Maryland or EPA to reexamine the BART determinations when reviewing a progress report.

In addition, in the 2017 Progress Report, Maryland addressed the implementation of the Healthy Air Act (HAA) which was a measure employed by Maryland for its regional haze SIP to achieve a 90% reduction of SO2 from coal-fired EGUs within the State to address RPGs for Class I areas impacted by Maryland and to address BART for those eligible EGUs. For a discussion of the HAA as the approved BART-alternative for EGUs in Maryland, see EPA's approval of the Maryland regional haze SIP at 77 FR 39938. In the 2017 Progress Report, Maryland included SO2 emissions data for EGUs demonstrating reductions from the HAA as well as from other SO2 reducing regulations. Therefore, as a factual matter, EPA disagrees with the commenter that Maryland did not reduce SO2 emissions by 90% from EGUs to meet the regional haze SIP measures. Maryland also discussed the implementation of BART within the State and thus met requirements for progress reports in 40 CFR 51.308. The commenter provided no information that Maryland had not implemented BART as approved by EPA.1

Regarding the commenter's concern about fuel sulfur limits, EPA addressed Maryland's fuel sulfur requirements in the approval of Maryland's regional haze SIP. As EPA stated when proposing to approve Maryland's regional haze SIP, since Maryland has not adopted a low sulfur fuel oil strategy, the State has a deficiency of 7,473.4 tons per year (tpy) of SO2 emissions. However, Maryland has a surplus of SO2 emission reductions of 57,552 tpy resulting from the HAA. This surplus accounts for the SO2 emission reductions needed to meet the requirements of the low sulfur fuel strategy. 77 FR 11827, 11835 (Feb. 28, 2012). As EPA approved Maryland's regional haze SIP without Maryland having a low sulfur fuel strategy as a measure for its SIP, whether or not Maryland has such a strategy now implemented, and whether any sulfur fuel requirements Maryland has are less stringent than other states, are not relevant or appropriate considerations before EPA in evaluating the 2017 Progress Report. 40 CFR 51.308(g) relates to discussion of the implementation of measures approved into a state's regional haze SIP. Thus, the 2017 Progress Report did not need to address any sulfur fuel requirements as those are not part of the Maryland regional haze SIP. As EPA found Maryland addressed its progress towards meeting RPGs in Class I areas impacted by Maryland emissions and addressed visibility improvement from measures in the Maryland SIP, EPA is approving the 2017 Progress Report as addressing 40 CFR 51.308(g).

EPA is approving Maryland's 2017 Progress Report submitted on August 9, 2017, as meeting the applicable regional haze requirements set forth in 40 CFR 51.308(g) and (h) as well as CAA section 110 requirements for SIPs.

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

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

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

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

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

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

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

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

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

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

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

In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by January 25, 2019. 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 to approve Maryland's regional haze 5-year progress report SIP revision may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2))

40 CFR part 52 is amended as follows:

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. 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:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Printing Office's e-CFR site at http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2011-0971 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before January 25, 2019. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2011-0971, 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 CBI or other information whose disclosure is restricted by statute.

• Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), (28221T), 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.

In the Federal Register of December 9, 2016 (81 FR 89036) (FRL-9953-69) and September 15, 2017 (82 FR 43352) (FRL-9965-43), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of pesticide petitions (PP 6F8502 and PP 7E8578, respectively) by Nichino America, Inc., 4550 New Linden Hill Road, Suite 501, Wilmington, DE 19808. The petitions requested that 40 CFR part 180 be amended by establishing tolerances for residues of the insecticide pyrifluquinazon, (1-acetyl-3,4-dihydro-3-[(3-pyridinylmethyl)amino]-6-[1,2,2,2-tetrafluoro-1-(trifluoromethyl)ethyl]-2(1H)-quinazolinone), as follows: PP 6F8502 requested tolerances for residues in or on Almond, hulls at 0.4 parts per million (ppm); Brassica head and stem vegetables (crop group 5-16) at 0.4 ppm; Cattle, fat at 0.01 ppm; Cattle, meat at 0.01 ppm; Cattle, meat byproducts at 0.01 ppm; Citrus fruits (crop group 10-10) at 0.5 ppm; Citrus, oil at 14 ppm; Cotton, gin byproducts at 4.0 ppm; Cotton, undelinted seed at 0.2 ppm; Cucurbit vegetables (crop group 9) at 0.06 ppm; Fruiting vegetables, tomato subgroup 8-10A at 0.20 ppm; Fruiting vegetables, pepper/eggplant subgroup 8-10B at 0.15 ppm; Goat, fat at 0.01 ppm; Goat, meat at 0.01 ppm; Goat, meat byproducts at 0.01 ppm; Horse, fat at 0.01 ppm; Horse, meat at 0.01 ppm; Horse, meat byproducts at 0.01 ppm; Leafy vegetables (crop group 4-16) at 5 ppm; Leaf petiole vegetables (crop subgroup 22B) at 1.5 ppm; Milk at 0.01 ppm; Pome fruits (crop group 11-10) at 0.04 ppm; Sheep, fat at 0.01 ppm; Sheep, meat at 0.01 ppm; Sheep, meat byproducts at 0.01 ppm; Small fruit vine climbing subgroup (crop subgroup 13-07F) except fuzzy kiwifruit at 0.6 ppm; Stone fruits, cherry subgroup 12-12A at 0.2 ppm; Stone fruits, peach subgroup 12-12B at 0.03 ppm; Stone fruits, plum subgroup 12-12C at 0.015 ppm; Tree nuts (crop group 14-12) at 0.01 ppm; and Tuberous and corm vegetables (crop subgroup 1C) at 0.01 ppm and PP 7E8578 requested a tolerance for residues in or on imported tea at 20 ppm. Those documents referenced summaries of the petitions prepared by Nichino America, Inc., the registrant, which are available in the docket, http://www.regulations.gov. Comments were received in response to the first notice of filing, and EPA's response can be found in Unit IV.C.

Consistent with the authority in section 408(d)(4)(A)(i), EPA is establishing tolerances that vary from what the petitioner sought. The reasons for these changes are explained in Unit IV.D.

Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”

Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for pyrifluquinazon including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with pyrifluquinazon follows.

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.

The effects observed following dietary exposure to pyrifluquinazon, primarily targeted the liver, thyroid, kidney, hematopoietic system, and the male and female reproductive organs. Nasal toxicity was observed following chronic oral exposures to rats, mice, and dogs, but was not observed following inhalation exposure to rats. Inhalation exposure for 28 days in rats resulted in portal-of-entry effects in the form of terminal airway inflammation in the lungs of males at an equivalent oral dose that was higher than those causing nasal effects in dogs (the most sensitive species for nasal toxicity). Systemic effects following inhalation exposure to pyrifluquinazon consisted of clinical signs including palpebral closure, splayed gait, hunched posture, ataxia, piloerection, lethargy, and ocular effects. No adverse effects were seen in rats following dermal exposure. Pyrifluquinazon showed no signs of immunotoxicity.

Pyrifluquinazon showed signs of increased pre- and postnatal quantitative susceptibility in rats. In the rat developmental toxicity study, maternal effects (decreased body weights, and mean gravid uterine weights) were seen at a higher dose than fetal effects (decreased anogenital distances (AGD) in males, increased incidences of skeletal variations, and increased incidences of supernumerary ribs). In the two-generation reproduction study in rats, systemic parental effects were consistent with the general systemic toxic effects in rats and occurred at doses higher than those eliciting offspring and reproductive effects. Offspring effects included decreased body weights and decreased AGD in the male pups, which is also considered a reproductive effect. In the rabbit developmental toxicity study, a decreased number of live fetuses per doe was observed, which is considered a maternal and developmental adverse effect since it is unknown whether the effect occurred from toxicity to maternal animals or the fetuses. In addition, effects were observed in reproductive organs (epididymides, testes, uterus).

Signs of neurotoxicity were observed in the acute neurotoxicity (ACN) study, and consisted of: Decreased motor activity, prostrate, ataxia, hyporeactivity, hunched posture, loss of the righting reflex, coldness to touch, lacrimation, bradyapnea, piloerection, and ptosis. Signs of neurotoxicity were also observed in the subchronic oral study and the inhalation study in rats at doses that caused portal-of-entry effects.

Exposure to pyrifluquinazon resulted in increased incidences of testicular interstitial cell tumors (Leydig tumors) in both male rats and mice. Based on its review of the available data, EPA has concluded that pyrifluquinazon is “not likely to be carcinogenic to humans at levels that do not alter rodent hormone homeostasis.” This conclusion is based on the following: (1) The Agency was only able to conclude that one type of Leydig cell tumor (in the male mice) is treatment-related because the type of rat tested has a high background rate for this tumor type; (2) the suggested mode of action is supported by the available data and indicates that the tumors are not likely to occur below doses that trigger androgen receptor degradation in sex-specific tissues leading to changes in circulating androgen related hormones; and (3) neither the parent molecule nor its metabolites showed evidence of genotoxicity or mutagenicity. For these reasons and because the level that triggers tumor development is higher than 70.1 mg/kg/day and the chronic reference dose is 0.06 mg/kg/day, EPA has determined that quantification of cancer risk using a non-linear approach (i.e., chronic reference dose) will adequately account for all chronic toxicity, including carcinogenicity that could result from exposure to pyrifluquinazon.

Specific information on the studies received and the nature of the adverse effects caused by pyrifluquinazon as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in document “Pyrifluquinazon: Human Health Risk Assessment for the Proposed Use on Tuberous and Corm Vegetables, Leafy Vegetables (including greenhouse-grown lettuce), Brassica Head and Stem Vegetables, Fruiting Vegetables (including greenhouse-grown pepper and tomato), Cucurbit Vegetables (including greenhouse-grown cucumber), Citrus Fruits, Pome Fruits, Stone Fruits, Small Vine Climbing Fruit (excluding fuzzy kiwifruit), Tree Nuts, Leaf Petiole Vegetables, and Cotton, and for the Establishment of a Tolerance without a U.S. Registration for Residues in/on Imported Tea” on pages 16-24 in docket ID number EPA-HQ-OPP-2011-0971.

Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see http://www.epa.gov/pesticides/factsheets/riskassess.htm.

A summary of the toxicological endpoints for pyrifluquinazon used for human risk assessment is shown in Table 1 of this unit.

FQPA SF = Food Quality Protection Act Safety Factor. LOAEL = lowest-observed-adverse-effect-level. LOC = level of concern. mg/kg/day = milligram/kilogram/day. MOE = margin of exposure. NOAEL = no-observed-adverse-effect-level. PAD = population-adjusted dose (a = acute, c = chronic). RfD = reference dose. UF = uncertainty factor. UFA = extrapolation from animal to human (interspecies). UFDB = to account for the absence of data or other data deficiency. UFH = potential variation in sensitivity among members of the human population (intraspecies).

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to pyrifluquinazon, EPA considered exposure under the petitioned-for tolerances. EPA assessed dietary exposures from pyrifluquinazon in food as follows:

i. Acute exposure. Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure. Such effects were identified for pyrifluquinazon. In estimating acute dietary exposure, EPA used the Dietary Exposure Evaluation Model software with the Food Commodity Intake Database (DEEM-FCID) Version 3.16. This software uses 2003-2008 food consumption data from the U.S. Department of Agriculture's (USDA's) National Health and Nutrition Examination Survey, What We Eat in America, (NHANES/WWEIA). As to residue levels in food, EPA assumed tolerance level residues, default processing factors, and 100 percent crop treated (PCT) for all proposed uses.

ii. Chronic exposure. In conducting the chronic dietary exposure assessment EPA used DEEM-FCID, Version 3.16 software with 2003-2008 food consumption data from the USDA's NHANES/WWEIA. As to residue levels in food, EPA assumed tolerance level residues, default processing factors, and 100 PCT for all proposed and registered uses.

iii. Cancer. Based on the data summarized in Unit III.A., EPA has concluded that pyrifluquinazon would not pose a cancer risk to humans at dose levels below the chronic reference dose. Therefore, a separate dietary exposure assessment for the purpose of assessing cancer risk is unnecessary.

iv. Anticipated residue and percent crop treated (PCT) information. EPA did not use anticipated residue and/or PCT information in the dietary assessment for pyrifluquinazon. Tolerance-level residues and/or 100% CT were assumed for all food commodities.

2. Dietary exposure from drinking water. The Agency used screening-level water exposure models in the dietary exposure analysis and risk assessment for pyrifluquinazon in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of pyrifluquinazon. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/about-water-exposure-models-used-pesticide.

Based on the Pesticides in Water Calculator (PWC) and Pesticide Root Zone Model Ground Water (PRZM GW), the estimated drinking water concentrations (EDWCs) of pyrifluquinazon for acute exposures are estimated to be 7.52 parts per billion (ppb) for surface water and 10.3 ppb for ground water; for chronic exposures for non-cancer assessments are estimated to be 3.99 ppb for surface water and 9.02 ppb for ground water.

Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For acute dietary risk assessment, the water concentration value of 10.3 ppb was used to assess the contribution to drinking water. For chronic dietary risk assessment, the water concentration of value 9.02 ppb was used to assess the contribution to drinking water.

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets). Pyrifluquinazon is not registered for any specific use patterns that would result in residential exposure.

4. Cumulative effects from substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

EPA has not found pyrifluquinazon to share a common mechanism of toxicity with any other substances, and pyrifluquinazon does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that pyrifluquinazon does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's website at http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/cumulative-assessment-risk-pesticides.

1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the FQPA Safety Factor (SF). In applying this provision, EPA either retains the default value of 10X, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.

2. Prenatal and postnatal sensitivity. Pyrifluquinazon showed signs of increased pre- and postnatal quantitative susceptibility in the developmental toxicity study and in the two-generation reproduction study in rats. In the rabbit developmental toxicity study, observed maternal and developmental effects were considered adverse since it is unknown whether the effects occurred from toxicity to maternal animals or the fetuses.

3. Conclusion. EPA has determined that reliable data show the safety of infants and children would be adequately protected if the FQPA SF were reduced to 1X. That decision is based on the following findings:

i. The toxicity database for pyrifluquinazon is complete.

ii. Evidence of potential neurotoxicity was observed for pyrifluquinazon; however, the concern is low since there were no neuropathological changes in any tissue, clear NOAELs were established for the observed effects, and the endpoints selected are protective. No additional UFs were required to account for neurotoxicity.

iii. Although there is evidence of increased quantitative fetal susceptibility following in utero exposure to pyrifluquinazon in rats and quantitative postnatal susceptibility in the two-generation reproduction study, the concern for all observed effects is low because: (1) The effects are well characterized, (2) clear NOAELs were established, and (3) risk assessment endpoints used were from the developmental rat and 2-generation reproduction studies.

iv. There are no residual uncertainties identified in the exposure databases. The dietary food exposure assessments were performed based on 100% CT and tolerance-level residues. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to pyrifluquinazon in drinking water. These assessments will not underestimate the exposure and risks posed by pyrifluquinazon.

EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.

1. Acute risk. Using the exposure assumptions discussed in this unit for acute exposure, the acute dietary (food plus water) risk for the U.S. population utilizes 1.2% of the acute population-adjusted dose (aPAD) and 2.5% for children 1-2 years old, who had the highest exposure estimate. For females 13 to 49 years old, for which the Agency used a different endpoint, the acute risk utilized 23% of the aPAD.

2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that chronic risk from pyrifluquinazon in food and water will utilize 13% of the cPAD for children 1-2 years old, the population subgroup receiving the greatest exposure. There are no residential uses for pyrifluquinazon.

3. Short- and intermediate-term risk. The Agency's assessment of short- and intermediate-term risk aggregates short- and intermediate-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level). Short- and intermediate-term adverse effects were identified; however, pyrifluquinazon is not registered for any use patterns that would result in short- or intermediate-term residential exposure. Because there is no residential exposure and chronic dietary exposure has already been assessed under the appropriately protective cPAD (which is at least as protective as the POD used to assess short-term risk), no further assessment of short- and intermediate-term risk is necessary, and EPA relies on the chronic dietary risk assessment for evaluating short- and intermediate-term risk for pyrifluquinazon.

4. Aggregate cancer risk for U.S. population. Based on the information referenced in Unit III.A., EPA has concluded that exposure to pyrifluquinazon is unlikely to cause cancer effects at doses that do not alter rodent hormone homeostasis. Because the chronic reference doses is protective of those alterations and the Agency's assessment concludes that aggregate exposure to pyrifluquinazon does not pose a chronic risk, EPA has determined that aggregate exposure to pyrifluquinazon is unlikely to pose a cancer risk to the U.S. population.

5. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to pyrifluquinazon residues.

Adequate enforcement methodology, high-performance liquid chromatography with tandem mass-spectrometry detection (HPLC-MS/MS) is available to enforce the tolerance expression for crop commodities. For livestock commodities, the method used is a modified QuEChERS LC/MS/MS method. These methods may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address: [email protected].

In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. Section 408(b)(4) of the FFDCA specifically requires that EPA determine whether the Codex Alimentarius Commission (Codex) has established a maximum residue level (MRL) for the commodity and to explain the reasons for departing from the Codex level when establishing tolerances at a different level. The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may also take into account MRLs established by other countries when determining what tolerance levels to set domestically.

The Codex has not established a MRL for residues of pyrifluquinazon. EPA is establishing the tolerance for residues of pyrifluquinazon in or on tea to harmonize with Japan.

EPA received two comments, only one of which was specific to the petition for pyrifluquinazon tolerances. The specific comment opposed “allowing such high residues” but did not provide any information relevant to the safety of the pesticide. The Agency recognizes that some individuals believe that pesticides should be banned on agricultural crops; however, the existing legal framework provided by section 408 of the FFDCA states that tolerances may be set when persons seeking such tolerances or exemptions have demonstrated that the pesticide meets the safety standard imposed by that statute. The comment appears to be directed at the underlying statute and not EPA's implementation of it; the citizen has made no contention that EPA has acted in violation of the statutory framework.

Almost all the tolerances being established in this rule differ from the petitioner requested in minor ways. For crop subgroups “vegetable, tuberous and corm, subgroup 1C,” “stone fruits, plum subgroup 12-12C,” and crop group “nut, tree, group 14-12,” the appropriate tolerance level (0.02 ppm) is based on the sum of the LOQs for pyrifluquinazon and metabolite IV-01, rather than on the LOQ for one analyte (0.01 ppm), as requested. In addition, EPA determined that a tolerance is needed for residues in or on the processed commodity citrus dried pulp, so EPA is establishing that tolerance in accordance with 40 CFR 180.40(f)(1)(i)(A). Based on the dietary burden calculations and the residue profile in the cattle feeding study, EPA concluded that tolerances are not needed for pyrifluquinazon residues of concern in milk, livestock meat, fat, or meat byproducts as expected secondary residues are less than 1/10th the combined LOQs. However, a tolerance for livestock liver is needed at the LOQ (pyrifluquinazon, metabolite IV-01, and metabolite IV-203) corresponding to a tolerance of 0.04 ppm. The combined LOQs for pyrifluquinazon, metabolite IV-01, and metabolite IV-203 in parent equivalents corresponded to 0.035 ppm; therefore, a tolerance of 0.04 ppm is required for the liver of cattle, goat, horse, and sheep. For the remainder of tolerances being established, EPA used corrected commodity names, and adjusted tolerances levels based on available residue data, proportionality adjustments to the crop field trial data. and correcting for potential decline during frozen storage, which resulted in increased recommended tolerances. Finally, EPA notes that although the notice of filing indicated that the petition requested a tolerance for almond, hulls at 0.01 ppm, the petition itself requested a tolerance at 0.4 ppm. Nevertheless, based on available residue data, the Agency has determined that a tolerance of 0.60 ppm is necessary to cover residues from this use.

Therefore, tolerances are established for residues of pyrifluquinazon, (1-acetyl-3,4-dihydro-3-[(3-pyridinylmethyl)amino]-6-[1,2,2,2-tetrafluoro-1-(trifluoromethyl)ethyl]-2(1H)-quinazolinone), and its metabolites in or on Almond, hulls at 0.60 ppm; Cherry subgroup 12-12A at 0.30 ppm; Citrus, dried pulp at 2.0 ppm; Citrus, oil at 30 ppm; Cotton, gin byproducts at 6.0 ppm; Cotton, undelinted seed at 0.30 ppm; Fruit, citrus, group 10-10 at 0.70 ppm; Fruit, pome, group 11-10 at 0.07 ppm; Fruit small vine climbing, except fuzzy kiwifruit, subgroup 13-07F at 0.30 ppm; Leaf petiole vegetable, subgroup 22B at 1.5 ppm; Peach subgroup 12-12B at 0.04 ppm; Plum subgroup 12-12C at 0.02 ppm; Nut, tree, group 14-12 at 0.02 ppm; Tea, dried at 20 ppm; Vegetable, brassica, head and stem, group 5-16 at 0.60 ppm; Vegetable, cucurbit, group 9 at 0.07 ppm; Vegetable, fruiting, group 8-10 at 0.30 ppm; Vegetable, leafy, group 4-16 at 5.0 ppm; Vegetable, tuberous and corm, subgroup 1C at 0.02 ppm; Cattle, liver at 0.04 ppm; Goat, liver at 0.04 ppm; Horse, liver at 0.04 ppm; and Sheep, liver at 0.04 ppm. For the plant commodities, compliance with the tolerance is determined by measuring residues of the parent compound and the IV-01 metabolite; for the livestock commodities, compliance is determined by measuring residues of the parent compound and the free and conjugated forms of IV-01 and IV-203 metabolites.

This action establishes tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. 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). Because this action has been exempted from review under Executive Order 12866, 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); Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997); or Executive Order 13771, entitled “Reducing Regulations and Controlling Regulatory Costs” (82 FR 9339, February 3, 2017). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq.), nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), do not apply.

This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501 et seq.).

This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).

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).

Therefore, 40 CFR chapter I is amended as follows:

Regulations governing the summer flounder fishery are found in 50 CFR 648.100 through 648.110. These regulations require annual specification of a commercial quota that is apportioned among the coastal states from Maine through North Carolina. The process to set the annual commercial quota and the percent allocated to each state is described in § 648.102, and the initial 2018 allocations were published on December 22, 2017 (82 FR 60682), and corrected January 30, 2018 (83 FR 4165).

The final rule implementing Amendment 5 to the Summer Flounder Fishery Management Plan, as published in the Federal Register on December 17, 1993 (58 FR 65936), provided a mechanism for transferring summer flounder commercial quota from one state to another. Two or more states, under mutual agreement and with the concurrence of the NMFS Greater Atlantic Regional Administrator, can transfer or combine summer flounder commercial quota under § 648.102(c)(2). The Regional Administrator is required to consider the criteria in § 648.102(c)(2)(i)(A) through (C) in the evaluation of requests for quota transfers or combinations.

Maryland is transferring 3,169 lb (1,437 kg) of summer flounder commercial quota to Massachusetts through mutual agreement of the states. This transfer was requested to repay landings by a Maryland-permitted vessel that landed in Massachusetts under a safe harbor agreement. Based on the initial quotas published in the 2018 Summer Flounder, Scup, and Black Sea Bass Specifications and subsequent adjustments, the revised summer flounder quotas for calendar year 2018 are now: Maryland, 128,070 lb (58,092 kg); and Massachusetts, 413,361 lb (187,497 kg).

This action is taken under 50 CFR part 648 and is exempt from review under Executive Order 12866.