Federal Register Vol. 83, No.87,

I. Background

The Agreement between the U.S. and the IAEA for the application of safeguards in connection with the Treaty for the Prohibition of Nuclear Weapons in Latin America (U.S.-IAEA Caribbean Territories Safeguards Agreement (ADAMS Accession No. ML17065A218)) entered into force on April 6, 1989. When the U.S.-IAEA Caribbean Territories Safeguards Agreement was signed, the U.S. and the IAEA also concluded a “Small Quantities Protocol” (SQP) to the agreement that held in abeyance almost all reporting and access requirements. The SQPs are designed for countries with minimal or no nuclear material and activities to minimize the burden of international safeguards implementation. The IAEA, as a part of its efforts to strengthen international safeguards in 2005, identified proliferation concerns associated with holding certain provisions of the U.S.-IAEA Caribbean Territories Safeguards Agreement in abeyance through an SQP, and has since urged countries with an original SQP, including the U.S., to adopt a “modified SQP” that would have the effect of taking out of abeyance certain reporting and inspection requirements of the U.S.-IAEA Caribbean Territories Safeguards Agreement. The U.S. and the IAEA have agreed on the text for a modified SQP, which will be brought into force upon an exchange of diplomatic letters between the U.S. and the IAEA.

When the U.S.-IAEA Caribbean Territories Safeguards Agreement and its SQP was brought into force in 1989, no revisions were made to part 75 of title 10 of the Code of Federal Regulations (10 CFR), “Safeguards on Nuclear Material—Implementation of U.S.-IAEA Agreement,” as most of the provisions were held in abeyance by the original SQP. In light of the modified SQP, which takes certain reporting and inspection provisions of the U.S.-IAEA Caribbean Territories Safeguards Agreement out of abeyance, the scope and requirements of 10 CFR part 75 need to be revised to include these reporting and inspection requirements. The applicable requirements of the U.S.-IAEA Caribbean Territories Safeguards Agreement, as captured in the amendments to 10 CFR part 75, impact all entities that possess source material and special nuclear material within the U.S. Caribbean Territories.

The scope and requirements of 10 CFR part 75 need to be expanded to include the provisions of the U.S.-IAEA Caribbean Territories Safeguards Agreement under the modified SQP. The applicable requirements of the U.S.-IAEA Caribbean Territories Safeguards Agreement, as captured in the amendments to 10 CFR part 75, impact all entities that possess source material and special nuclear material within the U.S. Caribbean Territories, which are defined in the amended 10 CFR part 75 as: Puerto Rico, the U.S. Virgin Islands, Navassa Island, Serranilla Bank, Baja Nuevo (Petrel Island), and the Guantanamo Bay Naval Base.

This final rule requires affected entities to:

• Provide basic information about the user (e.g., user's name and address), including organizational structure, geographic location, use of the nuclear material, and other relevant information requested pursuant to the safeguards agreement.

• Provide an initial inventory report of all source and special nuclear material possessed, and an annual inventory report thereafter. This reporting requirement will also include source material that is contained in non-nuclear end use applications (e.g., depleted uranium shielding).

• Provide annual Material Status Reports for nuclear materials covered by the applicable provisions of the U.S.-IAEA Caribbean Territories Safeguards Agreement.Provide an inventory change report when possessors import or export nuclear material (including shipments between U.S. Territories as well as to and from the 50 States) and provide advance notification, as specified in §§ 75.43, 75.44, and 75.45, of such an import or export exceeding one effective kilogram, as defined in § 75.4.

• Provide access for IAEA inspections. These inspections are expected to occur on an infrequent basis. The scope of IAEA inspections may include several activities, such as examination of records; verifying the functioning and calibration of instruments; and utilizing IAEA equipment for independent measurement, containment (such as a seal), and/or surveillance.

The regulations in 10 CFR part 75 already contain requirements for the existing IAEA safeguards agreements to which the U.S. is a party, i.e., the U.S.-IAEA Safeguards Agreement (INFCIRC/288) (ADAMS Accession No. ML17065A211) and its associated Additional Protocol. The revised regulations will clearly delineate which entities are subject to the requirements under each particular safeguards agreement. It should be noted that those entities subject to the provisions of the U.S.-IAEA Caribbean Territories Safeguards Agreement are not subject to the provisions of the U.S.-IAEA Safeguards Agreement and its associated Additional Protocol as defined in § 75.4.

Possessors of source and special nuclear material in the U.S. Caribbean Territories will be subject to special and ad hoc inspections by the IAEA pursuant to the modified SQP. Articles 69, 71, 72, 73, 74, and 87 of U.S.-IAEA Caribbean Territories Safeguards Agreement that pertain to IAEA inspections were previously held in abeyance. Through the modification of the SQP, these Articles will be newly applicable to possessors of “nuclear material outside facilities,” as that term is defined in revised § 75.4, which means “nuclear material in the U.S. Caribbean Territories that is not in a facility, and is customarily used in amounts of one effective kilogram or less.” In order to accommodate these new requirements, the NRC is revising existing sections of 10 CFR part 75 that pertain to IAEA inspections. Under existing regulations, IAEA inspections were only applicable to “facilities,” under the U.S.-IAEA Safeguards Agreement. However, through the inclusion of the U.S.-IAEA Caribbean Territories Safeguards Agreement in the scope of 10 CFR part 75, the NRC is expanding the applicability of inspection-related sections to include possessors of nuclear material outside facilities.

Possessors of nuclear material outside facilities in the U.S. Caribbean Territories will be subject to new recordkeeping and reporting requirements pursuant to the modified SQP. Articles 7, 12, 32, 47, 60, 66, 67, and 93 of the U.S.-IAEA Caribbean Territories Safeguards Agreement were either held in abeyance or not applicable; however, through the modification of the SQP, these Articles will now be applicable to possessors of nuclear material outside facilities. In order to accommodate these new requirements, the NRC revised existing sections of 10 CFR part 75 that pertain to records and reports. Under existing regulations, recordkeeping and reporting requirements were only applicable to “facilities” and “locations” (as defined in § 75.4). However, through the inclusion of the U.S.-IAEA Caribbean Territories Safeguards Agreement in the scope of 10 CFR part 75, the NRC is expanding the applicability of recordkeeping and reporting-related sections to include possessors of nuclear material outside facilities.

The U.S. Government may request termination and exemption from IAEA safeguards for declared source or special nuclear material under Articles 11, 13, 33, 34, 35, and 36 of the U.S.-IAEA Caribbean Territories Safeguards Agreement. Previously, the U.S. Government had not utilized the termination and exemption provisions under the U.S.-IAEA Safeguards Agreement, therefore these provisions were not in the existing regulations in 10 CFR part 75. Due to the anticipated material types, quantities, and uses of nuclear material in the U.S. Caribbean Territories, as well as the fact that this safeguards agreement mimics a comprehensive safeguards agreement for a non-nuclear weapon state, the U.S. Government anticipates utilizing the exemption and termination provisions under the U.S.-IAEA Caribbean Territories Safeguards Agreement. As such, this final rule incorporates termination and exemption provisions into 10 CFR part 75.

Given the addition of the U.S.-IAEA Caribbean Territories Safeguards Agreement to the scope of 10 CFR part 75, it is necessary to specifically define and reference each individual safeguards agreement (i.e., “U.S.-IAEA Safeguards Agreement” and “U.S.-IAEA Caribbean Territories Safeguards Agreement”). This change is implemented throughout 10 CFR part 75 to ensure consistency in the use of terminology, and to distinguish between the requirements of each safeguards agreement. Furthermore, the new term “physical location” is added to 10 CFR part 75 to clarify the difference between geographic coordinates and the Additional Protocol term of art “location.” The term “nuclear material outside of facilities” was added as a new and distinct term that refers specifically to special nuclear and source material in the U.S. Caribbean Territories. This new term was necessary in order to distinguish the requirements of the U.S.-IAEA Caribbean Territories Safeguards Agreement from the requirements in the other safeguards agreements that utilize the terms of art “facilities” and “locations.” The term “U.S. Caribbean Territories” was added to refer to the territories covered by the U.S.-IAEA Caribbean Territories Safeguards Agreement.

To enhance the clarity and consistency of the regulations, several new definitions are added, and other definitions are revised or removed. Additionally, this final rule incorporates conforming changes, punctuation, and grammatical edits. In several sections, a website link is added to reference existing NRC guidance documents to replace the requirement for the public to submit a written request for a copy of the guidance documents.

Under the Administrative Procedure Act (5 U.S.C. 553(a)(1)), the normal notice and comment requirements do not apply if the rulemaking involves a military or foreign affairs function of the U.S. Since this final rule involves a foreign affairs function of the U.S., the notice and comment provisions of the Administrative Procedure Act do not apply (5 U.S.C. 553(a)(1)). This final rule will become effective 30 days after its publication in the Federal Register. The amendments are effective June 4, 2018.

This final rule revises the 10 CFR part 75 title to read: SAFEGUARDS ON NUCLEAR MATERIAL—IMPLEMENTATION OF SAFEGUARDS AGREEMENTS BETWEEN THE UNITED STATES AND THE INTERNATIONAL ATOMIC ENERGY AGENCY.

This final rule revises § 75.1 to include all requirements under any safeguards agreement between the U.S. and the IAEA.

The purpose section is revised to make it generally applicable to all U.S.-IAEA safeguards agreements utilizing a new term “safeguards agreements.” “Safeguards agreements” includes the U.S.-IAEA Caribbean Territories Safeguards Agreement as well as other existing U.S.-IAEA safeguards agreements. The word “physical” is added in front of the word “location” (to read “physical location”).

This final rule revises § 75.2 to ensure that possessors of nuclear material outside facilities who are physically located in the U.S. Caribbean Territories are now included within the scope of the regulations in 10 CFR part 75. The previous text in § 75.2 is simplified to remove unnecessary and repetitive references to existing requirements already enumerated elsewhere in 10 CFR part 75. The national security exclusion, which previously only referenced the term “locations,” a term of art specifically relating to the Additional Protocol, is changed to reference “facilities or locations.”

This final rule revises § 75.3 to reference all safeguards agreements between the U.S. and the IAEA, using the defined term “safeguards agreements,” rather than list each agreement individually. “Safeguards agreements” includes the U.S.-IAEA Caribbean Territories Safeguards Agreement, as exemptions may apply to this agreement. Paragraph (b) is moved to new § 75.26, “Exemptions from IAEA safeguards.”

This final rule revises § 75.4 by adding definitions to accommodate the inclusion of the SQP to the U.S.-IAEA Caribbean Territories Safeguards Agreement in a manner that avoids confusion with the existing safeguards agreements, removing a definition that was specific to only one safeguards agreement, and revising certain definitions to make them generally applicable to all safeguards agreements. The definition for Agreement is being removed; the definitions for Inventory change, Key measurement point, Location, and Safeguards Agreement are being revised; and the definitions for Nuclear Material Outside Facilities, Person, Physical location, Small Quantities Protocol, U.S. Caribbean Territories, U.S.-IAEA Caribbean Territories Safeguards Agreement, and U.S.-IAEA Safeguards Agreement are being added.

Agreement is being removed because it referred to one specific safeguards agreement; § 75.4 now includes and defines each specific safeguards agreement.

Inventory change is being revised to remove the words “source or special” from the definition because the term “nuclear material” is defined under this part to include only source or special nuclear material.

Key measurement point is being revised to include the word “physical” before the word “location” so as to remove any potential confusion between this usage and the term of art “location” as it is used specifically in the Additional Protocol.

Location is revised to read any geographical point or area subject to IAEA safeguards under the Additional Protocol because it was identified either by the U.S. in its declarations, or by the IAEA resulting from a question.

Safeguards Agreement is being revised to read “Safeguards Agreements” such that it includes all current safeguards agreements, protocols, and subsidiary arrangements, between the U.S. and the IAEA.

Nuclear material outside facilities is being added and means nuclear material in the U.S. Caribbean Territories that is not in a facility, and is customarily used in amounts of one effective kilogram or less.

Person is being added and means (1) any individual, corporation, partnership, firm, association, trust, estate, public or private institution, group, government agency other than the Commission or the U.S. Department of Energy (except that the Department shall be considered a person within the meaning of the regulations in this part to the extent that its facilities and activites are subject to the licensing and related regulatory authority of the Commission pursuant to law), any State or any political subdivision of, or any political entity within a State, any foreign government or nation or any political subdivision of any such government or nation, or other entity; and (2) any legal successor, representative, agent, or agency of the foregoing.

Physical location is being added to provide a definition that is specific to a geographic point or area where nuclear material or activity resides and to remove any potential confusion with the term of art “location” as it is used specifically in the Additional Protocol.

Small Quantities Protocol is being added and means the Small Quantities Protocol to the Agreement between the United States of America and the International Atomic Energy Agency for the Application of Safeguards in Connection with the Treaty for the Prohibition of Nuclear Weapons in Latin America (INFCIRC/366).

U.S. Caribbean Territories is being added and means those territories for which, de jure or de facto, the U.S. is internationally responsible and which lie within the limits of the geographical zone established in Article 4 of the Treaty for the Prohibition of Nuclear Weapons in Latin America and the Caribbean (Tlatelolco Treaty), which includes: Puerto Rico, the U.S. Virgin Islands, Navassa Island, Serranilla Bank, Baja Nuevo (Petrel Island), and the Guantanamo Bay Naval Base.

U.S.-IAEA Caribbean Territories Safeguards Agreement is being added and means the Agreement between the United States of America and the International Atomic Energy Agency for the Application of Safeguards in Connection with the Treaty for the Prohibition of Nuclear Weapons in Latin America (INFCIRC/366), and all protocols and subsidiary arrangements thereto.

U.S.-IAEA Safeguards Agreement is being added and means the Agreement between the United States of America and the IAEA for the Application of Safeguards in the United States (INFCIRC/288), and all protocols and subsidiary arrangements thereto.

This final rule revises the heading for § 75.6 to read “Reporting requirements for facilities, locations, and nuclear material outside facilities.” The requirement to provide advance notification of imports, exports, or domestic transfers has been added to the table in paragraph (c) to correct an oversight from a previous rulemaking action. The letter ”C” is being added after “DOE/NRC Form 742” under the first item in the table under paragraph (c), to correct an oversight from a previous rulemaking action. The websites, https://www.nrc.gov/reading-rm/doc-collections/forms and www.AP.gov, where the forms listed in paragraphs (c) through (d) of § 75.6 can be accessed, are being added to correct an oversight from a previous rulemaking action. The phone number for the NRC Headquarters Operations Center (HOC) is being added to the table in paragraph (c) to clarify the means of contacting the HOC. Adding the terms “nuclear material outside facilities” and “safeguards agreements” to paragraph (b) of this section makes the U.S.-IAEA Caribbean Territories Safeguards Agreement generally applicable in this section. The section is being further revised to include accounting, recordkeeping, and reporting requirements for those entities subject to the U.S.-IAEA Caribbean Territories Safeguards Agreement that are physically located in the U.S. Caribbean Territories. These requirements are listed in the table under new paragraph (e) and pertain to the requirements as outlined in Parts I and II of the U.S.-IAEA Caribbean Territories Safeguards Agreement. Other conforming changes to account for the new information in paragraph (e) are being made throughout 10 CFR part 75 for consistency.

This final rule reorders and revises § 75.7 for clarity and changes the reference to “Safeguards Agreement” to read “US-IAEA Safeguards Agreement,” and the reference to “facility or location” to read “facility.” Both changes in reference clarify that a selection for IAEA safeguards can only be made under the U.S.-IAEA Safeguards Agreement, and do not pertain to other referenced agreements in this part, such as the Additional Protocol or the U.S.-IAEA Caribbean Territories Safeguards Agreement. Minor editorial changes, such as changing “Commission” to read “NRC,” are also being made.

This final rule revises § 75.8 to include the term of art “nuclear material outside facilities,” which is specific to the U.S.-IAEA Caribbean Territories Safeguards Agreement, and is included in paragraphs (a)-(d), which state that the NRC will provide notice in writing if an IAEA inspection is to occur, and describe the procedures that must be followed to allow the IAEA access. Paragraph (a) is revised to include the SQP agreement as allowing for IAEA inspections. Paragraph (a)(1) is revised to add the types of inspections applicable to possessors of nuclear material outside facilities located in the U.S. Caribbean Territories, which are ad hoc and special inspections only. Paragraph (a)(4) is revised to replace the word “place” with the term physical location to be more specific in where IAEA inspections may take place. The requirements specific to inspections for nuclear material outside facilities are located in new paragraphs (h) and (i), which are parallel in structure to the requirements for “facilities.” The text in the original paragraph (h) is revised and redesignated as new paragraph (j). Minor editorial changes, such as changing “Commission” to read “NRC,” are also being made.

This final rule revises § 75.9 to add a reference to new § 75.12 to the list of approved information collection requirements in 10 CFR part 75.

This final rule revises the undesignated center heading, “Facility and Location Information” to read “Information for Facilities, Locations, and Nuclear Material Outside Facilities.”

This final rule revises the § 75.10 section heading to read “Facilities.” Other minor conforming changes are being made to this section including changing “Safeguards Agreement” to read “US-IAEA Safeguards Agreement” and to include the word “physical” before the word “location” to denote when an actual physical location is being specified and to distinguish it from the “location” term of art used specifically under the Additional Protocol. Minor editorial changes, such as changing “Commission” to read “NRC,” are also being made.

This final rule revises § 75.11 section heading to read “Locations.” Other conforming changes are being made to this section including adding the word “physical” before the word “location” to denote when an actual physical location is being specified and to distinguish it from the “location” term of art used specifically under the Additional Protocol. Minor editorial changes, such as changing “Commission” to read “NRC,” are also being made.

This final rule redesignates § 75.12 as new § 75.13 and adds new § 75.12, “Nuclear material outside facilities.” The records retention requirements in paragraphs (b)(1) and (b)(4) of this section have been moved to § 75.24, “Retention of records.” Minor conforming changes are being made including changing the references to individual safeguards agreements to refer collectively to all safeguards agreements between the U.S. and the IAEA, and adding new § 75.12 for requirements applicable only to the U.S. Caribbean Territories. Minor editorial changes, such as changing “Commission” to read “NRC,” are also being made.

This final rule adds new § 75.12, which provides details on the types of information possessors of nuclear material outside facilities physically located in the U.S. Caribbean Territories are required to report to the NRC on an annual basis, such as name, mailing address, use of nuclear material, etc.

This final rule revises the undesignated center heading, “Material Accounting and Control For Facilities” to read “Material Accounting and Control” so that the subpart applies to all entities subject to material accounting and control requirements, not only to facilities.

This final rule revises § 75.15 by making minor conforming changes, such as changing “Commission” to read “NRC” and changing “Safeguards Agreement” to read “U.S.-IAEA Safeguards Agreement.”

This final rule revises § 75.21 by adding new paragraph (b) to include possessors of nuclear material outside facilities, and the requirement to establish, maintain, and follow written material accounting and control procedures, pursuant to the U.S.-IAEA Caribbean Territories Safeguards Agreement. The records retention requirements in paragraph (a) are moved to § 75.24, “Retention of records.” Minor conforming changes are being made to change the reference from “Safeguards Agreement” to read “U.S.-IAEA Safeguards Agreement” and by changing “Commission” to read “NRC.”

This final rule restructures and revises § 75.24 to include new paragraphs (a) and (b) to include the records retention requirements from § 75.21(a) and to specifically list who is required to retain records and to include the term of art “nuclear material outside facilities,” which is specific to the U.S.-IAEA Caribbean Territories Safeguards Agreement. Minor editorial changes, such as changing “Commission” to read “NRC,” are also being made.

This final rule adds a new undesignated center heading, “IAEA Nuclear Material Exemptions and Terminations.”

This final rule adds new §§ 75.26 and 75.27 to describe the types of nuclear material upon which the U.S. Government may request an exemption from IAEA safeguards and to address the different requirements after such exemptions have been granted by the IAEA for facilities, locations, and nuclear material outside facilities.

This final rule adds new §§ 75.28 and 75.29 to describe the conditions under which the U.S. Government may request the termination of IAEA safeguards and to address the different requirements after such terminations have been granted by the IAEA for facilities, locations, and nuclear material outside facilities.

This final rule restructures § 75.31 to include new paragraphs (a) and (b) to address general accounting, recordkeeping, and reporting requirements for possessors of nuclear material outside facilities. Minor editorial changes, such as changing “Commission” to read “NRC,” are also being made.

This final rule revises § 75.32 to address the specific initial inventory reporting requirements for both licensees of facilities and possessors of nuclear material outside facilities and to make minor editorial changes. Paragraph (a) is revised and split into two paragraphs: (a) Licensees of facilities and (b) Possessors of nuclear material outside facilities. Paragraph (b) is revised and redesignated as new paragraph (c). Paragraph (c) is revised and redesignated as new paragraph (e). A new paragraph (d) is added. Minor editorial changes, such as changing “Commission” to read “NRC,” are also being made.

This final rule revises § 75.33 by changing the name of the “Nuclear Material Transaction Report” to read “Inventory Change Report (Nuclear Material Transaction Report).”

This final rule revises § 75.34 to include possessors of nuclear material outside facilities in the requirement to submit inventory change reports and to include time submittal requirements. New paragraph (b)(4) is added to address the specific import requirements for possessors of nuclear material outside facilities. The previously undesignated sentence after paragraph (a)(2) but before paragraph (b) is revised and designated as paragraph (b)(3). The paragraphs previously designated (b)(1) and (2) are redesignated as paragraphs (c)(1) and (2) to explain when a U.S. Department of Energy (DOE)/NRC Form 740M must be completed. Websites that contain the Office of Management and Budget (OMB)-approved NUREG guidance documents are included in new paragraph (d). Minor editorial changes are being made, such as changing the name “Nuclear Material Transaction Reports” to read “Inventory Change Report (Nuclear Material Transaction Report).”

This final rule revises § 75.35 to include possessors of nuclear material outside facilities in the requirement to submit material status reports. New paragraphs (c)-(e) are being added. Paragraph (c) is added to include possessors of nuclear material outside facilities to the requirement to submit material status reports. Paragraph (d) is added to clarify when a material status report must be accompanied by DOE/NRC Form 740M. Paragraph (e) is added to clarify where the forms and their instructions may be accessed. Furthermore, a specific 12-month reporting period is being added. Minor editorial changes, such as changing “Commission” to read “NRC,” are also being made.

This final rule revises § 75.36 to include possessors of nuclear material outside facilities in the requirements for submitting special reports. Paragraph (c) is removed and the text is revised and redesignated as paragraphs (b)(1) and (2). Minor editorial changes, such as changing “Commission” to read “NRC,” are also being made.

This final rule revises § 75.43 by modifying paragraph (a) to make the section generally applicable to any person subject to any U.S.-IAEA safeguards agreement. Minor editorial changes, such as changing “Commission” to read “NRC,” are also being made.

This final rule revises § 75.46 to make it generally applicable to any person subject to any U.S.-IAEA safeguards agreement. Minor editorial changes, such as changing “Commission” to read “NRC,” are also being made.

This final rule revises paragraph (b) by changing the reference § 75.12 to its new designation as § 75.13 and by adding new §§ 75.26 through 75.29.

Under the Regulatory Flexibility Act (5 U.S.C. 605(b)), the NRC certifies that this final rule will not have a significant economic impact on a substantial number of small entities. This final rule affects two “small entities” as defined by the Regulatory Flexibility Act or the size standards established by the NRC (10 CFR 2.810).

A regulatory analysis has not been prepared for this final rule. The information reported is necessary to satisfy U.S. Government obligations with the IAEA under the Agreement between the U.S. and the IAEA for the application of safeguards in connection with the Treaty for the Prohibition of Nuclear Weapons in Latin America, (INFCIRC/366 or “U.S.-IAEA Caribbean Territories Safeguards Agreement”).

The NRC has determined that the backfit rule (§§ 50.109, 70.76, 72.62, or 76.76) does not apply to this final rule because this amendment does not involve any provisions that would impose backfits as defined in the backfit rule. Implementation of the U.S.-IAEA Caribbean Territories Safeguards Agreement and its modified SQP will not involve backfitting or issue finality considerations. The entities subject to the revised requirements needed to implement the modified SQP are not accorded backfitting or issue finality protection. Therefore, a backfit analysis is not required.

This final rule will take maximum advantage of the existing requirements in 10 CFR part 75 for those persons possessing nuclear material to maintain records of their receipt, shipment, and disposal of nuclear material and to submit reports on their holdings of nuclear material. Furthermore, the NRC will use existing OMB approved forms for reporting information on nuclear material.

The Plain Writing Act of 2010 (Pub. L. 111-274) requires Federal agencies to write documents in a clear, concise, and well-organized manner. The NRC has written this document to be consistent with the Plain Writing Act as well as the Presidential Memorandum, “Plain Language in Government Writing,” published June 10, 1998 (63 FR 31883).

The NRC has determined that this final rule is the type of action described in 10 CFR 51.22(c)(1), which categorically excludes from environmental review rules that are corrective or of a minor, nonpolicy nature and do not substantially modify existing regulations. Therefore, neither an environmental impact statement nor an environmental assessment has been prepared for this final rule.

This final rule contains a revision to existing collections of information subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). The collections of information were approved by the OMB, approval numbers 3150-0003, 3150-0004, 3150-0055, 3150-0057, and 3150-0058.

The burden to the public for the information collection(s) is estimated to average 3 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the information collection.

Persons licensed to possess specified quantities of nuclear material currently report inventory and transaction of material to the Nuclear Materials Management and Safeguards System via the DOE/NRC Forms: DOE/NRC Form 740M, Concise Note; DOE/NRC Form 741, Nuclear Material Transaction Report; DOE/NRC Form 742, Material Balance Report; and DOE/NRC Form 742C, Physical Inventory Listing. This collection is being renewed to include approximately 25 entities (9 have been identified) subject to the U.S.-IAEA Caribbean Territories Safeguards Agreement (INFCIRC/366). Part 75 of 10 CFR requires licensees to provide reports of nuclear material inventory and flow for entities under the U.S.-IAEA Caribbean Territories Safeguards Agreement (INFCIRC/366), permit inspections by IAEA inspectors, give immediate notice to the NRC in specified situations involving the possibility of loss of nuclear material, and give notice for imports and exports of specified amounts of nuclear material. These licensees will also follow written material accounting and control procedures, although actual reporting of transfer and material balance records to the IAEA will be done through the U.S. State System of Accounting and Control (Nuclear Materials Management and Safeguards System, collected under OMB clearance numbers 3150-0003, 3150-0004, 3150-0055, 3150-0057, and 3150-0058).

The NRC needs this information to implement its international safeguards obligations under the U.S.-IAEA Caribbean Territories Safeguards Agreement (INFCIRC/366).

You may submit comments on any aspect of the information collection(s), including suggestions for reducing the burden, by the following methods:

Federal rulemaking website: Go to http://www.regulations.gov and search for Docket ID NRC-2015-0263.

• Mail comments to: Information Services Branch, Office of the Chief Information Officer, Mail Stop: T-2 F43, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001 or to Aaron Szabo, Desk Officer, Office of Information and Regulatory Affairs (3150-0004, -0005, -0055, -0056, and -0057), NEOB-10202, Office of Management and Budget, Washington, DC 20503; telephone: 202-395-3621, email: [email protected].

The NRC may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the document requesting or requiring the collection displays a currently valid OMB control number.

This final rule is a rule as defined in the Congressional Review Act (5 U.S.C. 801-808). However, OMB has not found it to be a major rule as defined in the Congressional Review Act.

Under the “Policy Statement on Adequacy and Compatibility of Agreement State Programs” approved by the Commission on June 30, 1997, and published in the Federal Register on September 3, 1997 (62 FR 46517), this rule is classified as Compatibility Category “NRC.” Compatibility is not required for Category “NRC” regulations. The NRC program elements in this category are those that relate directly to areas of regulation reserved to the NRC by the Atomic Energy Act of 1954, as amended, or the provisions of title 10 of the Code of Federal Regulations. Although an Agreement State may not adopt program elements reserved to NRC, it may wish to inform its licensees of certain requirements via a mechanism that is consistent with the particular State's administrative procedure laws but does not confer regulatory authority on the State.

The NRC has revised NUREG/BR-0006, “Instructions for Completing Nuclear Material Transaction Reports” (ADAMS Accession Nos. ML17026A069), and NUREG/BR-0007, “Instructions for the Preparation and Distribution of Material Status Reports” (Accession Nos. ML17026A076), to add an SQP-specific appendix. Public comment will be sought by the NRC for the next revisions of NUREG/BR-0006 and NUREG/BR-0007 (separate from this final rule), anticipated in calendar year 2018.

For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 1974, as amended; and 5 U.S.C. 552 and 553, the NRC is adopting the following amendments to 10 CFR part 75:

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain The Boeing Company Model 737-200, -300, -400, and -500 series airplanes. The NPRM published in the Federal Register on August 15, 2017 (82 FR 38623). The NPRM was prompted by reports of cracks in the frame web common to the stringer ties adjacent to the air-conditioning support brackets. The NPRM proposed to require an inspection for any air-conditioning bracket assembly or intercostal, and, depending on the results, repetitive inspections for cracking of certain locations, and applicable on-condition actions.

We are issuing this AD to detect and correct cracks in the frame web common to the stringer ties adjacent to the air-conditioning support brackets, which could result in a severed frame, and, in combination with potential multiple site damage (MSD) at the stringer S-10 lap splice or chem-milled skin cracks, could result in possible rapid decompression and loss of structural integrity of the airplane.

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

Aviation Partners Boeing stated that accomplishing the supplemental type certificate (STC) ST01219SE does not affect the actions specified in the NPRM.

We concur with the commenter. We have redesignated paragraph (c) of the proposed AD as paragraph (c)(1) of this AD and added paragraph (c)(2) to this AD to state that installation of STC ST01219SE does not affect the ability to accomplish the actions required by this AD. Therefore, for airplanes on which STC ST01219SE is installed, a “change in product” alternative method of compliance (AMOC) approval request is not necessary to comply with the requirements of 14 CFR 39.17.

Boeing requested that we revise the preamble of the NPRM and paragraph (e) of the proposed AD to clarify the unsafe condition. Boeing also requested that we revise paragraph (i) of the proposed AD to clarify the type of cracking (frame web cracking) and the inspection area (frame web common to the stringer ties). The commenter mentioned that without these clarifications the specific wording could be misleading.

We agree that clarification is necessary for the reasons provided by the commenter and have revised this AD accordingly.

Boeing requested that we change all references to the Seattle ACO Branch to refer to the Los Angeles ACO Branch. Boeing pointed out that responsibility for The Boeing Company Model 737-200, -300, -400, and -500 series airplanes has changed to the Los Angeles ACO Branch.

We agree for the reasons provided by the commenter and have revised this AD accordingly.

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

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

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

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

We reviewed Boeing Alert Service Bulletin 737-53A1363, dated April 7, 2017. This service information describes procedures for an inspection of the frame for any air-conditioning bracket assembly or intercostal, repetitive inspections of the frame web for cracking of certain locations, and applicable on-condition actions. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

We estimate that this AD affects 302 airplanes of U.S. registry. We estimate the following costs to comply with this AD:

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

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

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

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

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

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

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

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

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

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

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

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

On December 19, 2017, the FAA published in the Federal Register (82 FR 60130) Docket FAA-2017-0855, a notice of proposed rulemaking to modify Class D airspace, Class E surface area airspace, Class E airspace designated as an extension, and Class E airspace extending upward from 700 feet above the surface at Pocatello Regional Airport, Pocatello, ID. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

Class D and E airspace designations are published in paragraph 5000, 6002, 6004, 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 71.1. The Class D and 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.

The FAA is amending Title 14 Code of Federal Regulations (14 CFR) part 71 by:

Amending Class D airspace at Pocatello Regional Airport, Pocatello, ID, by raising the vertical limit to 7,000 feet (from 6,900 feet) and increasing the airspace south of the airport to a 5.6-mile radius (from a 4.5-mile radius) to laterally protect IFR departures as they climb to 700 feet above the surface, due to rising terrain;

Amending Class E surface area airspace to be coincident with the Class D airspace area;

Removing Class E airspace designated as an extension to a Class D or Class E surface area as it contains no arrival aircraft within 1,000 feet of the surface, and is not necessary;

Amending Class E airspace extending upward from 700 feet above the surface to reduce the area southwest of the airport and slightly increase the area south of the airport. This redesign is necessary to ensure sufficient controlled airspace to contain IFR arrival aircraft within 1,500 feet above the surface and IFR departure aircraft until reaching 1,200 feet above the surface. The VORTAC navigation aid noted in the description is removed, as it no longer defines the boundary of the airspace. In addition, this action establishes airspace extending upward from 1,200 feet above the surface at the airport within 15 miles northwest and 5 miles southeast of a line extending from 15 miles southwest of the airport to 43 miles northeast of the airport. This provides controlled airspace to support aircraft operations under IFR as aircraft transition between the en route and airport environments.

Lastly, this action updates the airport's geographic coordinates for the associated Class D and E airspace areas to reflect the FAA's current aeronautical database, and replaces the outdated term “Airport/Facility Directory” with the term “Chart Supplement” in the Class D and Class E surface airspace legal descriptions. These modifications are necessary for the safety and management of IFR operations at the airport.

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

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

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

The final rule extends the compliance dates for two rules. In the Federal Register of May 27, 2016 (81 FR 33742 and 81 FR 34000), we published two final rules entitled “Food Labeling: Revision of the Nutrition and Supplement Facts Labels” (the Nutrition Facts Label Final Rule) and “Food Labeling: Serving Sizes of Foods That Can Reasonably Be Consumed At One Eating Occasion; Dual-Column Labeling; Updating, Modifying, and Establishing Certain Reference Amounts Customarily Consumed; Serving Size for Breath Mints; and Technical Amendments” (the Serving Size Final Rule). In those final rules the compliance date for manufacturers with $10 million or more in annual food sales was established as July 26, 2018; for manufacturers with less than $10 million in annual food sales, the compliance date was set as July 26, 2019.

This final rule extends the compliance date for manufacturers with $10 million or more in annual food sales from July 26, 2018, to January 1, 2020; for manufacturers with less than $10 million in annual food sales, the final rule extends the compliance date from July 26, 2019, to January 1, 2021.

The final rule extends the compliance date for manufacturers with $10 million or more in annual food sales from July 26, 2018, to January 1, 2020; for manufacturers with less than $10 million in annual food sales, the final rule extends the compliance date from July 26, 2019, to January 1, 2021. We are extending the compliance dates for the Nutrition Facts Label Final Rule and the Serving Size Final Rule, which were issued consistent with our authority in sections 403(q), 403(a)(1), 201(n), and 701(a) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 343(q), 343(a)(1), 321(n), and 371(a), respectively) and section 2(b)(1) of the Nutrition Labeling and Education Act (NLEA) (Pub. L. 101-535).

The impact of this final rule is summarized in the following table.

In the Federal Register of May 27, 2016 (81 FR 33742 and 81 FR 34000), we published the Nutrition Facts Label Final Rule and the Serving Size Final Rule. The Nutrition Facts Label Final Rule revises the Nutrition Facts label by:

• Removing the declaration of “Calories from fat” because current science supports a view that the type of fat is more relevant than overall total fat intake in increased risk of chronic diseases;

• Requiring the declaration of the gram amount of “Added Sugars” in a serving of a product, establishing a Daily Reference Value (DRV), and requiring the percent Daily Value (DV) declaration for added sugars;

• Changing “Sugars” to “Total Sugars” and requiring that “Includes ‘X’ g Added Sugars” be indented and declared directly below “Total Sugars” on the label;

• Updating the list of vitamins and minerals of public health significance. For example, the Nutrition Facts Label Final Rule requires the declaration of vitamin D and potassium and permits, rather than requires, the declaration of vitamins A and C;

• Updating certain reference values used in the declaration of percent DVs of nutrients on the Nutrition Facts and Supplement Facts labels;

• Revising the format of the Nutrition Facts label to increase the prominence of both the term “Calories” and the calories information;

• Removing the requirement for the footnote table listing the reference values for certain nutrients for 2,000 and 2,500 calorie diets; and

• Requiring the maintenance of records to support the declarations of certain nutrients under specified circumstances.

The Serving Size Final Rule requires all containers, including containers of products with “large” RACCs (i.e., products with RACCs of at least 100 grams (g) or 100 milliliters (mL)), containing less than 200 percent of the RACC to be labeled as a single-serving container. Except for when certain exceptions apply, the Serving Size Final Rule further requires that containers and units that contain at least 200 percent and up to and including 300 percent of the RACC be labeled with a column of nutrition information within the Nutrition Facts label that lists the quantitative amounts and percent DVs for the entire container or unit, as applicable, in addition to the required column listing the quantitative amounts and percent DVs for a serving that is less than the entire container or unit, as applicable (i.e., the serving size derived from the RACC). The Serving Size Final Rule also updates, modifies, and establishes RACCs for certain foods and product categories.

The Final Rules established compliance dates for manufacturers with $10 million or more in annual food sales of July 26, 2018, and for manufacturers with less than $10 million in annual food sales, of July 26, 2019.

After we published the Nutrition Facts Label and the Serving Size Final Rules, companies and trade associations with members covered by the rules informed us that they had significant concerns about their ability to update all their labels by the compliance dates due to issues regarding (among other things) the need for upgrades to labeling software, the need to obtain nutrition information from suppliers, the number of products that would need new labels, and a limited time for reformulation of products. Consequently, in the Federal Register of October 2, 2017 (82 FR 45753), we proposed to extend the compliance dates to provide more time to comply with the Nutrition Facts Label and the Serving Size Final Rules. We proposed extending the compliance dates by approximately 1.5 years for both categories of manufacturers as a means to balance the importance of ensuring that industry has sufficient time to comply with the new requirements, and the importance of decreasing costs, against the importance of minimizing the transition period during which consumers will see both the old and the new versions of the label in the marketplace.

The proposed rule provided a 30-day comment period. We received approximately 50,000 comments. The comments came from individual consumers, consumer groups, industry, trade associations, academia, health professionals, and state/local government Agencies. Some comments sought an even longer extension of the compliance dates or said a compliance date should be aligned with the United States Department of Agriculture's (USDA) work to implement the National Bioengineered Food Disclosure Law. Comments opposing an extension (including those from state or local government Agencies) focused, in large part, on the Nutrition Facts label's role in helping consumers maintain a healthy lifestyle, possible consumer confusion if two versions of the Nutrition Facts label exist in the market, and a belief that firms had adequate time to comply. Comments supporting an extension of the compliance dates stressed that companies need additional time to update their labels. For example, some comments stressed that the process for relabeling may involve coordination between a variety of parties to test and analyze products, enter ingredient information into databases, develop new labels, and print new labels. According to these comments, having more time to comply with the Nutrition Facts Label and the Serving Size Final Rules will help ensure the accuracy of the labels and will allow for consistent application and fuller compliance across industry.

The final rule extends the compliance date for the Nutrition Facts Label Final Rule and the Serving Size Final Rule for manufacturers with $10 million or more in annual food sales from July 26, 2018, to January 1, 2020; for manufacturers with less than $10 million in annual food sales, the final rule extends the compliance date from July 26, 2019, to January 1, 2021. The Nutrition Facts Label Final Rule and Serving Size Final Rule were issued consistent with our authority in sections 403(q), 403(a)(1), 201(n), and 701(a) of the FD&C Act and section 2(b)(1) of the NLEA.

We have numbered each comment to help distinguish among different comments. We have grouped similar comments together under the same number, and in some cases, we have separated different issues discussed in the same comment and designated them as distinct comments for purposes of our responses. The number assigned to each comment or comment topic is purely for organizational purposes and does not signify the comment's value or importance or the order in which comments were received.

(Comment 1) Many comments expressed concern that extending the compliance dates will delay the health and dietary benefits of the final rules because, for the period of the extension, the public would be precluded from making informed food choices based on the updated scientific information. Some comments expressed concern about the impact of the delay on people with certain medical conditions (such as cancer, diabetes, heart disease, high blood pressure, and obesity), stating that such people might be better able to follow medical advice using the new labels. The comments further stated that the extension means that until the new compliance dates consumers will not be able to follow advice in the 2015-2020 Dietary Guidelines for Americans and advice from other public health authorities on issues not reflected in the current Nutrition Facts label, such as limiting added sugar. Some comments asserted that consumers have a “right to know” what is in the product. Some comments also noted that the new labels are easier to understand and use for comparing products and making healthier choices.

(Response) Both the old and new versions of the Nutrition Facts label provide information that must be truthful and accurate. While we agree that extending the compliance dates will mean that certain information required on the new Nutrition Facts label under the Nutrition Facts and Serving Size Final Rules will not be available to consumers on all foods as soon as originally anticipated, consumers can still use the old Nutrition Facts label to help guide them in their food choices in the interim. Consumers with medical conditions should continue to follow the advice they receive from a health care professional concerning their conditions.

Although we are extending the compliance dates, this extension does not prevent companies from revising their labels before the new compliance dates. In fact, according to food labeling data from Label Insight, over 29,000 products have adopted the new Nutrition Facts label (Ref. 2).

(Comment 2) Some comments stated that having both the old and new versions of the Nutrition Facts labels in the marketplace will confuse consumers and hinder their ability to compare products. The comments stated that extending the compliance dates will increase the transition period from old to new versions of the Nutrition Facts label.

Some comments asserted that providing nutrition education is difficult when two versions of the Nutrition Facts label are in the marketplace. The comments also noted that the existence of old versions of the Nutrition Facts label on food packages delays the ability to teach people to make informed choices about their health.

A comment supporting an extension of the compliance dates asserted that, from a foreign food manufacturer's perspective, the extension of the compliance dates is greatly appreciated because foreign manufacturers tend to have longer revision cycles for food packaging destined for the United States; the comment said that a longer transitional period will allow foreign firms to take more time in “picking the right look” for their U.S. products.

A comment supporting the extension of the compliance dates stated that, during the transition, FDA should work to ensure that consumers are aware of and educated about the importance of the changes. Some comments noted that the extension will allow FDA and stakeholders more time to prepare consumer education efforts and to raise awareness.

(Response) We recognize that there will be a longer transition period when the two Nutrition Facts labels are in the marketplace. We also note that both labels must provide information that is truthful and accurate. To help consumers during the transition, we will be providing educational materials to help consumers understand information on the labels. Many nutrition education messages will remain similar for both labels (e.g., awareness of calories, serving size information, and using the daily values); for the new information for consumers (e.g., added sugars, potassium, vitamin D, and dual-column labeling) we will be updating education material, especially as the new label is becoming more common in the marketplace. We are working with other Federal government Agencies (including other Agencies within the Department of Health and Human Services), health professional organizations, food manufacturers, retailers, and non-profit organizations with an interest and focus on nutrition education and health promotion to develop and disseminate our educational materials on the new Nutrition Facts label.

Furthermore, we are continuing a variety of activities, such as conducting and reporting on food labeling research. We plan to continue to build partnerships to develop, disseminate, and evaluate labeling education efforts that target specific groups, including low literacy consumers and sub-populations at high risk of nutrition-related chronic disease, in addition to the general public.

(Comment 3) Several comments stated that companies have had sufficient time and resources to comply with the original compliance dates and that compliance by some companies shows that the original compliance dates can be met. The comments also pointed out that companies regularly change their packaging. The comments urged us not to be persuaded by industry to delay the compliance dates, stated that we provided no evidence to support industry's claims for the need for additional time, and expressed concerns that companies will use the delay to challenge the final rules. Another comment claimed that large companies are capable of developing new labels, but seek to extend the compliance date so that they can reformulate their products to remove or change ingredients or information before they have to declare those ingredients or information in a new Nutrition Facts label. Some comments also questioned whether extending the compliance dates would be fair to firms that have revised their Nutrition Facts labels already. One comment said that businesses that take advantage of an extended compliance date may have an unfair market advantage because of consumer familiarity with the old label, while another comment asserted that businesses that delay compliance with the new requirements might gain an advantage from consumers that may select a food based on the old label that they might not select based on the new label. Another comment stated that we should not extend the compliance dates and instead suggested rewarding companies that revised their Nutrition Facts labels in the original timeframe and penalizing companies that failed to revise their labels within a specific time period.

Many other comments supported the extension of the compliance dates. Some comments supporting an extension of the compliance dates stated that companies need additional time to update their labels. For example, some comments stated that some products may need to be reformulated and the process for relabeling may involve coordination between a variety of parties to test and analyze products, enter ingredient information into databases, develop new labels, and print new labels. Additionally, some comments stated that printing companies complete the orders of larger companies or packing orders before completing the orders of small and mid-size companies, that the range of label changes necessitates additional time, and that products with more ingredients take longer to relabel. According to the comments, having more time will help ensure the accuracy of the labels and will allow for consistent application and fuller compliance across industry. Furthermore, some comments noted that additional time for compliance once FDA makes decisions regarding the citizen petitions for dietary fiber would help ensure that consumers have access to products that help to meet their dietary fiber needs.

One comment suggested that we pause the compliance dates pending publication of the guidance documents or consider granting an additional extension in the future based on finalization of the guidance documents and future stakeholder concerns. Other comments suggested that we exercise enforcement discretion in cases where awaiting the guidance prevents companies from timely compliance with the original compliance dates. Some comments suggested that we base the dates on publication of the guidance documents, allowing firms additional time to implement the changes.

(Response) We have carefully considered the comments supporting and opposing an extension of the compliance dates, and we are extending the compliance dates to allow manufacturers additional time to comply with the final rules. We are aware that a number of manufacturers are already using labels consistent with the new requirements; however, we also are aware that other manufacturers have explained why the original compliance dates would not be feasible. We note that manufacturers will need to change different parts of their labels depending on the products they make.

The comments stating that an extension of the compliance dates is not warranted because some members of industry have already adopted the new labels did not explain why the fact that some manufacturers have had sufficient time to adopt the new labels means that all members of industry have had sufficient time to adopt the new labels. Based on the information available to FDA and the information provided by industry commenters, we understand that manufacturers' ability to meet the original compliance date is affected by many factors and that not all manufacturers are able to meet the original date.

Extending the compliance dates by approximately 1.5 years is guided by the desire to give industry more time, balanced against minimizing the transition period during which consumers will see both the old and the new versions of the label in the marketplace. The compliance date is the date by which we expect firms to be in compliance with a specific regulatory requirement. It would be prudent for companies to take actions (such as working with suppliers to make sure they have the information they need to update their labels, redesigning labels, and printing new labels, if necessary) to meet their regulatory obligations when the compliance date is reached.

With respect to comments that suggested factoring in when FDA issues guidance documents, we note that, in the Federal Register of March 2, 2018, we announced the availability of final guidance documents for industry entitled “Reference Amounts Customarily Consumed: List of Products for Each Product Category” and “Scientific Evaluation of the Evidence on the Beneficial Physiological Effects of Isolated or Synthetic Non-Digestible Carbohydrates Submitted as a Citizen Petition (21 CFR 10.30).” We issued these guidance documents to address questions we received after we issued the final rules in order to address such questions and help firms with their decisions about how to comply with a particular requirement or what information to submit to FDA in a citizen petition to request a non-digestible carbohydrate be included in the definition of “dietary fiber.”

With regard to the unfair market advantage issue raised in the comments, we have no data or information to show whether companies that have revised their Nutrition Facts labels already have an unfair market advantage or, conversely, are disadvantaged compared to companies that have not revised their Nutrition Facts labels yet. Therefore, we decline to speculate on whether an unfair market advantage exists and for the reason the comment asserted.

Finally, with regard to rewarding companies that revised their Nutrition Facts labels in the original timeframe and penalizing companies that failed to revise their labels within a specific time period, the comment provided no recommendation for how such a reward or penalty system could work or how such system would be implemented consistent with our existing authorities.

(Comment 4) Several comments would have us align the compliance dates with the National Bioengineered Food Disclosure Standard (which is administered by USDA). Other comments supported a coordinated, uniform label compliance dates across agencies because, according to the comments, USDA's Food Safety and Inspection Service also has Nutrition Facts label requirements for meat and poultry. In addition, other comments urged us to finalize other pending labeling changes (such as vending machine labeling, “natural” labeling, revising the definition of “healthy,” and “gluten-free” for fermented or hydrolyzed food products) before the extended compliance dates.

(Response) FDA and USDA collaborate to align compliance dates of regulations that require changes in food labeling. FDA is working to address, as appropriate and as time and resources permit, other regulatory issues that are outside the scope of this rulemaking in separate rulemaking actions. However, we do not agree that we need to ensure the alignment of compliance dates for other regulatory initiatives with those for the Nutrition Facts Label and Serving Size Final Rules.

(Comment 5) Several comments suggested alternatives to basing the compliance dates on the amount of annual sales. One comment suggested having just one extended compliance date to show impartiality and hold all businesses to the same standards, and some comments suggested other timeframes for the compliance dates. One comment would allow extensions on a case-by-case basis rather than a blanket extension. One comment suggested basing the date on the number of products sold as companies with more products may need more time to relabel, regardless of their total sales, than companies with fewer products. One comment would support extending the compliance date for small manufacturers only; the comment said that larger manufacturers (with over $10 million in annual food sales) do not need an extension because they have greater access to scientific information about their products as well as nutritional information compared to smaller companies. One comment suggested limiting the extension to honey products and products that contain fiber and not extending the compliance dates for all other products because, the comment stated, issues pertaining to added sugars in honey and the definition of fiber must be resolved before we establish compliance dates for honey products and products that contain fiber.

Other comments suggested that we stagger the compliance dates based on the type of business. According to the comments, ingredient manufacturers would comply first with finished goods manufacturers complying at least 1 year later. The comments indicated that providers of nutrition analysis and manufacturers of finished products need the information from ingredient manufacturers to relabel their products. One comment said extending the compliance dates may cause suppliers to delay revising their Nutrition Facts label, which would prohibit a company from keeping its existing timeline for label updates and could require the company to invest in off-cycle printing fees of old nutrition labels, leading to higher costs and compromising the ability to provide complete nutrition information on customer facing labels.

(Response) In the Nutrition Facts Label and Serving Size proposed rules (79 FR 11879 and 79 FR 11989; March 3, 2014), we originally proposed one compliance date of 2 years after the effective date, regardless of annual amount of sales. However, comments to the proposed rule for the Nutrition Facts Label suggested that small businesses may need more time or may face different challenges, compared to large businesses, in complying with the final rules. Because the comments emphasized the rules' potential impact on small businesses, we agreed that the impacts to smaller businesses may be more substantial than those on larger businesses, and so we provided a 3-year compliance date for manufacturers with less than $10 million in annual food sales. Thus, in the final Nutrition Facts label and Serving Size rules, the compliance date for manufacturers with $10 million or more in annual food sales was set at July 26, 2018; the compliance date for manufacturers with less than $10 million in annual food sales was set at July 26, 2019.

Regarding the comments suggesting alternative timeframes for compliance and comments suggesting alternative approaches to extended compliance dates (such as basing the dates on the number of products sold or having ingredient suppliers comply before other entities), the comments did not provide information that would enable us, as part of this rulemaking, to revise or alter our approach. For example, the comments did not explain what total number of products sold would be used as a basis for setting compliance dates.

With respect to ingredient suppliers, we note that bulk ingredient suppliers are not required to comply with the Nutrition Facts label requirements unless, among other requirements, the bulk ingredients are going directly to the consumer (see 21 CFR 101.9(j)(9)). Furthermore, as stated in our responses to comments 1 and 3, an extension of the compliance dates does not prevent manufacturers from revising their Nutrition Facts labels before the extended compliance dates.

Based on the comments received regarding the processes involved in obtaining nutrient information from suppliers and timing involved for various size businesses to gain access to equipment for developing and printing new labels, we consider the extended compliance dates in this final rule to provide adequate time for the coordination between suppliers, manufacturers, and labelers to ensure that new labels are ready and in use by the compliance dates.

(Comment 6) Some comments opposing the extension of the compliance dates asserted that the need for guidance is not a reason to delay the compliance dates because guidance documents are only recommendations and not enforceable. In contrast, comments supporting an extension of the compliance dates said that companies need guidance from FDA to address technical questions on issues such as dietary fiber, added sugars, serving sizes, small package labeling, and allulose before they can relabel and reformulate certain products. Some comments asserted that if food companies and manufacturers are given time to comply with the rules after they receive guidance from FDA, they would not need to make additional label changes. Other comments urged us to issue guidance documents as soon as possible, and some comments asserted that we need to publish the final guidance documents on dietary fiber and added sugars before we finalize a rule regarding the compliance dates.

(Response) After careful consideration, we have determined that extending the compliance dates by approximately 1.5 years, until January 1, 2020, or January 1, 2021 (depending on annual sales), would help ensure that all manufacturers covered by the final rules have time to use guidance from FDA to address, for example, certain technical questions we received after publication of the final rules. To the extent we issue a guidance document on a specific topic in advance of the applicable compliance date, we intend to issue such guidance document in draft form with an opportunity for public comment and, where appropriate, to finalize the guidance before those parties are expected to comply with the final rules. Additional time will also help to ensure that manufacturers have time to coordinate with various parties to complete and print updated Nutrition Facts labels for their products before they are expected to be in compliance with the final rules.

With regard to the comments about the enforceability of guidance, we agree that our guidance documents do not establish legally enforceable responsibilities. Instead, guidance documents describe our current thinking on a topic and should be viewed only as recommendations, unless specific regulatory or statutory requirements are cited. Furthermore, as we stated in our response to comment 3, in the Federal Register of March 2, 2018, we announced the availability of final guidance documents for industry entitled “Reference Amounts Customarily Consumed: List of Products for Each Product Category” (83 FR 9000) (Ref. 3) and “Scientific Evaluation of the Evidence on the Beneficial Physiological Effects of Isolated or Synthetic Non-Digestible Carbohydrates Submitted as a Citizen Petition (21 CFR 10.30)” (83 FR 8997) (Ref. 4). In addition to the final guidance documents, in the Federal Register of January 5, 2017, we announced the availability of draft guidance to address issues related to added sugars entitled, “Questions and Answers on the Nutrition and Supplement Facts Labels Related to the Compliance Date, Added Sugars, and Declaration of Quantitative Amounts of Vitamins and Minerals. ” Further, in the Federal Register of March 2, 2018, we announced the availability of draft guidance entitled “The Declaration of Added Sugars on Honey, Maple Syrup, and Certain Cranberry Products ” (83 FR 8953) (Ref. 5). We issued these guidance documents to address questions we received after we issued the final rules, and these guidance documents should address the questions and help firms with their decisions about how to comply with particular requirements such as serving sizes or the declaration of added sugars or what information to submit to FDA in a citizen petition to request a non-digestible carbohydrate be included in the definition of “dietary fiber.”

(Comment 7) One comment stated that giving large food manufacturers an additional 18 months to conform seems excessive. The comment noted that, to satisfy the requirement under 5 U.S.C. 553 (the section of the Administrative Procedure Act (APA) pertaining to rulemaking), the notice of proposed rulemaking should include all relevant studies and data used to make the rule. The comment requested additional information regarding the complexity of the burdens being placed on food manufacturers to support an extension of the compliance dates. The comment said that such information is necessary to satisfy the requirement under 5 U.S.C. 553 that the notice of proposed rulemaking include all relevant studies and data used to make the rule. The comment cited American Radio Relay League, Inc. v. Fed. Communications Comm. 524 F.3d 227 (D.C. Cir. 2007).

Another comment expressed concern that the extension of the compliance dates may violate the APA. The comment said that the proposed rule did not ask for comments relating to breath mints and did not refer to what a reformulation of products would look like or why a reformulation is necessary.

(Response) We believe that we have provided an adequate basis for the extension of the compliance dates. Thus, we disagree that the APA requires us to provide information, in addition to what we have already made available in the public docket for notice and comment, to support the extension of the compliance dates. In addition, the case the comment relies on concerns a situation where an agency engaged in rulemaking failed to make information on which it relied publicly available for notice and comment (American Radio Relay League, 524 F.3d at 237 through 239). The information on which we rely in this final rule to extend the compliance dates for the Nutrition Facts Label Final Rule and the Serving Size Final Rule, in contrast, was made publicly available for comment in the public docket for the proposed rule, which is the same docket as this final rule. We are not withholding information from the public docket on which we rely for our decision to extend the compliance dates.

As discussed in the preamble to the proposed rule to extend the compliance dates for the Nutrition Facts Label and Serving Size Final Rules (82 FR 45753 at 45754), we are taking this action because, after careful consideration, we have determined that additional time would help ensure that all manufacturers covered by the rules have guidance from FDA to address, for example, certain technical questions we received after publication of the final rules. We also are taking this action so that manufacturers may complete all the necessary steps and print updated Nutrition Facts labels for their products before they are expected to be in compliance with the rules. Companies and trade associations have informed us that they have significant concerns about their ability to update all their labels by the original compliance dates due to issues regarding (among other things) the need for upgrades to labeling software, the need to obtain nutrition information from suppliers, the number of products that would need new labels, and a limited time for reformulation of products (82 FR 45753 at 45754). Comments in response to the proposed rules reiterated the basis for the requests for additional time. Based on the information in the public docket, we have a sufficient basis on which to extend the compliance dates for the final rules.

In addition, as discussed in the Preliminary Regulatory Impact Analysis referenced in the proposed rule to extend the compliance dates for the Nutrition Facts Label and Serving Size Final Rules (82 FR 45753), we analyzed regulatory alternatives and considered two options for the time period of the extension of the compliance dates and presented the estimates for what the cost savings to industry would be. We concluded that extending the compliance date by approximately 1.5 years for both categories of manufacturers is a means to balance the importance of ensuring that industry has sufficient time to comply with complex new requirements against the importance of minimizing the transition period during which consumers will see both the old and the new versions of the label in the marketplace.

With regard to the comment about breath mints and product reformulation, this comment is outside the scope of this rulemaking. The Serving Size Final Rule changed the label serving size for breath mints to “1 unit.” The amendments to the Nutrition Facts label regulations became effective on July 26, 2016. This rulemaking, as explained in the preamble to the proposed rule of October 2, 2017, pertains solely to the compliance dates for the Nutrition Facts Label and Serving Size Final Rules (82 FR 45753 at 45754).

Some comments raised issues that were outside the scope of the proposed rule. In brief, we received comments asking about:

• Changing the label;

• Requiring schools to have education programs relating to the label;

• Requesting FDA to reopen the comment period on the Nutrition Facts Label and Serving Size Final Rules asserting a 3-year stay is needed to obtain additional empirical research data for substantiation of changes to the label made in the final rules; and

• Extending the compliance date for the front-of-package calorie labeling of items sold in vending machines to align with the proposed extension of the Nutrition Facts Label Final Rule.

The final rule pertains solely to the compliance dates for the Nutrition Facts Label and Serving Size Final Rules. Therefore, the comments are outside the scope of this rulemaking.

The final rule is effective on July 3, 2018.

The compliance date for manufacturers with $10 million or more in annual food sales is January 1, 2020. The compliance date for manufacturers with less than $10 million in annual food sales is January 1, 2021.

We have examined the impacts of the final rule under Executive Order 12866, Executive Order 13563, Executive Order 13771, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct us to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). Executive Order 13771 requires that the costs associated with significant new regulations “shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least two prior regulations.” This final rule is an economically significant regulatory action as defined by Executive Order 12866.

Executive Order 13771, entitled “Reducing Regulation and Controlling Regulatory Costs,” was issued on January 30, 2017. Section 2(a) of Executive Order 13771 requires an Agency, unless prohibited by law, to identify at least two existing regulations to be repealed when the Agency publicly proposes for notice and comment or otherwise issues a new regulation. In furtherance of this requirement, section 2(c) of Executive Order 13771 requires that the new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least two prior regulations. This final rule is an Executive Order 13771 deregulatory action. We estimate that this rule generates approximately $61 million in annualized cost savings, discounted relative to year 2016 and using a 7 percent discount rate, over a perpetual time horizon. Details on the estimated cost savings of this final rule can be found in the rule's economic analysis.

The Regulatory Flexibility Act requires us to analyze regulatory options that would minimize any significant impact of a rule on small entities. We have analyzed this final rule under the Regulatory Flexibility Act and certify that, because this final rule only extends the compliance dates for the Nutrition Facts Label and Serving Size Final Rules, this final rule would not have a significant economic impact on a substantial number of small entities.

The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires us to prepare a written statement, which includes an assessment of anticipated costs and benefits, before issuing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $148 million, using the most current (2016) Implicit Price Deflator for the Gross Domestic Product. This final rule would not result in an expenditure in any year that meets or exceeds this amount.

The principal benefit of this final rule to extend the compliance dates is the reduction in the costs to industry of meeting the compliance dates of the Nutrition Facts Label Final Rule and the Serving Size Final Rule. This reduction in costs can be attributed to a reduction in the relabeling and reformulation costs of the Nutrition Facts Label and Serving Size Final Rules. We estimate that, at the mean, the present value of the benefits (i.e., cost savings) of this final rule to extend the compliance dates over the next 20 years is $1 billion using either a 3 percent or 7 percent discount rate (2016$). This is illustrated in table 2. Extending the compliance dates by approximately 1.5 years would reduce the estimated benefits of the Nutrition Facts Label and Serving Size Final Rules because it would delay the realization by consumers of the full annual welfare gains of the Nutrition Facts Label and Serving Size Final Rules. More specifically, an extension of the compliance dates would delay the incorporation of the provisions of the Nutrition Facts Label and Serving Size Final Rules by food manufacturers into their products. We estimate that, at the mean, the present value of the foregone benefits of this final rule to extend the compliance dates over the next 20 years is $0.9 billion using either a 3 percent or 7 percent discount rate (2016$). This is also presented in table 2. We estimate that, at the mean, the present value of the net benefits (that is, cost savings minus foregone benefits) of this final rule to extend the compliance dates over the next 20 years is $0.1 billion using either a 3 percent or 7 percent discount rate (2016$). This is shown in table 2.

The full analysis of economic impacts is available in the docket for this final rule (Ref. 1) and at https://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/default.htm.

We have determined under 21 CFR 25.30(k) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

This final rule contains no collection of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 is not required.

We have analyzed this final rule in accordance with the principles set forth in Executive Order 13132. Section 4(a) of the Executive Order requires Agencies to “construe . . . a Federal statute to preempt State law only where the statute contains an express preemption provision or there is some other clear evidence that the Congress intended preemption of State law, or where the exercise of State authority conflicts with the exercise of Federal authority under the Federal statute.” Section 403A of the FD&C Act (21 U.S.C. 343-1) is an express preemption provision. Section 403A(a) of the FD&C Act provides that: “. . . no State or political subdivision of a State may directly or indirectly establish under any authority or continue in effect as to any food in interstate commerce—(4) any requirement for nutrition labeling of food that is not identical to the requirement of section 403(q) . . . .” The express preemption provision of section 403A(a) of the FD&C Act does not preempt any State or local requirement respecting a statement in the labeling of food that provides for a warning concerning the safety of the food or component of the food (section 6(c)(2) of the Nutrition Labeling and Education Act of 1990, Pub. L. 101-535, 104 Stat. 2353, 2364 (1990)). The final rule creates requirements that fall within the scope of section 403A(a) of the FD&C Act.

The following references are on display in the Dockets Management Staff (see ADDRESSES) and are available for viewing by interested persons between 9 a.m. and 4 p.m., Monday through Friday; they are also available electronically at https://www.regulations.gov. FDA has verified the website addresses, as of the date this document publishes in the Federal Register, but websites are subject to change over time.

The Federal Food, Drug, and Cosmetic Act (FD&C Act), as amended, establishes a comprehensive system for the regulation of medical devices intended for human use. Section 513 of the FD&C Act (21 U.S.C. 360c) established three categories (classes) of devices, reflecting the regulatory controls needed to provide reasonable assurance of their safety and effectiveness. The three categories of devices are class I (general controls), class II (special controls), and class III (premarket approval).

Devices that were not in commercial distribution prior to May 28, 1976 (generally referred to as postamendments devices) are automatically classified by section 513(f)(1) of the FD&C Act into class III without any FDA rulemaking process. Those devices remain in class III and require premarket approval unless, and until, the device is reclassified into class I or II, or FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the FD&C Act, to a predicate device that does not require premarket approval. The Agency determines whether new devices are substantially equivalent to predicate devices by means of premarket notification procedures in section 510(k) of the FD&C Act (21 U.S.C. 360(k)) and part 807 (21 CFR part 807).

A postamendments device that has been initially classified in class III under section 513(f)(1) of the FD&C Act may be reclassified into class I or class II under section 513(f)(3). Section 513(f)(3) of the FD&C Act provides that FDA acting by order can reclassify the device into class I or class II on its own initiative, or in response to a petition from the manufacturer or importer of the device. To change the classification of the device, the proposed new class must have sufficient regulatory controls to provide reasonable assurance of the safety and effectiveness of the device for its intended use.

Reevaluation of the data previously before the Agency is an appropriate basis for subsequent action where the reevaluation is made in light of newly available regulatory authority (see Bell v. Goddard, 366 F.2d 177, 181 (7th Cir. 1966); Ethicon, Inc. v. FDA, 762 F. Supp. 382, 388-391 (D.D.C. 1991)) or in light of changes in “medical science” (Upjohn v. Finch, 422 F.2d 944, 951 (6th Cir. 1970)). Whether data before the Agency are old or new, the “new information” to support reclassification under 513(f)(3) must be “valid scientific evidence,” as defined in section 513(a)(3) of the FD&C Act and 21 CFR 860.7(c)(2). (See, e.g., General Medical Co. v. FDA, 770 F.2d 214 (D.C. Cir. 1985); Contact Lens Assoc. v. FDA, 766 F.2d 592 (D.C. Cir.1985), cert. denied, 474 U.S. 1062 (1986).)

FDA relies upon “valid scientific evidence” in the classification process to determine the level of regulation for devices. To be considered in the reclassification process, the “valid scientific evidence” upon which the Agency relies must be publicly available. Publicly available information excludes trade secret and/or confidential commercial information, e.g., the contents of a pending PMA (see section 520(c) of the FD&C Act (21 U.S.C. 360j(c)). Section 520(h)(4) of the FD&C Act provides that FDA may use, for reclassification of a device, certain information in a PMA 6 years after the application has been approved. This includes information from clinical and preclinical tests or studies that demonstrate the safety or effectiveness of the device, but does not include descriptions of methods of manufacture or product composition and other trade secrets.

Section 510(m) of the FD&C Act provides that a class II device may be exempted from the 510(k) premarket notification requirements, if the Agency determines that premarket notification is not necessary to reasonably assure the safety and effectiveness of the device.

On November 7, 2017, FDA published an order in the Federal Register to reclassify the device (82 FR 51585) (the “proposed order”). The period for public comment on the proposed order closed on January 8, 2018. FDA received and has considered two comments on the proposed order, as discussed in section II.

We received two comments on the proposed order and both comments supported the proposed reclassification. The comments were received from a consumer and a healthcare professional in the drug industry.

We describe and respond to the comments in section B of this section. The order of response to the commenters is purely for organizational purposes and does not signify the comment's value or importance nor the order in which comments were received.

(Comment 1) One commenter discussed the experience of witnessing sharps disposal and was supportive of safe and cost-effective options for sharps disposal due to the potential injury to sanitation works or patients/users with improper disposal of sharps. The commenter was generally supportive of FDA's proposed reclassification. Additionally, the commenter stated that PMA requirements increase the price of these devices and that reclassification increases affordability of the sharps needle destruction devices, while ensuring safety.

(Response 1) FDA agrees with this comment. The Agency believes that reclassification of the sharps needle destruction device will reduce the regulatory burden on manufacturers, which could increase patient access to these devices and potentially reduce accidental needle sticks, while still providing reasonable assurance of safety and effectiveness. Additionally, FDA believes the special controls mitigate workplace hazards associated with sharps needle destruction and ensures proper use of the device.

(Comment 2) One commenter noted that while a PMA for these devices will no longer be required, FDA will still require premarket notification under section 510(k) of the FD&C Act. The commenter stated that in addition to 510(k) requirements, a prescription use restriction, and labeling, the identified special controls will provide reasonable assurance of device safety and effectiveness. The commenter noted that PMAs delay the access of these devices to patients. The commenter concluded that this reclassification may factor in positive outcomes for patient access and safety.

(Response 2) FDA agrees with this comment. The Agency believes that the special controls required in this final order provide a reasonable assurance of safety and effectiveness for these devices. FDA believes it has identified the risks to health (see section V of the proposed order) and that the measures described in this final order will be effective in mitigating the identified probable risks to health. Additionally, by reclassifying these types of devices from class III to class II, this will reduce regulatory burdens on industry because these types of devices will no longer be required to submit a PMA, but can instead submit a less burdensome premarket notification (510(k)) before marketing their device.

FDA is adopting its findings under section 513(f)(3) of the FD&C Act, as published in the preamble to the proposed order. FDA is issuing this final order to reclassify needle destruction devices from class III to class II, rename them sharps needle destruction devices, and establish special controls by revising 21 CFR part 880. In this final order, the Agency has identified the special controls under section 513(a)(1)(B) of the FD&C Act that, together with general controls, provide a reasonable assurance of the safety and effectiveness for sharps needle destruction devices.

FDA may exempt a class II device from the premarket notification requirements under section 510(k) of the FD&C Act under section 510(m) of the FD&C Act, if FDA determines that premarket notification is not necessary to provide reasonable assurance of the safety and effectiveness of the devices. FDA has determined that premarket notification is necessary to provide reasonable assurance of safety and effectiveness of sharps needle destruction devices, and therefore, this device type is not exempt from premarket notification requirements.

The device is assigned the generic name sharps needle destruction device, and it is identified as a prescription device that is intended to destroy needles or sharps used for medical purposes by incineration or mechanical means.

Under this final order, the sharps needle destruction device is a prescription use device under § 801.109 (21 CFR 801.109). Prescription devices are exempt from the requirement for adequate directions for use for the layperson under section 502(f)(1) of the FD&C Act (21 U.S.C. 352(f)(1)) and 21 CFR 801.5, as long as the conditions of § 801.109 are met (referring to 21 U.S.C. 352(f)(1)). Under 21 CFR 807.81, the device would continue to be subject to 510(k) requirements.

We have determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

This final administrative order establishes special controls that refer to previously approved collections of information found in other FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in part 807, subpart E have been approved under OMB control number 0910-0120 and the collections of information under 21 CFR part 801 have been approved under OMB control number 0910-0485.

Therefore, under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321 et seq., as amended) and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 880 is amended as follows:

The City of Fort Lauderdale notified the Coast Guard that it would be hosting the Fort Lauderdale Air Show annually over a Saturday and Sunday during the month of May. The regulated area would cover certain navigable waters of the Atlantic Ocean east of Fort Lauderdale, Florida beginning at Port Everglades Inlet and continuing north for approximately six miles.

In response, on January 25, 2018, the Coast Guard published a notice of proposed rulemaking (NPRM) titled “Special Local Regulation: Fort Lauderdale Air Show; Atlantic Ocean, Fort Lauderdale, FL” (83 FR 3450). There we stated why we issued the NPRM, and invited comments on our proposed regulatory action related to this event. During the comment period that ended February 26, 2018, we received 2 unrelated comments.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register. Delaying the effective date of this rule would be impracticable because immediate action is needed to respond to the potential safety dangers with aerial maneuvers conducted by high speed, low-flying aircraft during air shows. The special local regulation is necessary to provide for the safety of event participants, spectators and vessels transiting in proximity to the event area.

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Miami (COTP) has determined that potential hazards associated with the aerobatic and high speed aerial flight demonstrations demonstrated during the Ft. Lauderdale Air Show will be a safety concern for spectators and non-participant vessels in the regulated area. The purpose of this rule is to ensure the safety of vessels, persons, marine environment, and navigable waters in the regulated area before, during, and after the scheduled event.

As noted above, we received two comments on our NPRM published February 26, 2018. Both comments were unrelated to the regulation. There are no changes in the regulatory text of this rule from the proposed rule in the NPRM.

This rule establishes a special local regulation on certain waters of the Atlantic Ocean east of Fort Lauderdale, Florida beginning at the Port Everglades Inlet and continuing north for approximately six miles. The duration of the regulated area is intended to ensure the safety of the public during the aerial flight demonstrations and high speed boat races. Non-participant vessels are prohibited from entering, transiting through, anchoring in, or remaining within the regulated area without obtaining permission from the Captain of the Port (COTP) Miami or a designated representative. The Coast Guard will provide notice of the regulated area by Broadcast Notice to Mariners and on-scene designated representatives.

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

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

This regulatory action determination is based on the size, location, duration, and time-of-day of the special local regulation. Vessel traffic will be able to safely transit around this regulated area, which will affect a small designated area of the Atlantic Ocean over a period of two days during the month of May. Moreover, the Coast Guard would issue a Broadcast Notice to Mariners notifying the public of the regulated area via VHF-FM marine channel 16 and the rule would allow vessels to seek permission to enter the zone.

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

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

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Directive 023-01, and Commandant Instruction M16475.1D, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a regulation that would prohibit persons and vessels from transiting the regulated area during the air show. This action is categorically excluded from further review under paragraph L61 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A supplemental Environmental Assessment supporting this determination is available in the docket where indicated under ADDRESSES.

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

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

The Coast Guard will enforce the special local regulation in 33 CFR 100.726 for the Fort Lauderdale Air Show regulated area from 9:00 a.m. to 6:00 p.m. on May 5 and 6, 2018. This action is being taken to provide for the safety of life on navigable waterways during this 2-day event. Our regulation for the Fort Lauderdale Air Show, § 100.726, specifies the location of the regulated area for the Fort Lauderdale Air Show which is located on the Atlantic Ocean, east of Ft. Lauderdale, FL. During the enforcement periods, if you are the operator of a vessel in the regulated area you must comply with directions from the Patrol Commander or any Official Patrol displaying a Coast Guard ensign.

In addition to this notice of enforcement in the Federal Register, the Coast Guard plans to provide notification of this enforcement period via the Local Notice to Mariners and marine information broadcasts.

On December 20, 2017, the Coast Guard published a temporary deviation entitled “Drawbridge Operation Regulation; San Leandro Bay, between Alameda and Bay Farm Island, California” in the Federal Register (82 FR 60315). That temporary deviation, from 6 a.m. on January 2, 2018 to 6 p.m. on May 27, 2018, allows the drawspans to be secured in the closed-to-navigation position. The bridge owner, the California Department of Transportation, has requested a modification to the currently published deviation, extending it from 6 p.m. on May 27, 2018 to 9 p.m. on June 7, 2018 in order to complete major rehabilitation and maintenance of the drawbridges.

The highway drawbridge navigation span provides a vertical clearance of 20 feet above Mean High Water in the closed-to-navigation position. The bicycle drawbridge navigation span provides a vertical clearance of 26 feet above Mean High Water in the closed-to-navigation position. The draws operate as required by 33 CFR 117.193. Navigation on the waterway is commercial and recreational.

The drawspans will be secured in the closed-to-navigation position from 6 p.m. on May 27, 2018 through 9 p.m. on June 7, 2018, to allow the bridge to complete major rehabilitation and maintenance work. A temporary platform is installed beneath the drawspan of the highway drawbridge reducing he vertical clearance by 3 feet. This temporary deviation modification has been coordinated with waterway users. No objections to the proposed temporary deviation modification were raised.

Vessels able to pass through the bridge in the closed position may do so at any time. The bridge will not be able to open for emergencies and Oakland Inner Harbor Tidal Canal can be used as an alternate route for vessels unable to pass through the bridges in the closed position. The Coast Guard will also inform the users of the waterway through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridges so vessel operators can arrange their transits to minimize any impact caused by the temporary deviation.

In accordance with 33 CFR 117.35(e), the drawbridges must return to their regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.

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

On June 1, 2017 (82 FR 25213), the EPA proposed to approve the rules listed in Table 1, below, which were submitted by ADEQ on April 28, 2017 for approval into the ADEQ portion of the Arizona SIP (hereinafter referred to as the April 2017 NSR submittal). The submitted rules are from the Arizona Administrative Code, Title 18—Environmental Quality, Chapter 2—Department of Environmental Quality—Air Pollution Control, Articles 1 through 4.

As discussed in our June 1, 2017 proposed action, these rule revisions are intended to correct deficiencies in ADEQ's SIP-approved NSR program related to the requirements under both part C (prevention of significant deterioration or PSD) and part D (NA-NSR) of title I of the Act, which apply to major stationary sources and major modifications of such sources. 82 FR 25213. These revisions are necessary to correct several deficiencies we identified in a 2015 EPA final rule action to update ADEQ's SIP-approved NSR program, as well as certain deficiencies with ADEQ's NSR program that were the focus of a 2016 EPA final rule action related to PM2.5 precursors under the NA-NSR program requirements in CAA section 189(e). See 80 FR 67319 (Nov. 2, 2015) and 81 FR 40525 (June 22, 2016). We proposed to approve the April 2017 NSR submittal because we determined that the rules in the submittal complied with the relevant CAA requirements, with one exception, which ADEQ had indicated that it intended to address with a later SIP submittal, as discussed further below. Our June 1, 2017 proposed action contains more information on the rules in the April 2017 NSR submittal and our evaluation.

We also stated in our June 1, 2017 proposal that in our final action, we intended to update 40 CFR 52.144 to clarify that ADEQ has an approved PSD program, except for greenhouse gases (GHGs),1 under sections 160 through 165 of the Act. We explained that we would also move the codification of the PSD Federal Implementation Plan (FIP) for GHGs for Arizona from 40 CFR 52.37 to 40 CFR 52.144, where the State of Arizona's PSD program approval is listed.

The rules in the April 2017 NSR submittal will apply in all areas and to all stationary sources within Arizona for which ADEQ has CAA permitting jurisdiction. Currently, ADEQ has permitting jurisdiction for the following stationary source categories in all areas of Arizona: Smelting of metal ores, coal-fired electric generating stations, petroleum refineries, Portland cement plants, and portable sources. ADEQ also has permitting jurisdiction for major and minor sources in the following counties: Apache, Cochise, Coconino, Gila, Graham, Greenlee, La Paz, Mohave, Navajo, Santa Cruz, Yavapai, and Yuma. Finally, ADEQ has permitting jurisdiction over major sources in Pinal County 2 and the Rosemont Copper Mine in Pima County.

Table 2 lists the existing rules in the Arizona SIP that would be superseded or removed from the ADEQ portion of the Arizona SIP as part of our action. These rules would generally be replaced in the SIP by the submitted set of rules listed in Table 1.

Simultaneously with our proposed approval action on June 1, 2017, we published a related interim final determination to defer sanctions. 82 FR 25203. This interim final determination was based on our proposed finding that with the April 2017 NSR submittal, the State had satisfied the requirements of part D of the CAA permitting program for areas under the jurisdiction of ADEQ with respect to issues that had been identified as the basis for an earlier final limited disapproval action on November 2, 2015, under title I, part D of the Act, relating to requirements for nonattainment areas. See 80 FR 67319 (Nov. 2, 2015).

Subsequently, on January 10, 2018, the EPA supplemented its June 1, 2017 proposal on ADEQ's April 2017 NSR submittal to address the outstanding requirement that had been identified in the June 1, 2017 proposal. See 83 FR 1212. Specifically, we had found in our June 1, 2017 proposal that while ADEQ's updated NA-NSR program, as reflected in the April 2017 NSR submittal, included ammonia as a precursor to PM2.5 in PM2.5 nonattainment areas, the rules in the April 2017 NSR submittal did not define the term “significant” for purposes of applying the requirements of 40 CFR 51.165(a)(13) to modifications at existing major stationary sources of ammonia located in a PM2.5 nonattainment area, as required by 40 CFR 51.165(a)(1)(x)(F). ADEQ must address this requirement to fully resolve the deficiencies in its NA-NSR program related to PM2.5 precursors under the NA-NSR program requirements in CAA section 189(e) that were identified in our 2016 EPA final rule action. See 81 FR 40525 (June 22, 2016). To address this remaining deficiency, in a letter dated December 6, 2017, ADEQ committed to adopt certain rule revisions and/or make other specific demonstrations by March 31, 2019. The EPA therefore proposed a conditional approval of ADEQ's NA-NSR program pursuant to CAA section 110(k)(4) solely as it pertains to section 189(e) of the Act and the associated regulatory requirements for ammonia as a PM2.5 precursor in our supplemental action on January 10, 2018.

In addition, simultaneously with our proposed conditional approval action on January 10, 2018, we published an interim final determination to defer sanctions based on that proposed conditional approval action and our June 1, 2017 proposed approval action. 83 FR 1995. The EPA made an interim final determination that the State had satisfied the requirements of part D of the CAA permitting program for areas under the jurisdiction of ADEQ with respect to fine particular matter (PM2.5) precursors under section 189(e). The effect of our interim final determination that the State has corrected the deficiency in the permitting program was that the imposition of sanctions that were triggered by our previous limited disapproval action on June 22, 2016 (at 81 FR 40525) was deferred.

Our June 1, 2017 proposal, our January 10, 2018 supplemental proposal, and the two accompanying interim final determinations described above contain more information on the basis for the determinations we made in these actions.

The EPA's proposal and supplemental proposal each provided for a 30-day public comment period. We did not receive any comments during the public comment period on our June 1, 2017 proposed approval action, and we received one supportive comment from the Wyoming Department of Environmental Quality on our concurrent interim final determination to defer sanctions. We received 12 anonymous comments on our January 10, 2018 supplemental proposal and/or the related interim final determination to defer sanctions. Commenters on our January 10, 2018 proposal and interim final determination generally raised issues that are outside of the scope of this rulemaking and interim final determination, including but not limited to the National Environmental Policy Act (NEPA), climate science, the Intergovernmental Panel on Climate Change, the Navajo Generating Station (located on Tribal land), forest management, wildfire suppression, GHGs and other emissions from wildfires, and the Cross-State Air Pollution Rule. We also received one comment that was supportive of ADEQ correcting deficiencies in its program. The EPA is required to approve a state submittal if the submittal meets all applicable requirements. 42 U.S.C. 7410(k)(3). Commenters did not raise any specific issues germane to the approvability of the April 2017 NSR submittal, which relates to the permitting of stationary sources, including any issues germane to our proposal to conditionally approve ADEQ's NA-NSR program pursuant to CAA section 110(k)(4) solely as it pertains to section 189(e) of the Act and the associated regulatory requirements for ammonia as a PM2.5 precursor. Commenters also did not raise any specific issues germane to our interim final determinations to defer sanctions.

No comments were submitted that change our assessment of the rules submitted in the 2017 ADEQ NSR submittal and proposed for approval into the Arizona SIP as described in our proposed actions, nor were any comments submitted that change our assessment that certain ADEQ rules should be removed from the Arizona SIP as discussed in our proposals. Therefore, as authorized in section 110(k)(3) of the Act, the EPA is approving the rules in the 2017 ADEQ NSR submittal, as described in Table 1 above, into the ADEQ portion of the Arizona SIP, and the EPA is removing from the Arizona SIP the rules identified above in Table 2. Also, consistent with our proposal, we are moving the codification of the PSD FIP for GHGs for Arizona from 40 CFR 52.37 to 40 CFR 52.144, where the State of Arizona's PSD program approval is listed, and amending the regulatory text in 40 CFR 51.144 to clarify that ADEQ has an approved PSD program, except for GHGs, under sections 160 through 165 of the Act.

As a result of this final approval action, the offset sanction in CAA section 179, which would have applied 18 months after the effective date of our November 2, 2015 limited disapproval action (80 FR 67319), and the highway funding sanction in CAA section 179, which would have applied six months after this offset sanction was imposed, are permanently terminated.

We also received no comments that changed the determinations that were the basis for our proposed conditional approval action, thus we are finalizing a conditional approval of ADEQ's NA-NSR program solely with respect to ammonia as a precursor to PM2.5 under section 189(e) of the Act pursuant to CAA section 110(k)(4), as discussed in our supplemental proposal dated January 10, 2018. While we cannot grant full approval of the submittal at this time with respect to this issue, ADEQ has satisfactorily committed to address this deficiency by providing the EPA with a SIP submittal by March 31, 2019 that will include specific rule revisions and/or demonstrations that would adequately address this issue. If ADEQ submits the rule revisions and/or demonstrations that it has committed to submit by this deadline, and the EPA approves the submission, then this deficiency will be cured. However, if ADEQ fails to submit these revisions and/or demonstrations within the required timeframe, the conditional approval will become a disapproval for the specific issue of whether ADEQ's NA-NSR program meets the requirements of section 189(e) of the Act with respect to ammonia as a PM2.5 precursor, and the EPA will issue a finding of disapproval. The EPA is not required to propose the finding of disapproval.

Further, as a result of our final approval action and our final conditional approval action with respect to PM2.5 precursors under section 189(e) of the Act, all sanctions and any sanction clocks triggered by our 2016 PM2.5 precursor action (81 FR 40525) continue to be deferred unless at a later date our conditional approval converts to a disapproval, or the EPA proposes to take or takes final action to disapprove in whole or in part the SIP submittal that ADEQ is required to submit to fulfill its commitment in the conditionally approved plan. Sanctions and sanctions clocks triggered by our 2016 PM2.5 precursor action would be permanently terminated on the effective date of a final approval of the SIP submittal that ADEQ submits to fulfill the commitment in the conditionally approved plan.

In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the ADEQ rules described in the amendments to 40 CFR part 52 set forth below. The EPA has made, and will continue to make, these documents available through www.regulations.gov and at the EPA Region IX Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information). Therefore, these materials have been approved by the EPA for inclusion in the Arizona SIP, have been incorporated by reference by the EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of the EPA's approval, and will be incorporated by reference in the next update to the SIP compilation.3

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

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

• Is not an Executive Order 13771 (82 FR 9339, February 3, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by July 3, 2018. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See CAA section 307(b)(2).)

For the reasons stated in the preamble, part 52, chapter I, title 40 of the Code of Federal Regulations is amended as follows:

Section 169A(b)(2)(A) of the Clean Air Act (CAA or Act) requires states to submit regional haze plans that contain such measures as may be necessary to make reasonable progress towards the natural visibility goal, including a requirement that certain categories of existing major stationary sources built between 1962 and 1977 procure, install, and operate Best Available Retrofit Technology (BART) as determined by the state. Under the Regional Haze Rule (RHR), states are directed to conduct BART determinations for such “BART-eligible” sources that may be anticipated to cause or contribute to any visibility impairment in a Class I area. Rather than requiring source-specific BART controls, states also have the flexibility to adopt an emissions trading program or other alternative program as long as the alternative provides greater reasonable progress towards improving visibility than BART. See 40 CFR 51.308(e)(2). EPA provided states with this flexibility in the RHR, adopted in 1999, and further refined the criteria for assessing whether an alternative program provides for greater reasonable progress in two subsequent rulemakings. See 64 FR 35714 (July 1, 1999); 70 FR 39104 (July 6, 2005); 71 FR 60612 (October 13, 2006).

EPA demonstrated that CAIR would achieve greater reasonable progress than BART in revisions to the regional haze program made in 2005.1 See 70 FR 39104 (July 6, 2005). In those revisions, EPA amended its regulations to provide that states participating in the CAIR cap-and-trade programs pursuant to an EPA-approved CAIR SIP or states that remain subject to a CAIR FIP need not require affected BART-eligible electric generating units (EGUs) to install, operate, and maintain BART for emissions of SO2 and nitrogen oxides (NOX). As a result of EPA's determination that CAIR was “better-than-BART,” a number of states in the CAIR region, including Georgia, relied on the CAIR cap-and-trade programs as an alternative to BART for EGU emissions of SO2 and NOX in designing their regional haze plans. These states also relied on CAIR as an element of a long-term strategy (LTS) for achieving their reasonable progress goals (RPGs) for their regional haze programs. However, in 2008, the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) remanded CAIR to EPA without vacatur to preserve the environmental benefits provided by CAIR. North Carolina v. EPA, 550 F.3d 1176, 1178 (D.C. Cir. 2008). On August 8, 2011 (76 FR 48208), acting on the D.C. Circuit's remand, EPA promulgated CSAPR to replace CAIR and issued FIPs to implement the rule in CSAPR-subject states.2 Implementation of CSAPR was scheduled to begin on January 1, 2012, when CSAPR would have superseded the CAIR program.

Due to the D.C. Circuit's 2008 ruling that CAIR was “fatally flawed” and its resulting status as a temporary measure following that ruling, EPA could not fully approve regional haze plans to the extent that they relied on CAIR to satisfy the BART requirement and the requirement for a LTS sufficient to achieve the state-adopted RPGs. On these grounds, EPA finalized a limited disapproval of Georgia's regional haze plan on June 7, 2012 (77 FR 33642), and in the same action, promulgated a FIP to replace reliance on CAIR with reliance on CSAPR to address the deficiencies in Georgia's regional haze plan. EPA finalized a limited approval of Georgia's regional haze plan on June 28, 2012 (77 FR 38501), as meeting the remaining applicable regional haze requirements set forth in the CAA and the RHR.

In the June 7, 2012, limited disapproval action, EPA also amended the RHR to provide that participation by a state's EGUs in a CSAPR trading program for a given pollutant—either a CSAPR federal trading program implemented through a CSAPR FIP or an integrated CSAPR state trading program implemented through an approved CSAPR SIP revision—qualifies as a BART alternative for those EGUs for that pollutant. See 40 CFR 51.308(e)(4). Since EPA promulgated this amendment, numerous states covered by CSAPR have come to rely on the provision through either SIPs or FIPs.3

Numerous parties filed petitions for review of CSAPR in the D.C. Circuit, and on August 21, 2012, the court issued its ruling, vacating and remanding CSAPR to EPA and ordering continued implementation of CAIR. EME Homer City Generation, L.P. v. EPA, 696 F.3d 7, 38 (D.C. Cir. 2012). The D.C. Circuit's vacatur of CSAPR was reversed by the United States Supreme Court on April 29, 2014, and the case was remanded to the D.C. Circuit to resolve remaining issues in accordance with the high court's ruling. EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584 (2014). On remand, the D.C. Circuit affirmed CSAPR in most respects, but invalidated without vacating some of the CSAPR budgets as to a number of states. EME Homer City Generation, L.P. v. EPA, 795 F.3d 118 (D.C. Cir. 2015). The remanded budgets include the Phase 2 SO2 emissions budgets for Alabama, Georgia, South Carolina, and Texas and the Phase 2 ozone-season NOX budgets for 11 states. This litigation ultimately delayed implementation of CSAPR for three years, from January 1, 2012, when CSAPR's cap-and-trade programs were originally scheduled to replace the CAIR cap-and-trade programs, to January 1, 2015. Thus, the rule's Phase 2 budgets that were originally promulgated to begin on January 1, 2014, began on January 1, 2017.

On September 29, 2017 (82 FR 45481), EPA issued a final rule affirming the continued validity of the Agency's 2012 determination that participation in CSAPR meets the RHR's criteria for an alternative to the application of source-specific BART.4 EPA has determined that changes to CSAPR's geographic scope resulting from the actions EPA has taken or expects to take in response to the D.C. Circuit's budget remand do not affect the continued validity of participation in CSAPR as a BART alternative, because the changes in geographic scope would not have adversely affected the results of the air quality modeling analysis upon which the EPA based the 2012 determination. EPA's September 29, 2017, determination was based, in part, on EPA's final action approving a SIP revision from Alabama (81 FR 59869 (August 31, 2016)) adopting Phase 2 annual NOX and SO2 budgets equivalent to the federally-developed budgets and on SIP revisions submitted by Georgia and South Carolina to also adopt Phase 2 annual NOX and SO2 budgets equivalent to the federally-developed budgets.5 Since that time, EPA has approved the SIP revisions from Georgia and South Carolina. See 82 FR 47930 (October 13, 2017) and 82 FR 47936 (October 13, 2017), respectively.

A portion of Georgia's July 26, 2017, SIP submittal seeks to correct the deficiencies identified in the June 7, 2012, limited disapproval of its regional haze plan submitted on February 11, 2010, and supplemented on November 19, 2010, by replacing reliance on CAIR with reliance on CSAPR.6 Specifically, Georgia requests that EPA amend the State's regional haze plan by replacing its reliance on CAIR with CSAPR to satisfy SO2 and NOX BART requirements and first implementation period SO2 reasonable progress requirements for EGUs formerly subject to CAIR,7 and to support the RPGs for the Class I areas in Georgia for the first implementation period. EPA is approving the regional haze plan portion of the SIP submittal and amending the SIP accordingly.

By statute, plans meeting the requirements of sections 110(a)(1) and (2) of the CAA are to be submitted by states within three years (or less, if the Administrator so prescribes) after promulgation of a new or revised NAAQS to provide for the implementation, maintenance, and enforcement of the new or revised NAAQS. EPA has historically referred to these SIP submissions made for the purpose of satisfying the requirements of sections 110(a)(1) and 110(a)(2) as “infrastructure SIP” submissions. Sections 110(a)(1) and (2) require states to address basic SIP elements such as for monitoring, basic program requirements, and legal authority that are designed to assure attainment and maintenance of the newly established or revised NAAQS. More specifically, section 110(a)(1) provides the procedural and timing requirements for infrastructure SIPs. Section 110(a)(2) lists specific elements that states must meet for the infrastructure SIP requirements related to a newly established or revised NAAQS. The contents of an infrastructure SIP submission may vary depending upon the data and analytical tools available to the state, as well as the provisions already contained in the state's implementation plan at the time in which the state develops and submits the submission for a new or revised NAAQS.8

Section 110(a)(2)(D) has two components: 110(a)(2)(D)(i) and 110(a)(2)(D)(ii). Section 110(a)(2)(D)(i) includes four distinct components, commonly referred to as “prongs,” that must be addressed in infrastructure SIP submissions. The first two prongs, which are codified in section 110(a)(2)(D)(i)(I), are provisions that prohibit any source or other type of emissions activity in one state from contributing significantly to nonattainment of the NAAQS in another state (prong 1) and from interfering with maintenance of the NAAQS in another state (prong 2). The third and fourth prongs, which are codified in section 110(a)(2)(D)(i)(II), are provisions that prohibit emissions activity in one state from interfering with measures required to prevent significant deterioration of air quality in another state (prong 3) or from interfering with measures to protect visibility in another state (prong 4). Section 110(a)(2)(D)(ii) requires SIPs to include provisions ensuring compliance with sections 115 and 126 of the Act, relating to interstate and international pollution abatement.

A state can meet prong 4 requirements via confirmation in its infrastructure SIP submission that the state has an approved regional haze plan that fully meets the requirements of 40 CFR 51.308 or 51.309. 40 CFR 51.308 and 51.309 specifically require that a state participating in a regional planning process include all measures needed to achieve its apportionment of emission reduction obligations agreed upon through that process. A fully approved regional haze plan will ensure that emissions from sources under an air agency's jurisdiction are not interfering with measures required to be included in other air agencies' plans to protect visibility.

Georgia's May 14, 2012, 2008 8-hour Ozone submission; March 25, 2013, 2010 1-hour NO2 submission; October 22, 2013, 2010 1-hour SO2 submission as supplemented on July 25, 2014; and December 14, 2015, 2012 annual PM2.5 submission rely on the State having a fully approved regional haze plan to satisfy its prong 4 requirements. EPA is approving the regional haze plan portion of the State's July 26, 2017, SIP revision and converting EPA's previous action on Georgia's regional haze plan from a limited approval/limited disapproval to a full approval because final approval of this portion of the SIP revision would correct the deficiencies that led to EPA's limited approval/limited disapproval of the State's regional haze plan. Specifically, EPA's approval of this portion of Georgia's July 26, 2017, SIP revision would satisfy the SO2 and NOX BART requirements and SO2 reasonable progress requirements for EGUs formerly subject to CAIR and the requirement that a LTS include measures as necessary to achieve the State-adopted RPGs. Because a state may satisfy prong 4 requirements through a fully approved regional haze plan, EPA is also converting the Agency's September 26, 2016, conditional approvals to full approvals of the prong 4 portion of Georgia's May 14, 2012, 2008 8-hour Ozone submission; March 25, 2013, 2010 1-hour NO2 submission; October 22, 2013, 2010 1-hour SO2 submission as supplemented on July 25, 2014; and December 14, 2015, 2012 annual PM2.5 submission.

In a notice of proposed rulemaking (NPRM) published on February 2, 2018 (83 FR 4886), EPA proposed to take the following actions: (1) Approve the regional haze plan portion of Georgia's July 26, 2017, SIP submission to change reliance from CAIR to CSAPR; (2) convert EPA's limited approval/limited disapproval of Georgia's February 11, 2010, regional haze plan as supplemented on November 19, 2010, to a full approval; (3) remove EPA's FIP for Georgia which replaced reliance on CAIR with reliance on CSAPR to address the deficiencies identified in the limited disapproval of Georgia's regional haze plan; and (4) convert EPA's September 26, 2016, conditional approvals to full approvals of the prong 4 portion of Georgia's May 14, 2012, 2008 8-hour Ozone submission; March 25, 2013, 2010 1-hour NO2 submission; the State's October 22, 2013, 2010 1-hour SO2 submission as supplemented on July 25, 2014; and the State's December 14, 2015, 2012 annual PM2.5 submission. The details of Georgia's submission and the rationale for EPA's actions are explained in the NPRM. Comments on the proposed rulemaking were due on or before March 5, 2018. EPA received no adverse comments on the proposed action.

As described above, EPA is taking the following actions: (1) Approving the regional haze plan portion of Georgia's July 26, 2017, SIP submission to change reliance from CAIR to CSAPR; (2) converting EPA's limited approval/limited disapproval of Georgia's February 11, 2010, regional haze plan as supplemented on November 19, 2010, to a full approval; (3) removing EPA's FIP for Georgia which replaced reliance on CAIR with reliance on CSAPR to address the deficiencies identified in the limited disapproval of Georgia's regional haze plan; and (4) converting EPA's September 26, 2016, conditional approvals to full approvals of the prong 4 portion of Georgia's May 14, 2012, 2008 8-hour Ozone submission; March 25, 2013, 2010 1-hour NO2 submission; the State's October 22, 2013, 2010 1-hour SO2 submission as supplemented on July 25, 2014; and the State's December 14, 2015, 2012 annual PM2.5 submission. All other applicable infrastructure requirements for the infrastructure SIP submissions have been or will be addressed in separate rulemakings.

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

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

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

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

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

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

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

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

• Are not significant regulatory actions subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

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

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

The SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.

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

Under section 307(b)(1) of the CAA, petitions for judicial review of these actions must be filed in the United States Court of Appeals for the appropriate circuit by July 3, 2018. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of these actions for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. These actions may not be challenged later in proceedings to enforce its requirements. See section 307(b)(2).

40 CFR part 52 is amended as follows:

DoD is amending the DFARS to implement section 801 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018 (Pub. L. 115-404). Section 801 directs the insertion of a statement of purpose for Department of Defense acquisition in the DFARS. This rule adds the statement of purpose to DFARS 201.101.

This rule does not add any new provisions or clauses or impact existing provisions or clauses. The rule merely adds a purpose statement to the regulations.

The statute that applies to the publication of the Federal Acquisition Regulation (FAR) is the Office of Federal Procurement Policy statute (codified at title 41 of the United States Code). Specifically, 41 U.S.C. 1707(a)(1) requires that a procurement policy, regulation, procedure or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment, because it clarifies the purpose of the defense system as required by the NDAA for FY 2018. There is no cost or administrative impact on contractors or offerors. These requirements affect only the internal operating guidance of the Government.

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

This rule is not subject to Executive Order (E.O.) 13771, Reducing Regulation and Controlling Regulatory Costs, because the rule relates to agency organization, management, or personnel.

Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule under 41 U.S.C. 1707(a)(1) (see section III. of this preamble), the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are not applicable. Accordingly, no regulatory flexibility analysis is required and none has been prepared.

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

Therefore, 48 CFR part 201 is amended as follows:

DoD published a proposed rule in the Federal Register at 81 FR 50680 on August 2, 2016, to implement section 885(b) of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2016 (Pub. L. 114-92), which amends section 818(c)(3)(D)(iii) of the NDAA for FY 2012 (Pub. L. 112-81). Section 885(b) provides that contractors and subcontractors are subject to approval (as well as review and audit) by appropriate DoD officials when identifying a contractor-approved supplier of electronic parts. Four respondents submitted public comments on the proposed rule.

DoD reviewed the public comments in the formulation of the final rule. A discussion of the comments and the changes made to the rule as a result of those comments are provided as follows:

The final rule clarifies at DFARS 246.870-2(a)(1)(ii)(C) and 252.246-7008(b)(2)(iii) that the review, audit, and approval of contractor-approved suppliers by the Government will generally be in conjunction with a contractor purchasing system review (CPSR) or other surveillance of purchasing practices by the contract administration office, unless the Government has credible evidence that a contractor-approved supplier has provided counterfeit parts.

The respondents shared concerns about the details of how, what, when, and by whom the Government approval (or disapproval) of contractor-approved suppliers would be conducted. There was also concern about the impact of disapproval, how the notification would occur, and the extent of flow-down to subcontracts.

Comment: Several respondents commented on whether the review, audit, and approval are mandatory or discretionary. One respondent stated that the rule is silent as to whether the review, audit, and approval will take place. Another respondent noted that it appears that contractor selection of contractor-approved suppliers can be subject to (emphasis added) review, audit, and approval by the contracting officer, implying that such processes are optional and not mandatory actions, whether that function is conducted on individual transactions or through a CPSR or other surveillance of purchasing practices. Yet another respondent questioned the criteria for deciding when to review, audit, and approve suppliers that have been approved by the contractor.

Response: It is not mandatory that the Government review, audit, and approve contractor-approved suppliers. The final rule has been amended at DFARS 246.870-2(a)(1)(ii)(C) and 252.246-7008(b)(2)(iii) to clarify that such review, audit, and approval will generally be in conjunction with a CPSR by the contract administration office, or if the Government obtains credible evidence that a contractor-approved supplier has provided counterfeit parts.

Comment: One respondent noted that separate regulations address contractor purchasing system criteria and recommended that the audits conducted under the proposed DFARS rule providing for Government review, audit, and approval be limited to confirming that the contractor's process for selecting suppliers is based on appropriate industry standards and processes for counterfeit prevention. The respondent further recommended that DoD clarify that the Government would not impose additional requirements based on internal DoD standards for identifying trusted electronic parts suppliers. Another respondent stated that it was unclear if the proposed DFARS contracting officer approval function applied to the process used by contractors to approve electronic parts suppliers for parts out of production or if DoD intended to reserve the right to review, audit, and approve the selection of each part delivered by a contractor-approved supplier on each contract transaction. The same respondent commented that industry comments on DFARS case 2014-D005 speculated that the review and audit of the contractor selection process for contractor-approved suppliers by DoD officials might be satisfied through the CPSR process.

Response: The Government's review, audit, and approval of contractor-approved suppliers of electronic parts generally will be conducted during the CPSR or other surveillance of purchasing practices to verify that the contractor is using established counterfeit prevention industry standards and processes (including inspection, testing, and authentication), such as the DoD-adopted standards at https://assist.dla.mil, to select their suppliers, as required by DFARS clause 252.246-7008(b)(2)(i).

The contractor's authorization to identify and purchase electronic parts from their own contractor-approved suppliers and DoD's authority to review, audit, and approve those contractor-approved suppliers relates only to those suppliers of electronic parts that are not in production by the original manufacturer or an authorized aftermarket manufacturer and that are not currently available in stock from the original manufacturer, their authorized suppliers, or suppliers that obtain such parts exclusively from the original manufacturers of the parts or their authorized suppliers (see DFARS 246.870-2(a)(1)(ii)(C) and 252.246-7008(b)(2)(iii)). The rule grants the authority for the Government to review, audit, and approve or disapprove contractor-approved suppliers of electronic parts outside of a CPSR or other surveillance of purchasing practices by the contract administration office if there is credible evidence that a contractor-approved supplier has provided counterfeit electronic parts. As the basis of its review, audit, and approval, the Government generally intends to use established counterfeit prevention industry standards and processes.

Comment: All respondents had concern about the timing of the review, audit, and approval of contractor-approved suppliers. The respondents are concerned that the rule does not specify when the review, audit, and approval of contractor-approved suppliers should occur. According to the respondents, the contracting officer is able to review and approve electronic parts suppliers any time from contract award until closeout. If the contracting officer disapproves a supplier after the fact, this would likely cause significant cost increases and schedule delays. The respondents recommended that the contracting officer should establish schedules for these reviews and, to the maximum extent practicable, review and approve a contractor's electronic parts suppliers at the time of contract award or as early as possible during contract performance.

One respondent requested that a contracting officer's disapproval of a contractor-approved source should constitute a contract change that qualifies for equitable adjustment in the contract price, the delivery schedule, or both, pursuant to the Changes clause at FAR 52.243-1.

Response: DoD's authority to review, audit, and approve contractor-approved suppliers relates only to those suppliers of electronic parts that are not in production by the original manufacturer or an authorized aftermarket manufacturer and that are not currently available in stock from the original manufacturer, their authorized suppliers, or suppliers that obtain such parts exclusively from the original manufacturers of the parts or their authorized suppliers (see DFARS 246.870-2(a)(1)(ii)(C) and 252.246-7008(b)(2)(iii)). DoD relies primarily on the contractor to use established counterfeit prevention industry standards and processes (including inspection, testing, and authentication), such as the DoD-adopted standards at https://assist.dla.mil, as required by DFARS clause 252.246-7008(b)(2)(i). However, DoD also has the authority to review an individual supplier. DoD generally intends to exercise its right to review, audit, and approve contractor-approved suppliers in conjunction with a periodic CPSR (see FAR subpart 44.3, DFARS subpart 244.3, and DFARS 252.246-7007(d)) or other surveillance of purchasing practices, or if there is credible evidence that a contractor-approved supplier has supplied electronic counterfeit parts. DoD shares the desire of the contractors to avoid significant schedule delays, cost increases, and resultant impairment of operational readiness.

The contracting officer's disapproval of a contractor-approved source does not constitute a contract change that qualifies for equitable adjustment in the contract price, the delivery schedule, or both, pursuant to the Changes clause at FAR 52.243-1. The contract clause already provides that the contractor selection of a contractor-approved supplier is subject to review, audit, and approval by the Government, and therefore such review, audit, and approval or disapproval by the Government does not constitute a change to the contract.

Comment: One respondent was concerned whether it would be the procurement contracting officer or the administrative contracting officer who would approve contractor-approved suppliers. The respondent was concerned about potential overlap in authority. The respondent recommended that a contractor be able to cite to a prior approval, if another contracting officer seeks approval rights. The respondent also questioned how a procurement contracting officer would obtain the quality assurance expertise needed to conduct a review, audit, and approval of contractor-approved electronic parts suppliers.

Response: For a specific contract, the procurement contracting officer always has final approval authority, and may delegate certain functions to the administrative contracting officer. The contracting officer relies on the assistance of DoD quality experts, who make recommendations to the contracting officer. The FAR specifies that it is the administrative contracting officer who determines the need for a CPSR. The cognizant administrative contracting officer is responsible for granting, withholding, or withdrawing approval of a contractor's purchasing system.

Comment: Most respondents questioned whether approval or disapproval of a specific supplier would impact other contracts. The respondents were also concerned about the scenario in which contracting officers disagree on the approval of a supplier on different programs. According to one respondent, both the revised policy and the contract clause focus on the review, audit, and approval of a specific supplier by the contracting officer on a specific contract. However, the respondent notes that a prime contractor may select a specific supplier and use electronic parts sourced from that supplier across a wide variety of end items and contracts. Several respondents recommended that the approval of one procurement contracting officer should be binding across all contracts where the electronic parts supplier is used, and also recommended a mechanism to communicate such approval or disapproval of a supplier across all contracts and subcontracts where the supplier is utilized.

Response: If the contractor is covered by the cost accounting standards, the contractor's counterfeit electronic part detection and avoidance system under DFARS 252.246-7007 is part of the contractor's purchasing system. Any deficiencies in the contractor's purchasing system will impact the contractor across all Government contracts. If a contractor-approved supplier is not acceptable to the Government, the reasons for that unacceptability should be entered in the Government-Industry Data Exchange Program (GIDEP) when appropriate and may lead to suspension or debarment of that contractor-approved supplier, in accordance with FAR subpart 9.4. The list of all entities suspended, debarred, or proposed for debarment is publicly available in the System for Award Management (SAM) database. Procurement contracting officers dealing with common issues at the same contractor would generally coordinate with each other and with the cognizant administrative contracting officer. While each contracting officer retains ultimate authority for decisions with regard to a particular contract, the contracting officer would be likely to respect the decision of another prior contracting office unless new facts were available. Furthermore, regardless of Government approval or disapproval of a contractor-approved supplier, the contractor is responsible for the authenticity of parts provided by a contractor-approved supplier.

Comment: One respondent recommended that if a contractor has an approved purchasing system before DoD publishes the ensuing final rule, the prior approval should remain in effect until the next review of the contractor's purchasing system.

Response: That is generally the case. However, if due to changing CPSR thresholds or other circumstances, the requirement for a CPSR is no longer applicable to the contractor, then the approval would remain in effect for 3 years, after which time the status would be “not applicable.”

However, whether the approval of the contractor purchasing system is relevant with regard to this case would depend on whether, at the time of prior approval, the system contained the operational system to detect and avoid counterfeit electronic parts and suspect counterfeit electronic parts, as required by DFARS clause 252.247-7007.

Comment: One respondent stated that in no case should the review, audit, and approval process interfere with an award or subsequent performance, except in cases where a contractor-approved supplier reasonably creates heightened preaward risk of inserting a counterfeit electronic part in the supply chain or a counterfeit part is discovered prior to award.

Response: It is not in the interest of DoD to interfere with the award or performance of DoD contracts except in cases where the risk of counterfeit parts is sufficiently high to counterbalance the negative impact on timely fulfillment of DoD requirements.

Comment: According to one respondent, it is unclear what happens to the safe harbor at DFARS 231.205-71 in the event that a contracting officer does not review, audit, or approve any contractor-approved suppliers whatsoever or until after a counterfeit or suspect counterfeit electronic part inadvertently escapes in the DoD supply chain. One condition of the safe harbor is to obtain parts per the clause at DFARS 252.246-7008; if the contractor complies with the clause in its entirety and the contracting officer does not attempt to review, audit, or approve any contractor-approved supplier selection, industry understands the new rule to indicate that if a contracting officer does not review, audit, and approve, or to give subsequent notice disapproving the use of a contractor-approved supplier, does not obviate the safe harbor, even where a counterfeit electronic part from a contractor-approved supplier may be discovered in the supply chain at a later date.

Response: Whether DoD exercises its authority to review, audit, and approve contractor-approved suppliers has no impact on the applicability of the safe harbor provisions at DFARS 231.205-71, except to the extent that the contractor must have an operational system to detect and avoid counterfeit electronic parts and suspect counterfeit electronic parts that has been reviewed and approved by DoD, which is one of the required criteria for the safe harbor.

Comment: One respondent requested that DoD should clarify what constitutes notice from DoD to discontinue acquisition of parts from a specific contractor-approved supplier. The respondent recommended that DoD should provide guidance on a standard notice format and provide for a centralized DoD capability to provide timely notice to contractors and subcontractors about any contract-approved suppliers who are disapproved or where specific electronic parts are disapproved or found to be counterfeit. The respondent did not believe that any of the existing disclosure models, such as GIDEP or Electronic Resellers Association International (ERAI), can be scaled to act as notice provider on parts escapes, nor that they are designed to perform such notice duties.

Response: If a problem is identified in the course of a CPSR, the contractor will be notified in the standard means of communication consistent with FAR subpart 44.3 and DFARS subpart 244.3.

The contracting officer will provide written notice to the prime contractor if a contractor-approved supplier is not acceptable to the Government. In addition, that information should be entered in GIDEP when appropriate. If the contractor-approved supplier is found to have provided counterfeit parts, that may lead to suspension or debarment of that contractor-approved supplier, in accordance with FAR subpart 9.4. The list of all entities suspended, debarred, or proposed for debarment is publicly available in the SAM database.

Comment: One respondent commented that DoD may not have the resources to review, audit, and approve the counterfeit-prevention selection process implemented by each entity in the supply chain for a given program and recommended that DoD adopt a more limited or flexible approach to flowdown of the proposed clause.

Response: The flowdown requirement to subcontractors using contractor-approved suppliers of electronic parts is required by the statute. However, as previously stated, it is not the intent of DoD to review, audit, and approve the counterfeit prevention selection process by each entity in the supply chain, but on a selective basis, as determined necessary by DoD.

This rule does not add any new provisions or clauses to implement section 885(b) of the NDAA for FY 2016, which amends section 818 of the NDAA for FY 2012. It revises an existing clause at DFARS 252.246-7008, Sources of Electronic Parts, which applies to acquisitions at or below the SAT and to contracts and subcontracts for the acquisition of commercial items (including COTS items). A determination and findings was signed under DFARS Case 2014-D005 on May 26, 2016, by the Director, Defense Procurement and Acquisition Policy, to justify the application of section 818(c) of the NDAA for FY 2012, as amended, to acquisitions at or below the SAT and to contracts and subcontracts for the acquisition of commercial items (including COTS items).

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

This rule is not subject to E.O. 13771, Reducing Regulation and Controlling Regulatory Costs, because this rule is not a significant regulatory action under E.O. 12866.

A final regulatory flexibility analysis (FRFA) has been prepared consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

This rule implements section 885(b) of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2016 (Pub. L. 114-92), which amended section 818 of the NDAA for FY 2012. The objective of this rule is to provide to DoD the authority to approve contractor-approved suppliers of electronic parts, in accordance with section 885(b) of the NDAA for FY 2016.

There were no significant issues raised by the public in response to the initial regulatory flexibility analysis.

The review, audit, and approval of a contractor-approved source generally occurs in conjunction with a contractor purchasing system review (CPSR) or other surveillance of purchasing practices by the contract administration office. The Defense Contract Management Agency (DCMA) performs approximately 128 CPSRs per year. In addition, the contract administration office validates about 256 purchasing systems per year. There is also a quality management system audit of the purchasing system, which is performed on a risk-based basis at least once every three years. There are approximately 3,292 higher-level quality contractors, resulting in 1,097 possible reviews per year. Adding the purchasing system reviews and the quality management system audits totals 1,481 reviews (128 + 256 + 1097). However, DCMA estimates that it is likely that contractors using “contractor-approved” sources, would be limited to 10 percent or less of the contractors subject to these audits and reviews, i.e. not more than 148 contractors. DCMA further estimates that of those using “contractor-approved” sources, not more than 15 (10 percent) per year would result in issues or disapprovals by the Government.

This rule does not impose any reporting, recordkeeping, or other compliance requirements other than being subject to approval by DoD if the contractor or subcontractor identifies a contractor-approved supplier of electronic parts and the Government selects the contractor for review and audit. Since contractor selection of contractor-approved sources was already subject of review and audit, addition of “and approval” does not change much, because if the Government reviewed and audited a source and found a serious problem, the Government would require corrective action to prevent entry of such electronic parts into the supply chain. Furthermore, the contractor may proceed with the acquisition of electronic parts from a contractor-approved supplier unless otherwise notified by DoD.

DoD was unable to identify any significant alternatives that would reduce the economic impact on small entities and still fulfill the requirements of the statute. However, DoD does not expect this rule to have any significant economic impact on small entities, because it does not impose any new requirements on contractors or subcontractors. Contractors may proceed with the acquisition of electronic parts from a contractor-approved supplier unless otherwise notified by DoD.

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

Therefore, 48 CFR parts 212, 246, and 252 are amended as follows:

DoD published a proposed rule in the Federal Register at 80 FR 72669 on November 20, 2015, to amend the DFARS to indicate that DoD contracting officers have discretion to request a limited- or full-scope audit, as appropriate for the circumstances, when contractors voluntarily disclose defective pricing after contract award. In response to the Better Buying Power 2.0 initiative on “Eliminating Requirements Imposed on Industry where Costs Outweigh Benefits,” contractors recommended several changes to 41 U.S.C. chapter 35, Truthful Cost or Pricing Data (formerly the Truth in Negotiations Act) and to the related DFARS guidance. Specifically, contractors recommended that DoD clarify policy guidance to reduce repeated submissions of certified cost or pricing data. Frequent submissions of such data are used as a defense against defective pricing claims by DoD after contract award, since data that are frequently updated are less likely to be considered outdated or inaccurate and, therefore, defective. Better Buying Power 3.0 called for a revision of regulatory guidance regarding the requirement for contracting officers to request an audit even if a contractor voluntarily discloses defective pricing after contract award.

One respondent submitted a public comment in response to the proposed rule.

DoD reviewed the public comment in the development of the final rule. A discussion of the comment and changes made to the rule as a result of the comment is provided, as follows:

One change was made to the rule as a result of the public comment to remove the mandatory requirement to conduct an audit in all cases of a contractor's voluntary disclosure of defective pricing.

Comment: The respondent recommended that “shall” be replaced by the word “may” concerning the requirement to request a limited-scope audit as proposed at DFARS 215.407-1(c)(i). The respondent stated that the study entitled “Eliminating Requirements Imposed on Industry where Costs Outweigh Benefits” recommended that DoD not impose a mandatory requirement on itself to conduct an audit in all cases of a contractor's voluntary disclosure of defective pricing, because such a mandatory requirement provides no discretion for contracting officers not to request an audit if in their judgment an audit is not required by the circumstances. However, instead of removing this mandatory requirement as recommended by the study, the proposed rule would change the DFARS from “shall request an audit. . .” to “shall request a limited scope audit. . . .” Thus, the proposed language still provides a strong disincentive to contractors to voluntarily disclose defective pricing and it still imposes a mandatory requirement on contracting officers that may not be in the best interests of the DoD in all circumstances.

Response: The final rule is revised to remove the mandatory requirement to conduct an audit in all cases of a contractor's voluntary disclosure of defective pricing. However, in order to calculate appropriate price reductions as required by 10 U.S.C. 2306a(e), it is necessary that contracting officers, at a minimum, discuss the disclosure with the Defense Contract Audit Agency (DCAA) to determine the completeness of the contractor's voluntary disclosure and the accuracy of the contractor's cost impact calculation for the affected contract, and the potential impact on existing contracts, task or delivery orders, or other proposals the contractor has submitted to the Government. This discussion will assist the contracting officer in determining the involvement of DCAA, which could be a limited-scope audit (e.g., limited to the affected cost elements of the defective pricing disclosure), a full-scope audit, or technical assistance, as appropriate for the circumstances (e.g., nature or dollar amount of the defective pricing disclosure).

The requirement for submission of certified cost or pricing data does not apply to contracts at or below the simplified acquisition threshold or to commercial items, including commercially available off-the-shelf items. Therefore, this rule is not applicable to those classes of contracts.

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

This rule is not subject to E.O. 13771, Reducing Regulation and Controlling Regulatory Costs, because this rule is not a significant regulatory action under E.O. 12866.

A final regulatory flexibility analysis (FRFA) has been prepared consistent with the Regulatory Flexibility Act, 5 U.S.C. 691, et seq. The FRFA is summarized as follows:

The objective of this rule is to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to indicate that, in the interest of promoting voluntary contractor disclosures of defective pricing identified by the contractor after contract award, DoD contracting officers have discretion to request a limited-scope or full-scope audit, as appropriate for the circumstances. This rule will apply to all DoD contractors, including small entities, who are required to submit certified cost or pricing data.

There were no significant issues raised by the public in response to the initial regulatory flexibility analysis.

The number of small entities affected by this rule is unknown as this information is not available in the Federal Procurement Data System or other central repository. However, DoD anticipates that this rule could have a positive economic impact. If those small entities usually submit cost or pricing data frequently in order to avoid defective pricing claims, then this rule may encourage them to reduce the number of such submissions.

There is no change to reporting or recordkeeping as a result of this rule. The rule does not duplicate, overlap, or conflict with any other Federal rules, and there are no known significant alternative approaches to the rule that would meet the requirements.

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

Therefore, 48 CFR part 215 is amended as follows:

On May 15, 2015, the Board instituted a rulemaking proceeding in this docket to define “on-time performance” for intercity passenger trains for purposes of Section 213 of the Passenger Rail Investment and Improvement Act of 2008 (PRIIA), 49 U.S.C. 24308(f). See 80 FR 28928. The Board adopted its final rule in 49 CFR part 1040 on July 28, 2016, and the rule took effect on August 27, 2016. See 81 FR 51343.

Petitions for judicial review of the final rule were filed in the U.S. Courts of Appeals for the Eighth Circuit and the District of Columbia Circuit, and were ultimately consolidated in the Eighth Circuit. The Court of Appeals found that the Board lacked authority to promulgate a final rule defining on-time performance under PRIIA and vacated the Board's rule. See Union Pac. R.R. v. Surface Transp. Bd., 863 F.3d 816 (8th Cir. 2017). The National Railroad Passenger Corporation (Amtrak) and certain passenger organizations filed petitions for certiorari with the U.S. Supreme Court, which declined to review the Eighth Circuit's ruling.

The Board's rule is therefore invalid and 49 CFR part 1040 will be removed. Because this action is based on a final court determination that the rule being eliminated is invalid, the Board finds good cause to dispense with notice and comment under the Administrative Procedure Act (APA). See 5 U.S.C. 553(b)(B).

The Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 601-612, generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Because the Board has determined that notice and comment are not required under the APA for this rulemaking, the requirements of the RFA do not apply.

This final rule does not contain a new or amended information collection requirement subject to the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3521.

It is ordered:

1. Part 1040 is removed and notice will be published in the Federal Register.

2. This decision is effective on May 4, 2018.