        ENVIRONMENTAL PROTECTION AGENCY
        40 CFR Part 63
        [OAR-2003-0161, FRL-7987-6]
        RIN 2060-AK23
        National Emission Standards for Magnetic Tape Manufacturing Operations

          AGENCY:
          Environmental Protection Agency (EPA).

          ACTION:
          Proposed action; request for public comment.

          SUMMARY:
          On December 15, 1994, we promulgated national emission standards for hazardous air pollutants (HAP) from magnetic tape manufacturing operations (59 FR 64580). The national emission standards limit and control HAP that are known or suspected to cause cancer or have other serious health or environmental effect.
          Section 112(f)(2) of the Clean Air Act (CAA) directs EPA to assess the risk remaining (residual risk) after the application of national emission standards controls and to promulgate more stringent standards, if necessary, to protect public health with an ample margin of safety and to prevent adverse environmental effect. Also, section 112(d)(6) of the CAA requires EPA to review and revise the national emission standards, as necessary, taking into account developments in practices, processes, and control technologies. Based on our findings from the residual risk and technology review, we are proposing no further action at this time to revise the national emission standards. Today's proposed action requests public comments on the residual risk and technology review for the national emission standards.

          DATES:

            Comments. Comments must be received on or before December 8, 2005.

            Public Hearing. If anyone contacts EPA requesting to speak at a public hearing by November 14, 2005, a public hearing will be held approximately 30 days following publication of this notice in the Federal Register.

          ADDRESSES:
          Submit your comments, identified by Docket ID No. OAR-2003-0161, by one of the following methods:
          • Federal eRulemaking Portal: http://www.regulations.gov. Follow the on-line instructions for submitting comments.
          • Agency Web site: http://www.epa.gov/edkpub/index.jsp. EDOCKET, EPA's electronic public docket and comment system, is EPA's preferred method for receiving comments. Follow the on-line instructions for submitting comments.
          • E-mail: a-and-r-docket@epa.gov and dail.lynn@epa.gov.

          • Fax: (202) 566-1741 and (919) 541-5689.
          • Mail: U.S. Postal Service, send comments to: EPA Docket Center (6102T), Attention Docket Number OAR-2003-0161, 1200 Pennsylvania Ave., NW., Washington, DC 20460. Please include a total of two copies.
          • Hand Delivery: In person or by courier, deliver comments to: EPA Docket Center (6102T), Attention Docket ID Number OAR-2003-0161, 1301 Constitution Avenue, NW., Room B-108, Washington, DC 20004. Such deliveries are only accepted during the Docket's normal hours of operation, and special arrangements should be made for deliveries of boxed information. Please include a total of two copies.

          We request that you also send a separate copy of each comment to the contact person for the proposed action listed below (see FOR FURTHER INFORMATION CONTACT).

            Instructions: Direct your comments to Docket ID No. OAR-2003-0161. The EPA's policy is that all comments received will be included in the public docket without change and may be made available online at http://www.epa.gov/edkpub/index.jsp, including any personal information provided, unless the comment includes information claimed to be confidential business information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through EDOCKET, regulations.gov, or e-mail. Send or deliver information identified as CBI only to the following address: Mr. Roberto Morales, OAQPS Document Control Officer, U.S. EPA (C404-02), Attention Docket ID No. OAR-2003-0161, Research Triangle Park, NC 27711. Clearly mark the part or all of the information that you claim to be CBI. The EPA EDOCKET and the Federal regulations.gov Web sites are “anonymous access” systems, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through EDOCKET or regulations.gov, your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. For additional information about EPA's public docket visit EDOCKET on-line or see the Federal Register of May 31, 2002 (67 FR 38102).

            Docket: All documents in the docket are listed in the EDOCKET index at http://www.epa.gov/edkpub/index.jsp. Although listed in the index, some information is not publicly available, i.e., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in EDOCKET or in hard copy at the EPA Docket Center, Docket ID Number OAR-2003-0161, EPA West Building, Room B-102, 1301 Constitution Ave., NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the EPA Docket Center is (202) 566-1742. A reasonable fee may be charged for copying docket materials.

          FOR FURTHER INFORMATION CONTACT:

          For questions about the proposed action, contact Mr. H. Lynn Dail, EPA, Office of Air Quality Planning and Standards, Emission Standards Division, Coatings and Consumer Products Group (C539-03), Research Triangle Park, North Carolina 27711, telephone number (919) 541-2363, fax number (919) 541-5689, e-mail address: dail.lynn@epa.gov. For questions on the residual risk analysis, contact Ms. Maria Pimentel, EPA, Office of Air Quality Planning and Standards, Emission Standards Division, Risk and Exposure Assessment Group (C404-01), Research Triangle Park, North Carolina 27711, telephone (919) 541-5280, fax number (919) 541-0840, e-mail address: pimentel.maria@epa.gov.

        SUPPLEMENTARY INFORMATION:

          Regulated Entities. The regulated categories and entities affected by the national emission standards include:

            Category
            NAICS a code
            Examples of regulated entities

            Industry
            334613, 322222, 325992
            Operations at major sources that are engaged in the surface coating of magnetic tape.

            Federal Government

            Not affected.

            State, local, tribal government

            Not affected.

            a North American Industry Classification System.

        This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by the magnetic tape national emission standards. To determine whether your facility would be affected by the magnetic tape national emission standards, you should examine the applicability criteria in 40 CFR part 63.701(a) of subpart EE (national emission standards for magnetic tape manufacturing operations). If you have any questions regarding the applicability of the magnetic tape national emission standards to a particular entity, contact Mr. Lynn Dail, listed in the preceding FOR FURTHER INFORMATION CONTACT section.

          Worldwide Web (WWW). In addition to being available in the docket, an electronic copy of today's proposed action will also be available on the Worldwide Web through the Technology Transfer Network (TTN). Following signature, a copy of the proposed action will be posted on the TTN's policy and guidance page for newly proposed or promulgated rules at the following address: http://www.epa.gov/ttn/oarpg/. The TTN provides information and technology exchange in various areas of air pollution control.

          Related Information. We have prepared two summary documents covering the development of, and the rationale for, this proposal and the residual risk analysis. These reports are entitled: “Hazardous Air Pollutant Emissions from Magnetic Tape Manufacturing Operations—Background Information for Technology and Residual Risk Review” and “Residual Risk Assessment for the Magnetic Tape Manufacturing Source Category.” Both documents are available in Docket ID No. OAR-2003-0161. See the “Docket” section above for docket information.

          Public Hearing. If a public hearing is held, it will begin at 10 a.m. and will be held at EPA's campus in Research Triangle Park, North Carolina, or at an alternate facility nearby. Persons interested in presenting oral testimony or inquiring as to whether a public hearing is to be held should contact Ms. Janet Eck, Coatings and Consumer Products Group, Emission Standards Division, EPA (C539-03), Research Triangle Park, NC 27711, telephone (919) 541-7946.

          Outline. The information presented in this preamble is organized as follows:

          I. Background
          A. What is the statutory authority for this action?
          B. What did the magnetic tape national emission standards accomplish?
          C. What are the conclusions of the residual risk assessment?
          D. What are the conclusions of the technology review?
          II. Proposed Action
          III. Statutory and Executive Order Reviews
          A. Executive Order 12866, Regulatory Planning and Review
          B. Paperwork Reduction Act
          C. Regulatory Flexibility Act
          D. Unfunded Mandates Reform Act
          E. Executive Order 13132, Federalism
          F. Executive Order 13175, Consultation and Coordination With Indian Tribal Governments
          G. Executive Order 13045, Protection of Children From Environmental Health and Safety Risks
          H. Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use
          I. National Technology Transfer and Advancement Act

        I. Background
        A. What is the statutory authority for this action?
        Section 112 of the Clean Air Act (CAA) establishes a two-stage regulatory process to address emissions of HAP from stationary sources. In the first stage, after EPA has identified categories of sources emitting one or more of the HAP listed in the CAA, section 112(d) calls for us to promulgate national technology-based emission standards for sources within those categories that emit or have the potential to emit any single HAP at a rate of 10 tons or more per year or any combination of HAP at a rate of 25 tons or more per year (known as major sources), as well as for certain area sources emitting less than those amounts. These technology-based standards must reflect the maximum reductions of HAP achievable (after considering cost, energy requirements, and non-air health and environmental impacts) and are commonly referred to as maximum achievable control technology (MACT) standards.
        For area sources, CAA Section 112(d)(5) provides that in lieu of MACT, the Administrator may elect to promulgate standards or requirements which provide for the use of generally available control technologies or management practices and such standards are commonly referred to as generally available control technology (GACT) standards.
        EPA is then required to review these technology-based standards and to revise them “as necessary, taking into account developments in practices, processes and control technologies,” no less frequently than every 8 years.
        The second stage in standard-setting is described in section 112(f) of the CAA. This provision requires, first, that EPA prepare a Report to Congress discussing (among other things) methods of calculating risk posed (or potentially posed) by sources after implementation of the MACT standards, the public health significance of those risks, the means and costs of controlling them, actual health effects to persons in proximity to emitting sources, and recommendations as to legislation regarding such remaining risk. The EPA prepared and submitted this report (“Residual Risk Report to Congress,” EPA-453/R-99-001) in March 1999. The Congress did not act on any of the recommendations in the report, triggering the second stage of the standard-setting process, the residual risk phase.

        Section 112(f)(2) requires us to determine for each section 112(d) source category whether the MACT standards protect public health with an ample margin of safety. If the MACT standards for HAP “classified as a known, probable, or possible human carcinogen do not reduce lifetime excess cancer risks to the individual most exposed to emissions from a source in the category or subcategory to less than one in one million,” EPA must promulgate residual risk standards for the source category (or subcategory) as necessary to provide an ample margin of safety. EPA must also adopt more stringent standards to prevent an adverse environmental effect (defined in section 112(a)(7) as “any significant and widespread adverse effect * * * to wildlife, aquatic life, or natural resources * * *.”), but must consider cost, energy, safety, and other relevant factors in doing so.
        B. What did the magnetic tape national emission standards accomplish?
        On December 15, 1994, we promulgated the national emission standards for magnetic tape manufacturing operations (59 FR 64580) and required existing sources to comply with the national emission standards by December 15, 1996.
        The Magnetic Tape national emission standards cover HAP emissions from surface coatings used in the manufacture of magnetic and optical recording media used in audio, video, computer and magnetic stripe tape and disks. The emission units regulated by the Magnetic Tape national emission standards are storage tanks, mix preparation equipment, coating operations, waste handling devices, condenser vents in solvent recovery, particulate transfer operations, wash sinks for cleaning removable parts, equipment for flushing fixed lines, and wastewater treatment operations. The Magnetic Tape national emission standards regulates only those sources located at major sources. During the development of the national emission standards, we identified 25 existing magnetic recording media and magnetic stripe facilities, of which 14 were considered major and, therefore, subject to the national emission standards. Currently, there are only six magnetic tape manufacturing facilities remaining in the United States, all of which are major.
        In general, the current national emission standards require an overall HAP control efficiency of at least 95 percent for emissions from each solvent storage tank, piece of mix preparation equipment, coating operation, waste handling device, or condenser vent in solvent recovery. If an incinerator is used to control these emissions points, an outlet HAP concentration of no greater than 20 parts per million by volume by compound may be met, instead of achieving 95 percent control, as long as the efficiency of the capture system is 100 percent. If a coating with a HAP content no greater than 0.18 kilograms per liter (1.5 pounds per gallon) of coatings solids is used, that coating operation does not require further control.
        Several solvent and particulate HAP are used in the magnetic tape manufacturing industry. Currently, the HAP solvents used to the greatest extent are methyl ethyl ketone (MEK) and toluene, and the particulate HAP are cobalt and cobalt compounds, used at one facility. One individual facility uses 0.4 pound per year (lb/yr) of acrylonitrile and another facility uses 7 lbs/yr of lead. At the time of promulgation of the national emission standards, however, the solvent HAP in use included MEK, toluene, methyl isobutyl ketone, toluene diisocyanate, ethylene glycol, methanol, xylenes, ethyl benzene, and acetaldehyde; and the particulate HAP included chromium, cobalt, and their respective compounds. Several of these HAP are no longer used in the industry. The HAP, MEK and toluene, are used at all facilities; however, HAP such as n-hexane, methanol, methyl isobutyl ketone, xylenes, triethylamine, phenol, styrene, hydrogen cloride, ethyl acrylate and ethyl benzene are selectively used at individual facilities according to their coating formulation. At the time of promulgation of the Magnetic Tape national emission standards, we estimated that these HAP emissions, including MEK and toluene, would be reduced by 2,080 Mg/yr (2,300 tpy) from a baseline of 4,060 Mg/yr (4,470 tpy).
        C. What are the conclusions of the residual risk assessment?
        Source Category Characterization
        As required by section 112(f)(2) of the CAA, we prepared a risk assessment to determine the residual risk posed by magnetic tape manufacturing operations after implementation of the national emission standards. We compiled a list of the six magnetic tape manufacturing facilities still in operation in the United States based on inventory information we gathered from a number of manufacturing facilities and State environmental program offices (e.g., whether these facilities were still operating and manufacturing magnetic tape).
        Emissions Data
        The major HAP emitted by the magnetic tape manufacturing source category are MEK and toluene, which comprise 97 percent of all emissions in the source category. Other HAP such as n-hexane, methanol, methyl isobutyl ketone, xylenes, triethylamine, phenol, styrene, hydrogen chloride, ethyl acrylate, and ethyl benzene are used at individual facilities in very small amounts. The six magnetic tape manufacturing facilities have HAP emissions ranging from 3.9 to 214 Mg/yr (4.3 to 236 tpy). The total annual HAP emissions, nationally, are estimated to be 468 Mg/yr (516 tpy).
        The primary sources of emissions and parameter data for the residual risk assessment were the 1999 National Emissions Inventory, 2000 Toxics Release Inventory, State offices, and the facilities involved. The emissions and parameter data used for the residual risk assessment have been placed in the docket. Using these data, we modeled exposure concentrations surrounding the six facilities, calculated the risk of possible chronic cancer and noncancer health effects, evaluated whether acute exposures might exceed relevant health thresholds, and investigated human health multipathway and ecological risks.
        While the emissions data used in the residual risk assessment represent actual levels of emissions for the base year, we believe these levels are not substantially different from the maximum emission levels allowed under the current national emission standards. Therefore, the results of the risk assessment represent our approximation of the maximum risks which would be allowed under compliance with the national emission standards.
        Results
        Consistent with the tiered modeling approach described in the Residual Risk Report to Congress, the risk assessment for this source category started with a simple assessment which used conservative assumptions in lieu of site-specific data. The results demonstrated negligible risks for potential chronic cancer, chronic noncancer, and acute noncancer health endpoints. Also, no significant human health multipathway or ecological risks were identified. Had the resulting risks been determined to be non-negligible, a more refined analysis with site-specific data would have been necessary. The assessment is described in detail in the memorandum “Residual Risk Assessment for the Magnetic Tape Manufacturing Source Category” and the addendum memorandum, available in the docket. The assessment was peer reviewed by EPA scientists and revised, and the peer review comments have also been placed in the docket. Brief summaries of the results follow.

          Cancer. One of the six facilities within the magnetic tape manufacturing source category was quantitatively assessed for potential cancer risks due to the acrylonitrile emissions from the facility. Acrylonitrile is classified as a probable human carcinogen by EPA. The other five facilities did not emit any amount of known, probable, or possible carcinogens. The estimated maximum lifetime (i.e., 70-year) individual cancer risk associated with the facility was 1-in-100 million, or 0.01-in-a million. This is significantly less than the statutory trigger of 1-in-a million in section 112(f)(2) of the CAA.

          Chronic noncancer. The maximum chronic noncancer hazard indices (HI) were calculated for the emissions of all the noncarcinogens with published health threshold values for all six of the existing facilities. The maximum target organ-specific HI calculated for any of the facilities was 0.3, the major portion of the risk stemming from predicted exposures to cobalt. Cobalt is a respiratory toxicant when inhaled, but the chronic inhalation of air concentrations below 0.1 microgram per cubic meter (μg/m3) is considered to be without risk of adverse health effects, as stated in the Agency for Toxic Substances and Disease Registry's Toxicological Profile. Since all noncancer exposures were well below a target organ-specific HI of 1, we do not believe that chronic exposures from these facilities pose a public health concern.

          Acute. All maximum predicted 1-hour exposure concentrations for the pollutants emitted by the six magnetic tape manufacturing facilities were below all appropriate acute dose-response values. Therefore, we do not believe that acute exposures from these facilities pose any potential for a public health concern.

          Human health multipathway and ecological. Some persistent and bioaccumulative (PB) HAP may pose human health risks via exposure pathways other than inhalation and can also pose ecological risks by entering the wildlife food chain. Based on emissions data obtained for the magnetic tape manufacturing source category, lead is the only PB HAP reported as emitted by magnetic tape sources. Lead is a neurotoxicant when ingested or inhaled above acceptable concentration levels. Therefore, we investigated lead for potential human health impact via noninhalation pathways (e.g., ingestion).
        Lead was reported as emitted by one of the six facilities in the magnetic tape manufacturing source category. Although lead is not typically emitted from magnetic tape manufacturing processes, we nonetheless included those emissions in our analysis in an attempt to capture the worst-case impact for the facility.

        The maximum annual average air concentration of lead associated with this facility was estimated at 0.00032 μg/m3. The maximum soil concentration of lead due to deposition over a 30-year time period at a census block centroid was estimated at 4.6 milligrams per gram. All of the predicted blood lead levels associated with the one facility were estimated at concentrations ranging from 2.5 to 4.2 micrograms per deciliter (μg/dL) for the various age groups evaluated. The reference value which represents a level of concern for children as specified by EPA and the Centers for Disease Control and Prevention is 10 μg/dL. Thus, no significant human health multipathway risks are expected.
        We also consider the potential for adverse environmental effect as part of the assessment. Regarding the inhalation exposure to pathway for terrestrial mammals, we conclude that human toxicity values for the inhalation pathway are generally protective of terrestrial mammals. Therefore, because the maximum predicted cancer risks and noncancer hazards to humans from inhalation exposure are extremely low, we expect there to be no significant or widespread adverse effect to terrestrial mammals from inhalation exposure to HAP emitted from facilities in this source category. Further, to ensure that the potential for adverse effect to wildlife (including birds) resulting from noninhalation exposure is low, we carried out a screening-level multipathway assessment of the potential for adverse ecological effect due to the deposition of lead. The predicted soil lead concentrations from the one facility that emits lead are low compared to the screening value for lead in soil; therefore, we do not expect any unacceptable risks to ecological receptors. Since our results showed no screening-level ecological effect, we do not believe that there is any potential for an adverse effect on threatened or endangered species or on their critical habitat within the meaning of 50 CFR 402.14(a). Because of these results, EPA concluded that a consultation with the Fish and Wildlife Service is not necessary.
        Assessment Conclusions
        Since our assessment shows that the Magnetic Tape national emission standards pose maximum lifetime excess cancer significantly less than 1-in-1 million, and since noncancer health risks and ecological risks were found to be insignificant for this source category, EPA is not obligated to adopt standards under section 112(f) of the CAA.
        EPA recognizes that there may be circumstances where it would be appropriate to delist a source category even after MACT standards has been implemented. For example, an industry may have changed sufficiently in the years since the category was listed and the MACT standards issued, such that even in the absence of the MACT standards, emissions from the category would be sufficiently low to meet the criteria of section 112(c)(9). However, in the present case we have not developed data to support such an approach. We request comment on this approach. We also request comment (with supporting data) on whether this industry has changed such that it would be appropriate to delist the source category or a distinct subcategory.
        D. What are the conclusions of the technology review?

        Section 112(d)(6) of the CAA requires EPA to review and revise, as necessary (taking into account developments in practices, processes, and control technologies), emission standards promulgated under section 112 no less often than every 8 years. We reviewed available information about the industry, talked with industry representatives, and contacted several facilities in the industry to investigate available emission control technologies and the potential for additional emission reductions. We did not identify any additional control technologies beyond those that are already in widespread use within the source category (e.g., carbon adsorbers, condensers). The only developments identified involve improvements in the performance of existing technologies or increased frequency of inspections and testing, which would achieve only small incremental emission reductions, as indicated in the previous section. The only major technical advances we discovered were the development of two new technologies (optical recording media and solid state recording (SSR) media), which may eventually supplant magnetic tape. However, optical recording media and SSR media are not considered magnetic tape and would not be covered under the Magnetic Tape national emission standards. These new technologies, along with industry consolidation and competition from foreign producers, which have lower production costs (primarily labor costs) than domestic producers, have been identified as the primary reasons for the overall decline of this industry sector. Therefore, our investigation did not identify any significant developments in practices, processes, or control technologies in the magnetic tape manufacturing industry since promulgation of the original standards in 1994.
        In light of today's low-risk finding under section 112(f) (i.e., that, given compliance with the existing MACT standards, every source in the category poses excess lifetime individual cancer risks less than 1-in-a-million and no significant noncancer or ecological risks), the Agency seeks comment on the notion that, barring any unforeseeable circumstances which might substantially change this source category or its emissions, we would have no obligations to conduct future technology reviews under CAA section 112(d)(6).
        II. Proposed Action
        Because the existing national emission standards continues to represent the best controls that can be implemented nationally, we believe that no further revisions to the standards are needed under section 112(d)(6) of the CAA.
        III. Statutory and Executive Order Reviews
        A. Executive Order 12866: Regulatory Planning and Review
        Under Executive Order 12866 (58 FR 51735, October 4, 1993), EPA must determine whether a regulatory action is “significant” and, therefore, subject to Office of Management and Budget (OMB) review and the requirements of the Executive Order. The Executive Order defines “significant regulatory action” as one that is likely to result in a rule that may:
        (1) Have an annual effect on the economy of $100 million or more, or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities;
        (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;
        (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs, or the rights and obligations of recipients thereof; or
        (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.
        Pursuant to the terms of Executive Order 12866, OMB has notified EPA that it considers this a “significant regulatory action” within the meaning of the Executive Order. The EPA has submitted this action to OMB for review. Changes made in response to OMB suggestions or recommendations will be documented in the public record.
        B. Paperwork Reduction Act

        This action does not impose any information collection burden. It will not change the burden estimates from those previously developed and approved for the existing national emission standards. However, OMB has previously approved the information collection requirements contained in the existing regulation (59 FR 64580, December 15, 1994) under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501, et seq., and have assigned OMB control number 2060-0326, ICR No. 1678.05. A copy of the OMB approved Information Collection Request (ICR) may be obtained from Susan Auby, by mail at the Office of Environmental Information, Collection Strategies Division, EPA (2822T), 1200 Pennsylvania Avenue, NW., Washington, DC 20460, by e-mail at Auby.Susan@epa.gov, or by calling (202) 566-1672.
        Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.
        An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9.
        C. Regulatory Flexibility Act
        The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.
        For purposes of assessing the impact of today's proposed action on small entities, small entity is defined as: (1) A small business whose parent company has fewer than 500 to 1,000 employees, depending on the size definition for the affected NAICS code (as defined by Small Business Administration size standards); (2) a small governmental jurisdiction that is a government of a city, county, town, school district, or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.
        After considering the economic impact of today's proposed action on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. The proposed action will not impose any requirements on small entities. We are proposing no further action at this time to revise the national emission standards. Today's proposed action requests public comments on the residual risk and technology review.
        We continue to be interested in the potential impact of the proposed action on small entities and welcome comments on issues related to such impact.
        D. Unfunded Mandates Reform Act

        Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effect of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more in any 1 year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost-effective, or least burdensome alternative if the Administrator publishes with the final rule an explanation of why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements.
        The EPA has determined that the proposed action does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments in the aggregate, or to the private sector in any 1 year. The rule imposes no enforceable duty on State, local, or tribal governments, or the private sector. Thus, today's proposed action is not subject to the requirements of sections 202 and 205 of the UMRA. In addition, EPA has determined that the proposed action contains no regulatory requirements that might significantly or uniquely affect small governments, because it contains no requirements that apply to such governments or impose obligations upon them.
        E. Executive Order 13132, Federalism
        Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” are defined in the Executive Order to include regulations that 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.”
        Today's proposed action does not have federalism implications. It will not have 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, as specified in Executive Order 13132. Thus, Executive Order 13132 does not apply to the proposed action.
        In the spirit of Executive Order 13132, and consistent with EPA policy to promote communications between EPA and State and local governments, EPA specifically solicits comment on the proposed action from State and local officials.
        F. Executive Order 13175, Consultation and Coordination With Indian Tribal Governments
        Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” The proposed action does not have tribal implications as specified in Executive Order 13175. It will not have substantial direct effect on tribal governments, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to today's proposed action.
        G. Executive Order 13045, Protection of Children From Environmental Health & Safety Risks
        Executive Order 13045 (62 FR 19885, April 23, 1997) applies to any rule that: (1) Is determined to be “economically significant” as defined under Executive Order 12866 and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, EPA must evaluate the environmental health or safety effect of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by EPA.
        The proposed action is not subject to the Executive Order because it is not economically significant as defined in Executive Order 12866, and because EPA does not have reason to believe the environmental health or safety risks addressed by this action present a disproportionate risk to children.
        H. Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use
        Today's proposed decision is not a “significant energy action” as defined in Executive Order 13211 (66 FR 28355, May 22, 2001), because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Further, we have concluded that today's proposed decision is not likely to have any adverse energy impacts.
        I. National Technology Transfer and Advancement Act
        Under section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, sec. 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards (VCS) in its regulatory activities, unless to do so would be inconsistent with applicable law or otherwise impractical. The VCS are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by VCS bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency does not use available and applicable VCS.
        The proposed action does not involve technical standards. Therefore, EPA is not considering the use of any VCS. The EPA welcomes comments on this aspect of the proposed rulemaking and, specifically, invites the public to identify potentially applicable VCS and to explain why such standards should be used in the proposed action.

          List of Subjects in 40 CFR Part 63
          Environmental protection, Administrative practice and procedures, Air pollution control, Hazardous substances, Intergovernmental relations, Reporting and recordkeeping requirements.

          Dated: October 18, 2005.
          Stephen L. Johnson,
          Administrator.

      [FR Doc. 05-21186 Filed 10-21-05; 8:45 am]
      BILLING CODE 6560-50-P


        DEPARTMENT OF THE INTERIOR
        Fish and Wildlife Service
        DEPARTMENT OF COMMERCE
        National Oceanic and Atmospheric Administration
        50 CFR Part 424
        [Docket No. FWS-R9-ES-2011-0073; Docket No. NOAA-120606146-2146-01; 4500030114]
        RIN 1018-AY62; 0648-BC24
        Endangered and Threatened Wildlife and Plants; Revisions to the Regulations for Impact Analyses of Critical Habitat

          AGENCIES:
           Fish and Wildlife Service, Interior; National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

          ACTION:
          Proposed rule.

          SUMMARY:
          We, the U.S. Fish and Wildlife Service (FWS) and the National Marine Fisheries Service (NMFS) (collectively referred to as the “Services” or “we”), propose to revise our regulations pertaining to impact analyses conducted for designations of critical habitat under the Endangered Species Act of 1973, as amended (the Act). These changes are being proposed as directed by the President's February 28, 2012, memorandum, which directed us to take prompt steps to revise our regulations to provide that the economic analysis be completed and made available for public comment at the time of publication of a proposed rule to designate critical habitat.

          DATES:

          We will accept comments from all interested parties until October 23, 2012. Please note that if you are using the Federal eRulemaking Portal (see ADDRESSES below), the deadline for submitting an electronic comment is 11:59 p.m. Eastern Standard Time on this date.

          ADDRESSES:
          You may submit comments by one of the following methods:
          • Federal eRulemaking Portal: http://www.regulations.gov. Search for FWS-R9-ES-2011-0073, which is the docket number for this rulemaking.
          • U.S. mail or hand delivery: Public Comments Processing, Attn: FWS-R9-ES-2011-0073; Division of Policy and Directives Management; U.S. Fish and Wildlife Service; 4401 N. Fairfax Drive, PDM-2042; Arlington, VA 22203.
          We will post all comments on http://www.regulations.gov. This generally means that we will post any personal information you provide us (see the Request for Information section below for more information).

          FOR FURTHER INFORMATION CONTACT:
          Nicole Alt, U.S. Fish and Wildlife Service, Division of Conservation and Classification, 4401 N Fairfax Drive, Suite 420, Arlington, VA 22203, telephone 703/358-2171; facsimile 703/358-1735; or Marta Nammack, National Marine Fisheries Service, Office of Protected Resources, 1315 East-West Highway, Silver Spring, MD 20910, telephone 301/713-1401; facsimile 301/713-0376. If you use a telecommunications device for the deaf (TDD), call the Federal Information Relay Service (FIRS) at 800-877-8339.

        SUPPLEMENTARY INFORMATION:

        Executive Summary

          Why we need to publish a rule. The Services have decided to revise our regulations to provide the public earlier access to the draft economic analysis supporting critical habitat designations, consistent with the President's memorandum (Memorandum for the Secretary of the Interior, Proposed Revised Habitat for the Spotted Owl: Minimizing Regulatory Burdens, 77 FR 12985 (March 5, 2012)). The President's February 28, 2012, memorandum directed the Secretary of the Interior to revise the regulations implementing the Endangered Species Act to provide that a draft economic analysis be completed and made available for public comment at the time of publication of a proposed rule to designate critical habitat. Both transparency and public comment will be improved if the public has access to both the scientific analysis and the draft economic analysis at the same time. We are therefore publishing a proposed rule to achieve that goal and seeking public comments. Because the Act and its implementing regulations are jointly administered by the Departments of the Interior and Commerce, the Secretary of the Interior consulted with the Secretary of Commerce on the revision of this regulation. The proposed revisions would also address several court decisions and are informed by conclusions from a 2008 legal opinion by the Solicitor of the Department of the Interior. Specifically, we propose to revise 50 CFR 424.19 to clarify the instructions for making information available to the public, considering the impacts of critical habitat designations, and considering exclusions from critical habitat. The proposed rule is consistent with Executive Order 13563, and in particular with the requirement of retrospective analysis of existing rules, designed “to make the agency's regulatory program more effective or less burdensome in achieving the regulatory objectives.

          This rule proposes the following changes:

        (1) We propose to change the title of § 424.19 from “Final Rules—impact analysis of critical habitat” to “Impact analysis and exclusions from critical habitat.” We propose to remove the current reference to “[f]inal rules” to allow this section to apply to both proposed and final critical habitat rules. We propose to add the term “exclusions” in the title to more fully describe that this section addresses both impact analyses and how they inform the exclusion process under section 4(b)(2) of the Act for critical habitat.
        (2) We propose to divide current § 424.19 into three paragraphs. The division into three paragraphs closely tracks the requirements of the Act under section 4(b)(2) and provides for a clearly defined process for considerations of exclusions as required under the Act.

        (3) Proposed paragraph (a) would implement the direction of the President's February 28, 2012, memorandum by stating that, at the time of proposing a designation of critical habitat, the Secretary will make available for public comment the draft economic analysis of the designation. This proposed paragraph also carries over the first half of the first sentence of the existing regulation, with modifications.
        (4) Proposed paragraph (b) would implement the first sentence of section 4(b)(2) of the Act, which directs the Secretary to consider the economic impact, the impact on national security, and any other relevant impact of specifying any particular area as critical habitat. This paragraph states that the impact analysis should focus on the incremental effects resulting from the designation of critical habitat.
        (5) Proposed paragraph (c) would implement the second sentence of section 4(b)(2) of the Act, which allows the Secretary to exclude areas from the final critical habitat designation under certain circumstances.
        Background

        The purposes of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq.) (Act), are to provide a means to conserve the ecosystems upon which listed species depend, to develop a program for the conservation of listed species, and to achieve the purposes of certain treaties and conventions. Moreover, the Act states that it is the policy of Congress that the Federal Government will seek to conserve threatened and endangered species, and use its authorities in furtherance of the purposes of the Act.

        In passing the Act, Congress viewed habitat loss as a significant factor contributing to species endangerment. Habitat destruction and degradation have been a contributing factor causing the decline of a majority of species listed as threatened or endangered under the Act (Wilcove et al. 1998). The present or threatened destruction, modification, or curtailment of a species' habitat or range is included in the Act as one of the factors on which to base a determination that a species may be threatened or endangered. One of the tools provided by the Act to conserve species is designation of critical habitat.
        Critical habitat represents the habitat necessary for the species' recovery. Once designated, critical habitat provides for the conservation of listed species in several ways. Specifying the geographic location of critical habitat facilitates implementation of section 7(a)(1) of the Act by identifying areas where Federal agencies can focus their conservation programs and use their authorities to further the purposes of the Act. Designating critical habitat also helps focus the efforts of other conservation partners, such as State and local governments, nongovernmental organizations, and individuals. Furthermore, when designation of critical habitat occurs near the time of listing, it provides early conservation planning guidance to bridge the gap until the Services can complete more thorough recovery planning.
        In addition to serving as a notification tool, the designation of critical habitat also provides a significant regulatory protection—the requirement that Federal agencies consult with the Services under section 7(a)(2) of the Act to ensure that their actions are not likely to destroy or adversely modify critical habitat. The Federal Government, through its role in water management, flood control, regulation of resources extraction and other industries, Federal land management, and funding, authorization, or conduct of myriad other activities, may propose actions that are likely to affect critical habitat. The designation of critical habitat ensures that the Federal Government considers the effects of its actions on habitat important to species' conservation and avoids or modifies those actions that are likely to destroy or adversely modify critical habitat. This benefit should be especially valuable when, for example, species presence or habitats are ephemeral in nature, species presence is difficult to establish through surveys (e.g., when a species such as a plant's “presence” may be limited to a seed bank), or protection of unoccupied habitat is essential for the conservation of the species.
        The Secretaries of the Interior and Commerce (the “Secretaries”) share responsibilities for implementing most of the provisions of the Act. Generally, marine and anadromous species are under the jurisdiction of the Secretary of Commerce and all other species are under the jurisdiction of the Secretary of the Interior, though jurisdiction is shared between the two departments for some species, such as sea turtles and Atlantic salmon. Authority to administer the Act has been delegated by the Secretary of the Interior to the Director of the FWS and by the Secretary of Commerce to the Assistant Administrator for NMFS.
        This proposed rule addresses two developments related to 50 CFR 424.19. First, the Solicitor of the Department of the Interior issued a legal opinion on October 3, 2008, regarding the Secretary of the Interior's authority to exclude areas from critical habitat designation under section 4(b)(2) of the Act (M-37016, “The Secretary's Authority to Exclude Areas from a Critical Habitat Designation under Section 4(b)(2) of the Endangered Species Act” (Oct. 3, 2008)) (DOI 2008). The Solicitor concluded, among other things, that, while the Act requires the Secretary to consider the economic impact, the impact on national security, and any other relevant impact, the decision whether to make exclusions under section 4(b)(2) of the Act is at the discretion of the Secretary; that the Secretary has wide discretion when weighing the benefits of exclusion against the benefits of inclusion; and that it is appropriate for the Secretary to consider impacts of a critical habitat designation on an incremental basis. The Services have based this proposed rule on the reasoning and conclusions of this opinion and the President's February 28, 2012, memorandum.
        Second, the President's February 28, 2012 memorandum that directed the Secretary of the Interior to revise the implementing regulations of the Act to provide that an analysis of the economic impacts of a proposed critical habitat designation be completed by the Services and made available to the public at the time of publication of a proposed rule to designate critical habitat. The memo stated: “Uncertainty on the part of the public may be avoided, and public comment improved, by simultaneous presentation of the best scientific data available and the analysis of economic and other impacts.”
        Discussion of Proposed Revisions to 50 CFR 424.19
        This proposal would revise 50 CFR 424.19 to clarify the instructions for making information available to the public, considering the impacts of critical habitat designations, and considering exclusions from critical habitat.

        In proposing the specific changes to the regulations that follow, and setting out the accompanying clarifying discussion in this preamble, the Services are establishing prospective standards only. Nothing in these proposed revised regulations is intended to require (now or at such time as these regulations may become final) that any previously completed critical habitat designation be reevaluated on this basis. Furthermore, if this proposed rule is finalized, we will adopt the requirements of this regulation after the effective date. For proposed critical habitat designations published prior to the effective date of any final regulation, the Services will continue to follow their current practices.
        Statutory Authority
        The proposed regulatory changes described below derive from sections 4(b)(2) and 4(b)(8) of the Act. For the convenience of the reader, we are reprinting those sections of the Act here:

          (2) The Secretary shall designate critical habitat, and make revisions thereto, under subsection (a)(3) on the basis of the best scientific data available and after taking into consideration the economic impact, the impact on national security, and any other relevant impact, of specifying any particular area as critical habitat. The Secretary may exclude any area from critical habitat if he determines that the benefits of such exclusion outweigh the benefits of specifying such area as part of the critical habitat, unless he determines, based on the best scientific and commercial data available, that the failure to designate such area as critical habitat will result in the extinction of the species concerned.

          (8) The publication in the Federal Register of any proposed or final regulation which is necessary or appropriate to carry out the purposes of this Act shall include a summary by the Secretary of the data on which such regulation is based and shall show the relationship of such data to such regulation; and if such regulation designates or revises critical habitat, such summary shall, to the maximum extent practicable, also include a brief description and evaluation of those activities (whether public or private) which, in the opinion of the Secretary, if undertaken may adversely modify such habitat, or may be affected by such designation.

        Definition of Key Terms
        Under the first sentence of section 4(b)(2) of the Act, the Services are required to take “into consideration the economic impact, the impact on national security, and any other relevant impact, of specifying any particular area as critical habitat.” This is referred to as the “impact analysis.” Under the second sentence of section 4(b)(2) of the Act, the Secretary (via delegated authority to the Services) may exclude an area from critical habitat after identifying and weighing the benefits of inclusion and exclusion. This is referred to as the “weighing of benefits”.
        An economic analysis is a tool that informs both the required impact analysis and the discretionary weighing of benefits. Additionally, the draft economic analysis informs the determinations established under other statutes, regulations, or directives that are applicable to rulemakings generally, including critical habitat designations. However, the draft economic analysis only addresses the consideration of the potential economic impact of the designation of critical habitat.
        An “incremental analysis” is a method of determining the probable impacts of the designation that seeks to identify and focus solely on the impacts over and above those caused by existing protections and is used in the impact analysis, weighing of benefits, and economic analysis.
        Relationship of the Key Terms

        The purpose of the impact analysis is to inform the Secretary's decision about whether and/or how to consider excluding any particular area from a designation of critical habitat, as authorized by the second sentence of section 4(b)(2) of the Act. Information that is used in the impact analysis can come from a variety of sources, one of which is the draft economic analysis of the proposed designation of critical habitat. The Secretary must consider the probable economic, national security and other relevant impacts of the designation of critical habitat. This comparison is done through the method of an incremental analysis; that is, comparing conditions with and without the designation of critical habitat. The incremental analysis methodology is also used in the economic analysis.
        Proposed Revisions to 50 CFR 424.19
        We propose to change the title of this section from “Final rules—impact analysis of critical habitat” to “Impact analysis and exclusions from critical habitat.” The current reference to “[f]inal rules” would be deleted to allow for the application of this section to both proposed and final critical habitat rules. We propose to add the term “exclusions” to the title to more fully describe that this section addresses both impact analyses and how they inform the exclusion process under section 4(b)(2) of the Act for critical habitat.
        In the following text, we frequently refer to the current regulatory language at 50 CFR 424.19 and then give detailed information about how we propose to revise that language. For your convenience, we set out the current text of § 424.19 here:

          The Secretary shall identify any significant activities that would either affect an area considered for designation as critical habitat or be likely to be affected by the designation, and shall, after proposing designation of such an area, consider the probable economic and other impacts of the designation upon proposed or ongoing activities. The Secretary may exclude any portion of such an area from the critical habitat if the benefits of such exclusion outweigh the benefits of specifying the area as part of the critical habitat. The Secretary shall not exclude any such area if, based on the best scientific and commercial data available, he determines that the failure to designate that area as critical habitat will result in the extinction of the species concerned.

        Rationale for the Proposed Paragraph (a)
        We propose to divide current § 424.19 into three paragraphs. The first two sentences of proposed paragraph (a) are new and are being added to comply with the Presidential Memorandum. They would read:

        At the time of publication of a proposed rule to designate critical habitat, the Secretary will make available for public comment the draft economic analysis of the designation. The draft economic analysis will be summarized in the Federal Register notice of the proposed designation of critical habitat.

        The President's February 28, 2012 memorandum directed the Secretary of the Interior to take `prompt steps' to revise the regulations. The first sentence of this proposed change to the regulations will comply with the President's direction. The second sentence specifies that a summary of the draft economic analysis would be published in the Federal Register notice of the proposed designation of critical habitat. The draft economic analysis itself would be made available on http://www.regulations.gov along with the proposed designation of critical habitat or on other Web sites as deemed appropriate by the Services.
        The third sentence of proposed paragraph (a) would carry over the first half of the first sentence of the existing § 424.19, with modifications. It would read:

          The Secretary will, to the maximum extent practicable, when proposing and finalizing designation of critical habitat, briefly describe and evaluate in the Federal Register notice any significant activities that are known to have the potential to affect an area considered for designation as critical habitat or be likely to be affected by the designation.

        This language implements section 4(b)(8) of the Act. We propose to add “to the maximum extent practicable” to track the statutory language. For the same reason, we would replace “identify” with “briefly describe and evaluate.” We emphasize, however, the statutory term “brief,” i.e., the description and evaluation is not meant to be an exhaustive analysis. The Services cannot predict the outcome of any potential section 7 consultation. Rather, the purpose of this language in section 4(b)(8) is merely to alert the public generally to the relationship between the designation of critical habitat and activities on the landscape. We add the phrase “in the Federal Register notice” to make clear that this brief description and evaluation will be published in the Federal Register notice of the designation of critical habitat.
        We would keep the modifier “significant” with respect to activities, which clarifies that the statutory language should not be interpreted to apply to all activities, however insignificant. We propose to replace “would * * * affect an area” with “are known to have the potential to affect an area” to make clear that the Services are not able to predict with certainty what activities to address, but must infer the activities from the best available information.
        Rationale for the Proposed Paragraph (b)
        Proposed paragraph (b) would implement the first sentence of section 4(b)(2) of the Act (“The Secretary shall designate critical habitat * * * after taking into consideration the economic impact, the impact on national security, and any other relevant impact, of specifying any particular area as critical habitat.”). The proposed first sentence would carry over the second half of the first sentence of the existing § 424.19, with modifications, and would thus repeat the basic statutory requirement. We propose to replace “after proposing designation of such an area” with “[p]rior to finalizing the designation of critical habitat” to expressly provide for more flexibility in the timing of the consideration. The proposed first sentence would read:

          Prior to finalizing the designation of critical habitat, the Secretary will consider the probable economic, national security, and other relevant impacts of the designation upon proposed or ongoing activities.

        The statute itself requires only that the consideration occur—it does not specify when in the rulemaking process it must occur. That being said, we stress that the Act's legislative history is clear that Congress intended consideration of economic impacts to neither affect nor delay the listing of species. Therefore, regardless of the point in the rulemaking process at which consideration of economic impacts begins, that consideration must be kept analytically distinct from, and have no effect on the outcome or timing of, listing determinations. We also note that an draft economic analysis is only one of many pieces of information the Secretary uses in consideration of whether to exclude areas under section 4(b)(2) of the Act.

        Also in proposed paragraph (b), we retained the phrases “probable” and “upon proposed or ongoing activities.” These phrases provide guidance that the Services should not consider improbable or speculative impacts, and clarify that whatever impacts the Services consider are merely generalized predictions. However, the Services do not intend that the term “probable” requires a showing of statistical probability or any specific numeric likelihood. Moreover, the “activities” at issue are only those that would require consultation under section 7 of the Act. See DOI 2008 at 10-12. Although impact analyses are based on the best scientific data available, any predictions of future impacts are inherently uncertain and subject to change. Thus, the Services should consider the likely general impact of the designation and not make specific predictions of the outcome of particular section 7 consultations that have not in fact been completed.
        We propose to add the phrase “national security” to reflect statutory amendments to section 4(b)(2) of the Act (National Defense Authorization Act for Fiscal Year 2004, Pub. L. 108-136). Also, we propose to add the word “relevant” to the other impacts that the Services must consider to more closely track the statutory language.

        The first sentence of proposed paragraph (b) uses the term “consider,” which reflects the statutory term “consideration” in section 4(b)(2) of the Act. The proposed regulations would not further define this term. However, we agree with the Solicitor's 2008 Opinion that, in the context of section 4(b)(2) of the Act, to “consider” impacts the Services must gather available information about the impacts on proposed or ongoing activities that would be subject to section 7 consultation, and then must give careful thought to the relevant information in the context of deciding whether to proceed with an exclusion analysis. See DOI 2008 at 14-16.
        The second and third sentences of proposed paragraph (b) are additions that would provide further guidance on how the Services will consider impacts of critical habitat designation. They read:

          The Secretary will consider impacts at a scale that the Secretary determines to be appropriate, and will compare the impacts with and without the designation. Impacts may be qualitatively or quantitatively described.

        The first phrase of the second sentence, “[t]he Secretary will consider impacts at a scale that the Secretary determines to be appropriate,” would clarify that the Secretary has the discretion to determine the scale at which impacts are considered. The Secretary would determine the appropriate scale based on what would most meaningfully or sufficiently inform the decision in a particular context. For example, for a wide-ranging species with many square miles (kilometers) of potential habitat across several States, a relatively coarse-scale analysis would be sufficiently informative, while for a narrow endemic species, with specialized habitat requirements and relatively few discrete occurrences, it might be appropriate to engage in a relatively fine-scale analysis for the designation of critical habitat. The Secretary may also use this discretion to focus the analysis on areas where impacts are more likely, e.g., non-Federal lands. See DOI 2008 at 17.

        The second phrase of the second sentence, “and will compare the impacts with and without designation,” would clarify that impact analyses evaluate the incremental impacts of the designation. This is sometimes referred to as an “incremental analysis” or “baseline approach.” For the purpose of the impacts analysis required by the first sentence of section 4(b)(2) of the Act, the incremental impacts are those probable economic, national security, and other relevant impacts of the proposed critical habitat designation on ongoing or potential Federal actions that would not otherwise occur without the designation. Put another way, the incremental impacts are the probable impacts on Federal actions for which the designation is the “but for” cause.

        To determine the incremental impacts of designating critical habitat, the Services compare the protections provided by the critical habitat designation (the world with the particular designation) to the combined effects of all conservation-related protections for the species (including listing) and its habitat in the absence of the designation of critical habitat (the world without designation, i.e., the baseline condition). Thus, determining the incremental impacts requires identifying at a general level the additional protections that a critical habitat designation would provide for the species; this does not require the prejudging of the precise outcomes of hypothetical section 7 consultations. Finally, the Services determine what probable impacts those incremental protections will have on Federal actions, in terms of economic, national security, or other relevant impacts (the incremental impacts). See DOI 2008 at 11. Potential impacts to Federal actions could occur on private as well as public lands.

        In addition to using an incremental analysis in the impacts analysis, the Secretary will use an incremental analysis in the weighing of benefits under the second sentence of section 4(b)(2), if the Secretary decides to undertake that optional analysis. In that context, the Secretary will use an incremental analysis to identify the benefits (economic and otherwise) of excluding an area from critical habitat, and will likewise use an incremental analysis to identify the benefits of specifying an area as critical habitat.

        Benefits that may be addressed in the weighing of benefits can result from additional protections, in the form of project modifications or conservation measures due to consultation under section 7 of the Act; conversely, a benefit of exclusion can be avoiding costs associated with those protections. In addition, benefits (and associated costs) can result if the designation triggers compliance with separate authorities that are exercised in part as a result of the Federal critical habitat designation (e.g., additional reviews, procedures, or protections under State or local jurisdictional authorities). See DOI 2008 at 22-23.
        Finally, because its primary purpose is to facilitate the impact analysis and the weighing of benefits, the draft and final economic analyses should focus on the incremental economic benefits of the designation.

        Use of an incremental analysis in each of these contexts is the only logical way to implement the Act. The purpose of the impact analysis (described in the third sentence of proposed paragraph (a)) is to inform the Secretary's decision about whether to engage in the optional weighing of benefits under the second sentence of section 4(b)(2) of the Act (addressed in proposed paragraph (c)). To understand the difference that designation of an area makes and, therefore, the benefits of including an area in the designation or excluding an area from the designation, one must compare the hypothetical world with the designation to the hypothetical world without the designation. This is why the Services compare the protections provided by the designation to the protections without the designation. This is consistent with the general guidance given by the Office of Management and Budget to executive branch agencies as to how to conduct cost-benefit analyses. See Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf ).

        Nonetheless, between 2002 and 2008, the Services generally did not conduct an incremental analysis; instead they conducted a broader analysis of impacts pursuant to New Mexico Cattlegrowers Ass'n v. FWS, 248 F.3d 1277 (10th Cir. 2001). The genesis of the court's conclusion in that case was the definitions of “jeopardize the continued existence of” and “destruction or adverse modification,” which are the standards for section 7 consultations in the Services' 1986 joint regulations. See 50 CFR 402.02. Both phrases were defined in a similar manner in that they both looked to impacts on both survival and recovery of the species.
        The court in New Mexico Cattle Growers noted the similarity of the definitions, concluding that they were “virtually identical” and that the definition of “destruction or adverse modification” was in effect subsumed into the jeopardy standard. 248 F.3d at 1283. According to the court, these definitions thus led FWS to conclude that designation of critical habitat usually had no incremental impact beyond the impacts of the listing itself. Thus, given these definitions, the court concluded that doing only an incremental analysis rendered meaningless the requirement of considering the impacts of the designation, as there were no incremental impacts to consider. Although the court noted that the regulatory definitions had previously been called into question, id. at 1283 n.2 (citing Sierra Club v. U.S. Fish & Wildlife Serv., 245 F.3d 434 (5th Cir. 2001)), the validity of the regulations had not been challenged in the case before it. Instead, to cure this apparent problem, the court held that the FWS must analyze “all of the impacts of a critical habitat designation, regardless of whether those impacts are attributable co-extensively to other causes.” Id. at 1285.
        In 2004, the Ninth Circuit (Gifford Pinchot Task Force v. USFWS, 378 F.3d 1059 (9th Cir. 2004)) invalidated the prior regulatory definition of “destruction or adverse modification.” The court held that the definition gave too little protection to critical habitat by not giving weight to Congress's intent that designated critical habitat support the recovery of listed species. Since then, the Services have been applying “destruction or adverse modification” in a way that allows the Services to define an incremental effect of designation. This eliminated the predicate for the Tenth Circuit's analysis. Therefore, the Services have concluded that it is appropriate to consider the impacts of designation on an incremental basis.
        Indeed, no court outside of the Tenth Circuit has followed New Mexico Cattle Growers after the Ninth Circuit issued Gifford Pinchot Task Force. In particular, the Ninth Circuit recently concluded that the “faulty premise” that led to the invalidation of the incremental analysis approach in 2001 no longer applies. Arizona Cattle Growers Ass'n v. Salazar, 606 F.3d 1160, 1173 (9th Cir. 2010). The court held, in light of this change in circumstances, that “the FWS may employ the baseline approach in analyzing a critical habitat designation.” Id. In so holding, the court noted that the baseline approach is “more logical than” the coextensive approach. Id.; see also:

        • Maddalena v. FWS, No. 08-CV-02292-H (AJB) (S.D. Cal. Aug. 5, 2010);
        • Otay Mesa Property L.P. v. DOI, 714 F. Supp. 2d 73 (D.D.C. 2010);
        • Fisher v. Salazar, 656 F. Supp. 2d 1357 (N.D. Fla. 2009);
        • Home Builders Ass'n of No. Cal. v. USFWS, 2006 U.S. Dist. Lexis 80255 (E.D. Cal. Nov. 2, 2006), reconsideration granted in part, 2007 U.S. Dist. Lexis 5208 (Jan. 24, 2007), aff'd, 616 F.3d 983 (9th Cir. 2010);
        • CBD v. BLM, 422 F. Supp. 2d 1115 (N.D. Cal. 2006);
        • Cape Hatteras Access Preservation Alliance v. DOI, 344 F. Supp. 2d 108 (D.D.C. 2004).
        The Solicitor's opinion also reaches this conclusion. See DOI 2008 at 18-22.

        The Services may still, in appropriate circumstances, also analyze the broader impacts of conserving the species at issue to put the incremental impacts of the designation in context, or for complying with the requirements of other statutes or policies. See:

        • Arizona Cattle Growers' Ass'n v. Kempthorne, 534 F. Supp. 2d 1013 (D. Ariz. 2008), aff'd, 606 F.3d 1160 (9th Cir. 2010);
        • Home Builders Ass'n of No. Cal. v. USFWS, 2007 U.S. Dist. Lexis 5208 (E.D. Cal. Jan. 24, 2007), aff'd, 616 F.3d 983 (9th Cir. 2010);
        • DOI 2008 at 21.

        The third sentence of proposed paragraph (b) would clarify that impacts may be qualitatively or quantitatively described. In other words, there is no absolute requirement that impacts of any kind be quantified. See Cape Hatteras Access Preservation Alliance v. DOI, 731 F. Supp. 2d 15 (D.D.C. Aug. 17, 2010).
        Rationale for the Proposed Paragraph (c)
        Proposed paragraph (c) would implement the second sentence of section 4(b)(2) of the Act, which allows the Secretary to exclude areas from the final critical habitat designation under certain circumstances. It would read:

          The Secretary has discretion to exclude any particular area from the critical habitat upon a determination that the benefits of such exclusion outweigh the benefits of specifying the particular area as part of the critical habitat. In identifying those benefits, in addition to the impacts considered pursuant to paragraph (b) of this section, the Secretary may consider and assign the weight to any benefits relevant to the designation of critical habitat. The Secretary, however, will not exclude any particular area if, based on the best scientific and commercial data available, the Secretary determines that the failure to designate that area as critical habitat will result in the extinction of the species concerned.

        The first sentence of proposed paragraph (c) would carry over the second sentence of the existing section, with modifications. The phrase “the Secretary has discretion” would be added to emphasize that the exclusion of particular areas under section 4(b)(2) of the Act is always optional. See DOI 2008 at 6-9, 17. For example, the Secretary may choose not to exclude an area even if the impact analysis and subsequent balancing indicates that the benefits of exclusion exceed the benefits of inclusion and such exclusion would not result in the extinction of the species.
        Additional minor changes to the first sentence would make it more closely track the statutory language.

        The second sentence of paragraph (c) is new. They would codify aspects of the legislative history, the case law, and the Services' practices with respect to exclusions. The second sentence would clarify the breadth of the Secretary's discretion with respect to the types of benefits to consider. See:

        • CBD v. Norton, 240 F. Supp. 2d 1090 (D. Ariz. 2003);
        • Home Builders Ass'n of No. Cal. v. USFWS, 2006 U.S. Dist. Lexis 80255 (E.D. Cal. Nov. 2, 2006), reconsideration granted in part 2007 U.S. Dist. Lexis 5208 (Jan. 24, 2007), aff'd, 616 F.3d 983 (9th Cir. 2010);
        • DOI 2008 at 25-28.

        For example, the Secretary may consider effects on tribal sovereignty and the conservation efforts of non-Federal partners when considering excluding specific areas from a designation of critical habitat. The House Committee report that accompanied the 1978 amendments that added Section 4(b)(2) to the Act stated that “[t]he consideration and weight given to any particular impact is completely within the Secretary's discretion.” H.R. Rep. No. 95-1625, at 17. Subsequent case law and the Solicitor's Opinion have reflected that view, as does the rule proposed here. See:

        • CBD v. Salazar, 2011 U.S. Dist. Lexis 26967 (D.D.C. Mar. 16, 2011);
        • Wyoming State Snowmobile Ass'n v. USFWS, 741 F. Supp. 2d 1245 (D. Wyo. 2010);
        • DOI 2008 at 24.

        The third sentence of paragraph (c) essentially repeats the third sentence of the existing section. This sentence incorporates the limitation in the last clause of section 4(b)(2) of the Act. See DOI 2008 at 25.
        Request for Information

        Any final regulation based on this proposal will consider information and recommendations timely submitted from all interested parties. We, solicit comments, information, and recommendations from governmental agencies, Native American tribes, the scientific community, industry groups, environmental interest groups, and any other interested parties on this proposed regulation. All comments and materials received by the date listed in DATES above will be considered prior to the approval of a final document.
        This rulemaking does not modify the current methods and procedures of identifying and evaluating potential incremental impacts of a designation of critical habitat. Nonetheless, we will accept comments on the Services' approach to incremental impacts as well as on the manner in which particular impacts are considered and weighed.

        You may submit your information concerning this proposed rule by one of the methods listed in ADDRESSES. If you submit information via http://www.regulations.gov, your entire submission—including any personal identifying information—will be posted on the Web site. If your submission is made via a hardcopy that includes personal identifying information, you may request at the top of your document that we withhold this personal identifying information from public review. However, we cannot guarantee that we will be able to do so. We will post all hardcopy submissions on http://www.regulations.gov.

        Information and supporting documentation that we receive in response to this proposed rule will be available for you to review at http://www.regulations.gov, or by appointment, during normal business hours, at the U.S. Fish and Wildlife Service, Division of Conservation and Classification (see FOR FURTHER INFORMATION CONTACT).
        Required Determinations
        Regulatory Planning and Review (Executive Orders 12866 and 13563)
        Executive Order 12866 provides that the Office of Management and Budget's Office of Information and Regulatory Affairs (OIRA) will review all significant rules. The Office of Information and Regulatory Affairs has determined that this rule is significant because it raises novel legal or policy issues.
        Executive Order 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the nation's regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. The executive order directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. We have developed this rule in a manner consistent with these requirements. This proposed rule is consistent with Executive Order 13563, and in particular with the requirement of retrospective analysis of existing rules, designed “to make the agency's regulatory program more effective or less burdensome in achieving the regulatory objectives.”
        Regulatory Flexibility Act

        Under the Regulatory Flexibility Act (as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996; 5 U.S.C. 601 et seq.), whenever a Federal agency is required to publish a notice of rulemaking for any proposed or final rule, it must prepare, and make available for public comment, a regulatory flexibility analysis that describes the effect of the rule on small entities (i.e., small businesses, small organizations, and small government jurisdictions). However, no regulatory flexibility analysis is required if the head of an agency, or his designee, certifies that the rule will not have a significant economic impact on a substantial number of small entities. SBREFA amended the Regulatory Flexibility Act to require Federal agencies to provide a statement of the factual basis for certifying that a rule will not have a significant economic impact on a substantial number of small entities. We are certifying that these proposed regulations would not have a significant economic effect on a substantial number of small entities. The following discussion explains our rationale.
        The proposed revisions to the regulations revises and clarifies the regulations governing how the Services analyze and communicate the impacts of a possible designation of critical habitat, and how the Services may exercise the Secretary's discretion to exclude areas from designations. The proposed revisions to the regulations apply solely to the Services' procedures for the timing, scale, and scope of impact analyses and considering exclusions from critical habitat. The changes included in these proposed regulatory revisions serve to clarify, and do not expand the reach of, potential designations of critical habitat.
        NMFS and FWS are the only entities that are directly affected by this rule because we are the only entities that can designate critical habitat. No external entities, including any small businesses, small organizations, or small governments, will experience any economic impacts from this rule. Therefore, the only effect on any external entities large or small would likely be positive through reducing any uncertainty on the part of the public by simultaneous presentation of the best scientific data available and the economic analysis of the designation of critical habitat.
        Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq.)

        In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq.):
        (a) On the basis of information contained in the “Regulatory Flexibility Act” section above, these proposed regulations would not “significantly or uniquely” affect small governments. We have determined and certify pursuant to the Unfunded Mandates Reform Act, 2 U.S.C. 1502, that these regulations would not impose a cost of $100 million or more in any given year on local or State governments or private entities. A Small Government Agency Plan is not required. As explained above, small governments would not be affected because the proposed regulations would not place additional requirements on any city, county, or other local municipalities.
        (b) These proposed regulations would not produce a Federal mandate on State, local, or tribal governments or the private sector of $100 million or greater in any year; that is, this proposed rule is not a “significant regulatory action”' under the Unfunded Mandates Reform Act. These proposed regulations would impose no obligations on State, local, or tribal governments.
        Takings (E.O. 12630)
        In accordance with Executive Order 12630, these proposed regulations would not have significant takings implications. These proposed regulations would not pertain to “taking” of private property interests, nor would they directly affect private property. A takings implication assessment is not required because these proposed regulations (1) would not effectively compel a property owner to suffer a physical invasion of property and (2) would not deny all economically beneficial or productive use of the land or aquatic resources. These proposed regulations would substantially advance a legitimate government interest (conservation and recovery of endangered and threatened species) and would not present a barrier to all reasonable and expected beneficial use of private property.
        Federalism (E.O. 13132)
        In accordance with Executive Order 13132, we have considered whether these proposed regulations would have significant Federalism effects and have determined that a Federalism assessment is not required. These proposed regulations pertain only to determinations to designate critical habitat under section 4 of the Act, and would not have substantial direct effects on the States, on the relationship between the Federal Government and the States, or on the distribution of power and responsibilities among the various levels of government.
        Civil Justice Reform (E.O. 12988)
        These proposed regulations do not unduly burden the judicial system and meet the applicable standards provided in sections 3(a) and 3(b)(2) of Executive Order 12988. These proposed regulations would clarify how the Services will make designations of critical habitat under section 4 of the Act.
        Government-to-Government Relationship With Tribes
        In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), Executive Order 13175, and the Department of the Interior's manual at 512 DM 2, we readily acknowledge our responsibility to communicate meaningfully with recognized Federal Tribes on a government-to-government basis. In our proposed regulations, we explain that the Secretaries have discretion to exclude any particular area from the critical habitat upon a determination that the benefits of exclusion outweigh the benefits of specifying the particular area as part of the critical habitat. In identifying those benefits, the Secretaries may consider effects on tribal sovereignty.
        Paperwork Reduction Act
        This proposed rule does not contain any new collections of information that require approval by the OMB under the Paperwork Reduction Act. This proposed rule would not impose recordkeeping or reporting requirements on State or local governments, individuals, businesses, or organizations. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
        National Environmental Policy Act
        We are analyzing these proposed regulations in accordance with the criteria of the National Environmental Policy Act (NEPA), the Department of the Interior Manual (318 DM 2.2(g) and 6.3(D)), and Department of Commerce Departmental Administrative Order 216-6. We will complete our analysis, in compliance with NEPA, before finalizing these proposed regulations.
        Energy Supply, Distribution or Use E.O. 13211)
        Executive Order 13211 requires agencies to prepare Statements of Energy Effects when undertaking certain actions. These proposed regulations, if made final, are not expected to affect energy supplies, distribution, and use. Therefore, this action is not a significant energy action, and no Statement of Energy Effects is required.
        Clarity of This Proposed Rule
        We are required by Executive Orders 12866 and 12988 and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule or policy we publish must:
        (a) Be logically organized;
        (b) Use the active voice to address readers directly;
        (c) Use clear language rather than jargon;
        (d) Be divided into short sections and sentences; and
        (e) Use lists and tables wherever possible.

        If you feel that we have not met these requirements, send us comments by one of the methods listed in ADDRESSES. To better help us revise the proposed rule, your comments should be as specific as possible. For example, you should tell us the sections or paragraphs that are unclearly written, which sections or sentences are too long, the sections where you feel lists or tables would be useful, etc.
        References Cited

        A complete list of all references cited in this document is available on the Internet at http://www.regulations.gov at Docket No. FWS-R9-ES-2011-0073 or upon request from the U.S. Fish and Wildlife Service (see FOR FURTHER INFORMATION CONTACT).
        Authority

        We are taking this action under the authority of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq.).

          List of Subjects in 50 CFR Part 424
          Administrative practice and procedure, Endangered and threatened species.

        Proposed Regulation Promulgation

          PART 424—[AMENDED]
          1. The authority citation for part 424 is revised to read as follows:

            Authority:
             16 U.S.C. 1531 et seq.

          2. Revise § 424.19, including the section heading, to read as follows:

            § 424.19
            Impact analysis and exclusions from critical habitat.

            (a) At the time of publication of a proposed rule to designate critical habitat, the Secretary will make available for public comment the draft economic analysis of the designation. The draft economic analysis will be summarized in the Federal Register notice of the proposed designation of critical habitat.

            The Secretary will, to the maximum extent practicable, when proposing and finalizing designation of critical habitat, briefly describe and evaluate in the Federal Register notice any significant activities that are known to have the potential to affect an area considered for designation as critical habitat or be likely to be affected by the designation.
            (b) Prior to finalizing the designation of critical habitat, the Secretary will consider the probable economic, national security, and other relevant impacts of the designation upon proposed or ongoing activities. The Secretary will consider impacts at a scale that the Secretary determines to be appropriate, and will compare the impacts with and without the designation. Impacts may be qualitatively or quantitatively described.
            (c) The Secretary has discretion to exclude any particular area from the critical habitat upon a determination that the benefits of such exclusion outweigh the benefits of specifying the particular area as part of the critical habitat. In identifying those benefits, in addition to the impacts considered pursuant to paragraph (b) of this section, the Secretary may consider and assign the weight to any benefits relevant to the designation of critical habitat. The Secretary, however, will not exclude any particular area if, based on the best scientific and commercial data available, the Secretary determines that the failure to designate that area as critical habitat will result in the extinction of the species concerned.

            Dated: June 1, 2012.
            Eileen Sobeck,
            Acting Assistant Secretary for Fish and Wildlife and Parks, U.S. Department of the Interior.
            Dated: August 13, 2012.
            Alan D. Risenhoover,
            Acting Deputy Assistant Administrator for Regulatory Programs, National Marine Fisheries Service.

      [FR Doc. 2012-20438 Filed 8-23-12; 8:45 am]
      BILLING CODE 4310-55-P; 3510-22-P