        DEPARTMENT OF TRANSPORTATION
        National Highway Traffic Safety Administration
        49 CFR Parts 523, 531, 533, 534, 536 and 537
        [Docket No. NHTSA-2009-0059]
        Notice of Availability of a Draft Environmental Impact Statement (DEIS) for New Corporate Average Fuel Economy Standards; Notice of Public Hearing

          AGENCY:
          National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).

          ACTION:
          Notice of Availability of a Draft Environmental Impact Statement (DEIS); notice of public hearing.

          SUMMARY:

          NHTSA has prepared a DEIS to disclose and analyze the potential environmental impacts of proposed Corporate Average Fuel Economy (CAFE) standards for model year (MY) 2012-2016 passenger cars and light trucks, which NHTSA recently proposed pursuant to the Energy Independence and Security Act of 2007, and a reasonable range of alternative standards. To inform decisionmakers and the public, the DEIS compares the potential environmental impacts of the proposed standards and alternative standards reflecting a full range of stringencies, and it analyzes direct, indirect, and cumulative impacts in proportion to their significance. The DEIS provides a detailed analysis of potential impacts on energy resources, air quality, and climate. The DEIS uses climate modeling and NHTSA's own computer model (known as the “Volpe model”) to provide quantitative estimates of potential impacts on air quality, carbon dioxide (CO2) emissions, global mean surface temperature, precipitation, and sea level rise. The DEIS provides a qualitative analysis of resources that may be impacted by changes in climate, such as freshwater resources, terrestrial ecosystems, coastal ecosystems, land use, human health, and environmental justice. It examines these impacts on the U.S. and on a global scale. In addition, the DEIS analyzes potential environmental impacts unrelated to climate change.

          DATES:

            Public Hearing: The public hearing will be held on Friday, October 30, 2009 from 9 a.m. to 5 p.m. at the National Transportation Safety Board Conference Center, 429 L'Enfant Plaza, SW., Washington, DC 20594. NHTSA recommends that all persons attending the hearing arrive at least 45 minutes early in order to facilitate entry into the Conference Center. If you wish to attend or speak at the hearing, you must register in advance no later than Monday, October 19, 2009, by following the instructions in the Procedural Matters section of this notice. NHTSA will consider late registrants to the extent time and space allows, but NHTSA cannot ensure that late registrants will be able to speak at the hearing.

            Comments: To ensure that NHTSA has an opportunity to consider comments on the DEIS, NHTSA must receive written comments within 45 days of the date the U.S. Environmental Protection Agency (EPA) publishes a Notice of Availability of the DEIS in the Federal Register. NHTSA anticipates that EPA will publish that Notice on Friday, September 25, 2009, in which case NHTSA must receive written comments on the DEIS by Monday, November 9, 2009. NHTSA will try to consider comments received after that date to the extent the NEPA and rulemaking schedules allow, but NHTSA cannot ensure that it will be able to do so.

          FOR FURTHER INFORMATION CONTACT:

          Mr. Peter Prout or Ms. Angel Jackson, Telephone: 1-202-366-0846, Fuel Economy Division, Office of International Vehicle, Fuel Economy and Consumer Standards, National Highway Traffic Safety Administration, 1200 New Jersey Avenue, SE., Washington, DC 20590. E-mail: nhtsa.nepa@dot.gov. Information about the CAFE rulemaking and the NEPA process is also available at http://www.nhtsa.dot.gov.

          ADDRESSES:
          You may submit comments to the docket number identified in the heading of this document by any of the following methods:
          • Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting comments.
          • Mail: Docket Management Facility, M-30, U.S. Department of Transportation, West Building, Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590.
          • Hand Delivery or Courier: U.S. Department of Transportation, West Building, Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m. Eastern time, Monday through Friday, except Federal holidays.
          • Fax: 202-493-2251.
          Regardless of how you submit your comments, you should mention the docket number of this document.
          You may call the Docket at 1-800-647-5527.

          Note that all comments received, including any personal information, will be posted without change to http://www.regulations.gov.

        SUPPLEMENTARY INFORMATION:
        NHTSA has prepared a DEIS to disclose and analyze the potential environmental impacts of proposed CAFE standards for MY 2012-2016 passenger cars and light trucks and a reasonable range of alternative standards.1
           NHTSA invites Federal, State, and local agencies, Indian tribes, and the public to submit written comments and participate in a public hearing on the DEIS using the instructions set forth in this notice. As described in the Procedural Matters section of this notice, each speaker should anticipate speaking for approximately ten minutes, although we may need to adjust the time for each speaker if there is a large turnout. To facilitate review of the DEIS, NHTSA has posted the DEIS on its Web site, and it will be available in the Docket identified by the docket number at the beginning of this notice.2
           Copies in hard copy or electronic (CD-ROM) form have been sent to all stakeholders on NHTSA's National Environmental Policy Act (NEPA) mailing list for the proposed CAFE standards, and NHTSA will mail a CD-ROM containing the DEIS and its Appendices to any other interested party who requests one. NHTSA will consider the public comments received on the DEIS in preparing final NEPA documents to support final CAFE standards for MY 2012-2016 passenger cars and light trucks, which NHTSA plans to issue early next year. The agency's NEPA analysis is informing NHTSA's development of those standards.

            1 See National Environmental Policy Act (NEPA), 42 U.S.C. 4321-4347, and implementing regulations issued by the Council on Environmental Quality (CEQ), 40 CFR 1500-1508, and NHTSA, 49 CFR part 520.

            2 The DEIS is available at http://www.nhtsa.dot.gov/.

        NHTSA is proposing standards pursuant to amendments made by the Energy Independence and Security Act of 2007 (EISA) to the Energy Policy and Conservation Act of 1975 (EPCA).3

           To inform decisionmakers and the public, the DEIS analyzes the potential environmental impacts of the proposed standards and alternative standards reflecting a range of stringencies, and it analyzes direct, indirect, and cumulative impacts in proportion to their significance. The DEIS provides a detailed analysis of potential impacts on energy resources, air quality, and climate. The DEIS uses climate modeling and NHTSA's Volpe model to provide quantitative estimates of potential impacts on air quality, CO2 emissions, global mean surface temperature, precipitation, and sea level rise. The DEIS provides a qualitative analysis of resources that may be impacted by changes in climate, such as freshwater resources, terrestrial ecosystems, coastal ecosystems, land use, human health, and environmental justice. It examines impacts on the U.S. and on a global scale. In addition, the DEIS analyzes potential environmental impacts unrelated to climate change.

            3 EISA is Public Law 110-140, 121 Stat. 1492 (Dec. 19, 2007). EPCA is codified at 49 U.S.C. 32901 et seq.

          Background. EPCA sets forth extensive requirements concerning the rulemaking to establish MY 2012-2016 CAFE standards. It requires the Secretary of Transportation 4
           to establish average fuel economy standards at least 18 months before the beginning of each model year and to set them at “the maximum feasible average fuel economy level that the Secretary decides the manufacturers can achieve in that model year.” When setting “maximum feasible” fuel economy standards, the Secretary is required to “consider technological feasibility, economic practicability, the effect of other motor vehicle standards of the Government on fuel economy, and the need of the United States to conserve energy.” 5
           NHTSA construes the statutory factors as including environmental and safety considerations.6
           NHTSA also considers environmental impacts under NEPA when setting CAFE standards.

            4 NHTSA is delegated responsibility for implementing the EPCA fuel economy requirements assigned to the Secretary of Transportation. 49 CFR 1.50, 501.2(a)(8).

            5 49 U.S.C. 32902(a), 32902(f).

            6 See, e.g.,
            Competitive Enterprise Inst. v. NHTSA, 956 F.2d 321, 322 (D.C. Cir. 1992) (citing Competitive Enterprise Inst. v. NHTSA, 901 F.2d 107, 120 n.11 (D.C. Cir. 1990)).

        As recently amended, EPCA further directs the Secretary, after consultation with the Secretary of Energy (DOE) and the EPA Administrator, to establish separate average fuel economy standards for passenger cars and for light trucks manufactured in each model year beginning with model year 2011 “to achieve a combined fuel economy average for model year 2020 of at least 35 miles per gallon for the total fleet of passenger and non-passenger automobiles manufactured for sale in the United States for that model year.” 7

           In doing so, the Secretary of Transportation is required to increase average fuel economy standards for MY 2011-2020 vehicles through “annual fuel economy standard increases.” 8
           The standards for passenger cars and light trucks must be “based on 1 or more vehicle attributes related to fuel economy.” In any single rulemaking, standards may be established for not more than five model years.9
           EPCA also mandates a minimum standard for domestically manufactured passenger cars.10

            7 49 U.S.C.A. 32902(b)(1), 32902(b)(2)(A).

            8 49 U.S.C.A. 32902(b)(2)(C).

            9 49 U.S.C.A. 32902(b)(3)(A), 32902(b)(3)(B).

            10 49 U.S.C.A.32902(b)(4).

        Pursuant to EISA, on April 22, 2008, NHTSA proposed CAFE standards for MY 2011-2015 passenger cars and light trucks in a Notice of Proposed Rulemaking (NPRM).11
           On March 21, 2008, NHTSA issued a Notice of Intent (NOI) to prepare an EIS for the MY 2011-2015 CAFE standards.12

           On October 10, 2008, NHTSA submitted to the EPA its Final Environmental Impact Statement, Corporate Average Fuel Economy Standards, Passenger Cars and Light Trucks, Model Years 2011-2015. EPA published a Notice of Availability of the Final Environmental Impact Statement (FEIS) in the Federal Register on October 17, 2008.13
           On January 7, 2009, the DOT announced that the Bush Administration would not issue the final rule.14

            11 Notice of Proposed Rulemaking for Average Fuel Economy Standards, Passenger Cars and Light Trucks—Model Years 2011-2015, 73 FR 24352 (May 2, 2008). At the same time, NHTSA requested updated product plan information from the automobile manufacturers. See Request for Product Plan Information, Passenger Car Average Fuel Economy Standards—Model Years 2008-2020 and Light Truck Average Fuel Economy Standards—Model Years 2008-2020, 73 FR 21490 (May 2, 2008).

            12 73 FR 16615 (Mar. 28, 2008).

            13 73 FR 38204 (Jul. 3, 2008).

            14 The January 7, 2008 statement from the U.S. Department of Transportation can be found at: http://www.dot.gov/affairs/dot0109.htm (last accessed Jun. 9, 2009).

        In the context of calls for the development of new national policies to prompt sustained domestic and international actions to address the closely intertwined issues of energy independence, energy security, and climate change, President Obama issued a memorandum on January 26, 2009 to the Secretary of Transportation and the NHTSA Administrator.15
           The memorandum requested that NHTSA divide the MY 2011-2015 rulemaking into two parts: (1) MY 2011 standards, and (2) standards for MY 2012 and beyond.

            15 Memorandum for the Secretary of Transportation and the Administrator of the National Highway Traffic Safety Administration, 74 FR 4907 (Jan. 26, 2009).

        The request that the final rule establishing CAFE standards for MY 2011 passenger cars and light trucks be prescribed by March 30, 2009 was based on two factors. One was the requirement that the final rule regarding fuel economy standards for a given model year must be adopted at least 18 months before the beginning of that model year (49 U.S.C. 32902(g)(2)). The other was that the beginning of MY 2011 is considered for the purposes of CAFE standard setting to be October 1, 2010.
        For MYs 2012 and beyond, the President requested that, before promulgating a final rule concerning the model years after model year 2011, NHTSA

          [C]onsider the appropriate legal factors under the EISA, the comments filed in response to the Notice of Proposed Rulemaking, the relevant technological and scientific considerations, and to the extent feasible, the forthcoming report by the National Academy of Sciences mandated under section 107 of EISA.

        In addition, the President requested that NHTSA consider whether any provisions regarding preemption are appropriate under applicable law and policy.
        On April 1, 2009, NHTSA published a NOI to prepare an EIS for the MY 2012-2016 CAFE standards. The NOI described the statutory requirements for the standards, provided initial information about the NEPA process, and initiated scoping 16
           by requesting public input on the scope of the environmental analysis to be conducted.17

            16 Scoping, as defined under NEPA, is an early and open process for determining the scope of issues to be addressed in an EIS and for identifying the significant issues related to a proposed action. See 40 CFR 1501.7.

            17 See Notice of Intent to Prepare an Environmental Impact Statement for New Corporate Average Fuel Economy Standards, 74 FR 14857 (Apr. 1, 2009).

          The Proposed Action and Possible Alternatives: Concurrent with this DEIS, NHTSA and EPA are each announcing joint proposed rules whose benefits would address the urgent and closely intertwined challenges of energy independence and security and global warming. These proposed rules call for a strong and coordinated federal greenhouse gas and fuel economy program for passenger cars, light-duty-trucks, and medium-duty passenger vehicles (hereafter light-duty vehicles), referred to as the National Program. The proposed rules can achieve substantial improvements in fuel economy and reductions of greenhouse gas (GHG) emissions from the light-duty vehicle part of the transportation sector, based on technology that is already being commercially applied in most cases and that can be incorporated at a reasonable cost.
        The joint proposed standards are consistent with the President's announcement on May 19, 2009 of a National Fuel Efficiency Policy of establishing consistent, harmonized, and streamlined requirements that would improve fuel economy and reduce greenhouse gas emissions for all new passenger cars and light trucks sold in the United States.18
           The National Program holds out the promise of delivering additional environmental and energy benefits, cost savings, and administrative efficiencies on a nationwide basis that might not be available under a less coordinated approach. The proposed National Program also offers the prospect of regulatory convergence by making it possible for the standards of two different federal agencies and the standards of California and other states to act in a unified fashion in providing these benefits. This would allow automakers to produce and sell a single fleet nationally. Thus, it may also help to mitigate the additional costs that manufacturers would otherwise face in having to comply with multiple sets of federal and state standards. This joint notice is also consistent with the Notice of Upcoming Joint Rulemaking signed by DOT and EPA on May 19 19
           and responds to the President's January 26, 2009 memorandum on CAFE standards for model years 2011 and beyond.20

            18 President Obama Announces National Fuel Efficiency Policy, The White House, May 19, 2009. Available at: http://www.whitehouse.gov/the_press_office/President-Obama-Announces-National-Fuel-Efficiency-Policy/ (last accessed August 18, 2009). Remarks by the President on National Fuel Efficiency Standards, The White House, May 19, 2009. Available at: http://www.whitehouse.gov/the_press_office/Remarks-by-the-President-on-national-fuel-efficiency-standards/ (Last accessed August 18, 2009).

            19 74 FR 24007 (May 22, 2009).

            20 Available at: http://www.whitehouse.gov/the_press_office/Presidential_Memorandum_Fuel_Economy/ (last accessed on August 18, 2009)

        Under the proposed standards, each vehicle manufacturer's required level of CAFE would be based on target levels of average fuel economy set for vehicles of different sizes and on the distribution of that manufacturer's vehicles among those sizes. Size would be defined by vehicle footprint.21

           The level of the performance target for each footprint is intended to reflect the technological and economic capabilities of the industry. The specific target for each footprint is the same for all manufacturers, regardless of differences in their overall fleet mix. Compliance would be determined by comparing a manufacturer's harmonically averaged fleet fuel economy levels in a model year with a required fuel economy level calculated using the manufacturer's actual production levels and the targets for each footprint of the vehicles that it produces.

            21 A vehicle's “footprint” is generally defined as “the product of track width [the lateral distance between the centerlines of the base tires at ground, including the camber angle] * * * times wheelbase [the longitudinal distance between front and rear wheel centerlines] * * * divided by 144 * * *.” 49 CFR 523.2.

        NEPA requires an agency to compare the potential environmental impacts of its proposed action and a reasonable range of alternatives. In developing the proposed standards and the alternatives, NHTSA considered the four EPCA factors underlying maximum feasibility (technological feasibility, economic practicability, the effect of other standards of the Government on fuel economy, and the need of the nation to conserve energy) as well as relevant environmental and safety considerations. NHTSA is also guided by President Obama's memorandum to DOT on January 26, 2009, as described in Background.

        Section 1501.6 of the CEQ regulations emphasize agency cooperation early in the NEPA process and allow a lead agency (in this case, NHTSA) to request the assistance of other agencies that either have jurisdiction by law or have special expertise regarding issues considered in an EIS. NHTSA invited EPA to be a cooperating agency, pursuant to the CEQ regulations, because of its special expertise in the areas of climate change and air quality.22
           On May 12, 2009, the EPA accepted NHTSA's invitation and agreed to become a cooperating agency. NHTSA also consulted with DOE.

            22 40 CFR 1501.6.

        The Preferred Alternative requires approximately a 4.3-percent average annual increase in mpg, resulting in an estimated required MY 2016 fleetwide 38.0 mpg for passenger cars and 28.3 mpg for light trucks.23
           The Preferred Alternative also results in a combined estimated required fleetwide 34.1 mpg in MY 2016. The agency's Preferred Alternative represents the required fuel economy level that we have tentatively determined to be the maximum feasible under EPCA, based on our balancing of statutory considerations. A full discussion regarding the agency's tentative conclusion that Alternative 4 represents the “maximum feasible” average fuel economy level that the Secretary has decided the manufacturers can achieve, considering the statutory and other relevant factors, and is therefore the agency's Preferred Alternative, can be found in Section IV.F of the joint preamble of the Notice of Proposed Rulemaking.

            23 NHTSA notes that it cannot set out the precise level of CAFE that each manufacturer would be required to meet for each model year under the proposed standards, because the level for each manufacturer would depend on that manufacturer's final production figures and fleet mix for a particular model year. That information will not be available until the end of each model year.

        This alternative, along with EPA's proposed standards, form the National Program and together are consistent with the National Fuel Efficiency Policy announced by President Obama on May 19, 2009. Under the National Program, the overall light-duty vehicle fleet would reach 35.5 mpg in MY 2016, if all reductions were made through fuel economy improvements. In considering further action on the proposed standards and reasonable alternatives, NHTSA also will consider its NEPA analysis.
        In addition to the proposed standards, NHTSA has considered several regulatory alternatives for purposes of both Executive Order 12866 24
           and its NEPA analysis, which includes a “no action” alternative as required by NEPA. The alternatives, in order of increasing stringency, are:

            24 Exec. Order 12,866, “Regulatory Planning and Review,” 58 FR 51735, Oct. 4, 1993, as amended.

        (1) A “no action” alternative, which assumes, strictly for purposes of NEPA analysis, that no action would occur under CAFE (or under the National Program). Under that alternative, NHTSA would not issue a rule regarding CAFE standards for MY 2012-2016. The No Action Alternative assumes that average fuel economy levels in the absence of CAFE standards beyond MY 2011 would equal the higher of the agencies' collective market forecast or the manufacturers' required level of average fuel economy for MY 2011. The MY 2011 fuel economy level represents the standard NHTSA believes manufacturers would continue to abide by, assuming NHTSA does not issue a rule. NEPA requires agencies to consider a “no action” alternative in their NEPA analyses and to compare the effects of not taking action with the effects of the reasonable action alternatives to demonstrate the different environmental effects of the action alternatives. The recent amendments to EPCA direct NHTSA to set new CAFE standards and do not permit the agency to take no action on fuel economy.25
           NHTSA refers to this as the “No Action Alternative” or as a “no increase” or “baseline” alternative.

            25 CEQ has explained that “[T]he regulations require the analysis of the no action alternative even if the agency is under a court order or legislative command to act. This analysis provides a benchmark, enabling decisionmakers to compare the magnitude of environmental effects of the action alternatives. It is also an example of a reasonable alternative outside the jurisdiction of the agency which must be analyzed. [See 40 CFR 1502.14(c).] * * * Inclusion of such an analysis in the EIS is necessary to inform Congress, the public, and the President as intended by NEPA. [See 40 CFR 1500.1(a).]” Forty Most Asked Questions Concerning CEQ's National Environmental Policy Act Regulations, 46 FR 18026 (1981) (emphasis added).

        (2) A 3-percent average annual increase in mpg, resulting in a required MY 2016 fleetwide 35.6 mpg for passenger cars and 26.6 mpg for light trucks. The 3-Percent Alternative results in a combined required fleetwide 32.0 mpg in MY 2016.
        (3) A 4-percent average annual increase in mpg, resulting in a required MY 2016 fleetwide 37.4 mpg for passenger cars and 27.9 mpg for light trucks. The 4-Percent Alternative results in a combined required fleetwide 33.6 mpg in MY 2016.
        (4) An approximately 4.3-percent average annual increase in mpg, resulting in an estimated required MY 2016 fleetwide 38.0 mpg for passenger cars and 28.3 mpg for light trucks. The Preferred Alternative results in a combined estimated required fleetwide 34.1 mpg in MY 2016.
        (5) A 5-percent average annual increase in mpg, resulting in a required MY 2016 fleetwide 39.3 mpg for passenger cars and 29.3 mpg for light trucks. The 5-Percent Alternative results in a required achieved fleetwide 35.2 mpg in MY 2016.
        (6) The “MNB Alternative,” in which the Volpe model applies technologies to the vehicle market forecast until marginal benefits are estimated to equal marginal costs and net benefits are maximized. In this case, the model continues to include technologies until the marginal cost of adding the next technology exceeds the marginal benefit. This alternative requires approximately a 5.9-percent average annual increase in mpg, resulting in a required MY 2016 fleetwide 40.9 mpg for passenger cars and 30.6 mpg for light trucks. The MNB Alternative results in a combined required fleetwide 36.8 mpg in MY 2016.
        (7) A 6-percent average annual increase in mpg, resulting in a required MY 2016 fleetwide 41.1 mpg for passenger cars and 30.7 mpg for light trucks. The 6-Percent Alternative results in a combined required fleetwide 36.9 mpg in MY 2016.

        (8) A 7-percent average annual increase, resulting in a required MY 2016 fleetwide 43.1 mpg for passenger cars and 32.2 mpg for light trucks. The 7-Percent Alternative results in a combined required fleetwide 38.7 mpg in MY 2016.
        (9) The “TCTB Alternative,” in which the Volpe model applies technologies to the vehicle market forecast until total cost equals total benefit. In this case, the model increases the standard to a point where essentially total costs of the technologies added together over the baseline equals total benefits added over the baseline. This alternative requires approximately a 6.7-percent average annual increase in mpg, resulting in a required MY 2016 fleetwide 42.7 mpg for passenger cars and 31.5 mpg for light trucks. The TCTB Alternative results in a combined required fleetwide 38.1 mpg in MY 2016.
        Of the eight action alternatives that NHTSA is proposing, Alternative 2 (3-Percent Alternative), Alternative 3 (4-Percent Alternative), Alternative 5 (5-Percent Alternative), Alternative 7 (6-Percent Alternative), and Alternative 8 (7-Percent Alternative), require the average fuel economy for the industry-wide combined passenger car and light truck fleet to increase, on average, by a specified percentage for each model year from 2012-2016. Because the percentage increases in stringency are “average” increases, they may either be constant throughout the period or may vary from year to year.

        Three of the alternatives were added to the list of alternatives first proposed in the NOI to prepare an EIS for MY 2012-2016—the agency's Preferred Alternative (Alternative 4), an alternative that maximizes net benefits (MNB) (Alternative 6), and an alternative under which total costs equal total benefits (TCTB) (Alternative 9). The agency's Preferred Alternative represents the required fuel economy level that we have tentatively determined to be maximum feasible under EPCA, based on our balancing of statutory and other considerations. See Background. The other two alternatives, MNB and TCTB, represent fuel economy levels that are dependent on the agency's best estimate of relevant economic variables (e.g., gasoline prices, social cost of carbon, the discount rate, and rebound effect). The MNB Alternative and TCTB Alternative provide the decisionmaker and the public with useful information about where the standards would be set if costs and benefits were balanced in two different ways. All three alternatives (Preferred Alternative, MNB Alternative, and TCTB Alternative) are placed in context by identifying the approximate, on average annual percentage fuel economy increase, so that the public is able to see where they fall on the continuum of alternatives. See Section Three of NHTSA's Preliminary Regulatory Impact Analysis for a more detailed description of the MNB and TCTB Alternatives.
        NHTSA's decision process must balance the four EPCA factors and be informed by the environmental considerations of NEPA. In developing its reasonable range of alternatives, NHTSA identified alternative stringencies that represent the full spectrum of potential environmental impacts and safety considerations.26

            26 Given EPCA's mandate that NHTSA consider specific factors in setting CAFE standards and NEPA's instruction that agencies give effect to NEPA's policies “to the fullest extent possible,” NHTSA recognizes that a large number of alternative CAFE levels are potentially conceivable and that the alternatives described above essentially represent several of many points on a continuum of alternatives. Along the continuum, each alternative represents a different way in which NHTSA conceivably could assign weight to each of the four EPCA factors and NEPA's policies. CEQ guidance instructs that “[w]hen there are potentially a very large number of alternatives, only a reasonable number of examples, covering the full spectrum of alternatives, must be analyzed and compared in the EIS.” CEQ, Forty Most Asked Questions Concerning CEQ's National Environmental Policy Act Regulations, 46 FR 18026, 18027, Mar. 23, 1981 (emphasis original).

          The NEPA Process and the DEIS. Under NEPA, a federal agency must analyze environmental impacts if the agency implements a proposed action, provides funding for an action, or issues a permit for that action. Specifically, NEPA directs that “to the fullest extent possible,” federal agencies proposing “major federal actions significantly affecting the quality of the human environment” must prepare “a detailed statement” on the environmental impacts of the proposed action (including alternatives to the proposed action). To inform its development of the new MY 2012-2016 CAFE standards required under EPCA, as amended by EISA, NHTSA prepared this draft EIS to analyze and disclose the potential environmental impacts of a proposed preferred alternative and other proposed alternative standards. To inform its development of the new MY 2012-2016 CAFE standards required under EPCA, as amended by EISA, NHTSA prepared the DEIS to analyze and disclose the potential environmental impacts of a proposed preferred alternative and other proposed alternative standards pursuant to CEQ NEPA implementing regulations, DOT Order 5610.1C, and NHTSA regulations.27
           The DEIS compares the potential environmental impacts among alternatives, including a no action alternative. It also analyzes direct, indirect, and cumulative impacts and discusses impacts in proportion to their significance.

            27 NEPA is codified at 42 U.S.C. 4321-4347. CEQ NEPA implementing regulations are codified at 40 CFR Parts 1500-1508, and NHTSA's NEPA implementing regulations are codified at 49 CFR Part 520.

        In April 2009, NHTSA issued a NOI to prepare an EIS for the MY 2012-2016 CAFE standards and opened the NEPA “scoping” process.28

           The purpose of this notice was to request from the public its views and comments on the scope of the NEPA analysis, including the impacts and alternatives the DEIS should address, and to inform NHTSA of any available studies that would assist in the impact analysis for global climate-change issues. NHTSA mailed both Federal Register notices to hundreds of stakeholders and developed a mailing list of interested parties, including Federal agencies with environmental expertise, the Governors of every U.S. territory and State (or State NEPA contacts they identified), Indian tribes, organizations representing state and local governments and tribes, the automobile industry, environmental organizations, and other stakeholders interested in the CAFE program. NHTSA received seven responses to its scoping notice. Comments were provided by federal and state agencies, one automobile trade association, one environmental advocacy group, and three individuals. NHTSA reviewed and considered the public scoping comments and the studies commenters suggested. The predominant request by commenters during the scoping process was that NHTSA focus the DEIS on the standards' possible impacts on both air quality and global climate change.

            28 See Notice of Intent to prepare an Environmental Impact Statement for New Corporate Average Fuel Economy Standards, 74 FR 14857 (Apr. 1, 2009).

        NHTSA consulted with various federal agencies in the development of this DEIS, including the EPA, Bureau of Land Management, Centers for Disease Control and Prevention, Minerals Management Service, National Park Service, U.S. Army Corps of Engineers, U.S. Forest Service, Advisory Council on Historic Preservation. NHTSA is also currently exploring its Section 7 obligations under the Endangered Species Act with the U.S. Fish and Wildlife Service and the National Oceanic and Atmospheric Administration Fisheries Service.
        NHTSA used the scoping process to help determine “the range of actions, alternatives, and impacts to be considered” in the DEIS and to identify the most important issues for analysis.29
           The DEIS consists of a Summary and nine chapters: (1) Purpose and Need for the Proposed Action; (2) The Proposed Action and Alternatives; (3) Affected Environment and Consequences; (4) Cumulative Impacts; (5) Mitigation; (6) Preparers; (7) References; (8) Distribution List; and (9) Index. Five appendices include: sources identified in scoping comments (Appendix A); agency consultation letters (Appendix B); modeling data for air emissions and climate modeling (Appendix C); NHTSA's Preliminary Regulatory Impact Assessment (Appendix D); and EPA's Draft Regulatory Impact Assessment (Appendix E).

            29 See 40 CFR 1500.5(d), 1501.7, 1508.25.

        The DEIS devotes the most detailed analysis to direct, indirect and cumulative impacts of the proposed standards and the alternatives on energy, air quality, and climate. Key findings concerning estimated potential impacts on CO2 emissions, global mean surface temperature, rainfall, and sea level rise include the following:
        • Global CO
          2
          Emissions Reductions. Over the 2012 to 2100 timeframe, the range of alternatives NHTSA analyzed would reduce global CO2 emissions (from all sources) by about 19 to 42 billion metric tons of CO2 (based on global emissions of 5.29 trillion metric tons of CO2) from the emissions projected under the No Action Alternative. The alternatives would slow the expected increase in GHG emissions from the transportation sector over this period. Under all of the alternatives analyzed, growth in the number of passenger cars and light trucks in use throughout the United States, combined with assumed increases in their average use (annual vehicle miles traveled per vehicle), is projected to result in growth in total passenger car and light truck travel. This growth in travel overwhelms improvements in fuel economy such that, despite increases in fuel economy, total fuel consumption by U.S. passenger cars and light trucks is projected to increase under each of the action alternatives. Because CO2 emissions are a direct consequence of total fuel consumption, the same result is projected for total CO2 emissions from passenger cars and light trucks.
        • CO
          2
          Concentration and Global Mean Surface Temperature: Estimates for CO2 atmospheric concentrations and global mean surface temperature vary considerably, depending on which global emissions scenario is used as a reference case. Temperature increases are sensitive to climate sensitivity. Yet, projected differences among the CAFE alternatives are small—i.e., CO2 concentrations as of 2100 range from 779.0 ppm under the most stringent alternative (TCTB) to 783.0 ppm under the No Action Alternative. For 2030 and 2050, the range is even smaller. Temperatures are within 0.007 °C to 0.015 °C across alternatives—regardless of reference scenario and climate sensitivity.
        • Precipitation: The CAFE alternatives reduce temperature increases slightly and thus reduce increases in precipitation slightly, compared to the No Action Alternative.
        • Impact on Sea Level Rise: The impacts on sea level rise across the alternatives in 2100 range from 38.00 centimeters under the No Action Alternative to 37.86 centimeters under the TCTB Alternative, for a maximum reduction of 0.14 centimeters by 2100 from the No Action Alternative.

        These conclusions are not meant to be interpreted as expressing NHTSA's views that CO2 impacts on global mean surface temperature, precipitation, or sea-level rise are not areas of concern for policymakers. Under NEPA, the agency is obligated to discuss “the environmental impact[s] of the proposed action.” 42 U.S.C. Sec. 4332(2)(C)(i) (emphasis added). The EIS analysis is intended to fulfill NHTSA's obligations in this regard. The DEIS provides a qualitative analysis of resources that may be impacted by changes in climate, such as freshwater resources, terrestrial ecosystems, coastal ecosystems, land use, human health, socioeconomics and environmental justice. It examines impacts on the U.S. and on a global scale. In addition, the DEIS qualitatively examines the alternatives' non-climate-change-related direct, indirect and cumulative impacts on potentially affected resources. Such resources include water resources, biological resources, land use, hazardous materials, safety, noise, historic and cultural resources, and environmental justice.

        Throughout the DEIS, NHTSA's analysis relies extensively on findings of the United Nations Intergovernmental Panel on Climate Change (IPCC) and the U.S. Climate Change Science Program (USCCSP), including those presented in the IPCC's Fourth Assessment Report: Climate Change 2007 and the USCCSP's Scientific Assessments of the Effects of Global Change on the United States and Synthesis and Assessment Products.30
           The DEIS also uses applicable CEQ regulations to acknowledge uncertainty and incomplete or unavailable information relevant to NHTSA's NEPA analysis.31

            30 See generally http://www.ipcc.ch/ipccreports/assessments-reports.htm (last visited June 25, 2008) and http://www.climatescience.gov (last visited June 25, 2008).

            31 40 CFR 1502.22; see 40 CFR 1502.21.

          Procedural Matters: The hearing will be open to the public with advanced registration for seating on a space-available basis. Individuals wishing to register to assure a seat in the public seating area should provide their name, affiliation, phone number, and e-mail address to Mr. Peter Prout or Ms. Angel Jackson using the contact information in the FOR FURTHER INFORMATION CONTACT section at the beginning of this notice no later than Monday October 19, 2009. Should it be necessary to cancel the hearing due to an emergency or some other reason, NHTSA will take all available means to notify registered participants by e-mail or telephone.

        The hearing will be held at a site accessible to individuals with disabilities. Individuals who require accommodations such as sign language interpreters should contact Mr. Peter Prout or Ms. Angel Jackson using the contact information in the FOR FURTHER INFORMATION CONTACT section above no later than Monday October 19, 2009. Any written materials NHTSA presents at the hearing will be available electronically on the day of the hearing to accommodate the needs of the visually impaired. A transcript of the hearing and information received by NHTSA at the hearing will be placed in the docket for this notice at a later date.
        How long will I have to speak at the public hearing?

        Once NHTSA learns how many people have registered to speak at the public hearing, NHTSA will allocate an appropriate amount of time to each participant, allowing time for lunch and necessary breaks throughout the day. For planning purposes, each speaker should anticipate speaking for approximately ten minutes, although we may need to adjust the time for each speaker if there is a large turnout. To accommodate as many speakers as possible, NHTSA prefers that speakers not use technological aids (e.g., audio-visuals, computer slideshows). However, if you plan to do so, you must let Mr. Peter Prout or Ms. Angel Jackson know by Monday October 19, 2009, using the contact information in the FOR FURTHER INFORMATION CONTACT section above. You also must make arrangements to provide your presentation or any other aids to NHTSA in advance of the hearing in order to facilitate set-up. During the week of October 19th, NHTSA will post information on its Web site (http://www.nhtsa.dot.gov) indicating the amount of time allocated for each speaker and each speaker's approximate order on the agenda for the hearing.
        How can I get a copy of the DEIS?
        The DEIS is available on NHTSA's Web site at http://www.nhtsa.dot.gov/, and it will be available in the Docket identified by the docket number at the beginning of this notice. To request a CD-ROM containing the DEIS and its Appendices, please contact Mr. Peter Prout or Ms. Angel Jackson using the contact information in the FOR FURTHER INFORMATION CONTACT section above.
        How do I prepare and submit written comments?
        It is not necessary to attend or to speak at the public hearing to be able to comment on the issues. NHTSA invites the submission of written comments on the DEIS, which the agency will consider in preparing the final NEPA documents to support the new CAFE standards for MY 2012-2016 passenger cars and light trucks. Your comments must be written and in English. To ensure that your comments are correctly filed in the Docket, please include the docket number at the beginning of this notice in your comments.
        Your primary comments may not exceed 15 pages.32
           However, you may attach supporting documents to your primary comments. There is no limit to the length of the attachments.

            32 49 CFR 553.21.

        Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register at 65 FR 19477, April 11, 2000, or you may visit http://www.regulations.gov.

        If you wish Docket Management to notify you upon its receipt of your comments, enclose a self-addressed, stamped postcard in the envelope containing your comments. Upon receiving your comments, Docket Management will return the postcard by mail.
        How do I submit confidential business information?
        If you wish to submit any information under a claim of confidentiality, send three copies of your complete submission, including the information you claim to be confidential business information, to the Chief Counsel, National Highway Traffic Safety Administration, 1200 New Jersey Avenue, SE., Washington, DC 20590. Include a cover letter supplying the information specified in our confidential business information regulation (49 CFR part 512).
        In addition, send two copies from which you have deleted the claimed confidential business information to Docket Management, 1200 New Jersey Avenue, SE., West Building, Room W12-140, Washington, DC 20590, or submit them electronically, in the manner described at the beginning of this notice.
        Will the agency consider late comments?

        NHTSA will consider all comments that Docket Management receives before the close of business on the comment closing date indicated above under DATES. To the extent the NEPA and rulemaking schedules allow, NHTSA will try to consider comments that Docket Management receives after that date, but we cannot ensure that we will be able to do so.33

            33 See 49 CFR 553.23.

        Please note that even after the comment closing date, we will continue to file relevant information in the docket as it becomes available. Further, some commenters may submit late comments. Accordingly, we recommend that you periodically check the docket for new material.

          Issued: September 22, 2009.
          Ronald Medford,
          Acting Deputy Administrator.

      [FR Doc. E9-23199 Filed 9-22-09; 4:15 pm]
      BILLING CODE 4910-59-P


        DEPARTMENT OF ENERGY
        48 CFR Parts 909, 913, and 970
        RIN 1991-AB62
        Acquisition Regulation: Technical Revisions or Amendments To Update Clauses

          AGENCY:
          Department of Energy.

          ACTION:
          Notice of proposed rulemaking.

          SUMMARY:

          The Department of Energy (DOE) is proposing to amend its acquisition regulation to remove and add specified clauses, and revise certain other clauses, currently contained in the Department of Energy Acquisition Regulation (DEAR). This rule also proposes to revise associated regulatory coverage, as necessary.

          DATES:
          Written comments (three copies) on the proposed rulemaking must be received on or before August 29, 2005.

          ADDRESSES:

          This notice of proposed rulemaking is available and comments may be submitted online at http://www.Regulations.gov. Comments may be submitted by e-mail to Michael.fischetti@hq.doe.gov. Comments may be mailed to: Michael P. Fischetti, ME-61, U.S. Department of Energy, Office of Procurement and Assistance Management, 1000 Independence Avenue, SW., Washington, DC 20585.
          Comments by e-mail are encouraged.

          FOR FURTHER INFORMATION CONTACT:
          Michael Fischetti at (202) 287-1304 or Michael.fischetti@hq.doe.gov.

        SUPPLEMENTARY INFORMATION

          I. Background
          II. Section-by-Section Analysis
          III. Procedural Requirements
          A. Review Under Executive Order 12866
          B. Review Under Executive Order 12988
          C. Review Under the Regulatory Flexibility Act
          D. Review Under the Paperwork Reduction Act
          E. Review Under the National Environmental Policy Act
          F. Review Under Executive Order 13132
          G. Review Under the Unfunded Mandates Reform Act of 1995
          H. Review Under the Treasury and General Government Appropriations Act, 1999
          I. Review Under Executive Order 13211
          J. Review Under the Treasury and General Government Appropriations Act, 2001
          K. Approval by the Office of the Secretary of Energy

        I. Background
        The purpose of this rulemaking is to update various clauses within 48 CFR chapter 9 to specify contractor responsibility in the areas of performance, work authorization, and subcontract flow down provisions.
        This rulemaking would modify current guidance contained in DEAR clauses concerning Debarment; Fast Payment Procedures; Laws, Regulations, and Directives; Work Authorization; Integration of Environment, Safety, and Health into Work Planning and Execution; and Facilities Management.
        II. Section-by-Section Analysis
        The Department of Energy proposes to amend the regulation as follows:
        1. DEAR 909.406, Debarment, is proposed to be revised to permit a debarring official to debar a contractor, based upon a preponderance of the evidence, for falsely certifying or otherwise representing itself as a small, small disadvantaged, women- or veteran-owned, or similar concern.
        2. DEAR subpart 913.4 Fast Payment Procedure is proposed to be deleted in its entirety. DEAR 913.402 currently prohibits the use of fast payment procedures. Upon review of the Department's policy and the Federal Acquisition Regulation (FAR), DOE has determined that fast payment procedures could be used by DOE and that FAR coverage in subpart 13.4, Fast Payment Procedure, is adequate to protect the Department's interests. Removal of this section would permit DOE to use fast payment procedures under FAR 13.4.
        3. DEAR 970.5204-2, Laws, Regulations, and DOE Directives, is proposed to be revised by adding the following three sentences to the end of paragraph (e): “Unless the contract specifically instructs the contractor regarding subcontract flow-down, the contractor shall be responsible for determining the appropriate implementation of the requirements, including the extent to, and manner in which, requirements should be reflected in subcontracts. In doing so, the contractor retains the same responsibility for performance and cost management that it has for all contract efforts. Specifically, the contractor shall not unnecessarily or imprudently flow down requirements to subcontracts and shall only incur costs that would be incurred by a prudent person in the conduct of a competitive business.” This language is intended to emphasize the contractor's responsibility in effective cost management in flowing down prime contract requirements to its subcontractors.
        4. DEAR 970.5211-1, Work Authorization, is proposed to be added, with prescriptive language in DEAR 970.1170-1 and a contract clause instruction in DEAR 970.1170-2. This clause incorporates requirements that are presently located in the contractor's requirements document attached to DOE Directive DOE O 412.1, Work Authorization System. The DOE O 412.1 currently establishes an assignment and control process for budget of estimated costs, description of work, and schedule of performance for individual work activities performed by designated contractors within the contract scope of work. The proposed clause would eliminate the need for a contractor requirements document by establishing the requirements as a DEAR clause.
        5. DEAR 970.5223-1, Integration of Environment, Safety, and Health (ES&H) specifies contractor requirements pertaining to ES&H. It is proposed to be modified by making some editorial changes to paragraphs (d) and (e) and adding the following three sentences to paragraph (h): “Unless the contract specifically instructs the contractor regarding subcontract flow-down, the contractor shall be responsible for determining the appropriate implementation of the requirements, including the extent to which, and manner in which, requirements should be reflected in subcontracts. In doing so, the contractor retains the same responsibility for performance and cost management that it has for all contract efforts. Specifically, the contractor shall not unnecessarily or imprudently flow down requirements to subcontracts and shall only incur costs that would be incurred by a prudent person in the conduct of a competitive business.” This language is intended to emphasize the contractor's responsibility in effective cost management in flowing down prime contract requirements to its subcontractors.
        6. DEAR 970.5237-2, Facilities Management, and the corresponding instruction at DEAR 970.37, Facilities Management Contracting, are proposed to be deleted. They currently provide guidance concerning site development planning, design criteria, energy management, and subcontract requirements. DOE directives, such as DOE O 430.1A, Life Cycle Asset Management, already provide sufficient guidance.
        III. Procedural Requirements
        A. Review Under Executive Order 12866
        Today's regulatory action has been determined not to be a “significant regulatory action” under Executive Order 12866, “Regulatory Planning and Review,” (58 FR 51735, October 4, 1993). Accordingly, this rulemaking is not subject to review under that Executive Order by the Office of Information and Regulatory Affairs (OIRA) of the Office of Management and Budget (OMB).
        B. Review Under Executive Order 12988

        With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” 61 FR 4729 (February 7, 1996), imposes on Executive agencies the general duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; and (3) provide a clear legal standard for affected conduct rather than a general standard and promote simplification and burden reduction. With regard to the review required by section 3(a), section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, these proposed regulations meet the relevant standards of Executive Order 12988.
        C. Review Under the Regulatory Flexibility Act

        This rulemaking has been reviewed under the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., which requires preparation of an initial regulatory flexibility analysis for any rule that must be proposed for public comment and that is likely to have significant economic impact on a substantial number of small entities. The rulemaking would not have a significant economic impact on small entities. While rule requirements may flow down to subcontractors in certain circumstances, the costs of compliance are not estimated to be large and, in any event, would be reimbursable expenses under the contract or subcontract.
        Accordingly, DOE certifies that this rulemaking would not have a significant economic impact on a substantial number of small entities, and, therefore, no regulatory flexibility analysis has been prepared.
        D. Review Under the Paperwork Reduction Act
        Information collection or record keeping requirements contained in this rulemaking have been previously cleared under Office of Management and Budget paperwork clearance package Number 1910-0300. There are no new burdens imposed by this rulemaking.
        E. Review Under the National Environmental Policy Act

        DOE has concluded that promulgation of this proposed rule falls into a class of actions which would not individually or cumulatively have significant impact on the human environment, as determined by DOE's regulations (10 CFR part 1021, subpart D) implementing the National Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et seq.). Specifically, this proposed rule is categorically excluded from NEPA review because the amendments to the DEAR would be strictly procedural (categorical exclusion A6). Therefore, this proposed rule does not require an environmental impact statement or environmental assessment pursuant to NEPA.
        F. Review Under Executive Order 13132
        Executive Order 13132 (64 FR 43255, August 4, 1999) imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. Agencies are required to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and carefully assess the necessity for such actions. The Executive Order does require agencies to have an accountability process to ensure meaningful and timely input by state and local officials in the development of regulatory policies that have federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations (65 FR 13735). DOE has examined today's proposed rule and has determined that it does not preempt State law and does not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. No further action is required by Executive Order 13132.
        G. Review Under the Unfunded Mandates Reform Act of 1995
        The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) generally requires a Federal agency to perform a written assessment of costs and benefits of any rule imposing a Federal Mandate with costs to State, local or tribal governments, or to the private sector, of $100 million or more. This proposed rulemaking would only affect private sector entities, and the impact is less than $100 million.
        H. Review Under the Treasury and General Government Appropriations Act, 1999
        Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277), requires Federal agencies to issue a Family Policymaking Assessment for any rulemaking or policy that may affect family well-being. This rulemaking will have no impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.
        I. Review Under Executive Order 13211
        Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001), requires Federal agencies to prepare and submit to the Office of Information and Regulatory Affairs (OIRA), Office of Management and Budget, a Statement of Energy Effects for any proposed significant energy action. A “significant energy action” is defined as any action by an agency that promulgates or is expected to lead to promulgation of a final rule, and that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy, or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use. Today's rule is not a significant energy action. Accordingly, DOE has not prepared a Statement of Energy Effects.
        J. Review Under the Treasury and General Government Appropriations Act, 2001

        The Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516, note) provides for agencies to review most disseminations of information to the public under guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines were published at 67 FR 62446 (October 7, 2002). DOE has reviewed today's notice under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines.

        K. Approval by the Office of the Secretary of Energy
        Issuance of this proposed rule has been approved by the Office of the Secretary of Energy.

          List of Subjects in 48 CFR Parts 909, 913, and 970
          Government procurement.

          Issued in Washington, DC on July 20, 2005.
          Richard H. Hopf,
          Director, Office of Procurement and Assistance Management, Office of Management Budget and Evaluation/Chief Financial Officer.
          Robert C. Braden,
          Director, Office of Acquisition and Supply Management, National Nuclear Security Administration.

        For the reasons set out in the preamble, Chapter 9 of Title 48 of the Code of Federal Regulations is proposed to be amended as set forth below.

          PART 909—CONTRACTOR QUALIFICATIONS
          1. The authority citation for part 909 is revised to read as follows:

            Authority:
            42 U.S.C. 2201, 2282a, 2282b, 2282c, 7101 et seq.; 41 U.S.C. 418(b); 50 U.S.C. 2401 et seq.

            909.406
            Debarment.
            2. In section 909.406-2, the section heading is revised and paragraph (e) is added to read as follows:

            909.406-2
            Causes for debarment. (DOE coverage—paragraphs (c) through (e)).

            (e) The debarring official may debar a contractor, established by a preponderance of the evidence, such as an SBA determination, for falsely certifying itself as a:
            (1) Small Business Concern;
            (2) Small Disadvantaged Business Concern;
            (3) Women-Owned Small Business Concern;
            (4) Veteran-Owned Small Business Concern;
            (5) Service-Disabled Veteran-Owned Small Business Concern;
            (6) Historically Underutilized Business Zone Concern.

          PART 913—SIMPLIFIED ACQUISITION PROCEDURES
          3. The authority citation for part 913 continues to read as follows:

            Authority:
            42 U.S.C. 7101 et seq; 41 U.S.C. 418(b); 50 U.S.C. 2401 et seq.

            Subpart 913.4—[Removed]

          4. Subpart 913.4 is removed.

          PART 970—DOE MANAGEMENT AND OPERATING CONTRACTS
          5. The authority citation for part 970 continue to read as follows:

            Authority:
            42 U.S.C. 2201, 2282b, 2282c, 7101 et seq.; 41 U.S.C. 418b; 50 U.S.C. 2401 et seq.

            Subpart 970.11—Describing Agency Needs

          6. Sections 970.1170, 970.1170-1, and 970.1170-2 are added to read as follows:

            970.1170
            Work authorization.

            970.1170-1
            Policy.
            Each contract for the management and operation of a DOE site or facility, and other contracts designated by the DOE or NNSA Procurement Executive, must contain a scope of work section that describes, in general terms, work planned and/or required to be performed. Work to be performed under the contract shall be assigned through the use of a work authorization to control individual work activities performed within the scope of work. Work authorizations must be issued prior to the commencement of the work and incurrence of any costs.

            970.1170-2
            Contract provision.
            The Contracting Officer shall insert the clause at 48 CFR 970.5211-1, Work Authorization, in each solicitation and contract for the management and operation of a DOE site or facility and in other contracts designated by the DOE or NNSA Procurement Executive.

            Subpart 970.37—Facilities Management Contracting

              970.3770-2
              [Removed and Reserved]
              7. Section 970.3770-2 is removed and reserved.

            Subpart 970.52—Solicitation Provisions and Contract Clauses for Management and Operating Contracts

          8. Section 970.5204-2 is amended by revising the clause date and paragraph (e) to read as follows:

            970.5204-2
            Laws, regulations, and DOE directives.

              Laws, Regulations, and DOE Directives (XXX-XXXX)

              (e) Regardless of the performer of the work, the contractor is responsible for compliance with the requirements of this clause. The contractor is responsible for flowing down the requirements of this clause to subcontracts at any tier to the extent necessary to ensure the contractor's compliance with the requirements. Unless the contract specifically instructs the contractor regarding subcontract flow-down, the contractor shall be responsible for determining the appropriate implementation of the requirements, including the extent to, and manner in which, requirements should be reflected in subcontracts. In doing so, the contractor retains the same responsibility for performance and cost management that it has for all contract efforts. Specifically, the contractor shall not unnecessarily or imprudently flow down requirements to subcontracts and shall only incur costs that would be incurred by a prudent person in the conduct of a competitive business.

              (End of clause)

            9. Section 970.5211 is added to read as follows:

            970.5211-1
            Work authorization.
            As prescribed in 970.1170-2, insert the following clause.

              WORK AUTHORIZATION (XXX-XXXX)
              (a) Work Authorization Proposal. Prior to the start of each fiscal year, the Contracting Officer (CO) or designee shall provide the contractor with program execution guidance in sufficient detail to enable the contractor to develop an estimated cost, scope, and schedule. In addition, the Contracting Officer may unilaterally assign work. The contractor shall submit to the Contracting Officer or other designated official, a detailed description of work, a budget of estimated costs, and a schedule of performance for the work it recommends be undertaken during that upcoming fiscal year.
              (b) Cost Estimates. The contractor and the Contracting Officer shall establish a budget of estimated costs, description of work, and schedule of performance for each work assignment. If agreement cannot be reached as to scope, schedule, and estimated cost, the Contracting Officer may issue a unilateral work authorization, pursuant to this clause. The work authorization, whether issued bilaterally or unilaterally shall become part of the contract. No activities shall be authorized or costs incurred prior to Contracting Officer issuance of a work authorization or direction concerning continuation of activities of the contract.
              (c) Performance. The contractor will perform work as specified in the work authorization, consistent with the terms and conditions of this contract.
              (d) Modification. The Contracting Officer may at any time, without notice, issue changes to work authorizations within the overall scope of the contract. A proposal for adjustment in estimated costs and schedule for performance of work, recognizing work made unnecessary as a result, along with new work, shall be submitted by the contractor in accordance with paragraph (a) of this clause. Resolution shall be in accordance with paragraph (b) of this clause.

              (e) Increase in Estimated Cost. The contractor shall notify the Contracting Officer immediately whenever the cost incurred, plus the projected cost to complete work is projected to differ (plus or minus) from the estimate by 10 percent. The contractor shall submit a proposal for modification in accordance with paragraph (a) of this clause. Resolution shall be in accordance with paragraph (b) of this clause.
              (f) Expenditure of Funds and Incurrence of Costs. The expenditure of monies by the contractor in the performance of all authorized work shall be governed by the “Obligation of Funds” or equivalent clause of the contract.
              (g) Responsibility to achieve Environment, Safety, Health, and Security Compliance. Notwithstanding other provisions of the contract, the contractor may, in the event of an emergency, take that corrective action necessary to sustain operations consistent with applicable environmental, safety, health, and security statutes, regulations, and procedures. If such action is taken, the contractor shall notify the Contracting Officer within 24 hours of initiation and, within 30 days, submit a proposal for adjustment in estimated costs and schedule established in accordance with paragraphs (a) and (b) of this clause.

              (End of clause)

            10. The clause at section 970.5223-1 is amended by revising the clause date, paragraphs (d), (e), and (h) to read as follows:

            970.5223-1
            Integration of environment, safety, and health into work planning and execution.

              Integration of Environment, Safety, and Health into Work Planning and Execution (XXX-XXXX)

              (d) The System shall describe how the contractor will establish, document, and implement safety performance objectives, performance measures, and commitments consistent with DOE program guidance while maintaining the integrity of the System. The System shall also describe how the contractor will evaluate its effectiveness as well as maintenance and improvement processes.
              (e) The contractor shall submit to the Contracting Officer documentation of its System for review and approval. Dates for submittal, discussions, and revisions to the System will be established by the Contracting Officer. Guidance on the preparation, content, review, and approval of the System will be provided by the Contracting Officer. The contractor will evaluate System implementation and effectiveness annually. Formal change control and maintenance of the System is required. On an annual basis, the contractor shall review and update, for DOE approval, its safety performance objectives, performance measures, and commitments consistent with DOE's program guidance and direction. Resources shall be identified and allocated to meet the safety objectives and performance commitments as well as maintain the integrity of the entire System. Accordingly, the System shall be integrated with the contractor's business processes for work planning, budgeting, authorization, execution, and change control.

              (h) Regardless of the performer of the work, the contractor is responsible for compliance with the ES&H requirements applicable to this contract. Unless the contract specifically instructs the contractor regarding subcontract flow-down, the contractor shall be responsible for determining the appropriate implementation of the requirements, including the extent to which, and manner in which, requirements should be reflected in subcontracts. In doing so, the contractor retains the same responsibility for performance and cost management that it has for all contract efforts. Specifically, the contractor shall not unnecessarily or imprudently flow down requirements to subcontracts and shall only incur costs that would be incurred by a prudent person in the conduct of a competitive business.

            970.5237-2
            [Removed and reserved]
            11. Section 970.5237-2 is removed and reserved.

      [FR Doc. 05-14810 Filed 7-28-05; 8:45 am]
      BILLING CODE 6450-01-P


        DEPARTMENT OF THE TREASURY
        31 CFR Part 103
        RIN 1506-AA77
        Financial Crimes Enforcement Network; Withdrawal of the Notice of Proposed Rulemaking; Anti-Money Laundering Programs for Unregistered Investment Companies

          AGENCY:
          Financial Crimes Enforcement Network, Treasury.

          ACTION:
          Withdrawal of notice of proposed rulemaking.

          SUMMARY:
          The Financial Crimes Enforcement Network (“FinCEN”) is withdrawing the notice of proposed rulemaking, dated September 26, 2002, in which FinCEN proposed requiring unregistered investment companies—such as hedge funds, commodity pools, and similar investment vehicles—to establish and implement anti-money laundering programs.

          DATES:
          The withdrawal is effective November 4, 2008.

          FOR FURTHER INFORMATION CONTACT:
          Regulatory Policy and Programs Division, Financial Crimes Enforcement Network, (800) 949-2732.

        SUPPLEMENTARY INFORMATION:
        I. Background
        On October 26, 2001, the President signed into law the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA PATRIOT Act”), Public Law 107-56. Title III of the USA PATRIOT Act amended the anti-money laundering provisions of the BSA, which is codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959, and 31 U.S.C. 5311-5314, 5316-5332. The amendments were designed to promote the prevention, detection, and prosecution of international money laundering and terrorist financing.
        Regulations implementing the Bank Secrecy Act appear at 31 CFR Part 103. The authority of the Secretary of the Treasury (“the Secretary”) to administer the Bank Secrecy Act and its implementing regulations has been delegated to the Director of the Financial Crimes Enforcement Network.1

            1 Accordingly, references herein to the Secretary's authority apply equally to the Director of FinCEN.

        Section 352 of the USA PATRIOT Act amended section 5318(h) of the BSA. Section 352 requires every financial institution to establish an anti-money laundering program that includes, at a minimum, (1) The development of internal policies, procedures, and controls; (2) the designation of a compliance officer; (3) an ongoing employee training program; and (4) an independent audit function to test programs. Section 352 authorizes the Secretary, after consulting with the appropriate Federal functional regulator,2
           to prescribe minimum standards for anti-money laundering programs, and to exempt from the application of those standards any financial institution that is not subject to rules implementing the BSA.

            2 Unregistered investment companies—except commodity pools operated by a commodity pool operator that is registered or required to be registered with the Commodity Futures Trading Commission—are not functionally regulated.

        Investment companies are defined as financial institutions in the BSA.3
           On April 29, 2002, FinCEN published an interim final rule requiring mutual funds—a category of investment company—to establish and implement anti-money laundering programs.4
           On September 26, 2002, FinCEN issued a notice of proposed rulemaking, proposing to require “unregistered investment companies” to establish and implement anti-money laundering programs.5
           In November 2002, FinCEN temporarily exempted certain financial institutions, including investment companies that were not mutual funds as that term is defined in the anti-money laundering program rule for mutual funds,6
           from the requirement to establish and implement an anti-money laundering program.7

            3 31 U.S.C. 5312(a)(2)(I).

            4 Anti-Money Laundering Programs for Mutual Funds, 67 FR 21117 (Apr. 29, 2002).

            5 Anti-Money Laundering Programs for Unregistered Investment Companies, 67 FR 60617 (Sep. 26, 2002).

            6 See 31 CFR 103.130(a) (a “mutual fund” is an “open-end company,” as the term is defined in the Investment Company Act of 1940).

            7 31 CFR 103.170. See also Anti-Money Laundering Programs for Financial Institutions, 67 FR 67547 (Nov. 6, 2002).

        II. The 2002 Notice of Proposed Rulemaking and Subsequent Developments
        A. The 2002 Notice of Proposed Rulemaking
        In its September 2002 notice of proposed rulemaking, FinCEN proposed to define the term “unregistered investment company” as (1) An issuer that, but for certain exclusions, would be an investment company as that term is defined in the Investment Company Act of 1940, (2) a commodity pool, and (3) a company that invests primarily in real estate and/or interests in real estate. FinCEN proposed to capture within the definition so-called hedge funds, private equity funds, venture capital funds, commodity pools, and real estate investment trusts with total assets or subscriptions of $1,000,000 or more.
        FinCEN proposed to exclude, among other things, any issuer that subjected its participants to a two-year lock-up period. Because unregistered investment companies are not subject to Federal functional regulation,8
           FinCEN proposed requiring these companies to file a notice so that FinCEN and agencies conducting BSA compliance examinations of unregistered investment companies could readily identify such companies.

            8 Commodity pools, however, may be operated by a CFTC-regulated commodity pool operator. See 7 U.S.C. 1a(5) (defining a “commodity pool operator” as “any person engaged in a business that is of the nature of an investment trust, syndicate, or similar form of enterprise, and who * * * solicits, accepts, or receives from others, funds, securities, or property * * * for the purpose of trading in any commodity for future delivery on or subject to the rules of any contract market or derivatives transaction execution facility * * *”).

        The comment period closed on November 25, 2002. FinCEN received 34 comments in response to the notice of proposed rulemaking from law firms, unregistered investment companies, investment advisers, bank holding companies, trade groups, and a registered futures association. These comments addressed many aspects of FinCEN's proposal.
        Significantly, comments were focused on the breadth of the proposed definition of “unregistered investment company,” including the proposed inclusion of commodity pools that are operated by CFTC-regulated commodity pool operators; the proposed inclusion of real estate investment companies; and the proposal to exclude from the definition any company that subjects its participants to a two-year lock-up period. Comments also were focused on the minimum contact provisions proposed by FinCEN, under which certain offshore funds would be obligated to comply with the rule; the ability of funds to outsource anti-money laundering program obligations to third-party administrators; and the proposed notice requirement.
        B. Subsequent Developments
        In June 2007, FinCEN announced that it would be taking a fresh look at BSA regulation to ensure that it is being applied efficiently and effectively across the industries that FinCEN regulates and the industries FinCEN has proposed to regulate. As part of that initiative, FinCEN is considering whether and to what extent it should impose requirements under the BSA on unregistered investment companies.

        As it considers its approach to unregistered investment companies, FinCEN has determined that it will withdraw the notice of proposed rulemaking that was published in September 2002. Given the passage of time, FinCEN has determined that it will not proceed with an anti-money laundering program requirement for any entity within the proposed definition of unregistered investment company without publishing a new proposal. This will give industry and other interested parties an opportunity to provide comment on the contents of any such proposal, as it may be affected by any developments since 2002 in industry operations as well as functional and BSA regulation.
        Finally, since the time that the notice of proposed rulemaking was published, FinCEN has concluded the major rulemakings required by the USA PATRIOT Act for banks, broker-dealers, and futures commission merchants. Each of these institutions is subject to a comprehensive set of regulations under the BSA including, among other things, the obligation to establish and implement an anti-money laundering program,9
           the obligation to establish and implement a customer identification program,10
           the obligation to establish and implement a special due diligence program for foreign correspondent accounts and foreign private banking accounts,11
           the obligation to detect and report suspicious activity,12
           and the obligation to file currency transaction reports.13

            9 31 CFR 103.120.

            10 31 CFR 103.121-103.123.

            11 31 CFR 103.176 and 103.178.

            12 31 CFR 103.17-103.19.

            13 31 CFR 103.22.

        The financial transactions of unregistered investment companies and their participants must be conducted through other financial institutions that are subject to BSA requirements. Assets within any of these unregistered investment pools typically are carried with these financial institutions. Thus, as FinCEN continues to consider the extent to which BSA requirements should be imposed on unregistered investment companies, their activity is not entirely outside the current BSA regulatory regime.
        III. Withdrawal of the Notice of Proposed Rulemaking

        For the foregoing reasons, the notice of proposed rulemaking, in which FinCEN proposed requiring unregistered investment companies to establish and implement anti-money laundering programs, as published in the Federal Register on September 26, 2002 (67 FR 60617), is hereby withdrawn.

          Dated: October 29, 2008.
          James H. Freis, Jr.,
          Director, Financial Crimes Enforcement Network.

      [FR Doc. E8-26202 Filed 11-3-08; 8:45 am]
      BILLING CODE 4810-02-P