Federal Trade Commission (FTC or Commission).
Advance Notice of Proposed Rulemaking; request for comment.
President Obama signed the 2009 Omnibus Appropriations Act on March 11, 2009. Section 626 of the Act directed the Commission to initiate, within 90 days of the date of enactment, a rulemaking proceeding with respect to mortgage loans. To implement the Act, the Commission has commenced a rulemaking proceeding in two parts. This Advance Notice of Proposed Rulemaking (ANPR), the Mortgage Acts and Practices Rulemaking, addresses activities that occur throughout the life-cycle of a mortgage loan,
Comments must be received by July 30, 2009.
Interested parties are invited to submit written comments electronically or in paper form. Comments should refer to “Mortgage Acts and Practices Rulemaking, Rule No. R911004” to facilitate the organization of comments. Please note that comments will be placed on the public record of this proceeding-including on the publicly accessible FTC website, at (
Because paper mail addressed to the FTC is subject to delay due to heightened security screening, please consider submitting your comments in electronic form. Comments filed in electronic form should be submitted by using the following weblink: (
A comment filed in paper form should include the reference “Mortgage Acts and Practices Rulemaking, Rule No. R911004” both in the text of the comment and on the envelope, and should be mailed or delivered to the following address: Federal Trade Commission, Office of the Secretary, Room H-135 (Annex T), 600 Pennsylvania Avenue, NW, Washington, DC 20580. The FTC requests that any comment filed in paper form be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.
The FTC Act and other laws administered by the Commission permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments received, whether filed in paper or electronic form. Comments received will be available to the public on the FTC website, to the extent practicable, at (
Laura Johnson, Attorney, 202-326-3224, Division of Financial Practices, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580.
Section 626 of the Omnibus Appropriations Act of 2009
This ANPR, the Mortgage Acts and Practices (MAP) Rulemaking, addresses activities that occur throughout the life-cycle of a mortgage loan,
Based on its law enforcement experience and the limited scope of current federal regulation, the Commission believes that the servicing of mortgage loans is a topic on which proposed rules may be needed. The FTC, however, also recognizes that proposed rules also may be needed to address acts and practices related to mortgage loan advertising and marketing, origination, and appraisals. The Commission therefore is seeking public comment on whether proposed rules are needed concerning acts and practices throughout the life-cycle of mortgage loans.
The Commission is seeking comments to determine whether certain acts and practices of non-bank financial companies related to mortgage loans are unfair or deceptive under Section 5 of the FTC Act and should be incorporated into a proposed rule. These acts and practices include conduct that the FTC currently could challenge in a law enforcement action as violating Section 5 of the FTC Act. However, the Commission is not seeking comments on statutes that have been enacted and rules that have been issued on these topics. The FTC also specifically is not seeking comments on the Federal Reserve Board’s (Board) new rules concerning mortgage loans.
Pursuant to Section 626 of the Omnibus Appropriations Act of 2009, any violation of a rule adopted under that section will be treated as a violation of a rule promulgated pursuant to Section 18 of the FTC Act.
The Commission protects consumers from harmful acts and practices at every stage of the mortgage life-cycle-from the advertisement of mortgages to the collection of mortgage debts. At the early stages of the cycle, the FTC protects consumers from unfair, deceptive, or otherwise unlawful acts and practices of brokers, lenders, and others that advertise or offer mortgages, including entities that market loans on behalf of lenders. At the middle and later stages of the cycle, the agency protects consumers from the unlawful conduct of creditors, mortgage servicing agents, and debt collectors that collect payments from consumers. The Commission also protects consumers from the unlawful acts and practices of those that market credit repair or debt relief services, including entities (other than mortgage servicers) who offer assistance to consumers struggling with mortgage debt in dealing with the owners or servicers of their loans to modify their loans or avoid foreclosure.
The Commission has law enforcement authority over a wide range of acts and practices throughout the consumer credit life-cycle. The agency enforces Section 5 of the Federal Trade Commission Act, which prohibits “unfair or deceptive acts or practices in or affecting commerce.”
Notwithstanding the Commission’s broad authority over acts and practices related to financial services, the FTC does not have jurisdiction over all providers of these services. The FTC Act specifically excludes banks, thrifts, and federal credit unions from the agency’s jurisdiction.
CLARIFICATION OF FEDERAL TRADE COMMISSION JURISDICTION. Any person that directly or indirectly controls, is controlled directly or indirectly by, or is directly or indirectly under common control with, any bank or savings association . . . and is not itself a bank or savings association shall not be deemed to be a bank or savings association for purposes of any provisions applied by the Federal Trade Commission under the Federal Trade Commission Act.
Pub. L. No. 106-102, § 133(a), 113 Stat. 1383; 15 U.S.C. 41 note (a). This section has been interpreted to apply to subsidiaries of banks that are not themselves banks.
As discussed above, the Commission intends that any rules that it issues in this proceeding would apply only to the same types of entities over which the Commission has jurisdiction under the FTC Act.
Section 5 of the FTC Act broadly proscribes deceptive or unfair acts or practices in or affecting commerce. An act or practice is deceptive if there is a representation, omission of information, or practice that is likely to mislead consumers, who are acting reasonably under the circumstances, and the representation, omission, or practice is one that is material.
To determine that an act or practice is deceptive, the Commission first must conclude that there is a representation, omission of information, or a practice that is likely to mislead consumers. A claim about a product or service may be either express or implied. An express claim generally is established by the representation itself. An implied claim, on the other hand, is an indirect representation, which must be examined within the context of other information that is either presented or omitted. Deception may occur based on what is stated or because of the omission of information that would be important to the consumer. In determining that an advertisement is deceptive, for example, the Commission considers whether the overall net impression of the ad (including language and graphics) is likely to mislead consumers.
Second, the Commission considers the act or practice from the perspective of a consumer acting reasonably under the circumstances.
Third, to conclude that deception has occurred, the Commission must determine that the representation, omission, or practice is material,
Section 5(n) of the FTC Act also sets forth a three-part test to determine whether an act or practice is unfair.
In analyzing whether injury is substantial, the Commission is not concerned with trivial, speculative, or more subjective types of harm. The substantial injury test may be met by small harm to a large number of consumers. In most cases, substantial injury involves monetary harm. Once it determines that there is substantial consumer injury, the Commission considers whether the harm is offset by any countervailing benefits to consumers or to competition. Thus, the Commission considers both the costs of imposing a remedy and any benefits that consumers enjoy as a result of the practice at issue. Finally, the injury must be one that consumers cannot reasonably avoid. If consumers reasonably could have made a different choice that would have avoided the injury, but did not do so, the practice is not deemed to be unfair under the FTC Act.
In applying its unfairness standard, the Commission takes the approach that well-informed consumers are capable of making choices for themselves. The agency therefore may prohibit or restrict acts and practices if they unreasonably create, or take advantage of, an obstacle to the ability of consumers to make informed choices, thus causing, or being likely to cause, consumer injury.
In determining the restrictions on mortgage loans that should be included in an FTC proposed rule, it is important to consider the rules related to mortgage loans that the Board issued last year. On July 14, 2008, the Board announced new rules amending several aspects of Regulation Z, which implements TILA and HOEPA.
The federal banking agencies and the FTC enforce TILA (including HOEPA) and Regulation Z. TILA specifically provides enforcement authority to the Board (for state member banks of the Federal Reserve System), the Office of the Comptroller of the Currency (OCC) (for national banks), the Federal Deposit Insurance Corporation (FDIC) (for other insured banks), the Office of Thrift Supervision (OTS) (for savings associations), and the National Credit Union Administration (NCUA) (for federal credit unions).
The Board’s final rules make changes to Regulation Z in what the FTC describes as essentially four parts of the mortgage life-cycle. The rules address acts and practices related to: (1) advertising and marketing; (2) origination (including underwriting, loan terms, and disclosures); (3) appraisals; and (4) servicing. Most of the new rules will take effect on October 1, 2009, although the rules related to escrows do not take effect until 2010.
The mortgage life-cycle begins when a consumer initially shops for a mortgage. The consumer may seek out mortgage loan information on his or her own, whether on the Internet or through oral or written contacts with a real estate broker, mortgage lender, mortgage broker, or other source. The consumer also may see or hear more widely disseminated mortgage advertisements through various sources, whether in print (including billboards, direct mailings, emails, and faxes), or through television, radio, the Internet, or other electronic media. The advertiser or marketer may be the creditor itself, or a mortgage broker, real estate broker, lead generator, rate aggregator, or another person or entity.
The FTC Act requires that claims in advertising and marketing, including claims about mortgage loans, be truthful and non-misleading.
In July 2008, the Board issued rules under Regulation Z addressing mortgage advertising issues.
Closed-end credit includes a standard mortgage loan in which the proceeds are paid out in full at loan closing.
Second, the Board addressed a variety of practices regarding advertising mortgage rates and payments.
Third, the Board prohibited the following seven specific mortgage advertising claims based on its conclusion that the claims are per se “misleading or deceptive:”
1. advertising as “fixed” a rate or payment that will change after a period of time unless the advertisement meets certain criteria, such as having an equally prominent and closely proximate disclosure that the rate or payment is “fixed” for only a limited period of time;
2. comparing actual or hypothetical rates or payments to the rates or payments on an advertised loan unless the advertisement discloses the rates or payments that will apply over the full term of the advertised loan;
3. misrepresenting an advertised loan as being part of a “government loan program” or otherwise endorsed or sponsored by a government entity;
4. using the name of the consumer’s current lender unless the advertisement has an equally prominent disclosure of the person actually making the advertisement and includes a clear and conspicuous statement that the advertiser is not associated with the consumer’s current lender;
5. making any misleading claim that an advertised loan will eliminate debt or result in a waiver or forgiveness of a consumer’s existing loan terms with, or obligations to, another creditor;
6. using the term “counselor” in an advertisement to refer to a for-profit mortgage broker or mortgage lender; and
7. advertising mortgages in a language other than English while giving critical disclosures only in English.
The Board’s new mortgage rules also addressed the advertising of open-end home equity plans,
The FTC has brought numerous enforcement actions challenging the conduct of lenders, brokers, and other advertisers of mortgage loans in violation of the FTC Act or the TILA.
For many years, consumers purchased homes with traditional, fully documented, 30-year, amortizing, fixed-rate or adjustable rate mortgages (ARMs), under which the borrower pays principal and interest each month for the life of the loan. However, over the past decade, there has been an increase in the use of increasingly complex non-traditional, or alternative, mortgage products.
The growth of these products coincided with the rise of independent brokers originating loans and the “originate-to-distribute” model under which lenders immediately sell loans to the secondary market instead of holding them in their portfolios. Because these brokers and lenders are compensated early on in the loan transaction, the incentives do not facilitate diligent underwriting or interest in the long-term performance of loans.
Mortgage loan originators are subject to numerous federal laws that the FTC enforces.
The Board’s rules establish a new category of “higher-priced mortgage loans,” which effectively includes HOEPA loans and virtually all subprime loans.
The FTC’s law enforcement program protects consumers in connection with various aspects of their mortgage origination, including those related to mortgage underwriting requirements and loan terms that are restricted or prohibited for HOEPA loans. Some lenders against whom the FTC has taken action
Consumers are faced with numerous factors to take into consideration when comparing the terms of various mortgage loans, such as the duration of the loan, the interest rate, whether that rate is fixed or adjustable, the amount of closing costs, and other characteristics such as prepayment penalties and balloon payments. As consumers shop for a mortgage, it is important that they receive timely and understandable information about the terms and costs of the particular products they are trying to analyze and compare. Moreover, for many alternative mortgage products-where the payment schedule may increase substantially in future years, or prepayment penalties may apply-it is important that consumers receive information about their payments and other important loan terms at a time when they can use that material in selecting their preferred loan and terms.
Federal agencies other than the Commission currently have the specific authority to promulgate rules specifying mortgage disclosure requirements. These disclosures are intended to provide consumers with the opportunity to review, understand, and agree to the offered loan terms. The Department of Housing and Urban Development (HUD) has responsibility for disclosure of settlement costs under the Real Estate Settlement Procedures Act (RESPA).
Under RESPA, a lender or broker must provide consumers of “federally related mortgage loans”
In general, under TILA and the Board’s implementing Regulation Z, creditors currently must provide disclosures within three days of receiving a consumer’s written application for a purchase-money mortgage loan. For non-purchase (
In July 2008, the Board issued new rules under Regulation Z that require transaction-specific, earlier mortgage loan disclosures for closed-end loans secured by a consumer’s principal dwelling (including non-purchase money mortgages, such as refinancings, but excluding HELOCs).
The Commission has a long history of conducting empirical tests of the efficacy of disclosures relating to financial services.
The results of the FTC staff study indicate that consumers in both the prime and subprime markets would benefit substantially from comprehensive reform of mortgage disclosures that would create a single, comprehensive disclosure of all key costs and terms of a loan, presented in language consumers can easily understand and in a form they can easily use, and provided early in the transaction to aid consumers shopping for the best loans.
Mortgage lenders and brokers compete with each other to offer loan products to consumers. Regardless of which entity the consumer initially contacts, during the purchase money or refinance mortgage loan shopping process one of the parties seeks an appraisal
Several parties to the loan transaction may have an incentive to influence the appraisal valuation process. Borrowers want an appraisal valuation high enough that they can obtain a loan to purchase the property at the sales price. Mortgage brokers want an appraisal valuation high enough for the transaction to occur because they get paid only if the loan is made, and their commissions usually are based on the loan amount. Individual loan officers also want an appraisal valuation high enough for the transaction to occur, particularly if their compensation is tied to overall loan volume or the amount of the loan. Although lenders may have some interest in obtaining an appraisal valuation high enough so that the loan is made (particularly if they immediately sell the loan),
Appraisers are paid to value property for their customers, who primarily are lenders or mortgage brokers.
Typically, the conduct of appraisers is governed through the Appraisal Foundation and its Uniform Standards of Professional Appraisal Practice (USPAP) guidelines,
On March 3, 2008, the New York Attorney General (NYAG) announced settlement agreements with the Federal Home Loan Mortgage Corporation (Freddie Mac), Federal National Mortgage Association (Fannie Mae), and the Office of Federal Housing Enterprise Oversight (OFHEO).
As discussed above, in July 2008, the Board issued rules under Regulation Z addressing appraisal issues.
Mortgage servicers handle day-to-day duties for those who own mortgage loans. They collect mortgage payments, provide customer service, handle delinquencies (including bankruptcies and foreclosures), and otherwise protect the interests of the loans’ owners. The loans’ owners may be the original lenders or other investors in the future proceeds of the loans (and can include servicers themselves).
The relationship between mortgage servicers and consumers is vulnerable to abuse. Mortgage servicers typically do not have a customer relationship with homeowners; rather, they work for the loans’ owners. Moreover, borrowers cannot shop for a loan based on the quality of servicing, and they have virtually no ability to change servicers if they are dissatisfied. Mortgage servicing rights can be transferred frequently, causing consumers confusion about who owns their loan and where to send their payments.
In addition, servicers have financial incentives to impose fees on consumers. Servicers are compensated in three main ways. First, they receive a fixed fee for each loan, such as a fee based on the unpaid principal balance of the loan. Second, servicers earn “float” income from accrued interest between when consumers pay and when those funds are sent to investors. Third, servicers derive ancillary income from charges imposed on consumers, such as late fees or other delinquency-related fees. Thus, a borrower’s default can increase a servicer’s revenues.
For these reasons, it is important that servicers take appropriate care in acquiring and handling consumers’ mortgages, including providing consumers with complete and accurate information about fees and other account information. However, the process of acquiring, securitizing, and transferring large volumes of loans on the secondary market has raised concerns about the integrity of consumers’ loan information and the mistakes that can occur due to mishandling or lack of documentation. For example, courts have dismissed foreclosure cases against borrowers because the companies failed to show proof of ownership, and the United States Trustee Program has announced an effort to move against mortgage servicers that file false and inaccurate claims in consumer bankruptcy cases. The FTC is also concerned about the servicing of consumers’ loans in bankruptcy.
Because of these concerns and because mortgage servicers are the day-to-day contact for many homeowners, the FTC has been active in monitoring the servicing industry for potential abuses. The FTC’s experience in this area suggests that there is a need for comprehensive rules with respect to mortgage servicing.
The FTC Act prohibits unfair or deceptive acts or practices in or affecting commerce, including unfair or deceptive mortgage servicing activities. In addition, servicers may be subject to a patchwork of other laws.
In addition, HUD imposes disclosure and other requirements related to servicing under RESPA and its implementing Regulation X.
The FTC has challenged deceptive and unfair practices in the servicing of mortgage loans, addressing core issues such as failing to post payments upon receipt, charging unauthorized fees, and engaging in deceptive or abusive debt collection tactics.
In addition to requiring the defendants to pay over $40 million to redress consumer injury, the settlements enjoin the defendants from future law violations and impose new restrictions on their business practices. Among other things, the settlements:
1. require the defendants to accept partial payments from most consumers and to apply most consumers’ mortgage payments first to interest and principal;
2. prohibit the defendants from forcing consumers to buy insurance when they know the consumer has insurance or fail to take reasonable actions to determine whether the consumer has insurance;
3. enjoin the defendants from charging unauthorized fees, and place limits on specific fees;
4. require the defendants to acknowledge, investigate, and resolve consumer disputes in a timely manner;
5. require the defendants to provide timely billing information, including an itemization of fees charged;
6. prohibit the defendants from taking any action toward foreclosure unless they have reviewed the consumer’s loan records to verify that the consumer failed to make three full monthly payments, confirmed that the consumer has not been the subject of any illegal practices, and investigated and resolved any consumer disputes;
7. prohibit the defendants from piling on late fees in certain situations;
8. prohibit the defendants from enforcing certain waiver provisions in forbearance agreements that consumers had to sign to prevent foreclosure; and
9. prohibit the defendants from violating the FDCPA, the FCRA, or the RESPA.
The FTC conducted a review of the defendants’ compliance with certain aspects of the 2003 settlement.
1. a five-year prohibition on marketing optional products, which are products or services that are not required by the consumer’s loan (such as home warranties);
2. refunds of optional product fees paid by consumers in certain circumstances;
3. revised limitations on charging attorney fees in a foreclosure or bankruptcy to ensure that consumers receive full disclosures, including the actual amount due if consumers receive estimated attorney fees;
4. refunds for consumers who may have paid foreclosure attorney fees for services that were not actually performed since November 2003;
5. a permanent requirement that consumers be provided with monthly mortgage statements containing important information about their loans; and
6. a requirement that the company revise its monthly mortgage statements based on consumer testing performed by a qualified, independent third party.
In September 2008, the FTC settled charges that another mortgage servicer and its parent violated Section 5 of the FTC Act, the FDCPA, and the FCRA in servicing mortgage loans.
In addition to requiring the defendants to pay $28 million to redress consumer injury, the settlement bars the
1. bars the defendants from misrepresenting amounts due or any other loan terms;
2. requires them to possess and rely upon competent and reliable evidence to support claims made to consumers about their loans;
3. bars them from charging unauthorized fees, and places specific limits on property inspection fees even if they are authorized by the contract;
4. prohibits them from initiating a foreclosure action, or charging any foreclosure fees, unless they have reviewed all available records to verify that the consumer is in material default, confirmed that the defendants have not subjected the consumer to any illegal practices, and investigated and resolved any consumer disputes; and
5. prohibits the defendants from violating the FDCPA, FCRA, or TILA.
The settlement further requires defendants to establish and maintain a comprehensive data integrity program to ensure the accuracy and completeness of data and other information that they obtain about consumers’ loan accounts, before servicing those accounts. The defendants also are required to obtain periodic assessments over an eight-year period from a qualified, independent, third-party professional, to assure that their data integrity program meets the standards of the order.
The Commission is seeking comments on a wide range of topics related to mortgage loans, but it is not soliciting views on the merits of current statutory and regulatory schemes applicable to these topics.
The Commission has broad authority over acts and practices related to financial services, but the FTC Act specifically excludes banks, thrifts, and federal credit unions from the agency’s jurisdiction. However, non-bank subsidiaries or affiliates of banks are subject to the Commission’s jurisdiction. Likewise, the FTC has jurisdiction over entities that perform services on behalf of banks, but which are not themselves banks. As discussed above, the Commission intends that any rules it issues in this proceeding would apply only to the same types of entities over which the Commission has jurisdiction under the FTC Act.
The Commission is seeking comments to determine whether certain acts and practices of non-bank financial companies (such as non-bank mortgage lenders, brokers, appraisers, or servicers) related to mortgage loans are unfair or deceptive under Section 5 of the FTC Act and should be incorporated into a proposed rule. These acts and practices include conduct that the FTC currently could challenge in a law enforcement action as violating Section 5 of the FTC Act. However, the Commission is not otherwise seeking comments on statutes that have been enacted and rules that have been issued. The FTC also specifically is not seeking comments on the Board’s new rules.
The FTC invites interested persons to submit written comments on any issue of fact, law, or policy that may bear upon these issues. After examining the comments, the Commission will determine whether and how to incorporate them into a possible proposed rule. The Commission encourages commenters to respond to the specific questions asked. However, commenters do not need to respond to all questions. Please provide explanations for your answers and detailed, factual supporting evidence.
The Commission is particularly interested in receiving comments on the following questions and issues:
1. What types of unfair or deceptive acts and practices, if any, do non-bank financial companies engage in related to advertising and marketing mortgages? For any such act or practice, please answer the following questions:
a. Why is it unfair or deceptive under Section 5 of the FTC Act?
b. Should it be prohibited or restricted? If so, how? For all loans or only certain types of loans? What are the costs and benefits of such prohibitions or restrictions?
c. What would be the effect on competition and consumers if the Commission were to prohibit or restrict non-bank financial companies with respect to the act or practice, but banks, thrifts, and federal credit unions were not similarly prohibited or restricted?
2. Is there any specific information that non-bank financial companies should be required to disclose to prevent unfairness or deception in advertising and marketing mortgages? Identify any such type of information, and for each, please answer the following questions:
a. Why is the failure to disclose the information unfair or deceptive under Section 5 of the FTC Act?
b. Should disclosure be required for all loans or only certain types of loans? What are the costs and benefits of mandating its disclosure?
c. What would be the effect on competition and consumers if the Commission were to require non-bank financial companies to disclose this information, but banks, thrifts, and federal credit unions were not similarly required to do so?
3. What types of unfair or deceptive acts and practices, if any, do non-bank financial companies engage in regarding Internet financial services related to mortgage loans, including but not limited to acts and practices of mortgage rate aggregators that post rate and points charts? For any such act or practice, please answer the following questions:
a. Why is it unfair or deceptive under Section 5 of the FTC Act?
b. Should it be prohibited or restricted? If so, how? For all loans or only certain types of loans? What are the costs and benefits of such prohibitions or restrictions?
c. What would be the effect on competition and consumers if the Commission were to prohibit or restrict non-bank financial companies with respect to the act or practice, but banks, thrifts, and federal credit unions were not similarly prohibited or restricted?
4. Should the FTC incorporate into a proposed rule any of the requirements or prohibitions on acts or practices related to mortgage advertising that the Board promulgated under its TILA Section 105(a) authority, thereby allowing the FTC to obtain civil penalties for any violation of TILA, HOEPA, or Regulation Z, consistent with the authority conferred on federal banking regulatory agencies?
5. Do any recent reports, studies, or research provide data relevant to mortgage advertising rulemaking? If so, please provide or identify such reports, studies, or research.
6. What types of unfair or deceptive acts and practices, if any, do non-bank financial companies engage in related to mortgage origination? For any such act or practice, please answer the following questions:
a. Why is it unfair or deceptive under Section 5 of the FTC Act?
b. Should it be prohibited or restricted? If so, how? For all loans or only certain types of loans? What are the costs and benefits of such prohibitions or restrictions?
c. What would be the effect on competition and consumers if the Commission were to prohibit or restrict non-bank financial companies with respect to the act or practice, but banks,
7. Are there features of any non-traditional, or alternative, mortgage loans that are unfair or deceptive? Identify any such feature, and for each, please answer the following questions:
a. Why is it unfair or deceptive under Section 5 of the FTC Act?
b. Should it be prohibited or restricted? If so, how? For all loans or only certain types of loans? What are the costs and benefits of such prohibitions or restrictions?
c. What would be the effect on competition and consumers if the Commission were to prohibit or restrict non-bank financial companies with respect to the feature, but banks, thrifts, and federal credit unions were not similarly prohibited or restricted?
8. Is there any specific information that non-bank financial companies should be required to disclose to prevent unfairness or deception related to the origination of mortgage loans? Identify any such type of information, and for each, please answer the following questions:
a. Why is the failure to disclose the information unfair or deceptive under Section 5 of the FTC Act?
b. Should disclosure be required for all loans or only certain types of loans? What are the costs and benefits of mandating its disclosure?
c. What would be the effect on competition and consumers if the Commission were to require non-bank financial companies to disclose this information, but banks, thrifts, and federal credit unions were not similarly required to do so?
9. Should the FTC incorporate into a proposed rule any of the requirements or prohibitions on acts or practices related to mortgage disclosures that the Board promulgated under its TILA Section 105(a) authority, thereby allowing the FTC to obtain civil penalties for any violation of TILA, HOEPA, or Regulation Z, consistent with the authority conferred on federal banking regulatory agencies?
10. Do any recent reports, studies, or research provide data relevant to mortgage origination rulemaking? If so, please provide or identify such reports, studies, or research.
11. What types of unfair or deceptive acts and practices, if any, do non-bank financial companies engage in related to mortgage appraisals, including but not limited to engaging or selecting appraisers, ordering appraisals, or performing as appraisers? For any such act or practice, please answer the following questions:
a. Why is it unfair or deceptive under Section 5 of the FTC Act?
b. Should it be prohibited or restricted? If so, how? For all loans or only certain types of loans? What are the costs and benefits of such prohibitions or restrictions?
c. What would be the effect on competition and consumers if the Commission were to prohibit or restrict non-bank financial companies with respect to the act or practice, but banks, thrifts, and federal credit unions were not similarly prohibited or restricted?
12. Is there any specific information that non-bank financial companies should be required to disclose to prevent unfairness or deception related to mortgage appraisals? Identify any such type of information, and for each, please answer the following questions:
a. Why is the failure to disclose the information unfair or deceptive under Section 5 of the FTC Act?
b. Should disclosure be required for all loans or only certain types of loans? What are the costs and benefits of mandating its disclosure?
c. What would be the effect on competition and consumers if the Commission were to require non-bank financial companies to disclose this information, but banks, thrifts, and federal credit unions were not similarly required to do so?
13. Should the FTC incorporate into a proposed rule any of the prohibitions or restrictions on acts or practices related to mortgage appraisals addressed in the NYAG’s settlement and Code? Identify any such prohibited or restricted act or practice, and for each, please answer the following questions:
a. Why is it unfair or deceptive under Section 5 of the FTC Act?
b. Should it be prohibited or restricted? If so, how? For all loans or only certain types of loans? What are the costs and benefits of such prohibitions or restrictions?
c. What would be the effect on competition and consumers if the Commission were to prohibit or restrict non-bank financial companies with respect to the act or practice, but banks, thrifts, and federal credit unions were not similarly prohibited or restricted?
14. Do any recent reports, studies, or research provide data relevant to mortgage appraisal rulemaking? If so, please provide or identify such reports, studies, or research.
15. What types of unfair or deceptive acts and practices, if any, do non-bank financial companies engage in related to mortgage servicing? For any such act or practice, please answer the following questions:
a. Why is it unfair or deceptive under Section 5 of the FTC Act?
b. Should it be prohibited or restricted? If so, how? For all loans or only certain types of loans? What are the costs and benefits of such prohibitions or restrictions?
c. What would be the effect on competition and consumers if the Commission were to prohibit or restrict non-bank financial companies with respect to the act or practice, but banks, thrifts, and federal credit unions were not similarly prohibited or restricted?
16. Should the FTC incorporate into a proposed rule any of the prohibitions or restrictions on acts and practices addressed in its settlement orders with mortgage servicers?
a. Why is it unfair or deceptive under Section 5 of the FTC Act?
b. Should it be prohibited or restricted? If so, how? For all loans or only certain types of loans? What are the costs and benefits of such prohibitions or restrictions?
c. What would be the effect on competition and consumers if the Commission were to prohibit or restrict non-bank financial companies with respect to the act or practice, but banks, thrifts, and federal credit unions were not similarly prohibited or restricted?
17. Is there any specific information that non-bank financial companies should be required to disclose, or to disclose in a particular manner (for example, through uniform or model servicing disclosures), to prevent unfairness or deception related to mortgage servicing, such as:
a. information about fees the servicer is authorized to charge under the mortgage contract over the life of the loan; or
b. information about applicable fees the servicer has charged during a specific monthly statement period.
Identify any such type of information, and for each, please answer the following questions:
i. Why is the failure to disclose the information, or to disclose it in a particular manner, unfair or deceptive under Section 5 of the FTC Act?
ii. Should disclosure be required in a particular manner (for example, through uniform or model servicing disclosures)? Should disclosure be required for all loans or only certain
iii. What would be the effect on competition and consumers if the Commission were to require non-bank financial companies to make these disclosures, but banks, thrifts, and federal credit unions were not similarly required to do so?
18. Should the FTC consider prohibiting or restricting as unfair or deceptive certain acts and practices related to mortgage servicing fees or related charges, such as:
a. charging fees not authorized under the mortgage contract;
b. charging fees not authorized by state law;
c. charging for “estimated” attorney fees or other fees for services not rendered;
d. charging late fees that are not permitted under the service agreement or that are otherwise improper (other than “fee pyramiding,” which is already prohibited under the Board’s Regulation Z amendments
e. failing to disclose and itemize adequately fees in billing statements or other relevant communications with borrowers; or
f. forcing consumers to buy insurance on their homes when the servicer knows or should know that insurance is already in place?
Identify any such act or practice, and for each, please answer the following questions:
i. Why is it unfair or deceptive under Section 5 of the FTC Act?
ii. Should it be prohibited or restricted? If so, how? For all loans or only certain types of loans? What are the costs and benefits of such prohibitions or restrictions?
iii. What would be the effect on competition and consumers if the Commission were to prohibit or restrict non-bank financial companies with respect to the act or practice, but banks, thrifts, and federal credit unions were not similarly prohibited or restricted?
19. Should the FTC consider prohibiting or restricting as unfair or deceptive certain acts and practices related to how mortgage servicers handle payments, amounts owed, or consumer disputes, such as:
a. failing to post payments in a timely and proper manner (beyond the new prohibition under the Board’s Regulation Z amendments);
b. mishandling of partial payments or suspense accounts;
c. misrepresentation of amounts owed or other account terms or the status of the account;
d. making claims to borrowers about their loan accounts without a reasonable basis (
e. failing to have a adequate procedures to ensure accuracy of information used to service loans; or
f. failing to maintain and provide adequate customer service to handle disputes?
Identify any such act or practice, and for each, please answer the following questions:
i. Why is it unfair or deceptive under Section 5 of the FTC Act?
ii. Should it be prohibited or restricted? If so, how? For all loans or only certain types of loans? What are the costs and benefits of such prohibitions or restrictions?
iii. What would be the effect on competition and consumers if the Commission were to prohibit or restrict non-bank financial companies with respect to the act or practice, but banks, thrifts, and federal credit unions were not similarly prohibited or restricted?
20. Should the FTC consider prohibiting or restricting as unfair or deceptive certain acts and practices related to how mortgage servicers handle loan performance and loss mitigation issues, such as:
a. taking foreclosure action without first verifying loan information and investigating any disputes;
b. taking foreclosure action without first giving the consumer an opportunity to attend foreclosure counseling or mediation;
c. requiring consumers to release all claims (or other requirements, such as requiring binding arbitration agreements) in connection with loan modifications or other workout agreements/repayment plans; or
d. making loan modifications or other workout agreements/repayment plans without regard to the consumer’s ability to repay?
Identify any such act or practice, and for each, please answer the following questions:
i. Why is it unfair or deceptive under Section 5 of the FTC Act?
ii. Should it be prohibited or restricted? If so, how? For all loans or only certain types of loans? What are the costs and benefits of such prohibitions or restrictions?
iii. What would be the effect on competition and consumers if the Commission were to prohibit or restrict non-bank financial companies with respect to the act or practice, but banks, thrifts, and federal credit unions were not similarly prohibited or restricted?
21. Should the FTC consider prohibiting or restricting as unfair or deceptive certain acts and practices related to servicing of mortgage loans in connection with bankruptcy proceedings, such as:
a. failing to disclose fees incurred during a Chapter 13 bankruptcy case and then seeking to collect them from the consumer after discharge/dismissal?
b. filing of proofs of claim or other bankruptcy filings without a reasonable basis (
c. failing to apply properly payments in bankruptcy to pre-petition/post-petition categories of the consumer’s debts; or
d. charging of specific unnecessary or excessive fees in bankruptcy cases (
Identify any such act or practice, and for each, please answer the following questions:
i. Why is it unfair or deceptive under Section 5 of the FTC Act?
ii. Should it be prohibited or restricted? If so, how? For all loans or only certain types of loans? What are the costs and benefits of such prohibitions or restrictions?
iii. What would be the effect on competition and consumers if the Commission were to prohibit or restrict non-bank financial companies with respect to the act or practice, but banks, thrifts, and federal credit unions were not similarly prohibited or restricted?
22. Do any recent reports, studies, or research provide data relevant to mortgage servicing rulemaking? If so, please provide or identify such reports, studies, or research.
By direction of the Commission.
Federal Trade Commission (FTC or Commission)
Advance Notice of Proposed Rulemaking; request for comment
President Obama signed the 2009 Omnibus Appropriations Act on March 11, 2009. Section 626 of the Act directed the Commission to initiate, within 90 days of the date of enactment, a rulemaking proceeding with respect to
Comments must be received by July 15, 2009.
Interested parties are invited to submit written comments electronically or in paper form. Comments should refer to “Mortgage Assistance Relief Services Rulemaking, Rule No. R911003” to facilitate the organization of comments. Please note that comments will be placed on the public record of this proceeding-including on the publicly accessible FTC website, at (
Because paper mail addressed to the FTC is subject to delay due to heightened security screening, please consider submitting your comments in electronic form. Comments filed in electronic form should be submitted by using the following weblink: (
A comment filed in paper form should include the reference “Mortgage Assistance Relief Services Rulemaking, Rule No. R911003” both in the text of the comment and on the envelope, and should be mailed or delivered to the following address: Federal Trade Commission, Office of the Secretary, Room H-135 (Annex W), 600 Pennsylvania Avenue, NW., Washington, DC 20580. The FTC requests that any comment filed in paper form be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.
The FTC Act and other laws administered by the Commission permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments received, whether filed in paper or electronic form. Comments received will be available to the public on the FTC website, to the extent practicable, at (
Evan Zullow or Stephen Shin, Attorneys, (202) 326-3224, Division of Financial Practices, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580.
Section 626 of the Omnibus Appropriations Act of 2009
This ANPR, the Mortgage Assistance Relief Services (MARS) Rulemaking, addresses the practices of entities (other than mortgage servicers) who offer assistance to consumers in dealing with owners or servicers of their loans to modify them or avoid foreclosure. Another ANPR, the Mortgage Acts and Practices (MAP) Rulemaking, addresses more generally activities that occur throughout the life-cycle of a mortgage loan,
The Commission is seeking comments on a series of questions related to loan modification and foreclosure rescue. The FTC is seeking comments to determine whether certain acts and practices of loan modification and foreclosure rescue entities are unfair or deceptive under Section 5 of the FTC Act and should be incorporated into a proposed rule. These acts and practices include conduct that the FTC currently could challenge in a law enforcement action as violating Section 5 of the FTC Act. However, the Commission is not seeking comments on statutes that have been enacted and rules that have been issued on these topics.
Pursuant to Section 626 of the Omnibus Appropriations Act of 2009, any violation of a rule adopted under that section will be treated as a violation of a rule promulgated pursuant to Section 18 of the FTC Act.
The Commission has law enforcement authority over a wide range of acts and practices throughout the consumer credit life-cycle. The agency enforces Section 5 of the Federal Trade Commission Act, which prohibits “unfair or deceptive acts or practices in or affecting commerce.”
Notwithstanding the Commission’s broad authority over acts and practices related to financial services, the FTC does not have jurisdiction over all providers of these services. The FTC Act specifically excludes banks, thrifts, and federal credit unions from the agency’s jurisdiction.
CLARIFICATION OF FEDERAL TRADE COMMISSION JURISDICTION. Any person that directly or indirectly controls, is controlled directly or indirectly by, or is directly or indirectly under common control with, any bank or savings association . . . and is not itself a bank or savings association shall not be deemed to be a bank or savings association for purposes of any provisions applied by the Federal Trade Commission under the Federal Trade Commission Act.
Pub. L. No. 106-102, § 133(a), 113 Stat. 1383; 15 U.S.C. 41 note (a). This section has been interpreted to apply to subsidiaries of banks that are not themselves banks.
The Commission also does not have jurisdiction under the FTC Act over non-profit organizations.
As discussed above, the Commission intends that any rules that it issues in this proceeding would apply only to the same types of entities over which the Commission has jurisdiction under the FTC Act.
Section 5 of the FTC Act broadly proscribes deceptive or unfair acts or practices in or affecting commerce. An act or practice is deceptive if there is a representation, omission of information, or practice that is likely to mislead consumers, who are acting reasonably under the circumstances, and the representation, omission, or practice is one that is material.
To determine that an act or practice is deceptive, the Commission first must conclude that there is a representation, omission of information, or a practice that is likely to mislead consumers. A claim about a product or service may be either express or implied. An express claim generally is established by the representation itself. An implied claim, on the other hand, is an indirect representation, which must be examined within the context of other information that is either presented or omitted. Deception may occur based on what is stated or because of the omission of information that would be important to the consumer. In determining that an advertisement is deceptive, for example, the Commission considers whether the overall net impression of the ad (including language and graphics) is likely to mislead consumers.
Second, the Commission considers the act or practice from the perspective of a consumer acting reasonably under the circumstances.
Third, to conclude that deception has occurred, the Commission must determine that the representation, omission, or practice is material,
Section 5(n) of the FTC Act also sets forth a three-part test to determine whether an act or practice is unfair.
In analyzing whether injury is substantial, the Commission is not concerned with trivial, speculative, or more subjective types of harm. The substantial injury test may be met by small harm to a large number of consumers. In most cases, substantial injury involves monetary harm. Once it determines that there is substantial consumer injury, the Commission considers whether the harm is offset by any countervailing benefits to consumers or to competition. Thus, the Commission considers both the costs of imposing a remedy and any benefits that consumers enjoy as a result of the practice at issue. Finally, the injury must be one that consumers cannot reasonably avoid. If consumers reasonably could have made a different choice that would have avoided the injury, but did not do so, the practice is not deemed to be unfair under the FTC Act.
In applying its unfairness standard, the Commission takes the approach that well-informed consumers are capable of making choices for themselves. The agency therefore may prohibit or restrict acts and practices if they unreasonably create, or take advantage of, an obstacle to the ability of consumers to make informed choices, thus causing, or being likely to cause, consumer injury.
With the recent economic downturn, more consumers have become delinquent on their mortgages or at risk of foreclosure. Others, even if not yet delinquent, are struggling to pay their mortgage debt. To respond to these problems, many consumers have sought to modify their loans or purchase services to assist them in avoiding foreclosure. However, the acts and practices of some companies that provide or advertise loan modification and foreclosure rescue services have raised substantial consumer protection concerns. To date, the Commission has addressed these concerns primarily through law enforcement under Section 5 of the FTC Act. Through this ANPR, the FTC seeks comment on whether it should also issue rules to address the conduct of those who provide or advertise loan modification and foreclosure rescue services.
In the past, mortgage lenders usually made loans to consumers and then held the loans until consumers paid off their mortgages or sold their homes. In more recent years, however, more mortgage lenders have regularly sold their loans to others. Thus, the owner of a mortgage loan may be either the originating lender or an investor who has purchased the loan.
Owners of loans often contract with others to service their loans. A mortgage servicer is the agent responsible for handling the day-to-day aspects of a loan on behalf of the loan’s owner. A mortgage servicer’s responsibilities
Generally, financially distressed homeowners having difficulty making mortgage payments can contact their mortgage servicers directly and seek assistance. Pursuant to guidelines or agreements with the owners of loans, many servicers provide loss mitigation options for distressed homeowners. Owners of loans often have an incentive to consider such options because of the cost associated with foreclosure proceedings.
Mortgage servicers may provide various loss mitigation options to help distressed homeowners avoid foreclosure, including a repayment plan, forbearance agreement, short sale, deed-in-lieu of foreclosure, or loan modification.
A loan modification, in particular, benefits distressed homeowners because borrowers can avoid foreclosure and are more likely to be able stay in their homes with more affordable payments. In addition, if loans are in default, once they have been modified, servicers will reinstate the loans and treat borrowers as being current on their mortgages. The specific loan modification policies used vary by mortgage servicer.
Foreclosure is the legal means an owner of a mortgage loan can use to take possession of a home when a borrower defaults on the loan. In general, a borrower is in default thirty days after the first missed mortgage payment. Typically, a mortgage servicer may attempt various loss mitigation options prior to initiating foreclosure proceedings, which generally occur three to six months after the first missed mortgage payment.
Foreclosure processes differ by state and depend on the details of state foreclosure laws. Differences among states include the requirements of notification and the types of foreclosure proceedings available. Generally, there are three types of foreclosures processes: judicial foreclosure, power of sale foreclosure, and strict foreclosure. Judicial foreclosure involves the owner of the loan filing suit in court and the home being sold under the court’s supervision. All states allow judicial foreclosure, and in some states it is the only foreclosure option available. Power of sale foreclosure, also known as “statutory foreclosure,” involves the sale of the home at public auction by the servicer if the mortgage contains a “power of sale” clause or if a deed of trust was used instead of a mortgage. Many states permit power of sale foreclosure, which is often more expedient than judicial foreclosure. In a power of sale foreclosure, the owner of the loan sends notices demanding payment to borrowers who have defaulted. Once the required waiting period has passed, the mortgage servicer can sell the home at public auction, subject to judicial review. Strict foreclosure is available in a limited number of states and permits the owner of the loan to file lawsuits against borrowers who have defaulted. If the borrower cannot pay the mortgage debt within the period of time set by court order, the property title goes directly to the owner of the loan.
As a result of the recent downturn in the economy and housing market, many American homeowners are in financial distress. The rate of mortgage loan delinquency and foreclosure has risen to the highest level in three decades.
The FTC and other agencies like the U.S. Department of Housing and Urban Development (HUD) have generally advised consumers who are behind on their mortgage payments to contact their mortgage servicer about the possibility of loan modification or other options.
In addition, government agencies have instituted new programs to help homeowners in financial distress. For
In addition to federal efforts, state and local agencies and non-profit organizations also offer similar foreclosure prevention assistance and other housing-related services. Non-profit organizations and housing counseling agencies continue to provide a wide array of free services to homeowners who are in financial distress. HUD has certified numerous non-profit housing counseling agencies. These agencies provide homeowners with assistance, such as offering consumer education, assisting with debt management, negotiating directly with servicers to make mortgage payments more affordable-thereby providing foreclosure relief and helping consumers stay in their homes.
The private sector also has developed and offered programs at no cost to help distressed homeowners. HUD-approved counseling agents, mortgage companies, investors, and other mortgage market participants created the HOPE NOW Alliance (Hope Now) to provide homeowners with free foreclosure prevention assistance. Consumers can visit Hope Now’s website,
At the same time that governmental and private sector entities (both for-profit and non-profit) are increasing their efforts to assist distressed homeowners, there has been an increase in individuals and entities offering to assist consumers in securing loan modifications and foreclosure rescue services in exchange for a fee. Foreclosure rescue and loan modification entities frequently market their services via direct mail, email, radio, television, and Internet advertisements.
Foreclosure rescue and loan modification entities, sometimes also referred to as “foreclosure consultants,” generally offer to negotiate with a consumer’s servicer to secure a reduction in mortgage payments or otherwise obtain a favorable modification of loan terms on behalf of a consumer. Foreclosure rescue and loan modification entities charge a fee for their services, and this fee is almost always charged up-front. In many instances, these entities claim that they have knowledge of and experience with the mortgage industry and lending because they are attorneys or mortgage brokers. In some cases, instead of simply offering to negotiate on behalf of a consumer, foreclosure rescue operations require consumers to enter a new loan with them or to transfer title to the property (for example, to remain in the home as a renter with the option to repurchase or otherwise maintain the opportunity to reacquire title).
Consumers may choose to pay a fee for the services of providers of foreclosure rescue and loan modification services rather than use free services for a variety of reasons. Some distressed homeowners may be drawn to, or targeted for, aggressive advertisements by fee for service providers and may be unaware of the free services available to them. They also may be unwilling or unable to work directly with their mortgage servicer or with a non-profit organization. For example, consumers may be wary of or unsatisfied with a mortgage servicer’s loss mitigation offer, or frustrated with their inability to contact the appropriate person at their servicer.
The FTC has taken a number of law enforcement actions to protect consumers from unfair and deceptive loan modification and foreclosure rescue practices. The Commission has recently filed numerous lawsuits against defendants for allegedly engaging in deceptive practices.
In the FTC’s law enforcement actions against those who offer loan modification and foreclosure rescue services, the Commission has alleged that a number of acts and practices were deceptive under Section 5 of the FTC Act:
First, many defendants promised a high likelihood of success but failed to fulfill their promise to modify
Moreover, most defendants charged substantial, up-front fees, which appears to be a prevalent practice in the for-profit foreclosure rescue and loan modification industry. When defendants use deception to secure advance payment and then fail to fulfill their promise to stop a foreclosure or obtain a loan modification, consumers are unlikely to receive a refund or recover their money.
In addition, some defendants advise consumers, including those who are still current on their loans, to stop making mortgage payments and to cease communication with their mortgage servicer while the foreclosure rescue or loan modification operator purportedly negotiates on their behalf.
Many states have engaged in legislative and law enforcement efforts to address conduct in the loan modification and foreclosure rescue industry. First, several states have filed lawsuits against loan modification or foreclosure rescue entities for violating state consumer protection laws prohibiting unfair and deceptive practices.
In 1979, California enacted the first statute that specifically restricts the practices of entities offering foreclosure rescue or similar services.
Some statutes also impose additional requirements on foreclosure rescue operations that require consumers to transfer title to their homes, and purport to offer reconveyance at a later date. These statutes often include the requirement that foreclosure rescue operations must verify before doing a reconveyance that the consumer has a reasonable ability to pay for the subsequent conveyance of the home back to the consumer.
Almost all state foreclosure consultant laws exempt state-licensed attorneys. Some for-profit loan modification and foreclosure rescue operations have partnered with attorneys,
Some of the consumer protections that state statutes provide to homeowners in financial distress do not commence until the owner or servicer of a mortgage has served a notice of default on the borrower. However, some loan modification and foreclosure rescue services apparently provide services before a notice of default has been served, thereby limiting the protection accorded under state law to some homeowners in financial distress.
The Commission seeks written comments on a series of questions related to loan modification and foreclosure rescue. The FTC is seeking comments to determine whether certain acts and practices of loan modification and foreclosure rescue entities are unfair or deceptive under Section 5 of the FTC Act and should be incorporated into a proposed rule. These acts and practices include conduct that the FTC currently could challenge in a law enforcement action as violating Section 5 of the FTC Act. However, the Commission is not otherwise seeking comments on statutes that have been enacted and rules that have been issued.
The Commission invites interested persons to submit written comments on any issue of fact, law, or policy that may bear upon these issues. After examining the comments, the Commission will determine whether and how to incorporate them into any proposed rule.
The Commission encourages commenters to respond to the specific questions. However, commenters do not need to respond to all questions. Please provide explanations for your answers and detailed, factual supporting evidence.
Without limiting the scope of issues on which it seeks comment, the Commission is particularly interested in receiving comments on the following questions:
A. What empirical data are available concerning the nature, extent, and impact of the loan modification and foreclosure rescue industry? Please identify any such data sources.
B. What business models are used to provide loan modification and foreclosure rescue services? Please identify and describe any such business models and their impact on consumers and competition.
C. What are the distinctions between different models of providing loan modification and foreclosure rescue services (e.g., free versus fee-for-service, loan negotiation versus title transfer, etc.)?
D. What are the costs and benefits of various loan modification and foreclosure rescue services?
E. What roles do mortgage servicers play in the loan modification and foreclosure rescue industry? What are the costs and benefits of their conduct in the context of loan modification and foreclosure rescue services? Do the practices of mortgage servicers present consumer protection concerns? If so, how are these concerns the same as or different from those raised by third-party loan modification and foreclosure rescue entities?
F. What empirical data are available concerning the performance of loan modification and foreclosure rescue entities in obtaining promised results? Please identify any such data (broken down by business model, if possible) used to provide loan modification and foreclosure rescue services, including but not limited to data addressing the following:
1. The percentage or proportion of consumers enrolled in loan modification or foreclosure rescue services who successfully obtain a loan modification or foreclosure relief.
2. For the consumers described in (F)(1), the percentage who, after successfully obtaining the modification or foreclosure relief, remain current on their mortgage payments for a substantial period of time (e.g., six months, one year, or two years).
A. Given that many states have enacted and enforced laws concerning loan modification and foreclosure services and that the FTC has brought law enforcement actions against providers of these types of services under Section 5 of the FTC Act, should the FTC promulgate a rule to address these services? Why or why not?
A. Should conduct by loan modification and foreclosure rescue service providers or advertisers that the FTC has challenged as unfair or
B. Should conduct by loan modification and foreclosure rescue service providers or advertisers that states have declared unlawful by statute or regulation or have challenged in law enforcement actions be incorporated into a proposed FTC rule? Why or why not? If so, what prohibitions and restrictions should be incorporated in a proposed FTC rule?
1. Some states require providers to create written contracts and include key disclosures in these contracts. Should the Commission impose the same or similar disclosure requirements in a proposed FTC rule? If so, what disclosures should be included and why?
2. Some states require providers to give consumers who enroll the right to rescind or cancel their agreements with the providers. Should the Commission include the same or similar rights of rescission or cancellation in a proposed rule? If so, what rescission and cancellation rights should be included and why?
3. Some states have restricted the type, amount, and timing of the fees charged and refunds given by providers of loan modification and foreclosure rescue services. In particular, some states ban advance fees until all services promised or contracted for are completed.
(i) Should the Commission address in a proposed FTC rule any fee or refunds practices of providers of loan modification and foreclosure rescue services? If so, what practices should be addressed, how they should be addressed, and why?
(ii) Should the Commission ban the payment of advance fees for loan modification and foreclosure rescue services in a proposed FTC rule? If so, why or why not? What effect, if any, would an advance fee ban have on the willingness or ability of loan modification and foreclosure rescue services providers to do business?
(iii) Should the Commission impose fee restrictions in a proposed FTC rule other than a ban on the advance fees that providers of loan modification and foreclosure rescue services receive? If so, what restrictions should be imposed and why? Would these restrictions prevent or mitigate the potential harm caused by payment of these fees? For example, to what extent might the possible harm from advance fees be prevented or mitigated by requiring providers to make specific disclosures regarding the timing, amount, or allocation of fees? Additionally, to what extent might such harm be prevented or mitigated by requiring providers to make more general disclosures regarding the nature and material restrictions of their services (e.g., the disclosures regarding the likelihood of success, timing of services or negotiations with mortgage servicers, refund restrictions, or any potentially negative ramifications of using the service)?
4. Some states have foreclosure rescue laws which, in whole or in part, only apply once a consumer has received a notice of default. At what stage or stages of the process should a proposed FTC rule protect consumers? Should it take effect before consumers receive a notice of default, after the notice of default is received, or once foreclosure proceedings have begun? Why?
5. Please identify any other state restrictions or challenged conduct which should (or should not) be addressed in a proposed FTC rule, and explain why.
C. Are there any unfair or deceptive acts and practices by providers or advertisers of loan modification and foreclosure rescue services that neither the FTC nor the states have addressed that a proposed FTC rule should address? If so, how should these acts and practices be addressed and why?
A. As described in the text, an FTC proposed rule would not cover banks, thrifts, federal credit unions, and non-profits. To what extent do these types of entities provide or advertise loan modification and foreclosure rescue services? To what extent do these entities compete with entities that an FTC proposed rule would cover and what effect would an FTC proposed rule have on such competition?
B. As described in the text, many states have exempted attorneys from laws (e.g., foreclosure consultant laws) which regulate the conduct of providers and advertisers of loan modification and foreclosure rescue services. What are the costs and benefits of exempting attorneys from these laws? What has been the effect of such exemptions on competition between attorneys and non-attorneys in providing or advertising loan modification and foreclosure rescue services? Should an FTC proposed rule include an exemption for attorneys or any other class of persons or entities? Why or why not?
By direction of the Commission.
Coast Guard, DHS.
Notice of proposed rulemaking.
The Coast Guard proposes establishment of safety zones for annual events in the Captain of the Port Duluth Zone. This rule proposes removal of a safety zone currently located in part 100, and the addition of it to part 165. Further, this rule proposes new safety zones to be added to part 165. These safety zones are necessary to protect spectators, participants, and vessels from the hazards associated with fireworks displays.
Comments and related materials must reach the Coast Guard on or before July 1, 2009.
You may submit comments identified by Coast Guard docket number USCG-2009-0127 to the Docket Management Facility at the U.S. Department of Transportation. To avoid duplication, please use only one of the following methods:
(1)
(2)
(3)
(4)
LT Aaron Gross, Chief of Port Operations U.S. Coast Guard Sector Duluth; (218) 720-5286 Ext. 111.
We encourage you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted, without change, to
If you submit a comment, please include the docket number for this rulemaking (USCG-2009-0127), indicate the specific section of this document to which each comment applies, and give the reason for each comment. We recommend that you include your name, mailing address, and an e-mail address or other contact information in the body of your document to ensure that you can be identified as the submitter. This also allows us to contact you in the event further information is needed or if there are questions. For example, if we cannot read your submission due to technical difficulties and you cannot be contacted, your submission may not be considered. You may submit your comments and material by electronic means, mail, fax, or delivery to the Docket Management Facility at the address under
To view comments, as well as documents mentioned in this preamble as being available in the docket, go to
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
We do not now plan to hold a public meeting. But you may submit a request for a meeting by writing to Commanding Officer, Coast Guard Marine Safety Unit Duluth at the address under
This rule proposes the removal of the “Duluth Fourth Fest Fireworks” safety zone currently published in § 100.901 and adding it to proposed § 165.945. The Coast Guard proposes this change in an effort to consolidate all Captain of the Port Duluth Zone 4th of July fireworks display safety zones. Additionally, in § 165.945 we propose adding safety zones for fireworks in support of the Cornucopia Fireworks display, Cornucopia, Wisconsin; City of Bayfield Fireworks display, Bayfield, Wisconsin; Madeline Island Fireworks display, LaPointe, Wisconsin; and the Ashland Fireworks display, Ashland, Wisconsin. These safety zones are necessary to protect vessels and people from the hazards associated with fireworks displays. Such hazards include obstructions to the waterway, the explosive danger of fireworks and falling debris.
The proposed rule is necessary to ensure the safety of vessels and people during annual firework events in the Captain of the Port Duluth area of responsibility that may pose a hazard to the public. This rule proposes the removal of a regulation currently published in 33 CFR 100.901 under Sector Sault Ste. Marie, and the addition of it to proposed § 165.945. It also proposes the addition of four new events never before published in the CFR. All of the events listed occur in the Captain of the Port Duluth Zone.
The proposed safety zones will be enforced only immediately before, during, and after the aforementioned events.
The Captain of the Port Duluth will notify the public that the zones in this proposal will be enforced by all appropriate means to the affected segments of the public including publication in the
All persons and vessels shall comply with the instructions of the Coast Guard Captain of the Port or the designated representative. Entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Duluth, or his designated representative. The Captain of the Port or his designated representative may be contacted via VHF Channel 16.
This proposed rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, 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.
We expect the economic impact of this proposed rule to be so minimal that a full Regulatory Evaluation is unnecessary.
The Coast Guard's use of these safety zones will be periodic and of short duration. These safety zones will only be enforced immediately before, during, and after the time the events occur. The Coast Guard expects insignificant adverse impact to mariners from the activation of these safety zones.
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 would affect the following entities, some of which might
These safety zones would not have a significant economic impact on a substantial number of small entities for the following reasons: This proposed rule would be in effect for short periods of time, and only once per year, per zone. The safety zones have been designed to allow traffic to pass safely around the zone whenever possible and vessels will be allowed to pass through the zones with the permission of the Captain of the Port.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this proposed rule would have a significant economic impact on it, please submit a comment (see
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 proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact LT Aaron Gross, Chief of Port Operations, Coast Guard Marine Safety Unit Duluth, Duluth, MN at (218) 720-5286 Ext 111. 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.
This proposed rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on 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.
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 or more in any one year. Though this proposed rule will not result in such expenditure, we nevertheless discuss its effects elsewhere in this preamble.
This proposed rule will not effect the taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
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.
We have analyzed this proposed rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This proposed rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.
The Coast Guard recognizes the treaty rights of Native American Tribes. Moreover, the Coast Guard is committed to working with Tribal Governments to implement local policies and to mitigate tribal concerns. We have determined that this rule and fishing rights protection need not be incompatible. We have also determined that this proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. Nevertheless, Indian Tribes that have questions concerning the provisions of this proposed rule or options for compliance are encouraged to contact the point of contact listed under
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.
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 (
This proposed rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.
We have analyzed this proposed rule under Commandant Instruction M16475.lD and Department of Homeland Security Management Directive 023-01, 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 not likely to have a significant effect on the human environment. An environmental analysis checklist supporting this preliminary determination is available in the docket where indicated under
For the reasons discussed in the preamble, the Coast Guard proposes to
Regattas and Marine Parades.
Harbors, Marine Safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
1. The authority citation for part 100 continues to read as follows:
33 U.S.C. 1233.
2. In Table 1 to § 100.901 Table, under the entry for “Sector Saulte Ste. Marie, MI” remove the following: “Duluth Fourth Fest Fireworks.
3. The authority citation for Part 165 continues to read as follows:
33 U.S.C. 1226, 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, and 160.5; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1.
4. Add § 165.945 to read as follows:
(a)
(1)
(ii)
(2)
(ii)
(3)
(ii)
(4)
(ii)
(5)
(ii)
(b)
(1)
(2)
(c)
(2)(i) These safety zones are closed to all vessel traffic, except as may be permitted by the Captain of the Port, or his designated representative.
(ii) All persons and vessels must comply with the instructions of the Coast Guard Captain of the Port, or his designated representative.
(iii) Upon being hailed by the U.S. Coast Guard by siren, radio, flashing light or other means, the operator of a vessel shall proceed as directed.
(3)(i) All vessels must obtain permission from the Captain of the Port, or his designated representative to enter, move within, or exit the safety zone established in this section when this safety zone is enforced.
(ii) Vessels and persons granted permission to enter the safety zone must obey all lawful orders or directions of the Captain of the Port or a designated representative.
(iii) While within a safety zone, all vessels must operate at the minimum speed necessary to maintain a safe course.
(d)
(e)
(f)
Environmental Protection Agency (EPA).
Proposed rule.
EPA is proposing to approve a revision to the South Carolina State Implementation Plan (SIP) concerning the maintenance plan addressing the
In the Final Rules Section of this
Written comments must be received on or before July 1, 2009.
Submit your comments, identified by Docket ID No. EPA-R04-OAR-2008-1186 by one of the following methods:
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Zuri Farngalo, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. Mr. Farngalo may be reached by phone at (404) 562-9152 or by electronic mail address
For additional information see the direct final rule which is published in the Rules section of this
Environmental Protection Agency (EPA).
Proposed rule.
EPA is proposing national emission standards for control of hazardous air pollutants (HAP) for the Paints and Allied Products Manufacturing area source category. The proposed emissions standards for new and existing sources are based on EPA's proposed determination as to what constitutes the generally available control technology or management practices (GACT) for the area source category.
Comments must be received on or before July 1, 2009, unless a public hearing is requested by June 11, 2009. If a hearing is requested on this proposed rule, written comments must be received by July 16, 2009. Under the Paperwork Reduction Act, comments on the information collection provisions must be received by the Office of Management and Budget on or before July 1, 2009.
EPA will accept comment on the proposal for 30 days after publication in the
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Melissa Payne, Regulatory Development and Policy Analysis Group, Office of Air Quality Planning and Standards (C404-05), Environmental Protection Agency, Research Triangle Park, North Carolina 27711, telephone number: (919) 541-3609; fax number: (919) 541-0242; e-mail address:
The supplementary information in this preamble is organized as follows:
The regulated categories and entities potentially affected by this proposed action are shown in the table below. You are subject to this subpart if you own or operate a facility that performs paints and allied products manufacturing that is an area source of hazardous air pollutant (HAP) emissions and processes, uses, or generates materials containing the following HAP: benzene, methylene chloride, and compounds of cadmium, chromium, lead, and nickel. If the proposed standards are applicable to a paints and allied product manufacturing area source, the standards apply to all organic HAP emissions and all metal HAP emissions from all paints and allied products manufacturing operations at the area source.
The paints and allied products manufacturing area source rule (CCCCCCC) would cover all coatings, but does not include resin manufacturing, which is covered by the chemical manufacturing area source standard (VVVVVV). Facilities that manufacture both resins and coatings would be required to comply with both rules. Paints and allied products are defined in Sec. 63.11606 as any material such as a paint, ink, or adhesive that is intended to be applied to a substrate and consists of a mixture of resins, pigments, solvents, and/or other additives. Typically, these materials are described by Standard Industry Classification (SIC) codes 285 or 289 and North American Industry Classification System (NAICS) codes 3255 and 3259 and are produced by physical means, such as blending and mixing, as opposed to chemical synthesis means, such as reactions and distillation. The source category does not include the following: (1) The manufacture of products that do not leave a dried film of solid material on the substrate, such as thinners, paint removers, brush cleaners, and mold release agents; (2) the manufacture of electroplated and electroless metal films; and (3) the manufacture of raw materials, such as resins, pigments, and solvents used in the production of paints and allied products.
This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. To determine whether your facility would be regulated by this action
Do not submit information containing CBI to EPA through
In addition to being available in the docket, an electronic copy of this proposed action will also be available on the Worldwide Web (WWW) through EPA's Technology Transfer Network (TTN). A copy of this proposed action will be posted on the TTN's policy and guidance page for newly proposed or promulgated rules at the following address:
If anyone contacts EPA requesting to speak at a public hearing concerning this proposed rule by June 11, 2009, we will hold a public hearing on June 16, 2009. Persons interested in presenting oral testimony at the hearing, or inquiring as to whether a hearing will be held, should contact Ms. Christine Adams at (919) 541-5590 at least two days in advance of the hearing. If a public hearing is held, it will be held at 10 a.m. at the EPA's campus located at 109 T.W. Alexander Drive in Research Triangle Park, NC, or an alternate site nearby.
Section 112(d) of the Clean Air Act (CAA) requires EPA to establish national emission standards for hazardous air pollutants (NESHAP) for both major and area sources of HAP that are listed for regulation under CAA section 112(c). A major source emits or has the potential to emit 10 tons per year (tpy) or more of any single HAP or 25 tpy or more of any combination of HAP. An area source is a stationary source that is not a major source.
Section 112(k)(3)(B) of the CAA calls for EPA to identify at least 30 HAP which, as the result of emissions from area sources, pose the greatest threat to public health in the largest number of urban areas. EPA implemented this provision in 1999 in the Integrated Urban Air Toxics Strategy, (64 FR 38715, July 19, 1999). Specifically, in the Strategy, EPA identified 30 HAP that pose the greatest potential health threat in urban areas, and these HAP are referred to as the “30 urban HAP.” Section 112(c)(3) requires EPA to list sufficient categories or subcategories of area sources to ensure that area sources representing 90 percent of the emissions of the 30 urban HAP are subject to regulation. We implemented these requirements through the Integrated Urban Air Toxics Strategy (64 FR 38715, July 19, 1999). A primary goal of the Strategy is to achieve a 75 percent reduction in cancer incidence attributable to HAP emitted from stationary sources.
Under CAA section 112(d)(5), we may elect to promulgate standards or requirements for area sources “which provide for the use of generally available control technologies or management practices (GACT) by such sources to reduce emissions of hazardous air pollutants.” Additional information on GACT is found in the Senate report on the legislation (Senate Report Number 101-228, December 20, 1989), which describes GACT as:
Determining what constitutes GACT involves considering the control technologies and management practices that are generally available to the area sources in the source category. We also consider the standards applicable to major sources in the same industrial sector to determine if the control technologies and management practices are transferable and generally available to area sources. In appropriate
We are proposing these national emission standards in response to a court-ordered deadline that requires EPA to issue standards for categories listed pursuant to section 112(c)(3) and (k) by August 17, 2009 (
These proposed standards would affect any facility that manufactures paints, inks, adhesives, stains, varnishes, shellacs, putties, sealers, caulks, and other coatings, the intended use of which is to leave a dried film of solid material on a substrate. The paints and allied products manufacturing process may include, but is not limited to, any one or combination of the following steps: weighing, mixing, grinding, tinting, thinning, heating, cooking, flushing, and packaging. The paints and allied products may be manufactured in liquid or solid form.
We listed the Paints and Allied Products Manufacturing area source category under CAA section 112(c)(3) in one of a series of amendments (November 22, 2002, 67 FR 70427) to the original source category list included in the 1999 Integrated Urban Air Toxics Strategy. EPA listed this area source category for regulation pursuant to section 112(c)(3), based on emissions of the following six urban HAP: benzene, methylene chloride, and compounds of cadmium, chromium, lead, and nickel.
The definition of containing HAP is identical to the Occupational Safety and Health Administration (OSHA) definitions specified in 29 CFR 1910.1200(d)(4),
Throughout this proposed rule, we refer to compounds of cadmium, chromium, lead, and nickel as the “Paints and Allied Products Manufacturing metal HAP.” We refer to benzene and methylene chloride as the “Paints and Allied Products Manufacturing volatile HAP.”
Based on 2002 U.S. Census data, we estimate that 2,510 paints and allied products manufacturing facilities are currently operating in the U.S. Independent estimates by the industry trade association confirm our calculations. Nearly all (97 percent) of the paints and allied products manufacturing facilities are in urban areas. Our analyses also indicate that the 2,190 facilities that comprise the Paints and Allied Products Manufacturing area source category are small businesses, which the Small Business Administration generally defines as facilities with less than 500 employees. The 2002 Census data also show that nearly 50 percent of the facilities in this source category have less than 10 employees.
Paints and allied products manufacturing can be classified as a batch process and generally involves the blending and mixing of resins, pigments, solvents, and additives. Traditional coatings manufacturing consists of four major steps:
• Preassembly and premix;
• Pigment grinding, milling, and dispersing;
• Product finishing and blending; and
• Product filling and packaging.
The Paints and Allied Products Manufacturing volatile HAP emissions are a result of solvents that evaporate during the manufacturing process, and include benzene and methylene chloride. The Paints and Allied Products Manufacturing metal HAP emissions occur from the handling of solid materials such as pigments and resins during the manufacturing process. The metal HAP for this listing are cadmium, chromium, lead, and nickel compounds.
The preassembly and premix step involves the collection of raw materials that will be used to produce the desired coating product. These materials are added to a high speed dispersion or mixing vessel. The types of raw materials that are used for solvent-based coatings include resins, organic solvents, plasticizers, dry pigment, and pigment extenders; water, ammonia, dispersant, pigment, and pigment extenders are used for water-based coatings.
Pigment grinding or milling entails the incorporation of the pigment into the paint or ink vehicle to yield fine particle dispersion. The three stages of this process include wetting, grinding, and dispersion, which may overlap in any grinding operation. The wetting agent, normally a surfactant, wets the pigment particles by displacing air, moisture, and gases that are adsorbed on the surface of the pigment particles. Grinding is the mechanical breakup and separation of pigment clusters into isolated particles and may be facilitated by the use of grinding media such as pebbles, balls, or beads. Finally, dispersion is the movement of wetted particles into the body of the liquid vehicle to produce a particle suspension.
A wide array of milling equipment is used, depending on the types of pigments being handled. Commonly-used equipment includes the following: Roller mills, ball and pebble mills, attritors, sand mills, bead and shot mills, high-speed stone and colloid mills, high-speed dispersers, high-speed impingement mills, and horizontal media mills. Roller and ball mills are considered somewhat outdated methods and are usually associated with elevated volatile organic compound (VOC) emissions due to their more open design. Lids are commonly used on milling and mixing vessels to reduce product loss; the types of lids used range from plywood boards to plastic elasticized covers and, less often, steel lids.
High-speed dispersers, using disk-type impellers, are the most common method of mixing, or dispersion, in the industry. Because no grinding media are present in the mixing vat, pigment disperses on itself and against the surfaces of the rotor. While high-speed disk dispersion may work well for products such as undercoats and primers, it may not be appropriate for high-quality paints and inks, which instead use the other types of milling equipment as described above.
The finishing step involves adding small amounts of pigments, solids, or liquids to achieve the required color or consistency of the final product. The filling step involves packaging the final product for shipment to the buyer.
The process operations that generate HAP emissions include: emissions from loading of materials into the mixing tanks; heat-up losses during operation of the mixers; surface evaporation during mixing and blending; and filling losses
The National Emissions Inventory (NEI) database was used to determine the sources of HAP emissions and to estimate the amount of HAP emissions produced from these sources. A summary of the data is presented in the following table. Total HAP emissions presented in the NEI database for the source category are 1,500 Tons per year (tons/yr), or 1,400 Megagrams per year (Mg/yr). The table shows that over 90 percent of the HAP emissions occur during the paints and allied products manufacturing process. Product manufacturing generally includes the addition of raw materials to the process vessels, grinding of solids, mixing, and packaging of the final product.
Baseline HAP emissions were calculated using the HAP emissions from the 2002 NEI database and extrapolating the emissions data to estimate the emissions for all paints and allied products manufacturing area sources. Using this approach, we estimated the 2002 nationwide baseline HAP emissions (including total metal HAP and volatile HAP) to be 4,800 tons/yr (4,300 Mg/yr).
The total nationwide baseline emissions of the six listed urban HAP was estimated to be 221 tons/yr. This total includes 213 tons/yr of the listed urban volatile HAP (benzene, methylene chloride), and 8 tons/yr of the listed urban metal HAP (cadmium, chromium, lead, nickel).
Emissions reduction approaches were reviewed for the Paints and Allied Products Manufacturing volatile and metal HAP. The data indicate that add-on controls to reduce volatile HAP are not commonly used on process vessels in the paints and allied products manufacturing industry. An absence of prior Federal regulation or specific State or local rules, along with the generally high capital investment needed for add-on control devices, may contribute to these findings. Management practices currently used by the paints and allied products manufacturing industry to control volatile HAP emissions include coating substitution or reformulation from conventional solvent-based coatings, solvent substitution, use of process vessel covers, and other measures (
For the Paints and Allied Products Manufacturing metal HAP, our analysis showed that add-on controls for such emissions from process vessels are widespread throughout the industry. Particulate controls are used to capture metal HAP, which are included in particulate emissions. Typical particulate collection devices used by the industry include: baghouses, cyclones, and venturi scrubbers. Each of these mechanical collectors can achieve 98 percent reduction in particulate emissions. According to our data, 79 percent of facilities use particulate matter control technology. Along with dust collectors and other fabric filters, they are used to control airborne dust and particulate matter, primarily in the pigment loading area and during the mixing process. Generally, fabric filters and vent systems are used at facilities that use powdered or dry pigments in their coatings formulations to protect workers from exposure to hazardous materials in the pigments. Management practices used to abate particulate emissions of the Paints and Allied Products Manufacturing metal HAP include lower HAP content coatings, better materials management, use of sandmills instead of ballmills, and equipment modifications.
The proposed subpart CCCCCCC standards would apply to new and existing affected sources of paints and allied products manufacturing. The affected source is the new or existing paints and allied products manufacturing operation that processes, uses, or generates any of the following urban HAP: benzene, methylene chloride, and compounds of cadmium, chromium, lead, and nickel. An existing source is a paints and allied products manufacturing operation that processes, uses, or generates any of the following urban HAP: compounds of cadmium, chromium, lead, and nickel and benzene and methylene chloride. A new source is a paints and allied products manufacturing operation that processes, uses, or generates any of the following urban HAP: compounds of cadmium, chromium, lead, and nickel and benzene and methylene chloride, and that commences construction or reconstruction of the affected source on or after the date that this proposed rule is published in the
We recognize that standards limited to the emission points of the listed urban HAP in this area source category would be sufficient to satisfy the requirement in section 112(c)(3) and (k)(3)(B) that EPA regulate sufficient source categories to account for 90 percent of the urban HAP emissions. However, section 112 of the CAA does not prohibit EPA from regulating other HAP emitted from area sources listed pursuant to section 112(c)(3). Section
All existing area source facilities subject to this proposed rule would be required to comply with the rule requirements no later than two years after the date of publication of the final rule in the
We are proposing use of a particulate control device as GACT for metal HAP and management practices as GACT for volatile HAP emissions. The standards apply when any operation is being performed that processes, uses, or generates any HAP.
For metal HAP, this proposed rule would require owners or operators of all existing and new affected facilities to operate a particulate control device at all times during the manufacturing process that metal HAP emissions could be present, based on the Material Safety Data Sheet, and visible emissions from the particulate control device shall not exceed 5 percent opacity when averaged over a six-minute period. The Paints and Allied Products Manufacturing metal HAP emissions can be present during the preassembly/premix and pigment grinding and milling manufacturing processes.
New and existing affected sources will be required to comply with the following management practices for the control of all volatile HAP emissions during the preassembly/premix and grinding/milling manufacturing steps:
(1) Process and storage vessels, except for process vessels which are mixing vessels, must be equipped with covers or lids meeting the requirements of paragraphs (1)(i) through (iii) of this section. These vessels must be kept covered when not in use.
(i) The covers or lids can be of solid or flexible construction, provided they do not warp or move around during the manufacturing process.
(ii) The covers or lids must maintain contact along at least 90 percent of the vessel rim.
(iii) The covers or lids must be maintained in good condition.
(2) Mixing vessels must be equipped with covers that completely cover the vessel, except for safe clearance of the mixer shaft. The vessels must be kept covered during the manufacturing process, except for operator access for quality control testing of the product, and during the addition of pigments or other materials used to meet the final product specifications.
(3) Leaks and spills of materials containing volatile HAP must be immediately minimized and cleaned up.
(4) Waste solvent rags or other materials used for cleaning must be kept in closed storage vessels.
If the proposed standards are applicable to your paints and allied products manufacturing area source, then the proposed standards would apply to all organic HAP emissions from the manufacturing operation and all metal HAP emissions from the preassembly/premix and grinding/milling manufacturing steps at the area source, not just the Paints and Allied Products Manufacturing volatile and metal HAP. We are proposing that the standards for each type of emission point apply to all of the emission points of that type in an affected source, including those that do not emit Paints and Allied Products Manufacturing volatile or metal HAP. For example, an area source may have two process vessels, one containing tetrachloroethylene and the other containing methylene chloride, and, under the proposed rule, both would be part of the affected source and subject to the process vessel standards.
To demonstrate initial compliance, this proposed rule would require a new or existing source to certify that the required control technologies and management practices have been implemented and that all equipment associated with the processes will be properly operated and maintained. In addition, a visual emission test using EPA Method 9 will be required to be performed on the particulate control device on or before the compliance date and every six months thereafter.
To demonstrate on-going compliance, the proposed rule requires owners and operators of affected facilities to inspect the particulate control device monthly to ensure that the unit is operating as specified in the manufacturer's operating instructions, and to perform a visual emission test using EPA Method 9 on the particulate control device every 6 months.
We are proposing notification, reporting, and recordkeeping requirements to ensure compliance with this proposed rule. The owner or operator of a new or existing affected source would be required to comply with certain requirements of the General Provisions (40 CFR part 63, subpart A), which are identified in Table 1 of this proposed rule. Each facility would be required to submit an Initial Notification and a Notification of Compliance Status according to the requirements in 40 CFR 63.9, General Provisions to part 63. These notifications are needed for EPA to determine applicability and initial compliance with specific rule requirements.
The Initial Notification would be required within 120 days of the effective date of the NESHAP. That report serves to alert appropriate agencies (State agencies and EPA Regional Offices) of the existence of each affected source and puts them on notice for future compliance actions. The notification of compliance status (NOCS) report, which is due 150 days after the compliance date of the NESHAP, is a more comprehensive report that describes the affected source, the associated emissions points, and the strategy being used to comply.
Under this proposed rule, each facility would prepare an annual compliance certification for the previous calendar year. The annual compliance certification must be completed no later than January 31 of each year and kept for five years. Facilities would be required to submit this annual compliance report if there is any deviation from the requirements or visual emissions testing during the year, and would include these deviation reports with their compliance report. We recognize that most of these facilities are small businesses; therefore we are requiring the submission of this annual compliance certification only if deviations occur during the year, so that there is not an undue economic burden on small businesses.
The facility must generate a monthly record for the implemented management practices and the particulate control device inspections (daily, weekly, monthly and Method 9, as applicable), listed in Sections C and D above, respectively. For demonstrating ongoing compliance, the proposed requirements include daily, weekly, and annual inspections, semi-annual visible emission testing, monthly checklists and annual certifications that the management practices are being followed and the particulate control device is being properly operated according to manufacturer instructions.
A responsible official at the facility must sign off by the 15th day of the following month that all requirements were met in the previous month. In implementing the requirements of this rule, sources can consider including procedures from their existing Standard Operating Procedures provided the procedures are relevant to implementing the required management practices.
Owners and operators would be required to maintain all records and annual certifications that demonstrate initial and ongoing compliance with this proposed rule, including records of all required notifications and reports, with supporting documentation; and records showing compliance with the control technology and management practices. The records must be kept readily accessible on site for two years, and may be kept at an offsite location for the remaining three years.
As described in section II.B, we listed the Paints and Allied Products Manufacturing source category under CAA section 112(c)(3) on November 22, 2002 (67 FR 70427). The inclusion of this source category on the area source category list was based on its contributions to the urban HAP emissions in the 1990 CAA section 112(k) inventory (benzene, methylene chloride, and compounds of cadmium, chromium, lead, and nickel).
For this source category, we collected information on the production operations, emission sources, and available controls for both area and major sources using reviews of published literature, information gathered during the major source NESHAP, and reviews of operating permits. We also held discussions with industry representatives and EPA experts. This research confirmed that the Paints and Allied Products Manufacturing source category continues to emit the Paints and Allied Products Manufacturing volatile and metal HAP. We found that current emissions of such HAP have been significantly reduced from the amounts estimated in the section 112(k) 1990 base year inventory due to product reformulation, OSHA controls, and a shift in end-use and consumer preferences.
Consistent with the record supporting the listing of the Paints and Allied Products Manufacturing source category, we are proposing that the category include those area source paints and allied product manufacturing facilities that process, use, or generate paints and allied product manufacturing HAP or materials containing these HAP. We are defining materials containing HAP in a manner consistent with the definitions used in other area source categories,
Affected source, as defined in 40 CFR 63.2, means the collection of equipment, activities, or both within a single contiguous area and under common control that is included in a section 112(c) source category or subcategory for which a section 112(d) standard is established. In selecting the affected source for regulation for the paints and allied products manufacturing area source category, we identified the sources of HAP emissions, which include HAP-emitting colorants and cleaning products. We also identified the quantity of HAP emissions from the individual or groups of emissions points. We are proposing to designate all of the blending and mixing processes in the manufacturing operation, within a single contiguous area and under common control, as the affected source. This proposed designation is consistent with the approach EPA employed for other paints and allied product manufacturing regulations,
For this proposed rule, we have selected particulate matter (PM) as a surrogate for paints and allied products manufacturing metal HAP. When emitted, each of the metal HAP compounds behaves as PM. The control technologies used for the control of PM emissions achieve comparable levels of performance for these metal HAP emissions,
As provided in CAA section 112(d)(5), we are proposing standards representing GACT for the Paints and Allied Products Manufacturing area source HAP emissions. As noted in section II of this preamble, the statute requires the Agency to establish standards for area sources listed pursuant to section 112(c). The statute does not set any condition precedent for issuing standards under section 112(d)(5), other than that the area source category or subcategory at issue must be one that EPA listed pursuant to section 112(c), which is the case here.
Most of the facilities in this source category have good operational controls in place for particulate matter. Furthermore, we believe that almost all of the area source paints and allied products manufacturing facilities are small businesses. Below, we explain in detail our proposed GACT determinations.
We gathered background information on paints and allied products manufacturing facilities from a review of operating permits, the NEI database, and discussions with industry representatives to identify the emission controls and management practices that are currently used to control volatile and metal HAP emissions. We identified the control technologies and management practices that minimize
The data indicate that add-on controls to reduce volatile HAP are used only sparingly on process vessels, as reported in both the State permits and the NEI database. This is probably due to the absence of Federal regulation of this industry and a lack of specific State or local rules. We believe that in the time since the data were collected for the 2002 NEI, most facilities have begun to produce low-VOC and low volatile HAP paints. This is a result of a shift in market demand due to the recent Federal paint and coating rules for other sources, such as the Boat Manufacturing, Fabric Surface Coating, Large Appliance Surface Coating, Metal Can Surface Coating, Metal Furniture Surface Coating, Plastic Parts, Aerospace, and Wood Furniture NESHAPs. Consumer demand for low-VOC paints may also be a factor.
A common management practice that is used to reduce volatile HAP emissions is through the use of process vessel covers. The Miscellaneous Organic NESHAP estimated that 95 percent of the major source facilities in the paints and allied products manufacturing NAICS code use process vessel covers. We believe that the same percentage of the area source facilities in the paints and allied products manufacturing category are currently using process vessel covers; this information agrees with estimates provided by industry. Therefore, we propose the use of process vessel covers as GACT for volatile HAP in the paints and allied products manufacturing industry according to the following requirements:
(1) During the preassembly/premix and grinding/milling manufacturing steps, process and storage vessels, except for process vessels which are mixing vessels, must be equipped with covers or lids meeting the requirements of paragraphs (A)(1)(i) through (iii) of this section. These vessels must be kept covered when not in use.
(i) The covers or lids can be of solid or flexible construction, provided they do not warp or move around during the manufacturing process.
(ii) The covers or lids must maintain contact along at least 90 percent of the vessel rim.
(iii) The covers or lids must be maintained in good condition.
(2) During the preassembly/premix and grinding/milling manufacturing steps, mixing vessels must be equipped with covers that completely cover the vessel, except for safe clearance of the mixer shaft. The vessels must be kept covered during the manufacturing process, except for operator access for quality control testing of the product, and during the addition of pigments or other materials used to meet the final product specifications.
(3) Leaks and spills of materials containing volatile HAP must be immediately minimized and cleaned up.
(4) Waste solvent rags or other materials used for cleaning must be kept in closed storage vessels.
The facility must use a monthly checklist as a record for the implemented work practices as listed above. A responsible official at the facility must sign off that all work practice requirements have been met. Existing written standard operating procedures may be used as the work practices plan if those procedures include the activities required by the final rule for a work practices plan.
Paints and allied products manufacturing operating permits were obtained from State agency Web sites to determine the prevalence of add-on controls for metal HAP. The permit information, as well as discussions with the industry, show that add-on controls for metal HAP emissions from process vessels are commonly used throughout the industry. We believe that particulate control devices are primarily used because of concerns with workplace safety and, in some cases, to satisfy OSHA regulations. Information from the operating permits indicates that 23 of 29 (79 percent) area source facilities use add-on controls for particulate emissions. Based on this permit information, we determined that the use of controls to reduce particulate emissions during the preassembly/premix and grinding/milling steps of the paints and allied products manufacturing process commonplace.
To determine an applicable particulate matter standard, we reviewed the State operating permits for facilities in this source category. Most of the permits listed a concentration or mass emission particulate limit that requires testing using an appropriate particulate test method, in most cases EPA Method 5. We have concerns about the economic impact of particulate matter emissions testing for smaller facilities. The typical EPA Method 5 particulate matter emissions test on a stack costs between $3,000 and $10,000, which would be a significant economic burden for these area sources. Other area source rules and the States have used opacity as an effective surrogate for assessing mass emissions and to assure effective particulate emissions control. The use of visual emissions or opacity testing, as opposed to emission testing, is a lower cost method to determine compliance, and accommodates the different levels of activity that can occur from facility to facility, from product to product, and day to day within the same facility. This also reduces the cost impact on small businesses. There is a correlation between particulate matter concentration and opacity in the particulate matter control device outlet stream, and studies have shown that particulate concentrations are approximately zero at an opacity of zero.
Section 112(d)(1) of the Clean Air Act gives the Administrator discretion to distinguish among classes, types, and sizes of sources in a category when establishing emissions standards under section 112(d). EPA is not proposing to subcategorize the paints and allied products manufacturing source category for purposes of the standards proposed in today's action based on our conclusion that there are no distinguishable differences in the grinding and mixing processes, which produce most of the HAP at paints and allied products manufacturing facilities. EPA solicits comments on its proposal to establish GACT standards for this source category without distinguishing among the sources based on class, type, or size. Commenters who believe EPA should establish subcategories for this source category should provide data to support their position.
Another consideration of GACT is the cost of compliance. To estimate the cost impacts, we used the permit
For metal HAP, this rule proposes that all owners or operators of existing facilities route emissions from their pigment and solids addition processes to a particulate control device and that visible emissions from the particulate control device shall not exceed 5 percent opacity when averaged over a six-minute period. The manufacturing processes include the addition of pigments and other solids to the process vessels, and grinding and milling of pigments and solids. After the addition processes, the pigment and associated metal HAP are in solution, and metal HAP emissions are minimal.
The manufacturer's specifications for maintenance and all other functioning parameters must be followed. The particulate control device must be designed and operated so that visible emissions from the unit shall not exceed 5 percent opacity when averaged over a six-minute period.
The control technology and management practices proposed in this rule are equally effective at controlling emissions of HAP other than the Paints and Allied Products Manufacturing volatile and metal HAP. Applying the proposed standards to only the Paints and Allied Products Manufacturing HAP would require the facility to speciate HAP, as opposed to measuring total HAP when demonstrating compliance. This would require the facility to measure only the Paints and Allied Products Manufacturing metal HAP, which is mixed in with the other particulate matter emissions, and is a small percentage of the total. Applying the proposed standards to only the Paints and Allied Products Manufacturing urban HAP would require the facility to use different test methods to quantify these HAP emissions, which would increase compliance costs with no environmental benefits.
We are proposing to apply the standard to all HAP, as many of the area sources emit a significant amount of HAP in addition to the paints and allied products manufacturing urban HAP (for example, the listed HAP are only four percent of total HAP emissions at paints and allied products manufacturing facilities). Facilities that process, use, or generate HAP, but do not process, use, or generate any of the Paints and Allied Products volatile and metal HAP are not subject to the requirements of this NESHAP.
We have determined that sources would not have to install different controls or implement different management practices to implement the proposed standards for all HAP. Also, as part of the GACT analysis, we have found that the costs of applying the proposed standards to all HAP emissions from this source category are reasonable. For all of these reasons, we propose to apply these standards to all volatile HAP emissions in the manufacturing process and all metal HAP emissions from the preassembly/premix and grinding/milling steps of the manufacturing operations at paints and allied products manufacturing area sources, once the applicability criteria set forth in CCCCCCC are met. We request comment on the environmental, cost, and economic impacts of this approach.
We are proposing notification, reporting, and recordkeeping requirements to ensure compliance with this proposed rule. We are requiring an Initial Notification and Notification of Compliance Status because these requirements are consistent with § 63.9 of the General Provisions of this part.
For demonstrating ongoing compliance, the proposed requirements include daily, weekly, and annual inspections, semi-annual visible emission testing, monthly checklists and annual certifications that the management practices are being followed and the particulate control device is being properly operated according to manufacturer instructions. Based on our data, most facilities currently operate at the GACT level of control and almost all of the affected facilities are small businesses. Therefore, we are proposing a requirement that would ensure compliance without placing an undue burden on the affected facilities. We believe the proposed requirements for monthly checklists, particulate control device inspections, visible emissions testing, and annual certifications achieve that objective, and can be adequately done by facility employees.
Under this proposed rule, each facility would prepare an annual compliance certification and keep it on site in a readily-accessible location. Facilities would be required to submit this annual compliance certification as a report only if there are any deviations from the work practice requirements during the year, and would include a description of the deviation with their compliance certification report. Deviations may include, but are not limited to, exceeding the opacity standard or failure to meet any requirements or management practices established in this proposed rule. We recognize that most of these facilities are small businesses; therefore we are requiring the submission of this annual compliance certification report only if deviations occur during the year so that there is not an undue economic burden.
We are proposing that existing affected sources must achieve compliance two years after the final rule is published in the
We are proposing to exempt affected facilities in the Paint and Allied Products Manufacturing area source category from title V permitting requirements for the reasons described below.
Section 502(a) of the CAA provides that the Administrator may exempt an area source category from title V if he determines that compliance with title V requirements is “impracticable, infeasible, or unnecessarily burdensome” on an area source category. See CAA section 502(a). In December 2005, in a national rulemaking, EPA interpreted the term “unnecessarily burdensome” in CAA
The four factors that EPA identified in the Exemption Rule for determining whether title V is “unnecessarily burdensome” on a particular area source category include: (1) Whether title V would result in significant improvements to the compliance requirements, including monitoring, recordkeeping, and reporting that are proposed for an area source category (70 FR 75323); (2) whether title V permitting would impose significant burdens on the area source category and whether the burdens would be aggravated by any difficulty the sources may have in obtaining assistance from permitting agencies (70 FR 75324); (3) whether the costs of title V permitting for the area source category would be justified, taking into consideration any potential gains in compliance likely to occur for such sources (70 FR 75325); and (4) whether there are implementation and enforcement programs in place that are sufficient to assure compliance with the proposed NESHAP for the area source category, without relying on title V permits (70 FR 75326).
In discussing these factors in the Exemption Rule, we further explained that we considered on “a case-by-case basis the extent to which one or more of the four factors supported title V exemptions for a given source category, and then we assessed whether considered together those factors demonstrated that compliance with title V requirements would be ‘unnecessarily burdensome' on the category, consistent with section 502(a) of the Act.” See 70 FR 75323. Thus, in the Exemption Rule, we explained that not all of the four factors must weigh in favor of exemption for EPA to determine that title V is unnecessarily burdensome for a particular area source category. Instead, the factors are to be considered in combination, and EPA determines whether the factors, taken together, support an exemption from title V for a particular source category.
In the Exemption Rule, in addition to determining whether compliance with title V requirements would be unnecessarily burdensome on an area source category, we considered, consistent with the guidance provided by the legislative history of section 502(a), whether exempting the area source category would adversely affect public health, welfare or the environment. See 70 FR 15254-15255, March 25, 2005. We propose that requiring compliance with title V for this area source category would be unnecessarily burdensome. We further propose that the exemption from title V would not adversely affect public health, welfare or the environment. Our rationale for this decision follows.
In considering the proposed exemption from title V requirements for sources in the category affected by this proposed rule, we first compared the title V monitoring, recordkeeping, and reporting requirements (factor one) to the requirements in this proposed NESHAP for the Paints and Allied Products Manufacturing area source category. Title V requires periodic testing or monitoring to ensure compliance. One way that title V may improve compliance is by requiring monitoring (including recordkeeping designed to serve as monitoring) to assure compliance with the emissions limitations and control technology requirements imposed in the standard. This proposed standard would provide for monitoring in the form of visual emissions and opacity testing that would assure compliance with the requirements of this proposed rule. This proposed NESHAP would also require the preparation of an annual compliance certification report and submission of this report if there are any deviations during the year, which will identify for the agency implementing this rule those facilities with compliance issues, in the same way as a title V permit. Records would be required to ensure that the compliance requirements are followed and any needed corrective actions are taken, including such records as results of the visual emissions and opacity tests and the resulting corrective actions such as replacing a torn fabric filter bag. Therefore, this proposed rule contains monitoring sufficient to assure compliance with the requirements of this proposed rule.
In addition, title V imposes a number of recordkeeping and reporting requirements that may be important for assuring compliance. These include requirements for a monitoring report at least every 6 months, prompt reports of deviations, and an annual compliance certification. See 40 CFR 70.6(a)(3) and 40 CFR 71.6(a)(3), 40 CFR 70.6(c)(1) and 40 CFR 71.6(c)(1), and 40 CFR 70.6(c)(5) and 40 CFR 71.6(c)(5). This proposed NESHAP would also require an annual compliance certification report and submission of this report if there are any deviations during the year, which should call attention to those facilities in need of supervision to the State agency in the same way as a title V permit. Records would be required to ensure that the control technology requirements and management practices are followed, including records about particulate matter control maintenance and Material Safety Data Sheets for all HAP and materials containing HAP as processed, used, or generated in the manufacturing process.
We also considered the extent to which title V could potentially enhance compliance for area sources covered by this NESHAP through recordkeeping or reporting requirements. For any affected paints and allied products manufacturing area source facility, the proposed NESHAP would require an initial notification and a compliance status report, which would include certifications by responsible officials that the facilities are in compliance and will continue to comply with the NESHAP. In addition, the affected facilities must maintain records showing compliance. The required records are similar to the information that must be provided in the deviation reports required under 40 CFR 70.6(a)(3) and 40 CFR 71.6(a)(3).
We believe the monitoring, recordkeeping, and reporting requirements in this proposed rule are sufficient to assure compliance with the requirements of this proposed rule. Therefore, we conclude that title V would not result in significant improvements to the compliance requirements we are proposing for this area source category.
Under the second factor, we determined whether title V permitting would impose a significant burden on the area sources in the category and whether that burden would be aggravated by any difficulty the source may have in obtaining assistance from the permitting agency. Subjecting any source to title V permitting imposes certain burdens and costs that do not exist outside of the title V program. EPA estimated that the average cost of obtaining and complying with a title V permit was $65,700 per source for a 5-year permit period, including fees. See Information Collection Request for Part 70 Operating Permit Regulations, June 2007, EPA ICR Number 1587.07.
EPA does not have specific estimates for the burdens and costs of permitting Paints and Allied Products Manufacturing area sources; however, there are certain activities associated with the part 70 and 71 rules. These activities are mandatory and impose burdens on any facility subject to title V. They include reading and understanding permit program guidance and regulations; obtaining and understanding permit application forms;
We found that almost all of the approximately 2,190 paints and allied products manufacturing facilities that would be affected by this proposed rule are small entities; over half have nine or fewer employees. As discussed previously, title V permitting would impose significant costs on these area sources, and, accordingly, we conclude that title V is a significant burden for sources in this category. More than 90 percent of the facilities that would be subject to this proposed rule are small entities with limited resources, and under title V they would be subject to numerous mandatory activities with which they would have difficulty complying, whether they were issued a standard or a general permit. Furthermore, given the number of sources in the category and the relatively small size of many of those sources, it would likely be difficult for them to obtain sufficient assistance from the permitting authority. Thus, we conclude that factor two supports title V exemption for paints and allied products manufacturing facilities.
The third factor, which is closely related to the second factor, is whether the costs of title V permitting for these area sources would be justified, taking into consideration any potential gains in compliance likely to occur for such sources. We explained above under the second factor that the economic and non-economic costs of compliance with title V would impose a significant burden on many paint and allied products manufacturing facilities. We also conclude in considering the first factor that, while title V might impose additional requirements, the monitoring, recordkeeping, and reporting requirements in the proposed NESHAP are adequate to assure compliance with the control technology and management practices proposed in the NESHAP. In addition, in our consideration of the fourth factor as discussed below, we find that there are adequate implementation and enforcement programs in place to assure compliance with the NESHAP. Because the costs, both economic and non-economic, of compliance with title V are high, and the potential for gains in compliance is low, title V permitting is not justified for this source category. Accordingly, the third factor supports title V exemptions for paints and allied products manufacturing area sources.
The fourth factor we considered in determining whether title V permitting for this area source category is unnecessarily burdensome is whether there are implementation and enforcement programs in place that are sufficient to assure compliance with this NESHAP without relying on title V permits. EPA has implemented regulations that provide States the opportunity to take delegation of area source NESHAP, and we believe that State-delegated programs are sufficient to assure compliance with this NESHAP. See 40 CFR part 63, subpart E; States must have adequate programs to enforce the section 112 regulations and provide assurances that they will enforce all NESHAP before EPA will delegate the program. Furthermore, EPA retains authority to enforce this NESHAP at any time under CAA sections 112, 113 and 114. In addition, small business assistance programs required by CAA section 507 may be used to assist area sources that have been exempted from title V permitting. Also, States and EPA often conduct voluntary compliance assistance, outreach, and education programs (compliance assistance programs), which are not required by statute. These additional programs would supplement and enhance the success of compliance with this area source NESHAP. We believe that the statutory requirements for implementation and enforcement of this NESHAP by the delegated States and EPA and the additional assistance programs described above together are sufficient to assure compliance with this area source NESHAP without relying on title V permitting.
In applying the fourth factor in the Exemption Rule, where EPA had deferred action on the title V exemption for several years, we had enforcement data demonstrating that States were not only enforcing the provisions of the area source NESHAP that we exempted, but that the States were also providing compliance assistance to assure that the area sources were in the best position to comply with the NESHAP. See 70 FR 75325-75326. Although we do not have similar data in this case because the paints and allied products manufacturing area source NESHAP has yet to be promulgated and enforced, we have no reason to think that States will be less diligent in enforcing this NESHAP. In fact, States must have adequate programs to enforce the section 112 regulations and provide assurances that they will enforce all NESHAP before EPA will delegate the program. See 40 CFR part 63, General Provisions, subpart E.
In light of all of the information presented here, we conclude that there are implementation and enforcement programs in place that are sufficient to assure compliance with the paint and allied products manufacturing NESHAP without relying on title V permitting. Balancing the four factors for this area source category strongly supports the proposed finding that title V is unnecessarily burdensome. While title V might add additional compliance requirements if imposed, we believe that there would not be significant improvements to compliance with the NESHAP, because the requirements in this proposed rule are sufficient to assure compliance with the standards and management practices imposed on this area source category. Thus, we propose that title V permitting is “unnecessarily burdensome” for the paints and allied products manufacturing area source category.
In addition to evaluating whether compliance with title V requirements is “unnecessarily burdensome,” EPA also considered, consistent with guidance provided by the legislative history of section 502(a), whether exempting this area source category from title V requirements would adversely affect public health, welfare, or the environment. Exemption of the paints and allied products manufacturing category from the title V requirements would not have an adverse affect on public health, welfare, or the environment because the level of control would remain the same if a permit were required. The title V permit program does not impose new substantive air quality control requirements on sources, but instead requires that certain procedural measures be followed, particularly with
One of the primary purposes of the title V permitting program is to clarify, in a single document, the various and sometimes complex regulations that apply to sources in order to improve understanding of these requirements and to help sources to achieve compliance with the requirements. In this case, however, we do not believe that a title V permit is necessary to understand the requirements that would be applicable to these area sources because the requirements of the rule are not difficult to implement. The vast majority of NSPS and NESHAP standards apply only to major sources, with only a small number of such standards regulating any activities at area sources. Because there are so few standards that regulate areas sources, the likelihood that multiple NSPS or NESHAP would apply to these area sources is low. We also have no reason to think that new sources would be substantially different from the existing sources. In addition, we explained in the Exemption Rule that requiring permits could, at least in the first few years of implementation, potentially adversely affect public health, welfare, or the environment by shifting State agency resources away from ensuring compliance for major sources with existing permits to issuing new permits for these area sources, potentially reducing overall air program effectiveness. We therefore conclude that title V exemptions for the paints and allied products manufacturing area sources will not adversely affect public health, welfare, or the environment for all of the reasons explained above.
For the reasons stated here, we are proposing to exempt the Paints and Allied Products Manufacturing area source category from title V permitting requirements.
Area sources in the paints and allied products manufacturing category have made significant emission reductions since 1990 through product reformulation, process and cleaning changes, installation of control equipment, and as a result of OSHA regulations. Affected sources appear to be well-controlled, and our proposed GACT determination reflects such controls. For the sources that would be required to install emission controls to meet the emission limits specified in this proposed rule, we estimated the 2002 nationwide emissions of all of the paints and allied products manufacturing HAP (including total metal HAP and volatile HAP) to be 4,800 tons/yr (4,300 Mg/yr).
Based on our data, we estimate that 21 percent of the facilities, or 460 area sources, do not have particulate controls installed. Through compliance with this rule as proposed, these facilities would reduce total PM emissions by 6,300 tons/yr (5,700 Mg/yr), total metal HAP emissions by 4.2 tons/yr (3.8 Mg/yr), and listed urban metal HAP (cadmium, chromium, lead, nickel) emissions by 0.13 tons/yr (0.11 Mg/yr).
We estimate that requiring the use of covers on process vessels as proposed in this rule would reduce nationwide volatile HAP emissions of the paints and allied products manufacturing area source category by about 169 tons/yr (153 Mg/yr), and listed urban volatile HAP (benzene, methylene chloride) emissions by 5.1 tons/yr (4.6 Mg/yr). These emission reduction estimates are based on the assumption that 5 percent of the existing paints and allied products manufacturing facilities would add covers to their process vessels, and that the covers will achieve a 40 percent reduction in volatile HAP emissions.
We do not anticipate any indirect or secondary air impacts of this rule as proposed. The use of process vessel covers does not require any energy to be employed at existing paints and allied products manufacturing facilities.
In this analysis, two types of control options were investigated. The first type looked at potential control options for controlling volatile HAP. The second type looked at potential control options for controlling metal HAP. Costs for these options were developed for two model plants that are typical of the paints and allied products manufacturing industry.
Based on the cost effectiveness calculations, process covers are the most cost effective option of reducing volatile HAP emissions from process vessels. The cost effectiveness of applying covers to the process vessels was calculated to be $34 per ton of volatile HAP reduced for a small model plant and $28 per ton of volatile HAP reduced for a large model plant. These costs were conservatively estimated assuming that 15 percent of the process vessels would be required to be covered. When all VOC emissions are taken into account, the total cost was considerably lower at $3 per ton of VOC removed for both small and large model plants.
Per industry feedback, we know that 2-percent of the product will evaporate during the manufacturing process if the vessels are not covered. We estimated that it would cost $38,000 in total capital costs and $5,500 annually for the 110 facilities that will be required to install process vessel covers to meet the requirements of this rule. However the rule would also provide a cost savings to these same facilities, because they will have more coatings product at the end of the manufacturing process.
We determined that a particulate control device is GACT for reducing metal HAP emissions. The cost effectiveness was calculated to be $1.6 million per ton of metal HAP removed for a small model plant, and $330,000 per ton of metal HAP removed for the large model plant. For particulate emissions, the cost effectiveness for a small model plant was calculated to be $1,200 per ton of PM removed, and $200 per ton of PM removed for the large model plant. For fine particulate emissions, the cost effectiveness was determined to be $2,500 per ton of PM
The estimated total capital costs of this proposed rule for existing sources are $8.1 million for installing particulate control devices. The estimated annualized cost of the proposed rule for existing sources would be $3.1 million per year. The annualized costs account for the annualized capital costs of purchasing disposable process vessel covers for the existing facilities that would be required to install new emission controls, and the annualized cost of installing a particulate control device to facilities that currently do not have particulate control. The other affected facilities would incur costs only for submitting the notifications and for annual control device inspections because those facilities already meet the control, monitoring, and recordkeeping requirements that would be required under the proposed rule. The cost associated with recordkeeping and the one-time reporting requirements is estimated to be $147 per facility.
Both the magnitude of costs needed to comply with the rule and the
The cost to sales ratio is estimated to assess the impact on the affected facilities. Two sizes were used for the facilities and high, average, and low prices were used for the product. Cost to sales ratios range from 0.19 percent for the small model plant with the lowest ($3.50 per gallon price) to 0.001 percent for the large model plant with the highest price ($19.91 per gallon). Thus all of the 2,190 facilities are projected to have a cost to sales ratio below 1.0 percent. The average cost to sales ratio is expected to be around 0.13 percent. Thus this regulation is not expected to have significant impact on a substantial number of small entities. The costs are so small that the impact is not expected to be significant. These small costs are not expected to result in a significant market impact whether they are passed on to the purchaser or absorbed.
In terms of economic impacts, this proposed standard is estimated to impact a total of 2,190 area source facilities, which are all small entities. Our analysis indicates that this proposed rule would not impose a significant adverse impact on any facilities, large or small.
To comply with the rule as proposed, we expect that affected facilities would control emissions by installing, operating, and maintaining a particulate control device, and using process vessel covers; none of these controls generate wastewater. Therefore, we project that this rule as proposed would have no impact on water emissions.
There were few data available on the amount of solid and hazardous waste disposed of from the paints and allied products manufacturing industry. The main source of solid waste comes from the collected particulate from the particulate control device. Other sources of solid waste include rags used for cleaning and coatings that do not meet customer specifications. If facilities switch to producing low HAP coatings or use low HAP cleaning materials, the amount of hazardous waste would greatly decrease. The actual amount depends on several variables, including the type of manufactured coatings, the cleaners used, and number of facilities switching to low HAP or wetted pigments. It was assumed that there would be no significant waste disposal impacts because many of the facilities are producing low HAP coatings. The few facilities required to install and operate monitoring devices or systems would collect small amounts of metal HAP. Therefore, minimal additional solid waste would be generated as a result of the metal HAP emissions collected. If a facility switches from solvent-based coating to a water-based coating there should be a reduction in the amount of solid waste produced due to the use of nonvolatile materials.
Energy impacts consist of the fuel (natural gas) needed to operate the combustion-based control device (thermal oxidizer) that is used to comply with the regulatory alternatives. It also includes the amount of electricity to operate the control devices. The estimated electricity and fuel impacts are already included in the annual cost of the control technologies. No additional energy is required for the process vessel covers or other management practices.
No detrimental secondary impacts are expected to occur because 79 percent of all existing facilities are currently achieving the GACT level of control. There are no additional energy impacts associated with operation of the control devices or monitoring systems.
Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is a “significant regulatory action” because it may raise novel legal or policy issues. Accordingly, EPA submitted this action to the OMB for review under Executive Order 12866 and any changes made in response to OMB recommendations have been documented in the docket for this action.
The information collection requirements in this proposed rule have been submitted for approval to OMB under the Paperwork Reduction Act, 44 U.S.C. 501
The recordkeeping and reporting requirements in this proposed rule are based on the requirements in EPA's NESHAP General Provisions (40 CFR part 63, subpart A). The recordkeeping and reporting requirements in the General Provisions are mandatory pursuant to section 114 of the CAA (42 U.S.C. 7414). All information other than emissions data submitted to EPA pursuant to the information collection requirements for which a claim of confidentiality is made is safeguarded according to CAA section 114(c) and the Agency's implementing regulations at 40 CFR part 2, subpart B.
This proposed NESHAP would require Paints and Allied Product Manufacturing area sources to submit an Initial Notification and a Notification of Compliance Status according to the requirements in 40 CFR 63.9 of the General Provisions (subpart A). The annual burden for this information collection averaged over the first three years of this ICR is estimated to be a total of 2,887 labor hours per year at a cost of $322,009 or approximately $147 per facility.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9.
To comment on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, EPA has established a public docket for this rule, which includes this ICR, under Docket ID number [EPA-HQ-OAR-2008-0053]. Submit any comments related to the ICR to EPA and OMB. See
The Regulatory Flexibility Act generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule would not have a significant economic impact on a substantial number of small entities.
For the purposes of assessing the impacts of this proposed rule on small entities, small entity is defined as: (1) A small business that meets the Small Business Administration size standards for small businesses found at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district, or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.
After considering the economic impacts of this proposed rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. This proposed rule is estimated to impact a total of almost 2,200 area source paints and allied products manufacturing facilities; over ninety percent of these facilities are estimated to be small entities. We have determined that small entity compliance costs, as assessed by the facilities' cost-to-sales ratio, are expected to be approximately 0.13 percent for the estimated 460 facilities that would not initially be in compliance. Although this proposed rule contains requirements for new area sources, we are not aware of any new area sources being constructed now or planned in the next 3 years, and consequently, we did not estimate any impacts for new sources.
Although this proposed rule would not have a significant economic impact on a substantial number of small entities, EPA nonetheless has tried to reduce the impact of this rule on small entities. The standards represent practices and controls that are common throughout the paints and allied products industry. The standards also require only the essential recordkeeping and reporting needed to demonstrate and verify compliance. These standards were developed in consultation with small business representatives on the State and national level and the trade associations that represent small businesses.
We continue to be interested in the potential impacts of this proposed action on small entities and welcome comments on issues related to such impacts.
This proposed rule does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments, in the aggregate, or to the private sector in any one year. This proposed rule is not expected to impact State, local, or tribal governments. The nationwide annualized cost of this proposed rule for affected industrial sources is $3.1 million/yr. Thus, this proposed rule would not be subject to the requirements of sections 202 and 205 of the Unfunded Mandates Reform Act (UMRA).
This proposed rule would also not be subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. The proposed rule would not apply to such governments and would impose no obligations upon them.
Executive Order 13132 (64 FR 43255, August 10, 1999) requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”
This proposed rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This proposed rule does not impose any requirements on State and local governments. Thus, Executive Order 13132 does not apply to this proposed rule.
In the spirit of Executive Order 13132, and consistent with EPA policy to promote communications between EPA and State and local governments, EPA specifically solicits comment on this proposed rule from State and local officials.
Executive Order 13175 (65 FR 67249, November 6, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by Tribal officials in the development of regulatory policies that have Tribal implications.” This proposed rule does not have Tribal implications, as specified in Executive Order 13175. This proposed rule imposes no requirements on Tribal governments. Thus, Executive Order 13175 does not apply to this proposed rule. EPA specifically solicits additional comment on this proposed rule from Tribal officials.
EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Order has the potential to influence the regulation. This action is not subject to EO 13045 because it is based solely on technology performance.
This proposed rule is not a “significant energy action” as defined in Executive Order 13211 (66 FR 28355, May 22, 2001) because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Further, we have concluded that this rule is not likely to have any adverse energy effects. Existing energy requirements for this industry would not be significantly impacted by the additional controls or other equipment that may be required by this rule.
Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law 104-113 (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (
This rulemaking involves technical standards. Therefore, the Agency conducted a search to identify potentially applicable voluntary consensus standards. However, we
EPA welcomes comments on this aspect of the proposed rulemaking and, specifically, invites the public to identify potentially-applicable voluntary consensus standards and to explain why such standards should be used in this regulation.
Executive Order 12898 (59 FR 7629, February 16, 1994) establishes Federal executive policy on environmental justice. Its main provision directs Federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States.
EPA has determined that this proposed rule would not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it increases the level of environmental protection for all affected populations without having any disproportionately high and adverse human health or environmental effects on any population, including any minority or low-income population. This proposed rule would establish national standards for the Paints and Allied Products area source category. The nationwide standards would reduce HAP emissions and thus decrease the amount of emissions to which all affected populations are exposed.
Environmental protection, Air pollution control, Hazardous substances, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, title 40, chapter I, part 63 of the Code of Federal Regulations is proposed to be amended as follows:
1. The authority citation for part 63 continues to read as follows:
42 U.S.C. 7401
2. Part 63 is amended by adding subpart CCCCCCC to read as follows:
(a) You are subject to this subpart if you own or operate a facility that performs paints and allied products manufacturing that is an area source of hazardous air pollutant (HAP) emissions and processes, uses, or generates materials containing one or more of the following HAP: benzene, methylene chloride, and compounds of cadmium, chromium, lead, and nickel.
(b) The affected source consists of all paints and allied products manufacturing processes at the facility.
(1) An affected source is existing if you commenced construction or reconstruction of the affected source on or before June 1, 2009.
(2) An affected source is new if you commenced construction or reconstruction of the affected source after June 1, 2009.
(c) You are exempt from the obligation to obtain a permit under 40 CFR part 70 or 40 CFR part 71, provided you are not otherwise required by law to obtain a permit under 40 CFR 70.3(a) or 40 CFR 71.3(a). Notwithstanding the previous sentence, you must continue to comply with the provisions of this subpart.
(a) If you own or operate an existing affected source, you must achieve compliance with applicable provisions in this subpart by 2 years after the date of publication of the final rule in the
(b) If you start up a new affected source on or before the date of publication of the final rule in the
(c) If you start up a new affected source after the date of publication of the final rule in the
(a) For each new and affected source, you must capture particulate emissions and route them to a particulate control device meeting the requirements of this section during the addition of pigments and other solids and during the grinding and milling of pigments and solids.
(1) For new and existing affected sources, visible 5 percent opacity when averaged over a six-minute period.
(2) [RESERVED]
(b) For each new and existing affected source, you must comply with the requirements in paragraphs (b)(1) through (4) of this section.
(1) Process and storage vessels, except for process vessels which are mixing vessels, must be equipped with covers or lids meeting the requirements of paragraphs (b)(1)(i) through (iii) of this section. These vessels must be kept covered when not in use.
(i) The covers or lids can be of solid or flexible construction, provided they do not warp or move around during the manufacturing process.
(ii) The covers or lids must maintain contact along at least 90 percent of the vessel rim.
(iii) The covers or lids must be maintained in good condition.
(2) Mixing vessels must be equipped with covers that completely cover the vessel, except for safe clearance of the
(3) Leaks and spills of materials containing volatile HAP must be immediately minimized and cleaned up.
(4) Waste solvent rags or other materials used for cleaning must be kept in closed storage vessels.
(a) For each new and existing affected source, you must demonstrate initial compliance by conducting the inspection and monitoring activities in paragraph (a)(1) of this section and ongoing compliance by conducting the inspection and testing activities in paragraph (a)(2) of this section.
(1) Initial particulate control device inspections and tests. You must conduct an initial inspection of each particulate control device according to the requirements in paragraphs (a)(1)(i) through (iii) of this section and perform a visible emissions test according to the requirements of paragraph (a)(1)(iv) of this section. You must record the results of each inspection and test according to paragraph (b) of this section and perform corrective action where necessary. You must conduct each inspection no later than 60 days after your applicable compliance date for each control device which has been operated within 60 days following the compliance date. For a control device which has not been installed or operated within 60 days following the compliance date, you must conduct an initial inspection prior to startup of the control device.
(i) For each wet particulate control system, you must verify the presence of water flow to the control equipment. You must also visually inspect the system ductwork and control equipment for leaks and inspect the interior of the control equipment (if applicable) for structural integrity and the condition of the control system.
(ii) For each dry particulate control system, you must visually inspect the system ductwork and dry particulate control unit for leaks. You must also inspect the inside of each dry particulate control unit for structural integrity and condition.
(iii) An initial inspection of the internal components of a wet or dry particulate control system is not required if there is a record that an inspection has been performed within the past 12 months and any maintenance actions have been resolved.
(iv) For each particulate control device, you must conduct an initial 30 minute visible emission test using Method 9 (40 CFR part 60, appendix A-4). If the results of the visible emissions test indicate an opacity greater than the applicable limitation in § 63.11601(a), you must take corrective action according to the equipment manufacturer's specifications or instructions and retest within 15 days.
(2) Ongoing particulate control device inspections and tests. Following the initial inspections, you must perform periodic inspections of each PM control device according to the requirements in paragraphs (a)(2)(i) or (ii) of this section. You must record the results of each inspection according to paragraph (b) of this section and perform corrective action where necessary. You must also conduct tests according to the requirements in paragraph (a)(2)(iii) of this section and record the results according to paragraph (b) of this section.
(i) You must inspect and maintain each wet control system according to the requirements in paragraphs (a)(2)(i)(A) through (C) of this section.
(A) You must conduct a daily inspection to verify the presence of water flow to the wet particulate control system.
(B) You must conduct weekly visual inspections of the system ductwork and wet particulate control equipment for leaks.
(C) You must conduct inspections of the interior of the wet control system (if applicable) to determine the structural integrity and condition of the control equipment every 12 months.
(ii) You must inspect and maintain each dry particulate control unit according to the requirements in paragraphs (a)(2)(ii)(A) and (B) of this section.
(A) You must conduct weekly visual inspections of the system ductwork for leaks.
(B) You must conduct inspections of the interior of the dry particulate control unit for structural integrity and to determine the condition of the fabric filter (if applicable) every 12 months.
(iii) For each particulate control device, you must conduct a 30 minute visible emission test every 6 months using Method 9 (40 CFR part 60, appendix A-4). If the results of the visible emissions test indicate an opacity greater than the applicable limitation in § 63.11601(a), you must take corrective action according to the equipment manufacturer's specifications or instructions and retest within 15 days.
(b) You must record the information specified in paragraphs (b)(1) through (6) of this section for each inspection and testing activity.
(1) The date, place, and time;
(2) Person conducting the activity;
(3) Technique or method used;
(4) Operating conditions during the activity;
(5) Results; and
(6) Description of correction actions taken.
(a) Notifications. You must submit the notifications identified in paragraphs (a)(1) and (2) of this section.
(1) Initial Notification of Applicability. If you own or operate an existing affected source, you must submit an initial notification of applicability required by § 63.9(b)(2) no later than 120 days after the date of publication of the final rule in the
(i) The name and address of the owner or operator;
(ii) The address (
(iii) An identification of the relevant standard, or other requirement, that is the basis of the notification and the source's compliance date.
(2) Notification of Compliance Status. If you own or operate an existing affected source, you must submit a Notification of Compliance Status in accordance with § 63.9(h) of the General Provisions within 2 years and 120 days after the date of publication of the final rule in the
(i) Your company's name and address;
(ii) A statement by a responsible official with that official's name, title, phone number, e-mail address and
(b) Annual Compliance Certification Report. You must prepare an annual compliance certification report according to the requirements in paragraphs (b)(1) through (b)(3) of this section. This report does not need to be submitted unless a deviation from the requirements of this subpart has occurred. When a deviation from the requirements of this subpart has occurred, the annual compliance certification report must be submitted along with the deviation report.
(1) Dates. You must prepare and, if applicable, submit each annual compliance certification report according to the dates specified in paragraphs (b)(1)(i) through (iii) of this section.
(i) The first annual compliance report must cover the first annual reporting period which begins the day of the compliance date and ends on December 31.
(ii) Each subsequent annual compliance report must cover the annual reporting period from January 1 through December 31.
(iii) Each annual compliance report must be prepared no later than January 31 and kept in a readily-accessible location for inspector review. If a deviation has occurred during the year, each annual compliance report must be submitted along with the deviation report, and postmarked no later than February 15.
(2) General Requirements. The annual compliance certification report must contain the information specified in paragraphs (b)(2)(i) through (iii) of this section.
(i) Company name and address;
(ii) A statement in accordance with § 63.9(h) of the General Provisions that is signed by a responsible official with that official's name, title, phone number, e-mail address and signature, certifying the truth, accuracy, and completeness of the notification and a statement of whether the source has complied with all the relevant standards and other requirements of this subpart; and
(iii) Date of report and beginning and ending dates of the reporting period. The reporting period is the 12-month period beginning on January 1 and ending on December 31.
(3) Deviation Report. If a deviation has occurred during the reporting period, you must include a description of deviations from the applicable requirements, the time periods during which the deviations occurred, and the corrective actions taken. This deviation report must be submitted along with your annual compliance report, as required by paragraph (b)(1)(iii) of this section.
(c) Records. You must maintain the records specified in paragraphs (c)(1) through (4) of this section in accordance with paragraphs (c)(5) through (7) of this section, for five years after the date of each recorded action.
(1) As required in § 63.10(b)(2)(xiv), you must keep a copy of each notification that you submitted in accordance with paragraph (a) of this section, and all documentation supporting any Notification of Applicability and Notification of Compliance Status that you submitted.
(2) You must keep a copy of each Annual Compliance Certification Report prepared in accordance with paragraph (b) of this section.
(3) You must keep a copy of the particulate control device manufacturer specifications and recommendations on site at all times.
(4) You must keep records of all inspections and tests as required by § 63.11602(b).
(5) Your records must be in a form suitable and readily available for expeditious review, according to § 63.10(b)(1).
(6) As specified in § 63.10(b)(1), you must keep each record for 5 years following the date of each recorded action.
(7) You must keep each record onsite for at least 2 years after the date of each recorded action according to § 63.10(b)(1). You may keep the records offsite for the remaining 3 years.
Table 1 of this subpart shows which parts of the General Provisions in §§ 63.1 through 63.16 apply to you.
(a) This subpart can be implemented and enforced by the U.S. EPA or a delegated authority such as a State, local, or tribal agency. If the U.S. EPA Administrator has delegated authority to a State, local, or tribal agency pursuant to 40 CFR part 63, subpart E, then that Agency has the authority to implement and enforce this subpart. You should contact your U.S. EPA Regional Office to find out if this subpart is delegated to your State, local, or tribal agency.
(b) In delegating implementation and enforcement authority of this subpart to a State, local, or tribal agency under 40 CFR part 63, subpart E, the authorities contained in paragraphs (b)(1) through (4) of this section are retained by the Administrator of the U.S. EPA and are not transferred to the State, local, or tribal agency.
(1) Approval of an alternative nonopacity emissions standard under § 63.6(g).
(2) Approval of a major change to test methods under § 63.7(e)(2)(ii) and (f). A “major change to test method” is defined in § 63.90
(3) Approval of a major change to monitoring under § 63.8(f). A ”major change to monitoring” is defined in § 63.90.
(4) Approval of a major change to recordkeeping/reporting under § 63.10(f). A “major change to recordkeeping/reporting” is defined in § 63.90. As required in § 63.11432, you must comply with the requirements of the NESHAP General Provisions (40 CFR part 63, subpart A) as shown in the following table.
Terms used in this subpart are defined in the Clean Air Act, § 63.2, and in this section as follows:
(1) Fails to meet any requirement or management practices established by this subpart;
(2) Fails to meet any term or condition that is adopted to implement a requirement in this subpart and that is included in the operating permit for any affected source required to obtain such a permit; or
(3) Fails to meet any emissions limitation or management practice in this subpart during startup, shutdown, or malfunction, regardless of whether or not such failure is permitted by this subpart.
(1) Products that do not leave a dried film of solid material on the substrate, such as thinners, paint removers, brush cleaners, and mold release agents;
(2) Electroplated and electroless metal films; and
(3) Raw materials, such as resins, pigments, and solvents used in the production of paints and coatings.
(1) Vessels permanently attached to motor vehicles such as trucks, railcars, barges, or ships;
(2) Pressure vessels designed to operate in excess of 204.9 kilopascals and without emissions to the atmosphere;
(3) Vessels storing organic liquids that contain HAP only as impurities;
(4) Wastewater storage tanks; and
(5) Process vessels.
As required in § 63.11599, you must meet each requirement in the following table that applies to you.
Part 63 General Provisions to be incorporated for Paints and Allied Products Manufacturing Area Sources:
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Proposed rule; request for comments.
NMFS proposes regulations under authority of the Western and Central Pacific Fisheries Convention Implementation Act (Act) to implement certain decisions of the Commission for the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific Ocean (WCPFC). Those decisions require that the members of the WCPFC, including the United States, take certain measures with respect to their purse seine fisheries in the area of competence of the WCPFC, which includes most of the western and central Pacific Ocean (WCPO). This action is necessary for the United States to satisfy its international obligations under the Convention on the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific Ocean (Convention), to which it is a Contracting Party.
Comments must be submitted in writing by June 22, 2009.
You may submit comments, on this proposed rule, identified by 0648-AX60, and the regulatory impact review (RIR) prepared for the proposed rule by any of the following methods:
• Electronic submissions: Submit all electronic public comments via the Federal e-Rulemaking portal, at
• Mail: William L. Robinson, Regional Administrator, NMFS Pacific Islands Regional Office (PIRO), 1601 Kapiolani Blvd., Suite 1110, Honolulu, HI 96814. Include the identifier “0648-AX60” in the comments.
Instructions: All comments received are part of the public record and generally will be posted to
An initial regulatory flexibility analysis (IRFA) prepared under authority of the Regulatory Flexibility Act (RFA) is included in the Classification section of the
Copies of the RIR and copies of the environmental assessment (EA) prepared under authority of the National Environmental Policy Act are available at
Tom Graham, NMFS PIRO, 808-944-2219.
This proposed rule is also accessible at
The Convention entered into force in June 2004. The full text of the Convention can be obtained from the WCPFC website at:
The WCPFC, established under the Convention, is comprised of the Members, including Contracting Parties to the Convention and fishing entities that have agreed to be bound by the regime established by the Convention. Other entities that participate in the WCPFC include Participating Territories and Cooperating Non-Members. Participating Territories participate with the authorization of the Contracting Parties with responsibility for the conduct of their foreign affairs. Cooperating Non-Members are identified by the WCPFC on a yearly basis. In accepting Cooperating Non-Member status, such States agree to implement the decisions of the WCPFC in the same manner as Members.
The current Members of the WCPFC are Australia, Canada, China, Chinese Taipei (Taiwan), Cook Islands, European Community, Federated States of Micronesia, Fiji, France, Japan, Kiribati, Korea, Marshall Islands, Nauru, New Zealand, Niue, Palau, Papua New Guinea, Philippines, Samoa, Solomon Islands, Tonga, Tuvalu, United States, and Vanuatu. The current Participating Territories are French Polynesia, New Caledonia and Wallis and Futuna (affiliated with France); Tokelau (affiliated with New Zealand); and the Territory of American Samoa, the Commonwealth of the Northern Mariana Islands and the Territory of Guam (affiliated with the United States of America). The Cooperating Non-Members for 2009 are Belize, El Salvador, Indonesia, Mexico, and Senegal.
The United States ratified the Convention and, in doing so, became a Contracting Party to the Convention and a Member of the WCPFC in 2007. From 2004 until that time, the United States participated in the WCPFC as a Cooperating Non-Member. As a Contracting Party to the Convention and a Member of the WCPFC, the United States is obligated to implement the decisions of the WCPFC in a legally binding manner. The Act, enacted in 2007, authorizes the Secretary of Commerce, in consultation with the Secretary of State and the Secretary of the Department in which the United States Coast Guard (USCG) is operating (currently the Department of Homeland Security), to promulgate such regulations as may be necessary to carry out the obligations of the United States under the Convention, including the decisions of the WCPFC. The authority to promulgate regulations has been delegated to NMFS.
At its Fifth Regular Session, in December 2008, the WCPFC adopted
CMM 2008-01 includes provisions that: (1) for 2009-2011, establish purse seine fishing effort limits on the high seas in the Convention Area and require CCMs to implement compatible measures in their respective areas of national jurisdiction; (2) in the period 2009-2011, prohibit deploying and servicing fish aggregating devices (FADs) or associated electronic devices, and prohibit purse seine fishing on schools in association with FADs on the high seas in the Convention Area during specified periods each year (August 1 through September 30 in 2009 and July 1 through September 30 in 2010 and 2011; hereafter, “FAD prohibition periods”) and require CCMs to implement compatible measures in their respective areas of jurisdiction; (3) in 2010 and 2011, close two specific high seas areas within the Convention Area to purse seine fishing, unless the WCPFC decides otherwise at its regular annual session in December 2009; (4) in 2010 and 2011, require that all bigeye tuna, yellowfin tuna, and skipjack tuna be retained on board purse seine vessels in the Convention Area up to the point of first landing or transshipment, with certain exceptions and contingent on the WCPFC Regional Observer Programme (WCPFC ROP) being able to provide 100 percent observer coverage; and (5) in 2009, require that WCPFC ROP or national observers be on board all purse seine vessels fishing in the Convention Area during the FAD prohibition period, and in 2010 and 2011, require that WCPFC ROP observers be on board all purse seine vessels fishing in the Convention Area.
The WCPFC also adopted CMM 2008-03, “Conservation and Management of Sea Turtles.” The CMM prescribes specific measures to be used to handle, resuscitate, and release sea turtles captured in HMS fisheries, and for purse seine vessels, requires that certain procedures be used to deal with sea turtles encircled and entangled in purse seines or FADs, including carrying and using dip nets.
The proposed rule would include the following elements:
The proposed rule would establish a limit, from 2009 through 2011, on the number of fishing days per year that may be spent by the U.S. purse seine fleet on the high seas and in areas under U.S. jurisdiction (including the U.S. exclusive economic zone, or EEZ) within the Convention Area. Paragraph 10 of CMM 2008-01 gives the United States the choice of using the 2004 level or the average 2001-2004 level as the baseline for the limits on the high seas. Paragraphs 12 and 18 of CMM 2008-01 require the United States to take measures to reduce purse seine fishing mortality on bigeye tuna in the U.S. EEZ, in a way that is compatible with certain measures that the Parties to the Nauru Agreement (PNA) are to implement within their respective areas of national jurisdiction (as prescribed in Paragraphs 11 and 17 of the CMM). The pertinent measures to be implemented by the PNA are described in the following paragraph.
The PNA have established, and under CMM 2008-01 are required to implement, the Vessel Day Scheme (VDS), which limits the number of days fished by purse seine vessels in the EEZs of the PNA to no greater than 2004 levels and provides for the allocation of the limit among the PNA. The VDS defines a fishing day as any calendar day, or part of calendar day, during which a purse seine vessel is outside of a port, except when the vessel is not undertaking fishing activities (i.e., when all fishing gear is stowed). For the purpose of this proposed rule, “fishing day” would be defined in similar manner. The PNA VDS specifies rolling three-year management periods. The rolling three-year management periods function by having the limit on the number of fishing days set for each of the years in the initial three-year management period. In theory, before the end of the first year, the fishing limit is then to be set for the fourth year, and before the end of the second year, the fishing limit is set for the fifth year, and so on, so that the maximum allowable fishing days are always established for three years in advance. Transfer of a certain number of fishing days between management years by individual PNA is allowed (up to 100 percent of the days from another year in the same three-year management period; up to 30 percent of the days from the final year of the preceding management period). Allocated fishing days may also be transferred, within specified limits, among PNA.
Paragraph 7 of CMM 2008-01 provides that determinations of effort levels for the purpose of implementing the CMM shall include fishing rights under existing regional fisheries arrangements or agreements that were registered with the WCPFC by December 2006 in accordance with CMM 2005-01, “Conservation and Management Measure for Bigeye and Yellowfin Tuna in the Western and Central Pacific Ocean,” provided that the number of licenses authorized under such arrangements does not increase. The South Pacific Tuna Treaty (SPTT) is such an agreement, and the United States has registered the SPTT with the WCPFC in accordance with CMM 2005-01. The number of licenses allowed for the U.S. purse seine fleet under the SPTT is 45, five of which are reserved for vessels engaged in joint ventures with Pacific Island Parties to the SPTT, and these numbers have not increased. The licensing requirements of the SPTT do not apply to the U.S. EEZ, but the area of application of the SPTT does include portions of the U.S. EEZ. Since the inception of the SPTT, all U.S. purse seine vessels that have been used to fish in the U.S. EEZ in the WCPO have been licensed under the SPTT. In other words, the set of vessels used to fish in the U.S. EEZ in the WCPO has been identical to the set of vessels used to fish on the high seas and in foreign EEZs in the WCPO under the terms of the SPTT, and consequently, all such vessels have been effectively managed as part of the SPTT-governed U.S. purse seine fleet. For these reasons, the number of non-joint venture licenses authorized under the SPTT, 40, is used as the basis for the proposed fishing effort limits for both the high seas and
This baseline of 40 vessels is used to derive the proposed fishing effort limits, expressed in terms of fishing days, by determining the average number of fishing days spent per vessel in the appropriate baseline period, and multiplying that number by 40 vessels. The numbers of days fished during the baseline periods were determined from the best available historical operational data from the U.S. purse seine fleet, as reported on regional purse seine logsheets. For both the high seas and the U.S. EEZ within the Convention Area, average fishing effort per vessel was greater in 2004 than during 2001-2004, so the 2004 levels are used for both areas. For the high seas in the Convention Area, the estimated average number of fishing days spent per vessel during 2004 (when 21 vessels were active in that area) was 50.76. For the U.S. EEZ in the Convention Area, the estimated average number of fishing days spent per vessel during 2004 (when 20 vessels were active in that area) was 13.95. Therefore, the proposed limit would be 2,030 fishing days per year (but not necessarily applied on an annual basis) for the high seas and 558 fishing days per year for the U.S. EEZ, or a total of 2,588 fishing days per year. If any vessels enter the fishery with any of the five licenses reserved for vessels engaged in joint ventures with the Pacific Island Parties to the SPTT, the limit may be adjusted accordingly.
To accommodate the need for operational flexibility in the event of inter-annual variability in the spatial and temporal distribution of optimal fishing grounds and times, the proposed rule would implement the fishing effort limit on three different time scales: First, there would be a limit of 7,764 fishing days (3 times the base of 2,588 fishing days) for the entire three-year 2009-2011 period. Second, there would be a limit of 6,470 fishing days (2.5 times the base of 2,588 fishing days) for each of the two-year periods 2009-2010 and 2010-2011. Third, there would be a limit of 3,882 fishing days (1.5 times the base of 2,588 fishing days) for each of the one-year periods 2009, 2010, and 2011. This approach would allow greater fishing effort in any given year than would be allowed under a strict annual limit, yet ensure that total fishing effort over the three-year period does not exceed the WCPFC-mandated limit for that period.
Once NMFS determines during any of those time periods that, based on information collected in vessel logbooks and other sources, the limit is expected to be reached by a specific future date, NMFS would issue a notice announcing the closure of the purse seine fishery in the Convention Area on the high seas and in areas of U.S. jurisdiction starting on that specific future date and will remain closed until the end of the applicable time period. Upon closure of the fishery, it would be prohibited to use a U.S. purse seine vessel to fish in the Convention Area on the high seas or in areas under U.S. jurisdiction through the end of the applicable time period. NMFS would publish the notice at least seven calendar days before the effective date of the closure to provide fishermen advance notice of the closure.
The proposed rule would establish periods in each of the years 2009, 2010, and 2011 during which it would be prohibited to set purse seines around FADs, deploy FADs, and service FADs or their associated electronic equipment in the convention area. Also, to implement the provision in CMM 2008-01 to prohibit fishing “on schools in association with FADs”, it would be prohibited during these periods to set a purse seine within one nautical mile of a FAD or to set a purse seine in a manner intended to capture fish that have aggregated in association with a FAD, such as by setting the purse seine in an area from which a FAD has been moved or removed within the previous eight hours or setting the purse seine in an area into which fish were drawn by a vessel from the vicinity of a FAD. FADs would be defined to include both artificial and natural floating objects that are capable of aggregating fish. In 2009, the FAD prohibition period would be August 1 through September 30. In 2010 and 2011, it would be July 1 through September 30.
The proposed rule would establish two areas closed to fishing by U.S. purse seine vessels, effective January 1, 2010 through December 31, 2011. The areas would be the two areas of high seas within the Convention Area that are depicted on the map in Figure 1. In CMM 2008-01, the WCPFC has reserved the option of reversing its adoption of the closed areas at its regular annual session in December 2009. If such a decision occurs, NMFS will take appropriate action to rescind any closed areas that are established by regulation.
Figure 1. Proposed high seas closed areas. Areas of high seas are indicated in white; areas of claimed national jurisdiction, including territorial seas, archipelagic waters, and exclusive economic zones, are indicated in dark shading. Areas that would be closed to purse seine fishing are all high seas areas within the two rectangles bounded by the bold black lines. The coordinates of the two rectangles are set forth in the proposed regulation. This map displays indicative maritime boundaries only.
The proposed rule would prohibit discarding bigeye tuna, yellowfin tuna, or skipjack tuna (Katsuwonus pelamis) from a U.S. purse seine vessel at sea within the Convention Area. Exceptions would be provided for fish that are unfit for human consumption for reasons other than their size, for the last set of the trip if there is insufficient well space to accommodate the entire catch, and for cases of serious malfunction of equipment that necessitate that fish be discarded. This element of the proposed rule would become effective no earlier than January 1, 2010, and only upon NMFS' determination that an adequate number of WCPFC-approved observers are available for the purse seine vessels of all WCPFC CCMs as necessary to ensure compliance by such vessels with the catch retention requirement. Once it makes that determination, NMFS would announce the effective date of the requirement in a notice published in the
The proposed rule would require that U.S. purse seine vessels carry observers deployed as part of the WCPFC ROP or deployed by NMFS on all trips in the Convention Area from August 1 through September 30, 2009 (the FAD prohibition period). It would also require, effective January 1, 2010, through December 31, 2011, that U.S. purse seine vessels carry WCPFC-approved observers on all trips in the Convention Area. These observer requirements would not apply to trips that take place exclusively within areas under the jurisdiction of the United States, including the U.S. EEZ and U.S. territorial sea, or any other single nation. They also would not apply in cases where NMFS has determined that an observer is not available.
The proposed rule would require that owners and operators of U.S. purse seine vessels operating in the Convention Area carry specific equipment and use specific measures to disentangle, handle, and release sea turtles that are encountered in fishing gear, including purse seines and FADs. The required equipment would be a dip net with specified minimum design standards. The required measures would include: immediately releasing sea turtles that are observed enclosed in purse seines; disentangling sea turtles that are observed entangled in purse seines or FADs; stopping net roll until a sea turtle is disentangled from a purse seine; resuscitating sea turtles that appear dead or comatose; and releasing sea turtles back to the ocean in a specified manner. Unlike all the other elements of the proposed rule, this element would be effective indefinitely.
The NMFS Assistant Administrator has determined that this proposed rule is consistent with the Western and Central Pacific Fisheries Convention Implementation Act and other applicable laws, subject to further consideration after public comment.
NMFS prepared an EA that analyzes the proposed rule's expected impacts on the human environment. In the EA, NMFS compared the effects of the proposed rule and four alternatives to the proposed rule, including the No-Action or baseline alternative and three action alternatives. Although the alternatives would likely result in slightly different environmental impacts, all alternatives would have only minor impacts on bigeye tuna and other living marine resources in the WCPO. Overall, the expected impacts
The effects on the human environment from the proposed rule are expected to be minor for the following reasons. First, the duration of the proposed rule (with the exception of the sea turtle mitigation requirements) would be limited to three years, after which, unless similar or more restrictive future actions are taken, conditions would likely rebound to conditions similar to those under the No-Action or baseline alternative. Second, the proposed rule would have relatively minor effects on the conduct or catches of the U.S. purse seine fleet, and consequently only minor effects on the total fishing mortality rates of the stocks captured by the fleet, including bigeye tuna and yellowfin tuna in the WCPO. However, other present and reasonably foreseeable future actions for the conservation and management of HMS could cause similar beneficial effects, so overall, the cumulative impacts on the affected environment could be greater than if the proposed rule were implemented in isolation. Specifically, implementation by the United States of the provisions of CMM 2008-01 applicable to longline vessels (which NMFS intends to do via one or more separate rulemakings) and implementation by other CCMs of the provisions of the CMMs would enhance the beneficial impacts to bigeye tuna, yellowfin tuna, and other living marine resources. If the WCPFC adopts (and CCMs implement) similar or more restrictive measures after the three-year duration of CMM 2008-01, the beneficial impacts would be further enhanced (e.g., there could be a greater likelihood of attaining the objectives of CMM 2008-01).
The economic impacts of the proposed rule are addressed in the EA only insofar as they are related to impacts to the biophysical environment. They are addressed more fully in the RIR and IRFA. A copy of the EA is available from NMFS (see
This proposed rule has been determined to be not significant for purposes of Executive Order 12866.
An IRFA was prepared, as required by section 603 of the RFA. The IRFA describes the economic impact this proposed rule, if adopted, would have on small entities. A description of the action, why it is being considered, and the legal basis for this action are contained at the beginning of this section in the preamble and in the
There would be no disproportionate economic impacts between small and large vessels resulting from this rule. Furthermore, there would be no disproportionate economic impacts, among all vessels, based on vessel size, gear, or homeport.
The proposed rule would apply to owners and operators of U.S. purse seine vessels used for fishing in the Convention Area. The number of affected vessels is the number licensed under the SPTT. The current number of licensed vessels is 39, but the number could soon reach the maximum number of licenses available under the Treaty (excluding joint-venture licenses), which is 40. Based on limited financial information available on the purse seine fleet, NMFS believes that as many as 10 of the affected vessels are owned by small entities (i.e., they are business entities with gross annual receipts of no more than $4.0 million).
The proposed rule would not establish any new reporting or recordkeeping requirements (within the meaning of the Paperwork Reduction Act). Affected vessel owners and operators would have to comply with all the proposed requirements, as described at the beginning of this section in the preamble. Fulfillment of these requirements is not expected to require any professional skills that the affected vessel owners and operators do not already possess, except that the proposed sea turtle handling and release requirements might require some training of crew members, as described further below.
Owners and operators of purse seine vessels would have to cease fishing in the Convention Area in areas under U.S. jurisdiction and on the high seas if and when the fishery is closed as a result of the established effort limit being reached in one of the applicable periods (any of the calendar years 2009-2011, either of the two-year periods 2009-2010 and 2010-2011, or the three-year period 2009-2011). They would have to do so for the remainder of the calendar year. Closure of the fishery could cause foregone fishing opportunities and associated economic losses. The likelihood of the fishery being closed in any of the applicable periods and the economic losses a closure would bring cannot be projected with certainty.
Two factors potentially important with respect to the likelihood of the limit being reached are per-vessel fishing effort and climate/ocean conditions. Because the effort limits would be set at a level that would be expected from 40 vessels, which is the expected fleet size under no-action, the limits may not have a high likelihood of being reached. However, because the proposed limits are based on average per-vessel fishing effort from 2004, if per-vessel effort levels in the no-action 40-vessel fleet are greater than that historical level, the likelihood of the limit being reached would be that much greater. With respect to climatic and oceanic conditions, the spatial distribution of the fleet's fishing effort is strongly influenced by conditions associated with El Nino-Southern Oscillation (ENSO) patterns. The eastern areas of the WCPO have tended to be comparatively more attractive to the fleet during El Nino events, when warm water spreads from the western Pacific to the eastern Pacific. Consequently, the areas subject to the proposed limit appear to be somewhat more important fishing grounds during El Nino events. If El Nino conditions occur during 2009-2011 (the effective dates of this element of the proposed rule), the likelihood of the fishery being closed, along with any associated economic costs, would be slightly greater than if such an event does not occur. However, the proposed limits have been designed to mitigate that likelihood and the associated costs (not just in anticipation of El Nino events, but to accommodate the spatial-temporal variations in optimal fishing grounds that would be expected from any number of factors). Specifically, the most restrictive limit (in terms of allowable fishing days per unit of time) would be established for
The area that would be closed constitutes a relatively small portion of the fishing grounds available to, and typically used by, the U.S. purse seine fleet. Unpublished NMFS data indicate that, on average, during 1997 through 2007, fishing effort in the U.S. EEZ and on the high seas made up about 30 percent of the annual total, and percentage among those years ranged from 22 to 40. In the event of a closure, affected vessels could continue to be used in the Convention Area in foreign EEZs, to the extent authorized. Given that foreign EEZs in the Convention Area have collectively received the majority of the U.S. purse seine fleet's fishing effort (60 to 78 percent in the years 1997-2007), the cost associated with being limited to such areas would likely not be substantial. Nonetheless, the closure of any fishing grounds would be expected to bring some (unquantifiable) costs to affected entities (e.g., because revenues per unit of fishing effort in the open area might, during the closed period, be lower than in the closed area), and as indicated in the preceding paragraph, the losses would vary depending on where the best fishing grounds are during the closed period, which is dependent in part on ENSO-related conditions.
The effort limit could affect the temporal distribution of fishing effort in the U.S. purse seine fishery. Since the limit would be competitive that is, not allocated among individual vessels, vessel operators might have an incentive to fish harder in the affected area earlier in a given limit-period (e.g., one of the calendar years 2009-2011) than they otherwise would. To the extent such a shift occurs, it could affect the seasonal timing of fish catches and deliveries to canneries. If, for example, deliveries from the fleet were substantially concentrated early in the year, it could adversely affect prices during that period. However, as discussed in the preceding paragraphs, the majority of fishing effort is expected to occur outside the area subject to the proposed limit, so the timing of catches and deliveries would not be appreciably impacted by a “race-to-fish” in the area subject to the limit. Furthermore, the timing of cannery deliveries by the U.S. fleet alone is unlikely to have an appreciable impact on prices, since the canneries buy from the fleets of multiple nations. A race to fish could bring costs to affected entities if it causes vessel operators to forego vessel maintenance or to fish in weather or ocean conditions that it otherwise would not. This could bring costs in terms of human safety as well as the economic performance of the vessel. A race-to-fish effect might also be expected in the time period between when a closure of the fishery is announced and when it is actually closed, which would be at least seven calendar days. For the reasons stated above, any such effect and its adverse impacts are expected to be minor. In addition, there is no evidence that economies of scale will favor those vessels that are defined as large over small vessels or vice versa when effort is constrained by these measures.
The prohibitions on fishing in association with FADs during specified periods in each of the years 2009-2011 (August and September in 2009 and July through September in 2010 and 2011) would substantially constrain the manner in which purse seine fishing could be conducted during those periods. The costs associated with these constraints cannot be projected, but the fleet's historical use of FADs can give a qualitative indication of the costs. In the years 1997-2007, the proportion of sets made on FADs in the U.S. purse seine fishery ranged from less than 40 percent in some years to more than 90 percent in others. The importance of FADs in terms of profits appears to be quite variable over time, and is probably a function of many factors, including fuel prices (e.g., unassociated sets involve more searching time and thus tend to bring higher fuel costs than FAD sets) and market conditions (e.g., FAD-fishing, which tends to result in greater catches of small skipjack tuna than unassociated sets, might be more attractive and profitable when canneries are not rejecting small fish). Thus, the costs of implementing the FAD prohibition periods would depend on a variety of factors. The fact that the fleet has typically made a large portion of its sets on FADs suggests that prohibiting the use of FADs for two to three months each year would bring substantial costs to affected entities. Given current market conditions, it seems unlikely that any affected entities would choose not to fish during the FAD prohibition periods rather than fish without the use of FADs. However, as described below for element (5) on observer coverage, affected vessels would also bear costs associated with having to carry an observer during the 2009 FAD prohibition period. To mitigate the costs that the FAD prohibition periods would bring, vessel operators might choose to schedule their routine vessel maintenance during a portion of those periods.
Closure of the two areas of high seas in the Convention Area in 2010 and 2011 would foreclose fishing opportunities and bring associated economic costs to affected entities. Those costs cannot be quantified, but because the affected areas constitute a relatively small portion of the fleet's traditional fishing grounds, the closures would not be expected to have a large effect on the ability of vessels to fish and generate revenue. NMFS unpublished data from vessel logbooks indicate that from 1997 through 2007, the proportion of the fleet's total annual catch that was taken from the two areas collectively was about 10 percent, and ranged from about 3 to 20 percent. Total fishing effort by particular vessels would likely be unaffected, but the spatial distribution of effort would necessarily shift out of the affected areas into what would be less attractive, and in some cases, less profitable, fishing grounds.
Implementing the catch retention requirement would bring costs associated with having to fill well space with less valuable, and in some cases, unmarketable, product. Those costs cannot be quantified, but historical tuna discard rates in the U.S. purse seine fishery give a qualitative indication. Based on vessel observer data for the U.S. EEZ for the years 1997-2001, annual estimated discard rates (by weight) of bigeye tuna, skipjack tuna, and yellowfin tuna averaged 9 percent, 13 percent, and 6 percent, respectively.
The compliance costs of the catch retention requirement would likely be different for vessels that tend to operate out of Pago Pago and deliver their catch to the canneries in Pago Pago versus vessels that transship most of their catch to other vessels. For vessels in the former category, which have to steam relatively far from the fishing grounds in order to land their fish, a fishing trip typically only ends when the fish holds are full in order to maximize revenue during a given trip. Revenues and profits for these vessels are therefore strongly dependent on the capacity of their fish wells and on the value of fish per unit of well space. There have been occasions where the canneries have charged vessel operators to unload small fish. If that occurs with small fish that
Compliance costs are first estimated for 2009, in which vessels would be required to carry an observer during the FAD prohibition period, from August 1 through September 30, and then estimated for 2010 and 2011, when vessels would be required to carry observers on all trips.
Under the current 20 percent observer coverage requirement under the SPTT, vessels that operate out of Pago Pago, American Samoa, typically carry an observer on about one trip per year. The observers required under the terms of the SPTT are deployed by the Pacific Islands Forum Fisheries Agency (FFA), which acts as the SPTT Administrator on behalf of the Pacific Island Parties to the SPTT. Under an agreement between the United States and the Pacific Island Parties to the SPTT, the observers deployed for the purpose of meeting this new WCPFC-mandated observer requirement would also be deployed by the FFA. Under the SPTT, the FFA dictates the deployment of observers and the U.S. facilitates their placement on vessels. Deployment is done in a way such that vessel operators have essentially no control over which trips will be observed.
In 2009, if an SPTT-mandated observer is deployed by the FFA on a trip that includes the FAD prohibition period, that would satisfy this new WCPFC-mandated observer requirement, and there would be no new compliance costs for the affected vessel in 2009. If, on the other hand, an SPTT-mandated observer is not deployed on the trip or trips that include the 2009 FAD prohibition period, then the affected vessel would have to carry an observer (assuming an observer is available) on that trip or trips as well as on any trips that it carries an SPTT-mandated observer. In that case, the new compliance costs would be as follows:
The owner and operator of the affected vessel would be responsible for both the cost of providing food, accommodation, and medical facilities to observers (termed “observer accommodation costs” here), and certain costs imposed by the FFA for the operation of its observer program as it is applied to the U.S. purse seine fleet (termed “observer deployment costs” here). For the purpose of estimating these costs, it is assumed that an affected vessel would schedule its trips such that it takes one trip during the 61-day FAD prohibition period and that the trip lasts for the duration of the period (vessel logbook data indicate average trip lengths of more than 70 days in 2003 and 2004, but the averages in 2007 and 2008 were less than 40 days; SPC 2009a). If the timing or duration of an affected vessel's trips differs from these assumptions, the costs it would bear would vary accordingly from the estimates given in the following paragraphs.
Observer accommodation costs are expected to be about $20 per day, so total observer accommodation costs in 2009 for an affected vessel would be $1,400.
Based on the budget for the FFA observer program for the 2008-2009 SPTT licensing period, which is based on a 20 percent coverage rate, observer deployment costs are approximately $8,630 per vessel per year, or per observed trip. According to the budget, about 28 percent of those costs, or $2,416, are fixed costs (as opposed to variable, or per-trip, costs). It is not known how the fixed component of costs would change with the increase in coverage from the current 20-percent level. Assuming that fixed costs do not change at all, the cost for an additional observed trip in 2009 would be about $6,200. If, on the other hand, fixed costs increase in proportion to the number of trips observed, the cost for an additional observed trip in 2009 would be about $8,600.
In 2010 and 2011, observer coverage would be required on all trips. Assuming, based on recent logbook data, that an affected purse seine vessel spends 285 days at sea each year, and, as described above, $20 per observed-sea-day in observer accommodation costs, annual observer accommodation costs at 100 percent coverage would be about $5,700 per vessel. Of these estimated costs, 80 percent, or $4,600 per vessel, would be “new” annual costs associated with this proposed requirement.
Observer deployment costs in 2010 and 2011 are estimated based on the FFA observer program budget for the 2008-2009 SPTT licensing period, as done for 2009 in the preceding paragraphs. If fixed costs do not change at all in response to the increased observer coverage rate, the annual cost per vessel at 100 percent coverage would be about $33,400. If fixed costs increase in proportion to the level of observer coverage, the annual cost per vessel at 100 percent coverage would be about $43,200. Of these estimated per-vessel costs, 80 percent, or $26,700 to $34,500, would be new annual costs associated with this proposed requirement.
In summary, in 2009, affected vessels would be subject to compliance costs of up to about $7,600 to $10,000 ($1,400 in observer accommodation costs plus $6,200 to $8,600 in observer deployment costs). In each of 2010 and 2011, affected vessels would be subject to compliance costs of up to about $31,300 to $39,100 ($4,600 in observer accommodation costs plus $26,700 to $34,500 in observer deployment costs). Detailed up-to-date information on revenues and costs in the fleet are not available, but a 1998 study found average gross revenues per vessel to be about $4.7 million, which is equivalent to about $6.1 million in 2009 dollars. Thus, the expected observer-related compliance costs are roughly 0.5 to 0.6 percent of average gross revenues.
As described above for element (2) on the FAD prohibition periods, to mitigate the costs associated with the 2009 FAD prohibition period, including the observer-related costs identified here, vessel operators might choose to schedule their routine vessel maintenance during a portion of that period.
The costs of complying with the proposed sea turtle interaction mitigation requirements would include the costs of obtaining the required dip net, ensuring that crew members are adequately trained to execute the required mitigation measures, and the time and labor required to handle and release sea turtles in the required manner (potentially at the expense of fishing time). A dip net with the minimum required specifications is estimated to cost no more than $100. Training costs cannot be quantified, but because the proposed requirements are relatively simple, crew members can probably become sufficiently skilled through informal training using educational materials provide by NMFS. Training costs are consequently expected to be minor. Handling and releasing sea turtles in the required manner might involve more time on the part of crew members than is currently spent dealing with sea turtles that are entangled or encountered. However, such incidents occur only rarely in the fishery, so the costs of labor and lost fishing time are expected to be minor.
NMFS has not identified any Federal regulations that duplicate, overlap with, or conflict with the proposed regulations, with the exception of the proposed observer requirements. U.S. purse seine vessels are subject to regulations issued under authority of the South Pacific Tuna Act of 1988 (SPTA; 16 U.S.C. 973-973r), at 50 CFR 300.43. Those regulations require that operators and crew members of vessels operating pursuant to the SPTT allow and assist any person identified as an observer by the Pacific Island Parties to the SPTT to board the vessel and conduct and perform specified observer functions. Under the terms of the SPTT, U.S. purse seine vessels carry such observers on approximately 20 percent of their trips. The proposed observer requirement would overlap with the existing regulations in that carrying an observer pursuant to 50 CFR 300.43 would satisfy the proposed requirement that an observer be carried during the FAD prohibition period of 2009. The proposed requirement would not duplicate or conflict with existing regulations.
NMFS has identified and considered several alternatives to the proposed rule. The alternatives are limited to the way in which the fishing effort limits would be implemented.
One alternative differs from the proposed rule only in that the fishing effort limits would be allocated among individual vessels. This would likely alleviate any adverse impacts of the race-to-fish that might occur as a result of establishing the competitive fishing effort limits as in the proposed rule. As described in the previous paragraphs, those potential impacts include lower prices for landed product and risks to performance and safety stemming from fishing during sub-optimal times. Those impacts, however, are expected to be minor, so this alternative is not preferred.
Another alternative would differ from the proposed rule only in that there would be a single limit of 7,764 fishing days (three times the fishing effort rate of 2,588 fishing days per year) for the entire three-year period 2009-2011. This would provide slightly more operational flexibility to affected vessels than the proposed rule, which could bring lower compliance costs. However, the lack of any limits for a given year would bring the potential for a longer closed period (e.g., during a substantial part of 2011) than would likely occur under the proposed rule (under which relatively brief closures might be expected in one or more of the years 2009-2011). To the extent that continuous fishing and continuity of supply are important for the fishery, several short closures might cause less adverse economic impacts than a single long closure, and for this reason, this alternative is not preferred. For example, with a brief closure each year, vessel owners and operators might be able to schedule routine vessel maintenance during the closed periods and mitigate the losses of not being able to fish. This would be more difficult to do during a longer closed period. In any case, as described in the preceding paragraphs, because the majority of the fleet's traditional fishing grounds would not be subject to the limit or the closure, the potential losses caused by a closed period however short or long are likely to be relatively minor.
Another alternative would establish separate fishing effort limits for the high seas and for areas under U.S. jurisdiction and separate limits for each of the SPTT licensing years (which run from June 15 through June 14) during 2009-2011. In accordance with the baseline effort levels specified in CMM 2008-01, the limits would be 2,030 fishing days on the high seas and 558 fishing days in areas under U.S. jurisdiction. Because this alternative would provide less operational flexibility for affected purse seine vessels, the limits would be more constraining than those established under the proposed rule, and consequently more costly. It is not preferred for that reason.
The alternative of taking no action at all is not preferred because it would fail to accomplish the objective of the Act or satisfy the international obligations of the United States as a Contracting Party to the Convention.
Administrative practice and procedure, Fish, Fisheries, Fishing, Marine resources, Reporting and recordkeeping requirements, Treaties.
For the reasons set out in the preamble, 50 CFR part 300, subpart O, which was proposed to be added at 74 FR 23965, is proposed to be further amended as follows:
1. The authority citation for 50 CFR part 300, subpart O, continues to read as follows:
16 U.S.C. 6901
2. In § 300.211, definitions of “Effort Limit Area for Purse Seine” or “ELAPS”, “Fish aggregating device” or “FAD”, “Fishing day”, “Fishing trip”, and “Purse seine” are added, in alphabetical order, to read as follows:
3. A new § 300.223 is added to read as follows:
(a)
(1) The limits are as follows:
(i) For each of the years 2009, 2010, and 2011, there is a limit of 3,882 fishing days.
(ii) For each of the two-year periods 2009-2010 and 2010-2011, there is a limit of 6,470 fishing days.
(iii) For the three-year period 2009-2011, there is a limit of 7,764 fishing days.
(2) NMFS will determine the number of fishing days spent in the ELAPS in each of the applicable time periods using data submitted in logbooks and other available information. After NMFS determines that the limit in any applicable time period is expected to be reached by a specific future date, and at least seven calendar days in advance of the closure date, NMFS will publish a notice in the
(3) Once a fishery closure is announced pursuant to paragraph (a)(2) of this section, fishing vessels of the United States equipped with purse seine gear may not be used to fish in the ELAPS during the period specified in the
(b)
(1) Set a purse seine around a FAD or within one nautical mile of a FAD.
(2) Set a purse seine in a manner intended to capture fish that have aggregated in association with a FAD, such as by setting the purse seine in an area from which a FAD has been moved or removed within the previous eight hours or setting the purse seine in an area into which fish were drawn by a vessel from the vicinity of a FAD.
(3) Deploy a FAD into the water.
(4) Repair, clean, maintain, or otherwise service a FAD, including any electronic equipment used in association with a FAD, in the water or on a vessel while at sea, except that a FAD may be inspected and handled as needed to identify the owner of the FAD, identify and release incidentally captured animals, un-foul fishing gear, or prevent damage to property or risk to human safety.
(c)
(1) Effective January 1, 2010, through December 31, 2011, a fishing vessel of the United States may not be used to fish with purse seine gear on the high seas within either Area A or Area B, the respective boundaries of which are the four lines connecting, in the most direct fashion, the coordinates specified as follows:
(i) Area A: 7° N. latitude and 134° E. longitude; 7° N. latitude and 153° E. longitude; 0° latitude and 153° E. longitude; and 0° latitude and 134° E. longitude.
(ii) Area B: 4° N. latitude and 156° E. longitude; 4° N. latitude and 176° E. longitude; 12° S. latitude and 176° E. longitude; and 12° S. latitude and 156° E. longitude.
(2) NMFS may, through publication of a notice in the
(d)
(1) Based on its determination as to whether an adequate number of WCPFC observers are available for the purse seine vessels of all Members of the Commission as necessary to ensure compliance by such vessels with the catch retention requirements established by the Commission, NMFS will, through publication of a notice in the
(2) If, after announcing the effective date of the these requirements under paragraph (1) of this section, NMFS determines that there is no longer an adequate number of WCPFC observers available for the purse seine vessels of all Members of the Commission as necessary to ensure compliance by such vessels with the catch retention requirements established by the Commission, NMFS may, through publication of a notice in the
(3) Effective from the date announced pursuant to paragraph (d)(1) of this section through December 31, 2011, a fishing vessel of the United States equipped with purse seine gear may not discard at sea within the Convention Area any bigeye tuna (
(i) Fish that are unfit for human consumption, including but not limited to fish that are spoiled, pulverized, severed, or partially consumed at the time they are brought on board, may be discarded.
(ii) If at the end of a fishing trip there is insufficient well space to accommodate all the fish captured in a given purse seine set, fish captured in that set may be discarded, provided that no additional purse seine sets are made during the fishing trip.
(iii) If a serious malfunction of equipment occurs that necessitates that fish be discarded.
(e)
(1) From August 1 through September 30, 2009, a fishing vessel of the United States that is equipped with purse seine gear may not be used to fish in the Convention Area without a WCPFC observer or an observer deployed by NMFS on board. This requirement does not apply to fishing trips that meet any of the following conditions:
(i) The portion of the fishing trip within the Convention Area takes place entirely within areas under U.S. jurisdiction or entirely within areas of jurisdiction of a single nation other than the United States.
(ii) No fishing takes place during the fishing trip in the Convention Area in the area between 20° N. latitude and 20° S. latitude.
(iii) The Regional Administrator has determined that an observer is not available for the fishing trip and a written copy of the Regional Administrator's determination, which must include the approximate start date of the fishing trip and the port of departure, is carried on board the fishing vessel during the entirety of the fishing trip.
(2) Effective January 1, 2010, through December 31, 2011, a fishing vessel of the United States may not be used to fish with purse seine gear in the Convention Area without a WCPFC observer on board. This requirement does not apply to fishing trips that meet any of the following conditions:
(i) The portion of the fishing trip within the Convention Area takes place entirely within areas under U.S. jurisdiction or entirely within the areas of jurisdiction of a single nation other than the United States.
(ii) No fishing takes place during the fishing trip in the Convention Area in the area between 20° N. latitude and 20° S. latitude.
(iii) The Regional Administrator has determined that a WCPFC observer is not available for the fishing trip and a written copy of the Regional Administrator's determination, which must include the approximate start date of the fishing trip and the port of departure, is carried on board the fishing vessel during the entirety of the fishing trip.
(3) Owners, operators, and crew of fishing vessels subject to paragraphs (e)(1) or (e)(2) of this section must accommodate WCPFC observers in accordance with the provisions of § 300.215(c).
(4) Meeting any of the conditions in paragraphs (e)(1)(i), (e)(1)(ii), (e)(1)(iii),
(f)
(1)
(i)
(A)
(B)
(ii)
(A)
(B)
(2)
(i)
(ii)
(iii)
(iv)
(v)
(A) Using the dip net or a turtle hoist, the sea turtle must be brought aboard immediately; and
(B) The sea turtle must be handled in accordance with the procedures in paragraphs (f)(2)(vi) and (f)(2)(vii) of this section.
(vi)
(A) The sea turtle must be placed on its belly (on the bottom shell or plastron) so that it is right side up and its hindquarters elevated at least 6 inches (15.24 cm) for a period of no less than 4 hours and no more than 24 hours. The amount of the elevation varies with the size of the sea turtle; greater elevations are needed for larger sea turtles;
(B) A reflex test must be administered at least once every 3 hours. The test is to be performed by gently touching the eye and pinching the tail of a sea turtle to determine if the sea turtle is responsive;
(C) The sea turtle must be kept shaded and damp or moist (but under no circumstances place the sea turtle into a container holding water). A water-soaked towel placed over the eyes (not covering the nostrils), carapace and flippers is the most effective method of keeping a sea turtle moist; and
(D) If the sea turtle revives and becomes active, it must be returned to the sea in the manner described in paragraph (f)(2)(vii) of this section. Sea turtles that fail to revive within the 24-hour period must also be returned to the sea in the manner described in paragraph (f)(2)(vii) of this section, unless NMFS requests that the turtle or part thereof be kept on board and delivered to NMFS for research purposes.
(vii)
(A) Place the vessel engine in neutral gear so that the propeller is disengaged and the vessel is stopped;
(B) Using the dip net or a turtle hoist to release the sea turtle with little impact, gently release the sea turtle away from any deployed gear; and
(C) Observe that the turtle is safely away from the vessel before engaging the propeller and continuing operations.
(viii)
4. In § 300.222, paragraphs (v) through (aa) are added to read as follows:
(v) Use a fishing vessel equipped with purse seine gear to fish in the ELAPS while the fishery is closed under § 300.223(a).
(w) Set a purse seine around, near or in association with a FAD or deploy or service a FAD in contravention of § 300.223(b).
(x) Use a fishing vessel equipped with purse seine gear to fish in an area closed under § 300.223(c).
(y) Discard fish at sea in the ELAPS in contravention of § 300.223(d).
(z) Fail to carry an observer as required in § 300.223(e).
(aa) Fail to comply with the sea turtle mitigation gear and handling requirements of § 300.223(f).
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of Availability of Amendment 7 to the Fishery Management Plan for the Shrimp Fishery of the South Atlantic Region; request for comments.
The South Atlantic Fishery Management Council (Council) has submitted Amendment 7 to the Fishery Management Plan for the Shrimp Fishery of the South Atlantic Region (FMP) for review, approval, and implementation by NMFS. Amendment 7 proposes actions to rename the commercial vessel permit and the limited access endorsement; remove the requirement for a minimum level of landings for the renewal of a limited access endorsement; allow the reissue of a limited access endorsement that had been terminated because of failure to meet that minimum level; allow the reissue of an endorsement that had been terminated because of failure to renew it in a timely manner; and require the submission of economic data by participants in the fishery. The measures contained in the subject amendment are intended to maintain a viable rock shrimp fishery in the South Atlantic region.
Comments must be received no later than 5 p.m., eastern time, on July 31, 2009.
You may submit comments on the proposed rule, identified by “0648-AW19”, by any one of the following methods:
• Electronic Submissions: Submit all electronic public comments via the Federal eRulemaking Portal
• Fax: 727-824-5308, Attn: Kate Michie.
• Mail: Kate Michie, Southeast Regional Office, NMFS, 263 13th Avenue South, St. Petersburg, FL 33701.
Instructions: All comments received are a part of the public record and will generally be posted to
To submit comments through the Federal e-Rulemaking Portal:
Copies of Amendment 7 may be obtained from the South Atlantic Fishery Management Council, 4055 Faber Place, Suite 201, North Charleston, SC 29405; phone: 843-571-4366 or 866-SAFMC-10 (toll free); fax: 843-769-4520; e-mail: safmc@safmc.net. Amendment 7 includes an Environmental Assessment, an Initial Regulatory Flexibility Analysis, a Regulatory Impact Review, and a Social Impact Assessment/Fishery Impact Statement.
Kate Michie, telephone: 727-824-5305; fax: 727-824-5308; e-mail:
The South Atlantic shrimp fishery is managed under the FMP. The FMP was prepared by the Council and implemented by NMFS under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) by regulations at 50 CFR part 622.
Amendment 5 to the FMP established a limited access program for the rock shrimp fishery in federal waters south of the South Carolina/Georgia state line. In 2003, endorsements were issued to vessels with at least 15,000 pounds of rock shrimp landings in any one year during 1997-2000. A vessel must land at least 15,000 pounds of rock shrimp in at least one year during any four consecutive years or the endorsement cannot be renewed. The Rock Shrimp Advisory Panel (AP) suggested these landings requirements because they were concerned about the high number of latent permit holders and vessels that fished infrequently. The limited access program criteria were set so the core group of participants would remain in the fishery while overall effort was reduced. Of the 155 vessels issued limited access endorsements, 105 are currently active, 20 are renewable, and 30 are non-renewable. Therefore, a maximum of 125 endorsements are or may become active in the rock shrimp fishery under the current permit requirements.
The need for action through Amendment 7 to the FMP is based on the desire to maintain a viable rock shrimp fishery in the South Atlantic region. The AP suggested the fishery could support no more than 150 vessels. However, fewer vessels may not fully utilize the resource. The Council has determined that actions implemented through Amendment 5 have resulted in the desired reduction in capacity and may no longer be necessary in light of changes in the rock shrimp fishery over the past six years.
The Council is primarily concerned about the 15,000-pound landing requirement because 43 vessels have not met the requirement after the first four years of the program. The AP suggested the Council consider whether this provision should be retained, revoked, revised, or possibly extended (i.e. allow vessels a longer time period to meet the requirement). In addition, the AP suggested reinstatement of endorsements lost as a result of not meeting the landings requirement.
Another issue involves the requirement for vessel owners to renew their vessel's endorsement within one year after the endorsement's expiration date to retain their eligibility. The Council is concerned about confusion over the rock shrimp limited access endorsement as implemented in the final rule for Amendment 5 versus the
In total, 73 vessels will or have been eliminated from the rock shrimp fishery under current regulations due to not meeting the 15,000-pound requirement, the renewal period, or both. Thus 47 percent of the 155 endorsements originally issued may be eliminated if no changes are made to the current requirements and even more could be eliminated in the future for the same reasons.
In the Gulf of Mexico shrimp fishery, participants are selected each year to provide economic data to NMFS. Similar data for the South Atlantic shrimp fishery would allow NMFS to conduct analyses required by the Magnuson-Stevens Act and other applicable law. These data would also allow the Council to fully understand how proposed management measures would impact shrimp fishermen and dealers.
Amendment 7 proposes to rename the commercial vessel permit and the limited access endorsement; remove the requirement for a minimum level of landings for the renewal of a limited access endorsement; allow the reissue of a limited access endorsement that had been terminated because of failure to meet that minimum level; allow the reissue of an endorsement that had been terminated because of failure to renew it in a timely manner; and require the submission of economic data by participants in the fishery if selected.
The Council has submitted Amendment 7 for Secretarial review, approval, and implementation. NMFS' decision to approve, partially approve, or disapprove Amendment 7 will be based, in part, on consideration of comments, recommendations, and information received during the comment period on this notice of availability. After consideration of these factors, and consistency with the Magnuson-Stevens Act and other applicable laws, NMFS will publish a notice of agency action in the
Public comments received by 5 p.m. eastern time, on July 31, 2009, will be considered by NMFS in the approval/disapproval decision regarding Amendment 7.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Denial of a petition for emergency rulemaking.
NMFS announces its decision to deny a petition for emergency or interim rulemaking under the Administrative Procedure Act (APA) and Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). Several non-governmental organizations (NGOs) petitioned the U.S. Department of Commerce to immediately promulgate an emergency or interim rule under the Magnuson-Stevens Act to address loggerhead sea turtle interactions in the bottom longline component of the commercial reef fish fishery in the Gulf of Mexico (Gulf). NMFS finds the emergency rulemaking is not warranted because of an emergency rule promulgated independently at the request of Gulf of Mexico Fishery Management Council (Council), which satisfies the legal mandates of the Magnuson-Stevens Act and Endangered Species Act (ESA) for protecting hardshell sea turtles.
Peter Hood, telephone 727-824-5305, fax 727-824-5308, e-mail
NMFS published a notice of receipt of petition for rulemaking on February 25, 2009 (74 FR 8494), and invited public comments for 30 days ending March 27, 2009. Summaries of and responses to comments are provided in the Response to Public Comments section below.
Oceana has petitioned the Council and NMFS to implement emergency regulations for the bottom longline component of the Gulf reef fish fishery to reduce the high levels of loggerhead sea turtle bycatch in the fishery and to implement appropriate long-term actions, through an amendment to the Fishery Management Plan for Reef Fish Resources of the Gulf of Mexico (FMP), to ensure adequate protection for the loggerhead sea turtle populations. The Oceana petition specifically requests NMFS prohibit the use of reef fish bottom longline gear in waters shallower than 55 fathoms (100m) in the Gulf to protect loggerhead sea turtles within the depths where all observed takes have occurred, and that NMFS prohibit the use of squid as bait when fishing with reef fish bottom longlines in waters deeper than 55 fathoms (100m) to further reduce the possibility of takes.
Another petition from the Center for Biological Diversity, Defenders of Wildlife, Earthjustice, Caribbean Conservation Corporation, Gulf Restoration Network, and Turtle Island Restoration Network alleges NMFS has violated the ESA by allowing the bottom longline component of the reef fish fishery to continue to operate, given evidence it has exceeded its take based on the incidental take statement (ITS) from a 2005 biological opinion (opinion). This petition requests that NMFS close the bottom longline component of the Gulf reef fish fishery immediately until NMFS has put in place sufficient measures to protect loggerhead sea turtles consistent with the guidelines of the ESA.
According to the petitions filed by the NGOs, the reasons sea turtle bycatch by reef fish bottom longlines requires emergency action are: (1) A NMFS report released in 2008 suggests hardshell sea turtle take has exceeded that allowed by the ITS from a 2005 opinion. The opinion concluded continued authorization of the Gulf reef fish fishery managed under the FMP was not likely to jeopardize the continued existence of sea turtles and smalltooth sawfish. An ITS was issued with the opinion specifying anticipated sea turtle and smalltooth sawfish take on a 3-year basis. For hardshell sea turtles, the anticipated 3-year incidental take for the bottom longline component of the Gulf reef fish fishery was 113 takes, of which 56 would be lethal. The 2008 NMFS report using observer data estimated the level of take during an 18-month period was between 411 and 1,983 hardshell sea turtles, primarily comprised of loggerhead sea turtles. This number has been revised in a 2009 NMFS report using 2008 observer data to between 463 and 2,020 hardshell sea
NMFS agrees with the NGOs' assertion that estimated hardshell sea turtle, in particular loggerhead sea turtle take, has exceeded the level prescribed in the 2005 biological opinion. As a result, management action was needed to provide protection for threatened loggerhead sea turtles in compliance with the ESA and to reduce sea turtle bycatch and bycatch mortality in compliance with national standard 9 (NS 9) of the Magnuson-Stevens Act. NMFS and the Council had already initiated efforts to address the issue prior to receipt of either petition. Thus, NMFS has promulgated an emergency rule at the request of the Council to reduce hardshell sea turtle takes while the Council develops long-term measures in Amendment 31 to the FMP. This emergency rule moves the bottom longline component of the eastern Gulf reef fish fishery seaward of a line approximating the 50-fathom (91-m) depth contour and prohibits the use of longlines in the eastern Gulf once the deepwater grouper and tilefish quotas are met.
In developing the emergency rule, NMFS determined the selected measures were sufficient to meet the legal requirements of the Magnuson-Stevens Act and the ESA. All but one sea turtle observed taken were on sets in waters less than 50 fathoms (91 m) in the eastern Gulf. Restricting bottom longlines to waters greater than 50 fathoms is consistent with regulations in the western Gulf. No sea turtle takes were observed in the western Gulf where reef fish bottom longline gear is restricted to the area seaward of a line approximating 50 fathoms (91 m). Thus, reductions in the potential for interactions between bottom longline gear and sea turtles would be achieved without unduly restricting fishing activity in deeper water where the deepwater grouper and tilefish fisheries are prosecuted. In addition, prohibiting squid as bait was not considered in the emergency rule because it is unclear how much reduction in take would result from such a measure and it is unclear what effect this would have on the bait industry if the Council did not adopt a similar long-term measure in Amendment 31.
A total of 305 comments were received on the petitions for rulemaking. Of those comments, 232 were in support of the petitions and the remaining comments were against it. One comment in support of the petition was from an NGO that included 49,320 electronic signatories to their letter. Another series of comments in support of the petitions were conducted through a postcard campaign consisting of 220 identical responses. A summary of the comments and NMFS' responses follows.
Both the Magnuson-Stevens Act and ESA require NMFS to use the best available scientific information. In addition, ESA case law requires that when faced with data uncertainty, decisions should give the benefit of the doubt to the species (i.e., favor protection of the species). With respect to estimating bycatch, a 2004 NMFS national working group on bycatch reviewed regional issues related to fisheries and bycatch and discussed advantages and disadvantages of various methods for estimating bycatch, including fishery-independent surveys, self-reporting through logbooks, port sampling, recreational sampling, at-sea observation (observers and electronic monitoring), and stranding networks. Although all methods may contribute to useful information for estimating bycatch, the national working group concluded at-sea observation (observers or electronic monitoring) provides the best mechanism to obtain reliable and accurate bycatch estimates for many fisheries.
Given the above, the Southeast Fisheries Science Center (SEFSC) used observer data to estimate the number of loggerhead sea turtle takes for comparison with the anticipated takes specified in the 2005 biological opinion's ITS. This estimate constitutes the best scientific information available and must be used to guide the agency's decision. They found the anticipated take level had been exceeded by the bottom longline component of the reef fish fishery, and even the lower bounds of the 95-percent confidence intervals around the take estimates were above the anticipated takes specified in the ITS.
Other information implies loggerhead sea turtle populations may be declining. For the past 20 years, the Florida Fish and Wildlife Conservation Commission coordinated a detailed sea turtle nesting-trend monitoring program, the Index Nesting Beach Survey (INBS). The INBS counts represent approximately 69 percent of known loggerhead sea turtles nesting in Florida. In addition, Florida accounts for approximately 90 percent of loggerhead sea turtle nesting activity within the southeastern United States nesting population, which is considered the world's second largest population. Loggerhead sea turtle nests were counted annually at core index nesting beaches in Florida from 1989 through 2008 on both the Atlantic and Gulf coasts. Counts of nests indicated a declining trend in loggerhead sea turtle nesting. Many scientists have suggested the observed decline in the annual counts of loggerhead sea turtle nests on index and statewide beaches in peninsular Florida can best be explained by a decline in the number of adult female loggerhead sea turtles in the population.
After considering the assertions and proposed management measures set forth in the petitions and all public comments, NMFS has determined the specific measures requested in the petitions should not be addressed via emergency rulemaking at this time. NMFS agrees that hardshell sea turtle takes need to be reduced and has taken action at the request of the Council to implement an emergency rule to achieve
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Advance notice of proposed rulemaking; request for comments.
NMFS issues this advance notice of proposed rulemaking (ANPR) to request public comment on potential adjustments to the regulations governing the U.S. Atlantic bluefin tuna (BFT), north Atlantic swordfish (SWO), and shark fisheries to enable more thorough utilization of the available U.S. quotas for BFT and SWO and to improve highly migratory species (HMS) permit structure. Potential action(s) taken may to increase opportunities for U.S. fisheries to fully harvest the U.S. quotas recommended by the International Commission for the Conservation of Atlantic Tunas (ICCAT) while balancing continuing efforts to end BFT overfishing by 2010 and rebuild the stock by 2019; to continue efforts to revitalize the SWO fishery while minimizing bycatch to the extent practicable; and to clarify and simplify the current HMS permit structure. NMFS is also requesting public comment regarding the potential implementation of catch shares, limited access privilege programs (LAPPs), and individual bycatch caps (IBCs) in highly migratory species fisheries. This ANPR provides background information to inform the public on several actions that NMFS is considering to accomplish these objectives.
Written comments regarding the potential BFT management measures discussed in Section II of the
Written comments regarding pelagic longline (PLL) incidental catch requirements, HMS permits, LAPPs, and IBCs as discussed in Sections III and IV of the
Public meetings to obtain additional comments on the items discussed in this ANPR will be held in June and July 2009. Please see the
You may submit comments, identified by “0648-AX85”, by any one of the following methods:
• Electronic submissions: Submit all electronic public comments via the Federal e-Rulemaking Portal:
• Fax: 301-713-1917, Attn: Margo Schulze-Haugen.
• Mail: NMFS SF1, 1315 East-West Highway, Silver Spring, MD 20910.
Instructions: All comments received are part of the public record and will generally be posted to portal
Related documents, including the 2006 Consolidated HMS Fishery Management Plan (Consolidated HMS FMP) and the 2008 Stock Assessment and Fishery Evaluation (SAFE) Report are available upon request at the mailing address noted above or on the HMS Management Division's webpage at:
Public meetings to obtain additional comments on the items discussed in this ANPR will be held in North Carolina, New Jersey, Massachusetts, Florida, and Louisiana. Please see the
Sarah McLaughlin at 978-281-9260 or Randy Blankinship at 727-824-5399.
The U.S. Atlantic tunas, SWO, and billfish fisheries are managed under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) and the Atlantic Tunas Convention Act (ATCA), and implemented through the Consolidated HMS FMP. Atlantic sharks are managed under the authority of the Magnuson-Stevens Act. ATCA authorizes the Secretary of Commerce (Secretary) to promulgate regulations, as may be necessary and appropriate, to implement recommendations by ICCAT. The authority to issue regulations under the Magnuson-Stevens Act and ATCA has been delegated from the Secretary to the Assistant Administrator for Fisheries, NOAA. The implementing regulations for Atlantic HMS are at 50 CFR part 635. Atlantic HMS fisheries are also subject to the requirements of the Endangered Species Act (ESA), Marine Mammal Protection Act (MMPA), National Environmental Policy Act (NEPA), Administrative Procedures Act (APA), Coastal Zone Management Act (CZMA), and other domestic regulations.
In recent years, a combination of factors has contributed to a decline in domestic landings of north Atlantic SWO and western Atlantic BFT, to the point where U.S. landings are now below their respective ICCAT-recommended quotas. NMFS has implemented several management measures in the U.S. PLL fishery to meet legal mandates to reduce the bycatch and bycatch mortality of sea turtles, marine mammals, undersized and spawning fish, Atlantic billfish, and some shark species. These include time and area closures, a requirement to use only large circle hooks with specific baits, a prohibition on the use of live bait in the Gulf of Mexico, incidental catch limits, and a reduction in large coastal shark quotas and retention limits. Some of these measures have also contributed to lower catches of north Atlantic SWO and western Atlantic BFT in the PLL fishery. In addition to regulatory factors, increased fuel prices, low ex-vessel prices, and less expensive imports of SWO may have contributed to reduced landings in the SWO fishery. Factors that may have played a role in the underharvest of the
The reduction of bycatch and bycatch mortality, and the continuing need to rebuild overfished stocks in Atlantic HMS fisheries, remain important management priorities for NMFS as mandated under the Magnuson-Stevens Act. However, because domestic landings of north Atlantic SWO and western Atlantic BFT have been below ICCAT-recommended U.S. quotas, there is an ongoing concern among many HMS constituents that a portion of the U.S. quota for these species could be reallocated to other countries during future ICCAT negotiations.
In 2007, NMFS addressed persistent underharvests of the domestic SWO quota by increasing SWO retention limits for incidental SWO permit holders, modifying recreational SWO retention limits for HMS Charter/Headboat and Angling category permit holders, and modifying HMS limited access vessel upgrading restrictions for PLL vessels (72 FR 31688; June 7, 2007). Since then, NMFS has continued to receive comments suggesting changes that could increase domestic BFT and SWO landings, as well as public input regarding HMS permitting issues. These suggestions were received by NMFS during HMS Advisory Panel (AP) meetings in 2008 and 2009, during the 2009 BFT quota specifications public hearings, and in recent constituent and congressional correspondence.
NMFS prepared this ANPR in response to suggestions that have been received from the public regarding the underharvest of domestic SWO and BFT quotas. Additionally, this ANPR outlines some management strategies that NMFS is considering to improve HMS management, particularly regarding permitting issues, and enforcement of HMS regulations. In light of the recent underharvest of domestic BFT and SWO fisheries, the current status of HMS stocks, continuing bycatch and bycatch mortality concerns, market factors that may affect fishery performance and Agency efforts to address HMS permitting issues, NMFS formally requests comments on the potential regulatory changes described in this ANPR. All comments received in response to this ANPR will be considered in any potential future rulemakings.
The most recent stock assessment conducted by ICCAT's Standing Committee on Research and Statistics (SCRS) for western Atlantic BFT (2008) indicated that the 2007 spawning stock biomass was between 14 percent and 57 percent of the biomass required to support maximum sustainable yield (MSY) and that fishing mortality was between 1.27 and 2.18 of that that would produce MSY, depending upon the recruitment scenario assumed within the assessment. The western Atlantic BFT stock is considered to be overfished with overfishing occurring.
The SCRS stock assessment in 2006 indicated that the north Atlantic SWO biomass had improved (B
The stock status of Atlantic sharks varies by species. Several species of sharks are considered to be overfished with overfishing occurring, including sandbar sharks, dusky sharks, and blacknose sharks. Conversely, some shark species are not overfished and overfishing is not occurring, including Gulf of Mexico blacktip sharks, Atlantic sharpnose sharks, and bonnethead sharks. The current status of the blacktip shark population in the South Atlantic region as well as several other shark species is unknown.
As noted in “DATES” section, the comment period on issues in this section is open through June 30, 2009.
To provide background information, this section describes some of the current HMS regulatory requirements for the General category.
The current default General category daily retention limit is one large medium or giant BFT (measuring 73 inches (185 cm) or greater). To provide for maximum utilization of the quota for BFT, NMFS may increase or decrease the daily retention limit of large medium and giant BFT over a range from zero to a maximum of three per vessel, based on the consideration of several criteria. Regardless of the length of a trip, no more than a single day's retention limit of large medium or giant BFT may be possessed or retained aboard a vessel that has a General category Atlantic Tunas permit. When the General category is open, no person aboard such vessel may continue to fish, and the vessel must immediately proceed to port once the applicable limit for large medium or giant BFT has been attained. For the last several fishing seasons, NMFS has maintained a three-fish General category daily retention limit, with the exception of the January 2009 fishery, for which NMFS set a two-fish limit given the available January subquota.
The BFT General category season currently is open from January 1 through January 31, and from June 1 through December 31. The current time period quota allocations are as follows: 5.3% for January; 50% for June-August; 26.5% for September; 13% for October-November; and 5.2% for December. Through in-season authority, NMFS takes action to close the coastwide General category fishery when it determines that the subquota for a given time period is reached, or is projected to be reached. NMFS may also adjust each time period's quota based on overharvest or underharvest in the prior time period. NMFS may reopen the fishery at a later date if it determines that reasonable fishing opportunities are available, e.g., BFT have migrated into the area or weather is conducive for fishing.
From 2000 through 2007, the BFT fishery was managed on a June through May fishing year basis versus a calendar year basis (January through December), and in 2003, NMFS extended the General category season to include the month of January (68 FR 74504, December 24, 2003). However, since January 2004, NMFS has not needed to close the January fishery (i.e., the available General category quota has not been fully exhausted). In 2008, the BFT fishery returned to a calendar year fishery, such that the January sub-period is now the first period of the January through December fishing year.
Under current regulations, NMFS considers several criteria when applying underharvest of BFT from one fishing year to the next. These criteria include the usefulness of information obtained from catches in the particular category for biological sampling and monitoring of the status of the stock, the effects of the adjustment on BFT rebuilding and overfishing, and the effects of the adjustment on accomplishing the objectives of the fishery management plan.
A change to, or the elimination of, the daily retention limit could potentially be implemented via a regulatory amendment. If NMFS were to change or eliminate the maximum daily retention limit, it would still maintain the authority to establish the daily retention limit using an in-season action by filing an adjustment with the Office of the Federal Register.
The potential advantages of eliminating the maximum limit (three BFT/vessel/day) include: (1) positive socio-economic impacts for General category and HMS Charter/Headboat category vessels due to the ability to retain and sell more commercial-sized BFT per day/trip; (2) related positive impacts for dealers; (3) greater incentive for vessels to take offshore, multi-day trips, which could increase fishing opportunities and revenues on for-hire trips by Charter/Headboats; (4) decreased discard mortality of commercial sized BFT (that previously would have been in excess of daily retention limit); and, (5) fuller use of the U.S. BFT quota through increased General (quota) category landings.
The potential disadvantages of eliminating the maximum limit include: (1) increased discard mortality of undersized BFT (by General category vessels) due to potential increased fishing effort; and, (2) increased bycatch of non-target species, including protected species, and/or other biological and ecological impacts.
The potential advantages of extending the General category season include: (1) increased use of the U.S. BFT quota through increased General (quota) category landings; (2) positive socio-economic impacts for General category and HMS Charter/Headboat category vessels and dealers able to participate in the winter/spring fishery due to extended opportunities to make trips and land commercial-sized BFT; and , (3) positive socio-economic impacts for coastal communities in which winter/spring fishing opportunities exist.
The potential disadvantages of extending the General category season could include: (1) negative socio-economic impacts on General category vessels that traditionally have fished during June through December (
NMFS requests comments on the potential adjustment of regulations governing the BFT General category daily retention limits and fishing season. The preceding section provided background information regarding these topics. The public is encouraged to submit comments related to any aspect of these topics. NMFS is also specifically seeking comments to the following questions.
How should NMFS distribute General category underharvest to the time periods for the following year (e.g., by FMP allocation-50 percent for June-August; by applying all of any underharvest available for the General category to the first time period and rolling the unused portion forward throughout the calendar year; or by another method)?
Given that the underharvest carried forward from one year to the next cannot exceed 50 percent of the initial U.S. quota (10 percent beginning in 2011 per ICCAT recommendations), NMFS may not be able to apply the exact amount of General category underharvest to the following year's General category quota. Additionally, in the last few years, NMFS has applied underharvest to the subsequent year to meet several management needs (particularly ensuring that the Longline category has sufficient quota to operate during the fishing year while also accounting for BFT discards) rather than distributing the allowable amount of underharvest according to the FMP percentages. Should NMFS revise over/underharvest adjustment criteria for the General category or all categories in the future?
The closed season (February through May) has, in effect, served as a time/area closure both for BFT and potential bycatch species. What bycatch concerns or other biological/ecological impacts might there be?
Under current HMS regulations, persons aboard a Harpoon category permitted vessel may retain, possess, or land an unlimited number of giant BFT (81 inches (206 cm) or greater), but may retain, possess, or land only two large medium BFT (73 to less than 81 inches) per vessel per day (i.e., there is an incidental limit of two large medium BFT while targeting giant BFT).
The potential advantages of eliminating the large medium incidental daily retention limit for the Harpoon category include: (1) positive socio-economic impacts for Harpoon category vessels due to the ability to retain and sell more commercial-sized BFT per day/trip; (2) related positive impacts for dealers; (3) decreased discard mortality of large medium BFT that previously would have been in excess of the
The potential disadvantages of eliminating the large medium incidental daily retention limit for the Harpoon category include increased potential discard mortality of BFT under 73 inches due to increased fishing effort on smaller commercial-sized BFT and the low likelihood of survival after a harpoon strike.
NMFS requests comments on the potential adjustment of the daily retention limit for BFT Harpoon category permitted vessels. The public may submit comments related to any aspect of this topic. NMFS is also specifically seeking comments addressing the following questions.
Current HMS regulations specify that both General category and Harpoon category vessels may retain, possess, or land only large medium and giant BFT (73 inches or greater), under the retention limits described above. The current regulations do not specify a general “commercial minimum size” in inches but instead manage allowable commercial retention by specifying allowed size classes for retention by the various commercial permit categories. These allowed size classes are based on the best available information regarding the size associated with the age at first maturity for western Atlantic BFT (73 inches or greater), and on the type of authorized gear. For example, harpoon gear is more selective than rod and reel and can be used to target larger BFT. BFT stock assessments, conducted by ICCAT's SCRS, assume 8 years as the age at 50 percent maturity (i.e., age at which 50 percent of all individuals are sexually mature).
NMFS believes that reducing the BFT size that commercial vessels may retain would likely change future patterns of fishing mortality (
A reduction in the “commercial minimum size” would result in both recreational and commercial handgear vessels pursuing the same size class of fish (small medium BFT). As described below, NMFS has noted some recent changes in the pattern of BFT catches and landings that merit further consideration when making management decisions regarding this issue. Prior to 2007, recreational BFT fishing activity largely revolved around fishing opportunities for school BFT (27 to less than 47 inches (69 to less than 119 cm)) and resulted in substantial school BFT landings. Large Pelagic Survey size frequency data reveal a trend in the last several years toward larger recreational-size fish, particularly within the large school (47 to less than 59 inches) and small medium size classes (59 to less than 73 inches). Availability and landings of the recreational size classes have been high, and the 2007 and 2008 Angling category quotas were estimated to have been exceeded. In reviewing the available data, NMFS notes that the availability of recreational size fish is now limited to a narrow size range (or cohort), approximately age 4 in 2007 and age 5 in 2008. Thus, last year, the majority of recreationally caught BFT last year were in the large school size range. However, in 2009, NMFS anticipates that these BFT will be approximately age 6 and will enter the small medium size class. NMFS manages the recreational BFT quota by size class, so as this cohort of fish grows in weight but remains under 73 inches, NMFS expects the large school/small medium subquota to be attained with fewer, but larger, fish landed. Potentially allowing increased commercial effort by General and Harpoon fishermen to harvest small medium BFT would put additional pressure on these age 6 fish. For these reasons, NMFS believes that modification of the size of BFT allowed for commercial retention likely would need to be made via an FMP amendment that would include a thorough environmental impact assessment.
The potential advantages of reducing the “commercial minimum size” for retention by General and Harpoon category vessels (and HMS Charter/Headboat category vessels when fishing commercially) include: (1) increased use of the U.S. BFT quota through increased General and Harpoon (quota) category landings; (2) positive socio-economic impacts for General category, Harpoon category, and HMS Charter/Headboat category vessels due to the ability to retain and sell more commercial-sized BFT per day/trip; (3) related positive impacts for dealers; and , (4) decreased discard mortality of small medium BFT above a new “commercial minimum size” (that previously would have been caught incidentally to directed fishing for BFT 73 inches or greater).
The potential disadvantages of reducing the “commercial minimum size” for retention by General and Harpoon category vessels (and HMS Charter/Headboat category vessels when fishing commercially) include: (1) negative socio-economic impacts for recreational BFT fishermen due to increased competition and gear conflicts with the commercial handgear categories; (2) negative biological and
NMFS requests comments related to any aspect of this topic, and is specifically seeking comments that address the following questions.
Under current regulations, persons aboard a vessel issued an HMS Charter/Headboat category permit may retain and land BFT under the daily limits and quotas applicable to the Angling category or the General category, except when fishing in the Gulf of Mexico (in which case only the annual limit of one (recreational “trophy”) large medium or giant BFT may be retained, possessed, and landed). Specifically regarding retention limits, the size category of the first BFT retained determines the fishing category applicable to the vessel that day. For instance, if the first BFT retained is a large school BFT, the vessel may fish only under the Angling category daily retention limit that day and may not retain a commercial-sized BFT on that same day. Gear currently authorized for use on Charter/Headboat category vessels includes rod and reel, bandit gear, handline, and green-stick gear, as well speargun when recreationally fishing for non-bluefin Atlantic tunas. The current FMP quota allocations are as follows: 19.7 percent for the Angling category; 47.1 percent for the General category; 3.9 percent for the Harpoon category; 18.6 percent for the Purse Seine category; 8.1 percent for the Longline category; 0.1 percent for the Trap category; and 2.5 percent for the Reserve.
The suggested change to the daily retention limit could be implemented via a regulatory amendment, but changes to FMP quota allocations of BFT would require an FMP amendment.
The potential advantages of allowing commercial and recreational BFT fishing on the same day include: (1) increased use of the U.S. BFT quota through increased landings, particularly of commercial BFT counted against the underharvested General category quota; (2) positive socio-economic impacts for HMS Charter/Headboat category vessels due to the ability to retain and sell commercial-sized BFT on the same day as making a trip with paying passengers for recreational-sized BFT; (3) related positive impacts for dealers; and, (4) decreased discard mortality of BFT if fish were retained that previously would have exceeded the daily retention limit.
The potential disadvantages of allowing commercial and recreational BFT fishing on the same day include: (1) the removal of clear distinction between commercially and recreationally caught BFT; (2) increased difficulty of monitoring recreational BFT catch and landings through the Large Pelagics Survey; (3) increased difficulty enforcing the daily retention limits and reporting requirements; and (4) increased discard mortality of undersized BFT (in excess of recreational daily retention limit) due to potential increased effort on commercial-sized fish, particularly if implemented in conjunction with raising or eliminating the commercial retention limit.
The potential advantages of creating a separate Charter/Headboat quota would include positive socio-economic impacts for HMS Charter/Headboat vessels associated with a dedicated quota for that permit category. Conversely, potential disadvantages would include negative socio-economic impacts for vessels in other existing quota categories, due to reallocation.
NMFS proposed to authorize harpoon gear for the harvest of Atlantic tunas, including BFT, in the HMS Charter/Headboat category on May 6, 2008 (73 FR 24922), but did not finalize the change in the final rule (73 FR 54721, September 23, 2008). At that time, NMFS decided to maintain the status quo regarding authorized harpoon use, (
The potential advantages of authorizing harpoon gear use on Charter/Headboat category vessels would include increased opportunities to retain and land commercial sized BFT, thus making increased use of the U.S. BFT quota through increased General category landings.
The potential disadvantages of authorizing harpoon gear include: (1) increased discard mortality from inadvertent harpoon strikes on undersized BFT; and, (2) difficulty with enforcement if harpoons are authorized on non-for-hire trips only.
NMFS requests comments related to any aspect of this topic, and is specifically seeking comments that address the following questions.
Under current HMS regulations, persons that own or operate a fishing vessel that possesses or lands an Atlantic tuna (bigeye, albacore, yellowfin, and skipjack tunas) must maintain such tuna through offloading either in round form or eviscerated with the head and fins removed, provided one pectoral fin and the tail remain attached. For a whole or round tuna (head on), the sole criterion for determining the size and/or size class of a whole or round (head on) Atlantic tunas is a curved fork length measurement (CFL). The CFL measurement is determined by the length of a fish measured from the tip of the upper jaw to the fork of the tail along the contour of the body in a line that runs along the top of the pectoral fin and the top of the caudal keel. When the head of an Atlantic tuna is removed, a pectoral fin curved fork length (PFCFL) is the legal means of measuring the fish. The PFCFL is determined by the length of a fish with the head removed from the dorsal insertion of the pectoral fin to the fork of the tail measured along the contour of the body in a line that runs along the top of the pectoral fin and the top of the caudal keel. Both of these measurements require the tail to be naturally attached to attain a proper measurement.
The PFCFL is converted to CFL using a conversion factor of 1.35. The resulting CFL is the sole criterion for determining the size class of a BFT with the head removed. Applying the conversion factor from PFCFL to CFL for a BFT with the head removed currently means that no person shall retain or possess a BFT, with the head removed, measuring less than 20 inches (51 cm) PFCFL. For yellowfin and bigeye tuna, both of which have a minimum size of 27 inches CFL, the regulations state that no person shall remove the head of the fish if the remaining portion would be less than 27 inches from the fork of the tail to the forward edge of the cut.
The potential advantages of allowing the removal of Atlantic tuna tails include: (1) allowing for more efficient storage of harvested Atlantic tunas; (2) increased options for preserving the quality of harvested Atlantic tunas; and, (3) harmonization of Atlantic tunas minimum size limits, carcass condition regulations, and preferred fishery practices.
The potential disadvantages of allowing the removal of Atlantic tuna tails include: (1) may indirectly change the allowable minimum size of an Atlantic tuna; (2) may complicate analyses and require the generation of a conversion factor for comparison to historical fish length data; (3) may necessitate changes to reporting forms and reporting requirements; and (4) would likely necessitate changes to current terms and definitions in the regulations.
NMFS requests comments related to any aspect of this topic, and is specifically seeking comments that address the following questions.
As noted in the “DATES” section, the comment period on issues in this section is open through August 31, 2009.
This section of the ANPR addresses issues which may overlap several HMS fishery sectors.
Under current HMS regulations, persons aboard a vessel permitted in the Atlantic Tunas Longline category may retain, possess, land, and sell large medium and giant BFT taken incidentally when fishing for other species, as follows: One large medium or giant BFT per vessel per trip may be landed, provided that at least 2,000 lb (907 kg) of species other than BFT are legally caught, retained, and offloaded from the same trip and are recorded on the dealer weighout slip as sold; two large medium or giant BFT may be landed incidentally to at least 6,000 lb (2,727 kg) of species other than BFT; and three large medium or giant BFT may be landed incidentally to at least 30,000 lb (13,620 kg) of species other than BFT.
Commenters have suggested that NMFS should increase the incidental BFT retention limits for the PLL fishery in order to reduce regulatory discards of commercial-sized BFT and thus, increase profitability of PLL trips, which may result in increased SWO fishing effort and potentially increase landings of SWO.. Specifically, NMFS has received the suggestion to allow two large medium or giant BFT for 3,000 lb (1,361 kg) of target catch; 3 BFT for 6,000 lb (2,722 kg); 4 BFT for 9,000 lb (4,082 kg); and 5 BFT for 12,000 lb (5,443 kg).
Modifications to BFT incidental catch limits would need to be thoroughly analyzed and could potentially be made via a regulatory amendment assuming Longline landings remain consistent with the baseline allocation. If modifications were to result in Longline landings inconsistent with the baseline allocation, an FMP amendment may be required.
The potential advantages of increasing the PLL incidental retention limit include: (1) decreased regulatory discards of BFT caught incidentally while targeting other species; and, (2) increased profitability of PLL trips, which may result in increased SWO fishing effort, contributing to the revitalization of the SWO fishery and the increased utilization of the U.S. SWO quota.
Potential disadvantages associated with increasing the PLL incidental retention limit include: 1) Pursuant to the 2006 ICCAT BFT Recommendation, the United States must count BFT dead discards along with landings against the U.S. BFT quota. As a result, the Longline category BFT quota has been fully utilized. It is possible that increasing the incidental retention limits could result in increased PLL effort, which may necessitate NMFS closing the PLL fishery prior to the end of the fishing year. Such a closure would be disruptive to PLL fishing activities for target species and have negative economic impacts. 2) Second, there is a possibility of increased bycatch of undersized BFT and non-target species, including protected species, due to increased PLL fishing
NMFS requests comments related to any aspect of this topic, and is specifically seeking comments that address the following questions. What factors should NMFS consider in any potential PLL incidental retention limit analyses to prevent potential targeting of BFT? Should NMFS consider adjustments in the PLL incidental retention limits in the Atlantic Ocean only and not include the Gulf of Mexico because it is the spawning ground or should NMFS consider adjustments in all areas where BFT are bycatch in the PLL fishery? Should NMFS consider revisions to the Longline category's incidental nature and/or baseline allocation?
NMFS, with input from the HMS AP, evaluated the HMS permit structure over the past couple of years to determine if changes could be made that would add flexibility for fishermen and fishery managers, address existing HMS management needs, and simplify the permit structure for the public and for NMFS. Current HMS limited access permits include: SWO Directed, Incidental, and Handgear permits; Shark Directed and Incidental permits; and, the Atlantic Tunas Longline category permit. In general, the current HMS permit structure is complicated and sometimes burdensome on the public, especially with regard to obtaining and transferring limited access permits. For example, in order to retain tunas and SWO caught with PLL gear, a vessel must be issued an Atlantic Tunas Longline category permit, a shark limited access permit, and a SWO limited access permit (except Handgear).
Limited access permits were implemented in 1999 to rationalize harvesting capacity with available quotas, and to reduce latent effort in SWO and shark fisheries. A consequence of having limited access and not issuing new permits is that some of these permits are now valued at tens of thousands of dollars. Limitations on vessel size and horsepower upgrades have further affected their value and use.
The primary commercial gear currently used to catch SWO and tunas is PLL. Bottom longline (BLL) gear is primarily used to catch sharks. These gears generally catch larger numbers of target and non-target species than does handgear. The potential to issue new or lapsed/expired limited access permits to use PLL gear to harvest SWO has been restricted by bycatch concerns (including protected resources), gear conflict issues, and the poor condition of several Atlantic shark stocks, several of which are also caught on PLL gear. Given these restrictions on increasing effort of fishermen using longline gears, a potential option is the expansion of the Atlantic Tunas General category permit to allow for the retention of SWO and possibly the retention of sharks.
Currently, the Atlantic Tunas General category permit is an open access permit which authorizes the commercial harvest of Atlantic tunas with handgear. Potentially expanding the permit to allow for the retention of SWO and sharks would add flexibility for fishery managers and fishermen by allowing for the harvest of these species according to size and retention limits that are commensurate with the health of fish stocks. Potentially allowing for the commercial harvest of north Atlantic SWO with handgear by Atlantic Tunas General category permit holders could benefit fishermen, and address HMS management needs by providing additional opportunities to harvest SWO and achieve the domestic north Atlantic SWO quota by using a gear with generally low bycatch. The following sections describe some of the options and issues associated with potentially expanding the species allowed to be retained by Atlantic Tunas General category permit holders to include Atlantic SWO and sharks, thus converting the permit to an Atlantic HMS General commercial handgear permit, and establish size and retention limits for those species under the permit commensurate with the health of fish stocks.