Federal Register Vol. 83, No.38,

Authority for This Rulemaking

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 supports IFR operations at Pitt-Greenville Airport, Greenville, NC.

The FAA published a notice of proposed rulemaking in the Federal Register (82 FR 50596; November 1, 2017) for Docket No. FAA-2017-0801, to amend Class E surface airspace at Pitt-Greenville Airport, Greenville, NC. 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 paragraphs 6002 and 6005, respectively, of FAA Order 7400.11B dated August 3, 2017, and effective September 15, 2017, which is incorporated by reference in 14 CFR part 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

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

This amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 amends Class E surface airspace within a 4.4-mile radius of Pitt-Greenville Airport, Greenville, NC. The Pitt County Memorial Hospital Heliport no longer requires the southwest area below 200 feet from the airport for departures from the heliport. This action is for continued safety and management of IFR operations at the airport. The geographic coordinates of the airport are adjusted to coincide with the FAA's aeronautical database in both Class E surface airspace and Class E airspace extending upward from 700 feet above the surface.

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:

Cybersecurity risks pose grave threats to investors, our capital markets, and our country.1 Whether it is the companies in which investors invest, their accounts with financial services firms, the markets through which they trade, or the infrastructure they count on daily, the investing public and the U.S. economy depend on the security and reliability of information and communications technology, systems, and networks. Companies today rely on digital technology to conduct their business operations and engage with their customers, business partners, and other constituencies. In a digitally connected world, cybersecurity presents ongoing risks and threats to our capital markets and to companies operating in all industries, including public companies regulated by the Commission.

As companies' exposure to and reliance on networked systems and the internet have increased, the attendant risks and frequency of cybersecurity incidents also have increased.2 Today, the importance of data management and technology to business is analogous to the importance of electricity and other forms of power in the past century. Cybersecurity incidents 3 can result from unintentional events or deliberate attacks by insiders or third parties, including cybercriminals, competitors, nation-states, and “hacktivists.” 4 Companies face an evolving landscape of cybersecurity threats in which hackers use a complex array of means to perpetrate cyber-attacks, including the use of stolen access credentials, malware, ransomware, phishing, structured query language injection attacks, and distributed denial-of-service attacks, among other means. The objectives of cyber-attacks vary widely and may include the theft or destruction of financial assets, intellectual property, or other sensitive information belonging to companies, their customers, or their business partners. Cyber-attacks may also be directed at disrupting the operations of public companies or their business partners. This includes targeting companies that operate in industries responsible for critical infrastructure.

Companies that fall victim to successful cyber-attacks or experience other cybersecurity incidents may incur substantial costs 5 and suffer other negative consequences, which may include:

• Remediation costs, such as liability for stolen assets or information, repairs of system damage, and incentives to customers or business partners in an effort to maintain relationships after an attack; 6

• increased cybersecurity protection costs, which may include the costs of making organizational changes, deploying additional personnel and protection technologies, training employees, and engaging third party experts and consultants;

• lost revenues resulting from the unauthorized use of proprietary information or the failure to retain or attract customers following an attack;

• litigation and legal risks, including regulatory actions by state and federal governmental authorities and non-U.S. authorities; 7

• increased insurance premiums;

• reputational damage that adversely affects customer or investor confidence; and

• damage to the company's competitiveness, stock price, and long-term shareholder value.

Given the frequency, magnitude and cost of cybersecurity incidents, the Commission believes that it is critical that public companies take all required actions to inform investors about material cybersecurity risks and incidents in a timely fashion, including those companies that are subject to material cybersecurity risks but may not yet have been the target of a cyber-attack. Crucial to a public company's ability to make any required disclosure of cybersecurity risks and incidents in the appropriate timeframe are disclosure controls and procedures that provide an appropriate method of discerning the impact that such matters may have on the company and its business, financial condition, and results of operations, as well as a protocol to determine the potential materiality of such risks and incidents.8 In addition, the Commission believes that the development of effective disclosure controls and procedures is best achieved when a company's directors, officers, and other persons responsible for developing and overseeing such controls and procedures are informed about the cybersecurity risks and incidents that the company has faced or is likely to face.

Additionally, directors, officers, and other corporate insiders must not trade a public company's securities while in possession of material nonpublic information, which may include knowledge regarding a significant cybersecurity incident experienced by the company. Public companies should have policies and procedures in place to (1) guard against directors, officers, and other corporate insiders taking advantage of the period between the company's discovery of a cybersecurity incident and public disclosure of the incident to trade on material nonpublic information about the incident, and (2) help ensure that the company makes timely disclosure of any related material nonpublic information.9 In addition, we believe that companies are well served by considering the ramifications of directors, officers, and other corporate insiders trading in advance of disclosures regarding cyber incidents that prove to be material. We recognize that many companies have adopted preventative measures to address the appearance of improper trading and we encourage companies to consider such preventative measures in the context of a cyber event.

In October 2011, the Division of Corporation Finance (the “Division”) issued guidance that provided the Division's views regarding disclosure obligations relating to cybersecurity risks and incidents.10 The guidance explains that, although no existing disclosure requirement explicitly refers to cybersecurity risks and cyber incidents, companies nonetheless may be obligated to disclose such risks and incidents.11 After the issuance of the guidance, many companies included additional cybersecurity disclosure, typically in the form of risk factors.12

In light of the increasing significance of cybersecurity incidents, the Commission believes it is necessary to provide further Commission guidance. This interpretive release outlines the Commission's views with respect to cybersecurity disclosure requirements under the federal securities laws as they apply to public operating companies.13 While the Commission continues to consider other means of promoting appropriate disclosure of cyber incidents, we are reinforcing and expanding upon the staff's 2011 guidance. In addition, we address two topics not developed in the staff's 2011 guidance, namely the importance of cybersecurity policies and procedures and the application of insider trading prohibitions in the cybersecurity context.

First, this release stresses the importance of maintaining comprehensive policies and procedures related to cybersecurity risks and incidents. Companies are required to establish and maintain appropriate and effective disclosure controls and procedures that enable them to make accurate and timely disclosures of material events, including those related to cybersecurity. Such robust disclosure controls and procedures assist companies in satisfying their disclosure obligations under the federal securities laws.

Second, we also remind companies and their directors, officers, and other corporate insiders of the applicable insider trading prohibitions under the general antifraud provisions of the federal securities laws and also of their obligation to refrain from making selective disclosures of material nonpublic information about cybersecurity risks or incidents.14

The Commission, and the staff through its filing review process, continues to monitor cybersecurity disclosures carefully.

Companies should consider the materiality of cybersecurity risks and incidents when preparing the disclosure that is required in registration statements under the Securities Act of 1933 (“Securities Act”) and the Securities Exchange Act of 1934 (“Exchange Act”), and periodic and current reports under the Exchange Act.15 When a company is required to file a disclosure document with the Commission, the requisite form generally refers to the disclosure requirements of Regulation S-K 16 and Regulation S-X.17 Although these disclosure requirements do not specifically refer to cybersecurity risks and incidents, a number of the requirements impose an obligation to disclose such risks and incidents depending on a company's particular circumstances. For example:

• Periodic Reports: Companies are required to file periodic reports 18 to disclose specified information on a regular and ongoing basis.19 These periodic reports include annual reports on Form 10-K,20 which require companies to make disclosure regarding their business and operations, risk factors, legal proceedings, management's discussion and analysis of financial condition and results of operations (“MD&A”), financial statements, disclosure controls and procedures, and corporate governance.21 Periodic reports also include quarterly reports on Form 10-Q,22 which require companies to make disclosure regarding their financial statements, MD&A, and updated risk factors.23 Likewise, foreign private issuers are required to make many of these same disclosures in their periodic reports on Form 20-F.24 Companies must provide timely and ongoing information in these periodic reports regarding material cybersecurity risks and incidents that trigger disclosure obligations.

• Securities Act and Exchange Act Obligations: Securities Act and Exchange Act registration statements must disclose all material facts required to be stated therein or necessary to make the statements therein not misleading. Companies should consider the adequacy of their cybersecurity-related disclosure, among other things, in the context of Sections 11, 12, and 17 of the Securities Act, as well as Section 10(b) and Rule 10b-5 of the Exchange Act.25

• Current Reports: In order to maintain the accuracy and completeness of effective shelf registration statements with respect to the costs and other consequences of material cybersecurity incidents,26 companies can provide current reports on Form 8-K 27 or Form 6-K.28 Companies also frequently provide current reports on Form 8-K or Form 6-K to report the occurrence and consequences of cybersecurity incidents.29 The Commission encourages companies to continue to use Form 8-K or Form 6-K to disclose material information promptly, including disclosure pertaining to cybersecurity matters. This practice reduces the risk of selective disclosure, as well as the risk that trading in their securities on the basis of material non-public information may occur.30

In addition to the information expressly required by Commission regulation, a company is required to disclose “such further material information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading.” 31 The Commission considers omitted information to be material if there is a substantial likelihood that a reasonable investor would consider the information important in making an investment decision or that disclosure of the omitted information would have been viewed by the reasonable investor as having significantly altered the total mix of information available.32

In determining their disclosure obligations regarding cybersecurity risks and incidents, companies generally weigh, among other things, the potential materiality of any identified risk and, in the case of incidents, the importance of any compromised information and of the impact of the incident on the company's operations. The materiality of cybersecurity risks or incidents depends upon their nature, extent, and potential magnitude, particularly as they relate to any compromised information or the business and scope of company operations.33 The materiality of cybersecurity risks and incidents also depends on the range of harm that such incidents could cause.34 This includes harm to a company's reputation, financial performance, and customer and vendor relationships, as well as the possibility of litigation or regulatory investigations or actions, including regulatory actions by state and federal governmental authorities and non-U.S. authorities.

This guidance is not intended to suggest that a company should make detailed disclosures that could compromise its cybersecurity efforts—for example, by providing a “roadmap” for those who seek to penetrate a company's security protections. We do not expect companies to publicly disclose specific, technical information about their cybersecurity systems, the related networks and devices, or potential system vulnerabilities in such detail as would make such systems, networks, and devices more susceptible to a cybersecurity incident. Nevertheless, we expect companies to disclose cybersecurity risks and incidents that are material to investors, including the concomitant financial, legal, or reputational consequences. Where a company has become aware of a cybersecurity incident or risk that would be material to its investors, we would expect it to make appropriate disclosure timely and sufficiently prior to the offer and sale of securities and to take steps to prevent directors and officers (and other corporate insiders who were aware of these matters) from trading its securities until investors have been appropriately informed about the incident or risk.35

Understanding that some material facts may be not available at the time of the initial disclosure, we recognize that a company may require time to discern the implications of a cybersecurity incident. We also recognize that it may be necessary to cooperate with law enforcement and that ongoing investigation of a cybersecurity incident may affect the scope of disclosure regarding the incident. However, an ongoing internal or external investigation—which often can be lengthy—would not on its own provide a basis for avoiding disclosures of a material cybersecurity incident.

We remind companies that they may have a duty to correct prior disclosure that the company determines was untrue (or omitted a material fact necessary to make the disclosure not misleading) at the time it was made 36 (for example, if the company subsequently discovers contradictory information that existed at the time of the initial disclosure), or a duty to update disclosure that becomes materially inaccurate after it is made 37 (for example, when the original statement is still being relied on by reasonable investors). Companies should consider whether they need to revisit or refresh previous disclosure, including during the process of investigating a cybersecurity incident.

We expect companies to provide disclosure that is tailored to their particular cybersecurity risks and incidents. As the Commission has previously stated, we “emphasize a company-by-company approach [to disclosure] that allows relevant and material information to be disseminated to investors without boilerplate language or static requirements while preserving completeness and comparability of information across companies.” 38 Companies should avoid generic cybersecurity-related disclosure and provide specific information that is useful to investors.

Item 503(c) of Regulation S-K and Item 3.D of Form 20-F require companies to disclose the most significant factors that make investments in the company's securities speculative or risky.39 Companies should disclose the risks associated with cybersecurity and cybersecurity incidents if these risks are among such factors, including risks that arise in connection with acquisitions.40

It would be helpful for companies to consider the following issues, among others, in evaluating cybersecurity risk factor disclosure:

• The occurrence of prior cybersecurity incidents, including their severity and frequency;

• the probability of the occurrence and potential magnitude of cybersecurity incidents;

• the adequacy of preventative actions taken to reduce cybersecurity risks and the associated costs, including, if appropriate, discussing the limits of the company's ability to prevent or mitigate certain cybersecurity risks;

• the aspects of the company's business and operations that give rise to material cybersecurity risks and the potential costs and consequences of such risks, including industry-specific risks and third party supplier and service provider risks;

• the costs associated with maintaining cybersecurity protections, including, if applicable, insurance coverage relating to cybersecurity incidents or payments to service providers;

• the potential for reputational harm;

• existing or pending laws and regulations that may affect the requirements to which companies are subject relating to cybersecurity and the associated costs to companies; and

• litigation, regulatory investigation, and remediation costs associated with cybersecurity incidents.

In meeting their disclosure obligations, companies may need to disclose previous or ongoing cybersecurity incidents or other past events in order to place discussions of these risks in the appropriate context. For example, if a company previously experienced a material cybersecurity incident involving denial-of-service, it likely would not be sufficient for the company to disclose that there is a risk that a denial-of-service incident may occur. Instead, the company may need to discuss the occurrence of that cybersecurity incident and its consequences as part of a broader discussion of the types of potential cybersecurity incidents that pose particular risks to the company's business and operations. Past incidents involving suppliers, customers, competitors, and others may be relevant when crafting risk factor disclosure. In certain circumstances, this type of contextual disclosure may be necessary to effectively communicate cybersecurity risks to investors.

Item 303 of Regulation S-K and Item 5 of Form 20-F require a company to discuss its financial condition, changes in financial condition, and results of operations. These items require a discussion of events, trends, or uncertainties that are reasonably likely to have a material effect on its results of operations, liquidity, or financial condition, or that would cause reported financial information not to be necessarily indicative of future operating results or financial condition and such other information that the company believes to be necessary to an understanding of its financial condition, changes in financial condition, and results of operations.41 In this context, the cost of ongoing cybersecurity efforts (including enhancements to existing efforts), the costs and other consequences of cybersecurity incidents, and the risks of potential cybersecurity incidents, among other matters, could inform a company's analysis. In addition, companies may consider the array of costs associated with cybersecurity issues, including, but not limited to, loss of intellectual property, the immediate costs of the incident, as well as the costs associated with implementing preventative measures, maintaining insurance, responding to litigation and regulatory investigations, preparing for and complying with proposed or current legislation, engaging in remediation efforts, addressing harm to reputation, and the loss of competitive advantage that may result.42 Finally, the Commission expects companies to consider the impact of such incidents on each of their reportable segments.43

Item 101 of Regulation S-K and Item 4.B of Form 20-F require companies to discuss their products, services, relationships with customers and suppliers, and competitive conditions.44 If cybersecurity incidents or risks materially affect a company's products, services, relationships with customers or suppliers, or competitive conditions, the company must provide appropriate disclosure.

Item 103 of Regulation S-K requires companies to disclose information relating to material pending legal proceedings to which they or their subsidiaries are a party.45 Companies should note that this requirement includes any such proceedings that relate to cybersecurity issues. For example, if a company experiences a cybersecurity incident involving the theft of customer information and the incident results in material litigation by customers against the company, the company should describe the litigation, including the name of the court in which the proceedings are pending, the date the proceedings are instituted, the principal parties thereto, a description of the factual basis alleged to underlie the litigation, and the relief sought.

Cybersecurity incidents and the risks that result therefrom may affect a company's financial statements. For example, cybersecurity incidents may result in:

• Expenses related to investigation, breach notification, remediation and litigation, including the costs of legal and other professional services;

• loss of revenue, providing customers with incentives or a loss of customer relationship assets value;

• claims related to warranties, breach of contract, product recall/replacement, indemnification of counterparties, and insurance premium increases; and

• diminished future cash flows, impairment of intellectual, intangible or other assets; recognition of liabilities; or increased financing costs.

The Commission expects that a company's financial reporting and control systems would be designed to provide reasonable assurance that information about the range and magnitude of the financial impacts of a cybersecurity incident would be incorporated into its financial statements on a timely basis as the information becomes available.46

Item 407(h) of Regulation S-K and Item 7 of Schedule 14A require a company to disclose the extent of its board of directors' role in the risk oversight of the company, such as how the board administers its oversight function and the effect this has on the board's leadership structure.47 The Commission has previously said that “disclosure about the board's involvement in the oversight of the risk management process should provide important information to investors about how a company perceives the role of its board and the relationship between the board and senior management in managing the material risks facing the company.” 48 A company must include a description of how the board administers its risk oversight function.49 To the extent cybersecurity risks are material to a company's business, we believe this discussion should include the nature of the board's role in overseeing the management of that risk.

In addition, we believe disclosures regarding a company's cybersecurity risk management program and how the board of directors engages with management on cybersecurity issues allow investors to assess how a board of directors is discharging its risk oversight responsibility in this increasingly important area.

Cybersecurity risk management policies and procedures are key elements of enterprise-wide risk management, including as it relates to compliance with the federal securities laws. We encourage companies to adopt comprehensive policies and procedures related to cybersecurity and to assess their compliance regularly, including the sufficiency of their disclosure controls and procedures as they relate to cybersecurity disclosure. Companies should assess whether they have sufficient disclosure controls and procedures in place to ensure that relevant information about cybersecurity risks and incidents is processed and reported to the appropriate personnel, including up the corporate ladder, to enable senior management to make disclosure decisions and certifications and to facilitate policies and procedures designed to prohibit directors, officers, and other corporate insiders from trading on the basis of material nonpublic information about cybersecurity risks and incidents.50

Pursuant to Exchange Act Rules 13a-15 and 15d-15, companies must maintain disclosure controls and procedures, and management must evaluate their effectiveness.51 These rules define “disclosure controls and procedures” as those controls and other procedures designed to ensure that information required to be disclosed by the company in the reports that it files or submits under the Exchange Act is (1) “recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms,” and (2) “accumulated and communicated to the company's management . . . as appropriate to allow timely decisions regarding required disclosure.” 52

A company's disclosure controls and procedures should not be limited to disclosure specifically required, but should also ensure timely collection and evaluation of information potentially subject to required disclosure, or relevant to an assessment of the need to disclose developments and risks that pertain to the company's businesses.53 Information also must be evaluated in the context of the disclosure requirement of Exchange Act Rule 12b-20.54 When designing and evaluating disclosure controls and procedures, companies should consider whether such controls and procedures will appropriately record, process, summarize, and report the information related to cybersecurity risks and incidents that is required to be disclosed in filings. Controls and procedures should enable companies to identify cybersecurity risks and incidents, assess and analyze their impact on a company's business, evaluate the significance associated with such risks and incidents, provide for open communications between technical experts and disclosure advisors, and make timely disclosures regarding such risks and incidents.

Exchange Act Rules 13a-14 and 15d-14 55 require a company's principal executive officer and principal financial officer to make certifications regarding the design and effectiveness of disclosure controls and procedures,56 and Item 307 of Regulation S-K and Item 15(a) of Exchange Act Form 20-F require companies to disclose conclusions on the effectiveness of disclosure controls and procedures.57 These certifications and disclosures should take into account the adequacy of controls and procedures for identifying cybersecurity risks and incidents and for assessing and analyzing their impact. In addition, to the extent cybersecurity risks or incidents pose a risk to a company's ability to record, process, summarize, and report information that is required to be disclosed in filings, management should consider whether there are deficiencies in disclosure controls and procedures that would render them ineffective.

Companies and their directors, officers, and other corporate insiders should be mindful of complying with the laws related to insider trading in connection with information about cybersecurity risks and incidents, including vulnerabilities and breaches.58 It is illegal to trade a security “on the basis of material nonpublic information about that security or issuer, in breach of a duty of trust or confidence that is owed directly, indirectly, or derivatively, to the issuer of that security or the shareholders of that issuer, or to any other person who is the source of the material nonpublic information.” 59 As noted above, information about a company's cybersecurity risks and incidents may be material nonpublic information, and directors, officers, and other corporate insiders would violate the antifraud provisions if they trade the company's securities in breach of their duty of trust or confidence while in possession of that material nonpublic information.60

Beyond the antifraud provisions of the federal securities laws, companies and their directors, officers, and other corporate insiders must comply with all other applicable insider trading related rules. Many exchanges require listed companies to adopt codes of conduct and policies that promote compliance with applicable laws, rules, and regulations, including those prohibiting insider trading.61 We encourage companies to consider how their codes of ethics 62 and insider trading policies take into account and prevent trading on the basis of material nonpublic information related to cybersecurity risks and incidents. The Commission believes that it is important to have well designed policies and procedures to prevent trading on the basis of all types of material non-public information, including information relating to cybersecurity risks and incidents.

In addition, while companies are investigating and assessing significant cybersecurity incidents, and determining the underlying facts, ramifications and materiality of these incidents, they should consider whether and when it may be appropriate to implement restrictions on insider trading in their securities. Company insider trading policies and procedures that include prophylactic measures can protect against directors, officers, and other corporate insiders trading on the basis of material nonpublic information before public disclosure of the cybersecurity incident. As noted above, we believe that companies would be well served by considering how to avoid the appearance of improper trading during the period following an incident and prior to the dissemination of disclosure.

Companies also may have disclosure obligations under Regulation FD in connection with cybersecurity matters. Under Regulation FD, “when an issuer, or person acting on its behalf, discloses material nonpublic information to certain enumerated persons it must make public disclosure of that information.” 63 The Commission adopted Regulation FD owing to concerns about companies making selective disclosure of material nonpublic information to certain persons before making full disclosure of that same information to the general public.64

In cases of selective disclosure of material nonpublic information related to cybersecurity, companies should ensure compliance with Regulation FD. Companies and persons acting on their behalf should not selectively disclose material, nonpublic information regarding cybersecurity risks and incidents to Regulation FD enumerated persons 65 before disclosing that same information to the public.66 We expect companies to have policies and procedures to ensure that any disclosures of material nonpublic information related to cybersecurity risks and incidents are not made selectively, and that any Regulation FD required public disclosure is made simultaneously (in the case of an intentional disclosure as defined in the rule) or promptly (in the case of a non-intentional disclosure) and is otherwise compliant with the requirements of that regulation.67

On March 7, 1997, the Department issued a technical amendment to 20 CFR 802.204 to include a U.S. Post Office Box mailing address for filing notices of appeal with the Board. 62 FR 10666. The Department added the P.O. Box to augment timely receipt of incoming mail. Over time, the Department has found this supplemental process is not needed to ensure the timely receipt of mail. Therefore, to save costs, the Department is eliminating the P.O. Box and amending its regulations to direct that all notices of appeal and correspondence filed by mail be sent directly to the Board's offices in the Frances Perkins Department of Labor Building in Washington, DC. This document amends the relevant section in the Code of Federal Regulations governing the procedural rules of the Board in order to present the new mailing address.

This rule is promulgated by the Secretary of Labor under the authority of 5 U.S.C. 301, as well as the Black Lung Benefits Act, 30 U.S.C. 901 et seq., and the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. 901 et seq.

Section 553(b)(3) of the Administrative Procedure Act (APA), 5 U.S.C. 553(b)(3), provides that an agency is not required to publish a notice of proposed rulemaking in the Federal Register for “rules of agency organization, procedure, or practice.” 5 U.S.C. 553(b)(3)(A). Rules are also exempt when an agency finds “good cause” that notice and comment rulemaking procedures would be “impracticable, unnecessary, or contrary to the public interest.” 5 U.S.C. 553(b)(3)(B). The Department has determined that this rulemaking meets the notice and comment exemption requirements in 5 U.S.C. 553(b)(3)(A) and (B). The Department's revision makes a technical and non-substantive change to the rules of procedure before the Benefits Review Board and does not alter any substantive standard. The Department does not believe that public comment is necessary for this minor revision.

Because no notice of proposed rulemaking is required for this rule under section 553(b) of the APA, the requirements of the Regulatory Flexibility Act at 5 U.S.C. 601(2) do not apply to this rule, and the rule is not subject to sections 202 or 205 of the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1532 and 1535). In addition, this action does not significantly or uniquely affect small governments or impose a significant intergovernmental mandate as described in sections 203 and 204 of the UMRA (2 U.S.C. 1533 and 1534).

This action is further not classified as a “rule” under Chapter 8 of the Small Business Regulatory Enforcement Fairness Act of 1996, because it pertains to agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties. See 5 U.S.C. 804(3)(C).

This rule does not contain a collection of information requirements subject to Office of Management and Budget review under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.

The Department has reviewed this rule in accordance with the Executive Order on Federalism (Executive Order 13132, 64 FR 43255, August 10, 1999). This rule does not have federalism implications as outlined in E.O. 13132. The rule does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

The Department has reviewed this rule under the terms of Executive Order 13175 (65 FR 67249, November 6, 2000) and determined it does not have “tribal implications.” The rule does not have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.” As a result, no Tribal summary impact statement has been prepared.

This rule has been drafted and reviewed in accordance with Executive Order 12866. The rule is not a “significant regulatory action” as defined by section 3(f) of the order. Accordingly, there is no requirement for an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866. In addition, this rule is not an E.O. 13771 regulatory action because this rule is not significant under E.O. 12866.

For the reasons set forth above, the Department of Labor amends 20 CFR part 802 as follows:

Section 9010 of the Patient Protection and Affordable Care Act (PPACA), Public Law 111-148 (124 Stat. 119 (2010)), as amended by section 10905 of PPACA, and as further amended by section 1406 of the Health Care and Education Reconciliation Act of 2010, Public Law 111-152 (124 Stat. 1029 (2010)) (collectively, the Affordable Care Act or ACA) imposes an annual fee on covered entities that provide health insurance for United States health risks. All references in this preamble to section 9010 are references to section 9010 of the ACA. Section 9010 did not amend the Internal Revenue Code (Code) but contains cross-references to specified Code sections. Unless otherwise indicated, all other references to subtitles, chapters, subchapters, and sections in this preamble are references to subtitles, chapters, subchapters, and sections in the Code and related regulations. All references to “fee” in this preamble are references to the fee imposed by section 9010.

On November 27, 2013, the Department of the Treasury (Treasury Department) and the IRS published final regulations (TD 9643) relating to the health insurance providers fee in the Federal Register (78 FR 71476). On February 26, 2015, the Treasury Department and the IRS published temporary regulations (TD 9711) relating to the health insurance providers fee in the Federal Register (80 FR 10333). A notice of proposed rulemaking (REG-143416-14) cross-referencing the temporary regulations was published in the Federal Register in the same issue (80 FR 10435). The temporary regulations provided further guidance on the definition of a covered entity for the 2015 fee year and subsequent fee years.

The Treasury Department and the IRS received two written comments with respect to the notice of proposed rulemaking. No public hearing was requested or held. After considering the public written comments, the final regulations adopt the proposed regulations without change and the temporary regulations are removed.

The temporary regulations provided that, for the 2015 fee year and each subsequent fee year, an entity qualified for an exclusion under section 9010(c)(2) if it qualified for an exclusion either for the entire data year ending on the prior December 31st or for the entire fee year beginning on January 1st. The temporary regulations also generally imposed a consistency requirement that bound an entity to its original selection of either the data year or the fee year (its test year) to determine whether it qualified for an exclusion under section 9010(c)(2) for the 2015 fee year and each subsequent fee year. Next, the temporary regulations imposed a special rule for any entity that uses the fee year as its test year. Finally, the temporary regulations provided that a controlled group must report net premiums written only for each person who is a controlled group member at the end of the day on December 31st of the data year and that would qualify as a covered entity in the fee year if it were a single-person covered entity (that is, not a member of a controlled group).

The Treasury Department and the IRS received two written comments in response to the proposed and temporary regulations. Both commenters agreed with the approach described in the proposed and temporary regulations. One commenter suggested that the final rules add three additional requirements. First, the commenter suggested that entities seeking to claim the non-profit exemption described in section 9010(c)(2)(C) and § 57.2(b)(2)(iii) of the Health Insurance Providers Fee Regulations be required to file a Form 8963, “Report of Health Insurance Provider Information,” or similar report indicating its exempt status for either the data year or the fee year. Second, the commenter suggested that such entities claiming exempt status for the fee year should also file a year-end statement certifying that they maintained their exempt status through the end of the fee year. The Treasury Department and the IRS received similar comments prior to issuing the final regulations. The preamble to TD 9643 (78 FR 71476) explains that the Treasury Department and the IRS declined to adopt commenters' suggestions to require an entity qualifying for an exclusion to report its net premiums written because section 9010(g)(1) applies only to covered entities. Furthermore, imposing additional filing requirements for only certain entities is contrary to Executive Order 13789, which directs the Treasury Department to reduce tax regulatory burdens. Imposing additional filing requirements for only certain entities is also contrary to Executive Order 13765, which directs the executive branch to minimize the regulatory burden of the ACA specifically. Therefore, we decline to adopt the commenter's suggestions.

Third, the commenter suggested that any entities that fail to remain exempted for the full duration of the fee year should be subject to a fee assessment at the end of the year. The final regulations do not adopt this suggestion. Section 57.6(c) of the Health Insurance Providers Fee Regulations provides that the IRS will not alter fee calculations on the basis of information provided after the end of the error correction period. Section 9010(g)(2) and § 57.3(b)(1) of the Health Insurance Providers Fee Regulations impose a penalty on covered entities that fail to timely submit Form 8963 without reasonable cause. It is possible that if an entity fails to remain exempted for the full duration of the fee year, such entity will be subject to a penalty provided for by the existing statutory and regulatory framework. An additional fee assessment for such entities is not necessary.

Certain IRS regulations, including these, are exempt from the requirements of Executive Order 12866, as supplemented and reaffirmed by Executive Order 13563. Therefore, a regulatory impact assessment is not required. Because the final regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, the temporary regulations that preceded the final regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

The principal author of these final regulations is Rachel S. Smith, Office of the Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the Treasury Department and the IRS participated in their development.

Accordingly, 26 CFR part 57 is amended as follows:

Table of Contents for Preamble I. Abbreviations II. Basis and Purpose, and Regulatory History III. Discussion of the Rule IV. Regulatory Analyses A. Regulatory Planning and Review B. Small Entities C. Assistance for Small Entities D. Collection of Information E. Federalism F. Unfunded Mandates Reform Act G. Taking of Private Property H. Civil Justice Reform I. Protection of Children J. Indian Tribal Governments K. Energy Effects L. Technical Standards M. Environment V. Public Participation and Request for Comments I. Abbreviations CFR Code of Federal Regulations DHS Department of Homeland Security Fire Protection rule Harmonization of Standards for Fire Protection, Detection, and Extinguishing Equipment final rule, 81 FR 48220, July 22, 2016 FR Federal Register IFR Interim final rule NFPA 10 National Fire Protection Association Standard for Portable Fire Extinguishers, 2010 edition OMB Office of Management and Budget RA Regulatory Analysis §  Section symbol Subchapter M 46 CFR subchapter M—Towing Vessels U.S.C. United States Code II. Basis and Purpose, and Regulatory History

This interim final rule harmonizes fire protection requirements regarding portable and semi-portable fire extinguishers on inspected towing vessels with the requirements for other commercial vessels in Title 46 of the Code of Federal Regulations (CFR), including uninspected towing vessels. The Coast Guard may regulate fire protection equipment on inspected towing vessels under statutory authority found in 46 U.S.C. 3301 and 3306, which was delegated by the Secretary of Homeland Security to the Coast Guard in DHS Delegation Number 0170.1(II)(92).

The Coast Guard issues this rule without prior notice and opportunity for public comment. Section 553(b)(B) of the Administrative Procedure Act provides an exception from notice and comment requirements when an agency finds that notice and comment are “impracticable, unnecessary, or contrary to the public interest.” In accordance with 5 U.S.C. 553(b)(B), the Coast Guard finds that notice and comment are unnecessary because this rule would not require a substantive change of fire protection equipment on towing vessels, and would align with regulatory requirements already met by all existing towing vessels. This rule will revise 46 CFR subchapter M to require inspected towing vessels to meet fire protection equipment requirements that already apply to other commercial vessels, including uninspected towing vessels. The Coast Guard updated these standards in its 2016 Fire Protection rule. At the time the Coast Guard updated the fire protection equipment requirements for other commercial vessels, there were no towing vessels inspected under subchapter M: The Coast Guard established subchapter M in a June 2016 rule that published one month prior to the Fire Protection rule, and, as a practical matter, did not place requirements on any towing vessel until July 2017 or later.1 Because of the timing of subchapter M requirements, at this time uninspected towing vessels are subject to the more modern Fire Protection rule provisions. This rule corrects the anomalous situation whereby a towing vessel transitioning from uninspected to inspected status would be required to comply with the previous standards instead of the updated Fire Protection rule. Moreover, all existing marine fire extinguishers already meet the requirements of this interim final rule, and the number of extinguishers required on a vessel will not change. Because this rule will not require any existing vessel to change its equipment or practices, the Coast Guard finds good cause to forgo notice and opportunity to comment.

This is a summary of the Commission's document, Report No. 3086, released February 15, 2018. The full text of the Petition is available for viewing and copying at the FCC Reference Information Center, 445 12th Street SW, Room CY-A257, Washington, DC 20554. It also may be accessed online via the Commission's Electronic Comment Filing System at: http://apps.fcc.gov/ecfs/. The Commission will not send a Congressional Review Act (CRA) submission to Congress or the Government Accountability Office pursuant to the CRA, 5.U.S.C. because no rules are being adopted by the Commission.

Subject: Elimination of Main Studio Rule, MB Docket No. 17-106, FCC 17-137, published at 82 FR 57876, December 8, 2017. This document is being published pursuant to 47 CFR 1.429(e). See also 47 CFR 1.4(b)(1) and 1.429(f), (g).

Number of Petitions Filed: 1.

Of the six requested changes contained in the petitions, NHTSA is granting the petition request to postpone the compliance phase-in schedule by one year. NHTSA also is granting two petition requests relating to the “Sameness” requirements in the final rule to further allow variations in alert sound across different vehicle types, and to reduce the number of compliance criteria to meet the sameness standards. In addition, NHTSA is granting a petition request to modify the regulatory language to permit the alteration of the alert sound as originally equipped on a vehicle for repairs and recall remedies. NHTSA has decided to deny one petition request to change the crossover speed, which is the speed above which the pedestrian alert sound is allowed to turn off, from 30 kilometers per hour (km/h) to 20 km/h. The agency has determined that the available information on lowering the crossover speed does not warrant making that change.

Furthermore, regarding a petition request to allow vehicles to be manufactured with a suite of driver-selectable pedestrian alert sounds, the agency is neither granting nor denying that request in this document. Instead, NHTSA intends to issue a separate document at a later date to seek comment on the issue of driver-selectable sounds.

Additionally, this document addresses a few requests for technical changes and provides a few clarifications of final rule technical requirements raised in the petitions. Lastly, this document responds to a comment on the final rule about the availability of industry technical standards incorporated by reference in the final rule.

Pursuant to the Pedestrian Safety Enhancement Act of 2010 (PSEA),1 NHTSA issued a final rule on December 14, 2016, to create a new FMVSS setting minimum sound level requirements for low-speed operation of hybrid and electric light vehicles. The minimum sound requirements provide a means for blind and other pedestrians as well as bicyclists and other road users to detect the presence of these so-called quiet vehicles and thereby reduce the risk that these vehicles will be involved in low-speed pedestrian crashes.

After the final rule was published, NHTSA received timely petitions for reconsideration 2 from three sources: The Auto Alliance in conjunction with Global Automakers (Alliance/Global); American Honda Motor Company, Inc. (Honda); and Nissan North America, Inc. (Nissan). These petitions requested several changes covering several aspects of the final rule. Of the various issues covered in these petitions, NHTSA identified the following six discrete requests for specific changes to requirements in the final rule (listed here in the order they appear in the Alliance/Global, Honda, and Nissan petitions):

1. To delay by one year both the compliance phase-in schedule and the date by which all vehicle production must comply with the rule (section S9);

2. To limit the compliance criteria for the Sameness requirement (section S5.5.2) to only the digital sound file and digital processing algorithm;

3. To modify the Sameness requirement (S5.5.1) to allow alert sounds to vary by trim level or model series rather than just by make/model;

4. To modify section S8, which prohibits altering the factory-equipped alert sound, to allow recall remedies and vehicle repairs when components of the alert system are shared with other vehicle systems;

5. To lower the crossover speed from 30 km/h (18.6 mph) to 20 km/h (12.4 mph);

6. To modify the Sameness requirement so that a vehicle can be equipped with a suite of up to five driver-selectable alert sounds.

To facilitate the agency's response to the petitions, we are treating each of these six issues as separate petition requests and addressing them individually in this document.

As fully discussed later in this rule, the agency is granting several of these petition requests, specifically the first four issues listed above. We believe the corresponding adjustments to the final rule will clarify requirements, provide more flexibility to vehicle manufacturers, and remove potential barriers to achieving compliance, while having no foreseeable impact on the safety benefits estimated in the December 2016 final rule, as this rule simply corrects an error in the original final rule related to the phase-in schedule and does not make changes that affect the substance of the required alert sound. The agency is denying the fifth item above, relating to cross-over speed, because no new data or analyses have been presented that would justify reversing the agency's previous conclusion on cross-over speed as presented in the final rule preamble. As for the last item, on driver-selectable sounds, the agency has decided to request public comment before deciding how to respond to that request, and NHTSA intends to issue a notice of proposed rulemaking (NPRM) or other Federal Register document on that issue.

In this document, the agency also responds to two issues raised by Nissan relating to acoustic specifications in the final rule. In addition, in response to technical questions in the Honda petition, we are providing several clarifications of some requirements.

Lastly, in this document, NHTSA is responding to two comments submitted to the docket, one from Ford regarding the legality of equipping certain vehicles used for security purposes with a means of turning off the required pedestrian alert sound, and the other from PublicResource.org regarding the availability to the general public of technical documents, including industry standards from SAE, ISO, and ANSI, incorporated by reference in the final rule.

The Alliance/Global and Honda petitions along with a supplemental submission from Alliance/Global and a supporting comment from General Motors Corporation discussed several reasons related to vehicle design, development, and manufacturing that will make it very difficult if not impossible for manufacturers to meet the final rule's compliance phase-in schedule. The petitions and supporting comments pointed out that there are significant differences between the final rule requirements and those in the NPRM, as well as differences between the final rule and a European regulation on minimum vehicle sound, that will force manufacturers to make changes to prospective vehicle designs. Even if a manufacturer had already incorporated NPRM specifications into future vehicle designs, more design lead time still is needed to accommodate final rule requirements. They also discussed the specific language used in the PSEA regarding phase-in of compliance and indicated they believe the PSEA requires NHTSA to provide an additional year of lead time before manufacturers must achieve full compliance with the standard.

In consideration of these petitions and supporting documents, the agency recognizes that hybrid and electric vehicle product cycles that are in process for model years 2019 and 2020 may already be beyond the point where they could fully meet the final rule's compliance phase-in schedule.

Thus, the agency has decided to grant the petitions from Alliance/Global and Honda with respect to extending the lead-time for compliance with the final rule. In this document, we are specifying new compliance dates which delay by one full year the date in the final rule by which a fifty percent phase-in must be achieved (revised to September 1, 2019) and the deadline date for full compliance of all vehicles subject to the requirements of the safety standard (revised to September 1, 2020). We also are making conforming changes to the dates in the Part 585 Phase-in Reporting requirements as amended by the December 14, 2016, final rule.

The automakers that petitioned NHTSA stated that vehicles of the same model can have significant differences that might affect their sound output. For example, Honda pointed out that a two-door and four-door car can have the same make/model designation. Vehicles of the same model designation also might have different powertrains and bodywork such as grille design and body cladding, which have the potential to influence both the emitted sound and the air-generated sound when the vehicle is in motion. The agency recognizes that, because of these differences, it is not accurate in all instances to consider all vehicles of the same make/model to be the same for the purposes of the FMVSS No. 141 requirement.

Where the PSEA required “the same sound or set of sounds for all vehicles of the same make and model,” it was left up to NHTSA to interpret how “model” should be defined for the purpose of regulating similarity of the pedestrian alert sound. The agency therefore has decided to grant the Alliance/Global and Honda petitions with respect to this part of the “Sameness” requirement. We are amending the final rule so that alert sounds can vary across different vehicle trim levels in addition to varying by make, model, and model year as provided in the final rule.

We note that the term “trim level” was suggested in the Alliance/Global petition as the criterion that should be used to distinguish vehicles for the purpose of the FMVSS No. 141 Sameness requirements. Honda meanwhile suggested using the term “series.” “Trim level” is not a term that is defined in NHTSA regulations, while the term “series” is defined in Part 565.12. However, according to another definition in Part 565.12, specifically the definition of “model,” a series is not considered a subset of a model, as it would appear Honda assumed it is. Therefore, we believe that the term “series” is not appropriate to use in this instance. We thus are modifying the regulatory text to account for different trim levels, but not “series.” We believe amending the requirement in this way is the best approach for identifying groups of vehicles that are required to have the same pedestrian alert sound. This also will provide the added flexibility in the Sameness requirement that manufacturers are seeking, and it is responsive to both the Alliance/Global and Honda requests on this issue.

The second change we are making to the Sameness requirements is to limit the criteria listed in paragraph S5.1.2 for verifying compliance. As requested by Alliance/Global, we are simplifying the listed criteria so that the digital sound file and the sound processing algorithms will be the only specific criteria that are required to be the same from one specimen test vehicle to another. The automakers stated that other Sameness criteria listed in the final rule, such as component part numbers, are hardware-based criteria that should be excluded. One reason is that the PSEA statutory language allowed for “reasonable manufacturing tolerances.” They also stated that requiring hardware-based Sameness would unnecessarily impede competitive sourcing of components, a practice by which automakers source components from different suppliers such that the components may have dissimilar part numbers even though they are built to the same OEM specification and have the same performance. Alliance/Global also cited a legal precedent under which NHTSA regulations generally must avoid being design-restrictive except when there is a valid safety justification.

NHTSA has decided to grant Alliance/Global's request to amend the language in paragraph S8 of the final rule prohibiting the alteration of the alert sound originally equipped on a vehicle at the time of production. Alliance/Global and Honda state that this prohibition is unnecessarily restrictive and does not allow for “reasonable manufacturing tolerance” as required by the PSEA. Furthermore, they are concerned the final rule could prohibit vehicle repairs and recall remedies when hardware components such as an electronic control unit or body control module, which may by design be shared between the alert system and other vehicle systems, needs to be replaced.

Although the agency is uncertain that the existing final rule language which prohibits altering the alert sound originally equipped on a production vehicle would impede any vehicle repairs or remedies, we are adopting this change to clarify the existing language because it was not the agency's intention to hinder vehicle repairs or recall remedies.

NHTSA is denying Nissan's request to reduce the crossover speed from 30 km/h (18.6 mph) to 20 km/h (12.4 mph). Nissan's petition stated that NHTSA had not specifically addressed their NPRM comment regarding this issue. The Nissan petition did not provide new information or data on crossover speed that NHTSA had not considered when developing the final rule.

NHTSA notes that the final rule did specifically address a JASIC study and test data which was the basis of the Nissan NPRM comment. More importantly, NHTSA included a new analysis in the final rule to address comments, including Nissan's, about the need to evaluate crossover speed using detectability criteria rather than by other methods. The new analysis in the final rule used the Volpe detection model which previously had been used to develop the final rule's acoustic specifications. In this new analysis, data from a selection of internal combustion engine (ICE) vehicles in coast down mode (engine off to simulate an EV or HV in electric mode) was analyzed using the Volpe model to determine whether the vehicle noise at each test speed (10, 20, and 30 km/h) had reached a detectable level. NHTSA's conclusion about this new detection-based analysis was that it did not support lowering the crossover speed to 20 km/h. Since this analysis was based on detection rather than comparisons to other vehicles, we believe it was responsive to the Nissan NPRM comments on crossover speed. Given that fact and the absence of new data in Nissan's petition, NHTSA has no basis to revise our previous conclusion about crossover speed.

The agency also notes that the final rule contained other concessions that indirectly address manufacturer concerns about crossover speed. In the final rule, in addition to reducing the required number of bands from the proposed number of eight bands, all required minimum sound levels for each operating speed were reduced by 4 dB to offset potential measurement variation. By virtue of this across-the-board reduction, the required sound levels at 30 km/h in the final rule are close to the proposed levels for 20 km/h in the NPRM for this rulemaking.

Lastly, we note that safety organizations, particularly the National Federation of the Blind, have expressed their support of the 30 km/h crossover speed and have not agreed that lowering it to 20 km/h is acceptable.

The agency's position continues to be that lowering the crossover speed from the 30 km/h level, contained in both the NPRM and final rule, is not warranted by the available information, and we are denying the Nissan petition request on this issue.

NHTSA has decided to seek comment on Alliance/Global's request to allow hybrid and electric vehicles to be equipped with multiple, driver-selectable alert sounds before granting or denying this request. Amending the requirements to allow multiple sounds per vehicle would be a substantial change to the final rule. Because NHTSA did not solicit or receive comment on the number of driver-selectable sounds that should be allowed if NHTSA were to allow them, we believe it is appropriate to seek public comment before determining whether to grant this request. Therefore, in accordance with normal rulemaking administrative procedures, NHTSA tentatively plans to issue a separate document, which would provide an opportunity for public comment on this particular issue.

In addition to requesting specific changes to requirements in the final rule, the petitions raised technical issues relating to the acoustic specifications and test procedures and also asked for clarification on specific language in the final rule. These technical issues are summarized here and fully addressed later in this document.

Technical issues raised in Nissan's petition included two items: First was a request to allow the use of adjacent instead of only non-adjacent one-third octave bands for compliance; and second was a request to set the minimum band sum requirements for the 2-band compliance option to be equal to the corresponding overall SPLs of the 4-band compliance option. We note that, while Nissan phrased these two issues as petition requests, we are treating them as technical clarifications because the final rule preamble included substantial explanation of the agency's rationale for specifying non-adjacent bands for compliance as well as the agency's methodology for selecting the band sum levels for the 2-band compliance option, and we do not believe that the information presented in Nissan's petition invalidates the agency's previous analysis, as explained later in this document. After giving these two technical requests from Nissan due consideration, the agency is not making any changes to the acoustic specifications in response to these requests.

Honda's petition requested the following technical clarifications: Whether a vehicle can switch between 2-band and 4-band compliance at the different test speeds; which bands should be selected for compliance when the highest band levels above and below 1000 Hz are in adjacent rather than non-adjacent bands; and how to calculate the average of overall SPL values (section S7.1.4). Also, Honda requested that indoor testing be an option available for manufacturer certification in addition to outdoor testing.

In reviewing the regulatory text of the December 2016 final rule to address Honda's petition, NHTSA identified several inconsistencies and minor errors in section S7 of the regulatory text. Because the agency already was making a number of text changes to S7 to respond to Honda, NHTSA has taken this opportunity to correct and clarify the text as needed to resolve those inconsistencies and errors.

A submission to the docket from Publicresource.org was concerned with the public availability of technical documents that were incorporated by reference into the final rule. The documents in question are industry technical standards including an SAE recommended practice (in two versions), an ISO standard (in three versions), and an ANSI standard. Publicresource.org stated that various parties and members of the public that may have some interest in the rule would not have adequate access to these reference documents. This might include consumer protection groups, small manufacturers, hobbyists, and students. Publicresource.org did not specify why they believe availability would be limited or lacking, whether that would be due to cost of the documents or some other reason. The agency's position is that the subject reference documents for FMVSS No. 141 are available in the same manner as reference documents for any other FMVSS. For this rulemaking, the agency followed the same practice for handling reference documents as it always follows, as set forth in Section VI, Regulatory Notices and Analyses, in the final rule, as well as in the corresponding section at the end of this document.

NHTSA's involvement with the safety of quiet hybrid and electric vehicles and their impact on pedestrian safety goes back at least a decade to when the agency began monitoring efforts by various outside groups on this issue. In 2008 the agency held a public meeting on the safety of quiet vehicles and, the following year, initiated a statistical study of relevant pedestrian crashes and began researching the acoustical aspects of the safety problem.

In January 2011, the U.S. Congress enacted legislation, the Pedestrian Safety Enhancement Act of 2010 (PSEA), which directed NHTSA to undertake rulemaking to create a new safety standard to require hybrid and electric vehicles to have a minimum sound level in order to help pedestrians, especially those with impaired eyesight, to detect those vehicles.

In accordance with the PSEA, NHTSA issued an NPRM 3 on January 14, 2013, and a final rule 4 on December 14, 2016, establishing FMVSS No. 141, “Minimum Sound Requirements for Hybrid and Electric Vehicles.”

NHTSA's conducted a statistical crash data study, as cited in the final rule,5 which found that the pedestrian crash rate of hybrid vehicles was 1.18 times greater than that of conventional ICE vehicles. The agency's Final Regulatory Impact Assessment is available in the docket 6 with some proprietary information redacted. Also, the benefits of the final rule are summarized in section V-A 7 of the final rule preamble, and the costs are summarized in section V-B.8

NHTSA also completed an Environmental Assessment 9 of the potential for increase in ambient noise levels in urban and non-urban environments in the U.S. which would result from a federal regulation setting minimum sound levels for hybrid and electric vehicles. The Environmental Assessment estimated that there will be only minimal impact in one type of non-urban scenario, and the overall environmental noise increase from the safety standard for HVs and EVs was found to be negligible.

Pursuant to the Pedestrian Safety Enhancement Act, NHTSA issued a Notice of Proposed Rulemaking (NPRM) 10 in January 2013 to create a new FMVSS setting minimum sound level requirements for low-speed operation of hybrid and electric light vehicles.

The NPRM proposed a crossover speed of 30 km/h (18.6 mph) because at that speed, based on NHTSA tests that used a “peer vehicle” comparison methodology, tire noise, wind resistance, and other noises from the vehicle eliminated the need for added alert sounds. In the agency's tests, the sound levels of a selection of electric and hybrid vehicles were evaluated and compared to the sound levels of vehicles having the same or similar make, model, and body type but operating with internal combustion engines (ICEs). For example, the sound level of a hybrid Toyota Camry in electric mode in a pass-by test at 20 km/h was directly compared to the sound level of a conventional gas-engine Toyota Camry of the same model year at the same pass-by speed of 20 km/h.

The NPRM specified an outdoor compliance test procedure based on the September 2011 version of SAE J2889-1. The compliance procedure included tests for stationary, reverse, and pass-by measurements conducted at 10 km/h (6.2 mph), 20 km/h (12.4 mph), and 30 km/h (18.6 mph). We explained in the NPRM that NHTSA believed that outdoor pass-by testing is preferable to indoor testing in hemi-anechoic chambers using chassis dynamometers because outdoor testing is more representative of the real-world interactions between pedestrians and vehicles. We also expressed concern that specifications for indoor testing were not fully developed and did not have a known level of objectivity, repeatability, and reproducibility for testing minimum vehicle sound at low speeds.

The NPRM proposed a Sameness requirement in order to ensure that hybrid and electric vehicles of the same make and model emit the same sound, as directed by the PSEA. The NPRM proposed that vehicles of the same make, model, and model year must emit the same level of sound within 3 dB(A) in each one-third octave band from 160 Hz to 5000 Hz.

As noted, the final rule was published on December 14, 2016, and established FMVSS No. 141 which applies to electric and hybrid-electric passenger cars, MPVs, light trucks, and buses with a GVWR of 10,000 pounds or less and to low speed vehicles (LSVs). The standard applies to these vehicles if they can be operated in an electric mode in the test conditions covered by the standard, without an any internal combustion engine (ICE) operation. The final rule requires hybrid and electric vehicles to emit sound at minimum levels while the vehicle is stationary (although not when the vehicle is parked, i.e., when the transmission is in “park”), while in reverse, and while the vehicle is in forward motion up to 30 km/h. It also adopted the agency's proposal to conduct compliance testing outdoors.

In the final rule, the agency reduced the number of one-third octave bands for which vehicles must meet minimum sound pressure level requirements. The NPRM proposed that vehicles would have to emit sound meeting minimum requirements in eight one-third octave bands. In the final rule, hybrid and electric vehicles will instead have to meet a requirement based on sound level in either two or four one-third octave bands at the vehicle manufacturer's option, and a vehicle may alternate between meeting the 2-band and 4-band specifications depending on test speed. Vehicles complying with the 4-band option must meet minimum sound pressure levels in any four non-adjacent one-third octave bands between 315 Hz and 5000 Hz, including the one-third octave bands between 630 Hz and 1600 Hz (these bands were excluded in the NPRM). Vehicles complying with the 2-band option must meet minimum sound pressure levels in two non-adjacent one-third octave bands between 315 Hz and 3150 Hz, with one band below 1000 Hz and the other band at or above 1000 Hz. The two bands used to meet the 2-band option also must meet a minimum band sum level.

Under the 4-band compliance option, the minimum sound levels for each band are slightly lower than the values proposed in the NPRM, and the overall sound pressure of sounds meeting the 4-band option will be similar to those meeting the proposed eight-band requirements in the NPRM. Under the 2-band compliance option, the minimum sound requirements for each band are lower than those of the proposed eight-band requirements for the low and mid frequency bands (315 Hz through 3,150 Hz; the 4,000 Hz and 5,000 Hz bands are not included for the purpose of determining compliance with the 2-band requirement.) Neither the 4-band compliance option nor the 2-band compliance option include requirements for tones or broadband content that were contained in the NPRM.

For both the 2-band and 4-band compliance options, the final rule expands the range of acceptable one-third octave bands to include those between 630 Hz and 1600 Hz (these bands were excluded in the NPRM). It also reflects an across-the-board reduction in the minimum levels of 4 dB(A) to account for measurement variability which the agency's development of test procedures indicated was needed.

Reducing the number and minimum levels of required one-third octave bands while expanding the number of useable bands in the final rule provided additional flexibility to manufacturers for designing pedestrian alert systems while preserving the goal of pedestrian alert sounds that are detectable in various ambient environments.

Regarding Sameness, NHTSA revised the criteria for determining that the sound produced by two HVs or EVs of the same make, model, and model year is the same. The agency determined that the NPRM requirement for the sound produced by two specimen vehicles to be within three dB(A) in every one-third octave band between 315 Hz and 5000 Hz was technically not feasible. The final rule instead requires that HVs and EVs of the same make, model, and model year emit the same sound by specifying that those vehicles use the same alert system hardware and software, including specific items such as the same digital sound file to produce sound used to meet the minimum sound requirements. The final rule listed several other criteria including part numbers of alert system components that may be evaluated to verify compliance with the Sameness requirement.

The final rule made numerous improvements to the proposed test procedures in response to comments that were received on the NPRM.

With regard to the phase-in schedule for the safety standard, the NPRM proposed a phase-in schedule for manufacturers of HVs and EVs, with 30 percent of the HVs and EVs they produce required to comply three years before the date for full compliance established in the PSEA, 60 percent required to comply two years before the full-compliance date, and 90 percent required to comply one year before the full-compliance date. To respond to comments on that proposal, the final rule simplified the phase-in schedule by shortening it to include a single year of phase-in, rather than three years. This simplification provides somewhat more lead-time and responds to vehicle manufacturers' comments that the proposed phase-in was unnecessarily complex.

Under the final rule, half of each manufacturer's HV and EV production would have been required to comply with the final rule by September 1, 2018, and 100 percent by September 1, 2019. The phase-in does not apply to multi-stage and small volume manufacturers; all of their HV and EV production would have been required to comply with the final rule by September 1, 2019.

In response to the published final rule on Minimum Sound Requirements for Hybrid and Electric Vehicles, NHTSA received timely petitions for reconsideration (submitted by the January 30, 2017, deadline) from three sources: The Auto Alliance in conjunction with Global Automakers 11 (Alliance/Global); Nissan North America, Inc.12 (Nissan); and American Honda Motor Company, Inc.13 (Honda). Alliance/Global 14 also submitted a supplemental letter in support of their petition. In addition, General Motors Corp, Inc., submitted a letter providing support on one of the issues raised by Alliance/Global and Honda. (The GM letter contained proprietary information, so it has not been released to the docket.)

These petitions requested several changes covering several aspects of the final rule. NHTSA identified the following six discrete requests for changes to specific requirements (listed here in the approximate order they appear in the Alliance/Global, Honda, and Nissan petitions):

1. To delay by one year both the compliance phase-in date and the date by which all vehicle production must comply with the rule (section S9);

2. To consolidate the compliance criteria for the Sameness requirement (section S5.5.2) to include only the digital sound file and digital processing algorithm;

3. To modify the Sameness requirement (S5.5.1) to allow alert sounds to vary by trim level or model series rather than just by make/model;

4. To modify section S8, which prohibits altering the factory-equipped alert sound, so as not to impede vehicle repairs when components of the alert system are shared with other vehicle systems;

5. To lower the crossover speed from 30 km/h (18.6 mph) to 20 km/h (12.4 mph);

6. To modify the Sameness requirement so that a vehicle can be equipped with a suite of up to five driver-selectable alert sounds.

In addition to these specific requests for amendments to the final rule, some of the petitions included requests for technical clarifications. Nissan's submission included two such requests, one concerning the minimum sound levels for 2-band and 4-band specifications, and the other regarding allowing adjacent bands for compliance. Similarly, Honda's submission pointed out a few technical clarifications they believe are needed, involving the intended use of 2-band and 4-band compliance options, the correct method of data selection and calculation for certain steps in the sound evaluation process, and the option of using indoor testing.

Lastly, NHTSA received one additional docket comment, from PublicResourse.org, 15 that the agency has decided to address in this document. This comment was in regard to the availability to the public of technical reference documents, specifically several industry standards from SAE, ISO, and ANSI, that were incorporated by reference in the final rule. This docket submission in discussed in more detail below.

The Alliance/Global petition addressed requirements for: Compliance phase-in schedule; equipping HVs and EVs with driver-selectable sounds; applying Sameness to each “trim level” rather than each model; limiting the Sameness compliance criteria to the digital sound file and digital algorithm; and removing any prohibition on altering vehicle components that may be shared between the alert system and other vehicle systems.

Regarding the phase-in schedule, in addition to discussing design and manufacturing considerations that would make the final rule schedule unfeasible, Alliance/Global's petition pointed out that NHTSA's interpretation of the PSEA language regarding compliance dates appeared to have changed between the NPRM and the final rule. The petition argued that the earlier interpretation was the correct one and that, under that interpretation, the agency is required to provide an additional year of lead-time before full compliance is required.

Alliance/Global submitted a supplementary letter which provided further detail on the phase-in schedule and the issue of driver-selectable sounds. On the phase-in, the supplemental submission discussed specific final rule requirements that had changed since the NPRM. It also noted several areas where the final rule is different from the UN Regulation No. 138. In their supplementary submission, Alliance/Global also indicated that, if a set of driver-selectable sounds was permitted, manufacturers would limit the number to no more than five different sounds per make, model, model year, and trim level of vehicle.

A letter in support of the Alliance/Global petition submitted by GM (submitted under a request for confidentiality) addressed the issue of phase-in schedule. This letter stated, “While GM supports NHTSA's effort to create minimum sound requirements for electric and hybrid vehicles, the final rule contains a number of additional technical challenges that will require substantial redesigns to GM's existing systems.” GM's letter also stated, “The twenty-month phase-in provided by the final rule is far less than the normal timing required to develop, validate, and certify new systems.” GM cited the final rule's volume shift requirement, different frequency range, and several design changes that will be needed in the sound generating systems that GM already has been installing in its electric and hybrid production vehicles. The GM letter cited specific hardware changes, upgrades, and replacements that their current alert systems need to be compliant with FMVSS No. 141.

Most recently, on August 4, 2017, the Alliance of Automobile Manufacturers (the Alliance), the Association of Global Automakers (Global) and the National Federation of the Blind (NFB) wrote the Deputy Secretary of the Department of Transportation requesting that the December 2016 final rule be permitted to come into effect on September 5, 2017. The letter also requested that by September 5, 2017, NHTSA amend the compliance date of the December 2016 final rule to delay the phase-in and full compliance dates by one year and by November 6, 2017, respond to the remaining technical issues in the pending petitions for reconsideration.

Honda's petition included two specific petition requests, one regarding the phase-in schedule, and the other regarding allowance for alert sounds to vary from vehicle to vehicle according to model “series” as well as make, model, and model year. The remainder of Honda's submission was concerned with technical clarifications and comments on the rule. Honda asked if it is acceptable under the 2-band and 4-band compliance specifications for a vehicle to switch back and forth between the two specifications at the different speed conditions of the test procedure. Honda also asked NHTSA to clarify section S7.1.6(e)(i) of the test procedure, noting that there could be a conflict when choosing the two highest band levels while also choosing only non-adjacent bands for the compliance evaluation. In addition, Honda asked NHTSA to clarify the calculation method for averaging overall SPLs in section 7.1.4(c) of the test procedure.

Lastly, Honda stated that indoor testing should be optional for FMVSS No. 141 compliance evaluations and is preferable because of the better stability and the efficiency of indoor sound measurements, and also because, from a harmonization standpoint, that would better align the safety standard with UN Regulation No. 138 which permits indoor measurements.

Nissan submitted a cover letter and technical slides in which they requested that NHTSA reconsider its decision in the final rule on the crossover speed, which the agency set at 30 km/h (18.6 mph). Nissan stated that they believe the crossover speed should be set at 20 km/h, and cited a previous comment 16 that Nissan had submitted to the docket in May 2014 in response to the agency's NPRM and which summarized a JASIC study related to crossover speed. Nissan stated that NHTSA did not address this comment in the final rule.

Nissan's petition also raised two technical issues. The first was a request that NHTSA allow the use of adjacent instead of only non-adjacent one-third octave bands for compliance. The second issue was a request to set the minimum band sum requirements for the 2-band compliance option to be equal to the minimum overall SPLs for the 4-band compliance option. Although these two issues raised by Nissan ask the agency to reconsider specific requirements of the final rule and request specific changes, we believe these two issues were addressed in the discussion of NHTSA's acoustic research in the final rule preamble. Thus, we have decided it is appropriate to treat these issues as technical clarifications.

A comment from Publicresource.org expressed concern with public availability of technical documents that were incorporated by reference into the final rule. The documents in question are industry technical standards including an SAE recommended practice (in two versions), an ISO standard (in three versions), and an ANSI standard. Publicresource.org stated that various parties such as consumer protection groups, small manufacturers, hobbyists, and students would not have adequate access to these reference documents. Publicresource.org did not specify why that would be the case, i.e., whether it is due to the cost of the documents when purchased from their respective technical organizations, or some other reason.

As outlined in the previous section of this document, the petitions requested a number of changes covering several aspects of the final rule. NHTSA identified six discrete requests for changes to specific requirements. As stated previously, to facilitate responding to the petitions, the agency is treating each of the six issues as separate requests and addressing each request individually below.

After considering all information provided by petitioners, NHTSA is granting four of the requested actions, denying one request (on crossover speed), and for the last item (on driver-selectable sounds), the agency has decided that it will be necessary to request public comment before deciding how to respond to that request, and NHTSA intends to issue a notice of proposed rulemaking (NPRM) or other Federal Register document on that issue.

In regard to the four petition requests that the agency is granting, we are amending the final rule to implement the following changes:

• Amend Section S9, Phase-In Schedule, to add exactly one year to each of the dates listed in subsections S9.1, S9.1(a), S9.1(b), and S9.2.

• Amend Section S5.5, Sameness requirement, subsection S5.5.1, to allow alert sounds to vary across different trim levels, and also amend Section S4, Definitions, to add a new definition for “trim level.”

• Amend Section S5.5, Sameness requirement, subsection S5.5.2, to limit the criteria listed in the final rule to be used for verifying compliance with the Sameness requirement so that the digital sound file and the sound processing algorithm are the only criteria that are required to be the same. Other criteria, particularly part numbers of hardware components, would not be listed in the regulatory text.

• Amend Section S8, Prohibition on altering the sound of a vehicle subject to this standard, to clarify that the rule does not prohibit vehicle repairs unrelated to the alert system in the case of replacement of hardware components shared between the alert system and other vehicle systems, i.e., a body control module.

These amendments to the final rule and the agency's reasons for adopting them are further discussed below. In general, we believe these changes to the final rule are worthwhile refinements that will clarify the requirements, provide more flexibility to vehicle manufacturers, and remove potential barriers to achieving compliance, while having no foreseeable impact on the safety benefits estimated in the December 2016 final rule, as this rule simply corrects an error in the original final rule related to the phase-in schedule and does not make changes that affect the substance of the required alert sound.

Our decision to deny one request, as well as the agency's intent to seek comment on one issue, also are discussed in detail below. In addition, we address some technical issues raised and other comments relating to the final rule.

The agency has decided to grant the petitions from Alliance/Global and Honda with respect to extending the lead-time for compliance by extending the phase-in date and the full compliance date by one year. NHTSA is also addressing supplemental submissions from Alliance/Global and General Motors Corporation (GM) that provided information on the lead time issue.

After further consideration, we agree with the petitioners that the interpretation of the PSEA phase-in requirements provided by the agency in the NPRM is the correct interpretation and that delaying the full compliance date until September 1, 2020 is required by that interpretation. The PSEA states that, “The motor vehicle safety standard . . . shall establish a phase-in period for compliance, as determined by the Secretary, and shall require full compliance . . . on or after September 1 of the calendar year that begins 3 years after the date on which the final rule is issued.” In the NPRM, the agency had stated that the appropriate timeframe should be the calendar year beginning 36 months after the rule was issued, such that, if a rule were issued anytime in 2016, the 36-month period after the date of publication of the final rule would end sometime in 2019. Thus, the first calendar year that would begin after that date in 2019 would be calendar year 2020, meaning that full compliance should be by September 1, 2020. The agency believes that its interpretation from the NPRM continues to be the correct interpretation of the PSEA. In fact, upon review, the agency did not actually change this interpretation in the Final Rule, as the phase-in schedule and economic analysis were based on the assumption that the rule would be published in 2015, rather than 2016, which is what actually occurred. The agency now corrects this error.

Further, NHTSA agrees that, because of vehicle product cycles, it would be difficult for manufacturers to make the design modifications necessary for vehicles subject to FMVSS No. 141 to meet the current final rule phase-in schedule and full compliance date, especially in light of the significant changes from the NPRM and the uncertainty surrounding the issues raised in the petitions for reconsideration.

In the Final Rule, the agency estimated that the economic impact of the rule for MY 2020 vehicles was $42M to $41.5M in costs and $320M to $247.5M in benefits at the 3 percent and 7 percent discount rates. However, in light of the issues raised in the petitions and the more recent letter from the Alliance, Global, and NFB, the agency believes that the analysis in the final rule may likely have understated the initial costs to comply with the rule. More specifically, the analysis was based on a less aggressive phase-in schedule and as such, does not support a 100 percent compliance date of September 1, 2019. In fact, comments received indicate that the more accelerated phase-in schedule than what the agency had intended is not technically possible, which calls in to question the relationship between benefits and costs presented in the Final Rule. By delaying the compliance date by one year, the economic impacts of the rule will more closely mirror those presented in support of the Final Rule.

In this document, we are specifying new compliance dates which delay by one full year both corresponding dates in the final rule, i.e., the date by which a fifty percent phase-in must be achieved and also the deadline date for full compliance of all vehicles subject to the requirements of the safety standard. Under the amended one-year phase-in, half of vehicles produced in model year 2020 must be compliant, as follows:

• Fifty percent of each manufacturer's total production of hybrid and electric vehicles, subject to the applicability of FMVSS No. 141 and produced on and after September 1, 2019, and before September 1, 2020, shall comply with the safety standard;

OR, at the manufacturer's option: 50 percent of each manufacturer's average annual production of hybrid and electric vehicles subject to the applicability of FMVSS No. 141 and produced on and after September 1, 2016, and before September 1, 2019, shall comply with the safety standard.

Immediately following the one-year phase-in, starting with model year 2021, all hybrid and electric vehicles are required to comply, as follows:

• 100 percent of each manufacturer's production of hybrid and electric vehicles subject to the applicability of FMVSS No. 141 and produced on and after September 1, 2020, shall comply with the safety standard.

In making these changes to the compliance schedule, we believe this will afford manufacturers the additional flexibility and lead time needed to accommodate customary vehicle design cycles, thus addressing the schedule concerns expressed in their petitions.

As a consequence of the revised phase-in schedule, it is necessary to make conforming adjustments to the Part 585 reporting requirements in order to align them with the new phase-in period. The conforming changes to Part 585 are detailed below.

When a new safety regulation is phased in over a period of time, NHTSA requires manufacturers to submit production data so the agency can track and verify adherence to the phase-in schedule. Part 585 of Title 49 of the CFR contains the requirements for Phase-in Reporting for various FMVSS. To implement the one-year, 50-percent phase-in for FMVSS No. 141, the December 2016 final rule included amendments to Part 585, appending new Subpart N, to provide for tracking of production data so that the agency can verify that the requisite minimum percentage of vehicles are in compliance during the phase-in.

As a result of the amended phase-in schedule contained in this document, we are making corresponding adjustments to the phase-in reporting dates of Part 585, Subpart N, as amended in the December 14, 2016, final rule. This entails adding one year to the due dates in the following paragraphs of Part 585, Subpart N: § 585.130 `Applicability'; § 585.132 `Response to Inquiries'; § 585.133 `Reporting Requirements'; and § 585.130 `Records.' These revisions appear in the regulatory text at the end of this document.

The petitions from Alliance/Global and Honda requested that NHTSA amend section S5.5.1 of the Sameness requirement in the final rule regulatory text. That section required all vehicles of the same make, model, and model year to use the same pedestrian alert sound system and be designed to have the same sound. This requirement originated from the PSEA which stipulated that the safety standard “shall require manufacturers to provide, within reasonable manufacturing tolerances, the same sound or set of sounds for all vehicles of the same make and model. . . .”

The automakers stated that vehicles of the same model can have significant differences unrelated to the alert sound system that might affect their sound output. For example, Honda pointed out that a two-door and four-door car can have the same model designation. Vehicles of the same model designation also might have different powertrains and bodywork such as grille design and body cladding, which have the potential to influence both emitted sound and the air-generated sound when the vehicle is in motion.

Alliance/Global requested that NHTSA add the term “trim level” to “make, model, and model year” in S5.5.1 so that vehicles of the same make/model would be required to have the same sound only if the vehicles also have the same trim level designation. This would give manufacturers flexibility to allow the alert sound to vary among vehicles that, while having the same make/model designation, may nevertheless be physically different in significant ways. Honda made a similar request but, instead of the term “trim level,” Honda requested using the term “series.”

The agency recognizes that, because of the possibility of physically significant differences between vehicles within a model line, it is not practical to consider all vehicles of the same make/model to be the same for the purposes of the pedestrian alert sound. The agency therefore has decided to grant the Alliance/Global and Honda petitions with respect to this aspect of the “Sameness” requirement. We are amending the final rule so that alert sounds can vary across different vehicle trim levels and also by vehicle body type, in addition to varying by make, model, and model year as provided in the final rule.

For the revised requirement, “body type” is added and is used as defined in 49 CFR 565.12(b) which states, “Body type means the general configuration or shape of a vehicle distinguished by such characteristics as the number of doors or windows, cargo-carrying features and the roofline (e.g., sedan, fastback, hatchback).”

The request on this issue in Alliance/Global petition used the term “trim level” as the designation criterion that would distinguish vehicles for the purpose of Sameness requirements in FMVSS No. 141, while Honda suggested using the term “series.” We note that “trim level” is not a term that is defined anywhere in NHTSA regulations, while the term “series” is defined in Part 565.12.17 However, it also should be noted that, per the definition of “model” also included in Part 565.12, a “series” would not be considered a subset of a model. On the contrary, a “model” as defined in Part 565.12 is a subset of a “series.” Therefore, the agency believes based on the existing definitions that “series” does not reflect a subdivision of a model line, as Honda seems to have intended. On the other hand, we believe the term “trim level” is widely understood to denote a subset of a model, which is what the petitioners seek to achieve according to the information they provided on this issue. Therefore, we are modifying the regulatory text to account for different trim level designations, without reference to or use of the term “series.”

For this revised requirement, “trim level” is defined to mean a subset of vehicles within the same model designation and with the same body type which are alike in their general level of standard equipment, such as a “base” trim level of a vehicle model. Other trim levels within a model might include a “sport” version or “luxury” version. These depend on the trim designations that are used by different manufacturers. Generally, different trim levels comprise no more than a few different versions of a given model. For the purposes of FMVSS No. 141, minor differences including different wheel rim styles or merely being equipped with a sunroof should not be considered to constitute different trim levels. Trim levels should be considered to be different only if they represent vehicle differences that are likely to alter vehicle-emitted sound. We are including a definition of “trim level” in section S4 of the regulatory text to reflect this.

We believe relaxing the final rule in this manner will adequately distinguish between groups of vehicles that, based on their physical similarity, can reasonably be required to have the same pedestrian alert sound. This change will provide the added flexibility in meeting the Sameness requirement that the manufacturers are seeking. At the same time, this change is acceptable from a regulatory standpoint given that the agency's understanding of the PSEA language was to allow for variation of alert sounds across different groups of vehicles so long as vehicles that are the same in most other respects would have the same alert sound. As pointed out by petitioners, vehicles of the same model might not be the same in many respects, but vehicles of the same trim level would be the same.

The regulatory text of sections S4 and S5.5.1 amended per the above discussion appears at the end of this document.

The petitions from Alliance/Global and Honda raised concerns about the wording in S5.5.2 of the Sameness requirement. Paragraph S5.5.2 states that a “pedestrian alert system” includes all hardware and software components that are used to generate the alert sound. That section goes on to specifically list the types of vehicle components, including both hardware and software, that comprise a pedestrian alert system and that must be the same on any two vehicles of the same make, model, and model year. Among the listed items that must be the same are “alert system hardware components including speakers, speaker modules, and control modules, as evidenced by specific details such as part numbers and technical illustrations.”

The petitioners believe that this requirement is overly design-restrictive. In particular, they are concerned that requiring part numbers to be the same is not feasible. Alliance/Global stated, “The regulatory text as written places part-number specific restrictions on a vast number of components and as a result creates a major impediment for manufacturing.” They also state, “OEMs may choose to source components from more than one vendor, and requiring the use of the `same' hardware and software may preclude that competitive process.” They go on to say that the final rule is inconsistent with the Vehicle Safety Act stipulation that each FMVSS must permit a manufacturer to select any technology that can meet the performance requirements. Similarly, Honda's petition stated that, in cases where a shared component such as an ECU that serves multiple vehicle functions is modified during a model year due to changes in vehicle systems other than the alert system, “the ECU part number would change, thus causing a violation of the Sameness requirement.”

The agency has decided to amend the Sameness requirements as requested to limit the criteria listed in the final rule for verifying compliance so that the digital sound file and the sound processing algorithm will be the only criteria that are required to be the same from one specimen test vehicle to another. The petitioners stated that other Sameness criteria listed in the final rule are hardware-based criteria, such as component part numbers, and should not be included because it appears to disregard the statutory requirement to allow “reasonable manufacturing tolerances.” Also, requiring hardware-based Sameness would unnecessarily impede competitive sourcing of components and related vehicle manufacturing and assembly practices. For example, automakers may source a component from different suppliers, such that the components have dissimilar part numbers even though they are built to the same OEM specification and have the same performance. Alliance/Global also cited a legal precedent under which NHTSA regulations generally must avoid being design-restrictive except when there is a valid safety justification.

To implement the amendment described above, the agency is adopting new language based largely on that suggested by Alliance/Global. The revisions to paragraph S5.5.2 acknowledge two types of design of a digital sound-generating system. In simple terms, one type uses a digitally coded source, such as a digitally recorded sound file, which is processed by a controller program and played back through the speaker system. Another type creates the sound without a source file using programmed algorithms that generates the signal that is played back through the speaker system.

Section S8 of the final rule has the heading “Prohibition on altering the sound of a vehicle subject to this standard.” This requirement is unchanged from what the agency proposed in the NPRM, and it originated from a PSEA requirement stating that the safety standard must “prohibit manufacturers from providing any mechanism for anyone other than the manufacturer or the dealer to disable, alter, replace, or modify the sound” except to remedy a noncompliance or defect.

NHTSA's interpretation of the purpose of this requirement in the PSEA was to prevent access to vehicle features which control the alert sound system so that it could not be modified, adjusted, or reprogramed in a way that would change the emitted sound or render it noncompliant. In other words, the alert system needs to be tamper-resistant to some extent. For example, a vehicle's owner-accessible setup menus should not include a setting that disables the alert system.

The Alliance/Global expressed concern with NHTSA's wording of this requirement in the final rule. They stated, “An OEM may decide to install a body controller or other component that may not be dedicated solely to FMVSS 141 compliance, but which is installed—in part—to comply with FMVSS 141. The PSEA does not preclude actions to repair such a body controller for reasons unrelated to FMVSS 141, yet the final rule appears to preclude such repairs.” They also state that the requirement in the final rule exceeds the authority granted by the PSEA. Alliance's/Global's petition contained suggested edits to the regulatory text that would remove the potential conflict in the regulatory text.

Alliance/Global also stated that the final rule was unnecessarily restrictive on this issue, and it did not allow for “reasonable manufacturing tolerance” as stipulated in the PSEA. Furthermore, they along with Honda are concerned the final rule could prohibit vehicle repairs or create other obstacles to vehicle updates when components such as an electronic control unit or body control module are shared between the alert system and other vehicle systems.

We have decided to grant the request to modify the final rule with respect to this issue. Although the agency is uncertain that the existing final rule language in section S8 actually would impede any vehicle repair or upgrade, we are adopting this change because the language should be clear, and because it was not the agency's intention to hinder any vehicle repair or remedy unrelated to the pedestrian alert system.

The amended text we are adopting is that suggested by Alliance/Global. The revisions appear in the amended text of section S8 at the end of this document.

Nissan's petition request to lower the crossover speed revisits the issues raised in Nissan's comments to the NPRM. Nissan stated that NHTSA did not specifically address their May 19, 2014 submission to the NPRM docket on crossover speed. Nissan's petition for reconsideration did not provide any new information or data that was not already considered by the agency when developing the final rule.

NHTSA notes that the final rule specifically addressed a JASIC study 18 and test data which was the basis of Nissan's submission. More importantly, NHTSA included a new analysis in the final rule to address comments, including Nissan's, about the need to evaluate crossover speed using detectability criteria rather than by other methods. (Those other methods included comparisons of ICE sound levels with the engine on and engine off, referred to as the “coast down” method; and also, comparisons of the sound level of EVs or HVs to identical or similar ICE vehicles, called the “peer vehicle” method.) For the final rule, NHTSA added a new detectability analysis for crossover speed using the Volpe detection model 19 which had been used to develop the final rule's acoustic specifications. In this new analysis, data from a selection of ICE vehicles in coast down mode (engine off to simulate EVs and HVs in electric mode) was analyzed by the Volpe model to determine whether the vehicle noise at each test speed (10, 20, and 30 km/h) had reached a detectable level. NHTSA's conclusion from this new detection-based analysis, which we included in the final rule preamble to respond to comments, was that it did not support lowering the crossover speed to 20 km/h (12.4 mph). Furthermore, since this analysis was based on the detection model rather than comparisons between vehicles, it provides a more useful means of identifying the speed at which added sound is no longer needed than peer vehicle and coast down comparisons.20 As Nissan's petition cited their previous comment based on the existing JASIC study rather than providing new information, NHTSA has no basis to revise our previous conclusion about crossover speed.

The agency also notes that the final rule contained concessions that indirectly address manufacturer concerns about crossover speed. In the final rule, the minimum number of required one-third octave band components was reduced from the proposed number of eight bands. In addition, all of the required minimum sound levels for each operating speed were reduced by 4 dB to offset potential measurement variation. By virtue of these changes to the acoustic specifications, the overall level of sounds meeting the final rule acoustic requirements at 30 km/h (60 to 64 dB(A) for the 4-band option) is very similar to the overall level of sounds meeting the NPRM's proposed 8-band requirements at 20 km/h (approx. 62 dB(A)).

For all the reasons stated above, the agency's position continues to be that lowering the crossover speed from the 30 km/h level contained in both the NPRM and final rule is not warranted, and we are denying the Nissan petition request on this issue.

Nissan's petition raised two technical issues in addition to the petition request on crossover speed addressed above. First was a request to allow the use of adjacent instead of only non-adjacent one-third octave bands for compliance; and second was a request to set the minimum band sum requirements at each test speed for the 2-band compliance option to be equal to the corresponding overall SPLs of the 4-band compliance option.

After considering these two technical requests from Nissan, the agency is not making any changes to the acoustic specifications related to these issues. We note that, while Nissan phrased these two issues as petition requests, we are treating them as technical clarifications because Nissan's petition did not directly respond to or acknowledge the discussion and explanation in the final rule preamble as to the agency's rationale for specifying non-adjacent bands for compliance and the agency's methodology for selecting the band sum levels for the 2-band compliance option. The preamble included a lengthy discussion of detectability research the agency conducted after the NPRM had been published.

On the first issue, the question of adjacency of bands, Nissan cited a Zwicker loudness model that, according to Nissan, shows a frequency band will mask an adjacent band when the sound level difference between the two bands reaches 6 dB or more (in one-third octave band frequencies). Nissan pointed out that the difference from any band to an adjacent one in the final rule's required minimum levels is less than 4 dB for all of the bands included.

Our response to this is that the masking data cited by Nissan applies to the masking of a component at the center of its one-third octave band. If the masker is shifted toward the signal, while still in its own one-third octave band, masking can take place at levels significantly less than 6 dB.

Although it may be possible, depending on the ambient, to achieve detectability using adjacent bands, there still would be greater susceptibility to the combined masking effects due to adjacent components and the ambient that are enough to make a barely perceptible component not perceptible. This phenomenon appears to have influenced results of NHTSA's validation study 21 in which alert signals with non-adjacent bands were detected more consistently (in a standardized 55 dB(A) ambient) than signals with only adjacent bands.

NHTSA also is concerned that an acoustic specification allowing adjacent one-third octave bands is vulnerable to poor design practice, in that a single tone placed at the cut-off frequency of a one third octave band could be credited for two bands (one on either side of the cut-off, with a level in both bands about 3 dB lower than the tone). A signal like this, though it might technically meet a 2-band criterion with adjacent bands allowed, would disregard NHTSA's findings about the importance of spreading signal components across a wide frequency range to create robust sounds detectable in a variety of ambient sound profiles.

For these reasons, we do not agree with Nissan that adjacent bands should be allowed in the 2-band and the 4-band compliance requirements of the FMVSS No. 141 final rule. Furthermore, specifying non-adjacent bands imposes only a minor limitation on alert sound design, and we did not find any reason given in Nissan's submission why this requirement is unreasonable, impractical, or burdensome to an extent that it should be deleted. Therefore, the agency has decided not to amend the final rule with respect to the non-adjacency issue raised in Nissan's petition.

Regarding the second technical issue in Nissan's petition, they requested that the band sums at each test speed for the 2-band compliance option should be set equal to the overall SPL levels for the 4-band compliance option. In response, we first point out that the agency's reasons for specifying higher band sums when using the 2-band option are discussed in the preamble of the December 2016 final rule.22 In that discussion, the agency noted that the 2-band specifications were optimized so that allowable 2-band signals would achieve a degree of robustness (i.e., detectability in a wide range of ambients normalized to a 55 dB(A)) equivalent to that achieved by compliant 4-band signals. To maintain robustness, it was necessary to set the band sum levels high enough to compensate for the reduced number of bands. Without this optimization, the agency would not have been able to accommodate NPRM comments calling for a 2-band approach.

In comparing the 2-band and 4-band options, robustness is achieved for the latter by requiring acoustic energy at threshold levels in a minimum of four bands and specifying that these four bands span a minimum of nine one-third octave bands. The idea is that for an ambient of 55 dB(A), either the masking components would match those used for determining thresholds or masking components would tend not to spread across a wide range of nine one-third octave bands. Thus, there is a high likelihood with a 4-band alert signal that some portion of the vehicle's sound will be detectable in an ambient that is 55 dB(A) or lower so that it can be heard by pedestrians. The 2-band option has fewer bands and thus fewer opportunities to have a signal coincide with an advantageous ambient level. Instead, it achieves robustness by requiring a greater overall level (higher band sum) from the two bands (one below 800 Hz and one at or above 1000 Hz) that have the most acoustical energy. There is a fundamental tradeoff between loudness versus sound bandwidth when comparing the 2-band and 4-band options.

In summary, NHTSA believes that the approach taken in the final rule for setting the band sum levels for the 2-band option is reasonable and justifiable, and Nissan's petition did not include any research or other information that would persuade the agency to take a different approach. Therefore, we are not making the requested change to the final rule.

Honda made several comments in its petition about technical clarifications they believe are needed in the final rule. The first issue was whether a vehicle can switch between 2-band and 4-band compliance at the different test speeds.

The answer is `yes', it is acceptable to switch between compliance with the 2-band and 4-band options for different test conditions (stationary, reverse, 10 km/h, 20 km/h, and 30 km/h). In any test to verify compliance with FMVSS No. 141, the measured sound of a vehicle at each test condition would be checked for compliance with both the 2-band and 4-band requirements. For example, sound measurements of a vehicle in a 10 km/h pass-by test would be evaluated relative to both the 2-band and 4-band specifications, and the vehicle could achieve compliance by meeting one or both specifications. At 20 km/h, the evaluation of both the 2-band and 4-band specifications would be repeated independent of which specification was complied with at 10 km/h, and the vehicle could again comply with one or both specifications. As long as the measured sound at a given test speed meets at least one of the two optional specifications, then it would comply for the particular test speed.

Regarding evaluating the relative volume change requirement (S5.4) for vehicles that switch between 2-band and 4-band compliance, we note that relative volume change is based on a band sum of the whole range of 13 bands in the measured sound at each test condition, calculated per S7.6 of the test procedure. Because the criterion is the band sum of all the bands, relative volume change evaluation does not depend on which of the two minimum sound level options, 2-band or 4-band, is complied with in each test condition, and there is no conflict if a vehicle switches between the two specifications for different test conditions.

Another technical clarification requested by Honda was in regard to section S7.1.6(e) of the December 2016 final rule. That section of the test procedure specifies which one-third octave bands should be selected for compliance evaluations under the 2-band compliance option. The requirement states that the two bands with the highest levels, one below 1000 Hz and the other at or above 1000 Hz, should be selected. Honda said that it is unclear which bands should be selected in the event that the two bands with the highest levels are adjacent, i.e., if they are specifically the 800 Hz and 1000 Hz bands.

NHTSA recognizes this discrepancy and agrees that some clarification is needed. The intent of the final rule was that the two one-third octave bands (one below and one at or above 1000 Hz) with the highest SPLs that are, at the same time, non-adjacent would be selected, but the text does not specify what happens if the two bands with the highest SPLs are adjacent. In that case, to maintain non-adjacency, another band having the next-largest SPL would have to be substituted for either the 800 Hz or 1000 Hz band. This substitution involves at least two permutations of band selection. In one permutation, the 800 Hz band would be selected along with the band above 1000 Hz with the second-largest SPL of the bands at or above 1000 Hz. In the other permutation, the 1000 Hz band would be selected along with the band below 800 Hz with the second-largest SPL of the bands at or below 800 Hz. Both combination of two bands selected according to these restrictions are then evaluated according to S7.1.6(e)(ii) and at least one must comply with the applicable requirements in section S5 of the Standard.

To make this clear, we are revising the regulatory text of paragraph S7.1.6(e)(i) in a manner similar to what Honda suggested.

As a consequence of Honda's request to clarify this language, the agency identified two additional places in the regulatory text—in paragraphs S7.1.5(e) and in S7.3.5(e)—where it is necessary to insert similar amended text because those two paragraphs are analogous to S7.1.6(e), that is, all three of these paragraphs address an equivalent step in the procedure, with the only difference being the test speed. In the two additional paragraphs, S7.1.5(e) and S7.3.5(e), we also note that some of the text that was of concern to Honda in S7.1.6(e) was inadvertently omitted from the final rule. Specifically, those two paragraphs should have included the sentence, “One band shall be below 1000 Hz and one band shall be at or greater than 1000 Hz.”

To clarify the text and accurately state the procedural step for selection of bands to be evaluated for compliance with the 2-band option, the agency is revising S7.1.5(e) and S7.3.5(e) using the same amended text as for S7.1.6(e), described above, except with different paragraph references within the text, as appropriate. The amended text for these two paragraphs is included at the end of this document.

In addition to the above text clarifications and corrections, in section S7.1.5(e) of the December 2016 final rule, text applying to one-third octave band selection for the 4-band compliance option, but not for the 2-band compliance option was included. The iterative process to select a combination of four bands to be used to evaluate compliance does not apply for the 2-band option. Therefore, the agency is deleting that sentence from three sections of the test procedure where it is not relevant. The amended text appears at the end of this document.

Lastly, in making the above text changes, the agency identified a few minor mistakes and inconsistencies in the wording of related requirements. In sub-paragraphs S7.1.5(d)(ii) and S7.1.5(e)(ii), the words “of this paragraph” are unnecessary because the exact paragraph reference numbers are included in the text. Furthermore, the phrase “of this paragraph” could lead to a misunderstanding as it is not entirely clear what “this paragraph” refers to. Thus, we are deleting the phrase “of this paragraph” in both places. Additionally, in S7.1.5(e)(ii) and in S7.1.6(d)(ii), where reference is made to paragraph “(c)” without further specificity, we are replacing “(c)” with the full paragraph numbers, “S7.1.5(c)” and “S7.1.6(c)” respectively, to avoid any misunderstanding and to be consistent with the wording used in related sections of the test procedure. Also, to enhance S7.2, procedure for testing in Reverse, we are adding the sentence, “The minimum sound level requirements for the Reverse test condition are contained in S5.1.2, Table 2, for 4-band compliance and in S5.2, Table 6, for 2-band compliance.”

Similarly, to enhance S7.4 for pass-by tests above 20 km/h up to 30 km/h and S7.5 for pass-by tests at 30 km/h, we are adding an analogous statement to clarify which S5 requirements apply at those test speeds. In addition to this edit, we are re-wording S7.4 to more clearly express the pass-by speeds that may be tested. Finally, we are re-wording and adding an additional sentence to S7.3.6 so that pass-by test speeds above zero up to 10 km/h are explicitly included and to include specific reference to the appropriate requirement tables in S5 for both the zero to 10 km/h pass-by speed range and the greater than 10 km/h up to 20 km/h pass-by speed range.

NHTSA is making these technical changes in section S7 as part of the amendments in this document to respond to Honda's request and to correct inconsistencies and minor errors in the regulatory text. All technical changes and corrections discussed above appear in the amended regulatory text at the end of this document.

Another technical question in Honda's petition was how to correctly calculate the average of the overall SPL values in section S7.1.4 of the test procedure. The answer to Honda's question is that a linear average is taken, which is the sum of the SPL values divided by four. The result is rounded to a tenth of a decibel, as specified in the test procedure. We also point out, as discussed in more detail in the following paragraph, that NHTSA intends to provide a computer program for compliance evaluation that will automatically execute all necessary calculations including averaging overall SPLs for S7.1.4(c).

As a general response to Honda's comments, we note that the agency has been developing a “NHTSA Compliance Tool” for FMVSS No. 141, which is a programmed, computer-based application to facilitate compliance testing. As discussed in the final rule preamble,23 NHTSA intends to make this tool available publicly so that OEMs, test labs, suppliers, and others will have access to and full use of this tool, similar to what the agency did for FMVSS No. 126, Electronic Stability Control. This compliance tool will include a user interface that will prompt for test data input and will automatically evaluate vehicle compliance based on the input. All test data processing steps and calculations in section S7 of the safety standard are built-in to the tool. For example, with respect to Honda's technical questions, the tool will execute the band selection and calculate averages needed to verify compliance with the 2-band and 4-band specifications at each test speed, as well as compliance with the volume change requirements. The tool will evaluate all possible band combinations, such that if the situation regarding S7.1.6(e) cited by Honda were to arise, the tool would evaluate all combinations of the two highest non-adjacent bands above and below 1000 Hz.

The last technical issue raised in Honda's petition was about indoor testing. Honda stated that indoor testing should be optional, and it is preferable for certification of vehicles to FMVSS No. 141. Honda also stated that indoor testing is accommodated in the European regulation, United Nations Economic Commission for Europe Regulation (UN ECE) No. 138, Uniform Provisions Concerning the Approval of Quiet Road Transport Vehicles with Regards to Their Reduced Audibility. Honda cited factors such as Doppler shift that influence outdoor testing, and stated that indoor testing has better stability and efficiency for sound measurement.

In response to this, the agency points out that the preamble of the December 2016 final rule addressed indoor testing 24 because this topic was raised in several NPRM comments. The agency acknowledged some advantages of indoor testing in hemi-anechoic chambers but also pointed out several reasons why outdoor testing on an ISO-compatible test pad is preferable, and concluded that the agency intends to conduct its own compliance tests using outdoor facilities. Importantly, with regard to Honda's indoor testing comment in their petition, the agency notes that the absence of a specific test procedure for indoor testing in the final rule does not mean indoor testing is prohibited. On the contrary, vehicle manufacturers, suppliers, and others have the discretion to conduct FMVSS No. 141 certification tests indoors as long as they can certify that a vehicle fully complies with the Safety Standard.

The comment from Publicresource.org expressed concern with public availability of technical documents that were incorporated by reference into the final rule. However, their docket submission did not specify any particular reasons that they believe various parties such as consumer protection groups, small manufacturers, hobbyists, and students would not have adequate access to these reference documents. Thus, NHTSA is not able to provide a response to more adequately address any concerns they might have. Given that the subject documents from SAE, ISO, and ANSI are copyrighted material, the agency followed its normal practice in making them publicly available, which includes keeping a printed copy of each of the reference documents on hand at NHTSA headquarters. Printed copies of the referenced documents are also available at the National Archives and Records Administration. The public availability of documents incorporated by reference was discussed in Section VI of the December 14, 2016, final rule.25

Pursuant to the process established under 49 CFR part 553.37, after carefully considering all aspects of the petition, except for the request regarding driver selectable sounds, NHTSA has decided to grant the petitions discussed above without further proceedings.

Executive Order 12866, Executive Order 13563, and the Department of Transportation's regulatory policies require this agency to make determinations as to whether a regulatory action is “significant” and therefore subject to OMB review and the requirements of the aforementioned Executive Orders. The Executive Order 12866 defines a “significant regulatory action” as one that is likely to result in a rule that may:

(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities;

(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

We have considered the potential impact of this final rule under Executive Order 12866, Executive Order 13563, and the Department of Transportation's regulatory policies and procedures and have determined that today's final rule is not significant for any of the aforementioned reasons. This final rule only makes minor adjustments to the existing requirements of FMVSS No. 141. We are adjusting the phase-in schedule and its reporting requirements to give manufacturers additional time to comply with the requirements of the final rule. We are also making several minor amendments to the rule to clarify the rule's requirements. We thus anticipate that the economic impacts of this final rule will be limited.

Executive Order 13771 titled “Reducing Regulation and Controlling Regulatory Costs,” directs that, unless prohibited by law, whenever an executive department or agency publicly proposes for notice and comment or otherwise promulgates a new regulation, it shall identify at least two existing regulations to be repealed. In addition, any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs. Only those rules deemed significant under section 3(f) of Executive Order 12866, “Regulatory Planning and Review,” are subject to these requirements. As discussed above, this rule is not a significant rule under Executive Order 12866 and, accordingly, is not subject to the offset requirements of 13771.

NHTSA has determined that this rulemaking is a deregulatory action under E.O. 13771, as it imposes no costs and, instead, amends FMVSS No. 141 to give manufacturers of hybrid and electric vehicles greater flexibility during the manufacturing process and when sourcing parts that comprise the alert sound system. This final rule also provides flexibility to manufacturers by allowing them to differentiate hybrid and electric vehicles of different trim levels within a vehicle model by allowing vehicles of different trim levels to produce different sounds. This final rule also amends FMVSS No. 141 to delay the date by which manufacturers are required to fully comply with the requirements of the standard by one year.

Delaying the compliance date of FMVSS No. 141 for one year will result in a cost savings to manufacturers of hybrid and electric vehicles to which the standard applies of $21M to $20.75M for MY 2019 and $21M to $20.75M75 for MY 2020 at the three and seven percent discount rates, respectively. These cost savings will accrue because manufacturers of hybrid and electric vehicles to which the standard applies will not have to comply with the phase-in requirements of the standard until September 1, 2019 and will not have to fully comply with the standard's requirements until September 1, 2020. NHTSA contends that these cost savings estimates are conservative and that the true cost savings of the rule are likely to be higher because, as discussed above, the cost benefit analysis accompanying the December 2016 final rule assumed a longer compliance lead time and did not account for costs that may have been necessary to comply with the rule in a shorter time period.

The policy statement in section 1 of Executive Order 13609 provides, in part:

In the preamble to the December 2016 final rule we discussed the reasons for the differences in the regulatory approach taken by foreign governments that have addressed this issue. As stated above, we are declining to adopt a test procedure for indoor testing included in UN ECE Reg. No. 138. NHTSA's test procedures are not requirements that manufacturers must follow when certifying vehicles to the FMVSS and manufacturers are free to choose whatever certification method they wish as long as the manufacturer can demonstrate a good faith basis for certification.

Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601 et seq., as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996), whenever an agency is required to publish a notice of proposed rulemaking or final rule, it must prepare and make available for public comment a regulatory flexibility analysis that describes the effect of the rule on small entities (i.e., small businesses, small organizations, and small governmental jurisdictions). The Small Business Administration's regulations at 13 CFR part 121 define a small business, in part, as a business entity “which operates primarily within the United States.” (13 CFR 121.105(a)). No regulatory flexibility analysis is required if the head of an agency certifies the proposal will not have a significant economic impact on a substantial number of small entities. SBREFA amended the Regulatory Flexibility Act to require Federal agencies to provide a statement of the factual basis for certifying that a proposal will not have a significant economic impact on a substantial number of small entities.

I hereby certify that this rule would not have a significant economic impact on a substantial number of small entities. This final rule does not make any significant changes to the existing FMVSS No. 141. Instead, this rule aligns the phase-in requirements with manufacturers' design and production cycles, and makes other minor adjustments to specific regulatory text to facilitate manufacturer compliance with the new FMVSS No. 141. It also clarifies some technical requirements and test procedures. The final requirements as amended in this document afford more lead time, and somewhat greater clarity and flexibility to vehicle manufacturers while maintaining the safety goals and benefits of the enabling statute, the PSEA, under which FMVSS No. 141 was created.

NHTSA has examined today's final rule pursuant to Executive Order 13132 (64 FR 43255, August 10, 1999) and concluded that no additional consultation with States, local governments or their representatives is mandated beyond the rulemaking process. The agency has concluded that the rulemaking would not have sufficient federalism implications to warrant consultation with State and local officials or the preparation of a federalism summary impact statement. Today's final rule does not have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

NHTSA rules can have preemptive effect in two ways. First, the National Traffic and Motor Vehicle Safety Act contains an express preemption provision:

It is this statutory command by Congress that preempts any non-identical State legislative and administrative law addressing the same aspect of performance.

The express preemption provision described above is subject to a savings clause under which “[c]ompliance with a motor vehicle safety standard prescribed under this chapter does not exempt a person from liability at common law.” 49 U.S.C. 30103(e). Pursuant to this provision, State common law tort causes of action against motor vehicle manufacturers that might otherwise be preempted by the express preemption provision are generally preserved. However, the Supreme Court has recognized the possibility, in some instances, of implied preemption of State common law tort causes of action by virtue of NHTSA's rules—even if not expressly preempted.

This second way that NHTSA rules can preempt is dependent upon the existence of an actual conflict between an FMVSS and the higher standard that would effectively be imposed on motor vehicle manufacturers if someone obtained a State common law tort judgment against the manufacturer—notwithstanding the manufacturer's compliance with the NHTSA standard. Because most NHTSA standards established by an FMVSS are minimum standards, a State common law tort cause of action that seeks to impose a higher standard on motor vehicle manufacturers will generally not be preempted. However, if and when such a conflict does exist—for example, when the standard at issue is both a minimum and a maximum standard—the State common law tort cause of action is impliedly preempted. See Geier v. American Honda Motor Co., 529 U.S. 861 (2000).

Pursuant to Executive Order 13132, NHTSA has considered whether this rule could or should preempt State common law causes of action. The agency's ability to announce its conclusion regarding the preemptive effect of one of its rules reduces the likelihood that preemption will be an issue in any subsequent tort litigation.

To this end, the agency has examined the nature (e.g., the language and structure of the regulatory text) and objectives of today's final rule and finds that this rule, like many NHTSA rules, prescribes only a minimum safety standard. Accordingly, NHTSA does not intend that this final rule preempt state tort law that would effectively impose a higher standard on motor vehicle manufacturers than that established by today's final rule. Establishment of a higher standard by means of State tort law would not conflict with the minimum standard established in this document. Without any conflict, there could not be any implied preemption of a State common law tort cause of action.

NHTSA solicited comments from the States and other interested parties on this assessment of issues relevant to E.O. 13132 in the NPRM. However, we did not receive any comments with regard to this issue.

When promulgating a regulation, Executive Order 12988 specifically requires that the agency must make every reasonable effort to ensure that the regulation, as appropriate: (1) Specifies in clear language the preemptive effect; (2) specifies in clear language the effect on existing Federal law or regulation, including all provisions repealed, circumscribed, displaced, impaired, or modified; (3) provides a clear legal standard for affected conduct rather than a general standard, while promoting simplification and burden reduction; (4) specifies in clear language the retroactive effect; (5) specifies whether administrative proceedings are to be required before parties may file suit in court; (6) explicitly or implicitly defines key terms; and (7) addresses other important issues affecting clarity and general draftsmanship of regulations.

Pursuant to this Order, NHTSA notes as follows. The preemptive effect of this final rule is discussed above in connection with Executive Order 13132. NHTSA notes further that there is no requirement that individuals submit a petition for reconsideration or pursue other administrative proceeding before they may file suit in court.

Executive Order 13045, “Protection of Children from Environmental Health and Safety Risks,” (62 FR 19885; April 23, 1997) applies to any proposed or final rule that: (1) Is determined to be “economically significant,” as defined in Executive Order 12866, and (2) concerns an environmental health or safety risk that NHTSA has reason to believe may have a disproportionate effect on children. If a rule meets both criteria, the agency must evaluate the environmental health or safety effects of the rule on children, and explain why the rule is preferable to other potentially effective and reasonably feasible alternatives considered by the agency. This final rule is not subject to Executive Order 13045 because it is not economically significant.

Under the National Technology Transfer and Advancement Act of 1995 (NTTAA) (Pub. L. 104-113), “all Federal agencies and departments shall use technical standards that are developed or adopted by voluntary consensus standards bodies, using such technical standards as a means to carry out policy objectives or activities determined by the agencies and departments.” Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies, such as the Society of Automotive Engineers (SAE). The NTTAA directs us to provide Congress, through OMB, explanations when we decide not to use available and applicable voluntary consensus standards.

Pursuant to the above requirements, the agency conducted a review of voluntary consensus standards to determine if any were applicable to this final rule. For the specific provisions that we are adjusting in this rule, there were no applicable consensus standards.

The Unfunded Mandates Reform Act of 1995 requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually (adjusted for inflation with base year of 1995). We note that as this final rule only makes minor adjustments and clarifications to FMVSS No. 141. Thus, it would not result in expenditures by any of the aforementioned entities of over $100 million annually.

NHTSA has analyzed this rulemaking action for the purposes of the National Environmental Policy Act. The agency has determined that implementation of this action would not have any significant impact on the quality of the human environment. NHTSA has also determined that the changes in this final rule would not change the findings in the Final Environmental Assessment prepared in connection with the final rule.26

Under the Paperwork Reduction Act of 1995 (PRA), a person is not required to respond to a collection of information by a Federal agency unless the collection displays a valid OMB control number. While this final rule adjusts the timing of the phase-in reporting requirements to match the manufacturer's production year (i.e., to align the requirement with other potential phase-in reports that the manufacturer may need to produce), it includes no new collection of information because the actual reporting requirements are the same as the requirements in the April 2014 final rule.

The Department of Transportation assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda.

In consideration of the foregoing, NHTSA amends 49 CFR part 571 as follows: