[Federal Register Volume 79, Number 55 (Friday, March 21, 2014)]
[Proposed Rules]
[Pages 15708-15712]
[FR Doc No: 2014-06162]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 2 and 35

[Docket No. PL14-1-000]

Payment of Dividends From Funds Included in Capital Accounts

AGENCY: Federal Energy Regulatory Commission.

ACTION: Proposed policy statement.

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SUMMARY: The Commission proposes, as a statement of policy, that
section 305(a) of the Federal Power Act (FPA) should be interpreted as
not prohibiting the payment of dividends from funds included in capital
accounts by any public utility that has a market-based rate tariff on
file with the Commission, does not have captive customers, and does not
provide transmission or local distribution services. Because the
payment of dividends from funds included in capital accounts by such
public utilities does not appear to implicate the concerns underlying
the enactment of FPA section 305(a), the Commission proposes this
policy in order to eliminate a regulatory burden otherwise applicable
under FPA section 305(a) to such public utilities.

DATES: Comments on the proposed policy statement are due within May 20,
2014.

FOR FURTHER INFORMATION CONTACT: Eric Olesh (Technical Information),
Office of Energy Market Regulation, 888 First Street NE., Washington,
DC 20426,<PHONE_NUMBER><EMAIL_ADDRESS>Antonia Frost (Legal
Information), Office of General Counsel, 888 First Street NE.,
Washington, DC 20426,<PHONE_NUMBER><EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

    Before Commissioners: Cheryl A. LaFleur, Acting Chairman; Philip
D. Moeller, John R. Norris, and Tony Clark.

Proposed Policy Statement

    (Issued February 20, 2014)
    1. The Commission proposes, as a statement of policy, that section
305(a) of the Federal Power Act (FPA) \1\ should be interpreted as not
prohibiting the payment of dividends from funds included in capital
accounts by any public utility that has a market-based rate tariff on
file with the Commission, does not have captive customers, and does not
provide transmission or local distribution services. Because the
payment of dividends from capital accounts by such public utilities
does not appear to implicate the concerns underlying the enactment of
FPA section 305(a), the Commission proposes this policy in order to
eliminate a regulatory burden otherwise applicable under FPA section
305(a) to such public utilities.
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    \1\ 16 U.S.C. 825d(a) (2012).
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I. Background

A. FPA Section 305(a) and Its Underlying Concerns

    2. FPA section 305(a) provides that:

It shall be unlawful for any officer or director of any public
utility . . . to participate in the making or paying of any
dividends of such public utility from any funds properly included in
capital account.\2\
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    \2\ Id.

    3. In Citizens Utils. Co., the Commission noted that, at that time,
this part of FPA section 305(a) had not yet been interpreted by the
Commission or the courts, and that there was no explicit statement in
the legislative history discussing the intent behind this provision.\3\
The Commission went on to explain, however, that Congress' intent could
be gleaned from the practices that led to the passage of the
legislation,\4\ providing as an example: ``that sources from which cash
dividends were paid were not clearly identified and that holding
companies had been paying out excessive dividends on the securities of
their operating companies. A key concern, thus, was corporate officials
raiding corporate coffers for their personal financial benefit.'' \5\
Indeed, as the Commission has stated, ``a primary concern underlying
section 305(a) of the FPA is to preclude exploitation of a utility by
its directors or officers.'' \6\ Therefore, the Commission also has
stated that it reviews ``certain liquidity and financial matters when
considering the potential impact of a transaction on an applicant's
financial condition.'' \7\
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    \3\ Citizens Utils. Co., 84 FERC ] 61,158, at 61,864 (1998)
(Citizens).
    \4\ Id. at 61,864-65.
    \5\ Id. at 61,865 (footnotes omitted); see also Entergy
Louisiana Inc., 114 FERC ] 61,060, at P 12 (2006); Exelon Corp., 109
FERC ] 61,172, at P 8 (2004); ALLETE, Inc., 107 FERC ] 61,041, at P
10 (2004).
    \6\ Niagara Mohawk Holdings, Inc., 95 FERC ] 61,381, at 62,416,
order denying reh'g, 96 FERC ] 61,144 (2001).
    \7\ Exelon Corp., 109 FERC ] 61,172 at P 8 (footnote omitted)
(citing Niagara Mohawk Holdings, Inc., 99 FERC ] 61,323, at P 4
(2002)).
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B. Petitions for Declaratory Order Requesting Relief

    4. In cases in which a dividend (cash or otherwise) will be
accounted for as a charge to stated, additional, or miscellaneous paid-
in capital of a public utility,\8\ jurisdictional utilities have
developed a practice of filing petitions for declaratory orders in
which the petitioner requests the Commission's concurrence that, based
upon the facts and circumstances presented, as well as commitments
made, the making or paying of a proposed dividend will not implicate
the concerns underlying the enactment of FPA section 305(a) and will
not violate the prohibition in FPA section 305(a). The majority of
these petitions have been filed because of concerns that have arisen in
three situations: (1) In cases involving utility mergers or
acquisitions in which, due to the application of purchase accounting to
the transaction, the retained earnings (i.e., the traditional source of
dividends) of the acquired public utility is reclassified for balance
sheet purposes as additional paid-in capital, without having any effect
on cash otherwise available for paying future dividends; \9\ (2) in
cases involving the spin-off of a subsidiary or subsidiaries of a
public utility, as the result of which, again for balance sheet
purposes, the retained earnings of the public utility may be
substantially reduced or eliminated, without having any effect on cash
otherwise available for paying future dividends; \10\ and (3) in cases
involving single-asset generating companies with declining capital
needs that have experienced a build-up in their equity balances as
their assets have been depreciated.\11\
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    \8\ See, e.g., Account 201, Common stock issued, and Account
211, Miscellaneous paid-in capital, Part 101 Uniform System of
Accounts Prescribed for Public Utilities and Licensees Subject to
the Provisions of the Federal Power Act. 18 CFR pt. 101 (2013).
    \9\ See, e.g., National Grid plc, 117 FERC ] 61,080, at P 83
(2006), order denying reh'g, 122 FERC ] 61,096 (2008); Ameren Corp.,
131 FERC ] 61,240 (2010); Duke Energy Ohio, Inc., 137 FERC ] 61,137
(2011).
    \10\ See, e.g., Citizens, 84 FERC ] 61,158 (1998); ITC Holdings
Corp., 143 FERC ] 61,256 (2013).
    \11\ See, e.g., Allegheny Generating Co., 130 FERC ] 61,269
(2010); System Energy Resources, Inc., 140 FERC ] 61,184 (2012).
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    5. In response to petitions for declaratory orders concerning these
three situations, and in other situations, the Commission has found
that FPA section 305(a) would not be violated when there were adequate
protections to address the concerns underlying FPA section 305(a), and
it has allowed the public utility to make or pay dividends from funds
included in capital accounts.
    6. The Commission has used a three-factor analysis, derived from
Citizens, to determine that a proposed transaction does not implicate
the concerns underlying FPA section 305(a), including that: (1) The
utility clearly identifies the sources from which the dividends will be
paid; (2) the dividends will not be excessive; and (3) the proposed
transaction will not have an adverse effect on the value of
shareholders' interests.\12\ In certain orders granting relief from FPA
section 305(a), issued subsequent to Citizens, the Commission's
determination also was based on commitments by petitioners either to a
specific dollar cap on dividends or a limitation on the

amount of the payment of dividends equal to the pre-merger retained
earnings balance of the acquired utility, and/or a commitment by the
public utility to limit the amount of dividends from paid-in capital so
that common equity, as a percentage of total capitalization, is
maintained at a minimum level (frequently, a minimum of 30 percent
common equity as a percentage of total capitalization).\13\
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    \12\ Citizens, 84 FERC at 61,865.
    \13\ See, e.g., Duke Energy Ohio, Inc., 137 FERC ] 61,137, at P
7 (2011); National Grid plc, 117 FERC ] 61,080, at P 83 (2006). The
Commission also has accepted alternative protections. See, e.g.,
Niagara Mohawk Holdings, Inc., 99 FERC ] 61,323, at PP 12-13 (2002).
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    7. Historically, these petitions for declaratory orders concerning
FPA section 305(a) have largely involved requests by utilities that
have captive customers.\14\ We have found that a proposed transaction
would not violate FPA section 305(a) where we have been assured that no
exploitation or threat to the financial integrity of the utilities
would result from the payment of dividends from capital accounts.\15\
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    \14\ The Commission's regulations define ``captive customers''
to mean ``any wholesale or retail electric energy customers served
by a franchised public utility under cost-based regulation.'' 18 CFR
35.36(a)(6) (2013). Our use of the term ``captive customers'' in
this Proposed Policy Statement is based on this definition.
    \15\ See, e.g., National Grid plc, 117 FERC ] 61,080 (2006),
order denying reh'g, 122 FERC ] 61,096 (2008).
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C. May 16, 2013 Petition for Declaratory Order

    8. This proposed policy statement is the outgrowth of a May 16,
2013 petition for declaratory order (May 16 Petition) \16\ by Exelon
Generation Company, LLC (Exelon Generation) and five of its direct and
indirect subsidiaries (the Acquired Subsidiaries) \17\ (collectively
Applicants) requesting that the Commission confirm that FPA section
305(a) was not a bar to the payment of dividends from capital accounts
under the limitations and circumstances described in the petition.\18\
The relative novelty in this May 16 Petition was that it did not
involve utilities that have captive customers.\19\ Rather, Applicants
stated that Exelon Generation and the Acquired Subsidiaries did not
have captive customers; did not provide transmission or local
distribution service nor serve as a designated provider of last resort
(POLR) for any class of customers; and had electric market-based rate
authorizations from the Commission, with the standard waivers and
exemptions, including waivers of FPA section 204(a) (with respect to
securities issuances) \20\ and waiver of the requirement to maintain
their books and records in accordance with the Uniform System of
Accounts (USofA).\21\
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    \16\ While the May 16 Petition arose from a merger transaction
and related accounting issues (see infra note 18), our Proposed
Policy Statement here is not limited in its applicability to
transactions involving mergers and their related accounting issues.
    \17\ The five direct and indirect subsidiaries of Exelon
Generation included CER Generation II, LLC, Constellation Mystic
Power, LLC, Constellation NewEnergy, Inc., Constellation Power
Source Generation, Inc. and Criterion Power Partners, LLC.
    \18\ The May 16 Petition arose from a merger transaction, and
involved factual circumstances familiar to the Commission in the
context of FPA section 305(a). Specifically, Applicants explained
that the merger between Exelon Corporation (Exelon) and
Constellation Energy Group, Inc. (Constellation) was recorded by
Exelon under the purchase method of accounting and that Exelon
applied ``push-down'' accounting to the Legacy Constellation
Subsidiaries (i.e., all of the subsidiaries of Constellation that
became direct and indirect subsidiaries of Exelon Generation),
including the Acquired Subsidiaries. ``Push-down'' accounting is a
method of accounting in which the financial statements of a
subsidiary are presented to reflect the costs incurred by the parent
company to buy the subsidiary, instead of the subsidiary's
historical costs. Accordingly, the purchase costs of the parent
company are shown in the subsidiary's statements. As a result of the
``push-down'' accounting adjustments to the Legacy Constellation
Subsidiaries at the time of the merger closing, the pre-merger
retained earnings balances of the Legacy Constellation Subsidiaries
were ``reset to zero'' and reestablished on their books as
miscellaneous paid-in capital. In effect, the traditional source of
dividends--retained earnings--was eliminated, without, however,
having any impact on cash actually available for paying dividends.
The purpose of the May 16 Petition was to obtain a Commission
determination that FPA section 305(a) does not prohibit: (1) The
Acquired Subsidiaries from paying dividends to their parent company,
Exelon Generation, from their respective capital accounts in equal
measure to the funds that were recorded as retained earnings at the
close of the merger; and (2) Exelon Generation from, in turn, paying
dividends to its parent company, Exelon Ventures LLC, from its
capital accounts to the extent that Exelon Generation has received
dividends from any of the Legacy Constellation Subsidiaries paid out
of funds recorded as miscellaneous paid-in capital.
    \19\ However, we note that, in Docket No. EL06-15-000, Exelon
Generation and an affiliate previously filed a petition for
declaratory order requesting a declaration that FPA section 305(a)
was not a bar to the payment of dividends from capital accounts
under the limitations and circumstances described in that petition.
Exelon Generation Company, LLC, 114 FERC ] 61,317 (2006).
    \20\ 16 U.S.C. 824c(a) (2012).
    \21\ 18 CFR pt. 101 (2013).
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    9. In the May 16 Petition, Applicants presented the Commission with
two alternative requests:
    (1) The Commission could declare that FPA section 305(a) is not a
bar to the proposed payment of dividends by the Applicants, and this
determination could be based on the traditional Citizens three-part
analysis, namely, that: (1) The source of the dividends will be clearly
identified; (2) the dividends will not be excessive; and (3) the
issuance of such dividends will not harm shareholders; \22\ or,
alternatively,
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    \22\ See supra P 6.
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    (2) the Commission could declare that FPA section 305(a) is not a
bar to the payment of dividends by the Applicants and all current and
future public utility subsidiaries of Exelon on new grounds that all of
these entities have market-based rate authority, do not have captive
customers, do not provide transmission or local distribution service,
and do not provide POLR for any class of customers, rather than on the
basis of the application of the traditional Citizens three-factor
analysis.
    In support of its latter alternative, Applicants argued that the
capital concerns relating to traditional public utilities, which FPA
section 305(a) was meant to address, are not present for these kinds of
non-traditional public utilities.
    10. In response to the May 16 Petition, the Electric Power Supply
Association (EPSA) \23\ filed comments generally supporting both
alternative declarations requested by Applicants, but it also advocated
that the Commission grant an even broader FPA section 305(a)
determination.\24\ EPSA posited that the factors that made the
Applicants' petition compelling are broadly applicable to certain
classes of public utilities, such as merchant generators and power
marketers, which have market-based rate tariffs on file with the
Commission, do not have captive customers, and do not provide
transmission or local distribution services.\25\ EPSA added that,
although Applicants proposed that the entities eligible for Applicants'
alternative broadly construed declaration include a limitation that
they would not serve as a designated POLR, such condition is not
necessary where a designated POLR would meet the other three criteria,
i.e, would have market-based rate tariffs on file with the Commission,
would not have captive customers, and would not provide transmission or
local distribution services.\26\ Therefore, EPSA urged the Commission
to omit the POLR limitation proposed by Applicants in granting the
broader relief requested under section 305(a).\27\
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    \23\ EPSA is the national trade association for competitive
power suppliers, including merchant generators and power marketers.
    \24\ EPSA June 17, 2013 Comments at 1-2.
    \25\ Id. at 2-4.
    \26\ Id. at 2 n.3.
    \27\ Id.
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    11. In support of its request for a broader FPA section 305(a)
determination, EPSA argued that, in the case of entities that have
market-based rate authority, do not have captive

customers, do not provide transmission or local distribution services,
the concerns underlying section 305(a) are not present.\28\ In such
cases, according to EPSA, the distribution of dividends would not have
any adverse effect on the financial integrity of any traditional public
utility, its customers, or the ability of state commissions to protect
public utility customers.\29\
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    \28\ Id. at 5-6.
    \29\ Id. at 5.
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    12. In sum, because of the broad applicability of these principles
to the competitive power industry as a whole, and in the interest of
judicial economy, EPSA requested that the Commission issue a blanket
declaratory order finding that FPA section 305(a) does not act as a bar
to the payment of dividends from capital accounts by any public utility
that has market-based rate authority, does not have captive customers,
and does not provide transmission or local distribution services.\30\
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    \30\ Id. at 2-4.
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    13. In their answer, Applicants supported EPSA's request for a
broader FPA section 305(a) determination and, therefore, noted their
agreement with EPSA's proposal to drop the POLR limitation.\31\ As an
additional basis for dropping the POLR limitation, Applicants observed
that POLR service is a retail electric service and, thus, within the
regulatory framework of state utility commissions.\32\ Applicants also
stated that those public utilities that provide transmission and local
distribution services and also serve as a POLR would not be eligible
for the alternative broad declaration sought in Applicants' petition in
any event because of the limiting condition that such utilities are
providing transmission and local distribution services.\33\ Further,
Applicants asserted that eliminating the POLR limitation would have
positive public policy implications because, in such case, non-
traditional public utilities would not be discouraged from
participating in POLR service due to the FPA section 305(a) limits on
the payment of dividends.\34\ Accordingly, Applicants stated that they
would not object to the Commission's issuance of a blanket declaratory
order based on EPSA's proposal.
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    \31\ Applicants' June 20, 2013 Answer at 3. Applicants note that
POLR, or default, service is also known by other terms, such as
Standard Offer Service or Basic Generation Service. Id. at 2 n.3.
    \32\ Id. at 3.
    \33\ Id.
    \34\ Id.
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    14. In its September 3, 2013 order \35\ on the May 16 Petition, the
Commission granted Applicants' primary request for relief, based on the
Commission's traditional Citizens grounds, since the Commission agreed
that the concerns underlying FPA section 305(a) were not present under
the limitations and circumstances described in the petition.\36\ While
it declined to grant the broader relief requested in that proceeding,
the Commission also stated that it believed that Applicants and EPSA
had made a strong case for a close examination of whether FPA section
305(a) should be interpreted as not prohibiting the payment of
dividends from capital accounts by any public utility that has a
market-based rate tariff on file with the Commission, does not have
captive customers, and does not provide transmission or local
distribution services.\37\ Accordingly, the Commission stated its
intent to open a generic proceeding to consider the broader request for
relief, which would provide public notice and an opportunity for a
broader range of interested parties to comment.\38\
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    \35\ Exelon Generation Company, LLC, 144 FERC ] 61,181 (2013).
    \36\ Id. PP 20-21.
    \37\ Id. P 22.
    \38\ Id.
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II. Discussion

    15. In this proposed policy statement, we undertake that generic
proceeding to consider whether FPA section 305(a) should be interpreted
as not prohibiting the payment of dividends from capital accounts by
any public utility that has a market-based rate tariff on file with the
Commission, does not have captive customers,\39\ and does not provide
transmission or local distribution services.\40\ Because we believe
that the payment of dividends from capital accounts by such public
utilities does not appear to create the concerns underlying the
enactment of FPA section 305(a), we propose this policy in order to
eliminate this regulatory burden under FPA section 305(a) for such
public utilities.
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    \39\ See supra note 14.
    \40\ We propose that a public utility that does not provide
transmission or local distribution service is a public utility that
does not own transmission or local distribution facilities providing
these services.
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    16. As previously noted, we believe that Applicants and EPSA made a
strong case for a close examination of whether FPA section 305(a)
should be interpreted as not prohibiting the payment of dividends from
capital accounts by any public utility that has a market-based rate
tariff on file with the Commission, does not have captive customers,
and does not provide transmission or local distribution services. In
particular, Applicants argued that, in Order No. 697, the Commission
concluded that it was appropriate to apply a different standard of
oversight to public utilities that do not have captive customers and do
not sell electricity at cost-based rates.\41\ In Order No. 697, the
Commission found that it was reasonable to continue to grant entities
that do not have captive customers and do not sell electricity at cost-
based rates: (1) Blanket authorizations under FPA section 204(a) to
issue securities; and (2) waivers from the requirement to maintain
their books in accordance with the USofA.\42\ In essence, Applicants
argued that it would be unusual for the Commission to grant a non-
traditional public utility (i.e., merchant generators and power
marketers) with market-based rate authorization a blanket authorization
under FPA section 204(a) to issue securities, as well as a waiver from
the requirement to maintain their books in accordance with the USofA,
while, at the same time, under FPA section 305(a), limiting the
accounts from which that public utility may pay dividends.\43\
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    \41\ Applicants' May 16, 2013 Petition at 14.
    \42\ Market-Based Rates for Wholesale Sales of Electric Energy,
Capacity and Ancillary Services by Public Utilities, Order No. 697,
FERC Stats. & Regs. ] 31,252, at PP 984, 999, clarified, 121 FERC ]
61,260 (2007), order on reh'g, Order No. 697-A, FERC Stats. & Regs.
] 31,268, clarified, 124 FERC ] 61,055, order on reh'g, Order No.
697-B, FERC Stats. & Regs. ] 31,285 (2008), order on reh'g, Order
No. 697-C, FERC Stats. & Regs. ] 31,291 (2009), order on reh'g,
Order No. 697-D, FERC Stats. & Regs. ] 31,305 (2010), aff'd sub nom.
Montana Consumer Counsel v. FERC, 659 F.3d 910 (9th Cir. 2011),
cert. denied, 133 S. Ct 26 (2012).
    \43\ Applicants' May 16, 2013 Petition at 15. Specifically,
Applicants asserted that it would be anomalous for the Commission to
have previously concluded that it did not need to be concerned about
the character and quality of securities by a non-traditional public
utility (under FPA section 204(a)) or the manner in which a non-
traditional public utility keeps its accounts (under the USofA), and
to now conclude that the Commission is concerned about how a non-
traditional public utility accounts for dividends paid on its
securities (under FPA section 305(a)). Id.
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    17. Under the conditions advocated by Applicants and EPSA, we
observe that the eligible public utility: (1) Will have satisfied the
Commission's market power analysis to obtain market-based rate
authority for its wholesale power sales; (2) will have no captive
customers that require protection by the Commission or the state
commissions; and (3) will not provide transmission or local
distribution services, which are traditional monopoly services subject
to Commission and state commission oversight, to customers. Similar to
our finding in Order No. 697, it may be appropriate to now apply a
different approach to our FPA section 305(a) oversight for those public
utilities that meet these three conditions. We note, in

this regard, that FPA section 305(a) was promulgated in an era of
traditional, vertically-integrated utilities providing monopoly
services to captive customers, and Congress wanted to ensure that the
distribution of dividends would not have any adverse effect on the
financial integrity (and thus the ability to serve) of any such public
utility or its customers. Since that time, the electric industry has
evolved, and here we propose to oversee differently the payment of
dividends by non-traditional utilities, such as merchant generators and
power marketers, who have market-based rate authority, do not have
captive customers, and do not provide transmission and local
distribution services, which, as noted, are monopoly services.
    18. For these reasons, we request comment as to whether the
Commission should adopt a statement of policy that FPA section 305(a)
should be interpreted as not prohibiting the payment of dividends from
funds in capital accounts by any public utility that has a market-based
rate tariff on file with the Commission, does not have captive
customers, and does not provide transmission or local distribution
services, because such payment of dividends does not appear to
implicate the concerns underlying the enactment of FPA section 305(a)
and it is thus appropriate to eliminate this regulatory burden
otherwise applicable under FPA section 305(a) to such public utilities.

III. Comment Procedures

    19. The Commission invites comments on this proposed policy
statement within May 20, 2014.

IV. Document Availability

    20. In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
Internet through the Commission's Home Page (http://www.ferc.gov) and
in the Commission's Public Reference Room during normal business hours
(8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE., Room 2A,
Washington, DC 20426.
    21. From the Commission's Home Page on the Internet, this
information is available on eLibrary. The full text of this document is
available on eLibrary in PDF and Microsoft Word format for viewing,
printing, and/or downloading. To access this document in eLibrary, type
the docket number excluding the last three digits of this document in
the docket number field.
    22. User assistance is available for eLibrary and the Commission's
Web site during normal business hours from FERC Online Support at 202-
502-6652 (toll free at 1-866-208-3676) or email at
<EMAIL_ADDRESS>or the Public Reference Room at (202) 502-
8371, TTY<PHONE_NUMBER>. Email the Public Reference Room at
<EMAIL_ADDRESS>
    By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2014-06162 Filed 3-20-14; 8:45 am]
BILLING CODE 6717-01-P


Here are three items regarding our conference call on April 20.

Edit to the preamble on p. 68 of the redline version that we emailed to you on April 9 Edit to the preamble on p. 47 Excerpts from the Residual Risk Report to Congress regarding probabilistic analysis ( this was a comment from preamble p. 50).

( See attached file: Preamble_ Mar15 omb page 42. pdf)( See attached file: Preamble_ Mar15 omb page 68. pdf)

Below is text in the Residual Risk Report to Congress that supports that " in general" probabilistic analysis will be considered. Text supporting a tiered approach where decisions are made using analysis that propagates variability or uncertainty through the risk assessment is in bold ( emphasis added). ( I read sensitivity analysis as requiring this kind of analysis.)

* * * March 1999

Page 97 * * *

Approaches to Addressing Uncertainty and Variability in the Estimation of Residual Risks Systematic uncertainty and variability analyses have been used in support of risk assessment in a number of fields, most notably nuclear engineering, for over three decades. The use of uncertainty analysis in health risk assessment for exposure to chemical agents did not become widespread until the 1980s ( Bogen and Spear 1987). Since then, a wide range of techniques for quantitative uncertainty analysis have been developed and applied to risk related policy analysis ( e. g., Morgan and Henrion 1990; Frey 1992; Hoffman and Hammonds 1994; McKone 1994; Hattis and Barlow 1996). In its 1994 report, Science and Judgment in Risk Assessment, NRC recommended that, when possible, uncertainty and variability should be quantified and the distinction between them maintained throughout risk assessment ( NRC 1994). As discussed below, a number of techniques are available that allow the separate analysis of the impacts of uncertainty and variability on the overall dispersion in risk estimates.

The EPA has long recognized the need to consider uncertainty and variability in risk assessment. Agency guidance on these issues has gradually evolved over more than a decade, with major documents including:

Initial set of risk assessment guidance documents ( e. g., EPA 1986f, b);

Risk Assessment Council ( RAC) guidance (" the Habicht Memorandum," EPA 1992e);

Guidelines for Exposure Assessment ( EPA 1992a);

Policy and guidance for risk characterization (" the Browner Memorandum," EPA 1995a, f);

Summary Report of the Workshop on Monte Carlo Analysis ( EPA 1996g); and

Policy for Use of Probabilistic Analysis in Risk Assessment ( EPA 1997k) and Guiding Principles for Monte Carlo Analysis ( EPA 1997c).

Among these documents, the 1992 exposure assessment guidance, the 1997 Policy for Use of Probabilistic Analysis in Risk Assessment, and 1997 Guiding Principles for Monte Carlo Analysis provide the most detailed recommendations for uncertainty and variability analysis. The former document primarily provides technical guidance on uncertainty evaluation in the context of exposure assessment, while the latter two provide refined technical guidance, as well as recommendations on presentation of uncertainty information to decision makers. The 1997 Policy also documents EPA's judgment that probabilistic methods should be used wherever the circumstances justify these approaches. Thus, the Agency is committed to carefully considering use of quantitative methods for evaluating uncertainty and variability in its residual risk assessments. The Agency has also recently released a revised version of the Exposure Factors * * * March 1999

Page 98 * * * Handbook ( EFH) that supports probabilistic approaches to the treatment of a number of commonly employed risk assessment input variables ( EPA 1997g). In April 1998, the EPA Risk Assessment Forum convened a workshop on uncertainty analysis in which the problems associated with defining probability distributions for uncertainty and variability analyses were discussed.

As techniques for uncertainty analysis have matured, the Agency has come to endorse a tiered approach to such analyses. In residual risk and other air toxics analyses, EPA plans on addressing uncertainty in a tiered approach. In this way, EPA can efficiently utilize resources, mirroring the level of uncertainty analysis to the overall level of analysis. In the Policy for the Use of Probabilistic Risk Analysis in Risk Assessment ( EPA 1997k), four general steps ( tiers) in the recommended approach to quantitative uncertainty analysis are identified:

Single value estimates of high end and mid range risk;

Qualitative evaluation of model and scenario sensitivity;

Quantitative sensitivity analysis of high end or mid point estimates; and

Fully quantitative characterization of uncertainty and uncertainty importance. This approach starts with simple assessments of potential risks using both representative and more conservative scenarios, models, and input values, using point estimates of the major parameters. This approach may provide sufficient information for the policy question being addressed in some cases. For example, if risks for a suitably defined high end receptor are far below levels of concern, then no additional uncertainty analysis ( or risk analysis) may be needed to support a risk management decision. Such screening analyses will probably be appropriate as the first step in the analysis of residual risk uncertainty for all of the source categories. Where the single value high end and mid range estimates do not provide sufficient information about residual risk, additional analyses can be conducted to determine the likely range of uncertainty in these estimates, and the major factors that contribute to the uncertainty of the estimates. The sensitivity of the high end and mid point estimates to the specification of scenarios and models can usually be evaluated by conducting a manageable number of case studies using different model specifications and observing the resulting changes in risks. If scenario or model specification turns out to strongly affect risk estimates, a more refined analysis ( see below) may be necessary.

In addition to the evaluation of scenario and model uncertainty, it may be desirable to evaluate the sensitivity of the point estimates of risks to variability and uncertainty in model input parameters. This may be done through sensitivity analysis or through the use of more detailed probabilistic methods. If sensitivity analyses are used, care must be taken to insure that the combinations of parameter values that have the greatest impact on risks are identified. For example, the greatest contributions to uncertainty may arise where two or more variables take values that are only moderately different from their mean values, rather than where either one of them takes an extreme value.

For some source categories, systematic sensitivity analyses would provide sufficient information regarding residual risks, and the uncertainties associated with these risks. If they do not, the next step is explicit probability modeling, most likely Monte Carlo or related simulation methods. Using such approaches, uncertainty and variability distributions can be defined for the major parameter values used in the derivation of the mid range and high end risk estimates. These distributions would then be used to develop Monte Carlo estimates of risk and risk uncertainty. There are many precedents for the application of such methods ( Frey and Rhodes 1996) in the evaluation of potential risks from HAP sources.

Whether sensitivity analysis or simulation modeling is used, it is important to consider both uncertainty and variability at this stage of the analysis. Very often, key parameters in the residual risk assessment will be highly uncertain. Experience to date indicates that the emissionrelated parameters with a particularly high degree of uncertainty include measurements of emission rates, emissions inventories, ambient levels, and facility operating patterns that affect HAP releases. On the risk side, uncertainties in dose response models, dose response parameters, populations exposed, and behavior patterns associated with exposures seem to contribute significantly to the overall uncertainties in population risk estimates. Where data are lacking or limited, it may be necessary to extrapolate beyond the range of available information, or use surrogate data where direct observations are not available, in order to develop estimates of parameter variability and uncertainty. The Agency is currently exploring a number of promising techniques in this area. Where relatively few data are available, statistical techniques such as bootstrap analysis may be used to develop variability and uncertainty distributions. Where important data are lacking, techniques for eliciting expert opinion ( Morgan and Henrion 1990) may be useful in developing estimates of the uncertainty and variability of key parameters.

While these techniques can be very helpful in characterizing uncertainty, it is important that all assumptions and methods be fully documented, and that the available data sources be fully exploited before extrapolation or surrogate data are used. Decisions regarding the appropriate methods to be used in developing uncertainty distributions must be made on a casebycase basis, carefully considering the specific needs of the analysis. The final step in the analysis is a fully quantitative analysis of uncertainty and uncertainty importance. This approach is basically a more comprehensive extension of the previously described methods. In this case, however, rather than starting from pre defined central tendency and high end risk estimates, all scenarios and models ( to the extent possible) and all parameters are included in the modeling process as uncertainty and variability representations. Using standard two dimensional Monte Carlo simulation methods, the effects of variability and uncertainty on the overall dispersion in risk estimates can be separated and quantified. In addition, the relative importance of individual sources of uncertainty can be evaluated through partial correlation coefficients, regression methods, contributions to variance, or related methods. However, the data requirements of such an analysis often limit its ability to be truly comprehensive.

Within the residual risk program, this option will be appropriate for sources or source categories where potential risks may indicate the need for a risk management action. The importance analysis could be used to guide data gathering to parameters where uncertainty is the greatest, or to define conditions ( e. g., average emissions or operating conditions) for which risk estimates would not exceed levels of concern with a high degree of confidence.

* * * March 1999

Page 122 * * * 5.3.5 Refined Analyses For source categories that proceed from screening to refined risk assessments, additional data collection will be required, with a greater emphasis on site specific data for affected facilities. As mentioned previously, some assessments may begin at the refined level. In some cases, this data collection effort may be relatively extensive, although it should be able to be focused based on the results of the screening assessment, when done, on the HAPs, types of effects ( i. e., endpoints), sources, locations, exposure pathways, and receptors of most concern. Data collection to support the refined assessment may involve more detail about data elements used in the screening assessment ( e. g., HAP emission rates, source characteristics) as well as information about additional data elements ( e. g., exposed populations and subpopulations, epidemiology and disease registry information, actual ecosystems and endangered and threatened species that might be exposed). This data collection step is also more likely to include collection of data from industry sources and possibly other stakeholders, in addition to more extensive data collection from State and local agencies.

The sources of this additional information for the refined assessment will vary. It is assumed that State, local, and EPA Regional offices should have information that is more sitespecific, especially about which facilities are subject to a particular MACT rule, which have applied for operating permits, and which are in compliance at a particular time. Other facilityspecific information that is needed to conduct the more detailed exposure and risk analysis may have to be obtained from the information request mechanisms that were used to gather data for the MACT process. Other information needed may come from existing data bases, such as U. S. Census data, geographic information systems ( GIS), or other types of data bases that may provide needed inputs for modeling. EPA may also work together with industry to obtain needed data. Considerable professional judgment is required to carry out and interpret a more refined residual risk assessment, and the steps taken and approaches used may vary from one source to the next, even within the same source category. As noted earlier, refinement might be necessary for some or all components of the analysis. Evaluating the sensitivity of the risk results to different components of the risk analysis can help identify which components are most important and allow us to preferentially refine the more sensitive components or assumptions.

Human Health The refined analyses will be based on the methods and approaches described in Chapter 3 and will incorporate more site specific data, fewer simple default assumptions, and more comprehensive and complex models ( e. g., ISCST3 for atmospheric dispersion and deposition). In general, these analyses will be probabilistic and will produce estimates of risk distributions ( in addition to point estimates). The theoretical MEI risk estimate will not be used in refined assessments; instead, the MIR estimate for areas that people are believed to occupy will be used to provide input for risk management decisions that may call for additional controls or regulatory actions . Criteria for Evaluating Refined Analysis Results. The refined analysis, like the screening analysis, may be iterative with increasing complexity at each iteration. General assumptions and criteria are summarized in Exhibit 21. In refined risk assessment, the level of confidence is increased through the use of EPA or comparable consensus toxicity values that reflect currently available information. This ensures that toxicity criteria of consistently high quality and derived by a consistent methodology are used in the assessment. At this level of analysis, additional available credible and relevant data for all toxicity values used will be considered by the Agency. In the exposure assessment, more site specific data and more refined models are used to estimate exposure concentrations and intakes. In addition, the refined analysis considers the number of people exposed at different levels.


[Federal Register Volume 88, Number 219 (Wednesday, November 15, 2023)]
[Notices]
[Pages 78449-78450]
[FR Doc No: 2023-25113]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2023-0043]

Qualification of Drivers; Exemption Applications; Implantable
Cardioverter Defibrillator (ICD)

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), Department
of Transportation (DOT)

ACTION: Notice of denials.

-----------------------------------------------------------------------

SUMMARY: FMCSA announces its decision to deny the applications from two
individuals treated with an Implantable Cardioverter Defibrillator
(ICD) who requested an exemption from the Federal Motor Carrier Safety
Regulations (FMCSRs) prohibiting operation of a commercial motor
vehicle (CMV) in interstate commerce by persons with a current clinical
diagnosis of myocardial infarction, angina pectoris, coronary
insufficiency, thrombosis, or any other cardiovascular disease of a
variety known to be accompanied by syncope (transient loss of
consciousness), dyspnea (shortness of breath), collapse, or congestive
heart failure.

FOR FURTHER INFORMATION CONTACT: Ms. Christine A. Hydock, Chief,
Medical Programs Division, FMCSA, DOT, 1200 New Jersey Avenue SE, Room
W64-224, Washington, DC 20590-0001,<PHONE_NUMBER>,
[email protected]. Office hours are from 8:30 a.m. to 5 p.m. ET
Monday through Friday, except Federal holidays. If you have questions
regarding viewing materials in the docket, contact Dockets Operations,
(202) 366-9826.

SUPPLEMENTARY INFORMATION:

I. Public Participation

A. Viewing Comments

    To view comments go to www.regulations.gov. Insert the docket
number (FMCSA-2023-0043) in the keyword box and click ``Search.'' Next,
sort the results by ``Posted (Newer-Older),'' choose the first notice
listed, and click ``Browse Comments.'' If you do not have access to the
internet, you may view the docket online by visiting Dockets Operations
on the ground floor of the DOT West Building, 1200 New Jersey Avenue
SE, Washington, DC 20590-0001, between 9 a.m. and 5 p.m. ET Monday
through Friday, except Federal holidays. To be sure someone is there to
help you, please call<PHONE_NUMBER> or<PHONE_NUMBER> before visiting
Dockets Operations.

B. Privacy Act

    In accordance with 49 U.S.C. 31315(b)(6), DOT solicits comments
from the public on the exemption requests. DOT posts these comments,
without edit, including any personal information the commenter
provides, to www.regulations.gov. As described in the system of records
notice DOT/ALL 14 (Federal Docket Management System), which can be
reviewed at https://www.transportation.gov/individuals/privacy/privacy-act-system-records-notices, the comments are searchable by the name of
the submitter.

II. Background

    On September 28, 2023, FMCSA published a notice announcing receipt
of applications from two individuals treated with ICDs and requested
comments from the public (88 FR 66932). The individuals requested an
exemption from 49 CFR 391.41(b)(4) which prohibits operation of a CMV
in interstate commerce by persons with a current clinical diagnosis of
myocardial infarction, angina pectoris, coronary insufficiency,
thrombosis, or any other cardiovascular disease of a variety known to
be accompanied by syncope, dyspnea, collapse, or congestive heart
failure. The public comment period ended on October 30, 2023, and no
comments were received.
    FMCSA has evaluated the eligibility of the applicants and concluded
that granting an exemption would not provide a level of safety that
would be equivalent to, or greater than, the level of safety that would
be obtained by complying with Sec.  391.41(b)(4). A summary of each
applicant's medical history related to their ICD exemption request was
discussed in the September 28, 2023 Federal Register notice (88 FR
66932) and will not be repeated here.
    The Agency's decision regarding this exemption application is based
on information from the Cardiovascular Medical Advisory Criteria, an
April 2007 evidence report titled ``Cardiovascular Disease and
Commercial Motor Vehicle Driver Safety,'' \1\ and a December 2014
focused research report titled ``Implantable Cardioverter
Defibrillators and the Impact of a Shock in a Patient When Deployed.''
Copies of these reports are included in the docket.
---------------------------------------------------------------------------

    \1\ The report is available on the internet at https://rosap.ntl.bts.gov/view/dot/16462.
---------------------------------------------------------------------------

    FMCSA has published advisory criteria to assist medical examiners
in determining whether drivers with certain medical conditions are
qualified to operate a CMV in interstate commerce.\2\ The advisory
criteria for Sec.  391.41(b)(4) indicates that coronary artery bypass
surgery and pacemaker implantation are remedial procedures and thus,
not medically disqualifying. ICDs are disqualifying due to risk of
syncope.
---------------------------------------------------------------------------

    \2\ These criteria may be found in 49 CFR part 391, APPENDIX A
TO PART 391--MEDICAL ADVISORY CRITERIA, section D. Cardiovascular:
Sec.  391.41(b)(4), paragraph 4, which is available on the internet
at https://www.gpo.gov/fdsys/pkg/CFR-2015-title49-vol5/pdf/CFR-2015-title49-vol5-part391-appA.pdf.
---------------------------------------------------------------------------

III. Discussion of Comments

    FMCSA received no comments in this proceeding.

IV. Basis for Exemption Determination

    Under 49 U.S.C. 31136(e) and 31315(b), FMCSA may grant an exemption
from the FMCSRs for no longer than a 5-year period if it finds such
exemption would likely achieve a level of safety that is equivalent to,
or greater than, the level that would be achieved absent such
exemption.
    The Agency's decision regarding these exemption applications is
based on an individualized assessment of the applicants' medical
information, available medical and scientific data concerning ICDs, and
any relevant public comments received.
    In the case of persons with ICDs, the underlying condition for
which the ICD was implanted places the individual at high risk for
syncope or other unpredictable events known to result in gradual or
sudden incapacitation. ICDs may discharge, which could result in loss
of ability to safely control a CMV. The December 2014 focused research
report referenced previously upholds the findings of the April 2007
report and indicates that the available scientific data on persons with
ICDs and CMV driving does not support that persons with ICDs who
operate CMVs are able to meet an equal or greater level of safety.

V. Conclusion

    The Agency has determined that the available medical and scientific
literature and research provides insufficient data to enable the Agency
to conclude that granting these exemptions would achieve a level of
safety equivalent to, or greater than, the level of safety maintained
without the exemption. Therefore, the following applicants have been
denied an exemption from the physical qualification standards in Sec.
391.41(b)(4):
    Dean Cece (NC); and Donald Roach (KY).
    The applicants have, prior to this notice, received a letter of
final disposition regarding their exemption request. The decision
letter fully outlined the basis for the denial and constitute final
action by the Agency. The names of these individuals published today
summarizes the Agency's recent denials as required under 49 U.S.C.
31315(b)(4).

Larry W. Minor,
Associate Administrator for Policy.
[FR Doc. 2023-25113 Filed 11-14-23; 8:45 am]
BILLING CODE 4910-EX-P


[Federal Register Volume 77, Number 112 (Monday, June 11, 2012)]
[Proposed Rules]
[Pages 34285-34288]
[FR Doc No: 2012-14126]

=======================================================================
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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket No. USCG-2012-0223]
RIN 1625-AA00

Safety Zone; 2012 Ironman U.S. Championship Swim, Hudson River,
Fort Lee, NJ

AGENCY: Coast Guard, DHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Coast Guard proposes to establish a temporary safety zone
on the navigable waters of the Hudson River in the vicinity of
Englewood Cliffs and Fort Lee, NJ for the 2012 Ironman U.S.
Championship swim event. This temporary safety zone is necessary to
protect the maritime public and event participants from the hazards
associated with swim events. This proposed rule is intended to restrict
all vessels and persons from entering into, transiting through,
mooring, or anchoring within the safety zone unless authorized by the
Captain of the Port (COTP) New York or a designated representative.

DATES: Comments and related material must be received by the Coast
Guard on or before July 11, 2012.
    Requests for public meetings must be received by the Coast Guard on
or before July 2, 2012.

ADDRESSES: You may submit comments identified by docket number USCG-
2012-0223 using any one of the following methods:
    (1) Federal eRulemaking Portal: http://www.regulations.gov.
    (2) Fax:<PHONE_NUMBER>.
    (3) 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 20590-0001.
    (4) Hand delivery: Same as mail address above, between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays. The telephone
number is<PHONE_NUMBER>.
    To avoid duplication, please use only one of these four methods.
See the ``Public Participation and Request for Comments'' portion of
the SUPPLEMENTARY INFORMATION section below for instructions on
submitting comments.

FOR FURTHER INFORMATION CONTACT: If you have questions on this proposed
rule, call or email Ensign Kimberly Farnsworth, Coast Guard; Telephone

(718) 354-4163, email<EMAIL_ADDRESS>If you have
questions on viewing or submitting material to the docket, call Renee
V. Wright, Program Manager, Docket Operations, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Public Participation and Request for Comments

    We encourage you to participate in this rulemaking by submitting
comments and related materials. All comments received will be posted
without change to http://www.regulations.gov and will include any
personal information you have provided.

Submitting Comments

    If you submit a comment, please include the docket number for this
rulemaking (USCG-2012-0223), indicate the specific section of this
document to which each comment applies, and provide a reason for each
suggestion or recommendation. You may submit your comments and material
online (via http://www.regulations.gov) or by fax, mail, or hand
delivery, but please use only one of these means. If you submit a
comment online via www.regulations.gov, it will be considered received
by the Coast Guard when you successfully transmit the comment. If you
fax, hand deliver, or mail your comment, it will be considered as
having been received by the Coast Guard when it is received at the
Docket Management Facility. We recommend that you include your name and
a mailing address, an email address, or a telephone number in the body
of your document so that we can contact you if we have questions
regarding your submission.
    To submit your comment online, go to http://www.regulations.gov,
click on the ``submit a comment'' box, which will then become
highlighted in blue. In the ``Document Type'' drop down menu select
``Proposed Rule'' and insert ``USCG-2012-0223'' in the ``Keyword'' box.
Click ``Search'' then click on the balloon shape in the ``Actions''
column. If you submit your comments by mail or hand delivery, submit
them in an unbound format, no larger than 8\1/2\ by 11 inches, suitable
for copying and electronic filing. If you submit comments by mail and
would like to know that they reached the Facility, please enclose a
stamped, self-addressed postcard or envelope. We will consider all
comments and material received during the comment period and may change
the rule based on your comments.

Viewing Comments and Documents

    To view comments, as well as documents mentioned in this preamble
as being available in the docket, go to http://www.regulations.gov,
click on the ``read comments'' box, which will then become highlighted
in blue. In the ``Keyword'' box insert ``USCG-2012-0223'' and click
``Search.'' Click the ``Open Docket Folder'' in the ``Actions'' column.
You may also visit the Docket Management Facility in Room W12-140 on
the ground floor of the Department of Transportation West Building,
1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays. We have an
agreement with the Department of Transportation to use the Docket
Management Facility.

Privacy Act

    Anyone can search the electronic form of 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 a Privacy Act notice
regarding our public dockets in the January 17, 2008, issue of the
Federal Register (73 FR 3316).

Public Meeting

    We do not plan now to hold a public meeting. But you may submit a
request for one using one of the four methods specified under
ADDRESSES. Please explain why you believe a public meeting would be
beneficial. If we determine that one would aid this rulemaking, we will
hold one at a time and place announced by a later notice in the Federal
Register.

Basis and Purpose

    The legal basis for the proposed rule is 33 U.S.C. 1231; 46 U.S.C.
Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1,
6.04-6, 160.5; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland
Security Delegation No. 0170.1, which collectively authorizes the Coast
Guard to define regulatory safety zones.
    The COTP has determined that swim events in close proximity to
marine traffic pose significant risk to public safety and property. The
combination of increased numbers of recreation vessels, congested
waterways, and large numbers of swimmers in the water has the potential
to result in serious injuries or fatalities. In order to protect the
safety of all waterway users including event participants and
spectators, this proposed temporary rule would establish a temporary
safety zone for the duration of the event.

Discussion of Proposed Rule

    World Triathlon Corporation and New York City Triathlon is
sponsoring the 2012 Ironman U.S. Championship that includes a 2.4 mile
swim event in the Hudson River in the vicinity of Englewood Cliffs and
Fort Lee, New Jersey. This swim event poses significant risk to
participants, spectators, and the boating public because of the number
of swimmers, kayakers, and recreational vessels that are expected in
the area of this event.
    The swim event will take place from approximately 6:50 a.m. until
9:40 a.m. on August 11, 2012. The proposed safety zone will be enforced
from 6:00 a.m. until 10:00 a.m. on that day. During this time, there
will be an estimated 2,500 swimmers in the water. Swimmers will enter
the water via a spud barge in timed increments. The swim course is
straight north to south, approximately 100 yards off of the New Jersey
shoreline, west of the shipping channel, and will be designated with
buoys every 100 meters.
    This rule is being proposed to provide for the safety of life on
navigable waters during the event and to give the marine community the
opportunity to comment on the proposed zone location, size, and length
of time the zone will be activated.
    The final rule will not be published 30 days before the event and
the effective date of this proposed rule as is generally required by 5
U.S.C. 553(d)(3). The Coast Guard will accept comments on this
shortened period and address them in the final rule.

Regulatory Analyses

    We developed this proposed rule after considering numerous statutes
and executive orders related to rulemaking. Below we summarize our
analyses based on 13 of these statutes or executive orders.

Executive Order 12866 and Executive Order 13563

    This rule is not a significant regulatory action under section 3(f)
of Executive Order 12866, as supplemented by Executive Order 13563,
Regulatory Planning and Review, and does not require an assessment of
potential costs and benefits under section 6(a)(3) of that Order. The
Office of Management and Budget has not reviewed it under that Order.
    This proposed safety zone will be of limited duration, at an off
peak time, and vessels may transit in portions of the affected waterway
except for those areas covered by the proposed regulated areas.
Furthermore, vessels may be

authorized to transit this zone with the permission of the COTP New
York or the designated representative.

Small Entities

    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have
considered whether this proposed rule would have a significant economic
impact on a substantial number of small entities. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000.
    The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed
rule would not have a significant economic impact on a substantial
number of small entities. This proposed rule will affect the following
entities, some of which may be small entities: The owners and operators
of vessels intending to transit or anchor in the restricted portion of
the Hudson River during the effective period.
    The safety zone will not have significant economic impact on a
substantial number of small entities for the following reasons: Vessels
will only be restricted from safety zone area for a short duration;
vessels may transit in portions of the affected waterway except for
those areas covered by the proposed regulated area; and notifications
will be made to the local maritime community through the Local Notice
to Mariners and Broadcast Notice to Mariners well in advance of the
event.
    If you think that your business, organization, or governmental
jurisdiction qualifies as a small entity and that this rule would have
a significant economic impact on it, please submit a comment (see
ADDRESSES) explaining why you think it qualifies and how and to what
degree this rule would economically affect it.

Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this proposed rule so that they can better
evaluate its effects on them and participate in the rulemaking. If the
rule would affect your small business, organization, or governmental
jurisdiction and you have questions concerning its provisions or
options for compliance, please contact Ensign Kimberly Farnsworth,
Coast Guard Sector New York Waterways Management Division; telephone
718-354-4163, email<EMAIL_ADDRESS>The Coast Guard
will not retaliate against small entities that question or complain
about this proposed rule or any policy or action of the Coast Guard.

Collection of Information

    This proposed rule would call for no new collection of information
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520.).

Federalism

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on State or local
governments and would either preempt State law or impose a substantial
direct cost of compliance on them. We have analyzed this proposed rule
under that Order and have determined that it does not have implications
for federalism.

Unfunded Mandates Reform Act

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

Taking of Private Property

    This proposed rule would not cause a taking of private property or
otherwise have taking implications under Executive Order 12630,
Governmental Actions and Interference with Constitutionally Protected
Property Rights.

Civil Justice Reform

    This proposed rule meets applicable standards in sections 3(a) and
3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize
litigation, eliminate ambiguity, and reduce burden.

Protection of Children

    We have analyzed this proposed rule under Executive Order 13045,
Protection of Children from Environmental Health Risks and Safety
Risks. This rule is not an economically significant rule and would not
create an environmental risk to health or risk to safety that might
disproportionately affect children.

Indian Tribal Governments

    This proposed rule does not have tribal implications under
Executive Order 13175, Consultation and Coordination with Indian Tribal
Governments, because it would not have a substantial direct effect on
one or more Indian tribes, on the relationship between the Federal
Government and Indian tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian tribes.

Energy Effects

    We have analyzed this proposed rule under Executive Order 13211,
Actions Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use. We have determined that it is not a ``significant
energy action'' under that order because it is not a ``significant
regulatory action'' under Executive Order 12866 and is not likely to
have a significant adverse effect on the supply, distribution, or use
of energy. The Administrator of the Office of Information and
Regulatory Affairs has not designated it as a significant energy
action. Therefore, it does not require a Statement of Energy Effects
under Executive Order 13211.

Technical Standards

    The National Technology Transfer and Advancement Act (NTTAA) (15
U.S.C. 272 note) directs agencies to use voluntary consensus standards
in their regulatory activities unless the agency provides Congress,
through the Office of Management and Budget, with an explanation of why
using these standards would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., specifications of materials, performance, design, or
operation; test methods; sampling procedures; and related management
systems practices) that are developed or adopted by voluntary consensus
standards bodies.
    This proposed rule does not use technical standards. Therefore, we
did not consider the use of voluntary consensus standards.

Environment

    We have analyzed this proposed rule under Department of Homeland
Security Management Directive 023-01 and Commandant Instruction
M16475.lD, which guide the Coast Guard in complying with the National
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and
have made a preliminary determination that this action is one of a
category of actions that do not individually or cumulatively have a
significant effect on the human environment. A preliminary
environmental analysis checklist supporting this determination is

available in the docket where indicated under ADDRESSES. This proposed
rule involves the establishment of a temporary safety zone on a portion
of the Hudson River and appears to be categorically excluded, under
figure 2-1, paragraph (34)(g), the Commandant Instruction.
    We seek any comments or information that may lead to the discovery
of a significant environmental impact from this proposed rule.

List of Subjects in 33 CFR Part 165

    Marine safety, Navigation (water), Reporting and recordkeeping
requirements, Waterways.

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

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREA

    1. The authority citation for part 165 continues to read as
follows:

    Authority:  33 U.S.C. 1231; 46 U.S.C. Chapter 701, 3306, 3703;
50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, 160.5; Pub. L.
107-295, 116 Stat. 2064; Department of Homeland Security Delegation
No. 0170.1.

    2. Add Sec.  165.T01-0223 to read as follows:

Sec.  165.T01-0223  Safety Zone; 2012 Ironman US Championship Swim,
Hudson River, Fort Lee, NJ.

    (a) Regulated Area. All navigable waters of the Hudson River bound
by a line drawn from the shoreline of the Palisades Interstate Parkway,
approximately 2.8 NM North of the George Washington Bridge, Fort Lee,
New Jersey, approximate position 40[deg]53'44.93'' N 073[deg]56'11.79''
W, east to a point 515 yards offshore, approximate position
40[deg]53'40.00'' N 073[deg]55'53.00'' W, south to a position 242 yards
offshore, approximate position 40[deg]51'30.00'' N 073[deg]57'09.00''
W, west to the south corner of Ross Dock, Fort Lee, New Jersey,
approximate position 40[deg]51'33.77'' N 073[deg]57'16.00'' W, then
back to the point of origin.
    (b) Effective Period. This rule will be effective from 6:00 a.m. to
10:00 a.m. on August 11, 2012.
    (c) Regulations. (1) No vessels, except for participating safety
vessels, will be allowed to transit the safety zone without the
permission of the COTP.
    (2) All persons and vessels shall comply with the instructions of
the COTP or the designated representative. Upon being hailed by a U.S.
Coast Guard vessel by siren, radio, flashing light, or other means, the
operator of a vessel shall proceed as directed.
    (3) Vessel operators desiring to enter or operate within the
regulated area shall contact the COTP or the designated representative
via VHF channel 16 or<PHONE_NUMBER> (Coast Guard Sector New York Command
Center) to obtain permission to do so.

    Dated: May 17, 2012.
G.P. Hitchen,
Captain, U.S. Coast Guard, Acting Captain of the Port New York.
[FR Doc. 2012-14126 Filed 6-8-12; 8:45 am]
BILLING CODE 9110-04-P