Federal Register Vol. 83, No.88,

This final rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget (OMB).

This final rule is excluded from the scope of Executive Order 12372, Intergovernmental Consultation, which may require consultation with state and local officials. See the final rule related notice entitled, “Department Programs and Activities Excluded from Executive Order 12372” (50 FR 47034) advising that RUS loans and loan guarantees were not covered by Executive Order 12372.

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. RUS has determined that this final rule meets the applicable standards provided in section 3 of the Executive Order. In addition, all state and local laws and regulations that are in conflict with this rule will be preempted, no retroactive effect will be given to this rule, and, in accordance with section 212(e) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6912(e)), administrative appeal procedures, if any, must be exhausted before an action against the Department or its agencies may be initiated.

RUS has determined that this final rule will not have significant impact on a substantial number of small entities defined in the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). The RUS loan programs provide borrowers with loans at interest rates and terms that are more favorable than those generally available from the private sector. Borrowers, as a result of obtaining federal financing, receive economic benefits that exceed any direct cost associated with RUS regulations and requirements.

RUS has determined that this final rule will not significantly affect the quality of the human environment as defined by the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). Therefore, this action does not require an environmental impact statement or assessment.

The programs described by this final rule are listed in the Catalog of Federal Domestic Assistance under Numbers CFDA 10.751, Rural Energy Savings Program; CFDA 10.787, Broadband Initiatives Program; CFDA 10.850, Rural Electrification Loans and Loan Guarantees; CFDA 10.851, Rural Telephone Loans and Loan Guarantees; CFDA 10.855, Distance Learning and Telemedicine Loans and Grants; CFDA 10.857, Bulk Fuel Revolving Fund Grants; CFDA 10.858, Denali Commission Grants and Loans; CFDA 10.859, Assistance to High Energy Cost Rural Communities; CFDA 10.861, Public Television Station Digital Transition Grant Program; and, CFDA 10.863, Community Connect Grant Program. The General Services Administration (GSA) website at http://www.cfda.gov contains a PDF file version of the CFDA catalog. The print edition of the catalog may be purchased from the U.S. Government Publishing Office (GPO) by calling (202) 512-1800 or toll free at 1-866-512-1800, or by ordering it online at http://bookstore.thefederalregister.org.

The reporting and recordkeeping requirements contained in this final rule have been approved by the Office of Management and Budget (OMB) under OMB Control Number 0572-0095, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C Chapter 35). This final rule contains no new reporting or recordkeeping burdens under OMB Control Number 0572-0095 that would require approval under the Paperwork Reduction Act.

Send questions or comments regarding this burden or any other aspect of these collections of information, including suggestions for reducing the burden, to Thomas P. Dickson, Acting Director, Program Development and Regulatory Analysis, Rural Utilities Service, U.S. Department of Agriculture, 1400 Independence Avenue SW, Stop 1522, Room 5164-S, Washington, DC 20250-1522.

This final rule contains no Federal mandates (under the regulatory provision of title II of the Unfunded Mandates Reform Act of 1995) for state, local, and tribal governments or the private sector. Thus, this final rule is not subject to the requirements of sections 202 and 205 of the Unfunded Mandates Reform Act of 1995.

We invite you to participate in this rulemaking by submitting written comments, data, or views before the noted deadline. We will consider the comments we received and may conduct additional rulemaking based on the comments.

7 CFR part 1773, Policy on Audits of RUS Borrowers and Grantees (Part 1773), implements the standard RUS security instrument provision requiring RUS electric and telecommunications borrowers and grantees to prepare and furnish to RUS, at least once during each 12-month period, a full and complete report of its financial condition, operations, and cash flows, in form and substance satisfactory to RUS; audited and certified by an independent audit organization, satisfactory to RUS, and accompanied by a report of such audit, in form and substance satisfactory to RUS. This rule is amended to include coverage of all grantees and the title of Part 1773 is revised to reflect this change.

This rule amends Part 1773 to incorporate the 2011 revisions to GAGAS by the GAO issued in December 2011. The 2011 revision contains major changes that reinforce the principles of transparency and accountability and provide the framework for high-quality government audits that add value. This revision to GAGAS incorporates the AICPA Statements on Auditing Standards. The 2011 revisions to GAGAS were effective for financial audits for periods ending on or after December 15, 2012.

The professional standards and guidance contained in GAGAS provide a framework for conducting high quality audits with competence, integrity, objectivity, and independence. These standards are used by auditors of entities that receive government awards and audit organizations performing GAGAS audits. GAGAS contains standards for audits as well as requirements and guidance dealing with ethics, independence, auditors' professional judgment and competence, quality control, performance of the audit, and reporting.

This rule amends Part 1773 to incorporate the clarified audit standards issued by the AICPA in October 2011. The purpose of redrafting the auditing standards was for clarity and convergence although there were some changes and additions in terms of requirements. The clarified standards also introduced new terminology and new audit reports by adding extra paragraphs and segregating sections of the report under subheadings.

In 2013, the Office of Management and Budget (OMB) revised uniform administrative requirements, cost principles, and audit requirements for Federal awards by issuing 2 CFR part 200, which served to consolidate and replace OMB Circulars A-21, A-87, A-89, A-102, A-110, A-122, and A-133. 2 CFR part 200 was adopted by USDA in December 2014. The portion of this CFR applicable to audits, Subpart F, is recognized and adopted by this revision to Part 1773.

This rule revises all subparts to encompass grantees, to remove most references to Rural Telephone Bank (RTB), to conform the language used to generally accepted auditing standards (GAAS) issued by the AICPA and GAGAS. This rule adds, changes or deletes definitions as appropriate to clarify certain existing information. Perhaps most importantly, this rule replaces the RUS management letter with a report on compliance with aspects of contractual agreements and regulatory requirements based on the requirements found in AU-C 806 of GAAS. This rule also provides information on the electronic filing of annual audits in § 1773.21. RUS is also adding a requirement to the reporting package for a schedule of findings and recommendations in § 1773.34.

Due to the state boards of accountancy having now adopted peer review requirements as part of the CPA licensing requirements for performing attestation services, this amended rule significantly streamlines the RUS peer review monitoring included in § 1773.5 by removing much of the guidance previously provided with regard to auditor participation in an approved peer review program. RUS will no longer require that all auditors submit copies of their peer review reports but reserves the right to request said reports on a case by case basis. It also removes the option of requesting a waiver of the peer review requirement, relying instead on the requirements of the state boards of accountancy and the guidance provided within the peer review programs themselves.

Due to the scope and pervasiveness of the revisions being implemented, Part 1773 as revised is being published in its entirety in this final rule.

In this revision to Part 1773, all sample reports and financial statements will be combined into four appendices which will be available in RUS Bulletin 1773-1, Policy on Audits of RUS Borrowers and Grantees. Appendix A of RUS Bulletin 1773-1 contains the sample reports, financial statements and schedule of findings and recommendations for electric borrowers; Appendix B contains similar samples for telecommunications borrowers; Appendix C for broadband borrowers; and Appendix D contains sample reports for grantees. Appendices A through D will not be printed in the Code of Federal Regulations; however, these appendices are available at https://www.regulations.gov/ for review and comment in conjunction with the comment period for this final rule. Only Subparts A through E will be published in the Code of Federal Regulations. The appendices are included in RUS Bulletin 1773-1, Policy on Audits of RUS Borrowers and Grantees, which contains all of Part 1773, including subparts A through E and the appendices. Publishing Part 1773 in bulletin form provides the RUS audit policy in an easy to read format. This publication is available on RUS' website at https://www.rd.usda.gov/publications/regulations-guidelines/rural-utilities-service-audit.

In accordance with Federal civil rights law and U.S. Department of Agriculture (USDA) civil rights regulations and policies, the USDA, its Agencies, offices, and employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income derived from public assistance programs, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident.

Persons with disabilities who require alternative means of communication for program information (e.g., Braille, large print, audiotape, American Sign Language, etc.) should contact the responsible Agency or USDA's TARGET Center at (202) 720-2600 (voice and TTY) or contact USDA through the Federal Relay Service at (800) 877-8339. Additionally, program information may be made available in languages other than English.

To file a program discrimination complaint, complete the USDA Program Discrimination Complaint Form, AD-3027, found online at https://www.ascr.usda.gov/filing-program-discrimination-complaint-usda-customer and at any USDA office or write a letter addressed to USDA and provide in the letter all of the information requested in the form. To request a copy of the complaint form, call (866) 632-9992. Submit your completed form or letter to USDA by:

(1) Mail: U.S. Department of Agriculture, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC 20250-9410;

(2) fax: (202) 690-7442; or

(3) email: [email protected].

USDA is an equal opportunity provider, employer, and lender.

The 504 Loan Program is an SBA financing program authorized under Title V of the Small Business Investment Act of 1958 (the “SBIAct”), 15 U.S.C. 695 et seq. The core mission of the 504 Loan Program is to provide long-term financing to small businesses for the purchase or improvement of land, buildings, and major equipment, in an effort to facilitate the creation or retention of jobs and local economic development. Under the 504 Loan Program, loans are made to small business applicants by Certified Development Companies (“CDCs”), which are certified and regulated by SBA to promote economic development within their community. In general, a project in the 504 Loan Program (a “504 Project”) includes: A loan obtained from a private sector lender with a senior lien covering at least 50 percent of the project cost; a loan obtained from a CDC (a “504 Loan”) with a junior lien covering up to 40 percent of the total cost (backed by a 100 percent SBA-guaranteed debenture); and a contribution from the Borrower of at least 10 percent equity.

The Small Business Jobs Act of 2010 (the “Jobs Act”), Public Law 111-240, 124 Stat. 2504, enacted on September 27, 2010, temporarily expanded the ability of a small business to use the 504 Loan Program to refinance certain qualifying debt. Prior to the Jobs Act, a 504 Project could include a refinancing component only if the project involved an expansion of the small business and the existing indebtedness did not exceed 50% of the project cost of the expansion. See 13 CFR 120.882(e). The temporary Jobs Act program authorized the use of the 504 Loan Program for the refinancing of debt where there is no expansion of the small business concern (the “Debt Refinancing Program”). That program expired on September 27, 2012.

Section 521 of Division E of the Consolidated Appropriations Act, 2016 (the “2016 Act”), Public Law 114-113, enacted on December 22, 2015, reauthorized the Debt Refinancing Program with three modifications:

(1) The Debt Refinancing Program shall be in effect only in those fiscal years during which the cost to the Federal Government of making guarantees under the Debt Refinancing Program and under the 504 Loan Program is zero;

(2) A CDC is required to limit its financings under the 504 Loan Program so that, during any fiscal year, new financings under the Debt Refinancing Program do not exceed 50% of the dollars the CDC loaned under the 504 Loan Program during the previous fiscal year. The 2016 Act provides that this limitation may be waived by SBA upon application by a CDC and after determining that the refinance loan is needed for good cause; and

(3) The alternate job retention goal authorized by the Jobs Act for the Debt Refinancing Program is eliminated.

On May 25, 2016, SBA published an interim final rule to implement the 2016 Act (81 FR 33123) and, with the “zero cost” requirement satisfied for fiscal year 2016, SBA began accepting applications for assistance under the Debt Refinancing Program on June 25, 2016, the effective date of the interim final rule. With the “zero cost” requirement satisfied for fiscal years 2017 and 2018, the Debt Refinancing Program has continued to be in effect without interruption. The regulations governing this program are found at 13 CFR 120.882(g).

SBA received 49 comments during the comment period for the interim final rule, which closed on July 25, 2016. Of the comments received, 44, or 90%, were from Certified Development Companies, one was from a trade association, one was from a law firm, one was from a commercial real estate broker, one was from a financial institution, and one was from a private citizen. Below is a summary of the comments received.

The Jobs Act authorizes the refinancing of “Qualified Debt” which is defined to mean, among other factors, “indebtedness” that “was incurred not less than 2 years before the date of the application for assistance”, that “is a commercial loan”, and the proceeds of which were used to acquire an Eligible Fixed Asset. See section 502(7)(C)(III)(aa)(AA), (BB), and (DD) of the SBIAct. In imposing the two-year requirement, Congress clearly did not want the Debt Refinancing Program to apply to new loans (i.e., loans less than two years old). In implementing this statutory requirement, the current regulations define “Qualified debt”, in part, as a “commercial loan . . . [t]hat was incurred not less than 2 years before the date of the application for the refinancing available under [the 504 Debt Refinancing Program]”. See 13 CFR 120.882(g)(15) (definition of “Qualified debt”). Debt that was refinanced through the execution of a new Note within the two year period would not be considered Qualified debt under the current regulations.

Twenty-nine commenters requested that the definition of Qualified debt be revised to include debt that has been refinanced within the 2 years prior to the date of the 504 Debt Refinancing application. The commenters argue that, as long as the debt being refinanced was originally incurred more than 2 years before application, it falls under the statutory definition. Some of the commenters also contend that the term “indebtedness” is broader than the term “commercial loan”, and that SBA should look to the date of the “original” indebtedness and not the date that the loan was refinanced. One commenter suggested that a refinancing within two years of the application date that extends the date of the balloon payment should be allowed if the borrower did not receive any additional funds with the new loan.

SBA has reconsidered this issue and agrees that it is appropriate to consider the substance of the refinancing, rather than the form (i.e., whether the most recent debt is evidenced by a new Note), to determine whether it is the same “indebtedness” as the prior loan. SBA has concluded that certain loans that are refinanced within two years of the date of application (the resulting loan herein referred to as the “most recent loan”) may qualify as the same indebtedness, but only if the most recent loan is, in effect, a replacement for the prior loan. Specifically, in order to be considered the same indebtedness, the most recent loan cannot have advanced any additional funds to the Borrower (other than to pay the closing costs of the refinancing). SBA is revising the definition of “Qualified debt” to reflect that SBA will consider the most recent loan to be the same indebtedness as the prior loan if the effect of the most recent loan was to extend the prior loan's maturity date without advancing any additional proceeds to the Borrower. The collateral for the most recent loan must also include, at a minimum, the same Eligible Fixed Asset(s) that served as collateral for the prior loan that was refinanced. (Other terms of the most recent loan, however, such as interest rate or amortization schedule, may be different and may also include the addition of other eligible collateral.) In order to ensure that the Debt Refinancing Program complies with the statutory prohibition against refinancing new indebtedness, CDCs must submit to SBA as part of the application copies of the most recent loan and lien instruments, as well as copies of the loan and lien instruments for the loan that was replaced by the most recent loan, to show that the effect of the most recent loan was to extend the prior loan's maturity date without advancing any additional funds to the Borrower (other than to pay the closing costs of the refinancing).

In addition, SBA received comments relating to the statutory requirement that the applicant be current on all payments due for not less than one year preceding the date of application. See section 502(7)(C)(III)(bb) of the SBIAct. The current regulations define “current on all payments due” to mean that “no payment was more than 30 days past due from either the original payment terms or modified payment terms (including deferments) if such modification was agreed to in writing by the Borrower and the lender of the existing debt no less than one year preceding the date of application.” See 13 CFR 120.882(g)(15) (definition of “Qualified debt”, ¶ (vii)). In the Interim Final Rule published on May 25, 2016, SBA explained that it established the requirement that the modification be executed no less than one year preceding the 504 application because a debt should not be considered “current on all payments due for not less than one year preceding the date of application” if the payment terms were modified during the one year period. This requirement was imposed, in part, to ensure that the Debt Refinancing Program would not be used to refinance loans that had been modified for the sole purpose of avoiding a delinquency or default within the prior year.

Some commenters requested that SBA allow a modification (including through a renewal or extension) within the one year period when the purpose of the modification is to extend a balloon payment. SBA has reconsidered this issue and agrees that modifications that extend the maturity date of the loan may be allowed, provided that, during the one year period prior to the date of application (i.e., in the months prior to and after the modification), the applicant is current on all payments due, there have been no deferments of any payments, and no additional proceeds were advanced through the modification. To conform the current regulation to this revision, SBA is removing the reference to deferments from the regulatory text.

In addition, as SBA is now allowing certain refinanced loans to satisfy the 2-year indebtedness requirement described in ¶ II.A. above, these refinanced loans should not be excluded from the definition of “current on all payments due for not less than one year preceding the date of application” merely because the refinance occurred within the year prior to application. Thus, SBA will allow a refinanced loan to satisfy the “current on all payments due” requirement provided that it satisfies the same requirements as a modified loan, including that, during the one year period prior to the date of application (i.e., in the months prior to and after the refinancing), the applicant was current on all payments due, there were no deferments of any payments, and no additional proceeds were advanced through the refinancing (other than to pay the closing costs of the refinancing). (To be consistent with the change to the “Qualified debt” definition regarding when the indebtedness is incurred, the modified or refinanced loan may also change the interest rate and other terms.)

SBA emphasizes that it expressly reserves the right to determine, at its discretion on a loan-by-loan basis, whether the modified or refinanced repayment terms fail to satisfy prudent lending standards.

Concerns were expressed by 24 commenters about requiring Borrowers to contribute 15%, instead of 10%, for the refinancing of projects involving limited/single purpose properties. The commenters noted that, under the temporary Debt Refinancing Program, SBA required such Borrowers to make only a 10% contribution but, when SBA began to process applications under the reauthorized Debt Refinancing Program, SBA required Borrowers to contribute 15%. SBA notes that the temporary Debt Refinancing Program was implemented during very different economic conditions, when the projects to be refinanced under this program were sometimes significantly under-collateralized. By requiring Borrowers to contribute only 10% and not 15% for refinancing projects involving limited or single purpose properties, SBA made the program more available to Borrowers at a time when it was difficult for small businesses to access capital. Because the project was for the refinancing of an existing debt, and was not for the acquisition, construction, conversion, or expansion of a limited or single purpose property, SBA concluded that the 15% contribution was not required under statutory or regulatory requirements. See section 502(3)(C)(ii) and 13 CFR 120.910(a)(2). Due to the critical need to provide small businesses with access to capital during that time, SBA was willing to absorb the additional risk posed by debt refinancing projects where the underlying collateral was limited or single purpose properties.

However, when SBA implemented the 2016 Act, SBA reconsidered this policy in light of the fact that, with the economic recovery, project properties are now typically over-collateralized and can readily provide the additional 5% equity and often more, thereby mitigating the risk presented to SBA by projects involving single or limited purpose properties in the event of liquidation. The 2016 Act states that the Debt Refinancing Program may provide “not more than 90% of the value of the collateral” for the refinancing of the Qualified Debt, and SBA has determined that, where the underlying collateral is limited or single purpose properties, the financing provided through the Debt Refinancing Program will be limited to 85% of the collateral value, with 15% being contributed by the Borrower.

In the event that general market conditions result again in 504 Projects that are significantly under-collateralized, however, SBA wants the Debt Refinancing Program to have the flexibility to allow Borrowers to contribute only 10% toward the cost of a project involving single or limited use properties. Accordingly, the rule will provide that, if the Refinancing Project involves a limited or single purpose building or structure, the Borrower must contribute not less than 15%; provided, however, that SBA may determine, in its discretion, that in the event of an economic recession, as determined by the National Bureau of Economic Research or its equivalent, the required Borrower contribution may be not less than 10% for such projects. In such circumstance, SBA will publish a notice in the Federal Register of its determination and setting forth the justification for the lower required Borrower contribution. This lower Borrower contribution requirement would be in effect until the first day of the calendar quarter after the economic recession has ended as determined by the National Bureau of Economic Research or its equivalent. SBA will publish a notice in the Federal Register to announce that the lower required Borrower contribution ceased being in effect as of that date.

With respect to the loan provided by the Third Party Lender, the statute requires the Third Party Lender to contribute 50% to the project cost when the project is financing the construction (or acquisition, conversion or expansion) of a single or limited purpose property. See section 502(3)(B)(ii) of the SBIAct. While this statutory requirement does not strictly apply to the refinancing of existing debt involving single/limited purpose property, SBA has considered whether Third Party Lenders should nevertheless be required to contribute 50% in the case of refinancing a debt involving such properties. As Borrowers are now often able in the current market to contribute 20% or more equity to the Refinancing Project's costs, the 504 loan would amount to 30% or less of the project cost if the Third Party Lender were required to contribute 50%, which does not maximize the economic benefit of the 504 Loan Program to the small business. Thus, SBA has determined that Third Party Lenders will not be required to contribute 50% but, as required for all projects financed under the Debt Refinancing Program, their participation must be at least equal to the SBA 504 loan.

The current rule requires that the 504 loan proceeds be disbursed within 6 months after loan approval, and authorizes the Director, Office of Financial Assistance, or his or her designee, to approve any request for extension of the disbursement period for good cause. 13 CFR 120.882(g)(12). A commenter stated that, now that the program is permanent, the rule should be revised to allow up to one year for disbursement. The commenter observed that six months may not be sufficient time to, for example, satisfy certain environmental requirements. SBA has considered this comment and agrees to change the disbursement period to nine months, and to provide the Director, Office of Financial Assistance (D/FA), or his or her designee, with the authority to approve any request for extension of the disbursement period for not more than an additional six months for good cause. SBA finds that this increase, along with the limited authority to approve any request for extension for good cause, is sufficient to address the commenter's concerns. SBA is revising 13 CFR 120.882(g)(12) accordingly.

Under the Debt Refinancing Program, Borrowers may finance Eligible Business Expenses as part of the Refinancing Project if the amount of cash funds that will be provided for the Refinancing Project exceeds the amount to be paid to the lender of the Qualified debt. See 13 CFR 120.882(g)(6)(ii).

When SBA first implemented the reauthorized Debt Refinancing Program in 2016, SBA applied a maximum 75% loan-to-value (LTV) for any project that financed business expenses and limited such financing of business expenses to no more than 25% of the value of the Eligible Fixed Asset(s) securing the Qualified Debt. See Policy Notice 5000-1382, effective May 26, 2016. Thirty-six commenters expressed concerns that the 75% LTV was severely restrictive and would impair utilization of the program, and many urged SBA to allow for a 90% LTV for all Refinancing Projects. SBA considered these comments and decided to revise 13 CFR 120.882(g)(6)(i) to allow a maximum LTV of 85% for any project that includes the financing of Eligible Business Expenses. SBA concludes that this higher LTV will provide increased access to credit without adding undue risk to SBA.

In addition, most of the commenters expressed support for the 25% limitation on the amount that may be financed for business expenses, though SBA did receive at least one comment suggesting that the small business should determine the percentage of these expenses that may be financed. SBA notes that the financing of business expenses during Fiscal Year 2017 averaged less than 15% of the value of the Eligible Fixed Asset(s) securing the Qualified Debt. In addition, with the statutory requirement that SBA maintain the Debt Refinancing Program at zero subsidy in order for the program to be in effect during any fiscal year, SBA must be diligent in placing prudent controls on the program to mitigate SBA's risk and exposure. Accordingly, SBA has decided to limit the portion of the financing that may be for business expenses to 20% of the value of the Eligible Fixed Asset(s). In addition, if the Refinancing Project includes the financing of Eligible Business Expenses, SBA will not accept as collateral any fixed assets other than the Eligible Fixed Asset(s) securing the Qualified Debt. Accordingly, SBA is revising 13 CFR 120.882(g)(6)(i) and (ii) and the definition of “Refinancing Project” in 13 CFR 120.882(g)(15).

Twenty-eight commenters requested that SBA allow Borrowers to finance minor renovations or “non-substantial modifications or improvements to the Eligible Fixed Assets” as an Eligible Business Expense under the Debt Refinancing Program. Enacted by Congress in 2010, the Jobs Act created the temporary Debt Refinancing Program for projects that do not involve the expansion of a small business. See section 502(7)(C)(ii) of the SBIAct. SBA has concluded that the regulations would benefit from greater clarity regarding the type of minor renovations or “non-substantial modifications or improvements” that SBA regards as not involving the expansion of the small business.

SBA believes that a reasonable approach to this issue is to permit the financing of business expenses in the program as long as the expenses may be deducted as ordinary and necessary expenses on the small business's federal tax returns during the taxable year in which they were paid or incurred. See Internal Revenue Code, section 162. Examples of such expenses may include repairs, maintenance and minor improvements or renovations. Capital expenditures, on the other hand, would not be eligible for financing in the program because they have a useful life substantially beyond the taxable year. See Internal Revenue Code, section 263(a). Examples of such capital expenses may include the acquisition of land or improvements or betterments made to increase the value of any property. SBA believes that using this distinction between operating and capital expenditures is consistent with the statutory requirement that the Debt Refinancing Program be used for Refinancing Projects that do not involve the expansion of a small business.

Accordingly, SBA is revising the definition of Eligible Business Expenses to allow the financing of “any other expenses of the business that are not capital expenditures.” With the addition of this category, SBA is clarifying that the Borrower may finance any operating expense that it records and deducts as an expense in the taxable year in which it was paid or incurred, but may not finance any capital expense that is used to acquire or improve assets and which the Borrower may not claim as a deduction in the taxable year in which the expense was paid or incurred. SBA will rely upon the CDC and the small business to represent the nature of the expense and that the expense may be deducted as an ordinary and necessary expense during the taxable year in which it was paid or incurred. CDCs must document their determination regarding the nature of the expense in the credit memorandum.

SBA is also removing the phrase “or other obligations of the business” from the definition to clarify that, except as described below, other debt of the business is not included as an Eligible Business Expense. As SBA recently clarified, credit card debt may be included as an Eligible Business Expense if the credit card is issued in the name of the Applicant small business and the Applicant certifies that the credit card debt being refinanced was incurred exclusively for business related purposes. See SOP 50 10 5(J), Subpart C, Chapter 2, ¶ IV.E.3.g). SBA has also determined that business lines of credit may be included as an Eligible Business Expense if the business line of credit satisfies the same requirements as credit card debt. For debt that was incurred with a credit card or a business line of credit, the proceeds of the debt being refinanced, like all other business expenses financed under the Debt Refinancing Program, must have been used for expenses of the business that are not capital expenditures.

The 2016 Act requires that a CDC limit its financings under the 504 Loan Program so that, during any fiscal year, new financings under the Debt Refinancing Program do not exceed 50% of the dollars the CDC loaned under the 504 Loan Program during the previous fiscal year. The 2016 Act also provides that this limitation may be waived upon application by a CDC and upon SBA's determination that the refinance loan is needed for good cause. In the interim final rule, SBA stated that it would provide guidance regarding the good cause determination in its Standard Operating Procedures or other guidance documents. SBA received many comments suggesting various factors for SBA to consider in making the good cause determination, including projects that (i) assist manufacturing firms, (ii) will employ 1 full time equivalent job for every $100,000 in requested assistance, (iii) include the participation of another economic development entity, (iv) involve a borrower who has a pre-existing relationship with the CDC, or (v) involve a CDC with less than $5 million in 504 loans during the prior fiscal year. Some commenters also expressed concerns that the 50% limitation is disadvantageous to smaller or rural CDCs that may not have the same capacity as larger CDCs to finance these projects.

SBA considered these comments and concludes that the focus of the good cause determination should be only on the Borrower's financing needs, and not on the circumstances of the CDCs or other factors. Accordingly, as reflected in the recently issued SOP 50 10 5(J), Subpart C, Chapter 2, § IV.E.2, SBA will consider the following factors in determining whether there is good cause for the Borrower to obtain the refinancing through a CDC that exceeds the 50% requirement: (1) Whether the Borrower has access to other sources of financing, including other CDCs that have not exceeded their 50% cap; and (2) whether the CDC has an existing 504 loan with the Borrower that is in current status. No change to the regulation is necessary.

Several commenters requested changes to other program requirements in the Debt Refinancing Program, including that SBA: (i) Allow 504 or 7(a) loans to be refinanced in the Debt Refinancing Program, (ii) allow CDCs participating in the Premier Certified Lenders Program (PCLP) to use their delegated authority to approve loans made in the Debt Refinancing Program, and (iii) reinstate the alternative job retention goal provided in the Jobs Act for Borrowers that do not meet the job creation and retention goals under sections 501(d) and (e) of the Small Business Investment SBIAct.

However, each of these program requirements is mandated by statute: the prohibition against refinancing a loan subject to a guarantee by a Federal agency is mandated by section 502(7)(C)(i)(III)(aa)(CC) of the SBIAct; the prohibition against PCLP CDCs using their delegated authority to approve loans made in the Debt Refinancing Program is mandated by section 502(7)(C)(v) of the SBIAct; and the elimination of the alternative job retention goal was made by section 521(a)(1) of the 2016 Act. SBA notes that, with the elimination of the alternate job retention goal, all applicants for a loan under the Debt Refinancing Program are required to meet the job creation and retention goals under section 501(d) and (e) of the SBIAct. Based on these goals, a 504 Project, including a project financed under the Debt Refinancing Program, must achieve one of the economic development objectives set forth in 13 CFR 120.861 or 120.862.

Accordingly, SBA cannot adopt the requested changes.

Except as set forth below, 13 CFR 120.882(g) remains unchanged.

Section 120.882(g) Introductory Text. In the Interim Final Rule, SBA revised the introductory text in this section to remove the following phrase that is no longer applicable: “For applications received on or after February 17, 2011 and approved by SBA no later than September 27, 2012”. Also, with the permanent reauthorization of the Debt Refinancing Program by the 2016 Act, a specific application period is unnecessary. No comments were received on this provision and no further changes are being made.

Section 120.882(g)(3). In the Interim Final Rule, SBA revised this section by removing the maturity date requirement. In its place, SBA inserted the 2016 Act's requirement that, for the Debt Refinancing Program to be in effect during any fiscal year, the cost to the Federal government of making guarantees under the Debt Refinancing Program and under the 504 Loan Program must be zero. No comments were received on this provision and no further changes are being made.

Section 120.882(g)(5). This paragraph is being revised to provide that, if the Refinancing Project involves a limited or single purpose building or structure, the Borrower must contribute not less than 15%. However, SBA may determine, in its discretion, that in the event of an economic recession as determined by the National Bureau of Economic Research or its equivalent, the required Borrower contribution may be not less than 10% for such projects. This lower Borrower contribution requirement may be in effect until the recession ends as determined by the National Bureau of Economic Research or its equivalent. As explained above, SBA will publish a notice in the Federal Register to announce the lower Borrower contribution requirement and explaining its justification, and a notice to announce that, due to the end of the recession, the lower Borrower contribution requirement is no longer in effect.

Section 120.882(g)(6). As discussed above, SBA is revising § 120.882(g)(6)(i) to allow a maximum LTV of 85% for any project that includes the financing of Eligible Business Expenses, and to limit the portion of the financing that may be used for Eligible Business Expenses to 20% of the value of the Eligible Fixed Asset(s). SBA is also revising § 120.882(g)(6)(ii) to amend the definition of Eligible Business Expenses to include “any other expenses of the business that are not capital expenditures”, and to remove the phrase “other obligations of the business” from the definition to clarify that Eligible Business Expense may include credit card debt and business lines of credit in the name of the small business that were incurred exclusively for business related purposes, but no other debt of the business may be included.

Section 120.882(g)(10). As discussed above, the 2016 Act eliminated the alternate job retention goal and, accordingly, SBA removed the alternate job retention goal provision from the regulations in the Interim Final Rule.

Instead, the Interim Final Rule revised § 120.882(g)(10) to reflect the 2016 Act's requirement that a CDC limit its financings under the Debt Refinancing Program so that, during any fiscal year (October 1 to September 30), new financings under the Debt Refinancing Program do not exceed 50% of the dollars loaned by the CDC under the 504 Loan Program during the previous fiscal year. Because the 2016 Act provides that the 50% limitation applies to the dollars loaned under the 504 Loan Program during the previous fiscal year, all financings made by the CDC during the previous fiscal year will be included in determining this number, including those financings made under the Debt Refinancing Program.

The Interim Final Rule provided that, as authorized by the 2016 Act, the 50% limitation may be waived upon application by a CDC and a determination by SBA that the refinance loan is needed for good cause. As discussed above, SBA received comments on this provision and SBA has issued waiver guidance in the recently issued Standard Operating Procedure 50 10 5(J). SBA will monitor the implementation of this guidance and update it as needed in its policy guidance. For clarity, SBA is changing the term “refinance loan” to “504 loan” in the last sentence of section 120.882(g)((10). No further changes are being made to the regulation.

Section 120.882(g)(12). As discussed above, this paragraph is being revised to change the period by which a loan must be disbursed from six months to nine months. The Director, Office of Financial Assistance (D/FA), or his or her designee, will have the authority to approve any request for extension of the disbursement period for not more than an additional six months for good cause.

Section 120.882(g)(13). This section prohibits the Third Party Loan from being sold on the secondary market as a part of a pool guaranteed under subpart J of part 120 when the debt being refinanced is same institution debt. Subpart J of part 120, the Secondary Market Guarantee Program for First Lien Position 504 Loan Pools, expired on September 23, 2012; however, should this program be reauthorized, SBA wants to ensure that this prohibition remains in effect. Accordingly, in the Interim Final Rule, SBA revised this provision to make it clear that the prohibition would apply to any successor to the program described in subpart J of part 120. No comments were received on this provision and no further changes are being made.

Section 120.882(g)(15) (Definition of “Qualified debt”). As discussed above, SBA is revising the criterion in paragraph (i) to allow certain loans that are refinanced within the two years prior to the date of application to be eligible as the same “indebtedness” if the effect of the refinancing was to extend the maturity date without advancing any additional proceeds, and the collateral for the most recent loan includes, at a minimum, the same Eligible Fixed Asset(s) that served as collateral for the former loan that was refinanced. Other terms of the most recent loan, such as interest rate and the addition of other collateral, may be different. To be considered for eligibility by SBA, the loan documents and lien instruments for the most recent loan, as well as the loan documents and lien instruments for the loan that was replaced by the most recent loan, must be submitted to SBA as part of the application.

SBA is also revising the definition of “current on all payments due” in paragraph (vii) to allow the payment terms of a loan to be modified less than one year prior to the date of application (whether through a modification to an existing Note or a refinancing that results in a new Note) if the purpose of the modification or refinancing is to extend the maturity date of the loan, including balloon payments, no additional proceeds were advanced to the Borrower, and the Borrower was current on all payments due for the one year period prior to the date of application (i.e., in the months prior to and after the effective date of the modification or refinancing), including that there were no deferments of any payment.

SBA emphasizes that it reserves the right to determine, at its discretion on a loan-by-loan basis, whether the terms of any modification or refinancing are consistent with prudent lending standards.

Section 120.882(g)(15) (Definition of “Refinancing Project”). SBA is revising this definition to provide that, if the Refinancing Project includes the financing of Eligible Business Expenses, SBA will not accept as collateral any fixed assets other than the Eligible Fixed Asset(s) securing the Qualified debt.

The Office of Management and Budget has determined that this rule does not constitute a “significant regulatory action” under Executive Order 12866. This rule is also not a major rule under the Congressional Review Act.

This action meets applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. The action does not have preemptive effect or retroactive effect.

This rule does not have federalism implications as defined in Executive Order 13132. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in the Executive Order. As such it does not warrant the preparation of a Federalism Assessment.

The Consolidated Appropriations Act, 2016, reauthorized the Debt Refinancing Program, which was first authorized by the Jobs Act. The Agency received significant public comments on the Jobs Act interim final rule that was issued to implement the temporary Debt Refinancing Program (see 76 FR 9213, February 17, 2011). To assist in developing that interim final rule, the Agency held a public forum on November 17, 2010 in Boston, Massachusetts. As discussed above, SBA received a significant number of public comments on the interim final rule that was published to implement the reauthorized Debt Refinancing Program, and the revisions made by this final rule are the result of the public participation in the rulemaking process.

This rule is not an Executive Order 13771 regulatory action because it is not significant under E.O. 12866.

SBA has determined that this final rule does not impose any additional reporting or recordkeeping requirements under the Paperwork Reduction Act.

The RFA requires administrative agencies to consider the effect of their actions on small entities, including small non-profit businesses, and small local governments. Pursuant to the RFA, when an agency issues a rule, the agency must prepare an analysis that describes whether the impact of the rule will have a significant economic impact on a substantial number of these small entities. However, the RFA requires such analysis only where notice and comment rulemaking is required. This rule finalizes the interim final rule that was published in 2016 to implement the reauthorized Debt Refinancing Program. In issuing that rule, SBA provided just cause why it could be published without notice and comment, and therefore, exempted from the RFA requirement to prepare an initial regulatory flexibility analysis. Since this final rule merely finalizes that exempted interim rule, SBA believes a final regulatory analysis is also not required.

Accordingly, the interim final rule amending 13 CFR part 120 which was published at 81 FR 33123 on May 25, 2016, is adopted as a final rule with the following changes:

On October 16, 2017, SBA published a document announcing the Express Bridge Pilot. (82 FR 47958) The Express Bridge Pilot is designed to supplement the Agency's disaster response capabilities and authorizes the Agency's 7(a) Lenders with SBA Express lending authority to deliver expedited SBA-guaranteed financing on an emergency basis for disaster-related purposes to small businesses located in communities impacted by a Presidentially-declared disaster, while the businesses apply for and await long-term financing (including through SBA's direct disaster loan program, if eligible).

The Express Bridge Pilot applies the policies and procedures in place for the Agency's SBA Express program, except as outlined in the Federal Register document published on October 16, 2017. Pursuant to the authority provided to SBA under 13 CFR 120.3 to suspend, modify or waive certain regulations in establishing and testing pilot loan initiatives, SBA modified the regulation at 13 CFR 120.150 (“What are SBA's lending criteria?”), which applies to loans made in the 7(a) Business Loan Program. SBA modified the regulation in order to minimize the burdens on the businesses applying for loans through the Express Bridge Pilot and to expand the opportunities for SBA Express lenders to participate in the pilot.

SBA continues to refine and improve the design of the Express Bridge Pilot and, therefore, is issuing this document to clarify the fees that Lenders or third parties are able to collect from Applicants or Borrowers in connection with loans made under the pilot. All Express Bridge Pilot loans are subject to the same upfront guaranty fees required for 7(a) loans of similar size and maturity as set forth in 13 CFR 120.220. In addition, all Express Bridge Pilot loans are subject to the same Lender's annual service fee required for all 7(a) loans as set forth in 13 CFR 120.220(f).

In order to ensure that Applicants and Borrowers are charged only those additional fees reasonably necessary in connection with an Express Bridge Pilot loan, SBA is modifying the regulation at 13 CFR 120.221 (“Fees and expenses which the Lender may collect from a loan applicant or Borrower”), using the term modify as contemplated under 13 CFR 120.3, to permit Lenders to collect only the following:

1. Lender Fees: An SBA Express Lender must not impose any fees or direct costs on an Express Bridge Pilot Applicant or Borrower, except for the following:

a. Application Fee: SBA Express Lenders may charge an Express Bridge Pilot Applicant an application fee. The maximum permissible application fee is 2% of the loan amount or $250, whichever is greater. If an application fee is charged, it must be disclosed on SBA Form 159(7a), Fee Disclosure Form and Compensation Agreement for Agent Services in Connection with a SBA 7(a) Loan. If an undisbursed loan is canceled, the Lender may retain the application fee;

b. Late Payment Fee: A late payment fee not to exceed 5 percent of the scheduled Express Bridge Pilot loan payment; and

c. Liquidation Costs: The reasonable direct costs of liquidation.

2. Prohibition on all other fees and charges, including by loan packagers, referral agents or brokers. Except as permitted in 1. above, no other fee or costs may be charged to an Express Bridge Pilot Applicant or Borrower by the Lender. In addition, no fee or costs may be charged to an Express Bridge Pilot Applicant or Borrower by any third party in connection with an Express Bridge Pilot loan, including any referral fee, broker's fee, or similar fee.

The modification of this regulation will permit SBA Express lenders to recoup some of their costs in processing the application, without subjecting the Applicant to excessive or unnecessary fees for these small guaranteed loans that are intended to provide immediate cash to assist the small business with rebuilding and continuing or restarting its operations while awaiting long-term disaster financing. SBA believes that the costs of the program should be kept as low as possible to aid the disaster-affected small business. The application fee is optional; therefore an SBA Express Lender may choose not to collect an application fee from an Express Bridge Pilot Applicant. Additionally, because an Express Bridge Pilot loan Applicant must have had an existing banking relationship with the SBA Express lender, there is no need for either the Applicant or the Lender to pay a referral fee, broker's fee, or similar fee for these loans.

SBA's modification of 13 CFR 120.221 is authorized by 13 CFR 120.3 of its regulations, which provides that the SBA Administrator may suspend, modify or waive rules for a limited period of time to test new programs or ideas. This modification applies only to loans made under the Express Bridge Pilot and will last only for the duration of the pilot, which expires September 30, 2020. As part of the Express Bridge Pilot, this modification applies only to those small businesses that were located, as of the date of the applicable disaster, in counties that have been Presidentially-declared as disaster areas, plus any contiguous counties. A listing of Presidentially-declared disaster declarations, including primary and contiguous counties can be located at www.sba.gov/disaster.

All other SBA terms and conditions and regulatory waivers related to the Express Bridge Pilot remain unchanged.

SBA will provide more detailed guidance in the form of a program guide, which will be available on SBA's website, http://www.sba.gov. SBA may also provide additional guidance, if needed, through SBA notices, which also will be published on SBA's website, http://www.sba.gov.

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Gulfstream Aerospace Corporation Models G-IV and GIV-X airplanes. The NPRM published in the Federal Register on December 12, 2017 (82 FR 58362). The NPRM was prompted by the potential for fatigue cracks developing in the main landing gear actuator attachment fitting that had a certain repair incorporated. The NPRM proposed to require incorporating new revisions into the Instructions for Continued Airworthiness of the Limitations section of the FAA-approved maintenance program (e.g., maintenance manual) that establish an inspection cycle for the repaired MLG side brace actuator fittings. We are issuing this AD to address the unsafe condition on these products.

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

Gulfstream Aerospace Corporation stated that the compliance time for the actions required in the proposed AD should be changed to be in-line with the service information incorporated by reference in the proposed AD.

Gulfstream Aerospace Corporation stated that the compliance time specified in the service information incorporated by reference in the proposed AD is 24 months from September 16, 2016. Gulfstream Aerospace Corporation believes that the 100-hour time-in-service (TIS) compliance time after the effective date of the proposed AD significantly reduces the original compliance time and may cause an undue burden on the owner/operators of the affected airplanes.

We agree that the compliance time can be changed to more fully coincide with the service bulletin without affecting the safety risk of this AD. We have changed the compliance time of this AD to “Within the next 100 hours time-in-service (TIS) after the effective date of this AD or within the next 3 months after the effective date of this AD, whichever occurs later.” The 3-month compliance time combined with the 35 days after publication in the Federal Register effective date should coincide with the compliance time in the service bulletin.

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

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

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

We reviewed Gulfstream G350 Customer Bulletin Number 192A, dated June 15, 2017, including Appendix A, Gulfstream Document GIV-SGER-553, Revision A, Instructions for Continued Airworthiness for Gulfstream Repair Drawing SE05732102, dated December 14, 2016 (for model Gulfstream G350); Gulfstream G450 Customer Bulletin 192A, dated June 15, 2017, including Appendix A, Gulfstream Document GIV-SGER-553, Revision A, Instructions for Continued Airworthiness for Gulfstream Repair Drawing SE05732102, dated December 14, 2016 (for model Gulfstream G450); Gulfstream IV Customer Bulletin Number 238A, dated June 15, 2017, including Appendix A, Gulfstream Document GIV-SGER-553, Revision A, Instructions for Continued Airworthiness for Gulfstream Repair Drawing SE05732102, dated December 14, 2016 (for model Gulfstream IV); Gulfstream G300 Customer Bulletin Number 238A, dated June 15, 2017, including Appendix A, Gulfstream Document GIV-SGER-553, Revision A, Instructions for Continued Airworthiness for Gulfstream Repair Drawing SE05732102, dated December 14, 2016 (for model Gulfstream G300); and Gulfstream G400 Customer Bulletin Number 238A, dated June 15, 2017, including Appendix A, Gulfstream Document GIV-SGER-553, Revision A, Instructions for Continued Airworthiness for Gulfstream Repair Drawing SE05732102, dated December 14, 2016 (for model Gulfstream G400). For the applicable models, the service information describes procedures for inspecting maintenance records to determine if repair SE05732102 for the main landing gear side brace fitting has been incorporated and determining initial and repetitive inspection requirements for the main landing gear side brace fitting. 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 709 airplanes of U.S. registry.

We estimate the following costs to comply with 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 small airplanes, gliders, domestic business jet transport airplanes, and associated appliances to the Director of the Policy and Innovation 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:

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Airbus Model A318 series airplanes and Model A319 series airplanes; all Model A320-211, -212, -214, -216, -231, -232, and -233 airplanes; and all Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes. The NPRM published in the Federal Register on January 12, 2018 (83 FR 1579) (“the NPRM”). The NPRM was prompted by an evaluation by the DAH indicating that the holes of the upper cleat to upper stringer attachments at certain areas of the left- and right-hand wings are subject to WFD. The NPRM proposed to require modifying the holes of the upper cleat to upper stringer attachments at certain areas of the left- and right-hand wings. We are issuing this AD to prevent fatigue cracking in the stringer attachment holes of the wings, which could result in reduced structural integrity of the wings.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2017-0117, dated July 7, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus Model A318 series airplanes and Model A319 series airplanes; all Model A320-211, -212, -214, -216, -231, -232, and -233 airplanes; and all Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes. The MCAI states:

You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2017-1245.

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM and the FAA's response to each comment. United Airlines agreed with the intent of the NPRM.

Allegiant Air asked that we clarify the manufacturer serial numbers (MSNs) identified in the applicability section of the proposed AD. Allegiant Air stated that the effectivity specified in Airbus Service Bulletin A320-57-1208, dated November 21, 2016, identifies airplanes up to and including MSN 7493, and asked about airplanes having MSNs higher than 7493. Allegiant Air noted that it has 11 Model A320 airplanes with MSNs outside those listed in Airbus Service Bulletin A320-57-1208, dated November 21, 2016. Allegiant Air added that it understands the AD takes precedence over the service information, but there are several configurations listed therein. Allegiant Air also added that since the MSNs in question are not listed in the effectivity of the service information, an operator with an MSN outside the effectivity will not know which modification kit to order.

We agree to clarify. The effectivity in Airbus Service Bulletin A320-57-1208, dated November 21, 2016, does not include all MSNs for Model A320 airplanes, and the applicability specified in paragraph (c) of this AD includes all MSNs for Model A320 airplanes, except for airplanes having certain modifications. We acknowledge that the referenced service information may not be adequate for certain airplane configurations. Therefore, we have revised paragraph (g) of this AD to provide an option for doing the modification, including identification of the appropriate modification kit, using a method approved by the Manager, International Section, Transport Standards Branch, FAA; or EASA; or Airbus's EASA Design Organization Approval (DOA).

In addition, Airbus has informed us that Revision 1 of the referenced service information will expand the effectivity to include MSNs up to 8555. Airbus has also informed us that, upon request, it will issue a technical adaptation as an interim method of compliance until a revised service bulletin is issued.

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

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

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

Airbus has issued Airbus Service Bulletin A320-57-1208, dated November 21, 2016. This service information describes procedures for modifying the stringer attachments at rib 2 through rib 7 of the left- and right-hand wings. The modification includes oversizing the holes, doing an eddy current inspection of the affected holes for damage, and repair. 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 1,136 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 to the Director of the System Oversight Division.

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

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

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

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

3. Will not affect intrastate aviation in Alaska, and

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

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

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Safran Helicopter Engines, S.A., Arriel 2E turboshaft engines. The NPRM published in the Federal Register on November 3, 2017 (82 FR 51170). The NPRM was prompted by reports of ruptured front support pins on the accessory gearbox front support. The NPRM proposed to require replacement of the accessory gearbox front support. We are issuing this AD to address the unsafe condition on these products.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA AD 2016-0235, dated November 24, 2016 (referred to after this as the MCAI), to address the unsafe condition on these products. The MCAI states:

You may obtain further information by examining the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2017-0838.

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

We reviewed the relevant data and determined that air safety and the public interest require adopting this final rule as proposed.

We reviewed Safran Helicopter Engines, S.A., Mandatory Service Bulletin (MSB) No. 292 72 2197, Version A, dated September 15, 2016. The MSB describes procedures for replacement of the accessory gearbox front support.

We estimate that this AD affects 28 engines installed on aircraft of U.S. registry.

We estimate the following costs to comply with 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 engines, propellers, and associated appliances to the Manager, Engine and Propeller Standards Branch, Policy and Innovation Division.

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

For the reasons discussed above, I certify this AD:

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

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

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

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

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

Authority for This Rulemaking

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends the Class E airspace extending upward from 700 feet above the surface at Fitch H. Beach Airport, Charlotte, MI, to support IFR operations for instrument approach procedures at the airport.

The FAA published notice of proposed rulemaking (NPRM) in the Federal Register (82 FR 44541; September 25, 2017) for Docket No. FAA-2017-0721 to modify the Class E airspace extending upward from 700 feet above the surface at Fitch H. Beach Airport, Charlotte, MI. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. One comment was received stating “. . . increasing one class of airspace would diminish the boundary between two. This would require the Pilot In Command to request access in their airspace.”

The FAA does not agree. The airspace classification, currently Class E airspace extending upward from 700 feet above the surface, is being amended to increase the radius of the airspace by 0.1 mile to fully protect the transitional IFR requirements to and from the terminal and en route environments at Fitch H. Beach Airport, Charlotte, MI, as required by FAA Order 7400.2L, Procedures for Handling Airspace Matters. This amendment only affects the class E airspace extending upward from 700 feet above the surface at Fitch H. Beach Airport and does not affect or impact any other airspace within the area. This amendment does not change the class of airspace, and therefore does not change any of the current requirements on the pilot in command when operating at Fitch H. Beach Airport.

Due to a recent change to FAA Order 7400.2L, dated October 12, 2017, the name of the city associated with the airport is removed from the airspace legal designation.

Class E airspace designations are published in paragraph 6005 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 E airspace designations listed in this document will be published subsequently in the Order.

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

This amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 modifies Class E airspace area extending upward from 700 feet above the surface within a 6.4-mile radius (increased from a 6.3-mile radius) at Fitch H. Beach, Charlotte, MI, and updates the geographic coordinates of the airport to coincide with the FAA's aeronautical database.

The name of the city associated with the airport is removed from the airspace legal designation to comply with a recent change to FAA Order 7400.2L. Except for the change noted above, this rule is the same as published in the NPRM.

Airspace reconfiguration is necessary due to the decommissioning of the Lansing VOR/TACAN, which provided navigation guidance for the instrument procedures to this airport, as part of the VOR MON Program. This action enhances safety and the management of IFR operations at this airport.

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

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

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

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 amends Class E airspace designated as a surface area and Class E airspace extending upward from 700 feet above the surface at Muscatine Municipal Airport, Muscatine, IA, to support instrument flight rules (IFR) operations at the airport.

The FAA published a notice of proposed rulemaking in the Federal Register (82 FR 61698; December 29, 2017) for Docket No. FAA-2017-1002 to modify Class E airspace designated as a surface area and Class E airspace extending upward from 700 feet above the surface at Muscatine Municipal Airport, Muscatine, IA. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

Class E airspace designations are published in paragraph 6002 and 6005, respectively, of FAA Order 7400.11B, dated August 3, 2017, and effective September 15, 2017, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

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

The FAA amends Title 14, Code of Federal Regulations (14 CFR) part 71 by:

Modifying Class E airspace designated as a surface area to within a 4.1-mile radius (increased from a 3.9-mile radius) of Muscatine Municipal Airport, Muscatine, IA, with an extension 1.0 mile either side of the 305° bearing from the airport from the 4.1-mile radius to 4.4 miles northwest of the airport, and an extension 1.0 mile either side of the 238° bearing from the airport from the 4.1-mile radius to 4.4 miles southwest of the airport. This action also makes an editorial change to the airspace legal description replacing “Airport/Facility Directory” with “Chart Supplement”; and

Modifying Class E airspace extending upward from 700 feet above the surface at Muscatine Municipal Airport by removing the Port City VOR/DME from the airspace description, removing the extensions referencing the Port City VOR/DME, and adding an extension 3.8 miles either side of the 238° bearing from the airport from the 6.6-mile radius to 10.5 miles southwest of the airport.

Airspace reconfiguration is necessary due to the decommissioning of the Port City VOR as part of the VOR MON Program, and to bring the airspace and airspace descriptions into compliance with FAA Order 7400.2L, Procedures for Handling Airspace Matters. Controlled airspace is 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, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

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

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

Authority for This Rulemaking

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends Class E airspace extending upward from 700 feet above the surface at Batten International Airport, Racine, WI, contained within the Milwaukee, WI, airspace description, to support IFR operations at the airport.

The FAA published a notice of proposed rulemaking (NPRM) in the Federal Register (82 FR 44365; September 22, 2017) for Docket No. FAA-2017-0740 to modify Class E airspace extending upward from 700 feet above the surface at Batten International Airport, Racine, WI, contained within the Milwaukee, WI, airspace legal description. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

Class E airspace designations are published in paragraph 6005 of FAA Order 7400.11B, dated August 3, 2017, and effective September 15, 2017, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

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

This amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 modifies Class E airspace area extending upward from 700 feet above the surface to within a 6.6-mile radius (decreased from an 8.1-mile radius) at Batten International Airport, Racine, WI, contained within the Milwaukee, WI, airspace legal description.

Airspace reconfiguration is necessary due to the decommissioning of the Horlick VOR, which provided navigation guidance for the instrument procedures to this airport, as part of the VOR MON Program. This action enhances safety and the management of IFR operations at this airport.

The names of the cities associated with the airports listed in the Milwaukee, WI, airspace designation have been removed to comply with a recent change to FAA Order 7400.2L, Procedures for Handling Airspace Matters.

Except for the change noted above, this rule is the same as published in the NPRM.

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

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

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

In a document published in the Federal Register of October 16, 2014 (79 FR 62090), FDA announced that we had filed a food additive petition (animal use) (FAP 2288) submitted by DSM Nutritional Products, 45 Waterview Blvd., Parsippany, NJ 07054. The petition proposed that the regulations for food additives permitted in feed and drinking water of animals be amended to provide for the safe use of Schizochytrium sp. dried marine microalgae as a source of DHA for use in complete, dry foods for adult dogs.

FDA concludes that the data establish the safety and utility of Schizochytrium sp. dried marine microalgae as a source of DHA for use in complete, dry foods for adult dogs and that the food additive regulations should be amended as set forth in this document. This is not a significant regulatory action subject to Executive Order 12866.

In accordance with § 571.1(h) (21 CFR 571.1(h)), the petition and documents we considered and relied upon in reaching our decision to approve the petition will be made available for inspection at the Center for Veterinary Medicine by appointment with the information contact person (see FOR FURTHER INFORMATION CONTACT). As provided in § 571.1(h), we will delete from the documents any materials that are not available for public disclosure before making the documents available for inspection.

The Agency has determined under 21 CFR 25.32(r) 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.

Any person who will be adversely affected by this regulation may file with the Dockets Management Staff (see ADDRESSES) either electronic or written objections. Each objection shall be separately numbered, and each numbered objection shall specify with particularity the provision of the regulation to which objection is made and the grounds for the objection. Each numbered objection on which a hearing is requested shall specifically so state. Failure to request a hearing for any particular objection shall constitute a waiver of the right to a hearing on that objection. Each numbered objection for which a hearing is requested shall include a detailed description and analysis of the specific factual information intended to be presented in support of the objection in the event that a hearing is held. Failure to include such a description and analysis for any particular objection shall constitute a waiver of the right to a hearing on the objection.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 573 is amended as follows:

Therefore, under the Federal Food, Drug, and Cosmetic Act, and under authority delegated to the Commissioner of Food and Drugs, the direct final rule published on January 26, 2018 (83 FR 3586) is withdrawn.

Table of Contents I. Background II. Consideration of Comments III. Direct Final Rulemaking IV. Discussion of Changes V. Legal Considerations VI. Final Economic Analysis and Regulatory Flexibility Act Certification VII. Office of Management and Budget (OMB) Review Under the Paperwork Reduction Act of 1995 VIII. Federalism IX. State Plan States X. Unfunded Mandates Reform Act I. Background

On January 9, 2017, OSHA published its final rule Occupational Exposure to Beryllium and Beryllium Compounds in the Federal Register (82 FR 2470). OSHA concluded that employees exposed to beryllium and beryllium compounds at the preceding permissible exposure limits (PELs) were at significant risk of material impairment of health, specifically chronic beryllium disease and lung cancer. OSHA concluded that the new 8-hour time-weighted average (TWA) PEL of 0.2 µg/m3 reduced this significant risk to the maximum extent feasible. Based on information submitted to the record, in the final rule OSHA issued three separate standards—general industry, shipyards, and construction. In addition to the revised PEL, the final rule established a new short-term exposure limit (STEL) of 2.0 µg/m3 over a 15-minute sampling period and an action level of 0.1 µg/m3 as an 8-hour TWA, along with a number of ancillary provisions intended to provide additional protections to employees, such as requirements for exposure assessment, methods for controlling exposure, respiratory protection, personal protective clothing and equipment, housekeeping, medical surveillance, hazard communication, and recordkeeping similar to those found in other OSHA health standards.

This DFR amends the text of the beryllium standard for general industry to clarify OSHA's intent with respect to certain terms in the standard, including the definition of Beryllium Work Area (BWA), the definition of emergency, and the meaning of the terms dermal contact and beryllium contamination. It also clarifies OSHA's intent with respect to provisions for disposal and recycling and with respect to provisions that the Agency intends to apply only where skin can be exposed to materials containing at least 0.1% beryllium by weight.

This direct final rule is expected to be an Executive Order (E.O.) 13771 deregulatory action. Details on OSHA's cost/cost savings estimates for this direct final rule can be found in the rule's economic analysis. OSHA has estimated that, at a 3 percent discount rate over 10 years, there are net annual cost savings of $0.36 million per year for this direct final rule; at a discount rate of 7 percent, there are net annual cost savings of $0.37 million per year. When the Department uses a perpetual time horizon, the annualized cost savings of the direct final rule is $0.37 million with 7 percent discounting. While the 2017 Beryllium Final Rule went into effect on May 20, 2017, compliance obligations do not begin until May 11, 2018.

OSHA will consider comments on all issues related to this action including economic or other regulatory impacts of this action on the regulated community. If OSHA receives no significant adverse comment, OSHA will publish a Federal Register document confirming the effective date of this DFR and withdrawing the companion Notice of Proposed Rulemaking (NPRM). Such confirmation may include minor stylistic or technical changes to the document. For the purpose of judicial review, OSHA views the date of confirmation of the effective date of this DFR as the date of promulgation.

In direct final rulemaking, an agency publishes a DFR in the Federal Register, with a statement that the rule will go into effect unless the agency receives significant adverse comment within a specified period. The agency may publish an identical concurrent NPRM. If the agency receives no significant adverse comment in response to the DFR, the rule goes into effect. OSHA typically confirms the effective date of a DFR through a separate Federal Register document. If the agency receives a significant adverse comment, the agency withdraws the DFR and treats such comment as a response to the NPRM. An agency typically uses direct final rulemaking when an agency anticipates that a rule will not be controversial.

For purposes of this DFR, a significant adverse comment is one that explains why the amendments to OSHA's beryllium standard would be inappropriate. In determining whether a comment necessitates withdrawal of the DFR, OSHA will consider whether the comment raises an issue serious enough to warrant a substantive response in a notice-and-comment process. OSHA will not consider a comment recommending an additional amendment to this rule to be a significant adverse comment unless the comment states why the DFR would be ineffective without the addition.

In addition to publishing this DFR, OSHA is publishing a companion NPRM in the Federal Register. The comment period for the NPRM runs concurrently with that of the DFR. OSHA will treat comments received on the companion NPRM as comments also regarding the DFR. Similarly, OSHA will consider significant adverse comment submitted to the DFR as comment to the companion NPRM. Therefore, if OSHA receives a significant adverse comment on either this DFR or the NPRM, it will withdraw this DFR and proceed with the companion NPRM. In the event OSHA withdraws the DFR because of significant adverse comment, OSHA will consider all timely comments received in response to the DFR when it continues with the NPRM. After carefully considering all comments to the DFR and the NPRM, OSHA will decide whether to publish a new final rule.

OSHA determined that the subject of this rulemaking is suitable for direct final rulemaking. This amendment to the standard is clarifying in nature and does not adversely impact the safety or health of employees. The amended standard will clarify OSHA's intent regarding certain terms in the standard, including the definition of Beryllium Work Area (BWA), the definition of emergency, and the meaning of the terms dermal contact and beryllium contamination. It will also clarify OSHA's intent with respect to provisions for disposal and recycling and with respect to provisions that the Agency intends to apply only where skin can be exposed to materials containing at least 0.1% beryllium by weight. The revisions do not impose any new costs or duties. For these reasons, OSHA does not anticipate objections from the public to this rulemaking action.

On January 9, 2017, OSHA adopted comprehensive standards addressing exposure to beryllium and beryllium compounds in general industry, construction, and shipyards. 82 FR 2470. Beryllium “occurs naturally in rocks, soil, coal, and volcanic dust,” but can cause harm to workers through exposure in the workplace. 80 FR 47579. OSHA has thus set a general industry exposure limit for beryllium and beryllium compounds since 1971, modified most recently in 2017. See 80 FR 47578-47579; 82 FR 2471. This DFR amends that 2017 general industry beryllium standard (codified at 29 CFR 1910.1024) to clarify its applicability to materials containing trace amounts of beryllium and to make related changes. This DFR does not affect the construction and shipyard standards, which are being addressed in a separate rulemaking. See 82 FR 29182.

During the last rulemaking, OSHA addressed the issue of trace amounts of beryllium. In its notice of proposed rulemaking, OSHA proposed to exempt from its beryllium standard materials containing less than 0.1% beryllium by weight on the premise that workers in exempted industries are not exposed at levels of concern, 80 FR 47775, but noted evidence of high airborne exposures in some of those industries, in particular the primary aluminum production and coal-fired power generation industries. 80 FR 47776. Therefore, OSHA proposed for comment several regulatory alternatives, including an alternative that would “expand the scope of the proposed standard to also include all operations in general industry where beryllium exists only as a trace contaminant.” 80 FR 47730. After receiving comment, OSHA adopted in the final rule an alternative limiting the exemption for materials containing less than 0.1% beryllium by weight to where the employer has objective data demonstrating that employee exposure to airborne beryllium will remain below the action level (AL) of 0.1 µg/m3, measured as an 8-hour TWA, under any foreseeable conditions. 29 CFR 1910.1024(a)(2). In doing so, OSHA noted that the AL exception ensured that workers with airborne exposures of concern were covered by the standard:

As the regulatory history makes clear, OSHA intended to protect employees working with trace beryllium only when it caused airborne exposures of concern. OSHA did not intend for provisions aimed at protecting workers from the effects of dermal contact to apply in the case of materials containing only trace amounts of beryllium. Since the publication of the final rule, however, stakeholders have suggested that an unintended consequence of the final rule's revision of the trace exemption is that provisions designed to protect workers from dermal contact with beryllium-contaminated material could be read as applying to materials with only trace amounts of beryllium.

This DFR adjusts the regulatory text of the general industry beryllium standard to clarify that OSHA does not intend for requirements that primarily address dermal contact to apply in processes, operations, or areas involving only materials containing less than 0.1% beryllium by weight. These clarifications are made through changes to the definition of beryllium work area; the addition of definitions of dermal contact, beryllium-contaminated, and contaminated with beryllium; clarifications of certain hygiene provisions with respect to beryllium contamination; and the clarifications to provisions for disposal and recycling. In addition, because under these changes it is possible to have a regulated area that is not a beryllium work area, this DFR makes changes to certain housekeeping provisions to ensure they apply in all regulated areas. Finally, this DFR also includes a change to the definition of “emergency”, adding detail to the definition so as to clarify the nature of the circumstances OSHA intends to be considered an emergency for the purposes of the standard.

Definition of beryllium work area. Paragraph (b) of the beryllium standard published in January 2017 defined a beryllium work area as any work area containing a process or operation that can release beryllium where employees are, or can reasonably be expected to be, exposed to airborne beryllium at any level or where there is the potential for dermal contact with beryllium. This DFR amends the definition as follows: “Beryllium work area means any work area: (1) Containing a process or operation that can release beryllium and that involves materials that contain at least 0.1% beryllium by weight; and (2) where employees are, or can reasonably be expected to be, exposed to airborne beryllium at any level or where there is the potential for dermal contact with beryllium.” This change clarifies OSHA's intent that many of the provisions associated with beryllium work areas should only apply to areas where there are processes or operations involving materials at least 0.1% beryllium by weight.

Specifically, this change to the beryllium work area definition clarifies OSHA's intent that the following provisions associated with beryllium work areas do not apply where processes and operations involve only materials containing trace amounts of beryllium (less than 0.1% beryllium by weight): Establishing and demarcating beryllium work areas (paragraphs (e)(1)(i) and (e)(2)(i)); including procedures for minimizing cross-contamination within (paragraph (f)(1)(i)(D)) or minimizing migration of beryllium out of (paragraph (f)(1)(i)(F)) such areas in the written exposure control plan; ensuring that at least one engineering or process control is in place to reduce beryllium exposure where airborne beryllium levels meet or exceed the AL (revised paragraph (f)(2)(ii)).1 Additionally, for areas where beryllium is only present in materials at concentrations of less than 0.1% beryllium by weight, unless that area is also a regulated area, employers are not required to ensure that all surfaces in such areas are as free as practicable of beryllium (paragraph (j)(1)(i)); ensure that all surfaces in such areas are cleaned by HEPA-filtered vacuuming or other methods that minimize the likelihood and level of airborne exposure (paragraph (j)(2)(i)); or prohibit dry sweeping or brushing for cleaning surfaces in such areas (paragraph (j)(2)(ii)).

This DFR also includes conforming changes to maintain the January 2017 rule's requirements for housekeeping in regulated areas. Because all regulated areas were also beryllium work areas under the January 2017 beryllium standard, OSHA did not specify whether requirements for beryllium work areas should also apply in regulated areas (areas in which airborne beryllium exposure meets or exceeds the TWA PEL or STEL). This DFR's clarification to the definition of beryllium work area, however, means that it is possible for a work area to be a regulated area, but not a beryllium work area. This would occur when processes that involve only materials containing less than 0.1% beryllium by weight nevertheless create airborne beryllium exposures at or above the TWA PEL or STEL. 82 FR 2583. It is thus important to clarify that housekeeping (paragraph (j)) requirements continue to apply in regulated areas, even if the processes or operations in these areas involve materials with only trace beryllium. Operations or processes involving trace beryllium materials must generate extremely high dust levels in order to exceed the TWA PEL or STEL. Following the housekeeping methods required by paragraph (j) will help to protect workers against resuspension of surface beryllium accumulations from extremely dusty operations and limit workers' airborne exposure to beryllium.

The DFR accordingly amends paragraphs (j)(1)(i), (j)(2)(i), and (j)(2)(ii) to state explicitly that they apply to regulated areas, as follows. Paragraph (j)(1)(i), as amended, states that “[t]he employer must maintain all surfaces in beryllium work areas and regulated areas as free as practicable of beryllium and in accordance with the written exposure control plan required under paragraph (f)(1) and the cleaning methods required under paragraph (j)(2) of this standard.” Paragraph (j)(2)(i), as amended, states that “[t]he employer must ensure that surfaces in beryllium work areas and regulated areas are cleaned by HEPA-filtered vacuuming or other methods that minimize the likelihood and level of airborne exposure.” Paragraph (j)(2)(ii), as amended, states that “[t]he employer must not allow dry sweeping or brushing for cleaning surfaces in beryllium work areas or regulated areas unless HEPA-filtered vacuuming or other methods that minimize the likelihood and level of airborne exposure are not safe or effective.”

This DFR also makes conforming changes to the engineering controls requirements to ensure that the hierarchy of controls continues to apply in all regulated areas. Paragraph (f)(2) of the January 2017 beryllium standard provided that, if airborne exposures still exceed the PEL or STEL after implementing at least one control for each operation in a beryllium work area that releases airborne beryllium, the employer must implement additional or enhanced engineering and work practice controls to reduce airborne exposure to or below the limit exceeded. OSHA intended this provision to apply to all operations within the scope of the standard that can release airborne beryllium. 82 FR 2671-72. Because, under this DFR's revisions, not all regulated areas will be beryllium work areas, this DFR rearranges the regulatory text of paragraph (f)(2) to make clear that the hierarchy of controls will continue to apply in regulated areas that are not beryllium work areas.

Definitions related to beryllium contamination. To further clarify OSHA's intent that the standard's requirements aimed at reducing the effect of dermal contact with beryllium should not apply to areas where there are no processes or operations involving materials containing at least 0.1% beryllium by weight, this DFR defines “beryllium-contaminated or contaminated with beryllium” and adds those terms to certain provisions in the standard. The DFR defines those terms as follows: “Contaminated with beryllium and beryllium-contaminated mean contaminated with dust, fumes, mists, or solutions containing beryllium in concentrations greater than or equal to 0.1 percent by weight.” The DFR adds the terms to certain provisions in the standard's requirements for hygiene areas and disposal and recycling.

The use of this definition accordingly clarifies OSHA's intent that the following provisions, which apply where clothing, hair, skin, or work surfaces are beryllium-contaminated, do not apply where the contaminating material contains less than 0.1% beryllium by weight: Paragraph (h)(2)(i) and paragraph (h)(2)(ii), which require the employer to ensure that each employee removes all beryllium-contaminated personal protective clothing and equipment at the appropriate time and as specified in the written exposure control plan required by paragraph (f)(1); and paragraph (h)(2)(iii) and paragraph (h)(2)(iv), which require the employer to ensure that measures to prevent cross contamination between beryllium-contaminated personal protective clothing and equipment and street clothing are observed and that beryllium-contaminated personal protective clothing and equipment are not removed from the workplace. This DFR also amends paragraph (h)(3)(ii), which requires the employer to ensure that beryllium is properly removed from PPE, by adding the term “beryllium-contaminated” so that this requirement applies only where the contaminating material contains at least 0.1% beryllium by weight. The amended paragraph (h)(3)(ii) reads as follows: “The employer must ensure that beryllium is not removed from beryllium-contaminated personal protective clothing and equipment by blowing, shaking, or any other means that disperses beryllium into the air.”

Similarly, the DFR's inclusion of the term “contaminated with beryllium” in paragraphs (i)(3)(i)(B) and (i)(3)(ii)(B) clarifies OSHA's intent that those provisions, which require employers to provide and ensure use of showers where employees' hair or body parts other than hands, face, and neck can reasonably be expected to become contaminated with beryllium, do not apply where the contaminating material contains less than 0.1% beryllium by weight.

The DFR's adoption of the definition of “beryllium-contaminated” further clarifies the application of certain requirements that are meant to minimize re-entrainment of airborne beryllium and reduce the effect of dermal contact with beryllium. Specifically, it clarifies that paragraph (j)(2)(iii), which prohibits the use of compressed air for cleaning beryllium-contaminated surfaces except where used in conjunction with an appropriate ventilation system, and paragraph (j)(2)(iv), which requires the use of respiratory protection and PPE in accordance with paragraphs (g) and (h) of the standard when dry sweeping, brushing, or compressed air are used to clean beryllium-contaminated surfaces, do not apply where the contaminating material contains less than 0.1% beryllium by weight. OSHA does not expect the additional airborne exposure from dry brushing, sweeping, or using compressed air to significantly increase the levels of airborne exposure outside regulated areas when working with trace beryllium. This is because for trace beryllium to generate airborne exposures of concern, excessive amounts of dust would need to be generated, and this would not happen outside of regulated areas.

This DFR also adds the term “beryllium-contaminated” to certain requirements pertaining to eating and drinking areas to clarify that hygiene requirements in these areas apply only where materials containing more than 0.1% beryllium by weight may contaminate such areas. Paragraph (i)(4)(i), as amended by this DFR, states that wherever the employer allows employees to consume food or beverages at a worksite where beryllium is present, the employer must ensure that “[b]eryllium-contaminated surfaces in eating and drinking areas are as free as practicable of beryllium.” Paragraph (i)(4)(ii), as amended by this DFR, requires employers to ensure that “[n]o employees enter any eating or drinking area with beryllium-contaminated personal protective clothing or equipment unless, prior to entry, surface beryllium has been removed from the clothing or equipment by methods that do not disperse beryllium into the air or onto an employee's body.”

Definition of dermal contact with beryllium. To clarify OSHA's intent that requirements of the standard associated with dermal contact with beryllium should not apply to areas where there are no processes or operations involving materials at least 0.1% beryllium by weight, this DFR also adds a definition for dermal contact with beryllium. This new definition provides, “Dermal contact with beryllium means skin exposure to: (1) Soluble beryllium compounds containing beryllium in concentrations greater than or equal to 0.1 percent by weight; (2) solutions containing beryllium in concentrations greater than or equal to 0.1 percent by weight; or (3) dust, fumes, or mists containing beryllium in concentrations greater than or equal to 0.1 percent by weight.” Accordingly, the definition clarifies that paragraph (h)(1)(ii), which requires an employer to provide and ensure the use of personal protective clothing and equipment where there is a reasonable expectation of dermal contact with beryllium, applies only where contact may occur with materials containing at least 0.1% beryllium by weight. This definition also clarifies that the requirements related to dermal contact in the written exposure control plan, washing facilities, medical examinations, and training provisions only apply where contact may occur with materials containing at least 0.1% beryllium by weight.

Definition of emergency. This DFR also clarifies the definition of “emergency” in paragraph (b) of the beryllium standard published in January 2017. That paragraph defined an emergency as “any uncontrolled release of airborne beryllium.” This DFR amends the definition as follows: “Emergency means any occurrence such as, but not limited to, equipment failure, rupture of containers, or failure of control equipment, which may or does result in an uncontrolled and unintended release of airborne beryllium that presents a significant hazard.” This change clarifies the circumstances under which the provisions associated with emergencies should apply, including the requirements that employers provide and ensure employee use of respirators and that employers provide medical surveillance to employees exposed in an emergency. This change is consistent with OSHA's intent as explained in the preamble to the 2017 final rule. 82 FR 2690 (“An emergency could result from equipment failure, rupture of containers, or failure of control equipment, among other causes.”). These examples show OSHA's intent to define an “emergency” as something unintended as well as uncontrolled, and including the examples in the new definition make that clear. It is also consistent with other OSHA standards, such as methylenedianiline (1910.1050), vinyl chloride (1910.1017), acrylonitrile (1910.1045), benzene (1910.1028), and ethylene oxide (1910.1047).

Disposal and recycling. Finally, this DFR clarifies the application of the disposal and recycling provisions. Paragraph (j)(3) of the beryllium standard published in January 2017 required employers to ensure that materials designated for disposal that contain or are contaminated with beryllium are disposed of in sealed, impermeable enclosures, such as bags or containers, that are labeled in accordance with paragraph (m)(3) of the standard. It also required that materials designated for recycling which contain or are contaminated with beryllium are cleaned to be as free as practicable of surface beryllium contamination and labeled in accordance with paragraph (m)(3) of the standard, or placed in sealed, impermeable enclosures, such as bags or containers, that are labeled in accordance with paragraph (m)(3) of the standard. These provisions were designed to protect workers from dermal contact with beryllium dust generated during processing, where there is a risk of beryllium sensitization. See 82 FR 2694, 2695. This DFR accordingly limits those requirements to “materials that contain beryllium in concentrations of 0.1 percent by weight or more or are contaminated with beryllium,” consistent with OSHA's intention that provisions aimed at protecting workers from the effects of dermal contact do not apply in the case of materials containing only trace amounts of beryllium. The hazard communication standard continues to apply according to its terms. See 29 CFR 1910.1200.

The purpose of the Occupational Safety and Health Act of 1970) (“OSH Act”; 29 U.S.C. 651 et seq.) is “to assure so far as possible every working man and woman in the Nation safe and healthful working conditions and to preserve our human resources.” 29 U.S.C. 651(b). To achieve this goal, Congress authorized the Secretary of Labor to promulgate and enforce occupational safety and health standards. 29 U.S.C. 655(b), 658. A safety or health standard is a standard that “requires conditions, or the adoption or use of one or more practices, means, methods, operations, or processes, reasonably necessary or appropriate to provide safe or healthful employment and places of employment.” 29 U.S.C. 652(8). A standard is reasonably necessary or appropriate when a significant risk of material harm exists in the workplace and the standard would substantially reduce or eliminate that workplace risk. See Industrial Union Dept., AFL-CIO v. Am. Petroleum Inst., 448 U.S. 607, 641-42 (1980) (plurality opinion).

OSHA need not make additional findings on risk for this DFR. As discussed above, this DFR will not diminish the employee protections put into place by the standard being amended. And because OSHA previously determined that the beryllium standard substantially reduces a significant risk (82 FR 2545-52), it is unnecessary for the Agency to make additional findings on risk for the minor changes and clarifications being made to the standard. See, e.g., Public Citizen Health Research Group v. Tyson, 796 F.2d 1479, 1502 n.16 (D.C. Cir. 1986) (rejecting the argument that OSHA must “find that each and every aspect of its standard eliminates a significant risk”).

OSHA has determined that these minor changes and clarifications are technologically and economically feasible. All OSHA standards must be both technologically and economically feasible. See United Steelworkers v. Marshall, 647 F.2d 1189, 1264 (D.C. Cir. 1980) (“Lead I”). The Supreme Court has defined feasibility as “capable of being done.” Am. Textile Mfrs. Inst. v. Donovan, 452 U.S. 490, 509-10 (1981) (“Cotton Dust”). Courts have further clarified that a standard is technologically feasible if OSHA proves a reasonable possibility, “within the limits of the best available evidence . . . that the typical firm will be able to develop and install engineering and work practice controls that can meet the PEL in most of its operations.” Lead I, 647 F.2d at 1272. With respect to economic feasibility, courts have held that “a standard is feasible if it does not threaten massive dislocation to or imperil the existence of the industry.” Id. at 1265 (internal quotation marks and citations omitted). In the final economic analysis (FEA) for the 2017 beryllium rule, OSHA concluded that the rule was economically and technologically feasible. OSHA has determined that this DFR is also economically and technologically feasible, because it does not impose any new requirements or costs.

Executive Orders 12866 and 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1532(a)) require that OSHA estimate the benefits, costs, and net benefits of regulations, and analyze the impacts of certain rules that OSHA promulgates. E.O. 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility.

This DFR is not an “economically significant regulatory action” under Executive Order 12866, or a “major rule” under the Congressional Review Act (5 U.S.C. 801 et seq.), and its impacts do not trigger the analytical requirements of UMRA. Neither the benefits nor the costs of this DFR would exceed $100 million in any given year. This DFR would, however, result in a net cost savings for employers in primary aluminum production and coal-fired utilities, which are the only industries in General Industry covered by the 2017 Beryllium Final Rule that OSHA identified with operations involving materials containing only trace beryllium (less than 0.1% beryllium by weight).

Several calculations illustrate the expected cost savings. At a discount rate of 3 percent, this DFR would yield annualized cost savings of $0.36 million per year for 10 years. At a discount rate of 7 percent, this DFR would yield an annualized cost savings of $0.37 million per year for 10 years. These net cost savings amount to approximately 0.6 percent of the original estimated cost of the 2017 Beryllium Final Rule for General Industry at discount rates of either 3 or 7 percent; to approximately 5.3 percent of the original estimated cost of the 2017 Beryllium Final Rule for primary aluminum production and coal-fired utilities only at a discount rate of 3 percent and 5.2 percent of the original estimated cost of the 2017 Beryllium Final Rule for primary aluminum production and coal-fired utilities only at a discount rate of 7 percent.2 Under a perpetual time horizon, the annualized cost savings of this DFR is $0.37 million at a discount rate of 7 percent.

Because baseline costs typically reflect the costs of compliance without the changes set forth in an agency's action—in this case, the DFR—OSHA has revised the baseline costs, as displayed in the FEA in support of the beryllium standard of January 9, 2017, in two ways. First, OSHA updated the projected costs for general industry contained in the FEA that accompanied the rule from 2015 to 2017 dollars, using the latest Occupational Employment Statistics (OES) wage data (for 2016) and inflating them to 2017 dollars. Second, OSHA excluded certain familiarization costs, included in the cost estimates developed in the beryllium FEA for the 2017 Beryllium Final Rule, because OSHA expects that those costs have already been incurred by affected employers. Thus, the baseline costs for this FEA are the projected costs from the 2017 FEA, updated to 2017 dollars, less familiarization costs in the 2017 beryllium final rule (but including some new familiarization costs for employers to become familiar with the revised provisions). Throughout this analysis of costs and cost savings, the context is limited to employers in primary aluminum production and coal-fired utilities.

As in the 2017 FEA, OSHA has not accounted for overhead labor costs in its analysis of the cost savings for this DFR due to concerns about consistency. There are several ways to look at the cost elements that fit the definition of overhead, and there is a range of overhead estimates currently used within the federal government—for example, the Environmental Protection Agency has used 17 percent,3 and government contractors have been reported to use an average of 77 percent.4 Some overhead costs, such as advertising and marketing, may be more closely correlated with output than with labor. Other overhead costs vary with the number of new employees. For example, rent or payroll processing costs may change little with the addition of 1 employee in a 500-employee firm, but may change substantially with the addition of 100 employees. If an employer is able to rearrange current employees' duties to implement a rule, then the marginal share of overhead costs, such as rent, insurance, and major office equipment (e.g., computers, printers, copiers) would be very difficult to measure with accuracy.

If OSHA had included an overhead rate when estimating the marginal cost of labor, without further analyzing an appropriate quantitative adjustment, and adopted for these purposes an overhead rate of 17 percent on base wages, the cost savings of this DFR would increase to approximately $0.39 million per year, at discount rates of either 3 percent or 7 percent.5 The addition of 17 percent overhead on base wages would therefore increase cost savings by approximately 7 percent above the primary estimate at either discount rate.

OSHA estimates a net cost savings from this DFR for employers at primary aluminum production and coal-fired utilities, which again are the only two industries identified in the 2017 FEA as having costs associated with exposure to trace beryllium materials.6 Annualizing the present value of net cost savings over ten years, the result is an annualized net cost savings of $0.36 million per year at a discount rate of 3 percent, or $0.37 million per year at a discount rate of 7 percent. When the Department uses a perpetual time horizon, the annualized net cost savings of this DFR is $0.37 million at a discount rate of 7 percent.

The undiscounted cost savings by provision and year are presented below in Table 1, and the cost savings by provision and discount rate are shown below in Tables 2 and 3. As described elsewhere in this document, the cost savings described in this FEA reflect savings only for provisions covered by the changes in this DFR as well as added familiarization costs. OSHA estimated no cost savings for the PEL, respiratory protection, exposure assessment, regulated areas, medical surveillance, medical removal protection, written exposure control plan, or training provisions because the DFR makes no changes of substance to those provisions.

a. Beryllium work areas. OSHA is limiting the definition of “beryllium work area” to any work area containing a process or operation “that involves materials that contain at least 0.1% beryllium by weight. . . .” OSHA has determined that affected establishments in primary aluminum production and coal-fired utilities would thus no longer need to designate and demarcate beryllium work areas because their materials would not meet that threshold outside of the “regulated areas” in primary aluminum production where employee exposures to airborne beryllium would exceed the PEL. In its previous economic analysis, OSHA had estimated that each of the establishments in these categories required beryllium work areas in addition to “regulated areas,” which were costed separately. The removal of these beryllium work area designations results in an annualized cost savings of $12,913 using a 3 percent discount rate and $15,682 using a 7 percent discount rate. Annualized costs by provision and discount rate can be seen below in Tables 2 and 3.

b. Protective work clothing and equipment. OSHA is recognizing no cost savings in this DFR for the elimination of PPE requirements associated with dermal contact in coal-fired utilities. In its 2017 FEA, OSHA listed the PPE compliance rate for utility workers at coal-fired utilities at 75 percent and therefore estimated PPE costs for the residual 25 percent of utility workers in the industry (where airborne exposures exceed the PEL or STEL or where there is dermal contact with beryllium). But upon further review, OSHA has determined that it should not have included those costs because affected employers in coal-fired utilities were already required to wear PPE under 29 CFR 1910.1018(j) to prevent skin and eye irritation from exposure to trace inorganic arsenic found in coal ash. As OSHA noted in its technological feasibility analysis, inorganic arsenic is often found in coal fly ash in “concentrations 10 to 1,000 times greater than beryllium,” fly ash is the primary source of beryllium exposure for employees in coal-fired utilities, and employers in this application group indicated that they were already following a majority of the provisions of the rule to comply with OSHA requirements for other hazardous substances, such as arsenic (p. IV-652). Thus, in all of the areas within a facility in which employees are likely to be exposed to beryllium, they are also likely to be exposed to concentrations of arsenic significantly high so as to trigger the arsenic PPE requirements. Accordingly, coal-fired utility compliance rates with the PPE requirement for affected workers should have been 100 percent in the prior FEA, and no costs for PPE for these workers should have been included in OSHA's cost estimates. Because OSHA should not have included new beryllium PPE costs for this group, OSHA is recognizing no cost savings in this DFR for the elimination of PPE requirements associated with dermal contact in coal-fired utilities.

There are, however, some small PPE cost savings for primary aluminum production. The January 2017 rule requires employers to provide PPE in two situations: (1) Where airborne exposure exceeds, or can reasonably be expected to exceed, the TWA PEL or STEL; and (2) where there is a reasonable expectation of dermal contact with beryllium. 29 CFR 1910.1024(h)(1). It is the second of these two situations which OSHA believes will trigger cost savings. Because this DFR clarifies that “dermal contact with beryllium” does not include contact with beryllium in concentrations less than 0.1% beryllium by weight, gloves and other PPE requirements will be triggered by a reasonable expectation of dermal contact only with materials containing more than 0.1% beryllium by weight. In primary aluminum production, there is no dermal contact with materials containing beryllium above this threshold. As a result, the Agency has determined that in primary aluminum production, additional PPE is only necessary for workers exposed over the PEL. This change results in an annualized cost savings for employers in primary aluminum production of $35,023 using a 3 or 7 percent discount rate. Annualized costs by provision and discount rate can be seen below in Tables 2 and 3.

c. Hygiene areas and practices. The DFR's adoption of a definition for “contaminated with beryllium” also reduces the costs of complying with the Hygiene Areas and Practices provision in primary aluminum production (the costs for coal-fired utilities would not be affected). The 2017 Final Beryllium Rule requires employers to provide showers where both of two conditions are met:

d. Housekeeping. Similar to the above discussion about PPE in coal-fired utilities, OSHA is recognizing no cost savings in this DFR for coal-fired utilities as a result of the modification of the housekeeping requirements. In the FEA in support of the 2017 Beryllium Final Rule, the Agency listed the housekeeping compliance rate for affected workers at coal-fired utilities at 75 percent and therefore estimated housekeeping costs for the residual 25 percent of utility workers in a beryllium work area. But upon further review, OSHA has determined that affected employers in coal-fired utilities were already required to perform comparable housekeeping duties under 29 CFR 1910.1018(k) to prevent accumulations of inorganic arsenic found in coal ash. Accordingly, coal-fired utility compliance rates with the housekeeping requirements for affected workers should have been 100 percent in the prior FEA, and no costs for housekeeping for these workers should have been included in OSHA's cost estimates. Consequently, OSHA is recognizing no cost savings in this DFR for coal-fired utilities as a result of the modification of the housekeeping requirements.

The rule clarification also means that employers in primary aluminum production facilities will typically only be required to comply with the beryllium housekeeping provisions in “regulated areas,” which for cost purposes OSHA identified as employees exposed over the PEL in its exposure profile. There are several exceptions, none of which have a quantifiable impact on costs: Employers in this industry would still need to follow the housekeeping requirements when cleaning up spills and emergency releases of beryllium (paragraph (j)(1)(ii)), handling and maintaining cleaning equipment (paragraph (j)(2)(v)), and when necessary to reduce some workers exposures below the PEL (serving as an engineering control to prevent over-exposure to beryllium within regulated areas or the need for regulated areas). OSHA did not identify separate costs in its prior FEA for this use of housekeeping as a form of engineering control and does not do so here. Thus, for cost calculation purposes in this new FEA, OSHA removed housekeeping costs for all employees exposed below the PEL in its exposure profile. This change results in an annualized cost savings for employers in primary aluminum production of $323,664 using a 3 percent discount rate and $330,324 using a 7 percent discount rate. Annualized costs by provision and discount rate can be seen below in Tables 2 and 3. OSHA believes that these estimated cost savings might be slightly overstated to the extent that some housekeeping outside of the regulated areas will still be needed to perform an engineering-control function in some facilities, but the Agency is unable to quantify them now because of the variability among facilities and controls that employers may implement to comply with the standard.

e. Additional familiarization. In the FEA in support of OSHA's 2017 Beryllium Final Rule, the Agency determined that employers would need to spend time familiarizing themselves with the rule and allocated 4, 8, and 40 hours, depending on establishment size (fewer than 20 employees, between 20 and 499 employees, and 500 or more employees, respectively). OSHA has similarly determined that establishments will need to spend time familiarizing themselves with this DFR. As the affected provisions in this DFR are only a fraction of all the provisions in the 2017 final rule and would not require any new actions on the part of employers, the Agency has estimated familiarization time of 2, 4, and 20 hours per employer, depending on establishment size, for a supervisor to review the changes to the beryllium rule reflected in this DFR. This results in an annualized cost of $9,404 using a 3 percent discount rate and $11,421 using a 7 percent discount rate. Annualized costs by provision and discount rate—3 and 7 percent—can be seen below in Tables 2 and 3, respectively.

f. Unchanged provisions. As discussed earlier, this DFR primarily serves to clarify OSHA's intent with respect to certain terms and requirements in OSHA's 2017 beryllium general industry standard. These changes largely deal with clarifying the application of various requirements to trace beryllium. The triggers for most provisions in the standard—the PEL, respiratory protection, exposure assessment, regulated areas, medical surveillance, medical removal protection, written exposure control plan, and training provisions 8 —are determined by factors other than beryllium concentration and are unchanged by this DFR. Similarly, the revised definition of “emergency” in this DFR would not affect the costs estimated for the other provisions in the standard.

In the FEA for the 2017 beryllium standard, OSHA concluded that the rule was economically and technologically feasible. This DFR does not impose any new requirements and has the net impact of removing a small amount of cost, so OSHA has determined that this final rule is also economically and technologically feasible.

We published proposed revisions to this rule in the Federal Register on January 11, 2017 (82 FR 3219) and received seven sets of public comments in response, from companies, industry representative organizations, and law firms. The vast majority of the comments were on 32 CFR 2004.32 and 2004.34, relating to national interest determinations (NIDs) made when an entity is under foreign ownership, control, or influence (FOCI) and the proposed mitigation method is a special security agreement. Overall, commenters strongly recommended that NIDs be eliminated, but, if not possible to do so, the commenters suggested ways in which to streamline the process and the regulatory provisions, including granting the Defense Security Service (DSS) authority to make NIDs concurrently with making eligibility determinations, establishing a presumption of approval if an entity otherwise has a favorable record, and making NIDs prior to contract awards.

We are not at this time able to eliminate NIDs because certain categories of classified information involve assessment of factors specific to that information. The regulation is also not drafted on the basis of what DSS may or may not do, as DSS is not one of the cognizant security agencies (CSAs) specifically named in Executive Order (E.O.) 12829. DSS has authority granted to it by the Department of Defense, one of the CSAs, and each CSA has equivalent authority under the NISP to make entity eligibility determinations and NIDs. We decline to create a presumption of approval because of the potential risk to national security, particularly with regard to certain categories of proscribed information. In addition, no agency has the capability to evaluate companies for a NID prior to any acquisition activity so as to include the NID in contract award documents.

Nonetheless, we have taken the comments and suggestions into consideration and made changes to further streamline the NID process and these regulatory sections in response to the public comments. We have established that the CSA (or DSS for the CSA, in the case of DoD determinations) makes the NID and does so concurrently with making the entity eligibility determination. In this manner, for several categories of classified information, the NID will take no longer than the entity eligibility determination. In cases in which the proscribed information does not require concurrence from a controlling agency, the entity's access may begin as soon as a positive determination is made. Now, only in cases in which the proscribed information requires concurrence from a controlling agency (RD, COMSEC, SCI), must the entity wait in order to have access to that information. We have revised the process to also allow an entity to begin accessing a category of proscribed information once the CSA informs the entity that the controlling agency concurs, even if other categories of proscribed information are pending concurrence. This allows entities to begin work and have access to at least part of the information at a faster rate.

In addition, we revised the regulation to allow an entity's access to SCI, RD, or COMSEC to remain in effect so long as the entity remains eligible for access to classified information and the contract or agreement imposing the requirement for access to those categories of proscribed information remains in effect, except under certain circumstances, and to remain in effect across contract renewals, new task orders, and SSA renewals (except under certain circumstances). Both of these revisions reduce the number of NIDs an entity must undergo and reduce the potential disruptions and burdens of previous NID frequency. We believe these regulations significantly streamline the NID process and reduce burdens on entities by: (1) Allowing the CSA to render NIDs for certain categories of information concurrently with eligibility determinations, (2) allowing access to information as NID concurrences are received rather than waiting for all concurrences, and (3) establishing a 30-day timeline for concurrence (this was included in the proposed rule).

We have coordinated and vetted the comments and resulting revisions through the CSAs listed in E. O. 12829, National Industrial Security Program (January 6, 1993 (58 FR 3479)), as amended by E.O. 13691 (February 13, 2015 (80 FR 9347)): Department of Defense, Department of Energy, Nuclear Regulatory Commission, Office of the Director of National Intelligence, and Department of Homeland Security. We have also coordinated this rule with the other executive branch agencies that are members of the National Industrial Security Program Policy Advisory Committee (NISPPAC) or that release classified information to contractors, licensees, grantees, or certificate holders, and with the industry members of the NISPPAC. These revisions do not change requirements for industry (which are contained in the NISPOM), but instead clarify agency responsibilities.

The NISP is the Federal Government's single, integrated industrial security program. E.O. 12829 (amended in 1993) established the NISP to safeguard classified information in industry and preserve the nation's economic and technological interests. The President issued E.O. 13691, Promoting Private Sector Cybersecurity Information Sharing (February 13, 2015 (80 FR 9347)), and E.O. 13708, Continuance or Reestablishment of Certain Federal Advisory Committees (September 30, 2015 (80 FR 60271)), which further amended E.O. 12829.

E.O. 12829, sec. 102(b), delegated oversight of the NISP to the Director of NARA's Information Security Oversight Office (ISOO). As part of ISOO's responsibilities under E.O. 12829, it is authorized to issue such directives as necessary to implement the E.O., which are binding on agencies. In 2006, ISOO issued, and periodically updates, this regulation, which functions as one of those directives.

This regulation establishes uniform standards throughout the Program, and helps agencies implement requirements in E.O. 12829, as amended (collectively referred to as “E.O. 12829”).

This revision also establishes agency responsibilities for implementing the insider threat provisions of E.O. 13587, Structural Reforms to Improve the Security of Classified Networks and the Responsible Sharing and Safeguarding of Classified Information (October 7, 2011 (76 FR 63811)) within the NISP. However, the regulation does not stand alone; users should refer concurrently to the underlying executive orders for guidance.

Nothing in this regulation supersedes the authority of the Secretary of Energy or the Nuclear Regulatory Commission under the Atomic Energy Act of 1954, as amended (42 U.S.C. 2011, et seq.); the authority of the Director of National Intelligence (or any intelligence community element) under the Intelligence Reform and Terrorism Prevention Act of 2004 (Pub. L. 108-458), the National Security Act of 1947 (50 U.S.C. 401, et seq.), as amended, and E.O. 12333 (December 4, 1981), as amended by E.O. 13355, Strengthened Management of the Intelligence Community (August 27, 2004) and E.O. 13470, Further Amendments to Executive Order 12333 (July 30, 2008); or the authority of the Secretary of Homeland Security, as the Executive Agent for the Classified National Security Information Program established under E.O. 13549, Classified National Security Information Program for State, Local, Tribal, and Private Sector Entities (August 18, 2010), or by E. O. 13284, Amendment of Executive Orders, and Other Actions, in Connection with the Establishment of the Department of Homeland Security, (January 23, 2003).

The Office of Management and Budget (OMB) has reviewed this proposed regulation.

Executive Order 12866, Regulatory Planning and Review, 58 FR 51735 (September 30, 1993), and Executive Order 13563, Improving Regulation and Regulation Review, 76 FR 23821 (January 18, 2011), 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). This rule is not “significant” under Executive Order 12866, sec. 3(f), and is not a major rule as defined in 5 U.S.C. Chapter 8, Congressional Review of Agency Rulemaking. The Office of Management and Budget (OMB) has reviewed this regulation.

This review requires an agency to prepare an initial regulatory flexibility analysis and publish it when the agency publishes the proposed rule. This requirement does not apply if the agency certifies that the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities (5 U.S.C. 603). As required by the Regulatory Flexibility Act, we certify that this rulemaking will not have a significant impact on a substantial number of small entities because it applies only to Federal agencies. This regulation does not establish requirements for entities; those requirements are established in the NISPOM. This rule sets out coinciding requirements for agencies. However, agencies implementing this regulation will do so through contracts with businesses (as well as other agreements with entities) and thus it indirectly affects those entities. Agencies have been applying the requirements and procedures contained in the NISPOM (and, to a lesser extent, contained in this regulation) to entities for 20 years, with the exception of insider threat provisions added to the NISPOM in 2016, and the additions to this regulation do not substantially alter those requirements. Most of the provisions being added to this regulation have applied to entities through the NISPOM; we are simply incorporating the agency responsibilities for those requirements into the regulation. Other revisions to this regulation are primarily administrative, except the new insider threat requirements. The insider threat requirements make minor additions to training, oversight, information system security, and similar functions already being conducted by entities, and thus will not have a significant economic impact on a substantial number of small business entities.

This rule contains information collection activities that are subject to review and approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act. We refer to the following OMB-approved DoD information collection in § 2004.34(b) and (c)(1) of this regulation: OMB control No. 0704-0194, SF 328/CF 328, Certificate Pertaining to Foreign Interests, approved through September 30, 2019. DoD published the information collection notice in the Federal Register in May 2015 (80 FR 27938, May 15, 2015) for public comment, and the notice of OMB review in the Federal Register in July 2016 (81 FR 47790, July 22, 2016), providing a second opportunity for public comment.

Review under Executive Order 13132 requires that agencies review regulations for federalism effects on the institutional interest of states and local governments, and, if the effects are sufficiently substantial, prepare a Federal assessment to assist senior policy makers. This rule will not have any direct effects on State and local governments within the meaning of the Executive Order. Therefore, this rule does not include a federalism assessment.

This final rule is not subject to the requirements of Executive Order 13771 because this final rule is related to agency organization, management, or personnel.

I. Table of Abbreviations CFR Code of Federal Regulations COTP Captain of the Port Sector Ohio Valley DHS Department of Homeland Security FR Federal Register MM Mile marker NPRM Notice of proposed rulemaking §  Section U.S.C. United States Code II. Background Information and Regulatory History

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(3)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because publishing an NPRM would be impracticable and contrary to the public interest. On May 1, 2018, a towing vessel struck the I-24 Bridge near mile marker (MM) 940.8, causing 12 barges to break away. One barge sank near MM 940.8, and another sank near MM 942.5 on the left-descending bank. This safety zone must be established immediately to protect people and vessels associated with and resulting from the hazard to navigation created by the sunken barges and we lack sufficient time to provide a reasonable comment period and then consider those comments before issuing this rule. This safety zone includes closures and navigation restrictions and requirements that are vital to maintaining safe navigation on the Ohio River during the recovery of the sunken barges. Therefore, delaying the effective date for this emergency safety zone to complete the NPRM process would also be contrary to the public interest as it would delay the safety measures vital to safe navigation.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register. Delaying the effective date of this rule would be contrary to public interest because immediate action is needed to protect personnel, vessels, and the marine environment from potential hazards created by the sunken barges.

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Sector Ohio Valley (COTP) has determined that potential hazards associated with the sunken barges will be a safety concern for anyone within MM 939.8 to MM 943.0 of the Ohio River, starting on May 1, 2018, and continuing 24 hours daily through 11:59 p.m. on May 7, 2018. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone while the sunken barges are being recovered.

The Coast Guard is establishing a temporary emergency safety zone for all navigable waters of the Ohio River from MM 939.8 and MM 943.0, extending the entire width of the river. Entry is prohibited for all traffic beginning on May 1, 2018 and will continue to be prohibited through midnight on May 7, 2018 or until the hazard has been mitigated. The COTP will terminate the enforcement of this safety zone before May 7, 2018, if the sunken barges have been recovered. Entry into this safety zone is prohibited unless authorized by the COTP or his designated representative. A designated representative is a commissioned, warrant, or petty officer of the U.S. Coast Guard assigned to units under the operational control of USCG Sector Ohio Valley.

Requests for entry will be considered and reviewed on a case-by-case basis. The COTP may be contacted by telephone at 502-779-5422 or can be reached by VHF-FM channel 16. Persons and vessels permitted to enter this safety zone must transit at their slowest safe speed and comply with all lawful directions issued by the COTP or the designated representative.

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

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

This determination is based on the limited size, location, and duration the safety zone, and the time of year. This safety zone will restrict vessel traffic from entering or transiting within a 3.2 mile area of navigable waterways on the Ohio River between MM 939.8 and MM 943.0. Moreover, the Coast Guard will issue Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone, and the rule allows vessels to seek permission to enter the zone.

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

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

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves an emergency safety zone lasting less than one week that will prohibit entry on a 3.2 mile stretch of the Ohio River during recovery of sunken barges. It is categorically excluded from further review under paragraph L60(c) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. Because this safety zone is established in response to an emergency situation and is less than one week in duration, a Record of Environmental Consideration (REC) is not required. Should this emergency situation require a safety zone lasting longer than one week, a REC will be made available as 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 165 as follows:

The Coast Guard will enforce the Marinette Logging and Heritage Festival Fireworks safety zone listed as item (e)(50) in Table 165.929 of 33 CFR 165.929 from 9 p.m. through 11 p.m. on July 14, 2018 on all waters of the Menominee River, in the vicinity of Stephenson Island, within the arc of a circle with a 900-foot radius from the fireworks launch site in position 45°06.232′ N, 087°37.757′ W (NAD 83). Entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Lake Michigan or a designated on-scene representative.

This notice of enforcement is issued under authority of 33 CFR 165.929, Safety Zones; Annual events requiring safety zones in the Captain of the Port Lake Michigan zone, and 5 U.S.C. 552(a). In addition to this publication in the Federal Register, the Coast Guard plans to provide the maritime community with advance notification for the enforcement of this safety zone via Broadcast Notice to Mariners or Local Notice to Mariners. The Captain of the Port Lake Michigan or a designated representative will inform the public through a Broadcast Notice to Mariners of any changes in the planned schedule. The Captain of the Port Lake Michigan or a representative may be contacted via Channel 16, VHF-FM., or via telephone (414) 747-7182

I. Table of Abbreviations CFR Code of Federal Regulations COTP Captain of the Port Marine Safety Unit Port Arthur DHS Department of Homeland Security FR Federal Register KCS Kansas City Southern Railroad Company NPRM Notice of proposed rulemaking § Section U.S.C. United States Code VTS Vessel Traffic Service II. Background Information and Regulatory History

On April 19, 2018, the Coast Guard was notified that the wood fendering systems designed to protect bridge support columns of the Kansas City Southern Railroad Company's bridge (KSC) from strikes by vessels transiting under the bridge had been damaged or destroyed by Hurricane Harvey. The south bank column protection fenders are missing and the north bank column protection fenders are severely damaged. KCS indicated that strikes to the support columns could compromise the bridge structure.

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(3)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable. The fendering systems protecting the bridge from strikes by passing marine traffic are missing or severely damaged and we must establish this safety zone immediately to protect the bridge and those persons that use the bridge. The Coast Guard is providing an opportunity to comment while the rule is in effect and may amend the rule after it becomes effective, if necessary.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register. Delaying the effective date of this rule would be impracticable and contrary to the public interest because immediate action is needed to respond to potential safety hazards posed by and to passing vessel traffic by and to the unprotected bridge columns supporting the KCS Bridge.

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Marine Safety Unit Port Arthur (COTP) has determined that potential hazards posed by the unprotected bridge columns are a safety concern to the KCS Bridge and to persons and property on or near the bridge. The purpose of this rule is to provide for the safety of the KCS Bridge and persons and property on or near the bridge.

This rule establishes a safety zone from 1 p.m. on May 1, 2018 through midnight on August 31, 2018 until missing and/or damaged fendering systems are repaired or replaced, whichever occurs first. The safety zone will extend 500-feet on either side of the KCS Bridge that crosses the Neches River in Beaumont, TX in approximate location 30° 04′54.8″ N 094°05′29.4″ W. The duration of the zone is intended to protect the bridge support columns as well as persons and property on or near the bridge until the bridge fendering is repaired or replaced. Only vessels less than 65 feet in length and not engaged in towing are authorized to enter the zone, unless otherwise permitted by the COTP or a designated representative are permitted to enter the safety zone.

Persons and vessels not permitted to enter the safety zone must request permission from the COTP or a designated representative. They may be contacted through Vessel Traffic Service (VTS) on channels 65A or 13 VHF-FM, or by telephone at (409) 719-5070.

Permission to transit through the bridge will be based on weather, tide and current conditions, vessel size, horsepower, and availability of assist vessels. All persons and vessels permitted to enter this temporary safety zone shall comply with the lawful orders or directions given to them by COTP or a designated representative.

Intentional or unintentional contact with any part of the bridge or associated structure, including fendering systems, support columns, spans or any other portion of the bridge, is strictly prohibited. Report any contact with the bridge or associated structures immediately to VTS Port Arthur on channels 65A, 13 or 16 VHF-FM or by telephone at (409) 719-5070.

The Coast Guard will inform the public through public of the effective period of this safety zone through VTS Advisories, Broadcast Notices to Mariners (BNMs), Local Notice to Mariners (LNMs), and/or Marine Safety Information Bulletins (MSIBs) as appropriate.

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 as 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 and duration of the safety zone. This rule will only affect certain vessels transiting the upper reaches of the Neches River in Beaumont, TX. The Coast Guard will issue a VTS Advisory concerning the zone, and the rule allows vessels to seek permission to enter the zone.

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

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

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone that will prohibit entry within 500-feet of either side of the KCS Bridge that crosses the Neches River in Beaumont, TX. It is categorically excluded from further review under paragraph L60(d) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Record of Environmental Consideration 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.

We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. The Coast Guard may amend this temporary final rule if we receive comments from the public that indicate that a change is warranted. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion.

We encourage you to submit comments through the Federal eRulemaking Portal at http://www.regulations.gov. If your material cannot be submitted using http://www.regulations.gov, contact the person in the FOR FURTHER INFORMATION section of this document for alternate instructions.

We accept anonymous comments. All comments received will be posted without change to http://www.regulations.gov and will include any personal information you have provided. For more about privacy and the docket, visit http://www.regulations.gov/privacyNotice.

Documents mentioned in this temporary final rule as being available in the docket, and all public comments, will be in our online docket at http://www.regulations.gov and can be viewed by following that website's instructions. Additionally, if you go to the online docket and sign up for email alerts, you will be notified when comments are posted.

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

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

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

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

Under FFDCA section 408(g), 21 U.S.C. 346a(g), any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2017-0294 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before July 6, 2018. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2017-0294, by one of the following methods:

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

• Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001.

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.html. Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at http://www.epa.gov/dockets.

In the Federal Register of October 23, 2017 (82 FR 49022) (FRL-9967-37), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide tolerance petition (PP 6F8531) by International Animal Health Products Pty. Ltd., 18 Healey Circuit, Huntingwood, New South Wales 2148, Australia (in care of SciReg. Inc., 12733 Director's Loop, Woodbridge, VA 22192). The petition requested that 40 CFR part 180 be amended by establishing an exemption from the requirement of a tolerance for residues of Duddingtonia flagrans strain IAH 1297 in or on all raw and processed agricultural commodities. That document referenced a summary of the petition prepared by the petitioner International Animal Health Products Pty. Ltd., which is available in the docket via http://www.regulations.gov. There were no comments received in response to the notice of filing.

EPA changed the commodity to be reflected in the tolerance expression from “in or on all raw and processed agricultural commodities” to “in or on all food commodities.” The reason for this change is explained in Unit VII.B.

Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the exemption is “safe.” Section 408(c)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings but does not include occupational exposure. Pursuant to FFDCA section 408(c)(2)(B), in establishing or maintaining in effect an exemption from the requirement of a tolerance, EPA must take into account the factors set forth in FFDCA section 408(b)(2)(C), which require EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance or tolerance exemption and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue . . . .” Additionally, FFDCA section 408(b)(2)(D) requires that EPA consider “available information concerning the cumulative effects of [a particular pesticide's] . . . residues and other substances that have a common mechanism of toxicity.”

EPA performs a number of analyses to determine the risks from aggregate exposure to pesticide residues. First, for microbial pesticides, EPA determines the pathogenicity and toxicity of the pesticide. Second, EPA examines exposure to the pesticide through food, drinking water, and other exposures that occur as a result of pesticide use in residential settings, as well as other non-occupational exposure to the substance.

Consistent with FFDCA section 408(b)(2)(D), EPA reviewed the available scientific data and other relevant information on Duddingtonia flagrans strain IAH 1297 and considered their validity, completeness, and reliability, as well as the relationship of this information to human risk. EPA also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.

Duddingtonia flagrans is a fungus commonly found worldwide in soils, various plant materials, and animal feces that, in the presence of nematodes, forms looped adhesive network traps in animal feces in pasture when the diet of grazing animals is supplemented with the fungus' chlamydospores or the chlamydospores are acquired naturally from soil or plant material while the animals graze. Duddingtonia flagrans strain IAH 1297 chlamydospores can survive passage through the rumen and gastrointestinal tract after ingestion by grazing animals and then germinate on pasture (i.e., the chlamydospores do not germinate in animals and cannot grow at normal body temperature or under anaerobic conditions). Nematode eggs excreted by pastured or wild animals hatch in the presence of Duddingtonia flagrans strain IAH 1297. Thereafter, Duddingtonia flagrans strain IAH 1297 passively traps nematodes, penetrates the nematode cuticle and kills them within 4-8 hours, occupies the nematode body with hyphae within 20-36 hours, and consumes nematodes within 48 hours, thus breaking the infection excretion and reinfection cycle of nematodes. Duddingtonia flagrans strain IAH 1297's use as a feed-through nematicide comes as growing anthelmintic (antiparasitic drug) resistance and general lack of new drug options to treat affected animals is becoming a concern.

All applicable mammalian toxicology data requirements supporting the request for an exemption from the requirement of a tolerance for residues of Duddingtonia flagrans strain IAH 1297 in or on all food commodities have been fulfilled with data submitted by the petitioner or data waiver requests that have been granted by EPA. The toxicity tests (acute oral and dermal) and the primary dermal irritation test that address potential routes of exposure to the active ingredient are all classified in Toxicity Category IV (see section II of Ref. 3) and reveal no toxicity or irritation attributed to Duddingtonia flagrans strain IAH 1297. Moreover, during typical toxicity/pathogenicity testing done with microbial pesticides, Duddingtonia flagrans strain IAH 1297 showed no toxicity, pathogenicity, or infectivity via the pulmonary route of exposure. The conclusions and classifications from all toxicological information associated with the active ingredient and submitted by the petitioner are briefly described below.

1. Acute oral toxicity—rat (Harmonized Guideline 870.1100; Master Record Identification Number (MRID) No. 503887-01). An acceptable acute oral toxicity study demonstrated that Duddingtonia flagrans strain IAH 1297 is not toxic to female rats when dosed via the oral route at 5,000 milligrams per kilogram (mg/kg) of bodyweight. The oral median lethal dose (LD50), which is a statistically derived single dose that can be expected to cause death in 50% of test animals, was greater than 5,000 mg/kg of bodyweight for female rats (Toxicity Category IV). (Refs. 1 and 2).

2. Acute oral toxicity/pathogenicity (Harmonized Guideline 885.3050; MRID Nos. 501117-14 and 501117-27). An acceptable scientific rationale was submitted by the petitioner; therefore, EPA waived acute oral toxicity/pathogenicity testing for Duddingtonia flagrans strain IAH 1297. An acute oral toxicity study conducted on female rats (MRID No. 503887-01) demonstrated that Duddingtonia flagrans strain IAH 1297 was not toxic (LD50 greater than 5,000 mg/kg; Toxicity Category IV). Further, field studies were conducted on animal groups in Australia under direction of veterinarians. A 56-day study using young cattle demonstrated that a test substance containing Duddingtonia flagrans strain IAH 1297 had no discernible health effects when given with feed at 125 grams per 100 kilograms of bodyweight per day (representing 10X the label use rate). A 42-day study using Merino ewes had no findings attributable to treatment with a test substance containing Duddingtonia flagrans strain IAH 1297, and both groups had statistically similar weight gains throughout at 1 kilogram per group per day (representing 5X the label use rate). A 56-day study using horses demonstrated that a test substance containing Duddingtonia flagrans strain IAH 1297 had no discernible health effects when given with feed at 1 gram per kilogram bodyweight per day (representing 10X the label use rate). No signs of any infection were observed during these lengthy studies. EPA believes these data, when taken together, indicate that this fungus would not be toxic, infective, and/or pathogenic through the oral route of exposure and that further testing is not necessary. (Refs. 1 and 2).

3. Acute pulmonary toxicity/pathogenicity—rat (Harmonized Guideline 885.3150; MRID Nos. 501117-15, 501117-16, 505317-00, and 505318-00). An acceptable acute pulmonary toxicity/pathogenicity study performed with Duddingtonia flagrans strain IAH 1297 did not induce signs of toxicity, infectivity, or pathogenicity when administered to rats as a single, intratracheal dose of 5.8 × 104 spores per animal. Additionally, clearance was established by day 42 of the test. (Refs. 1, 2, and 4).

4. Acute injection toxicity/pathogenicity (Harmonized Guideline 885.3200; MRID No. 501117-17). An acceptable scientific rationale was submitted by the petitioner; therefore, EPA waived acute injection toxicity/pathogenicity testing for Duddingtonia flagrans strain IAH 1297. Intratracheal pulmonary administration of the highest possible dose of Duddingtonia flagrans strain IAH 1297 did not show any sign of infection or pathogenicity (MRID No. 501117-16). Lengthy oral dosing of cattle, sheep, and horses demonstrated no effects at doses of 5-10X the label use rates (MRID No. 501117-27), and an oral dose of 5,000 mg/kg of bodyweight to female rats also demonstrated no effects (MRID No. 503887-01). Further, injection is expected to result in minimal breakdown of spores, and the relatively large size of the spores makes injection testing impractical. The lack of growth when Duddingtonia flagrans strain IAH 1297 was tested at 37°C (oral dosing) also allays the need to test infectivity and pathogenicity by the injection route. Duddingtonia flagrans strain IAH 1297 has not shown any ability to germinate or grow when mammals were exposed by various other routes, and injection of these large spores is not expected to result in infection even if possible to perform the test. Thus, EPA believes these data and information, when taken together, indicate that this fungus would not be toxic, infective, and/or pathogenic through the injection route of exposure and that further testing is not necessary. (Refs. 1 and 2).

5. Acute dermal toxicity—rat (Harmonized Guideline 870.1200; MRID No. 501113-05). An acceptable acute dermal toxicity study conducted using a test substance containing Duddingtonia flagrans strain IAH 1297 demonstrated that the fungus was not toxic to rats when dosed at 5,000 mg/kg of bodyweight for 24 hours to a body surface area of approximately 10 percent. Following exposure, animals were observed for 14 days. All animals survived, gained weight, appeared active and healthy, and had no signs of dermal irritation throughout the study. No observable abnormalities were found in any animal at necropsy. The dermal LD50 for male and female rats combined was greater than 5,000 mg/kg of bodyweight (Toxicity Category IV). (Refs. 1 and 2).

6. Primary dermal irritation—rabbit (Harmonized Guideline 870.2500; MRID No. 501113-07). An acceptable primary dermal irritation study conducted using a test substance containing Duddingtonia flagrans strain IAH 1297 demonstrated that the fungus was non-irritating to the skin of rabbits. No dermal erythema, edema, or irritation was noted on any animal during the study. The primary irritation index was 0.0, and all animals gained weight normally during the study (Toxicity Category IV). (Refs. 1 and 2).

In examining aggregate exposure, FFDCA section 408 directs EPA to consider available information concerning exposures from the pesticide residue in food and all other non-occupational exposures, including drinking water from ground water or surface water and exposure through pesticide use in gardens, lawns, or buildings (residential and other indoor uses).

1. Food exposure. The proposed use of Duddingtonia flagrans strain IAH 1297 is as a feed-through product for grazing animals such as sheep, goats, cattle, horses, deer, alpacas and zoo animals. As Duddingtonia flagrans is naturally present in soils and commonly found in various plant materials, it is likely that grazing animals have natural background exposure to the fungus. No adverse effects have been reported as a result of these types of exposures. Studies performed with Duddingtonia flagrans strain IAH 1297 have not shown that this strain has the ability to germinate or grow when mammals are exposed by various routes, including the oral route. Further, no foodborne disease outbreaks or cases of mammalian toxin production from Duddingtonia flagrans have been reported. As a result, dietary exposure to Duddingtonia flagrans strain IAH 1297 through agricultural commodities is not anticipated from use of the pesticide products as the spores and/or components of the spores are unlikely to remain in the treated animals. Should Duddingtonia flagrans strain IAH 1297 be present in food, however, supporting toxicological data and information indicate that no toxicity, pathogenicity, or infectivity is likely to occur with this type of exposure resulting from the use of this microbial pesticide when applied in accordance with label directions and good agricultural practices.

2. Drinking water exposure. Since Duddingtonia flagrans is naturally present in the environment and Duddingtonia flagrans strain IAH 1297 will be present in the feces of treated animals, exposure to surface and possibly groundwater can be expected. Water treatment processes should remove any Duddingtonia flagrans or Duddingtonia flagrans strain IAH 1297 present in these water sources, and no adverse effects have been reported from exposure to Duddingtonia flagrans through drinking water. As a result, dietary exposure to Duddingtonia flagrans strain IAH 1297 through drinking water is not anticipated from use of the pesticide products as the spores and/or components of the spores are unlikely to survive the water treatment process. Should Duddingtonia flagrans strain IAH 1297 be present in water, however, supporting toxicological data and information indicate that no toxicity, pathogenicity, or infectivity is likely to occur with this type of exposure resulting from the use of this microbial pesticide when applied in accordance with label directions and good agricultural practices.

The pesticide products containing Duddingtonia flagrans strain IAH 1297 are proposed for agricultural use sites and zoos. As a result, residential exposures resulting from use of these products are not anticipated. Nevertheless, Duddingtonia flagrans strain IAH 1297 was not toxic or irritating by dermal exposure and was not toxic, infective, or pathogenic by pulmonary exposure. Further, the products are mixed into feed ingredients at 2-34.6% so it is not in pure form, and the spore size is at the upper end of the respirable range so human exposures to Duddingtonia flagrans strain IAH 1297 by inhalation from contact with animal feed supplements is unlikely.

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

Duddingtonia flagrans strain IAH 1297 is not toxic and does not have a common mechanism of toxicity with other substances. Consequently, FFDCA section 408(b)(2)(D)(v) does not apply.

For all of the reasons discussed previously, EPA concludes that there is reasonable certainty that no harm will result to the U.S. population, including infants and children, from aggregate exposure to residues of Duddingtonia flagrans strain IAH 1297. This includes all anticipated dietary exposures and all other exposures for which there is reliable information.

FFDCA section 408(b)(2)(C) provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure, unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the Food Quality Protection Act Safety Factor. In applying this provision, EPA either retains the default value of 10X or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor. As discussed above, EPA has concluded that Duddingtonia flagrans strain IAH 1297 is not toxic, pathogenic, or infective to mammals, including infants and children. Because there are no threshold levels of concern to infants, children, and adults when Duddingtonia flagrans strain IAH 1297 is used in accordance with label directions and good agricultural practices, EPA concludes that no additional margin of safety is necessary to protect infants and children.

An analytical method is not required for enforcement purposes because EPA is establishing an exemption from the requirement of a tolerance without any numerical limitation.

One modification has been made to the requested tolerance exemption. EPA is changing “in or on all raw and processed agricultural commodities” to “in or on all food commodities” to align with the terminology the Agency currently uses when establishing tolerance exemptions for residues of other like active ingredients.

EPA concludes that there is a reasonable certainty that no harm will result to the U.S. population, including infants and children, from aggregate exposure to residues of Duddingtonia flagrans strain IAH 1297. Therefore, an exemption from the requirement of a tolerance is established for residues of Duddingtonia flagrans strain IAH 1297 in or on all food commodities when used in accordance with label directions and good agricultural practices.

This action establishes a tolerance exemption under FFDCA section 408(d) in response to a petition submitted to EPA. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001), or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

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

This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes. As a result, this action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, EPA has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, EPA has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501 et seq.).

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

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, 40 CFR chapter I is amended as follows:

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

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

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

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2017-0249 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before July 6, 2018. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2017-0249, by one of the following methods:

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

• Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001.

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.html. Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at http://www.epa.gov/dockets.

In the Federal Register of September 15, 2017 (82 FR 43352) (FRL-9965-43), EPA issued a document pursuant to FFDCA section 408, 21 U.S.C. 346a, announcing the filing of a pesticide petition (PP IN-11048) by Technology Services Group, on behalf of, Attune Agriculture, LLC, 10552 Philadelphia Road, White Marsh, MD 21162. The petition requested that 40 CFR 180.920 be amended by establishing an exemption from the requirement of a tolerance for residues of konjac glucomannan (also referred to as konjac mannan) (CAS Reg. No. 37220-17-0) when used as an inert ingredient (thickener) in pesticide formulations applied to growing crops only at a maximum use level of 1.0%. That document referenced a summary of the petition prepared by Technology Services Group, on behalf of, Attune Agriculture, LLC, the petitioner, which is available in the docket, http://www.regulations.gov. A comment was received on the notice of filing. EPA's response is discussed in Unit V.C.

Inert ingredients are all ingredients that are not active ingredients as defined in 40 CFR 153.125 and include, but are not limited to, the following types of ingredients (except when they have a pesticidal efficacy of their own): Solvents such as alcohols and hydrocarbons; surfactants such as polyoxyethylene polymers and fatty acids; carriers such as clay and diatomaceous earth; thickeners such as carrageenan and modified cellulose; wetting, spreading, and dispersing agents; propellants in aerosol dispensers; microencapsulating agents; and emulsifiers. The term “inert” is not intended to imply nontoxicity; the ingredient may or may not be chemically active. Generally, EPA has exempted inert ingredients from the requirement of a tolerance based on the low toxicity of the individual inert ingredients.

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

EPA establishes exemptions from the requirement of a tolerance only in those cases where it can be clearly demonstrated that the risks from aggregate exposure to pesticide chemical residues under reasonably foreseeable circumstances will pose no appreciable risks to human health. In order to determine the risks from aggregate exposure to pesticide inert ingredients, the Agency considers the toxicity of the inert in conjunction with possible exposure to residues of the inert ingredient through food, drinking water, and through other exposures that occur as a result of pesticide use in residential settings. If EPA is able to determine that a finite tolerance is not necessary to ensure that there is a reasonable certainty that no harm will result from aggregate exposure to the inert ingredient, an exemption from the requirement of a tolerance may be established.

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

EPA has evaluated the available toxicity data and considered their validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. Specific information on the studies received and the nature of the adverse effects caused by konjac glucomannan as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies are discussed in this unit.

Konjac glucomannan is a non-digestible polysaccharide with a large molecular weight (i.e., 200,000-2,000,000 daltons). A substance of this size would be unlikely to penetrate intact human skin or gastrointestinal tract. Because of its large molecular weight and the body's inability to digest it, it is unlikely that the body will absorb konjac glucomannan. This is supported by the studies below.

Often in the literature, konjac flour and konjac glucomannan are used interchangeably. The European Commission defines konjac flour as the unpurified raw product from the root of the perennial plant Amorphophallus konjac, and konjac glucomannan refers to the product that has been washed and extracted using water-containing ethanol. The majority of the studies refer to the use of konjac flour as the test substance. EPA has concluded that it is appropriate to rely on those studies since the two substances are essentially the same in molecular weight and origin thus expected to present the same toxicological profile.

Konjac glucomannan exhibits low levels of acute toxicity. Acute studies in rats and mice show oral LD50s of >2,800 mg/kg to >5,000 mg/kg. The dermal LD50 in rabbits is >2,000 mg/kg. Konjac glucomannan was not shown to be a skin irritant or dermal sensitizer and shows minimal eye irritation.

Asthmatic responses in humans (e.g., Konjac asthma or konnyaku asthma) exposed to airborne powders produced during commercial manufacture of konjac flour from konjac tubers has been reported. It has been associated with the inhalation of dust produced during the production of konjac flour to make konnyaku, a traditional jelly-like Asian food prepared from glucomannan. An inhalation exposure study with guinea pigs demonstrated that respiratory hypersensitivity to food grade konjac flour can be induced following repeated inhalation exposures. According to a more recent study, however, the antigen in konjac flour responsible for respiratory sensitization is actually a protein and not glucomannan.

Several repeat-dose toxicity studies conducted on Sprague-Dawley rats are available for konjac flour: A four-week dietary study, a twelve-week feeding study, an 18-month dietary study, and an 8-week oral study with pregnant cats. Two carcinogenicity studies are also available.

A four-week dietary exposure study was conducted with Sprague-Dawley rats. Groups of four male rats were fed either 5% cellulose (control), 10% cellulose, 10% pectin or 10% konjac (~5,000 mg/kg/day) for 28 days. Compared to the control group, consumption of 10% konjac in the diet decreased the digestion and absorption of protein in the large intestine which resulted in a decrease in body weight gain. Because of the high dosing it is not certain if the effect seen is the result of excessive dosing or from the toxicity of chemical.

In a twelve-week feeding study, groups of 12/sex, five week old Sprague-Dawley rats received the basal diet (a 1% cholesterol) or konjac meal supplementation at 2.5, 5.0 or 10% of the diet (~1,250, 2,500, or 5,000 mg/kg/day). Changes were seen on gross examination of the liver. The full study report was not available but according to the Food and Agriculture Organization/World Health Organization (FAO/WHO) Joint Expert Committee on Food Additives (JECFA) report, the author suggests the reason for this is that konjac flour binds with bile acids and depresses reabsorption in the intestines which consequently reduces the accumulation of lipids in the liver. All treated groups had reduced total cholesterol in comparison with the high-cholesterol control group. Body-weight gain was slightly but statistically significantly lower in males fed 10% refined konjac meal than in the other groups during the first eight weeks. Food intake was also reduced in this group. Therefore, the NOAEL is 5% of the diet (~2,500 mg/kg/day) with a LOAEL of 10% (~5,000 mg/kg/day) based on decreased body weight gain in males.

An 18-month dietary study assessed groups of 15 Sprague-Dawley rats fed a basal diet or a diet with 1.0% konjac flour (~500 mg/kg/day). There was no difference in body weight gain, absolute or relative organ weights or femur weights and no evidence of treatment-related pathological changes or effects on calcium and phosphorus metabolism. Treated male rats had significantly lower serum cholesterol levels at 9 and 18 months and lower triglycerides at 3 and 9 weeks but not 12 months. In female rats, the only difference from the control was a lower triglyceride level at 18 months. The liver of treated rats had smaller more lightly stained nuclei and reduced bile duct proliferation in the portal area. Certain cells (not specified) of treated rats displayed fewer signs of senescence compared to controls. There was no evidence that 1% konjac flour in the diet (~500 mg/kg/day) was toxic to rats.

Two groups of 15 adult pregnant British short-hair cats were fed diets containing either 2% carob gum or 2% konjac flour (0.98 to 3.08 mg/kg/day prior to parturition) for eight weeks. There were no significant changes in body weight between controls and treated animals. Biochemical and hematological parameters were reported to be within normal ranges throughout the study. Mean birth weight of kittens born to control cats was statistically significantly lower (p >0.01) than kittens born to konjac fed cats; however, the standard deviation was within the range of controls and therefore, these effects are not considered adverse. All cats in the study completed lactation and reared successfully.

There is no evidence that konjac glucomannan suppresses or otherwise harms immune function in mammalian systems. No signs of neurotoxicity were reported in the studies of acute or repeat-dose oral exposure to konjac glucomannan.

Genotoxicity tests of konjac flour include an Ames test, a mouse lymphoma assay, and an in vivo mouse micronucleus test. All genotoxicity assays were negative. Konjac was not mutagenic in the Ames test and did not induce mutations in cultured mouse lymphoma cells or cause clastogenicity in the in vivo micronucleus study in the presence or absence of S-9 activation.

Konjac glucomannan is not expected to be carcinogenic. In addition to showing negative results in genotoxicity and mutagenicity tests, a 20-week and a 1-year feeding study were conducted and no evidenced of carcinogenicity was observed. In fact, the incidence of colon tumors in 1,2-dimethylhydrazine DMH treated animals was significantly reduced with konjac glocomannan consumption. Similarly, spontaneous liver tumors in C3H/He mice were inhibited by maintaining the mice on a diet containing 10% glucomannan.

No toxicological endpoint of concern has been identified for konjac glucomannan. Based on the available information as discussed in Unit IV.A., it is concluded that there is no end point of concern identified and therefore, quantitative risk assessment is not warranted.

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to konjac glucomannan, EPA considered exposure under the proposed exemption from the requirement of a tolerance. EPA assessed dietary exposures from konjac glucomannan in food as follows:

Dietary exposure (food and drinking water) to konjac glucomannan may occur following ingestion of foods with residues from treated crops. Additional dietary exposure may result from the use of konjac glucomannan as a food additive; it has been used as a thickener, texture stabilizer, emulsifier, and gelling agent in foods and beverages, as well as agriculture and animal feed. However, a quantitative dietary exposure assessment was not conducted since a toxicological endpoint for risk assessment was not identified.

2. Dietary exposure from drinking water. Since a hazard endpoint of concern was not identified for the acute and chronic dietary assessment, a quantitative dietary exposure risk assessment for drinking water was not conducted, although exposures may be expected from use on food crops.

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., textiles (clothing and diapers), carpets, swimming pools, and hard surface disinfection on walls, floors, tables). Although currently, there are no uses for konjac glucomannan in products that might result in residential exposure, it is possible that some may be requested in the future. Additional non-dietary exposure may occur from use of konjac glucomannan in pharmaceutical products and cosmetics. Based on the discussion above, a quantitative residential exposure assessment for konjac glucomannan was not conducted.

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

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

Section 408(b)(2)(C) requires EPA to retain an additional tenfold margin of safety in the case of threshold effects to ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. As noted in Unit IV.B., there is no indication of threshold effects being caused by konjac glucomannan. Therefore, this requirement does not apply to the present analysis. Moreover, due to the lack of any toxicological endpoints of concern, EPA is conducting a qualitative assessment of konjac glucomannan, which does not use safety factors for assessing risk, and no additional safety factor is needed for assessing risk to infants and children.

Taking into consideration all available information on konjac glucomannan, EPA has determined that there is a reasonable certainty that no harm to any population subgroup will result from aggregate exposure to konjac glucomannan. Therefore, EPA concludes that the exemption from the requirement of a tolerance as requested by the petitioner—for residues of konjac glucomannan on growing crops when used as an inert ingredient (thickener), in pesticide formulations at a concentration not to exceed 1.0% by weight of the pesticide formulation is safe under FFDCA section 408.

An analytical method is not required for enforcement purposes since the Agency is not establishing a numerical tolerance for residues of konjac glucomannan in or on any food commodities. EPA is establishing limitations on the amount of konjac glucomannan that may be used in pesticide formulations applied to growing crops. These limitations will be enforced through the pesticide registration process under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C. 136 et seq. EPA will not register any pesticide formulation for use on growing crops for sale or distribution that exceeds 1% by weight of konjac glucomannan.

One comment was received in response to the Notice of Filing. The comment was received from a private citizen who opposed the authorization to sell any pesticide that leaves a residue on food. The Agency recognizes that some individuals believe that no residue of pesticides should be allowed. However, under the existing legal framework provided by section 408 of the Federal Food, Drug and Cosmetic Act (FFDCA) EPA is authorized to establish pesticide tolerances or exemptions where persons seeking such tolerances or exemptions have demonstrated that the pesticide meets the safety standard imposed by the statute. EPA has evaluated all the available data and concluded that there is a reasonable certainty of no harm from the limited use of konjac glucomannan as inert ingredients in pesticide formulations. The commenter has not provided any information supporting a conclusion that this exemption would not be safe.

Therefore, an exemption from the requirement of a tolerance is established under 40 CFR 180.920 for konjac glucomannan (CAS Reg. No. 37220-17-0) when used as an inert ingredient (thickener) in pesticide formulations applied to growing crops only at a concentration not to exceed 1.0% by weight of the pesticide formulation.

This action establishes an exemption from the requirement of a tolerance under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001); Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997); or Executive Order 13771, entitled “Reducing Regulations and Controlling Regulatory Costs” (82 FR 9339, February 3, 2017). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq.), nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

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

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

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

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, 40 CFR chapter I is amended as follows:

This is a summary of the Commission's Order, DA 18-282, released on March 22, 2018. The complete text of this document is available for inspection and copying during normal business hours in the FCC Reference Information Center, Portals II, 445 12th Street SW, Room CY-A257, Washington, DC 20554. To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to [email protected] or call the Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY). The complete text of this document is also available on the Commission's website at http://www.fcc.gov.

1. NTIA designated forty channels for interoperability communications among federal agencies and between federal agencies and non-federal entities with which federal agencies have a requirement to interoperate. A non-federal public safety entity may communicate on the federal interoperability channels for joint federal/non-federal operations, provided it first obtains a license from the Commission authorizing use of the channels.

2. In September 2015, NTIA streamlined the process which enables non-federal agencies to obtain an FCC license to use the federal interoperability channels. Under the new process, the Statewide Interoperability Coordinator (SWIC) or state appointed official in each state is responsible for coordinating access to the federal interoperability channels by non-federal public safety entities. Each SWIC/official will sign an agreement with a federal user with a valid assignment. The agreement may specify which federal interoperability channels are available for use in a particular state or territory and establish the conditions for their use by non-federal public safety entities.

3. Once the federal-state agreement for a given state is signed, non-federal public safety entities in that state may file an application with the Commission to license the designated federal interoperability channels under the new streamlined process. Before filing with the Commission, a non-federal public safety entity seeking to license mobile and portable units on the federal government interoperability channels must first obtain written concurrence from its SWIC/official. The non-federal agency must then include a copy of the written concurrence with its license application to the Commission.

4. NTIA's streamlined process eliminates the need for non-federal public safety entities to obtain written certification from a federal government agency and for the Commission to refer applications for the federal interoperability channels to the Interdepartment Radio Advisory Committee's (IRAC) Frequency Assignment Subcommittee for approval.

5. On March 22, 2018, the Public Safety and Homeland Security Bureau and the Office of Engineering and Technology, on delegated authority, jointly released an Order amending §§ 2.102(c)(4) and 90.173(c) and adopting new § 90.25 in order to conform the Commission's rules to the new streamlined process established by NTIA.

6. The requirement in new § 90.25 that non-federal public safety agencies obtain written concurrence from the SWIC/official constitutes a new information collection subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be submitted to the Office of Management and Budget (OMB) for review and public comment under section 3507(d) of the PRA.

7. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198 (see 44 U.S.C. 3506(c)(4)), the Commission's Public Safety and Homeland Security Bureau will seek specific comment on how it might further reduce the information collection burden for small business concerns with fewer than 25 employees.

8. The Commission will not send a copy of this Order pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A), because the adopted rules are rules of agency organization, procedure, or practice that do not “substantially affect the rights or obligations of non-agency parties.

9. Accordingly, it is ordered, pursuant to sections 4(i), 303(c) and 332 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 303(c), and 332, this order is hereby adopted.

10. It is further ordered that the rules and requirements adopted herein will become effective June 6, 2018, except for new § 90.25 that contains a new or modified information collection requirement that requires review by the OMB under the PRA. Section 90.25 will become effective after OMB review and approval, on the effective date specified in a notice that the Commission will publish in the Federal Register announcing such approval and effective date.

11. This action is taken under delegated authority pursuant to section 155(c) of the Communications Act of 1934, as amended, 47 U.S.C. 155(c) and §§ 0.31, 0.191, 0.241, and 0.392 of the Commission's rules, 47 CFR 0.31, 0.191, 0.241, and 0.392.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR parts 2 and 90 as follows.

In a January 23, 2018, Notice of Availability (83 FR 3108), NMFS announced that the Council submitted Amendment 4 to the Secretary of Commerce for approval, and requested comments on Amendment 4. The 60-day public comment period ended on March 26, 2018. NMFS approved Amendment 4 to the HMS FMP on April 24, 2018.

On February 27, 2018, NMFS published a proposed rule in the Federal Register (83 FR 8414) to implement Amendment 4 by revising regulations at 50 CFR 660.709 contingent upon approval of Amendment 4. The proposed rule contains additional background information on Amendment 4. The 45-day public comment period for the proposed rule closed on April 13, 2018.

Amendment 4 is intended to better align the Council's biennial management cycle for HMS with the timing of international stock assessments and stock status determinations for these species. The changes to the current biennial management cycle included in Amendment 4 and implemented by this rule would allow the Council to streamline domestic and international management activities, such as stock assessment and biological reference point reviews, and to better align schedules to meet statutory timelines in section 304(e) and (i) of the MSA (16 U.S.C. 1854(e) and (i)) for making recommendations for domestic regulations and international measures when stocks are determined to be overfished or subject to overfishing. Additionally, this rule would ensure that the meeting schedule is not codified in regulations, thus allowing the Council to make changes to the schedule for its meetings in the biennial management cycle, consistent with the HMS FMP, without needing to seek a change in the regulatory language. Allowing the Council to make this type of adjustment without seeking a regulatory change improves the efficiency with which future changes to the biennial management cycle can be implemented.

This rule amends 50 CFR 660.709 to remove a specific schedule for the Council's biennial management cycle (i.e., during June, September, and November Council meetings) from codified text and replace it with a reference to a biennial management cycle schedule specified in the FMP (i.e., during September, November, and March Council meetings under Amendment 4). Thus, future schedule changes to the Council's biennial management cycle will not require a rulemaking. The rule also provides the Council's Science and Statistical Committee greater discretion over whether to review, and make recommendations on, the estimates in the annual stock assessment and fishery evaluation report.

NMFS did not make any changes in this final rule to the regulatory text of the proposed rule.

A total of 13 comments were received in response to either the Notice of Availability for the Amendment or the proposed rule. All comments remarked solely on issues beyond the scope of the proposed rule and lacked any specific remarks on NMFS' decision to approve, disapprove, or partially approve the amendment. Because 10 of the comments contained inappropriate content, NMFS made only three of the comments available on the Federal eRulemaking Portal (see ADDRESSES).

The Administrator of the West Coast Region, NMFS, determined that Amendment 4 to the HMS FMP and this final rule are necessary for the conservation and management of U.S. West Coast HMS fisheries and are consistent with the MSA and other applicable laws.

This final rule has been determined to be not significant for purposes of Executive Order 12866.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration during the proposed rule stage that this action would not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. No comments were received regarding this certification. As a result, a regulatory flexibility analysis was not required and none was prepared.

There are no new collection-of-information requirements associated with this action that are subject to the Paperwork Reduction Act; however, existing collection-of-information requirements associated with the HMS FMP still apply. These requirements have been approved by the Office of Management and Budget (OMB control numbers 0648-0204, 0648-0223, 0648-0361, 0648-0498). Notwithstanding any other provision of the law, no person is required to respond to, and no person shall be subject to penalty for failure to comply with, a collection-of-information subject to the requirements of the PRA, unless that collection-of-information displays a currently valid OMB control number.

For the reasons set out in the preamble, 50 CFR part 660 is amended as follows: