Presidential Documents. Final rule

138,494 words·~630 min read·/register/2010/01/08/2010-312

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

Billing code 5001-06-M 75 5 Friday, January 8, 2010 Rules and Regulations Part II Department of Energy 10 CFR Part 431 Energy Conservation Program: Energy Conservation Standards for Certain Consumer Products (Dishwashers, Dehumidifiers, Microwave Ovens, and Electric and Gas Kitchen Ranges and Ovens) and for Certain Commercial and Industrial Equipment (Commercial Clothes Washers); Final Rule DEPARTMENT OF ENERGY 10 CFR Part 431 [Docket Number EERE-2006-STD-0127] RIN 1904-AB93 Energy Conservation Program:

Energy Conservation Standards for Certain Consumer Products (Dishwashers, Dehumidifiers, Microwave Ovens, and Electric and Gas Kitchen Ranges and Ovens) and for Certain Commercial and Industrial Equipment (Commercial Clothes Washers) AGENCY: Office of Energy Efficiency and Renewable Energy, Department of Energy. ACTION: Final rule. SUMMARY: The U.S. Department of Energy

(DOE)is adopting amended energy conservation standards for commercial clothes washers (CCWs). DOE has determined that amended energy conservation standards for these types of equipment would result in significant conservation of energy, and are technologically feasible and economically justified. DATES: The effective date of this rule is March 9, 2010. The standards established in today's final rule will be applicable starting January 8, 2013. ADDRESSES: For access to the docket to read background documents, the technical support document, transcripts of the public meetings in this proceeding, or comments received, visit the U.S. Department of Energy, Resource Room of the Building Technologies Program, 950 L'Enfant Plaza, SW., 6th Floor, Washington, DC 20024,

(202)586-2945, between 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. Please call Brenda Edwards at the above telephone number for additional information regarding visiting the Resource Room. ( **Note** : DOE's Freedom of Information Reading Room no longer houses rulemaking materials.) You may also obtain copies of certain previous rulemaking documents in this proceeding ( *i.e.,* framework document, advance notice of proposed rulemaking, notice of proposed rulemaking, supplemental notice of proposed rulemaking), draft analyses, public meeting materials, and related test procedure documents from the Office of Energy Efficiency and Renewable Energy's Web site at *http://www1.eere.energy.gov/buildings/appliance_standards/commercial/clothes_washers.html.* FOR FURTHER INFORMATION CONTACT: Stephen Witkowski, U.S. Department of Energy, Energy Efficiency and Renewable Energy, Building Technologies Program, EE-2J, 1000 Independence Avenue, SW., Washington, DC 20585 Telephone:

(202)586-7463. E-mail: *Stephen.Witkowski@ee.doe.gov.* Francine Pinto, Esq. or Betsy Kohl, Esq., U.S. Department of Energy, Office of General Counsel, GC-71/72, 1000 Independence Avenue, SW., Washington, DC 20585. Telephone:

(202)586-7432,

(202)586-7796. E-mail: *Francine.Pinto@hq.doe.gov, Elizabeth.Kohl@hq.doe.gov.* SUPPLEMENTARY INFORMATION: Table of Contents I. Summary of the Final Rule and Its Benefits A. The Standard Levels B. Current Federal Standards for Commercial Clothes Washers C. Benefits to Consumers of Commercial Clothes Washers D. Impact on Manufacturers E. National Benefits F. Conclusion II. Introduction A. Consumer Overview B. Authority C. Background 1. Current Standards 2. History of Standards Rulemaking III. General Discussion A. Test Procedures B. Technological Feasibility 1. General 2. Maximum Technologically Feasible Levels C. Energy Savings D. Economic Justification 1. Specific Criteria a. Economic Impact on Commercial Consumers and Manufacturers b. Life-Cycle Costs c. Energy Savings d. Lessening of Utility or Performance of Equipment e. Impact of Any Lessening of Competition f. Need of the Nation To Conserve Energy g. Other Factors 2. Rebuttable Presumption IV. Methodology and Discussion of Comments on Methodology A. Equipment Classes B. Technology Assessment C. Engineering Analysis 1. Efficiency Levels 2. Manufacturing Costs D. Life-Cycle Cost and Payback Period Analysis 1. Equipment Prices 2. Installation Cost 3. Annual Energy Consumption 4. Energy and Water Prices a. Energy Prices b. Water and Wastewater Prices 5. Repair and Maintenance Costs 6. Equipment Lifetime 7. Discount Rates 8. Effective Date of the Amended Standards 9. Equipment Energy Efficiency in the Base Case 10. Split Incentive Between CCW Consumers and Users 11. Rebound Effect 12. Inputs to Payback Period Analysis 13. Rebuttable-Presumption Payback Period E. National Impact Analysis—National Energy Savings and Net Present Value Analysis 1. General 2. Shipments a. New Construction Shipments b. Replacements and Non-replacements c. Impacts of Standards on Shipments 3. Other Inputs a. Base-Case Forecasted Efficiencies b. Standards-Case Forecasted Efficiencies c. Annual Energy Consumption d. Site-to-Source Conversion e. Energy Used in Water and Wastewater Treatment and Delivery f. Total Installed Costs and Operating Costs g. Discount Rates h. Effects of Standards on Energy Prices F. Consumer Subgroup Analysis G. Manufacturer Impact Analysis H. Employment Impact Analysis I. Utility Impact Analysis J. Environmental Assessment K. Monetizing Carbon Dioxide and Other Emissions Impacts V. Discussion of Other Comments A. Proposed Trial Standard Levels

(TSLs)for Commercial Clothes Washers B. Proposed Standards for Commercial Clothes Washers VI. Analytical Results and Conclusions A. Trial Standard Levels B. Significance of Energy Savings C. Economic Justification 1. Economic Impacts on Commercial Customers a. Life-Cycle Cost and Payback Period b. Commercial Consumer Subgroup Analysis c. Rebuttable-Presumption Payback 2. Economic Impacts on Manufacturers a. Industry Cash-Flow Analysis Results b. Cumulative Regulatory Burden c. Impacts on Employment d. Impacts on Manufacturing Capacity e. Impacts on Subgroups of Manufacturers 3. National Impact Analysis a. Amount and Significance of Energy Savings b. Net Present Value of Customer Costs and Benefits c. Impacts on Employment 4. Impact on Utility or Performance of Equipment 5. Impact of Any Lessening of Competition 6. Need of the Nation To Conserve Energy 7. Other Factors D. Conclusion VII. Procedural Issues and Regulatory Review A. Review Under Executive Order 12866 B. Review Under the Regulatory Flexibility Act C. Review Under the Paperwork Reduction Act D. Review Under the National Environmental Policy Act E. Review Under Executive Order 13132 F. Review Under Executive Order 12988 G. Review Under the Unfunded Mandates Reform Act of 1995 H. Review Under the Treasury and General Government Appropriations Act, 1999 I. Review Under Executive Order 12630 J. Review Under the Treasury and General Government Appropriations Act, 2001 K. Review Under Executive Order 13211 L. Review Under the Information Quality Bulletin for Peer Review M. Congressional Notification VIII. Approval of the Office of the Secretary I. Summary of the Final Rule and Its Benefits A. The Standard Levels The Energy Policy and Conservation Act 1 (EPCA), as amended (42 U.S.C. 6291 *et seq.;* EPCA), directs the Department of Energy

(DOE)to consider amended mandatory energy conservation standards for CCWs. (42 U.S.C. 6313(e)(2)(A)) Any such amended energy conservation standard must be designed to “achieve the maximum improvement in energy efficiency * * * which the Secretary determines is technologically feasible and economically justified.” (42 U.S.C. 6295(o)(2)(A) and 6316(a)) Furthermore, any new or amended standard must “result in significant conservation of energy.” (42 U.S.C. 6295(o)(3)(B) and 6316(a)) The standards in today's final rule, which apply to all CCWs, satisfy these and other statutory criteria discussed in this notice. 1 42 U.S.C. 6291 *et seq.* Table I.1 shows the amended standard levels that DOE is adopting today. These standards will apply to all CCWs manufactured for sale in the United States, or imported to the United States, on or after January 8, 2013. Table I.1—Amended Energy Conservation Standards for Commercial Clothes Washers Equipment class Amended energy conservation standards Top-loading commercial clothes washers 1.60 Modified Energy Factor/8.5 Water Factor. Front-loading commercial clothes washers 2.00 Modified Energy Factor/5.5 Water Factor. B. Current Federal Standards for Commercial Clothes Washers EPCA, as amended by the Energy Policy Act of 2005 (EPACT 2005), prescribes standards for CCWs manufactured on or after January 1, 2007. (42 U.S.C. 6313(e)) These standards require that CCWs have a modified energy factor

(MEF)of at least 1.26 and a water factor

(WF)of not more than 9.5. ( *Id.;* 10 CFR 431.156) C. Benefits to Consumers of Commercial Clothes Washers Table I.2 indicates the impacts on commercial consumers of today's amended standards. The economic impacts of the amended CCW standards on commercial consumers as measured by the average life-cycle cost

(LCC)savings are positive, even though the standards may increase some initial costs. For example, typical top-loading CCWs—the most common type currently being sold—have an average installed price of $760 and average lifetime operating costs (discounted) of $3,286. To meet the amended standards, DOE estimates that the average installed price of such equipment will increase by $214, which will be more than offset by savings of $394 in average lifetime operating costs (discounted). Table I.2—Implications of Amended Standards for Commercial Consumers Equipment class Energy conservation standard Average installed price * *$* Average installed price increase *$* Average life-cycle cost savings *$* Median payback period *years* Top-loading CCWs 1.60 Modified Energy Factor/8.5 Water Factor 974 214 180 4.3 Front-loading CCWs 2.00 Modified Energy Factor/5.5 Water Factor 1,365 23 ** 20 ** 0.4 * For a baseline model. ** DOE estimates that 96 percent of front-loading CCW consumers would purchase a model at the standard level even without amended standards. The values refer to average impacts for the 4 percent of consumers who would be affected by the standard. D. Impact on Manufacturers Using a real corporate discount rate of 7.2 percent, DOE estimates the industry net present value

(INPV)of the CCW industry to be approximately $62 million in 2008$. DOE expects the impact of today's standards on the INPV of manufacturers of CCWs to be a loss of between 7.8 percent and 11.4 percent of the INPV, which is approximately $5 to $7 million. Based on DOE's interviews with the manufacturers of CCWs, DOE expects possible loss of employment for one manufacturer as a result of the standards. E. National Benefits DOE estimates that the energy conservation standards will save a significant amount of energy—an estimated 0.10 quadrillion British thermal units (Btu), or quads, of cumulative energy over 30 years (2013-2043). This amount is equivalent to 2 days of U.S. gasoline use. In addition, DOE estimates the standards for CCWs will save over 143 billion gallons of cumulative water consumption over 30 years (2013-2043). The national net present value

(NPV)of CCW consumer benefit resulting from the standards, considering the impacts of equipment sold in 2013-2043, is $0.4 billion using a 7-percent discount rate and $0.9 billion using a 3-percent discount rate, in 2008$. This is the estimated total value of future operating cost savings minus the estimated increased equipment costs, discounted to 2009. The NPV for consumers (at the 7-percent discount rate) would exceed industry losses, discussed above, due to energy efficiency standards by at least 80 times. By 2043, DOE expects the energy savings from the standards to eliminate the need for approximately 18 MW of electricity generating capacity. The energy savings will result in cumulative greenhouse gas emissions reductions in 2013-2043 of approximately 5.1 million tons

(Mt)of carbon dioxide (CO 2 ), or an amount equal to that produced by approximately 5.1 million new cars in a year. Additionally, the standards will help alleviate air pollution by resulting in approximately 3.0 kilotons

(kt)of cumulative nitrogen oxide (NO X ) emission reductions and 0.0003 tons of cumulative mercury

(Hg)emission reductions. The estimated net present monetary values of these emissions reductions at a 7-percent discount rate (discounted to 2009 and expressed in 2008$) are between $13 and $140 million for CO 2 , between $0.4 and $4.2 million for NO X , and between $0.0 and $0.6 million for Hg. At a 3-percent discount rate, the estimated net present values of these emissions reductions (discounted to 2009 and expressed in 2008$) are between $28 and $303 million for CO 2 , between $0.8 million and $8.4 million for NO X , and between $0.0 and $0.6 million for Hg. The benefits and costs of today's final rule can also be expressed in terms of annualized values. Estimates of annualized values for three economic growth cases are shown in Table I.3. The annualized monetary values are the sum of the annualized national economic value of operating savings benefits (energy, maintenance and repair), plus the monetary values of the benefits of carbon dioxide emission reductions, monetized using a value of $20 per metric ton of carbon dioxide. The $20 value is a central interim value from a recent interagency process, as discussed in section VI.C.6. Although summing the value of operating savings to the values of CO 2 reductions provides a valuable perspective, please note the following. The national operating savings are domestic U.S. consumer monetary savings found in market transactions while the CO 2 value is based on a range of estimates of imputed marginal social cost of carbon, which are meant to reflect the global benefits of CO 2 reductions. Furthermore, the assessments of operating savings and CO 2 savings are performed with different computer models, leading to different time frames for analysis. The present value of national operating savings considers the impacts of equipment sold in 2013-2043. The value of CO 2 , on the other hand is meant to reflect the present value of all future climate-related impacts, which go well beyond the lifetime of the equipment sold in the forecast period. Using a 7-percent discount rate for the annualized cost analysis, the cost of the standards established in today's final rule for CCWs is $23.4 million per year in increased equipment and installation costs, while the annualized benefits are $60.6 million per year in reduced equipment operating costs and $5.1 million in CO 2 reductions, for a net benefit of $42.2 million per year. Using a 3-percent discount rate, the cost of the standards established in today's final rule is $22.7 million per year in increased equipment and installation costs, while the benefits of today's standards are $72.8 million per year in reduced operating costs and $5.9 million in CO 2 reductions, for a net benefit of $56.0 million per year. Table I.3—Annualized Benefits and Costs of Amended Standards for Commercial Clothes Washers (TSL 3) Category Unit Primary estimate ( *AEO* reference case) 7% 3% Low estimate ( *AEO* low-growth case) 7% 3% High estimate ( *AEO* high-growth case) 7% 3% Benefits Monetized Operating Cost Savings *Million 2008$* 60.6 72.8 54.9 65.3 66.6 80.4 Quantified Emissions Reductions CO 2 *(Mt)* 0.14 0.16 0.14 0.16 0.14 0.16 NO X *(kt)* 0.087 0.194 0.087 0.194 0.087 0.194 Hg *(t)* 0.0002 0.0001 0.0002 0.0001 0.0002 0.0001 Monetized Avoided Emissions Reductions * ( *Million 2008$* ) CO 2 5.1 5.9 5.1 5.9 5.1 5.9 NO X 0.2 0.3 0.2 0.3 0.2 0.3 Hg 0.0 0.0 0.0 0.0 0.0 0.0 Costs Monetized Incremental Product and Installation Costs *Million 2008$* 23.4 22.7 21.9 20.9 24.6 23.9 Net Benefits Monetized Value *Million 2008$* 42.5 56.3 38.3 50.6 47.3 62.7 * For CO 2 , benefits reflect value of $20/t, which is in the middle of the values considered by DOE for valuing the potential global benefits resulting from reduced CO 2 emissions. For NO X and Hg, the benefits reflect values of $2,491/t and $17 million/t, respectively. These values are the midpoint of the range considered by DOE. F. Conclusion The benefits (energy savings, LCC savings for CCW consumers, positive national NPV, and emissions reductions) to the Nation of the standards outweigh their costs (loss of manufacturer INPV and LCC increases for some CCW consumers). Today's standards also represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and will result in significant energy savings. At present, CCWs that meet the amended standard levels are commercially available. II. Introduction A. Consumer Overview DOE is amending in today's final rule energy conservation standard levels for CCWs as shown in Table I.1. These standards apply to equipment manufactured or imported on or after January 8, 2013. DOE research suggests that commercial consumers will see benefits from today's standards even though DOE expects the purchase price of the high efficiency CCWs to increase (by 2 to 28 percent) from the average price of this equipment today. However, the energy efficiency gains are expected to result in lower energy and water costs, saving consumers $53 to $103 per year on their energy and water bills, again depending on the equipment class. When these savings are summed over the lifetime of the equipment, consumers are expected to save an average of $20 to $190, depending on the equipment class, utility costs, and other factors. DOE estimates that the payback period

(PBP)for the more efficient, higher-priced equipment will range from 0.2 to 5.6 years, depending on the equipment class. B. Authority Title III of EPCA sets forth a variety of provisions designed to improve energy efficiency. Part A-1 of Title III (42 U.S.C. 6311-6317) establishes an energy conservation program for “Certain Industrial Equipment,” which deals with a variety of commercial and industrial equipment (referred to hereafter as “covered equipment”) including CCWs, the subject of this rulemaking. (42 U.S.C. 6312; 6313(e)) DOE publishes today's final rule pursuant to Part A-1 of Title III, which provides for test procedures, labeling, and energy conservation standards for CCWs and certain other equipment, and authorizes DOE to require information and reports from manufacturers. The test procedures for CCWs appear at 10 CFR part 430, subpart B, appendix J1 (pursuant to 10 CFR 431.154). Section 136(a) and

(e)of the Energy Policy Act of 2005 (EPACT 2005; Pub. L. 109-058) added CCWs as equipment covered under EPCA and established standards for such equipment that is manufactured on or after January 1, 2007. 2 (42 U.S.C. 6311(1) and 6313(e)) These amendments to EPCA also require that DOE issue a final rule by January 1, 2010, to determine whether these standards should be amended. (EPACT 2005, section 136(e); 42 U.S.C. 6313(e)) If amended standards are justified, they would become effective no later than January 1, 2013. ( *Id.* ) 2 Under the statute, a CCW must have an MEF of at least 1.26 and a WF of not more than 9.5. EPCA provides criteria for prescribing amended standards for covered products and equipment. 3 As indicated above, any amended standard for this equipment must be designed to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A) and 6316(a)) Additionally, EPCA provides specific prohibitions on prescribing such standards. DOE may not prescribe an amended or new standard for any equipment for which DOE has not established a test procedure. (42 U.S.C. 6295(o)(3)(A) and 6316(a)). Further, DOE may not prescribe an amended standard if DOE determines by rule that such standard would not result in “significant conservation of energy” or “is not technologically feasible or economically justified.” (42 U.S.C. 6295(o)(3)(B) and 6316(a)) 3 The EPCA provisions discussed in the remainder of this subsection directly apply to covered products, and also apply to certain covered equipment, such as CCWs, by virtue of 42 U.S.C. 6316(a). Note that the term “product” is used generally to refer to consumer appliances, while “equipment” is used generally to refer to commercial units. EPCA also provides that, in deciding whether such a standard is economically justified for equipment such as CCWs, DOE must, after receiving comments on the proposed standard, determine whether the benefits of the standard exceed its burdens by considering, to the greatest extent practicable, the following seven factors:

(1)The economic impact of the standard on manufacturers and consumers of the products or equipment subject to the standard;

(2)The savings in operating costs throughout the estimated average life of the covered products or equipment in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered products that are likely to result from the imposition of the standard;

(3)The total projected amount of energy (or, as applicable, water) savings likely to result directly from the imposition of the standard;

(4)Any lessening of the utility or the performance of the covered products or equipment likely to result from the imposition of the standard;

(5)The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the imposition of the standard;

(6)The need for national energy and water conservation; and

(7)Other factors the Secretary considers relevant. (42 U.S.C. 6295(o)(2)(B)(i) and 6316(a)) In addition, EPCA, as amended (42 U.S.C. 6295(o)(2)(B)(iii) and 6316(a)), establishes a rebuttable presumption that any standard for covered products is economically justified if the Secretary finds that “the additional cost to the consumer of purchasing a product complying with an energy conservation standard level will be less than three times the value of the energy (and as applicable, water) savings during the first year that the consumer will receive as a result of the standard, as calculated under the test procedure * * *” in place for that standard. See section III.D.2. Furthermore, EPCA contains what is commonly known as an “anti-backsliding” provision. (42 U.S.C. 6295(o)(1) and 6316(a)) This provision prohibits the Secretary from prescribing any amended standard that either increases the maximum allowable energy use or decreases the minimum required energy efficiency of a covered product or equipment. EPCA further provides that the Secretary may not prescribe an amended standard if interested persons have established by a preponderance of the evidence that the standard is “likely to result in the unavailability in the United States of any product type (or class)” with performance characteristics, features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States at the time of the Secretary's finding. (42 U.S.C. 6295(o)(4) and 6316(a)) Section 325(q)(1) of EPCA is applicable to promulgating standards for most types or classes of equipment, including CCWs, that have two or more subcategories. (42 U.S.C. 6295(q)(1) and 42 U.S.C. 6316(a)) Under this provision, DOE must specify a different standard level than that which applies generally to such type or class of products or equipment “for any group of covered products which have the same function or intended use, if * * * covered products within such group—(A) consume a different kind of energy from that consumed by other covered products within such type (or class); or

(B)have a capacity or other performance-related feature which other products within such type (or class) do not have and such feature justifies a higher or lower standard” than applies or will apply to the other products. (42 U.S.C. 6295(q)(1)(A) and (B)) In determining whether a performance-related feature justifies such a different standard for a group of equipment, DOE must consider “such factors as the utility to the consumer of such a feature” and other factors DOE deems appropriate. (42 U.S.C. 6295(q)(1)) Any rule prescribing such a standard must include an explanation of the basis on which DOE established such higher or lower level. (See 42 U.S.C. 6295(q)(2)) Federal energy conservation requirements for commercial equipment, including CCWs, generally supersede State laws or regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6297(a)-(c); 42 U.S.C. 6316(a)) DOE can, however, grant waivers of Federal preemption for particular State laws or regulations, in accordance with the procedures and other provisions of EPCA found in 42 U.S.C. 6297(d). Specifically, States that regulate an energy conservation standard for a type of covered product for which there is a Federal energy conservation standard may petition the Secretary for a DOE rule that allows the State regulation to become effective with respect to such covered product. (42 U.S.C. 6297(d)(1)(A); 42 U.S.C. 6316(a)) DOE must prescribe a rule granting the petition if the Secretary finds that the State has established by a preponderance of the evidence that its regulation is needed to meet “unusual and compelling State or local energy * * * interests.” (42 U.S.C. 6297(d)(1)(B); 42 U.S.C. 6316(a)) C. Background 1. Current Standards EPCA, as amended by EPACT 2005, prescribes energy conservation standards for CCWs manufactured on or after January 1, 2007. (42 U.S.C. 6313(e)) These standards require that CCWs have an MEF of at least 1.26 cubic feet of capacity (ft 3 ) per kilowatt-hour

(kWh)and a WF of not more than 9.5 gallons of water

(gal)per ft 3 . ( *Id.;* 10 CFR 431.156) 2. History of Standards Rulemaking As discussed in the supplemental notice of proposed rulemaking (SNOPR), 74 FR 57738 (Nov. 9, 2009) (the November 2009 SNOPR), the EPACT 2005 amendments to EPCA require that DOE issue a final rule by January 1, 2010, to determine whether standards for CCWs should be amended. (EPACT 2005, section 136(e); 42 U.S.C. 6313(e)) If amended standards are justified, they would become effective no later than January 1, 2013. ( *Id.* ) To initiate the current rulemaking to consider energy conservation standards, on March 15, 2006, DOE published on its Web site a document titled, *Rulemaking Framework for Commercial Clothes Washers and Residential Dishwashers, Dehumidifiers, and Cooking Products* (Framework Document). 4 71 FR 15059 (March 27, 2006). The Framework Document described the procedural and analytical approaches that DOE anticipated using to evaluate energy conservation standards for these products, and identified various issues to be resolved in conducting the rulemaking. DOE held a public meeting on April 27, 2006, to present the Framework Document, to describe the analyses it planned to conduct during the rulemaking, to receive comments from interested parties, and to inform and facilitate interested parties' involvement in the rulemaking. DOE received 11 written comments in response to the Framework Document after the public meeting. 4 This document is available on the DOE Web site at: *http://www1.eere.energy.gov/buildings/appliance_standards/commercial/clothes_washers.html.* DOE published the advance notice of proposed rulemaking (ANOPR) for this rulemaking on November 15, 2007 (November 2007 ANOPR) (72 FR 64432), and held a public meeting on December 13, 2007, to present and seek comment on the November 2007 ANOPR analytical methodology and results. The November 2007 ANOPR included background information on the history and conduct of this rulemaking. 72 FR 64432, 64438-39 (Nov. 15, 2007) In the November 2007 ANOPR, DOE described and sought further comment on the analytical framework, models, and tools ( *e.g.,* LCC and NIA spreadsheets) it was using to analyze the impacts of energy conservation standards for these products. In conjunction with the November 2007 ANOPR, DOE also posted on its Web site the complete November 2007 ANOPR technical support document (TSD). The TSD included the results of a number of DOE's preliminary analyses in this rulemaking. In the November 2007 ANOPR and at the public meeting, DOE invited comment in particular on the following issues concerning CCWs:

(1)Product classes;

(2)horizontal-axis designs;

(3)technologies unable to be analyzed and exempted product classes, including potential limitations of existing test procedures;

(4)per-cycle energy consumption;

(5)consumer prices;

(6)repair and maintenance costs;

(7)efficiency distributions in the base case;

(8)shipments forecasts;

(9)base-case and standards-case forecasted efficiencies; and

(10)TSLs. 72 FR 64432, 64512-14 (Nov. 15, 2007). On October 17, 2008, DOE published a NOPR (October 2008 NOPR) in the **Federal Register,** in which it proposed amended energy conservation standards for certain products and equipment, including CCWs. 73 FR 62034. The energy conservation standards proposed in the October 2008 NOPR for CCWs are shown in Table II.1. Table II.1—Commercial Clothes Washer Energy Conservation Standards Proposed in the October 2008 NOPR Equipment Modified energy factor * ft 3 /kWh * Water factor * gal/ft 3 * Top-loading CCWs 1.76 8.3 Front-loading CCWs 2.00 5.5 In the October 2008 NOPR, DOE described and sought further comment on the analytical framework, models, and tools ( *e.g.,* LCC and NIA spreadsheets) it was using to analyze the impacts of energy conservation standards for this equipment. In conjunction with the October 2008 NOPR, DOE also posted on its Web site the complete TSD, which along with the October 2008 NOPR, is available at *http://www1.eere.energy.gov/buildings/appliance_standards/.* The TSD included the results of a number of DOE's analyses. In the October 2008 NOPR and at the public meeting held on November 13, 2008 (referred to as the “November 2008 public meeting”), DOE invited comment in particular on the following issues concerning CCWs:

(1)The efficiency levels;

(2)DOE's determination of the maximum technologically feasible (max-tech) efficiency levels for top-loading and front-loading CCWs;

(3)the magnitude of possible equipment class shifting to front-loading CCWs;

(4)the analysis and data relevant to the price elasticity of demand for calculating the anticipated energy and water savings at different TSLs;

(5)the analysis of consumer knowledge of the Federal ENERGY STAR program and its potential as a resource for increasing knowledge of the availability and benefits of energy efficient appliances in the home appliance consumer market;

(6)discount rates other than 7 percent and 3 percent real to discount future emissions reductions;

(7)data that might enable DOE to test for market failures or other specific problems for CCWs; and

(8)the determination of anticipated environmental impacts of the standards proposed in the October 2008 NOPR, particularly with respect to the methods for valuing the expected CO 2 and NO X emissions savings. 73 FR 62034, 62133 (Oct. 17, 2008). The October 2008 NOPR also included background information, in addition to that set forth above, on the history and conduct of this rulemaking. 73 FR 62034, 62040-62041 (Oct. 17, 2008). DOE presented the methodologies and results for the October 2008 NOPR analyses at the November 2008 public meeting. Comments presented by interested parties during this meeting and submitted in response to the October 2008 NOPR concerning the accuracy of the stated max-tech CCW efficiency level led to a thorough investigation of CCW efficiencies and the November 2009 SNOPR. DOE subsequently tested the max-tech unit at an independent test facility, revised the max-tech level, updated the analysis, and published the November 2008 SNOPR to allow interested parties to comment on the revised efficiency level proposals. 74 FR 57738 (Nov. 9, 2009). In the November 2009 SNOPR, DOE revised the proposed energy conservation standards for CCWs. 74 FR 57738 (Nov. 9, 2009). In conjunction with the November 2009 SNOPR, DOE also published on its Web site the complete TSD for the proposed rule, which incorporated the final analyses that DOE conducted, and contained technical documentation for each step of the analysis. The TSD included the engineering analysis spreadsheets, the LCC spreadsheet, and the national impact analysis spreadsheet. The revised energy conservation standards proposed in the November 2009 SNOPR for CCWs are shown in Table II.2. Table II.2—Commercial Clothes Washer Energy Conservation Standards Proposed in the November 2009 SNOPR Equipment Modified energy factor * ft 3 /kWh * Water factor * gal/ft 3 * Top-loading CCWs 1.60 8.5 Front-loading CCWs 2.00 5.5 In the November 2009 SNOPR, DOE identified issues on which it was particularly interested in receiving comments and views of interested parties. These included the following:

(1)Whether the method of “loading” clothes washers, or any other characteristic commonly associated with traditional “top-loading” or “front-loading” clothes washers, are “features” within the meaning of 42 U.S.C. 6295(o)(4) in EPCA and whether the availability of such feature(s) would likely be affected by eliminating the separate classes for these equipment types previously established by DOE;

(2)the revised efficiency levels, including the revised max-tech level for top-loading CCWs;

(3)technological feasibility of the proposed max-tech CCW, including washing and rinsing performance measures for CCWs and population data for water heating CCWs;

(4)the determination of manufacturer impacts, including the effects of manufacturer tax credits and competitive concerns;

(5)the determination of environmental impacts; and

(6)the newly proposed energy conservation standards. 74 FR 57738, 57800 (Nov. 9, 2009) After the publication of the November 2009 SNOPR, DOE also held a public meeting in Washington, DC, on November 16, 2009 (referred to as the “November 2009 public meeting”), to hear oral comments on and solicit information relevant to the revised proposed rule. The November 2009 SNOPR included additional background information on the history of this rulemaking. 74 FR 57738, 57742-43 (Nov. 9, 2009). Comments presented by interested parties during the November 2009 public meeting and submitted in response to the November 2009 NOPR concerning the sensitivity of the analyses to the estimated market share split of CCW shipments among laundromats, multi-family housing, and on-premises laundry applications led DOE to conduct a sensitivity analysis for today's final rule. See appendix 11C of the TSD. III. General Discussion A. Test Procedures EPCA directs DOE to use the same test procedures for CCWs as those established by DOE for residential clothes washers (RCWs). (42 U.S.C. 6314(a)(8)) 73 FR 62034, 62043-44 (Oct. 17, 2008). While DOE believes commercial laundry practices likely differ from residential practices, 5 DOE concluded in the October 2008 NOPR that the existing clothes washer test procedure (at 10 CFR part 430, subpart B, appendix J1) adequately accounts for the efficiency rating of CCWs, and that DOE's methods for characterizing energy and water use in the October 2008 NOPR analyses adequately accounted for the consumer usage patterns specific to CCWs. In response to the October 2008 NOPR, interested parties agreed with DOE's conclusion that the DOE clothes washer test procedure is adequate for rating CCWs. DOE did not receive any comments objecting to the use of the DOE clothes washer test procedure for CCWs. Therefore, for the November 2009 SNOPR, DOE continued to consider the existing DOE test procedure adequate to measure energy and water consumption of CCWs. 74 FR 57738, 57743 (Nov. 9, 2009). 5 CCWs are typically used more frequently and filled with a larger load than RCWs. The Appliance Standards Awareness Project

(ASAP)commented that DOE is currently reviewing its clothes washer test procedure, and noted that there may be revisions as a result of that rulemaking. ASAP asked whether, under EPACT 2005, those potential changes in the test procedure would apply to the determinations of compliance with this standard that is currently proposed for CCWs. (ASAP, Public Meeting Transcript, No. 67.4 at pp. 13-16 6 ) EPCA states that “[w]ith respect to commercial clothes washers, the test procedures shall be the same as the test procedures established by the Secretary for RCWs under section 6295(g) of this title.” (42 U.S.C. 6314(a)(8)) Therefore, CCWs will be required to be tested to the DOE clothes washer test procedure that is effective at the time the testing is conducted. 6 A notation in the form “ASAP, Public Meeting Transcript, No. 67.4 at pp. 13-16” identifies an oral comment that DOE received during the November 16, 2009, SNOPR public meeting and which was recorded in the public meeting transcript in the docket for this rulemaking (Docket No. EE-2006-STD-0127), maintained in the Resource Room of the Building Technologies Program. This particular notation refers to a comment

(1)made by the Appliance Standards Awareness Project

(ASAP)during the public meeting,

(2)recorded in document number 67.4, which is the public meeting transcript that is filed in the docket of this rulemaking, and

(3)which appears on pages 13-16 of document number 67.4. B. Technological Feasibility 1. General As stated above, any standards that DOE establishes for CCWs must be technologically feasible. (42 U.S.C. 6295(o)(2)(A) and (o)(3)(B); 42 U.S.C. 6316(a)) DOE considers a design option to be technologically feasible if it is in use by the respective industry or if research has progressed to the development of a working prototype. “Technologies incorporated in commercial products or in working prototypes will be considered technologically feasible.” 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(i). Therefore, in each standards rulemaking, DOE conducts a screening analysis, based on information it has gathered regarding existing technology options and prototype designs. In consultation with manufacturers, design engineers, and other interested parties, DOE develops a list of design options for consideration in the rulemaking. Once DOE has determined that a particular design option is technologically feasible, it further evaluates each design option in light of the following three additional criteria:

(a)Practicability to manufacture, install, and service;

(b)adverse impacts on product utility or availability; or

(c)adverse impacts on health or safety. 10 CFR part 430, subpart C, appendix A, section 4(a)(3) and (4). All design options that pass these screening criteria are candidates for further assessment in the engineering and subsequent analyses in the NOPR (or SNOPR) stage. DOE published a list of evaluated CCW technologies in the November 2007 ANOPR. 72 FR 64432, 64458 (Nov. 15, 2007). For the reasons described in the November 2007 ANOPR and in chapter 4 of the TSD, DOE is not considering the following design options, as they do not meet one or more of the screening criteria: Bubble action, electrolytic disassociation of water, ozonated laundering, reduced thermal mass, suds-saving, and ultrasonic washing. In the November 2009 SNOPR, DOE did not screen out any additional technology options that were retained in the October 2008 NOPR analyses. No comments were received objecting to the technology options which were screened out in the October 2008 NOPR. 73 FR 62034, 62052 (Oct. 17, 2008). Therefore, DOE considered the same design options in the November 2009 SNOPR as those evaluated in the October 2008 NOPR. 74 FR 57738, 57743-44 (Nov. 9, 2009). This final rule considers the same design options as those evaluated in the November 2009 SNOPR. All the evaluated technologies have been used (or are being used) in commercially available equipment or working prototypes. DOE also has determined that there is equipment either in the market or in working prototypes at all of the efficiency levels analyzed in this notice. Therefore, DOE has determined that all of the efficiency levels evaluated in this final rule, which are based upon the retained design options, are technologically feasible. For more detail on DOE's method for developing CCW technology options and the process for screening these options, refer to the chapters 3 and 4 of the TSD. 2. Maximum Technologically Feasible Levels When DOE considers an amended standard for a type (or class) of equipment such as front-loading or top-loading CCWs, it must “determine the maximum improvement in energy efficiency or maximum reduction in energy use that is technologically feasible” for such equipment. (42 U.S.C. 6295(p)(2) and 6316(a)) For the October 2008 NOPR, DOE determined the max-tech efficiency levels for front-loading and top-loading CCWs in the engineering analysis, based on published MEF and WF values of commercially available equipment. (See chapter 5 in the NOPR TSD.) For the October 2008 NOPR, DOE proposed the max-tech levels shown in Table III.1. 73 FR 62034, 62036 (Oct. 17, 2008). Table III.1—Commercial Clothes Washer Max-Tech Efficiency Levels Proposed in the October 2008 NOPR Equipment class Max-tech level MEF, *ft* 3 */kW* WF, *gal/ft* 3 Top-Loading CCWs 1.76 8.3 Front-Loading CCWs 2.35 4.4 DOE received comments in response to the October 2008 NOPR questioning the max-tech top-loading CCW efficiency rating presented in the November 2009 SNOPR. DOE examined the max-tech efficiency level for top-loading CCWs, contracting an independent testing laboratory to verify the performance ratings for the max-tech top-loading CCW model. The laboratory results (based on a 3-unit sample) suggested that the max-tech model achieves 1.63 MEF/8.4 WF. Based on this information, DOE revised the max-tech top-loading CCW level in the November 2009 SNOPR downward to 1.60 MEF/8.5 WF, a level proposed in the October 2008 NOPR as a “gap-fill” level and one which DOE concluded in the November 2009 SNOPR is attainable by the max-tech CCW model. For the November 2009 SNOPR, the proposed front-loading max-tech level was the same as in the October 2008 NOPR, whereas the proposed top-loading max-tech level was revised to 1.60 MEF/8.5 WF based on the independent test results. 74 FR 57738, 57744 (Nov. 9, 2009). DOE received comments in response to the November 2009 SNOPR that objected to the max-tech efficiency level for top-loading CCWs based on lack of wash performance and consumer acceptance of the max-tech top-loading CCW model in a commercial laundry setting. DOE agrees that inherent in a determination of technological feasibility is performance related to the equipment's primary function ( *i.e.,* cleaning clothes), but DOE considers as evidence of sufficient performance and consumer acceptance of the highest efficiency top-loading CCWs the presence on the market of two such models at or near the max-tech level proposed in the November 2009 SNOPR. Therefore, for today's final rule, the max-tech levels for both classes are the max-tech levels identified in the November 2009 SNOPR. These levels are shown in Table III.2 below. For more details on this selection of max-tech levels, see section IV.C.1.a of today's final rule. Table III.2—Commercial Clothes Washer Max-Tech Efficiency Levels Equipment class Max-tech level MEF, * ft 3 /kW * WF, * gal/ft 3 * Top-Loading CCWs 1.60 8.5 Front-Loading CCWs 2.35 4.4 C. Energy Savings DOE forecasted energy savings in its national energy savings

(NES)analysis through the use of an NES spreadsheet tool, as discussed in the November 2009 SNOPR. 74 FR 57738, 57744 (Nov. 9, 2009). One criterion that governs DOE's adoption of standards for CCWs is the standard must result in “significant” energy savings. (42 U.S.C. 6295(o)(3)(B) and 42 U.S.C. 6316(a)) While EPCA does not define the term “significant,” the U.S. Court of Appeals for the District of Columbia, in *Natural Resources Defense Council* v. *Herrington,* 768 F.2d 1355, 1373 (D.C. Cir. 1985), indicated that Congress intended “significant” energy savings in this context to be savings that were not “genuinely trivial.” DOE's estimates of the energy savings for the energy conservation standards adopted in today's final rule are nontrivial. Therefore, DOE considers them “significant” within the meaning of section 325 of EPCA. D. Economic Justification 1. Specific Criteria As noted earlier, EPCA provides seven factors to be evaluated in determining whether an energy conservation standard is economically justified. (42 U.S.C. 6295(o)(2)(B) and 42 U.S.C. 6316(a)) The following sections discuss how DOE has addressed each of those seven factors in this rulemaking. a. Economic Impact on Commercial Consumers and Manufacturers DOE considered the economic impact of the amended CCW standards on commercial consumers and manufacturers. For consumers, DOE measured the economic impact as the change in installed cost and life-cycle operating costs, *i.e.,* the LCC. (See sections IV.D and IV.E and chapter 8 of the TSD.) DOE investigated the impacts on manufacturers through the manufacturer impact analysis (MIA). (See sections IV.G and VI.C.2, and chapter 13 of the TSD.) The economic impact on commercial consumers and manufacturers is discussed in detail in the November 2009 SNOPR. 74 FR 57738, 57751-55, 57761-65, 57769-77 (Nov. 9, 2009). b. Life-Cycle Costs DOE considered life-cycle costs of CCWs, as discussed in the November 2009 SNOPR. 74 FR 57738, 57751-55 (Nov. 9, 2009). DOE calculated the sum of the purchase price and the operating expense—discounted over the lifetime of the equipment—to estimate the range in LCC benefits that commercial consumers would expect to achieve due to the standards. c. Energy Savings Although significant conservation of energy is a separate statutory requirement for imposing an energy conservation standard, EPCA also requires DOE, in determining the economic justification of a proposed standard, to consider the total projected energy savings that are expected to result directly from the standard (42 U.S.C. 6295(o)(2)(B)(i)(III) and 42 U.S.C. 6316(a)). As in the November 2009 SNOPR (74 FR 57738, 57755-61 (Nov. 9, 2009)), for today's final rule, DOE used the NIA spreadsheet results in its consideration of total projected savings that are directly attributable to the standard levels DOE considered. d. Lessening of Utility or Performance of Equipment In selecting today's standard levels, DOE sought to avoid new standards for CCWs that would lessen the utility or performance of that equipment (42 U.S.C. 6295(o)(2)(B)(i)(IV) and 42 U.S.C. 6316(a)). As with the November 2009 SNOPR (74 FR 57738, 57745 (Nov. 9, 2009)), today's standards do not involve changes in equipment design or unusual installation requirements that would reduce the utility or performance of CCWs. e. Impact of Any Lessening of Competition DOE considers any lessening of competition likely to result from standards. Accordingly, as discussed in the November 2009 SNOPR (74 FR 57738, 57745, 57762-63 (Nov. 9, 2009)), DOE requested that the Attorney General transmit to the Secretary a written determination of the impact, if any, of lessening of competition likely to result from the proposed standards, together with an analysis of the nature and extent of such impact (42 U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii) and 42 U.S.C. 6316(a)). To assist the Attorney General in making such a determination, DOE provided the U.S. Department of Justice

(DOJ)with copies of the November 2009 proposed rule and the TSD for review. The Attorney General's response is discussed in section VI.C.5 below, and is reprinted at the end of this rule. Impacts on manufacturers are also discussed in section IV.G below. f. Need of the Nation to Conserve Energy In considering standards for CCWs, the Secretary must consider the need of the Nation to conserve energy (42 U.S.C. 6295(o)(2)(B)(i)(VI) and 42 U.S.C. 6316(a)). The Secretary recognizes that energy conservation benefits the Nation in several important ways. The non-monetary benefits of the standards are likely to be reflected in improvements to the security and reliability of the Nation's energy system. Today's standards will also result in environmental benefits. As discussed in the November 2009 SNOPR, DOE has considered these factors in adopting today's standards. 74 FR 57738, 57765-67 (Nov. 9, 2009). g. Other Factors In determining whether a standard is economically justified, EPCA directs the Secretary to consider any other factors deemed relevant (42 U.S.C. 6295(o)(2)(B)(i)(VII) and 42 U.S.C. 6316(a)). In adopting today's amended standards, the Secretary found no relevant factors other than those identified elsewhere in today's final rule. 2. Rebuttable Presumption Section 325(o)(2)(B)(iii) of EPCA states that there is a rebuttable presumption that an energy conservation standard is economically justified if the additional cost to the consumer that meets the standard level is less than three times the value of the first-year energy savings resulting from the standard (and water savings in the case of a water efficiency standard), as calculated under the applicable DOE test procedure (42 U.S.C. 6295(o)(2)(B)(iii) and 42 U.S.C. 6316(a)). DOE's LCC and PBP analyses generate values that calculate the PBP for consumers of equipment meeting potential energy conservation standards, which includes, but is not limited to, the 3-year PBP contemplated under the rebuttable presumption test discussed above. (See chapter 8 of the TSD.) However, DOE routinely conducts a full economic analysis that considers the full range of impacts, including those to the consumer, manufacturer, Nation, and environment, as required under 42 U.S.C. 6295(o)(2)(B)(i) and 42 U.S.C. 6316(a). The results of this analysis serve as the basis for DOE to definitively evaluate the economic justification for a potential standard level (thereby supporting or rebutting the results of any preliminary determination of economic justification). IV. Methodology and Discussion of Comments on Methodology DOE used several previously developed analytical tools in setting today's standard. Each was adapted for this rule. One of these analytical tools is a spreadsheet that calculates LCC and PBP. Another calculates national energy savings and national NPV. A third tool is the Government Regulatory Impact Model (GRIM), the results of which are the basis for the MIA, among other methods. In addition, DOE developed an approach using the National Energy Modeling System

(NEMS)to estimate impacts of energy efficiency standards for CCWs on electric utilities and the environment. The TSD appendices discuss each of these analytical tools in detail. As a basis for this final rule, DOE has continued to use the spreadsheets and approaches explained in the November 2009 SNOPR. DOE used the same general methodology but has revised some of the assumptions and inputs for this final rule in response to comments from interested parties. The following paragraphs discuss these revisions. A. Equipment Classes In the October 2008 NOPR, DOE proposed separate equipment classes and accompanying standards for top-loading and front-loading CCWs with separate standards for each class. 73 FR 62034, 62036 (Oct. 17, 2008). DOE determined in the October 2008 NOPR that two equipment classes were warranted because the method of “loading” had been previously determined, under DOE rulemakings for residential clothes washers, to be a “feature,” as defined by EPCA, and because an amended standard for a single equipment class might set the MEF for all CCWs at a level significantly higher than what the max-tech for top-loading machines can attain today, and effectively eliminate top-loading CCWs from the market. 73 FR 62034, 62049-50 (Oct. 17, 2008). This determination remained unchanged in the November 2009 SNOPR, 74 FR 57738, 57746-47, although DOE sought comment as to

(1)whether the method of “loading” clothes washers, or any other characteristic commonly associated with traditional “top-loading” or “front-loading” clothes washers, such as presence or absence of agitators, ability to interrupt cycles, and possibly others, are “features” within the meaning of 42 U.S.C. 6295(o)(4) in EPCA; and

(2)whether the availability of such feature(s) would likely be affected by eliminating the separate classes for these equipment types previously established by DOE. DOE received comments in response to the November 2009 SNOPR both in support of and opposed to establishing two equipment classes for CCWs. These comments are described in more detail in the following paragraphs. The Association of Home Appliance Manufacturers (AHAM), GE Consumer & Industrial (GE), 7 Whirlpool Corporation (Whirlpool), and Alliance Laundry Systems (Alliance) stated that they support the definition of separate equipment classes for top-loading and front-loading CCWs. (AHAM, Public Meeting Transcript, No. 67.4 at p. 33; AHAM, No. 67.12 at p. 2; 8 ; GE, Public Meeting Transcript, No. 67.4 at p. 44; GE, No. 67.9 at p. 1) Whirlpool, Public Meeting Transcript, No. 67.4 at p. 45; Whirlpool, No. 67.11 at p. 1; Alliance, Public Meeting Transcript, No. 67.4 at p. 46. AHAM stated that EPACT 2005 allows DOE to establish different classes, directing DOE to create “classes of products, depending on their energy use or performance characteristics.” AHAM noted that there is a bimodal distribution of efficiencies between top-loading and front-loading CCWs. According to AHAM, the standards proposed for the front-load equipment class in terms of MEF and WF are beyond the capability of a traditional, or even a non-traditional, top-load CCW. (AHAM, Public Meeting Transcript, No. 67.4 at pp. 39-40; AHAM, No. 67.12 at pp. 2-3) GE, Whirlpool, and Alliance agree that DOE has the ability to define two CCW equipment classes. (GE, Public Meeting Transcript, No. 67.4 at p. 44; Whirlpool, Public Meeting Transcript, No. 67.4 at p. 45; Alliance, Public Meeting Transcript, No. 67.4 at p. 46). AHAM further stated that if DOE moves forward with a single equipment class, top-loading CCWs would not be able to meet a standard that would be fairly easy for front-loaders to achieve. With two equipment classes, energy and water savings could be achieved by both top-loaders and front-loaders, albeit at a different level. According to AHAM, this reduces the possibility that consumers would repair older, less efficient top-loading CCWs, because new high efficiency top-loaders would be available. (AHAM, Public Meeting Transcript, No. 67.4 at pp. 40-41; AHAM, No. 67.12 at p. 2.) 7 In its December 9, 2009, letter, GE states that it “adopt[s] by reference the comments on the SNOPR that [it] understand[s] will be submitted by the Association of Home Appliance Manufacturers

(AHAM)* * * ” Therefore, comments submitted by AHAM, designated by comment number 67.12 in the docket for this rulemaking, should be interpreted as representing GE's and well as AHAM's views. 8 A notation in the form “AHAM, No. 67.12 at p. 2” identifies a written comment

(1)made by the Association of Home Appliance Manufacturers (AHAM),

(2)recorded in document number 67.12 that is filed in the docket of this rulemaking (Docket No. EE-2006-STD-0127), maintained in the Resource Room of the Building Technologies Program, and

(3)which appears on page 2 of document number 67.12. Alliance commented that “ `top-loading' is a `feature' within the meaning of 42 U.S.C. 6295, because it provides consumers the opportunity to purchase lower cost CCWs.” Alliance stated that purchase cost is a primary reason why top-loading clothes washers hold an approximate 65-percent market share, since consumers can choose the lower-cost design option of a top-loading door for a vertical-axis machine versus the higher-cost front-loading door design for a horizontal-axis machine. Alliance noted that there is one unique horizontal-axis design that incorporates a loading door on top that essentially opens a door on the side of the horizontally rotatable spin tub, but described this design as “unpopular.” Alliance commented that, although the cost difference between vertical-axis and horizontal-axis models has decreased, a comparably featured standard capacity top-loader remains far less costly than a standard capacity front-loader due to the inherent differences in components. Alliance listed variable speed motors, sophisticated motor electronic controls, heavy mass weights, and door assembly costs as the key components contributing to the cost of front-loading designs. More specifically, Alliance stated that a front-loader door must incorporate high-temperature impact-resistant glass, a door/tub boot seal, a very sophisticated lock system, and a heavy-duty hinge system to withstand the abuse in a commercial environment. In contrast, Alliance described a top-loader door as a simple metal stamping with a low-cost hinge and a fairly simple micro-switch to remove power from the basket drive mechanism during spin. Additionally, Alliance stated that front-loaders require a “pedestal” to raise the loading door in response to consumer objections to stooping so far down. Alliance estimated the retail price of such a pedestal as $250, which along with an estimated $250 retail price difference between a baseline efficiency top-loader and a comparably featured front-loader, would result in a top-loader costing consumers at least $500 less than a front-loader. Therefore, Alliance concluded that top-loading is “undeniably” a feature for consumers because of its low cost. (Alliance, Public Meeting Transcript, No. 67.4 at pp. 46-48; Alliance, No. 66.4 Letter at pp. 1-2, 9 Alliance, No. 67.8 at p. 2.) Whirlpool described a top-loading horizontal-axis RCW as a rare configuration that is not produced or sold domestically by any major manufacturers of laundry equipment, and one that does not effectively meet the needs of either top-loading or front-loading RCW consumers. According to Whirlpool, the openings of such units are small and prone to snagging of clothes. Further, Whirlpool stated that this configuration is not available in CCWs. (Whirlpool, No. 67.11 at p. 4.) 9 A notation in the form “Alliance, No. 66.4 Letter at pp. 1-2” identifies pages 1-2 of a written comment submitted by Alliance entitled “Is Top-Loading a Feature Within the Meaning of EPCA?” This letter was entered as comment number 66.4 in the docket for this rulemaking, along with a written comment submitted by Alliance entitled “Response to DOE Commercial Clothes Washer SNOPR.” Alliance also stated that top-loading is a “feature” because of its convenience to the user. A user is not required to stoop or bend to load a top-loader, and according to Alliance most consumers prefer this convenience, though no supporting data was provided. Alliance stated that another convenience is the ability to add a garment to a clothes load in a washer which has already initiated a wash cycle. For top-loaders, such action only requires lifting the lid to drop the item in. Alliance commented that most front-loaders require time to unlock the door and possibly drain the wash water, then require the user to stoop or bend to add the garment to the washer. (Alliance, Public Meeting Transcript, No. 67.4 at pp. 48-49; Alliance, No. 66.4 Letter at p. 2; Alliance, No. 67.8 at p. 2) Finally, Alliance commented that convenient cycle times, as defined by typical top-loading washers, are important to users. According to Alliance, front-loading washers have longer cycle times because there is less mechanical action in tumbling in a front-loading design than the vigorous mechanical action imparted by an agitator in a top-loading design. Alliance cited the February 2009 edition of *Consumer Reports* magazine as stating that “front-loader cycle times are getting longer; many take more than 90 minutes per load,” and that the article shows that front-loader cycle times are 70-115 minutes compared to top-loader cycle times of 30-85 minutes. Alliance noted that all front-loaders in the *Consumer Reports* article with cycle times less than 85 minutes scored poorly in Consumer Union's “wash rating” compared to front-loaders with cycle times of 85 minutes or longer, while top-loaders with cycle times of 55 minutes achieved wash ratings of “good” to “very good.” Alliance concludes that top-loader door location is associated with providing consumers with their expected good washing performance at a convenient washing cycle time of around 55 minutes. (Alliance, Public Meeting Transcript, No. 67.4 at p. 49; Alliance, No. 66.4 Letter at p. 2; Alliance, No. 67.8 at p. 3) GE agreed that cycle time and cost to the consumer are very important differentiators between top-loading and front-loading CCWs which, along with consumer preference, counsel in favor of maintaining the two separate equipment classes. (GE, Public Meeting Transcript, No. 67.4 at pp. 44-45) AHAM provided a similar consumer utility rationale in support of two equipment classes, specifying level of vibration, ergonomic factors (bending), history, and experience of use, cycle interruption, and preference as consumer utilities and functions. (AHAM, No. 67.12 at p. 3) Whirlpool agreed that vibration, ergonomics, cycle time, and familiarity are factors which consumers use in selecting top-loading CCWs, and added configuration, noise, value proposition, and sour smell. (Whirlpool, No. 67.11 at p. 1) Whirlpool also commented that it does not believe high efficiency top-loaders are viable in the commercial market because clothes rollover necessary for effective washing and rinsing is not possible in an overloaded machine. Whirlpool states that overloading is a common practice by CCW users because they are paying by the load. (Whirlpool, No. 67.11 at p. 4) Alliance also commented that, for the September 21, 2009, RCW Framework public meeting, Whirlpool had stated that one-fifth of consumers who bought a front-loading washer have gone back to a top-loading washer. (Alliance, No. 66.4 Letter at p. 2) Whirlpool commented that, in addition to the impact on the user of a standard applicable to a single equipment class, there is also an impact on the route operators 10 and multi-housing complexes, most of which have specialized in either top-loading or front-loading CCWs. According to Whirlpool, a major reinvestment in terms of technical training and parts inventories would be required for those companies that have invested in top-loading CCWs if a standard resulted in the phaseout of such machines. Whirlpool also stated that CCWs are often refurbished and moved down-market, possibly multiple times during a particular unit's lifetime, making CCWs available to many socioeconomic classes. (Whirlpool, Public Meeting Transcript, No. 67.4 at p. 45; Whirlpool, No. 67.11 at p. 1; see also AHAM, No. 67.12 at p. 3) AHAM stated that route operators have accumulated expertise on either the top-loading or front-loading platform. (AHAM, No. 67.12 at p. 3) 10 Route operators supply laundry equipment and maintain facilities in exchange for a percentage of the laundry revenue. Whirlpool also commented that separate equipment classes would be consistent with energy conservation standards for refrigeration, which have separate classes for side-by-side, top freezer, and bottom freezer refrigerators, and room air conditioners, since the product classes reflect home configuration, consumer choice, and consumer utility. (Whirlpool, Public Meeting Transcript, No. 67.4 at p. 46; Whirlpool, No. 67.11 at pp. 1-2) Earthjustice

(EJ)stated that the separation in EPCA of refrigerator by method of access was codified by Congress as two distinct standards. According to EJ, because Congress enacted a single standard for all CCWs, what it chose to do for refrigerators is not entirely applicable to the CCW rulemaking. (EJ, Public Meeting Transcript, No. 67.4 at pp. 49-50) EJ stated that Congress has provided several examples of the product attributes that it anticipated as constituting “features” under EPCA: “automatic defrost, through the door ice, size of room air conditioners, and noise levels.” H. Rep. 100-11, at 23 (1987). EJ commented that this demonstrates that Congress indicated that the fact of access is a feature (for example, through the door ice), but did not suggest that the method of access is also a feature (for example, side-by-side versus stacked configuration refrigerators) within the meaning of 42 U.S.C. 6295(o)(4). (EJ, No. 67.5 at p. 5) EJ commented that subparagraph

(B)of 42 U.S.C. 6295(q)(1) is permissive, and provides that DOE “shall” create separate classes for products based on the presence of “a capacity or other performance-related feature” only if “such feature justifies a [different] standard.” According to EJ, EPCA then sets out very expansive criteria for DOE to apply in determining whether a given feature justifies a unique standard. EJ stated that, although DOE must consider the utility of the feature, DOE is free to supplement this consideration with any other factors it deems appropriate. (EJ, No. 67.5 at p. 3) EJ stated that 42 U.S.C. 6295(o)(4) provides that DOE may separate covered equipment into distinct classes when necessary to prohibit the adoption of standards that eliminate certain product attributes. EJ further stated that DOE's authority to adopt standards that group all varieties of the given covered equipment into a single class is only barred when such a standard is likely to result in the unavailability of features that are substantially the same as those currently available; *i.e.,* EPCA only mandates the creation of multiple equipment classes when the failure to do so would eliminate certain truly unique equipment attributes from the market. According to EJ, this statutory scheme forecloses an interpretation that EPCA mandates the designation of distinct equipment classes for top-loading and front-loading CCWs. (EJ, No. 67.5 at pp. 3-4) EJ provided four separate reasons why it believes 42 U.S.C. 6295(o)(4) prohibits DOE from adopting standards that would treat all CCWs as a single equipment class:

(1)The method of loading a CCW is not a “feature” within the meaning of 42 U.S.C. 6295(o)(4) 11 ;

(2)the ability to load a CCW from the front is substantially the same as the ability to load from the top;

(3)maintaining a single CCW category is not likely to lead to the unavailability of top-loaders; and

(4)top-loading CCWs possess no other attributes requiring protection under 42 U.S.C. 6295(o)(4). (EJ, No. 67.5 at pp. 4-8) 11 EJ stated that the method of loading a CCW is not a feature because:

(1)DOE research on the public's valuation of clothes washer characteristics, presented in a December 2000 Technical Support Document, shows that door placement was not among the top ten most important attributes, and the value of this attribute is likely even lower now given the increased prevalence of front-loaders;

(2)the FTC eliminated the distinction between top-loading and front-loading machines in its labeling requirements (65 FR 16134 (March 27, 2000)); and

(3)the legislative history supports the conclusion that door placement is not a feature because examples cited suggest that while access itself may be a feature, the method of access is not. (EJ No. 67.5 at 4) EJ commented that if, for the sake of argument, the method provided to access a CCW is a “feature” within the meaning of 42 U.S.C. 6295(o)(4), it did not follow that EPCA would require separate equipment classes. EJ stated that, in enacting the EPCA language, Congress was “careful to note” that the “prohibition against grouping all varieties of a covered product into a single product class was a narrow one.” (EJ, No. 67.5 at p. 6) A valid standard may entail some minor loss of characteristics, features, sizes, etc.; for this reason, the Act requires that “substantially the same,” though not necessarily identical, characteristics or features should continue to be available. [42 U.S.C. 6295(o)(4)] also does not apply to trivial effects in which a standard might result. H. Rep. 100-11, at 23 (1987). According to EJ, the inclusion of this “substantially the same” language shows that Congress did not intend the resulting unavailability of any and every feature to be a barrier to the imposition of strong efficiency standards, but rather a standard would be barred only if it would have a substantial impact on product utility. EJ stated that the ability to access the CCW from the top is “substantially the same” as the ability to access the unit from the front because either delivers the same basic functionality of accessing the unit for loading and unloading. Thus EJ states that DOE is not barred from maintaining a single set of efficiency standards for all CCWs, even assuming that those standards would have the consequence of eliminating all top-loading CCWs from the market. (EJ, No. 67.5 at p. 6) EJ also did not agree with AHAM's statement that a distinction in energy use between two types of CCWs would justify a separate equipment class. According to EJ, that would be at odds with the intent of EPCA. EJ stated that whenever two examples of equipment use different amounts of energy, the intent is for a standard to eliminate the one that uses too much energy. (EJ, Public Meeting Transcript, No. 67.4 at pp. 41-42) EJ also commented that it is sensible to adopt a strong unitary standard that applies to both top-loading and front-loading CCWs. EJ stated that it had already made the case that the method of loading is not a feature under 42 U.S.C. 6295(o)(4), but even if DOE did determine that the method of loading is a feature, a strong standard would not eliminate top-loading CCWs from the market. (EJ, Public Meeting Transcript, No. 67.4 at pp. 42-43) EJ also commented on the recent Ninth Circuit decision reversing DOE's denial of the California Energy Commission's

(CEC)petition for exemption from existing energy efficiency standards for RCWs and remanding the petition for further review. 12 EJ stated that the court, while not directly addressing the “features” issue, indicated that DOE can't just look at the market today, but must assess what the market will be when the standard takes effect. EJ stated that DOE would have to find by preponderance of the evidence that a strong standard would eliminate top-loaders from the market in 2013. EJ noted that it did not believe that top-loaders would be eliminated at that time, based on the existence of very efficient top-loading RCWs currently in the market. (EJ, Public Meeting Transcript, No. 67.4 at p. 43; EJ, No. 67.5 at pp. 6-7) 12 California Energy Commission versus DOE, Case No. 07-71576 (October 28, 2009). EJ further commented that no other attributes of CCWs which DOE identified in the November 2009 SNOPR as possibly providing consumer utility, such as the presence or absence of agitators and the ability to interrupt cycles, require protection under 42 U.S.C. 6295(o)(4). EJ stated that DOE has neither explained why the presence or absence of agitators would provide any consumer utility, nor considered that high efficiency CCWs may still be equipped with an agitator. EJ also stated that horizontal-axis CCWs available today are often able to be interrupted mid-cycle. In addition, EJ commented that, although Alliance cited an article which discussed cycle times for top-loaders and front-loaders, Alliance did not contend that the variation in cycle time is an issue for CCWs. EJ stated that the range of cycle times for top-loaders and front-loaders broadly overlap, and because front-loaders typically have a lower ending remaining moisture content

(RMC)than top-loaders, the total washing and drying times required for top-loading and front-loading CCWs are likely to be equivalent. (EJ, No. 67.5 at p. 8) The Pacific Gas and Electric Company, Southern California Gas Company, and San Diego Gas Company (the California Utilities) also supported a single equipment class, arguing for reasons similar to those articulated by EJ that the method of loading and other characteristics commonly associated with the method of loading are not features, and that a single class would not likely result in the unavailability of top-loading CCWs. (California Utilities, No. 67.10 at pp. 2-3) Further, the California Utilities stated that, although CCWs and RCWs are similar in technologies, design, and operating characteristics, a “feature” of RCWs is not necessarily a “feature” of CCWs. (California Utilities, No. 67.10 at p. 3) The California Utilities also asserted that the LCC savings of a single equipment class with standards at various front-loading TSLs could increase as much at $304 as compared to the LCC savings estimated for the standards proposed in the November 2009 SNOPR. According to the California Utilities and ASAP, American Council for an Energy-Efficiency Economy, American Rivers, National Consumer Law Center, Natural Resources Defense Council, Northeast Energy Efficiency Partnerships, and Seattle Public Utilities (the Joint Comment), cost-effectiveness of standards based on a single equipment class best serves long-term public interest. (California Utilities, No. 67.10 at p. 4; Joint Comment, No. 67.6 at p. 3) The Joint Comment commented that DOE is concerned that at the highest TSL, significant numbers of potential consumers of front-loading CCWs would choose to purchase a less efficient top-loading CCW instead. (Joint Comment, No. 67.6 at p. 2) According to ASAP and the Joint Comment, this underscores the interchangeability between top-loading and front-loading CCWs in a commercial setting and that this interchangeability could be so broad and substantial that it would facilitate potential recapture of market share by less efficient but less expensive top-loaders. ASAP stated that the real distinction between top-loaders and front-loaders is price point rather than any specific consumer utility. Therefore, ASAP and the Joint Comment recommended a single equipment class for CCWs. ASAP also stated that route operators are operating in a one equipment class environment today, and managing the issues that Whirlpool identified. (ASAP, Public Meeting Transcript, No. 67.4 at pp. 46, 99-102; Joint Comment, No. 67.6 at pp. 2-3) ASAP and the Joint Comment stated that the standard proposed for front-loaders is already met by almost 97 percent of the front-loaders on the market, and since DOE has seldom, if ever, proposed a standard that has such a low impact on the marketplace, ASAP suggests there are some difficulties in going forward with two equipment classes. (ASAP, Public Meeting Transcript, No. 67.4 at pp. 53-54; Joint Comment, No. 67.6 at p. 2) The California Utilities estimated that a single equipment class with standards set at 2.35 MEF/4.4 WF would achieve 50 percent more energy savings and over 200 percent more water savings over the next 30 years than the standards proposed in the November 2009 SNOPR, and that additional energy and water savings would be captured in future CCW rulemakings. (California Utilities, No. 67.10 at pp. 3-4) Regarding impacts to competition as these impacts relate to the equipment class issue, EJ stated that it would not agree with DOE if the Department determines that a single standard cannot be adopted because of impacts to the manufacturers and impacts on competition. EJ and the Joint Comment believe those impacts are overstated. (EJ, Public Meeting Transcript, No. 67.4 at pp. 30-31; Joint Comment, No. 67.6 at pp. 4-5; see also California Utilities, No. 67.10 at pp. 4-5) EJ asserted that it is not only the lessening in competition, but rather the effects of such lessening, that DOE must consider. EJ stated that the DOJ, in its letter to DOE on this rulemaking, failed to consider low barriers to entry into the CCW market in its analysis of the impacts to competition, and that consequently, it would be irrational for DOE to conclude that a single standard would result in any significant impact on competition in the CCW market. (EJ, No. 67.5 at p. 9) EJ, ASAP, and the Joint Comment also asserted that DOE must consider adopting a tiered standard, or granting Alliance a temporary waiver, as ways to minimize any impacts on competition that may result from imposition of a single standard. (EJ, No. 67.5 at 9-10; ASAP, Public Meeting Transcript, No. 67.4 at pp. 166-167; Joint Comment, No. 67.6 at p. 6; see also California Utilities, No. 67.10 at pp. 4-5) In response to the above comments, DOE notes that EPCA provides the criteria under which DOE may define classes for covered equipment: A rule prescribing an energy conservation standard for a type (or class) of covered products shall specify a level of energy use or efficiency higher or lower than that which applies (or would apply) for such type (or class) for any group of covered products which have the same function or intended use, if the Secretary determines that covered products within such group— • Consume a different kind of energy from that consumed by other covered products within such type (or class); or • Have a capacity or other performance-related feature which other products within such type (or class) do not have and such feature justifies a higher or lower standard from that which applies (or will apply) to other products within such type (or class). In making a determination under this paragraph concerning whether a performance-related feature justifies the establishment of a higher or lower standard, the Secretary shall consider such factors as the utility to the consumer of such a feature, and such other factors as the Secretary deems appropriate. 42 U.S.C. 6295(q); see also 6316(a). As stated above, DOE concluded preliminarily in the October 2008 NOPR and the November 2009 SNOPR that separate equipment classes for top-loading and front-loading CCWs were warranted because the method of loading had been previously determined to be a “feature” under rulemakings for RCWs and a single standard would eliminate top-loading CCWs from the market. DOE analysis for this final rule, including evaluation of comments submitted by interested parties, has identified at least one consumer utility related to the method of loading clothes, specifically for CCWs, which represents a “feature” for purposes of 42 U.S.C. 6295(o)(4). Consequently, DOE has retained two equipment classes for CCWs for this standard. Specifically, DOE believes that the longer cycle times of front-loading CCWs versus cycle times for top-loaders are likely to significantly impact consumer utility. In commercial and multi-housing settings, it is beneficial to consumers with multiple, sequential laundry loads to approximately match CCW cycle times to those of the dryers to maximize throughput and minimize wait times, and wash times of 70-115 minutes would be longer than most drying cycles. Because the longer wash cycle times for front-loaders arise from the reduced mechanical action of agitation as compared to top-loaders, DOE believes such longer cycles may be required to achieve the necessary cleaning, and thereby constitute a performance-related utility of front-loading CCWs versus top-loading CCWs under the meaning of 42 U.S.C. 6295(q). DOE notes that access without stooping is not a consumer utility that would warrant the definition of separate equipment classes. DOE agrees that top-loaders eliminate the need for stooping, while front-loaders, in the absence of a pedestal, require such action. DOE further notes, however, that commercial clothes dryers are front-loading as well, so it believes that those consumers that dry their clothing loads are already accustomed to stooping. In addition, DOE observes that many laundromat and multi-housing applications have installed the CCWs on a platform to effect the same elevation as a manufacturer-supplied pedestal would, and that the cost of installing such a platform in the event that the owner/operator decides that preventing stooping is important is likely to be minimal. DOE is aware that a top-loading, horizontal-axis CCW had been available previously. Due to the inherently higher efficiency of a horizontal-axis platform, it is likely that such a design could achieve a higher MEF and lower WF than the max-tech top-loading CCW efficiency level assumed for this analysis. DOE research determined, however, that this particular washer platform was withdrawn from the market based on a lack of suitability for commercial settings. However, even if a top-loading, horizontal-axis CCW was again marketed, it is likely that such washers would have cycle times similar to those of other horizontal-axis machines and, therefore, would not likely provide substantially the same consumer utility as top-loading, vertical-axis machines. DOE also does not consider first cost a “feature” that provides consumer utility for purposes of EPCA. DOE acknowledges that price is an important consideration to consumers, but DOE accounts for such consumer impacts in the LCC and PBP analyses conducted in support of this rulemaking. Given the above discussion on cycle times, DOE concludes, consistent with its preliminary conclusion in the October 2007 NOPR and November 2008 SNOPR, that top-loading involves consumer utilities that, in the context of CCWs, are a feature for purposes of 42 U.S.C. 6295(o)(4). For the reasons stated in section VI.D of the preamble, DOE believes that the standards established for top-loading and front-loading CCWs achieve the maximum improvements in energy efficiency that are technologically feasible and economically justified. DOE further believes that the top-loading standard, set at the max-tech efficiency level, can be achieved by all manufacturers by the time compliance with the standards is required. Therefore, DOE concludes that top-loading CCWs would not be eliminated from the market by the amended energy conservation standards. In response to the comments related to impacts on competition, DOE believes its analysis accurately describes the impacts of the various TSLs, including the standards established today, on the low-volume manufacturer (LVM). See section VI.C.2 of the preamble for further discussion of these impacts. In addition, EPCA does not permit DOE to establish a tiered standard for CCWs. 42 U.S.C. 6313(e)(2)(A)(ii) states that an amended standard for CCWs “shall apply to products manufactured 3 years after the date on which the final amended standard is published.” DOE interprets this provision to mean that the amended standard must apply to all CCWs manufactured 3 years after the date of publication of this final rule, and that imposing some intermediate standard at that time ( *i.e.,* 2013) and the final amended standard at some future date ( *i.e.,* 2015) is not authorized. In contrast, 42 U.S.C. 6295(g)(4)(C) states in relevant part that amendments to the standards “shall apply to products manufactured after a date which is five years after” the effective date of the previous amendment. DOE believes that the phrase “ *after* a date which is 5 years after” (emphasis added) may allow more flexibility for a tiered standard. DOE also believes that the provisions of 42 U.S.C. 7194 that allow for the grant of an exemption from an energy conservation standard promulgated by DOE are not an appropriate justification for the promulgation of a particular efficiency standard in the first instance. B. Technology Assessment For the technology assessment in the November 2009 NOPR analyses, DOE considered all RCW and CCW technology options that it was aware have been incorporated into working prototypes or commercially available clothes washers at the time of the analysis. DOE noted in the November 2009 SNOPR that it considered as design options many technologies that are found in both RCWs and CCWs. Of the technology options screened out, only suds-saving 13 has appeared previously as a feature in commercially available RCWs. DOE concluded in the November 2009 SNOPR that suds-savings was an RCW feature that was appropriately screened out for the CCW analysis. 74 FR 57738, 57747 (Nov. 9, 2009). 13 A suds-saving feature allows water from one wash cycle to be reused in the next wash cycle. After agitation, sudsy wash water is pumped into a separate storage tub, remaining there until the next wash cycle. While the water is stored, soil settles to the bottom of the tub. During the next wash cycle, all but an inch of the water is pumped back into the washer tub for use again. Clothes washers with the suds-saving feature must be larger than typical clothes washers in order to accommodate the additional storage tub. For the November 2009 SNOPR, DOE also gathered and analyzed data published by CEC, CEE, and the ENERGY STAR Program to provide an overview of the energy efficiency levels achieved in CCWs and RCWs. DOE found that all front-loading CCWs on the market at that time were more efficient than top-loading CCW models. No top-loading CCW listed in these databases had an MEF greater than 1.76, whereas the majority of front-loading CCWs were listed as having MEFs greater than 2.0. Similarly, no top-loading CCWs were rated as having a WF below 8.0, whereas the majority of front-loading CCWs had rated WFs below 7.0. In contrast, DOE research suggested that the most efficient vertical-axis RCWs achieved efficiency levels comparable to some horizontal-axis CCWs. 14 High efficiency, vertical-axis platforms that do not employ an agitator have been sold into the RCW market for several years, but have yet to be released in a CCW form. DOE noted in the November 2009 SNOPR that it expected manufacturers would continue to introduce new features first in the higher-volume residential markets before transitioning them to commercial applications. However, DOE noted that it is not aware of such technologies being incorporated in either commercially available CCWs or working CCW prototypes, and therefore did not consider them in the SNOPR analyses. DOE concluded in the November 2009 SNOPR that it believed it had adequately considered RCW technologies that may be applicable to CCWs in its technology assessment. 74 FR 57738, 57747-48 (Nov. 9, 2009). 14 Typically, vertical-axis clothes washers are accessed from the top (also known as “top-loaders”), while horizontal-axis clothes washers are accessed from the front (also known as “front-loaders”). However, a limited number of residential horizontal-axis clothes washers which are accessible from the top (using a hatch in the wash basket) are currently available, although DOE is unaware of any such CCWs on the market. For the purposes of this analysis, the terms “vertical-axis” and “top-loading” will be used interchangeably, as will the terms “horizontal-axis” and “front-loading.” Additionally, clothes washers that have a wash basket whose axis of rotation is tilted from horizontal are considered to be horizontal-axis machines. Because DOE did not receive any comments on the technology options analyzed in the November 2009 SNOPR, DOE continues to conclude in today's final rule that it has adequately considered RCW technologies that may be applicable to CCWs in its technology assessment. C. Engineering Analysis The purpose of the engineering analysis is to characterize the relationship between the incremental manufacturing cost and efficiency improvements of CCWs. DOE used this cost-efficiency relationship as input to the PBP, LCC, and NES analyses. As discussed in the November 2009 SNOPR, DOE conducted the engineering analysis for this rulemaking using the efficiency-level approach, which provides the incremental costs of moving to higher energy efficiency levels, without regard to the particular design option(s) used to achieve such increases. For this analysis, DOE relied upon efficiency data published in multiple databases, including those published by CEC, CEE, and ENERGY STAR, which were supplemented with limited laboratory testing, data gained through engineering analysis, and primary and secondary research. 74 FR 57738, 57748-51 (Nov. 9, 2009). Chapter 5 of the TSD contains a detailed discussion of the engineering analysis methodology. 1. Efficiency Levels In the November 2009 SNOPR, DOE proposed the following efficiency levels for CCWs, shown in Table IV.1, in which the max-tech top-loading level was designated at efficiency level 2 (1.60 MEF/8.5 WF). The top-loading max-tech efficiency level representated a change from the max-tech level proposed in the October 2008 NOPR, based on DOE testing and analysis of the max-tech top-loading CCW model. No changes were made to the efficiency levels proposed in the October 2008 NOPR for front-loading CCWs in the November 2009 SNOPR. Table IV.1—Commercial Clothes Washer Efficiency Levels Proposed for the November 2009 SNOPR Efficiency level Modified energy factor, * ft 3 /kWh * /water factor, * gal/ft 3 * Top-loading Front-loading Baseline 1.26/9.5 1.72/8.0 1 1.42/9.5 1.80/7.5 2 1.60/8.5 2.00/5.5 3 N/A 2.20/5.1 4 N/A 2.35/4.4 DOE noted in the November 2009 SNOPR that the max-tech top-loading CCW is currently marketed only to on-premise laundry facilities and is not yet offered with a coin-box or smart card reader option for laundromat or multi-housing laundry use. DOE research indicated that the max-tech CCW is based on a standard vertical-axis RCW platform ( *i.e.,* one with an agitator) with similar construction and components as the CCW models marketed by that manufacturer to commercial laundromats. No proprietary technologies were observed, and, thus, DOE stated in the November 2009 SNOPR that it believes that all CCW manufacturers could market vertical-axis clothes washers with similar performance in time for the compliance date of the proposed rule. 74 FR 57738, 57749-50 (Nov. 9, 2009). DOE research, conducted as part of the November 2009 SNOPR, also suggested that commercial acceptance depends on wash performance. DOE recognized that any amended energy conservation standard could result in a lessening of certain equipment utility and hence interviewed interested parties for the November 2009 SNOPR to better understand the potential impacts of energy efficiency strategies that manufacturers might employ in their equipment. Although interested parties suggested that the max-tech model does not provide acceptable washing and rinsing performance targets, especially when overloaded, they did not submit evidence of such performance degradation. 74 FR 57738, 57750 (Nov. 9, 2009). EJ commented that, if top-loading CCWs are required to be retained in the commercial market under amended standards, DOE must consider a third standard level based on the performance of Alliance's best-performing top-loader. Alliance stated that, while no industry standard performance test procedure exists for CCWs, it believes wash and rinse performance would be affected at the top-loading max-tech level, because the max-tech model does not allow true hot or warm water, unlike existing traditional CCWs which offer site-supplied hot water typically of 120 degrees Fahrenheit (°F) and above and user-acceptable 90 °F to 110 °F warm water. Alliance stated that the max-tech top-loading model only provides 108 °F to 112 °F water when the hot setting is selected, which Alliance considers to be warm water. Similarly, Alliance stated that when the user selects a warm setting on the max-tech top-loader, the unit only provides 71 °F to 73 °F wash water, which Alliance considers to be cold water. Alliance believes that CCW users that pay for hot water should receive hot water. Otherwise, CCW users could not clean clothes as well as consumers with access to RCWs. Further, Alliance commented that rinsing is minimal for the max-tech top-loader, unlike typical complete submersion of the clothes load that would allow sand, heavy sediment, or suds trapped between the layers to be properly removed. Alliance stated that the max-tech top-loading model has received almost no acceptance by the industry, based on comments it received from its top 20 multi-housing customers, and that DOE has not tested its ability to clean clothes. Therefore, Alliance believes that max-tech top-loader model is not appropriate for the commercial laundry market. (Alliance, Public Meeting Transcript, No. 67.4 at pp. 22-23, 29); Alliance, No. 66.4 at pp. 4, 7, 9; Alliance, No. 67.8 at p. 3). Alliance stated that the front-loading max-tech efficiency level should have a WF of 5.0 rather than 4.4. Alliance stated that it tested a competitive front-loading CCW model that had a WF of 4.5 and found that it did not wet the center of the clothes load during the wash tumble portion of the cycle. Therefore, Alliance stated that consumer utility would be negatively affected. (Alliance, Public Meeting Transcript, No. 67.4 at pp. 139-140; Alliance, No. 67.8 at p. 3). Alliance further stated that consumer utility in a CCW must go beyond just getting clothes wetted, applying some mechanical action and then extraction of the moisture. Alliance commented that DOE did not assess if the proposed max-tech CCW cleans clothes to user expectations. According to Alliance, the ability of a CCW to clean clothes sufficiently is a central issue in this rulemaking, and stated that “A rulemaking will be overturned as arbitrary and capricious if `the [agency] has failed to respond to specific challenges that are sufficiently central to its decision.' ” *Horsehead Resource Dev. Co.* v. *Browner* , 16 F.3d 1246, 1263 (DC Cir 1994) (citations omitted). (Alliance, No. 66.4 at pp. 6-7). GE commented that, while it supports the standards proposed in the November 2009 SNOPR for top-loading and front-loading CCWs, it is concerned that the max-tech top-loading CCW model is designed for on-premises laundry, which is a relatively limited segment of the commercial market. GE stated that the max-tech model has not been shown to be viable in the harsher laundromat environment where CCWs are subject to tougher conditions such as overloading. GE also requested DOE's test data on the max-tech top-loader model. (GE, Public Meeting Transcript, No. 67.4 at p. 58; GE, No. 67.9 at pp. 1-2). Whirlpool stated that a top-loading CCW max-tech level of 1.76 MEF/8.3 WF can be attained with sufficient investment of financial and human capital. However, Whirlpool considers this level a considerable stretch target that it has not achieved even in a prototype platform. Whirlpool believes that the front-loading CCW max-tech level could be slightly higher, since the CEE database lists a model at 2.23 MEF/4.3 WF. Whirlpool believes this level is at or near the capabilities of known technologies that are viable in the commercial environment. (Whirlpool, No. 67.11 at p. 2). Northwest Power and Conservation Council

(NPCC)asked whether, because the max-tech top-loading CCW model did not meet its rated MEF and WF, DOE would consider testing units at other levels, particularly high-efficiency models, to make sure the performance is as advertised. (NPCC, Public Meeting Transcript, No. 67.4 at pp. 57-59). In response, DOE notes that, in the absence of an accepted, standardized test procedure for CCW wash and rinse performance, it cannot evaluate the cleaning capabilities of various considered max-tech models. DOE agrees that proper wetting and distribution of the detergent and rinse water in the machine is critical for cleaning performance. However, DOE did not receive any evidence that the max-tech top-loading model does not achieve such action, only the inference that, because the unit employs spray rinse, that it would not exhibit acceptable rinse performance. DOE further notes that it did not receive any evidence that somewhat reduced water temperatures at hot and cold settings would preclude acceptable cleaning performance. DOE notes the existence of multiple wash and rinse performance standards such as AHAM HLW-1, but the industry has yet to come to a consensus regarding the minimum wash and rinse performance that an RCW or CCW should achieve. In the interim, DOE relies on manufacturers to market and sell only those products that they feel perform adequately. DOE concluded for the November 2009 SNOPR that the performance of the top-loading CCW model was 1.63 MEF/8.4 MEF instead of the rated value of 1.76 MEF/8.3 WF on which the max-tech level for the October 2008 NOPR was based. DOE does not have evidence to suggest that any other CCWs currently on the market can achieve 1.76 MEF/8.3 WF, nor that technology exists to do so without significantly impacting cleaning performance. DOE based the selection of the top-loading max-tech level at efficiency level 2 on test results for the max-tech model and its belief that 1.60 MEF/8.5 WF represented the maximum CCW performance achievable by all manufacturers without material harm. At the time of the analysis, Alliance's highest efficiency top-loading CCW was rated at 1.55 MEF/8.6 WF. DOE believes that Alliance's model and the max-tech model incorporate similar technologies, and that the energy and water usage of the two models are not sufficiently different as to warrant the inclusion of an additional efficiency level slightly below the max-tech level. Given the constraints of the rulemaking schedule, DOE cannot evaluate an undetermined number of CCW models in order to confirm that no other unit which is rated at lower efficiencies than the proposed max-tech model could in actuality achieve higher performance, nor does DOE have any evidence, particularly regarding durability, to demonstrate that the max-tech top-loading CCW model, while designed for on-premises laundry applications, cannot be utilized successfully in other commercial laundry facilities such as laundromats or multi-family housing settings. Therefore, DOE has retained the max-tech top-loader efficiency level for today's final rule based on the max-tech top-loading CCW model proposed in the November 2009 SNOPR. ASAP suggested that DOE should not limit consideration of max-tech models to CCWs, but that DOE should also consider clothes washer products from the residential market. According to ASAP, the distinctive nature of the CCW market has been characterized by the need for durability and resistance to overloading and misuse, which is typical of laundromats and multi-housing laundry rooms. But CCWs for on-premises laundry facilities are also being considered in this rulemaking, and they typically are subject to less harsh conditions than models destined for laundromats and multi-family housing, Thus, ASAP questioned why RCWs would not be considered for the max-tech levels if CCWs designed for on-premises laundry are. (ASAP, Public Meeting Transcript, No. 67.4 at pp. 61-62, 64-65) Southern California Gas Company

(SCG)commented that DOE should consider durability as well as efficiency in selecting the max-tech models. (SCG, Public Meeting Transcript, No. 67.4 at p. 63) Additional comments regarding the applicability of RCWs in CCW application were received (along with other comments) from 20 route operators: All Valley Washer Services, Inc; Angel Coin Service, Inc.; Automatic Industries; Automatic Laundry Services Co., Inc.; B&H Coin Laundry Service; Caldwell and Gregory, LLC; CALECO; Cincinnati Coin Laundry, Inc.; Coin Meter Company; Commercial Laundries, Inc.; Continental Laundry Systems Incorporated; Excalibur Laundries, Inc.; F&B Coin Laundry Route; Family Pride Laundries; FMB Laundry, Inc.; Jetz Service Co., Inc.; Launderama, LLC; Laundry Equipment Corp.; National Coin Washer and Service Company, Inc.; and San Diego Laundry Equipment Co. (the Multiple Route Operators). These comments were originally sent to DOJ in response to the October 2008 NOPR, and were resubmitted by Alliance along with its own comments in response to the November 2009 SNOPR. Ninety-five percent of all route operators who commented on the November 2009 SNOPR stated that they did not consider RCWs suitable for CCW applications. The principal reasons given were the lack of durability, lack of resistance to vandalism, and other specified and unspecified performance issues. Most of the Multiple Route Operators expressed reluctance to try high efficiency top-loading clothes washers due to perceived wash performance issues. Additionally, several of the Multiple Route Operators stated that had tried out such washers and replaced them with regular top-loading clothes washers due to consumer complaints regarding wash performance and other issues. (Multiple Route Operators, No. 67.8, pp. 1-3 15 ) 15 The Multiple Route Operators' letters were attached to the Alliance letter, comment number 67.8, in response to the November 2009 SNOPR. A notation in the form “Multiple Route Operators, No. 67.8 at pp. 1-3” identifies a written comment

(1)made by some or all of the Multiple Route Operators,

(2)recorded in document number 67.8 that is filed in the docket of this rulemaking (Docket No. EE-2006-STD-0127), maintained in the Resource Room of the Building Technologies Program, and

(3)which appears on pages 1-3 of each of the letters submitted by the Multiple Route Operators. DOE notes that multiple manufacturers stated during interviews that high efficiency RCWs utilize technologies that are not suitable in harsher commercial settings such as laundromats and multi-family housing due to environmental factors such as overloading and abuse. Among these manufacturers were suppliers of high efficiency top-loading RCWs, *i.e.,* manufacturers that would face the lowest conversion costs in the industry to modify a given RCW model for CCW use. Additionally, DOE considered the comments submitted by the Multiple Route Operators with experience utilizing high efficiency top-loading clothes washers in a commercial setting. Lastly, DOE received no evidence that all the technologies used in a max-tech top-loading RCW can be expected to be ready for inclusion in CCWs by the compliance date of today's final rule while offering similar or better wash performance, given the very different operational environments (short wash cycles, among other factors). Hence, DOE concludes that high efficiency top-loading RCW models should not be considered representative of the efficiency levels that top-loading CCWs can achieve until the technologies required to achieve such efficiency levels have been successfully demonstrated in CCWs. For front-loaders, DOE observes that multiple models from several manufacturers, including Alliance, are rated with a WF of 4.5 or lower. DOE believes that the presence of these CCW models on the commercial market suggests that sufficient cleaning performance is able to be achieved at such WF levels. Further, DOE did not receive any evidence that the max-tech model, rated at a 4.4 WF, could not demonstrate wash performance on par with consumer utility requirements, nor if, in fact, it did not, that a WF of 5.0 would provide wash performance that would be deemed suitable, DOE notes that the max-tech level proposed in the November 2009 SNOPR had approximately 5 percent higher MEF and 2 percent higher WF than the model that Whirlpool suggests. While the proposed max-tech level therefore was slightly less stringent in terms of water consumption than the level Whirlpool suggested, DOE believes that the higher energy consumption of the proposed level is the primary factor to consider in defining a max-tech level. Therefore, DOE concluded that the max-tech levels proposed in the November 2009 SNOPR are technologically feasible, and it has retained the efficiency levels shown in Table IV.1 for today's final rule. DOE received comments in response to the October 2008 NOPR that front-loading CCWs with electric heaters have an MEF of 1.96, which would not meet the proposed front-loading standards. According to these comments, consumers in some parts of the northern United States need such heaters to supplement their hot water supply in order to maintain proper wash temperatures despite very cold water supply temperatures. DOE indicated in the November 2009 SNOPR that it had received no data on the extent or size of this impact or of the affected population. DOE sought comment, including population and efficiency impact data, to describe this issue. 74 FR 57738, 57750 (Nov. 9, 2009) Alliance and NPCC discussed whether a water heating CCW would be measured as having higher water heating energy consumption under the DOE clothes washer test procedure than a non-water heating CCW, given the inlet water temperature requirements. Alliance stated that the test procedure would require measurement of energy consumption with the heater on. (Alliance, Public Meeting Transcript, No. 67.4 at pp. 66-72) Whirlpool stated that it does not produce any water heating CCWs and does not believe this is a significant segment of the market. In the absence of further data on the affected population or efficiency impacts, DOE is adopting energy conservation standards for front-loading CCWs both with and without electric heaters for the reasons discussed in section VI.D. DOE did not receive further information regarding the market share or efficiency impact of water heating CCWs, but agrees that it likely does not represent a significant segment of the CCW market. In the absence of additional data, DOE determined that it will retain the max-tech front-loading CCW level that was proposed in the November 2009 SNOPR. 2. Manufacturing Costs In the October 2008 NOPR, DOE presented manufacturing cost estimates based on the November 2007 ANOPR analysis, revised in response to detailed CCW manufacturer feedback obtained at the NOPR stage for equipment at each efficiency level. 73 FR 62034, 62055-56 (Oct. 17, 2008). These manufacturing costs were the basis of inputs for a number of other analyses in this rulemaking, including the LCC, national impact, and GRIM analyses. As described in the October 2008 NOPR, DOE found that an LVM operates in both the residential and CCW markets. DOE considers this manufacturer to be low-volume because its annual shipments in the combined RCW and CCW market are significantly lower than those of its larger competitors. However, unlike its larger rivals, most of the LVM's unit shipments are in the CCW market, where the LVM has significant market share. Also unlike its diversified competitors, this company exclusively manufactures laundry equipment. A review of the Securities and Exchange Commission

(SEC)10-K documents filed by the LVM revealed that, as of 2005, this company derived 22 percent of its total revenue from the sale of front- and top-loading clothes washers and 87 percent of that income was from the commercial market. 16 As a result, the LVM could be affected disproportionately by any rulemaking concerning CCWs compared to its competitors, for whom CCWs represent less than 2 percent of total clothes washer sales. Alliance stated in response to the October 2008 NOPR that it is the LVM and that it has neither the purchasing power nor the funding to support wide-ranging research and development programs like those of its larger, more diverse rivals. As a result, the manufacturing costs for Alliance are inherently higher compared to those of its rivals. Alliance believes that the cost of compliance with the top-loading CCW standard proposed in the October 2008 NOPR would be especially high if Alliance were required to introduce non-traditional agitator designs to meet it. 74 FR 57738, 57762 (Nov. 9, 2009). 16 SEC documents pertaining to the LVM are available online at *http://sec.gov/.* DOE research, conducted as part of the November 2009 SNOPR, suggests that the proposed efficiency level for vertical-axis clothes washers can be met with conventional, non-proprietary technology that is on the market today. Since the October 17, 2008 NOPR meeting, DOE received no further comments on the manufacturing cost curves. For the November 2009 SNOPR, DOE retained all cost estimates presented in the October 2008 NOPR at the retained efficiency levels, though each value was scaled by the Producer Price Index

(PPI)multiplier for the commercial laundry equipment industry (NAICS 333312) between 2007 and 2008 to update the costs in the October 2008 NOPR to 2008$. 17 These are shown in Table IV.2. 17 PPI data is maintained by the Bureau of Labor Statistics and is available at http:// *www.bls.gov/ppi/* Table IV.2—Commercial Clothes Washer Incremental Manufacturing Costs Proposed in November 2009 SNOPR Efficiency level Modified energy factor * ft 3 /kWh * /water factor * gal/ft 3 * Top-loading Front-loading Incremental cost *$* Top-loading Front-loading Baseline 1.26/9.5 1.72/8.0 0.00 0.00 1 1.42/9.5 1.80/7.5 77.60 0.00 2 1.60/8.5 2.00/5.5 134.99 14.21 3 N/A 2.20/5.1 N/A 39.34 4 N/A 2.35/4.4 N/A 66.16 Because DOE did not receive any new information on the manufacturing cost curves, DOE retained all the incremental manufacturing costs presented in the November 2009 SNOPR at the retained efficiency levels for today's final rule. Table IV.3 shows these costs. Table IV.3—Commercial Clothes Washer Incremental Manufacturing Costs Efficiency level Modified energy factor * ft 3 /kWh * /water factor * gal/ft 3 * Top-loading Front-loading Incremental cost *$* Top-loading Front-loading Baseline 1.26/9.5 1.72/8.0 0.00 0.00 1 1.42/9.5 1.80/7.5 77.60 0.00 2 1.60/8.5 2.00/5.5 134.99 14.21 3 N/A 2.20/5.1 N/A 39.34 4 N/A 2.35/4.4 N/A 66.16 D. Life-Cycle Cost and Payback Period Analysis In response to the requirements of section 325(o)(2)(B)(i) of the Act, DOE conducted LCC and PBP analyses to evaluate the economic impacts of possible amended energy conservation standards on CCW consumers. This section of the notice describes these analyses. DOE conducted the analysis using a spreadsheet model developed in Microsoft

(MS)Excel for Windows 2007. The LCC is the total consumer expense over the life of the equipment, including purchase and installation expense and operating costs (energy and water expenditures, repair costs, and maintenance costs). The PBP is the number of years it would take for the consumer to recover the increased costs of a higher-efficiency equipment through energy savings. To calculate the LCC, DOE discounted future operating costs to the time of purchase and summed them over the lifetime of the equipment. DOE measured the change in LCC and the change in PBP associated with a given efficiency level relative to a base case forecast of equipment efficiency. The base case forecast reflects the market in the absence of amended mandatory energy conservation standards. As part of the LCC and PBP analyses, DOE developed data that it used to establish equipment prices, installation costs, annual energy consumption, energy and water prices, maintenance and repair costs, equipment lifetime, and discount rates. Commenting on DOE's use of LCC and PBP results to evaluate the economic impacts of possible amended energy conservation standards on CCW consumers, Mr. Gayer stated that if the private benefits to consumers of a more efficient CCW outweigh the private costs of a more efficient CCW, then there will be a market for high efficiency CCWs and regulation would not be necessary. He added that if consumers are unwilling to purchase a high efficiency CCW without the regulation, then this suggests they are not willing to pay the higher CCW price in order to accrue lower future energy costs. (Gayer, No. 67.7 at p. 1) DOE agrees with the observation that many CCW purchasers are unwilling to pay the higher cost of a more efficient CCW in the face of potential operating savings benefits. DOE disagrees that this implies that it is using the wrong cost of capital in its analysis. DOE does not in general assume in its analysis that unregulated markets will equilibrate to a state where consumer decisions are perfectly aligned with private benefits and costs. DOE estimated the cost of capital based on information regarding the cost of borrowing and the opportunity cost of investment for CCW owners. Based on this cost of capital, DOE found that the operating cost benefits for many CCWs exceed the burden of increased initial costs for more efficient CCWs for many consumers who are currently using low-cost, low-efficiency CCWs. There are several possible reasons for the disparity between observed consumer behavior and the results of DOE's consumer financial analysis which may include:

(1)Limited consumer information and information processing capabilities and

(2)the high transaction costs of fully evaluating LCC and other characteristics of available CCWs prior to purchase or lease. In addition, there remain a number of environmental externalities that are not currently reflected in energy and water prices, which cannot be considered by consumers and which are not included in DOE's LCC and PBP analyses.. DOE did not receive or obtain sufficient information to provide a detailed explanation of why CCW purchasers tend to minimize first costs in the face of financially feasible gains that are likely to accrue from increased energy efficiency. DOE believes that its use of LCC and PBP results to evaluate the economic impacts of possible amended energy conservation standards on CCW consumers is appropriate given the information that is available. DOE was unable to develop a survey-based consumer sample for CCWs because the U.S. Energy Information Administration's

(EIA)*Commercial Building Energy Consumption Survey* (CBECS) does not provide the necessary data to develop one. 18 Instead, DOE established the variability and uncertainty in energy and water use by defining the uncertainty and variability in the use (cycles per day) of the equipment. The variability in energy and water pricing was characterized by regional differences in energy and water prices. DOE calculated the LCC associated with a baseline CCW. To calculate the LCC savings and PBP associated with equipment meeting higher efficiency standards, DOE substituted the baseline unit with a more efficient design. 18 Available online at: * http://www.eia.doe.gov/emeu/cbecs/.* Table IV.4 summarizes the approaches and data DOE used to derive the inputs to the LCC and PBP calculations for the November 2009 SNOPR. For today's final rule, DOE did not introduce changes to either the LCC and PBP analyses methodology described in the November 2009 SNOPR or the inputs to the analysis. Chapter 8 of the TSD contains detailed discussion of the methodology utilized for the LCC and PBP analyses as well as the inputs developed for the analyses. Table IV.4—Summary of Inputs and Key Assumptions in the LCC and PBP Analyses Inputs November 2009 SNOPR Changes for the final rule Affecting Installed Costs Equipment Price Derived by multiplying manufacturer cost by manufacturer, distributor markups, and sales tax No change. Installation Cost Baseline cost updated with RS Means *Mechanical Cost Data,* 2008 No change Affecting Operating Costs Annual Energy and Water Use Per-cycle energy and water use based on MEF and WF levels. Disaggregated into per-cycle machine, dryer, and water heating energy using data from DOE's 2000 TSD for residential clothes washers. Annual energy and water use determined from the annual usage (number of use cycles). Usage based on several studies including research sponsored by MLA 19 and the Coin Laundry Association 20 (CLA). Different use cycles determined for multi-family and laundromat equipment applications No change. Energy and Water/Wastewater Prices Electricity: Updated using EIA's 2007 Form 861 data No change. Natural Gas: Updated using EIA's 2007 *Natural Gas Monthly* . Water/Wastewater: Updated using RFC/AWWA's 2006 *Water and Wastewater Survey* Variability: Regional energy prices determined for 13 regions; regional water/wastewater price determined for four regions Energy and Water/Wastewater Prices Trends Energy: Reference Case forecast updated with EIA's *AEO 2009* April Release. High-Growth and Low-Growth forecasts updated with EIA's *AEO 2009* March Release No change. Water/Wastewater: Linear extrapolation of 1970-2008 historical trends in national water price index. For the four years after 2008, fixed the annual price to the value in 2008 to prevent a dip in the forecasted prices Repair and Maintenance Costs Estimated annualized repair costs for each efficiency level based on half the equipment lifetime divided by the equipment lifetime No change. Affecting Present Value of Annual Operating Cost Savings Equipment Lifetime Based on data from various sources including the CLA. Different lifetimes established for multi-family and laundromat equipment applications. Variability and uncertainty characterized with Weibull probability distributions No change. Discount Rates Approach based on cost of capital of publicly traded firms in the sectors that purchase CCWs. Primary data source is Damodaran Online. 21 No change. Affecting Installed and Operating Costs Effective Date of New Standard 2013 No change. Base-Case Efficiency Distributions Analyzed as two equipment classes: top-loading and front-loading. Distributions for both classes based on the number of available models at the efficiency levels No change. Top-Loading: 64.8% at 1.26 MEF/9.5 WF; 33.8% at 1.42 MEF/9.5 WF; 1.4% at 1.60 MEF/8.5 WF Front-Loading: 3.5% at 1.72 MEF/8.0 WF; 0.0% at 1.80 MEF/7.5 WF; 73.7% at 2.00 MEF/5.5 WF; 22.8% at 2.20 MEF/5.1 WF; 0.0% at 2.35 MEF/4.4 WF 19 Please see the following Web site for further information: *http://www.mla-online.com/.* 20 Please see the following Web site for further information: *http://www.coinlaundry.org/.* 21 Please see the following Web site for further information: *http://pages.stern.nyu.edu/~adamodar/.* 1. Equipment Prices To calculate the equipment prices faced by CCW purchasers, DOE multiplied the manufacturing costs developed from the engineering analysis by the supply chain markups it developed (along with sales taxes). DOE used the same supply chain markups for today's final rule that were developed for the November 2009 SNOPR. See chapter 7 of the TSD for additional information. To calculate the final installed prices, DOE added installation cost to the equipment prices. 2. Installation Cost Installation costs include labor, overhead, and any miscellaneous materials and parts. For the November 2009 SNOPR and today's final rule, DOE used data from the RS Means *Mechanical Cost Data,* 2008 on labor requirements to estimate installation costs for CCWs. 22 DOE estimates that installation costs do not increase with equipment efficiency. 22 Available online at: *http://www.rsmeans.com/bookstore/.* 3. Annual Energy Consumption DOE determined the annual energy and water consumption of CCWs by multiplying the per-cycle energy and water use by the estimated number of cycles per year. In the November 2009 SNOPR, DOE concluded that the use of the existing RCW test procedure provides a representative basis for rating and estimating the per-cycle energy use of CCWs. For today's final rule, DOE maintained the same approach. 4. Energy and Water Prices a. Energy Prices DOE derived average electricity and natural gas prices for 13 geographic areas consisting of the nine U.S. Census divisions, with four large States (New York, Florida, Texas, and California) treated separately. For the November 2009 SNOPR and today's final rule, DOE estimated commercial electricity prices for each of the 13 geographic areas based on 2007 data from EIA Form 861, *Annual Electric Power Industry Report.* 23 DOE calculated an average commercial electricity price by first estimating an average commercial price for each utility, and then calculated a regional average price by weighting each utility with consumers in a region by the number of commercial consumers served in that region. 23 Available online at: *http://www.eia.doe.gov/cneaf/electricity/page/eia861.html* . For the November 2009 SNOPR and today's final rule, DOE estimated average commercial natural gas prices in each of the 13 geographic areas based on 2007 data from the EIA publication *Natural Gas Monthly.* 24 DOE calculated an average natural gas price for each area by first calculating the average prices for each State, and then calculating a regional price by weighting each State in a region by its population. 24 Available online at: *http://www.eia.doe.gov/oil_gas/natural_gas/data_publications/natural_gas_monthly/ngm.html.* To estimate the trends in electricity and natural gas prices for the November 2009 SNOPR and today's final rule, DOE used the price forecasts in the *AEO 2009* April Release. 25 To arrive at prices in future years, DOE multiplied the average prices described above by the forecast of annual average price changes. Because the *AEO* forecasts prices only to 2030, DOE followed past guidelines provided to the Federal Energy Management Program by EIA and used the average rate of change during 2020-2030 to estimate the price trends beyond 2030. 25 All AEO publications are available online at: *http://www.eia.doe.gov/oiaf/aeo/* . The spreadsheet tools used to conduct the LCC and PBP analysis allow users to select either the *AEO'* s high-growth case or low-growth case price forecasts to estimate the sensitivity of the LCC and PBP to different energy price forecasts. The *AEO 2009* April Release provides only forecasts for the Reference Case. Therefore, for the November 2009 SNOPR and today's final rule, DOE used the *AEO 2009* March Release high-growth case or low-growth forecasts to estimate high-growth and low-growth price trends. b. Water and Wastewater Prices DOE obtained commercial water and wastewater price data from the *Water and Wastewater Rate Survey* conducted by Raftelis Financial Consultants

(RFC)and the American Water Works Association (AWWA). For the November 2009 SNOPR and today's final rule, DOE used the 2006 *Water and Wastewater Rate Survey.* 26 The survey covers approximately 300 water utilities and 200 wastewater utilities, with each industry analyzed separately. DOE calculated values at the Census region level (Northeast, South, Midwest, and West). Edison Electric Institute

(EEI)questioned why water and wastewater prices were not developed at the Census division level. (EEI, Public Meeting Transcript, No. 40.5, p. 103 and p. 178) The samples that DOE obtained of 200-300 utilities are not large enough to calculate regional prices for all U.S. Census divisions and large States. Hence, DOE was only able to capture the variability of water and wastewater prices at the Census region level. 26 Raftelis Financial Consultants, Inc., *2006 RFC/AWWA Water and Wastewater Rate Survey, 2006,* (2006). This document is available at: *http://www.raftelis.com/ratessurvey.html* . To estimate the future trend for water and wastewater prices, DOE used data on the historic trend in the national water price index (U.S. city average) provided by the Bureau of Labor Statistics (BLS). For the October 2008 NOPR, DOE extrapolated a future trend based on the linear growth from 1970 to 2007. For the SNOPR, DOE continued to use the BLS historical data, which now provides data for the year 2008, and extrapolated the future trend based on the linear growth from 1970 to 2008. But rather than use the extrapolated trend to forecast the prices for the four years after 2008, DOE pinned the annual price to the value in 2008. Otherwise, forecasted prices for this 4-year time period would have been up to 8 percent lower than the price in 2008. Estimating prices in this manner is appropriate because it is consistent with the historical trend that demonstrates that prices do not decrease over time. Beyond the 4-year time period, DOE used the extrapolated trend to forecast prices out to the year 2043. DOE continued to use the above approach for today's final rule. 5. Repair and Maintenance Costs Repair costs are associated with repairing or replacing components that have failed in the appliance, whereas maintenance costs are associated with maintaining the operation of the equipment. DOE was unable to gather any empirical data specific to CCWs to estimate repair and maintenance cost. For the October 2008 NOPR and the November 2009 SNOPR, DOE included increased repair costs based on an algorithm developed by DOE for central air conditioners and heat pumps and which was also used for residential furnaces and boilers. 27 This algorithm calculates annualized repair costs by dividing half of the equipment retail price over the equipment lifetime. In the absence of better data, DOE retained its approach from the November 2009 SNOPR for today's final rule. 27 U.S. Department of Energy, Technical Support Document: Energy Efficiency Standards for Consumer Products: Residential Central Air Conditioners and Heat Pumps (May 2002) chapter 5. This document is available at: *http://www.eere.energy.gov/buildings/appliance_standards/residential/ac_central_1000_r.html.* 6. Equipment Lifetime For the November 2009 SNOPR and today's final rule, DOE used a variety of sources to establish low, average, and high estimates for equipment lifetime. The average CCW lifetime was 11.3 years for multi-family applications, and 7.1 years in laundromat applications. DOE characterized CCW lifetimes with Weibull probability distributions. 7. Discount Rates To establish discount rates for CCWs for the November 2009 SNOPR and today's final rule, DOE estimated the cost of capital of publicly traded firms in the sectors that purchase CCWs as the weighted average of the cost of equity financing and the cost of debt financing. DOE identified the following sectors purchasing CCWs:

(1)Educational services;

(2)hotels;

(3)real estate investment trusts; and

(4)personal services. DOE estimated the weighted-average cost of capital

(WACC)using the respective shares of equity and debt financing for each sector that purchases CCWs. It calculated the real WACC by adjusting the cost of capital by the expected rate of inflation. To obtain an average discount rate value, DOE used additional data on the number of CCWs in use in various sectors. DOE estimated the average discount rate for companies that purchase CCWs at 5.7 percent. 8. Effective Date of the Amended Standards The compliance date is the future date when parties subject to the requirements of a new standard must begin compliance. For the November 2009 SNOPR, DOE expected that the final rule will be published by January 1, 2010, as required by EPACT 2005, with compliance with new standards required by January 1, 2013. For today's final rule, DOE used the same date for compliance. DOE calculated the LCC for CCW consumers as if they would purchase new equipment in the year after the standard takes effect. 9. Equipment Energy Efficiency in the Base Case For the LCC and PBP analysis, DOE analyzes higher efficiency levels relative to a baseline efficiency level. However, some consumers may already purchase equipment with efficiencies greater than the baseline equipment levels. Thus, to accurately estimate the percentage of consumers that would be affected by a particular standard level, DOE estimates the distribution of equipment efficiencies that consumers are expected to purchase under the base case ( *i.e.,* the case without new energy efficiency standards). DOE refers to this distribution of equipment energy efficiencies as a base-case efficiency distribution. As discussed previously in section IV.A, DOE decided to analyze CCWs with two equipment classes—top-loading CCWs and front-loading CCWs. For the November 2009 SNOPR and today's final rule, DOE used the number of available models within each equipment class to establish the base-case efficiency distributions. Table IV.5 presents the market shares of the efficiency levels in the base case for CCWs. See chapter 8 of the TSD for further details on the development of CCW base-case market shares. Table IV.5—Commercial Clothes Washers: Base Case Market Shares Top-loading Standard level MEF WF Market share *%* Front-loading Standard level MEF WF Market share *%* Baseline 1.26 9.50 64.8 Baseline 1.72 8.00 3.5 1 1.42 9.50 33.8 1 1.80 7.50 0.0 2 1.60 8.50 1.4 2 2.00 5.50 73.7 3 2.20 5.10 22.8 4 2.34 4.40 0.0 10. Split Incentive Between CCW Consumers and Users Under a split incentive situation, the party purchasing more efficient and presumably more expensive equipment (referred to as “consumers” in this notice) may not realize the operating cost savings from that equipment, because another party may pay the utility bill. Such a situation exists in segments of the CCW market. In comments on the October 2008 NOPR, Whirlpool and Alliance stated that those who own CCWs (usually route operators) often do not incur the operating costs as do, generally, laundromats and owners of multi-family dwellings. 73 FR 62067 (Oct. 17, 2008). Recognizing this, DOE evaluated the ability of CCW consumers to pass on the higher purchase costs of more expensive CCWs and concluded that few route operators would allow themselves to be held to a lease agreement that would prevent them from recovering the cost of more efficient CCW equipment. That is, DOE believes that these CCW consumers would be able to realize a significant share of the operating cost savings from more-efficient equipment. The Joint Comment stated that contracts between route operators and multi-housing property owners are subject to revision and renewal, and that the division of coin-box revenue may be renegotiated to allow for the savings achieved by more-efficient CCWs to be equitably shared between the purchasers/owners of the machines (route operators) and the parties responsible for paying electric, gas, water, and sewer bills (property owners). (Joint Comment, No. 67.6 at p. 3) DOE agrees with the above comment, and continues to conclude that CCW consumers would be able to realize a significant share of the operating cost savings from more-efficient equipment. 11. Rebound Effect The rebound effect occurs when a piece of equipment, made more efficient and used more intensively, does not yield the expected energy savings from the efficiency improvement. In the case of more efficient clothes washers, limited research indicates that there is no rebound effect for RCWs, although the consumer may choose to purchase larger models with more features that would result in higher energy use. 28 DOE did not receive any comments from interested parties on the issue of the rebound effect for CCWs. Based on the limited research showing no rebound effect for RCWs, DOE did not include a rebound effect in its analysis of CCW standards. 28 L.A. Greening, D.L. Greene, and C. Difiglio. “Energy efficiency and consumption—the rebound effect—a survey.” *Energy Policy* 28

(2000)389 *-* 401. Available for purchase at *http://* *www.elsevier.com/locate/enpol.* 12. Inputs to Payback Period Analysis The PBP is the amount of time (expressed in years) it takes the consumer to recover the additional installed cost of more efficient equipment through operating cost savings, compared to baseline equipment. The simple PBP does not account for changes in operating expense over time or the time value of money. The inputs to the PBP calculation are the total installed cost of the equipment to the consumer for each efficiency level and the annual (first- year) operating expenditures for each efficiency level. For the November 2009 SNOPR and today's final rule, the PBP calculation uses the same inputs as the LCC analysis, except that energy price trends and discount rates are not needed. 13. Rebuttable-Presumption Payback Period As noted above, EPCA, as amended (42 U.S.C. 6295(o)(2)(B)(iii) and 6316(a)), establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that “the additional cost to the consumer of purchasing a product complying with an energy conservation standard level will be less than three times the value of the energy (and as applicable, water) savings during the first year that the consumer will receive as a result of the standard,” as calculated under the test procedure in place for that standard. For each TSL, DOE determined the value of the first year's energy savings by calculating the quantity of those savings in accordance with DOE's test procedure, and multiplying that amount by the average energy price forecast for the year in which a new standard would be first effective—in this case, 2013. E. National Impact Analysis—National Energy Savings and Net Present Value Analysis 1. General DOE's NIA assesses the national energy savings, as well as the national NPV of total consumer costs and savings, expected to result from new standards at specific efficiency levels. DOE applied the NIA spreadsheet to perform calculations of energy savings and NPV, using the annual energy consumption and total installed cost data from the LCC analysis. DOE forecasted the energy savings, energy cost savings, equipment costs, and NPV for each equipment class from 2013 to 2043. The forecasts provide annual and cumulative values for all four parameters. In addition, DOE incorporated into its NIA spreadsheet the capability to analyze sensitivity of the results to forecasted energy prices and equipment efficiency trends. Table IV.6 summarizes the approach and data DOE used to derive the inputs to the NES and NPV analyses for the November 2009 SNOPR. DOE made no changes to the analyses for today's final rule. (See chapter 11 of the final rule TSD for further details.) Table IV.6—Approach and Data Used to Derive the Inputs to the National Energy Savings and NPV Analyses Inputs 2009 SNOPR Description Changes for the final rule Shipments Annual shipments from Shipments Model No change. Effective Date of Standard 2013 No change. Base-Case Forecasted Efficiencies Shipment-weighted efficiency

(SWEF)determined in the year 2005. SWEF held constant over forecast period No change. Standards-Case Forecasted Efficiencies Analyzed as two equipment classes. For each equipment class, roll-up scenario used for determining SWEF in the year that standards become effective for each standards case. SWEF held constant over forecast period No change. Annual Energy Consumption per Unit Annual weighted-average values as a function of SWEF No change. Total Installed Cost per Unit Annual weighted-average values as a function of SWEF No change. Energy and Water Cost per Unit Annual weighted-average values as a function of the annual energy consumption per unit and energy (and water) prices No change. Repair Cost and Maintenance Cost per Unit Incorporated changes in repair costs as a function of efficiency No change. Escalation of Energy and Water/Wastewater Prices Energy Prices: Updated to *AEO 2009* April Release forecasts for the Reference Case. *AEO 2009* April Release does not provide High-Growth and Low-Growth forecasts; used *AEO 2009* March Release High-Growth and Low-Growth forecasts to estimate high- and low-growth price trends Water/Wastewater Prices: Linear extrapolation of 1970-2008 historical trends in national water price index. For the four years following 2013, fixed the annual price to the value in 2008 to prevent a dip in the forecasted prices No change. Energy Site-to-Source Conversion Conversion varies yearly and is generated by DOE/EIA's NEMS program (a time-series conversion factor; includes electric generation, transmission, and distribution losses) No change. Effect of Standards on Energy Prices Determined but found not to be significant No change. Discount Rate 3% and 7% real No change. Present Year Future expenses discounted to year 2009 No change. 2. Shipments The shipments portion of the NIA Spreadsheet is a Shipments Model that uses historical data as a basis for projecting future shipments of the equipment that are the subject of this rulemaking. In projecting CCW shipments, DOE accounted for three market segments:

(1)New construction;

(2)existing buildings ( *i.e.,* replacing failed equipment); and

(3)retired units not replaced. DOE used the non-replacement market segment to calibrate the Shipments Model to historical shipments data. For purposes of estimating the impacts of prospective standards on equipment shipments ( *i.e.,* forecasting standards-case shipments) DOE considered the combined effects of changes in purchase price, annual operating cost, and household income on the magnitude of shipments. Table IV.7 summarizes the approach and data DOE used to derive the inputs to the shipments analysis for the November 2009 SNOPR, and the changes it made for today's final rule. The general approach for forecasting CCW shipments for today's final rule remains unchanged from the November 2009 SNOPR. That is, all CCW shipments (for both equipment classes) were estimated for the new construction, replacement, and non-replacement markets. DOE then allocated shipments to each of the two equipment classes based on the market share of each class. For the November 2009 SNOPR, DOE estimated that top-loading washers comprise 70 percent of the market while front-loading washers comprise 30 percent. DOE estimated that the equipment class market shares would remain unchanged over the time period 2005-2043. Table IV.7—Approach and Data Used To Derive the Inputs to the Shipments Analysis Inputs 2009 SNOPR description Changes for the final rule Number of Equipment Classes Two: top-loading washers and front-loading washers. Shipments forecasts established for all CCWs and then disaggregated into the two equipment classes based on the market share of top- and front-loading washers. Updated market share data based on SEC 10K report of the LVM and tax credits claimed by the LVM for producing high-efficiency CCWs. Market share determined to be 70% top-loading and 30% front-loading. Equipment class market shares held constant over forecast period No change. New Construction Shipments Determined by multiplying multi-housing forecasts by forecasted saturation of CCWs for new multi-housing. Multi-housing forecasts with *AEO 2009* April Release forecasts for the Reference Case. Verified frozen saturations with data from the U.S. Census Bureau's *American Housing Survey*

(AHS)for 1997-2005 No change. Replacements Determined by tracking total equipment stock by vintage and establishing the failure of the stock using retirement functions from the LCC and PBP analysis. Retirement functions revised to be based on Weibull lifetime distributions No change. Retired Units not Replaced ( *i.e.,* non-replacements) Used to calibrate Shipments Model to historical shipments data. Froze the percentage of non-replacements at 15 percent for the period 2007─2043 to account for the increased saturation rate of in-unit washers in the multi-family stock between 1997 and 2005 timeframe shown by the AHS No change. Historical Shipments Data sources include AHAM data submittal, *Appliance Magazine,* and U.S. Bureau of Economic Analysis' quantity index data for commercial laundry. Relative market shares of the two equipment applications, common-area laundry facilities in multi-family housing and laundromats, estimated to be over time at 85 and 15 percent, respectively Conducted a sensitivity analysis based on relative market shares of 66 percent for multi-family housing and a 34-percent share for laundromats. Purchase Price, Operating Cost, and Household Income Impacts due to efficiency standards Developed the “relative price” elasticity which accounts for the purchase price and the present value of operating cost savings divided by household income. Used purchase price and efficiency data specific to residential refrigerators, clothes washers, and dishwashers between 1980 and 2002 to determine a “relative price” elasticity of demand, of −0.34 No change. Fuel Switching Not applicable No change. DOE based its Shipments Model for CCWs on the following three assumptions:

(1)All equipment shipments for new construction are driven by the new multi-family housing market,

(2)the relative market shares of the two equipment applications, common-area laundry facilities in multi-family housing and laundromats, are constant over time at 85 and 15 percent, respectively, and

(3)the U.S. Census Bureau's quantity index data can be used to validate the shipments trend observed in the historical data. The Joint Comment stated that DOE's assumed 85 percent to 15 percent split between sales for multi-family applications and sales for laundromat applications is not based on robust or current data, and understates the energy, water, and dollar savings that would be achieved by all of the standard levels under consideration. It cited information from Alliance's Form 10-K for 2008, which, the Joint Comment asserted, suggested that the ratio of multi-family to laundromat shipments is about 40 percent to 60 percent. It noted that because some laundromats purchase a limited number of larger capacity washers not found in multi-family settings, the commenters believe a split of roughly 45 percent for multi-family venues and 55 percent for laundromats is reasonable, and should be evaluated by DOE for the final rule. (Joint Comment, No. 67.6 at p. 3) Whirlpool commented that it believes the industry mix is not nearly as heavily weighted toward the multi-family channel as DOE assumed. (Whirlpool, No. 67.11 at p. 4). In contrast, Alliance stated that it believes that the split of the distribution channels of laundromat versus multi-family housing common-area laundry rooms of 15 percent and 85 percent respectively is generally representative of the industry. (Alliance, No. 67.8 at p. 2) In response, DOE believes that the interpretation by the Joint Comment of information from Alliance's Form 10-K for 2008 understates the importance of equipment other than CCWs. The total 2008 revenues from Alliance's sales to the commercial laundry industry are $338 million, and sales to laundromats and multi-family housing amount to $240 million. However, based on data gathered for its MIA, DOE estimated that the total sales of CCWs by Alliance amount to only $73 million. Therefore, it seems evident that a large fraction of the sales to laundromats and multi-family housing are accounted for by equipment other than CCWs. This unaccounted-for equipment would include clothes dryers in addition to washer-extractors and tumblers, which are large-capacity, higher-performance washing machines, and matching large-capacity dryers, respectively. Laundromats account for much more of the larger equipment than multi-family housing, and this type of equipment is more expensive than CCWs. Therefore, the laundromat share of sales to the North American commercial laundry industry by Alliance is as high as it is primarily due to sales of larger equipment. Thus, the revenue share between the multi-family and laundromat markets is not a good indicator of the share of laundromats in sales of CCWs. The CCW unit shipment shares of 85 percent for multi-family housing and 15 percent for laundromats used in the SNOPR were based upon the input of industry experts consulted in a comprehensive study conducted by the Consortium for Energy Efficiency in 1998. 29 Although the report was conducted over 10 years ago, it was the most reliable data source for developing a market split for CCW shipments that was available. DOE notes that Alliance believes that this split is generally representative of the industry. However, because the assumed shares of laundromats and multi-family housing in shipments have a significant effect on the NIA results, DOE conducted a sensitivity analysis in which it used the data in Alliance's 2008 10K report, coupled with a number of assumptions and input from Whirlpool, to estimate the shares of laundromats and multi-family housing in shipments of CCWs in 2008. The analysis, which is described in appendix 11C of the final rule TSD, yields an estimate of a 66 percent share for multi-family housing and a 34 percent share for laundromats. Using these shares increases national energy savings by approximately 9 percent (compared to the savings when using the 15 percent and 85 percent shares), and increases the NPV of consumer benefit by approximately 12 percent under TSLs 3, 4, and 5. 29 Consortium for Energy Efficiency, *Commercial Family-Sized Washers: An Initiative Description of the Consortium for Energy Efficiency* (1998). This document is available at: *http://* *www.cee1.org/com/cwsh/cwsh-main.php3.* a. New Construction Shipments To determine new construction shipments, DOE used a forecast of new housing coupled with equipment market saturation data for new housing. For new housing completions and mobile home placements, DOE adopted the projections from EIA's *AEO 2009* April Release Reference Case through 2030 for the November 2009 SNOPR and today's final rule. For CCWs, DOE relied on new construction market saturation data from the above-mentioned CEE report. b. Replacements and Non-Replacements DOE estimated replacements using equipment retirement functions developed from equipment lifetimes. For the November 2009 SNOPR and today's final rule, DOE used retirement functions based on Weibull distributions. DOE determined that the growth of in-unit washer saturations in the multi-family stock over the last 10 years was likely caused by conversions of rental property to condominiums, resulting in the gradual phase-out or non-replacement of failed CCWs in common-area laundry facilities. As a result, DOE used the average percent of non-replacements over the period between 1999 and 2005 (18 percent) and maintained it over the entire forecast period. The effect of maintaining non-replacements at 18 percent results in forecasted CCW shipments staying relatively flat during the forecast period. c. Impacts of Standards on Shipments To estimate the combined effects on CCW shipments from increases in equipment purchase price and decreases in equipment operating costs due to amended efficiency standards, DOE relied on a literature review and a statistical analysis that it has conducted on a limited set of appliance price, efficiency, and shipments data. DOE used purchase price and efficiency data specific to residential refrigerators, clothes washers, and dishwashers between 1980 and 2002 to conduct regression analyses. DOE's analysis suggests that the “relative” short-run price elasticity of demand, averaged over the three appliances, is −0.34. Because DOE's forecast of shipments and impacts due to standards spans over 30 years, DOE also considered how the relative price elasticity is affected once a new standard takes effect. After the purchase price change, price elasticity becomes more inelastic over the years until it reaches a terminal value. DOE incorporated a change in relative price elasticity change that resulted in a terminal value of approximately one-third of the short-run elasticity. In other words, DOE determined that consumer purchase decisions, in time, become less sensitive to the initial change in the equipment's relative price. NPCC suggested that it might be useful for DOE to compare the relative price elasticity approach used for CCWs with the shipments model that was used in the previous rulemaking for RCWs. (NPCC, Public Meeting Transcript, No. 67.4 at pp. 97-98) The approach that was used in the previous rulemaking for RCWs modeled consumer purchase decisions in terms of probabilities that typically depend on the type of stock, the age of the clothes washer, the incremental cost of the decision, and market conditions. The dependence of decision probabilities on price and market conditions was given by a standard econometric logic equation. In the present rulemaking for CCWs, DOE did not use such an approach, in part because it requires detailed information on consumer decision making, which is not available in the case of CCWs. For its November 2009 SNOPR as well as today's final rule, DOE estimated that price increases due to standards would lead to reductions in unit shipments for both top-loading and front-loading CCWs. DOE analyzed the impacts of increased purchase prices for each equipment class independently of the other. Because the price impacts for more efficient top-loaders are higher than those for more efficient front-loaders, DOE estimated that sales would decrease more for top-loading CCWs than for front-loaders. DOE did not explicitly model potential switching between top-loaders and front-loaders due to lack of information on the appropriate cross-price elasticity. Whirlpool commented that there are considerable between-class switching costs which would act against class switching by purchasers of commercial clothes washers. (Whirlpool, No. 67.11 at p. 2) DOE notes the comment by Whirlpool but it believes that there is uncertainty regarding the extent of switching that could result from changes in the price differential between top-loaders and front-loaders. 3. Other Inputs a. Base-Case Forecasted Efficiencies A key input to the calculations of NES and NPV are the energy efficiencies that DOE forecasts for the base case (without new standards). The forecasted efficiencies represent the annual shipment-weighted energy efficiency

(SWEF)of the equipment under consideration over the forecast period ( *i.e.,* from the estimated effective date of a new standard to 30 years after that date). For the November 2009 SNOPR, DOE first determined the distribution of equipment efficiencies currently in the marketplace to develop a SWEF for each equipment class for 2005. Using the SWEF as a starting point, DOE developed base-case efficiencies based on estimates of future efficiency increase. From 2005 to 2013 (2013 being the estimated effective date of a new standard), DOE estimated that there would be no change in the SWEF ( *i.e.,* no change in the distribution of equipment efficiencies). Because there are no historical data to indicate how equipment efficiencies have changed over time, DOE estimated that forecasted efficiencies would remain at the 2013 level until the end of the forecast period. DOE recognizes the possibility that equipment efficiencies may change over time ( *e.g.,* due to voluntary efficiency programs such as ENERGY STAR). But without historical information, DOE had no basis for estimating how much the equipment efficiencies may change. For today's final rule, DOE maintained its estimate that the SWEF would remain constant from 2005 through the end of the forecast period. b. Standards-Case Forecasted Efficiencies For its determination of each of the cases with alternative standard levels (“standards cases”), DOE used a “roll-up” scenario in the November 2009 SNOPR to establish the SWEF for 2013. In a roll-up scenario, equipment efficiencies in the base case which do not meet the standard level under consideration are projected to roll-up to meet the new standard level. Further, all equipment efficiencies in the base case that are above the standard level under consideration are not affected by the standard. The same scenario is used for the forecasted standards-case efficiencies as for the base-case efficiencies, namely, that forecasted efficiencies remained at the 2013 efficiency level until the end of the forecast period, as DOE has no data to reasonably estimate how such efficiency levels might change over the next 30 years. By maintaining the same rate of increase for forecasted efficiencies in the standards case as in the base case ( *i.e.,* no change), DOE retained a constant efficiency difference between the two cases over the forecast period. Although the no-change trends may not reflect what would happen to base-case and standards-case equipment efficiencies in the future, DOE believes that maintaining a constant efficiency difference between the base case and standards case provides a reasonable estimate of the impact that standards have on equipment efficiency. It is more important to accurately estimate the efficiency difference between the standards case and base case, than to accurately estimate the actual equipment efficiencies in the standards and base cases. DOE retained the approach used in the November 2009 SNOPR for today's final rule. c. Annual Energy Consumption The annual energy consumption per unit depends directly on equipment efficiency. For the November 2009 SNOPR and today's final rule, DOE used the SWEFs associated with the base case and each standards case, in combination with the annual energy data, to estimate the shipment-weighted average annual per-unit energy consumption under the base case and standards cases. The national energy consumption is the product of the annual energy consumption per unit and the number of units of each vintage, which depends on shipments. As noted above in section IV.D, DOE used a relative price elasticity to estimate standards-case shipments for CCWs. As a result, shipments forecasted under the standards cases are lower than under the base case. To avoid the inclusion of energy savings from reduced shipments, DOE used the standards-case shipments projection and the standards-case stock to calculate the annual energy consumption in the base case. For CCWs, any drop in shipments caused by standards is estimated to result in the purchase of used machines. As a result, the standards-case forecast explicitly accounted for the energy and water consumption of new standard-compliant CCWs and also used machines coming into the market due to the drop in new equipment shipments. DOE retained the use of the base-case shipments to determine the annual energy consumption in the base case and the approach used in the November 2009 SNOPR for today's final rule. d. Site-to-Source Conversion To estimate the national energy savings expected from appliance standards, DOE uses a multiplicative factor to convert site energy consumption (energy use at the location where the appliance is operated) into primary or source energy consumption (the energy required to deliver the site energy). For the November 2009 SNOPR and today's final rule, DOE used annual site-to-source conversion factors based on the version of NEMS that corresponds to the *AEO 2009* March Release version. These conversion factors account for natural gas losses from pipeline leakage and natural gas used for pumping energy and transportation fuel. For electricity, the conversion factors vary over time due to projected changes in generation sources ( *i.e.,* the power plant types projected to provide electricity to the country). Since the *AEO* does not provide energy forecasts that go beyond 2030, DOE used conversion factors that remain constant at the 2030 values throughout the remainder of the forecast. In response to a request from the DOE, Office of Energy Efficiency and Renewable Energy (EERE), the National Research Council

(NRC)appointed a committee on “Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy Efficiency Standards” to conduct a study called for in section 1802 of EPACT 2005. 30 The fundamental task before the committee was to evaluate the methodology used for setting energy efficiency standards and to comment on whether site (point-of-use) or source (full-fuel-cycle) measures of energy efficiency better support rulemaking to achieve energy conservation goals. The NRC committee defined site (point-of-use) energy consumption as reflecting the use of electricity, natural gas, propane, and/or fuel oil by an appliance at the site where the appliance is operated, based on specified test procedures. Full-fuel-cycle energy consumption was defined as including, in addition to site energy use, the energy consumed in the extraction, processing, and transport of primary fuels such as coal, oil, and natural gas; energy losses in thermal combustion in power-generation plants; and energy losses in transmission and distribution to homes and commercial buildings. 30 The National Academies, Board on Energy and Environmental Systems, Letter to Dr. John Mizroch, Acting Assistant Secretary, U.S. DOE, Office of EERE from James W. Dally, Chair, Committee on Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy Efficiency Standards, May 15, 2009. In evaluating the merits of using point-of-use and full-fuel-cycle measures, the NRC committee noted that DOE uses what the committee referred to as “extended site” energy consumption to assess the impact of energy use on the economy, energy security, and environmental quality. The extended site measure of energy consumption includes the generation, transmission, and distribution but, unlike the full-fuel-cycle measure, does not include the energy consumed in extracting, processing, and transporting primary fuels. A majority of members on the NRC committee believe that extended site energy consumption understates the total energy consumed to make an appliance operational at the site. As a result, the NRC committee's primary general recommendation is for DOE to consider moving over time to use of a full-fuel-cycle measure of energy consumption for assessment of national and environmental impacts, especially levels of greenhouse gas emissions, and to providing more comprehensive information to the public through labels and other means, such as an enhanced Web site. For those appliances that use multiple fuels ( *e.g.,* water heaters), the NRC committee believes that measuring full-fuel-cycle energy consumption would provide a more complete picture of energy used, allowing comparison across many different appliances as well as an improved assessment of impacts. The NRC committee also acknowledged the complexities inherent in developing a full-fuel-cycle measure of energy use and stated that a majority of the committee recommended a gradual transition to that expanded measure and eventual replacement of the currently used extended site measure. To improve consumers' understanding, the committee recommended that DOE and the Federal Trade Commission could evaluate potential indices of energy use and its impacts and could explore various options for label design and content using established consumer research methods. DOE acknowledges that its site-to-source conversion factors do not capture the energy consumed in extracting, processing, and transporting primary fuels. DOE also agrees with the NRC committee's conclusion that developing site-to-source conversion factors that capture the energy associated with the extraction, processing, and transportation of primary fuels is inherently complex and difficult. As a result, DOE will evaluate whether moving to a full-fuel-cycle measure will enhance its ability to set energy-efficiency standards. DOE also notes that the NRC committee's recommendation to use a full-fuel-cycle measure was especially focused on appliances using multiple fuels. For single-fuel appliances, the committee recommended that the current practice of basing energy efficiency requirements on the site measure of energy consumption should be retained. Although CCWs utilize heated water from both electric and natural gas water heaters and are credited with improved performance by reducing the energy used in electric and gas clothes dryers, the energy efficiency metric with which they are regulated, the MEF, is expressed in terms of electrical energy usage (cubic feet per kWh). As a result, for labeling and enforcement purposes, CCWs are a single-fuel appliance. Therefore, although a full-fuel-cycle measure may provide a better assessment of national and environmental impacts, it is not necessary for providing energy use comparisons among CCW models. e. Energy Used in Water and Wastewater Treatment and Delivery In the October 2008 NOPR and the November 2009 SNOPR, DOE did not include the energy required for water treatment and delivery in its analysis. It stated that EPCA defines “energy use” to be “the quantity of energy directly consumed by a consumer product at point of use, determined in accordance with test procedures under section 6293 of [42 U.S.C.].” (42 U.S.C. 6291(4)) Based on the definition of “energy use,” DOE concluded that it does not have the authority to consider embedded energy ( *i.e.,* the energy required for water treatment and delivery) in the analysis. It added that, even if DOE had the authority, it does not believe adequate analytical tools exist to conduct such an evaluation. 31 31 An analytical tool equivalent to EIA's NEMS would be needed to properly account for embedded energy impacts on a national scale, including the embedded energy due to water and wastewater savings. This new version of NEMS would need to analyze spending and energy use in dozens, if not hundreds, of economic sectors. This version of NEMS also would need to account for shifts in spending in these various sectors to account for the marginal embedded energy differences among these sectors. 72 FR 64432, 64498-99 (Nov. 15, 2007). DOE does not have access to such a tool or other means to accurately estimate the source energy savings impacts of decreased water or wastewater consumption and expenditures. In response, the California Utilities stated that DOE should account for energy savings associated with energy embedded in water. (California Utilities, No. 67.10 at p. 5) For the reason stated above, DOE did not include the energy required for water treatment and delivery in its analysis of energy savings from amended CCW standards. EJ commented that two of the additional rationales provided by DOE for not including the energy required for water treatment and delivery in its analysis were not convincing. In reference to DOE's statement that “Inclusion of the embedded energy associated with water and wastewater service, would, for completeness, also require inclusion of the energy associated with all other aspects of the installation and operation of the equipment, *e.g.* the manufacture, distribution, and installation of the equipment;” EJ stated that DOE has offered no explanation for why consideration of the energy embedded in the water used in equipment's operation would mandate this much wider expansion of the Department's analysis. Regarding DOE's contention that its analysis already reflects the cost of the energy embedded in water because the cost of the energy used in treating and delivering water is a component of the cost of water for clothes washer consumers, EJ stated that the outcome of the life-cycle cost analysis is not the only factor DOE must consider in determining whether a standard level is economically justified, and DOE must consider, to the maximum extent practicable, “the total projected amount of energy * * * savings likely to result directly from the imposition of the standard.” 42 U.S.C. 6295(o)(2)(B)(i)(III). (EJ, No. 67.5 at p. 12) In response, DOE notes that neither of the additional rationales on which EJ commented is central to its conclusion that it does not have the authority to consider the energy required for water treatment and delivery in the analysis. In the first instance, DOE was simply pointing out that it is difficult to select what should be included once one deviates from the aforementioned EPCA definition of “energy use.” In the second instance, DOE was noting that its analysis does include some aspects of the energy embedded in water delivered to CCWs. DOE agrees that the outcome of the life-cycle cost analysis is not the only factor DOE must consider in determining whether a standard level is economically justified; however, it believes that in considering the energy savings likely to result directly from the imposition of the standard, the appropriate course is to follow the EPCA definition of “energy use.” f. Total Installed Costs and Operating Costs The increase in total annual installed cost is equal to the difference in the per-unit total installed cost between the base case and standards case, multiplied by the shipments forecasted in the standards case. The annual operating cost savings per unit includes changes in energy, water, repair, and maintenance costs. For the November 2009 SNOPR and today's final rule, DOE forecasted energy prices using data from *AEO 2009* April Release. For today's final rule, DOE maintained the approach it used to develop repair and maintenance costs for more efficient CCWs in the November 2009 SNOPR. Commenting on valuation of energy savings, the California Utilities urged DOE to assess the energy impacts from the proposed standard such that the analysis captures the value of energy over time. It noted that California has developed an energy costing analysis for standards, called Time-Dependent Valuation of savings (TDV), which places a high value on energy savings that occur during high-cost times of the day and year. It added that water and wastewater can also have time-dependent values, which should be accounted for in DOE's analysis. (California Utilities, No. 67.10 at p. 6) In response, DOE acknowledges that the approach suggested by the California Utilities has merits, but it believes that the amount of effort and time required to develop time-dependent values of energy savings (as well as water and wastewater savings) at a diversity of locations across the nation would it make it impossible to implement this approach within the context of the present rulemaking. g. Discount Rates DOE multiplies monetary values in future years by the discount factor to determine the present value. DOE estimated national impacts using both a 3-percent and a 7-percent real discount rate, in accordance with guidance provided by the Office of Management and Budget

(OMB)to Federal agencies on the development of regulatory analysis (OMB Circular A-4 (Sept.17, 2003), section E, “Identifying and Measuring Benefits and Costs”). 32 32 OMB circulars are available online at: *http://www.whitehouse.gov/omb/circulars/.* The California Utilities stated that DOE should give primary weight to calculations based on the 3-percent discount rate for its national impact analysis. (California Utilities, No. 67.10 at p. 6) In response, DOE notes that OMB Circular A-4 references an earlier Circular A-94, which states that a real discount rate of 7 percent should be used as a base case for regulatory analysis. The 7-percent rate is an estimate of the average before-tax rate of return to private capital in the U.S. economy. It approximates the opportunity cost of capital, and, according to Circular A-94, it is the appropriate discount rate whenever the main effect of a regulation is to displace or alter the use of capital in the private sector. OMB later found that the average rate of return to capital remains near the 7-percent rate estimated in 1992. Circular A-4 also states that when regulation primarily and directly affects private consumption, a lower discount rate is appropriate: “The alternative most often used is sometimes called the social rate of time preference * * * the rate at which “society” discounts future consumption flows to their present value.” It suggests that the real rate of return on long-term government debt may provide a fair approximation of the social rate of time preference, and states that over the last 30 years, this rate has averaged around 3 percent in real terms on a pre-tax basis. Circular A-4 concludes that “for regulatory analysis, [agencies] should provide estimates of net benefits using both 3 percent and 7 percent.” Consistent with OMB's guidance, DOE did not give primary weight to results derived using a 3-percent discount rate. h. Effects of Standards on Energy Prices For the October 2008 NOPR, DOE conducted an analysis of the impact of reduced energy demand associated with possible standards on CCWs on prices of natural gas and electricity. The analysis found that gas and electric demand reductions resulting from max-tech standards for CCWs would have no detectable change on the U.S. average wellhead natural gas price or the average user price of electricity. Therefore, DOE concluded that CCW standards will not provide additional economic benefits resulting from lower energy prices. For today's final rule, DOE has made no change to its conclusions about the effects of CCW standards on energy prices. F. Consumer Subgroup Analysis For the November 2009 SNOPR and today's final rule, DOE analyzed the potential effects of CCW standards on two subgroups:

(1)Consumers not served by municipal water and sewer providers, and

(2)small businesses. For consumers not served by water and sewer, DOE analyzed the potential impacts of standards by conducting the analysis with well and septic system prices, rather than water and wastewater prices based on RFC/AWWA data. For small businesses, DOE analyzed the potential impacts of standards by conducting the analysis with different discount rates, because small businesses do not have the same access to capital as larger businesses. DOE estimated that for businesses purchasing CCWs, the average discount rate for small companies is 3.5 percent higher than the industry average. Due to the higher costs of conducting business, as evidenced by their higher discount rates, the benefits of CCW standards for small businesses will be lower than for the general population of CCW owners. More details on the consumer subgroup analysis can be found in chapter 12 of the final rule TSD. G. Manufacturer Impact Analysis DOE performed an MIA to estimate the financial impact of amended energy conservation standards on CCW manufacturers, and to calculate the impact of such standards on domestic manufacturing employment and capacity. The MIA has both quantitative and qualitative aspects. The quantitative part of the MIA primarily relies on the GRIM—an industry-cash-flow model customized for this rulemaking. The GRIM inputs are data characterizing the industry cost structure, shipments, and revenues. The key output is the INPV. Different sets of assumptions (scenarios) will produce different results. The qualitative part of the MIA addresses factors such as equipment characteristics, characteristics of particular firms, and market and equipment trends, and it also includes an assessment of the impacts of standards on subgroups of manufacturers. DOE outlined its methodology for the MIA in the October 2008 NOPR. 73 FR 62034, 62075-81 (Oct. 17, 2008). The complete MIA for the October 2008 NOPR is presented in chapter 13 of the NOPR TSD. For the November 2009 SNOPR, DOE updated the MIA results based on several changes to other analyses that impact the MIA. The total shipments and efficiency distributions were updated using the new estimates outlined in the SNOPR NIA. The SNOPR MIA also used the same analysis period as in the NIA (2013-2043) and updated the base year to 2009. DOE also updated the manufacturer production costs and the capital and equipment conversion costs to 2008$ using the producer price index for commercial laundry equipment manufacturing (NAICS 333312). Additionally, DOE updated the GRIM to allow the inclusion of Federal production tax credits. 74 FR 57738, 57762 (Nov. 9, 2009). For today's final rule, DOE continued to use the GRIM and revised the MIA results from the November 2009 SNOPR. For details of the MIA, see chapter 13 of the TSD. The following sections describe the revisions made to the MIA for today's final rule. For the November 2009 SNOPR, DOE used publicly available information, recent SEC filings, and the information published in chapter 13 and appendix 13A of the October 2008 NOPR to estimate the likely Federal production tax credits for which the CCW industry would be eligible. 74 FR 57738, 57764 (Nov. 9, 2009). For today's final rule, DOE used tax and earnings information published in SEC filings for the LVM and the same methodology described in appendix 13C to revise the estimated Federal production tax credits for 2009 and 2010. For details on the Federal production tax credits, see appendix 13C of the TSD. For the November 2009 SNOPR, DOE received a number of comments from interested parties in response to the distribution and usage patterns for commercial laundry, which affect the shipment analysis. In response, DOE modeled a sensitivity analysis to account for the slightly different shipment results. Shipments affect MIA results because they directly influence the value of the INPV estimated in the GRIM. For today's final rule, the GRIM was revised to include an alternative shipment scenario based on the sensitivity analysis. See appendix 11C for details on the sensitivity analysis, including the INPV results from the analysis. DOE received a number of comments from interested parties in response to the MIA analysis presented in the November 2009 SNOPR. At the SNOPR public meeting and in its written comments, Alliance stated that DOE's belief that all manufacturers can achieve a top-loading standard greater than or equal to 1.60 MEF and a water factor less than or equal to 8.5 is flawed. (Alliance, No. 66.4 at p. 5 33 ; Alliance, Public Meeting Transcript, No. 67.4 at pp. 24, 57) SCG also inquired if manufacturers can comply with the revised standard proposed in the November 2009 SNOPR. (SCG, Public Meeting Transcript, No. 67.4 at p. 57) Alliance stated that while it currently markets a top-loading CCW that is close to meeting the proposed top-loading standard in the November 2009 SNOPR, that model was developed to allow some customers to earn an ENERGY STAR rating and a CEE rebate. Alliance stated that this model is not accepted by all customers, as some reject the water-saving features required to achieve its rated efficiency level. Since all CCWs currently marketed at or near the proposed top-loading energy conservation standard use similar water-saving techniques, Alliance stated that it would not be appropriate to set a minimum efficiency standard at the level proposed in the November 2009 SNOPR and proposed setting the standard at 1.42 MEF/9.5 WF for top-loading CCWs instead. (Alliance, Public Meeting Transcript, No. 67.4 at p. 139; Alliance, No. 66.4 at p. 9) Whirlpool and GE stated that they are supportive of all standard levels proposed for CCWs in the November 2009 SNOPR. However, Whirlpool also stated that energy and water consumption levels more restrictive than 1.60 MEF/8.5 WF for top-loading CCWs and 2.20 MEF/5.5 WF for front-loading CCWs would likely lead to poor wash performance, poor rinse performance, or both. GE noted that its max-tech top-loading CCW (which meets the proposed top-loading standard) was designed for the on-premise laundry market, a relatively small sub-segment of the CCW market and said that model has not yet demonstrated viability in laundromats. (Whirlpool, No. 67.11 at p. 3 and GE, No. 67.9 at p. 1) Many of the Multiple Route Operators stated opposition to any efficiency level above the baseline for CCWs on the basis of poor wash performance. Additionally, most of the Multiple Route Operators stated that they had experimented with high efficiency top-loading CCWs ( *i.e.,* agitator-less models) and encountered sufficient operational and wash performance issues to abandon such models and replace them with traditional top-loading CCWs. Additionally, most of the Multiple Route Operators stated that they would be reluctant to utilize high efficiency top-loading CCWs based on reports of consumer dissatisfaction with such units. Lastly, the Multiple Route Operators strongly oppose the top-loading standard level proposed in the October 2008 NOPR ( *i.e.,* 1.76 MEF/8.3 WF) (Multiple Route Operators, No. 67.8 at pp. 1-3). 33 A notation in the form “Alliance, No. 66.4 at p. 5” identifies page 5 of a written comment submitted by Alliance entitled “Response to DOE Commercial Clothes Washer SNOPR.” This document was entered as comment number 66.4 in the docket for this rulemaking, along with a letter submitted by Alliance entitled “Is Top-Loading a Feature Within the Meaning of EPCA?” DOE proposed a 1.60 MEF/8.5 WF standard for top-loading CCWs in the November 2009 SNOPR in response to these and other concerns voiced by interested parties. For the November 2009 SNOPR, DOE stated it believed the proposed top-loading level could be met by all competitors because the unit would be based on a standard top-loading platform that uses a traditional agitator and no proprietary technology. 74 FR 57738, 57762-63 (Nov. 9, 2009). The model that the LVM references in its comment meets a 1.55 MEF/8.6 WF, and DOE research suggests that this model could be modified to meet the amended energy conversation standard. DOE notes that the LVM has not refuted that this model could be modified to meet the amended energy conservation standard, and while a manufacturer may develop higher efficiency models in order to qualify for energy star, tax credits, and similar rebates, DOE believes it is unlikely that a manufacturer would purposely risk its reputation and release a non-functional product onto the market. DOE has noted throughout the rulemaking that the heavy concentration of earnings from CCWs relative to its total clothes washer business, its overall focus on commercial laundry, and its relatively low revenue base compared to its principal CCW competitors would lead to the LVM being impacted disproportionately by any amended efficiency standard for CCWs. DOE also notes that TSL 3 avoids requiring manufacturers, including the LVM, to make concurrent, substantial investments in both top-loading and front-loading platforms. DOE continues to believe that the benefits of the amended energy conservation standard outweigh the burdens, including the negative impacts on manufacturers (see section VI.D). Alliance stated that its most recent SEC 10-Q for the quarter ending September 30, 2009, shows that its long-term debt bank covenants limit additional borrowing to $19.2 million, that its current credit facility must be refinanced before January 27, 2011, and that it expects tighter credit terms. Alliance estimates that an $18.4 million investment would be required to modify its facilities to manufacture top-loading CCWs at the max-tech efficiency level, double the total annual capital expenditures for the entire company. Alliance stated that, even if the funds were available for a dramatic redesign of its top-loading CCWs, it would not be approved for funding by its investors regardless of the method used to calculate the financial payback because the equipment does not meet customers' minimum requirements. (Alliance, No. 66.4 at p. 5; Alliance, Public Meeting Transcript, No. 67.4 at pp. 24-25) Alliance also stated that it would need to redesign the inner and outer tubs to match the max-tech top-loading CCW's larger capacity. These changes might not be possible to its existing tub fabrication cells while simultaneously meeting demand, and could require a new building due to lack of space to “shoe-horn” fabrication and to avoid shutting down. Alliance stated that its customers do not want larger capacity washers because its tub size has been designed to match commercial laundry users' needs and load sizes, as evidenced by decades of sales and customer experience. (Alliance, No. 67.8 at p. 4) DOE estimates that the total conversion costs for the industry to meet the top-loading amended energy conservation standard will be approximately $16.6 million. DOE research thus suggests that the LVM's production facilities could be modified at a more modest cost than projected by the LVM to make a sufficient number of top-loading CCWs that would meet the amended energy conservation standards. DOE estimates that the majority of the conversion costs will consist of product development, engineering, testing, marketing, and other costs required to make equipment designs comply with energy conservation standards while addressing consumer acceptance issues raised by the LVM. As of December 31, 2008, Alliance stated in its SEC filings that its principal line of credit was limited to an additional $16.2 million of borrowing and that a substantial portion of its long term debt is due concurrently with the compliance date of the final rule. DOE agrees with the LVM that the company's current debt structure makes it more difficult to finance additional product development and capital expense. In response to these and other concerns voiced by the LVM, DOE revised the proposed top-loading CCW energy conservation standard to a level which a current top-loading LVM model almost attains. Thus, the negative impacts on the LVM have been weighed in DOE's consideration of the amended energy conservation standard. Alliance stated that the standards proposed in the November 2009 SNOPR place 292 union laborers in its Ripon, WI plant at risk of losing their jobs. Of these 292 laborers, 150 union laborers are attributed to CCW production and 142 laborers are associated with companion commercial clothes dryers. The standards proposed in the November 2009 SNOPR could also eliminate an additional 40 non-production jobs. (Alliance, Public Meeting Transcript, No. 67.4 at p. 25; Alliance, No. 66.4 at p. 8) For the October 2008 NOPR, DOE calculated the direct employment impacts using the GRIM and information gathered from interviews with manufacturers. DOE estimated that there would be positive employment impacts among domestic CCW manufacturers for TSL 1 through TSL 5. Because the LVM had previously stated it could be eliminated from the commercial market, DOE also specifically investigated the LVM employment using its CCW revenues and additional employment estimates. DOE estimated that if the LVM ceased to produce soft-mount dryers and CCWs that this would lead to a loss of 292 production jobs. DOE estimated that a complete closure of the Ripon, WI facility would result in the dismissal of approximately 600 factory employees. 73 FR 60234, 62102-03 (Oct. 17, 2008). For the November 2009 SNOPR, DOE stated that it believes that the proposed energy conservation standard would allow the LVM to continue to produce top-loading CCWs, mitigating any potential closure of its domestic manufacturing facility. 74 FR 57738, 57763 (Nov. 9, 2009). DOE did not receive any additional comments that suggest technical barriers would prevent manufacturers from meeting the energy conservation standards and notes that two competitors support the proposed amended energy conservation standards for top-loading CCWs. Thus, for today's final rule, DOE estimates that the LVM would be able to continue to produce top-loading CCWs, and that significant impacts on LVM manufacturing employment due to today's final rule are hence unlikely. Further discussion of the LVM and the potential impacts on direct employment for the CCW industry is presented in chapter 13 of the TSD. ASAP stated that much of the SNOPR analysis was driven by DOE's concern for the precarious position of the LVM. ASAP stated that it remains somewhat unconvinced that the numbers are as stark as presented in the revised MIA. (ASAP, Public Meeting Transcript, No. 67.4 at p. 33) ASAP and the Joint Comment questioned DOE's estimates of the potential impacts on the LVM if the market were to shift entirely to front-loading CCWs. ASAP and the Joint Comment stated that the green-field assumption in this analysis was not valid, especially considering that the LVM is already making a substantial number of front-loading washers, and since new buildings are costly and depreciate over a much longer schedule than new equipment. The Joint Comment argues that these assumptions disproportionately increase the annualized financial cost of conversion. (ASAP, Public Meeting Transcript, No. 67.4 at pp. 140-142; Joint Comment, No. 67.6 at pp. 5-6) ASAP also inquired if a shift to only front-loading production would involve a green-field manufacturing facility even if top-loading production is ceasing. (ASAP, Public Meeting Transcript, No. 67.4 at p. 143) ASAP and the Joint Comment stated that a shift to only front-loading washer production would not force the LVM to completely redesign washers nor incur expenses such as research and development. Both ASAP and the Joint Comment argue that, because front-loading washers currently represent 25 to 30 percent of the LVM's unit shipments, the LVM will have the operating experience to gradually reduce production costs and improve production designs without a complete redesign. (ASAP, Public Meeting Transcript, No. 67.4 at p. 146; Joint Comment, No. 67.6 at p. 5) DOE research confirms that the LVM has been gradually increasing its production of front-loading CCWs. However, the LVM's production of top-loading CCWs still heavily outweighs its production of front-loading CCWs. DOE believes a complete shift to front-loading CCWs would represent a radical departure from the much more gradual market transition that has been occurring. As illustrated in chapter 13 of the TSD, such a market disruption would disproportionately impact the LVM since the LVM would have to increase front-loader manufacturing capacity by multiples, while its competitors would have to increase their overall front-loader manufacturing capacity by less than 5 percent to fully transition their CCW production to only front-loading washers. Since top-loaders and front-loaders share few parts and require separate assembly lines, sub-assembly stations, etc., DOE concluded that the LVM would have to build an annex to house the expanded front-loader fabrication and assembly lines as long as top-loading clothes washer production continues. For example, the LVM could continue to manufacture top-loading RCWs even after ceasing top-loading CCW production. While some equipment and space could potentially be re-purposed towards fabricating front-loader components ( *i.e.,* large presses, machining centers, etc.), DOE research suggests that much of the space currently occupied by hard-tooled top-loading clothes washer assembly lines in the LVM facility will remain unavailable until the LVM ceases to produce top-loading clothes washers altogether. DOE expects the LVM to continue to produce top-loading clothes washers as long as it can to fulfill customer demand. Consequently, the space currently occupied by the top-loading clothes washer lines will likely continue to be occupied on the compliance date of today's final rule, necessitating an annex in which to house expanded front-loader assembly and fabrication. Alliance agreed that its existing facility could not accommodate the new equipment for front-loading production and continue to produce its current volumes of top-loading washers. (Alliance, Public Meeting Transcript, No. 67.4 at pp. 145-146) As illustrated in chapter 13 of the TSD, a complete transition to front-loading CCWs would likely lead to a market disruption since switching costs for customers would be minimized. Consequently, DOE research suggests that the LVM would be required to redesign its front-loader platform to become more cost-competitive. In appendix 13C of the SNOPR TSD, DOE estimated that the LVM would be eligible for about $4.1 million in Federal production tax credits between 2007 and 2010. ASAP and the Joint Comment questioned DOE's conclusion that additional tax credits in 2010 are unlikely. The Joint Comment estimated that additional credits in 2010 are likely as production of front-loaders ramps up further (ASAP, Public Meeting Transcript, No. 67.4 at pp. 126-129; Joint Comment, No. 67.6, at p. 6) ASAP questioned if DOE believed that the LVM was reaching a limit on the number of front-loading washers that it could sell or produce. (ASAP, Public Meeting Transcript, No. 67.4 at pp. 126-129) ASAP also asked if there was an analysis to support the estimate of the cap on machines that would qualify for the Federal production tax credit, and if such tax credits for 2007 were included in the analysis. (ASAP, Public Meeting Transcript, No. 67.4 at p. 129, 135) Finally, the Joint Comment stated that, even though DOE's analysis of the Federal production tax credits has relatively little impact on the industry as a whole, the Federal production tax credits will mitigate a significant portion of the conversion costs borne by the LVM to convert their entire production to front-loading washers. (Joint Comment, No. 67.6 at p. 6). Alliance stated, while it has earned tax credits for qualifying washers, these tax credits have not been used for a cash benefit. (Alliance, No. 67.8 at p. 4) For the November 2009 SNOPR, DOE accounted for the impacts of the Federal production tax credits updated by The Energy Improvement and Extension Act of 2008 (Pub. L. 110-343; EIEA 2008). Because only the LVM produces qualifying CCWs, DOE based its estimates of the potential benefits to the CCW industry by estimating the potential Federal production tax credits that the LVM could receive. Using publicly available information, recent SEC filings, and the information published in chapter 13 and appendix 13A of the October 2008 NOPR, DOE estimated the LVM's front-loading CCW shipment projections to 2010 and calculated the Federal production tax credits for qualifying shipments. In the November 2009 SNOPR, DOE estimated that the LVM would likely not qualify for any Federal production tax credits in 2010. 74 FR 57738, 57763-64 (Nov. 9, 2009) DOE's estimate was not based on a cap on the number of qualifying washers the LVM could sell or produce; rather, it was based on statements in the LVM's 10-Q filing for the quarter ending March 31, 2009. The 10-Q at that time suggested that the LVM's front-loading production in 2010 would not increase significantly to qualify for additional Federal production tax credits. For today's final rule, DOE updated its estimates using the most recent, publicly available information to calculate the likely benefit to the LVM from the tax credit provisions. DOE updated the assumptions for the estimated Federal production tax credit for 2009 and 2010 based on the LVM's recent SEC filings. The LVM's 10-Q filing for the quarter ending September 30, 2009, reported higher tax benefits from the energy efficiency tax program compared to the 10-Q filing for the quarter ending March 31, 2009. DOE revised its figures for 2009 based on this new information and used the LVM's most recent historical estimate for the growth rate of the commercial laundry industry to estimate LVM shipments for 2010. 34 The revised estimates suggest that the LVM will collect approximately $4.0 million in Federal production tax credits from 2008-2010 from the provisions updated by EIEA 2008 and a total of $5.3 million from the program from 2007-2010. The revised estimate for today's final rule is approximately $1.2 million higher than the estimate published in the November 2009 SNOPR. 34 See *http://www.comlaundry.com/investors/relations/sec-filings.asp* for a list of Alliance Laundry System's SEC filings. In the GRIM, DOE accounts for the Federal production tax credit as a direct cash benefit in the base and standards cases that directly increases INPV. Because 2009 is the base year to which industry cash flows are discounted, any Federal production tax credit from 2007 and 2008 is not counted towards the INPV analysis because it falls outside the analysis period. However, any tax benefit in 2009 and 2010 falls within the analysis period and hence increases industry value (potentially decreasing the impacts on manufacturers due to energy conservation standards). DOE's revised Federal production tax credit estimates for the LVM are approximately $1.2 million and $0.4 million for 2009 and 2010, respectively. These revised figures do not significantly impact the INPV calculated by DOE nor do they come close to paying for a facility conversion to front-load only CCW production. DOE estimates that a wholesale conversion to only front-loading CCW production would cost the LVM approximately 12 times the total Federal production tax credit benefit DOE expects the LVM to collect over the life of the program. (See chapter 13 of the TSD for further details.) While DOE research suggests that Federal production tax credits could help the LVM implement gradual changes to its production facilities, such tax credits would not substantially defray wholesale plant conversion costs. Whirlpool commented that the ability of a manufacturer to use an earned tax credit is a function of the earnings situation for that manufacturer and that many manufacturers cannot use earned tax credits in some years due to current economic conditions. (Whirlpool, No. 67.11 at p. 3) Because the LVM reported earnings from the tax credit and stated that it expected to earn a benefit from the tax credits in 2009, DOE calculated the expected tax credits for the LVM in 2009 and 2010 and assumed that the LVM would benefit in those years. Whirlpool agreed with DOE's conclusion that the past tax credits have only offset a small fraction of the costs necessary to produce high efficiency equipment. Whirlpool also stated that if tax credits were offered in between the issuance of the final rule and the compliance date, they could have an impact on the ability of individual manufacturers to make the capital investment in new product platforms. (Whirlpool, No. 67.11 at p. 3) DOE agrees that tax credits that were effective between the issuance of the final rule and the compliance date of the amended standards could have an impact on the ability of manufacturers to fund capital investments. However, because most of the benefit from the EIEA 2008 takes place outside of the analysis period, DOE believes it is unlikely that manufacturers could use the credits to fund much of their capital conversion costs. EJ recommended that DOE review its Federal production tax credit projections for 2010 if it adopts a strong standard that applies to all CCWs. EJ added that such a standard would likely cause manufacturers to ramp up production of qualifying washers over time, not just beginning in 2013. (EJ, Public Meeting Transcript, No. 67.4 at pp. 137-138) For today's final rule, DOE revised its Federal production tax credit projections for 2010 using the LVM's most recent SEC filings. Based on the LVM's 10-Q for the quarter ending September 30, 2009, DOE revised its estimates to include Federal production tax credits for 2010. DOE continues to believe that it is unlikely that manufacturers would shift their clothes washer production to exclusively manufacture front-loading washers in response to the Federal production tax credits or the energy conservation standards in today's final rule. Thus, DOE relied on the forward-looking projections published by the LVM to estimate CCW sales that qualify for the production tax credits. Alliance and White & Case (W&C) cited DOJ's letter in response to the October 2008 NOPR that stated there appeared to be a real risk that at least one manufacturer could not meet the proposed amended energy conservation standard for top-loading CCWs. Both Alliance and W&C stated that DOE's response in the November 2009 SNOPR ignored DOJ's conclusion that DOE should consider keeping the existing standard in place for top-loading CCWs to maintain competition. (Alliance, No. 66.4 at p. 3; W&C, Public Meeting Transcript, No. 67.4 at pp. 26-27) Alliance stated that DOJ's recommendation to keep the existing standard in place for top-loading CCWs was the appropriate course of action for this rulemaking. (Alliance, No. 66.4 at p. 9; Alliance, Public Meeting Transcript, No. 67.4 at pp. 29-30) In addition, Multiple Route Operators stated they were concerned that the standards proposed in the October 2008 NOPR could force Alliance to exit the manufacture of top-loading CCWs, which would cause them significant harm because they would pay more for washers. Multiple Route Operators urged DOE to adopt a standard that would enable Alliance to remain the lowest-cost CCW provider. (Multiple Route Operators, No. 67.8 at pp. 1-3) In the October 2008 NOPR, DOE proposed amended standards of 1.76 MEF/8.3 WF for top-loading CCWs. 73 FR 62034, 62036 (Oct. 17, 2008). In response, DOJ found that there was a real risk that one or more CCW manufacturers could not meet the proposed standard for top-loading CCWs. DOJ stated that it was concerned that meeting the proposed standards could require substantial investment in the development of new technology that some suppliers of top-loading CCWs might not find economically justifiable. 74 FR 57738, 57802 (Nov. 9, 2009). In response to the concerns raised by DOJ and other concerns raised by interested parties, DOE proposed a top-loading CCW standard of 1.60 MEF/8.5 WF in the November 2009 SNOPR. 74 FR 57738, 57763 (Nov. 9, 2009). In today's final rule, DOE determined that 1.60 MEF/8.5 WF is the maximum top-loading CCW efficiency level that is economically justified and technologically feasible while being sensitive to concerns raised by DOJ and the LVM. EJ stated that DOE failed to consider the low barriers to entry in the CCW market in its analysis of the competition issue. While there are currently only three CCW manufacturers, if the departure of any of these manufacturers increases markups significantly, higher profits would allow RCW manufacturers or small players to expand into the commercial market. EJ asserted that, because these manufacturers would not have to design completely new equipment or construct a new manufacturing facility to begin selling CCWs, it would be “irrational” for DOE to contend that there would be any significant adverse impact on competition in the commercial market. EJ stated that DOE must explain why new entrants would be unable to gain a foothold in the CCW market by taking advantage of this disturbance in the *status quo* if one manufacturer exited the market. (EJ, No. 67.5 at. pp. 8-9; Public Meeting Transcript, No. 67.4 at p. 138) Multiple Route Operators believe they would face higher prices if Alliance were eliminated from the market. (Multiple Route Operators, No. 67.8 at pp. 1-3) In response to the October 2008 NOPR, DOJ found that there was a real risk that one or more of the manufacturers could not meet the proposed standard for top-loading CCWs. 74 FR 57738, 57802 (Nov. 9, 2009) DOE revised its proposed standards in part to ease these competitive concerns raised by the DOJ and other interested parties. 74 FR 57738, 57763 (Nov. 9, 2009). In chapter 13 of the TSD, DOE offers multiple reasons why it believes the LVM has succeeded in the CCW market despite low overall production volumes:

(1)Well-depreciated machinery and legacy design;

(2)effective customer and service networks;

(3)a large installed base of top-loading CCWs; and

(4)stock of repair parts that ensures a large market for replacement machines. Multiple Route Operators confirmed many of these advantages, stating that they believe Alliance offers CCWs with the lowest total cost of ownership because its washers have the longest functional life. In addition, Multiple Route Operators stated that the quality, service, and unique products with CCW features separate Alliance from other manufacturers. (Multiple Route Operators, No. 67.8 at pp. 1-3) DOE believes that route operators' and distributors' large inventory of service parts and repair knowledge represent a significant switching cost, discouraging customers from adopting rival platforms. As long as the LVM can continue to produce replacement top-loading CCWs, DOE does not believe the LVM will be placed at a substantial disadvantage relative to its larger competitors. However, due to the relatively small stock of front-loading clothes washers installed in the CCW market, DOE believes that a wholesale conversion of the CCW market to front-loading machines would eliminate most of the LVM's advantages that have allowed it to remain competitive. DOE research suggests that, while the cost of entering the CCW market may be construed as low, statements by multiple manufacturers indicate that actual success in the CCW market depends on many factors. For example, DOE notes that a top-loading, horizontal-axis clothes washer used to be marketed into the CCW market but that it was withdrawn for a number of reasons. Additionally, converting residential platforms for commercial use is not as simple as adding a coin box; substantial investments are required to integrate a variety of payment systems. Custom user interfaces are required, both for compliance with the Americans with Disabilities Act, and to facilitate consumer education. Resultant conversion costs have to be amortized across a much lower production volume than is typically found in the residential market, and critical parts and service personnel have to be present in the territory of any route operator that is going to consider a rival. Hence, while entering the CCW market may not represent significant technical hurdles, the operational and financial challenges are sufficient to limit the market to a small number of competitors. DOE also received comment regarding its characterization of Alliance as an LVM. The Joint Comment argued that DOE's characterization of Alliance as an LVM is a significant misnomer, as the LVM reported revenues equivalent to approximately half of the total CCW industry revenue and claims to be the leading manufacturer of stand-alone commercial laundry equipment in North America. (Joint Comment, No. 67.6 at p. 5) For the October 2008 NOPR, DOE presented a separate analysis of the LVM. 73 FR 62034, 62103-04 (Oct. 17, 2008). Although DOE continues to agree with the Joint Comment that the LVM has a significant share of the CCW industry based on reported revenues, DOE maintains that the LVM does not have the same overall clothes washer manufacturing scale as its competitors (for both residential products and commercial equipment) and should hence be characterized as an LVM in the context of this rulemaking. DOE notes that most CCWs on the market in the United States are based largely on RCW platforms that are upgraded selectively. Some investments (such as the controllers) are CCW-specific but only comprise part of the total unit cost. The majority of capital expenditures related to tooling, equipment, and other machinery in a plant can typically be applied to the residential as well as the commercial market. Thus, overall (both RCW and CCW) manufacturing scale has a significant impact on the cost-effectiveness of potential platform upgrades. A manufacturer with a high-volume residential line can cost justify much more capital-intensive solutions if they are applicable in both markets, whereas an LVM could lack the scale and capital to make such investments. Thus, an LVM may be required to purchase upgrade options from third-party vendors instead of developing in-house solutions that reduce costs at higher volumes. In the CCW market, the most direct competitor to the LVM has over 60 times the overall shipment volumes of the LVM. This scale difference also affects purchasing power because a large, diversified appliance manufacturer can use its production scale to achieve better prices for raw materials and commonly purchased components such as controllers, motors, belts, switches, sensors, and wiring harnesses. Even if a large company purchases fewer items of a certain component, its overall revenue relationship with a supplier may still enable it to achieve better pricing than a smaller competitor, even if that competitor buys certain components in higher quantities. Lastly, high-volume manufacturers benefit from being able to source their components through sophisticated supply chains on a worldwide basis. Therefore, DOE concludes that an LVM is unlikely to be able to compete solely on manufacturing cost. H. Employment Impact Analysis DOE considers employment impacts in the domestic economy as one factor in selecting a proposed standard. Employment impacts include direct and indirect impacts. Direct employment impacts are changes in the number of employees for manufacturers of equipment subject to standards, their suppliers, and related service firms. The MIA addresses these impacts. Indirect employment impacts from standards consist of the net jobs created or eliminated in the national economy, other than in the manufacturing sector being regulated, due to:

(1)Reduced spending by end users on energy (electricity, gas (including liquefied petroleum gas), and oil);

(2)reduced spending on new energy supply by the utility industry;

(3)increased spending on the purchase price of new equipment; and

(4)the effects of those three factors throughout the economy. DOE expects the net monetary savings from standards to be redirected to other forms of economic activity. DOE also expects these shifts in spending and economic activity to affect the demand for labor in the short term, as explained below. One method for assessing the possible effects on the demand for labor of such shifts in economic activity is to compare sectoral employment statistics developed by the BLS. The BLS regularly publishes its estimates of the number of jobs per million dollars of economic activity in different sectors of the economy, as well as the jobs created elsewhere in the economy by this same economic activity. Data from BLS indicate that expenditures in the utility sector generally create fewer jobs (both directly and indirectly) than expenditures in other sectors of the economy. There are many reasons for these differences, including wage differences and the fact that the utility sector is more capital intensive and less labor intensive than other sectors. (See Bureau of Economic Analysis, *Regional Multipliers: A User Handbook for the Regional Input-Output Modeling System* (RIMS II), Washington, DC, U.S. Department of Commerce, 1992.) Efficiency standards have the effect of reducing consumer utility bills. Because reduced consumer expenditures for energy likely lead to increased expenditures in other sectors of the economy, the general effect of efficiency standards is to shift economic activity from a less labor-intensive sector ( *i.e.,* the utility sector) to more labor-intensive sectors ( *e.g.,* the retail and manufacturing sectors). Thus, based on the BLS data alone, DOE believes net national employment will increase due to shifts in economic activity resulting from standards for CCWs. In developing the November 2009 SNOPR, DOE estimated indirect national employment impacts using an input/output model of the U.S. economy called Impact of Sector Energy Technologies (ImSET). 35 ImSET is a special-purpose version of the “U.S. Benchmark National Input-Output” (I-O) model designed to estimate the national employment and income effects of energy-saving technologies. The ImSET software includes a computer-based I-O model with structural coefficients to characterize economic flows among 188 sectors most relevant to industrial, commercial, and residential building energy use. The Joint Comment stated that DOE must consider its projections that an increase in employment will result from the adoption of standards in weighing the economic costs and benefits of strong efficiency standards. (Joint Comment, No. 44 at p. 13) As described in section VI.C.3 below, DOE takes into consideration the indirect employment impacts estimated using ImSET when evaluating alternative standard levels. Direct employment impacts on the manufacturers that produce CCWs are analyzed in the MIA, as discussed in section IV.G. For today's final rule, DOE has made no change to its method for estimating employment impacts. For further details, see chapter 15 of the final rule TSD. 35 More information regarding ImSET is available online at: *http://www.pnl.gov/main/publications/external/technical_reports/PNNL-15273.pdf* I. Utility Impact Analysis The utility impact analysis estimates the change in the forecasted power generation capacity for the Nation that would be expected to result from adoption of new standards. For the November 2009 SNOPR and today's final rule, DOE calculated this change using the NEMS-BT computer model. NEMS-BT models certain policy scenarios such as the effect of reduced energy consumption by fuel type. The analysis output provides a forecast for the needed generation capacities at each TSL. The estimated net benefit of the standard in today's final rule is the difference between the forecasted generation capacities by NEMS-BT and the *AEO 2009* April Release Reference Case. DOE obtained the energy savings inputs associated with efficiency improvement on CCW energy consumption electricity and natural gas from the NIA. These inputs reflect the effects of both fuel (natural gas) and electricity consumption savings. Chapter 14 of the final rule TSD presents results of the utility impact analysis. In its November 2009 SNOPR, DOE did not estimate impacts on water and wastewater utilities because the water and wastewater utility sector exhibits a high degree of geographic variability produced by a large diversity of water resource availability, institutional history, and regulatory context. 73 FR 62034, 62082 (Oct. 17, 2008). EJ commented that given the water supply and water and wastewater infrastructure concerns that are affecting and will continue to affect many parts of the country, it would be arbitrary and capricious for the Department to fail to address the impact on water and wastewater utilities of reduced water consumption resulting from commercial clothes washer standards. (EJ, No. 67.5 at p. 13) In response, DOE refers again to the diversity of the water and wastewater utility sector. Whereas in the case of the electric utility sector DOE has a tool and data set that allows estimation of impacts on infrastructure (in terms of installed generation capacity), DOE does not have (and is not aware of) a comparable tool and data set that would allow estimation of impacts on infrastructure in the water and wastewater utility sector resulting from commercial clothes washer standards. Therefore, for today's final rule, DOE did not estimate impacts to the water and wastewater utility sector. J. Environmental Assessment Pursuant to the National Environmental Policy Act of 1969

(NEPA)(42 U.S.C. 4321 *et seq.* ) 42 U.S.C. 6295(o)(2)(B)(i)(VI), DOE prepared a draft environmental assessment

(EA)of the potential impacts of the standards for CCWs in today's final rule, which it has included as chapter 16 of the TSD. DOE found that the environmental effects associated with the standards for CCWs were not significant. Therefore, DOE is issuing a Finding of No Significant Impact (FONSI), pursuant to NEPA, the regulations of the Council on Environmental Quality (40 CFR parts 1500-1508), and DOE's regulations for compliance with NEPA (10 CFR part 1021). The FONSI is available in the docket for this rulemaking. In the EA, DOE estimated the reduction in power sector emissions of CO 2 , NO X , and Hg using the NEMS-BT computer model. Because the on-site operation of CCWs requires use of fossil fuels and results in emissions of CO 2 and NO X , DOE also accounted for the reduction in these emissions due to the standards. In the EA, NEMS-BT is run similarly to the *AEO* NEMS, except that CCW energy use is reduced by the amount of energy saved (by fuel type) due to the TSLs. The inputs of national energy savings come from the NIA analysis; the output is the forecasted physical emissions. The estimated net benefit of the standard in today's final rule is the difference between the forecasted emissions by NEMS-BT at each TSL and the *AEO 2009* April Release Reference Case. NEMS-BT tracks CO 2 emissions using a detailed module that provides results with broad coverage of all sectors and inclusion of interactive effects. DOE has determined that sulfur dioxide (SO 2 ) emissions from affected Electric Generating Units

(EGUs)are subject to nationwide and regional emissions cap and trading programs that create uncertainty about the impact of energy conservation standards on SO 2 emissions. Title IV of the Clean Air Act sets an annual emissions cap on SO 2 for all affected EGUs. SO 2 emissions from 28 eastern States and the District of Columbia (D.C.) are also limited under the Clean Air Interstate Rule (CAIR, published in the **Federal Register** on May 12, 2005; 70 FR 25162 (May 12, 2005), which creates an allowance-based trading program that will gradually replace the Title IV program in those States and D.C. (The recent legal history surrounding CAIR is discussed below.) The attainment of the emissions caps is flexible among EGUs and is enforced through the use of emissions allowances and tradable permits. Energy conservation standards could lead EGUs to trade allowances and increase SO 2 emissions that offset some or all SO 2 emissions reductions attributable to the standard. DOE is not certain that there will be reduced overall SO 2 emissions from the standards. The NEMS-BT modeling system that DOE uses to forecast emissions reductions currently indicates that no physical reductions in power sector emissions would occur for SO 2 . The above considerations prevent DOE from estimating SO 2 reductions from standards at this time. Even though DOE is not certain that there will be reduced overall emissions from the standard, there may be an economic benefit from reduced demand for SO 2 emission allowances. Electricity savings from standards decrease the generation of SO 2 emissions from power production, which can lessen the need to purchase emissions allowance credits, and thereby decrease the costs of complying with regulatory caps on emissions. Much like SO 2 emissions, NO X emissions from 28 eastern States and the District of Columbia (D.C.) are limited under the CAIR. Although CAIR has been remanded to EPA by the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit), it will remain in effect until it is replaced by a rule consistent with the Court's July 11, 2008, opinion in *North Carolina* v. *EPA.* 531 F.3d 896 (D.C. Cir. 2008); see also *North Carolina* v. *EPA,* 550 F.3d 1176 (D.C. Cir. 2008). These court positions were taken into account in the November 2009 SNOPR and in today's final rule. Because all States covered by CAIR opted to reduce NO X emissions through participation in cap and trade programs for electric generating units, emissions from these sources are capped across the CAIR region. In the 28 eastern States and D.C. where CAIR is in effect, DOE's forecasts indicate that no NO X emissions reductions will occur due to energy conservation standards because of the permanent cap. Energy conservation standards have the potential to produce an economic impact in the form of lower prices for NO X emissions allowances, if their impact on electricity demand is large enough. However, DOE has concluded that the standards in today's final rule will not have such an effect because the estimated reduction in electricity demand in States covered by the CAIR cap would be too small to affect allowance prices for NO X under the CAIR. New or amended energy conservation standards would reduce NO X emissions in those 22 States that are not affected by the CAIR. DOE used the NEMS-BT to forecast emission reductions from the CCW standards in today's final rule. Similar to emissions of SO 2 and NO X , future emissions of Hg would have been subject to emissions caps. The Clean Air Mercury Rule

(CAMR)would have permanently capped emissions of Hg from new and existing coal-fired plants in all States beginning in 2010 (70 FR 28606). The CAMR was vacated by the D.C. Circuit in its decision in *New Jersey* v. * Environmental Protection Agency* prior to the publication of the October 2008 NOPR. 517 F 3d 574 (D.C. Cir. 2008). However, the NEMS-BT model DOE initially used to estimate the changes in emissions for the proposed rule assumed that Hg emissions would be subject to CAMR emission caps. Thus, after CAMR was vacated, DOE was unable to use the NEMS-BT model to estimate any changes in the physical quantity of Hg emissions that would result from standard levels it considered in the October 2008 NOPR. Instead, DOE used an Hg emission rate (in metric tons of Hg per energy produced) based on the *AEO 2008.* Because virtually all Hg emitted from electricity generation is from coal-fired power plants, DOE based the emission rate on the metric tons of Hg emitted per TWh of coal-generated electricity. To estimate the reduction in Hg emissions, DOE multiplied the emission rate by the reduction in coal-generated electricity associated with the standard levels considered. DOE continued to use the above approach, updated for the *AEO 2009* April Release, to estimate the Hg emission reductions due to standards for the SNOPR. For today's final rule, however, DOE used the latest version of NEMS-BT, which reflects CAMR being vacated and does not incorporate CAMR emission caps, to estimate the reduction in Hg emissions. In addition to electricity generation, the operation of gas-fired CCWs results in emissions of CO 2 and NO X at the sites where the appliances are used. NEMS-BT provides no means for estimating such emissions. Therefore, DOE calculated separate estimates of the effect of the potential standards on site emissions of CO 2 and NO X based on emissions factors derived from the literature. Because natural gas combustion does not yield SO 2 emissions, DOE did not report in either the November 2009 SNOPR or today's final rule the effect of the proposed standards on site emissions of SO 2 . For its November 2009 SNOPR, DOE conducted a separate analysis of wastewater discharge impacts as part of the environmental assessment for commercial clothes washers. 73 FR 62034, 62112-13 (Oct. 17, 2008). For today's final rule, DOE retained the same analysis method for estimating wastewater discharge impacts. EJ commented that given the water supply concerns that are affecting and will continue to affect many parts of the country, it would be arbitrary and capricious for the Department to fail to address the environmental benefits of reduced water consumption resulting from commercial clothes washer standards. (EJ, No. 67.5 at p. 13) In response, DOE notes that the environmental impacts of reduced water use are highly variable across the country. DOE has neither an analytical tool that could estimate such impacts nor sufficient information to draw definitive conclusions about such impacts. Therefore, it was not able to account for potential environmental benefits of reduced water consumption resulting from the commercial clothes washer standards considered for today's final rule. K. Monetizing Carbon Dioxide and Other Emissions Impacts For the November 2009 SNOPR, DOE calculated the possible monetary benefit of CO 2 , NO X , and Hg reductions. Cumulative monetary benefits were determined using discount rates of 3 and 7 percent. DOE monetized reductions in CO 2 emissions due to standards based on a range of monetary values drawn from studies that attempt to estimate the present value of the marginal economic benefits (based on the avoided marginal social cost of carbon) likely to result from reducing greenhouse gas emissions. The marginal social cost of carbon is an estimate of the monetary value to society of the environmental damages of CO 2 emissions. In the October 2008 NOPR, DOE used the range $0 to $20 per ton CO 2 for reductions in the year 2007 in 2007$. These estimates were intended to represent the lower and upper bounds of the costs and benefits likely to be experienced in the United States. The lower bound was based on an assumption of no benefit and the upper bound was based on an estimate of the mean value of worldwide impacts due to climate change that was reported by the Intergovernmental Panel on Climate Change

(IPCC)in its “Fourth Assessment Report.” For the November 2009 SNOPR and today's final rule, DOE is relying on a new set of values recently developed by an interagency process that conducted a thorough review of existing estimates of the social cost of carbon (SCC). The SCC is intended to be a monetary measure of the incremental damage resulting from greenhouse gas

(GHG)emissions, including, but not limited to, net agricultural productivity loss, human health effects, property damages from sea level rise, and changes in ecosystem services. Any effort to quantify and to monetize the harms associated with climate change will raise serious questions of science, economics, and ethics. But with full regard for the limits of both quantification and monetization, the SCC can be used to provide estimates of the social benefits of reductions in GHG emissions. For at least three reasons, any single estimate of the SCC will be contestable. First, scientific and economic knowledge about the impacts of climate change continues to grow. With new and better information about relevant questions, including the cost, burdens, and possibility of adaptation, current estimates will inevitably change over time. Second, some of the likely and potential damages from climate change—for example, the value society places on adverse impacts on endangered species—are not included in all of the existing economic analyses. These omissions may turn out to be significant in the sense that they may mean that the best current estimates are too low. Third, controversial ethical judgments, including those involving the treatment of future generations, play a role in judgments about the SCC (see in particular the discussion of the discount rate, below). To date, regulations have used a range of values for the SCC. For example, a regulation proposed by the U.S. Department of Transportation

(DOT)in 2008 assumed a value of $7 per ton CO 2 (2006$) for 2011 emission reductions (with a range of $0-$14 for sensitivity analysis). Regulation finalized by DOE used a range of $0-$20 (2007$). Both of these ranges were designed to reflect the value of damages to the United States resulting from carbon emissions, or the “domestic” SCC. In the final Model Year 2011 Corporate Average Fuel Economy rule, DOT used both a domestic SCC value of $2/t CO 2 and a global SCC value of $33/t CO 2 (with sensitivity analysis at $80/t CO 2 ), increasing at 2.4 percent per year thereafter. In recent months, a variety of agencies have worked to develop an objective methodology for selecting a range of interim SCC estimates to use in regulatory analyses until improved SCC estimates are developed. The following summary reflects the initial results of these efforts and proposes ranges and values for interim social costs of carbon used in this rule. It should be emphasized that the analysis described below is preliminary. These complex issues are of course undergoing a process of continuing review. Relevant agencies will be evaluating and seeking comment on all of the scientific, economic, and ethical issues before establishing final estimates for use in future rulemakings. The interim judgments resulting from the recent interagency review process can be summarized as follows:

(a)DOE and other Federal agencies should consider the global benefits associated with the reductions of CO 2 emissions resulting from efficiency standards and other similar rulemakings, rather than continuing the previous focus on domestic benefits;

(b)these global benefits should be based on SCC estimates (in 2007$) of $55, $33, $19, $10, and $5 per ton of CO 2 equivalent emitted (or avoided) in 2007 (in calculating the benefits reported in this notice, DOE has escalated the 2007$ values to 2008$ for consistency with other dollar values presented in this notice);

(c)the SCC value of emissions that occur (or are avoided) in future years should be escalated using an annual growth rate of 3 percent from the current values); and

(d)domestic benefits are estimated to be approximately 6 percent of the global values. These interim judgments are based on the following considerations. 1. *Global and domestic estimates of SCC.* Because of the distinctive nature of the climate change problem, estimates of both global and domestic SCC values should be considered, but the global measure should be “primary.” This approach represents a departure from past practices, which relied, for the most part, on measures of only domestic impacts. As a matter of law, both global and domestic values are permissible; the relevant statutory provisions are ambiguous and allow the agency to choose either measure. (It is true that Federal statutes are presumed not to have extraterritorial effect, in part to ensure that the laws of the United States respect the interests of foreign sovereigns. But use of a global measure for the SCC does not give extraterritorial effect to Federal law and hence does not intrude on such interests.) It is true that under OMB guidance, analysis from the domestic perspective is required, while analysis from the international perspective is optional. The domestic decisions of one nation are not typically based on a judgment about the effects of those decisions on other nations. But the climate change problem is highly unusual in the sense that it involves

(a)a global public good in which

(b)the emissions of one nation may inflict significant damages on other nations and

(c)the United States is actively engaged in promoting an international agreement to reduce worldwide emissions. In these circumstances, the global measure is preferred. Use of a global measure reflects the reality of the problem and is expected to contribute to the continuing efforts of the United States to ensure that emission reductions occur in many nations. Domestic SCC values are also presented. The development of a domestic SCC is greatly complicated by the relatively few region- or country-specific estimates of the SCC in the literature. One potential estimate comes from the DICE (Dynamic Integrated Climate Economy, William Nordhaus) model. In an unpublished paper, Nordhaus

(2007)produced disaggregated SCC estimates using a regional version of the DICE model. He reported a U.S. estimate of $1/t CO 2 (2007 value, 2007$), which is roughly 11 percent of the global value. An alternative source of estimates comes from a recent EPA modeling effort using the FUND (Climate Framework for Uncertainty, Negotiation and Distribution, Center for Integrated Study of the Human Dimensions of Global Change) model. The resulting estimates suggest that the ratio of domestic to global benefits varies with key parameter assumptions. With a 3-percent discount rate, for example, the U.S. benefit is about 6 percent of the global benefit for the “central”

(mean)FUND results, while, for the corresponding “high” estimates associated with a higher climate sensitivity and lower global economic growth, the U.S. benefit is less than 4 percent of the global benefit. With a 2-percent discount rate, the U.S. share is about 2 to5 percent of the global estimate. Based on this available evidence, a domestic SCC value equal to 6 percent of the global damages is used in this rulemaking. This figure is in the middle of the range of available estimates from the literature. It is recognized that the 6 percent figure is approximate and highly speculative and alternative approaches will be explored before establishing final values for future rulemakings. 2. *Filtering existing analyses.* There are numerous SCC estimates in the existing literature, and it is legitimate to make use of those estimates to produce a figure for current use. A reasonable starting point is provided by the meta-analysis in Richard S. J. Tol's, “The Social Cost of Carbon: Trends, Outliers, and Catastrophes, Economics: The Open-Access, Open-Assessment E-Journal,” Vol. 2, 2008-25. *http://www.economics-ejournal.org/economics/journalarticles/2008-25* (2008). With that starting point, it is proposed to “filter” existing SCC estimates by using those that

(1)are derived from peer-reviewed studies;

(2)do not weight the monetized damages to one country more than those in other countries;

(3)use a “business as usual” climate scenario; and

(4)are based on the most recent published version of each of the three major integrated assessment models (IAMs): FUND, DICE and PAGE (Policy Analysis of the Greenhouse Effect). Proposal

(1)is based on the view that those studies that have been subject to peer review are more likely to be reliable than those that have not been. Proposal

(2)is based on a principle of neutrality and simplicity; it does not treat the citizens of one nation differently on the basis of speculative or controversial considerations. Proposal

(3)stems from the judgment that as a general rule, the proper way to assess a policy decision is by comparing the implementation of the policy against a counterfactual state where the policy is not implemented. A departure from this approach would be to consider a more dynamic setting in which other countries might implement policies to reduce GHG emissions at an unknown future date, and the United States could choose to implement such a policy now or in the future. Proposal

(4)is based on three complementary judgments. First, the FUND, PAGE, and DICE models now stand as the most comprehensive and reliable efforts to measure the damages from climate change. Second, the latest versions of the three IAMs are likely to reflect the most recent evidence and learning, and hence they are presumed to be superior to those that preceded them. It is acknowledged that earlier versions may contain information that is missing from the latest versions. Third, any effort to choose among them, or to reject one in favor of the others, would be difficult to defend at this time. In the absence of a clear reason to choose among them, it is reasonable to base the SCC on all of them. The agency is keenly aware that the current IAMs fail to include all relevant information about the likely impacts from greenhouse gas emissions. For example, ecosystem impacts, including species loss, do not appear to be included in at least two of the models. Some human health impacts, including increases in food-borne illnesses and in the quantity and toxicity of airborne allergens, also appear to be excluded. In addition, there has been considerable recent discussion of the risk of catastrophe and of how best to account for worst-case scenarios. It is not clear whether the three IAMs take adequate account of these potential effects. 3. *Use a model-weighted average of the estimates at each discount rate.* At this time, there appears to be no scientifically valid reason to prefer any of the three major IAMs (FUND, PAGE, and DICE). Consequently, the estimates are based on an equal weighting of estimates from each of the models. Among estimates that remain after applying the filter, the average of all estimates within a model is derived. The estimated SCC is then calculated as the average of the three model-specific averages. This approach ensures that the interim estimate is not biased towards specific models or more prolific authors. 4. *Apply a 3-percent annual growth rate to the chosen SCC values.* SCC is assumed to increase over time, because future emissions are expected to produce larger incremental damages as physical and economic systems become more stressed as the magnitude of climate change increases. Indeed, an implied growth rate in the SCC is produced by most studies that estimate economic damages caused by increased GHG emissions in future years. But neither the rate itself nor the information necessary to derive its implied value is commonly reported. In light of the limited amount of debate thus far about the appropriate growth rate of the SCC, applying a rate of 3 percent per year seems appropriate at this stage. This value is consistent with the range recommended by IPCC

(2007)and close to the latest published estimate (Hope, 2008). For climate change, one of the most complex issues involves the appropriate discount rate. OMB's current guidance offers a detailed discussion of the relevant issues and calls for discount rates of 3 percent and 7 percent. It also permits a sensitivity analysis with low rates for intergenerational problems. (“If your rule will have important intergenerational benefits or costs you might consider a further sensitivity analysis using a lower but positive discount rate in addition to calculating net benefits using discount rates of 3 and 7 percent.”) The SCC is being developed within the general context of the current guidance. The choice of a discount rate, especially over long periods of time, raises highly contested and exceedingly difficult questions of science, economics, philosophy, and law. See, *e.g.,* William Nordhaus, “The Challenge of Global Warming (2008); Nicholas Stern, The Economics of Climate Change” (2007); “Discounting and Intergenerational Equity” (Paul Portney and John Weyant, eds., 1999). Under imaginable assumptions, decisions based on cost-benefit analysis with high discount rates might harm future generations—at least if investments are not made for the benefit of those generations. (See Robert Lind, “Analysis for Intergenerational Discounting,” *id.* at 173, 176-177.) At the same time, use of low discount rates for particular projects might itself harm future generations, by ensuring that resources are not used in a way that would greatly benefit them. In the context of climate change, questions of intergenerational equity are especially important. Reasonable arguments support the use of a 3-percent discount rate. First, that rate is among the two figures suggested by OMB guidance, and hence it fits with existing National policy. Second, it is standard to base the discount rate on the compensation that people receive for delaying consumption, and the 3-percent rate is close to the risk-free rate of return, proxied by the return on long term inflation-adjusted U.S. Treasury Bonds. (In the context of climate change, it is possible to object to this standard method for deriving the discount rate.) Although these rates are currently closer to 2.5 percent, the use of 3 percent provides an adjustment for the liquidity premium that is reflected in these bonds' returns. At the same time, other arguments support use of a 5-percent discount rate. First, that rate can also be justified by reference to the level of compensation for delaying consumption, because it fits with market behavior with respect to individuals' willingness to trade off consumption across periods as measured by the estimated post-tax average real returns to private investment ( *e.g.,* the Standard & Poor's 500 Index). In the climate setting, the 5-percent discount rate may be preferable to the riskless rate because it is based on risky investments and the return to projects to mitigate climate change is also risky. In contrast, the 3-percent riskless rate may be a more appropriate discount rate for projects where the return is known with a high degree of confidence ( *e.g.,* highway guardrails). Second, 5 percent, and not 3 percent, is roughly consistent with estimates implied by reasonable inputs to the theoretically derived Ramsey equation, which specifies the optimal time path for consumption. That equation specifies the optimal discount rate as the sum of two components. The first reflects the fact that consumption in the future is likely to be higher than consumption today (even accounting for climate impacts), so diminishing marginal utility implies that the same monetary damage will cause a smaller reduction of utility in the future. Standard estimates of this term from the economics literature are in the range of 3 to 5 percent. The second component reflects the possibility that a lower weight should be placed on utility in the future, to account for social impatience or extinction risk, which is specified by a pure rate of time preference (PRTP). A conventional estimate of the PRTP is 2 percent. (Some observers believe that a principle of intergenerational equity suggests that the PRTP should be close to zero.) It follows that a discount rate of 5 percent is within the range of values which are able to be derived from the Ramsey equation, albeit at the low end of the range of estimates usually associated with Ramsey discounting. It is recognized that the arguments above—for use of market behavior and the Ramsey equation—face objections in the context of climate change, and of course there are alternative approaches. In light of climate change, it is possible that consumption in the future will not be higher than consumption today, and if so, the Ramsey equation will suggest a lower figure. Some people have suggested that a very low discount rate, below 3 percent, is justified in light of the ethical considerations calling for a principle of intergenerational neutrality. See Nicholas Stern, “The Economics of Climate Change” (2007); for contrary views, see William Nordhaus, “A Question of Balance” (2008); Martin Weitzman, “ *Review* of the *Stern Review* on the Economics of Climate Change,” *Journal of Economic Literature,* 45(3): 703-724 (2007). Additionally, some analyses attempt to deal with uncertainty with respect to interest rates over time; a possible approach enabling the consideration of such uncertainties is discussed below. Richard Newell and William Pizer, “Discounting the Distant Future: How Much Do Uncertain Rates Increase Valuations?” J. Environ. Econ. Manage. 46 ( *2003* ) 52-71. The application of the methodology outlined above yields estimates of the SCC that are reported in Table IV.8. These estimates are reported separately using 3-percent and 5-percent discount rates. The cells are empty in rows 10 and 11 because these studies did not report estimates of the SCC at a 3-percent discount rate. The model-weighted means are reported in the final or summary row; they are $33 per t CO 2 at a 3-percent discount rate and $5 per t CO 2 with a 5-percent discount rate. Table IV.8—Global Social Cost of Carbon

(SCC)Estimates ($/ t CO 2 in 2007 in 2007$), Based on 3% and 5% Discount Rates * Model Study Climate scenario 3 *%* 5 *%* 1 FUND Anthoff et al. 2009 FUND default 6 −1 2 FUND Anthoff et al. 2009 SRES A1b 1 −1 3 FUND Anthoff et al. 2009 SRES A2 9 −1 4 FUND Link and Tol 2004 No THC 12 3 5 FUND Link and Tol 2004 THC continues 12 2 6 FUND Guo et al. 2006 Constant PRTP 5 −1 7 FUND Guo et al. 2006 Gollier discount 1 14 0 8 FUND Guo et al. 2006 Gollier discount 2 7 −1 FUND Mean 8.25 0 9 PAGE Wahba & Hope 2006 A2-scen 57 7 10 PAGE Hope 2006 7 11 DICE Nordhaus 2008 8 Summary Model-weighted mean 33 5 * The sample includes all peer reviewed, non-equity-weighted estimates included in Tol (2008), Nordhaus (2008), Hope (2008), and Anthoff et al. (2009), that are based on the most recent published version of FUND, PAGE, or DICE and use business-as-usual climate scenarios. All values are based on the best available information from the underlying studies about the base year and year dollars, rather than the Tol

(2008)assumption that all estimates included in his review are 1995 values in 1995$. All values were updated to 2007 using a 3-percent annual growth rate in the SCC, and adjusted for inflation using GDP deflator. DOE used the model-weighted mean values of $33 and $5 per ton (2007$), as these represent the estimates associated with the 3-percent and 5-percent discount rates, respectively. The 3-percent and 5-percent estimates have independent appeal and at this time a clear preference for one over the other is not warranted. These values were then escalated to 2008$ and rounded to $34 and $5. Thus, DOE has also included—and centered its current attention on—the average of the estimates associated with these discount rates, which is approximately $20 (in 2008$). (Based on the $20 global value, the domestic value would be approximately $1 per ton of CO 2 equivalent.) It is true that there is uncertainty about interest rates over long time horizons. Recognizing that point, Newell and Pizer have made a careful effort to adjust for that uncertainty. See Newell and Pizer, *supra.* This is a relatively recent contribution to the literature. There are several concerns with using this approach in this context. First, it would be a departure from current OMB guidance. Second, an approach that would average what emerges from discount rates of 3 percent and 5 percent reflects uncertainty about the discount rate, but based on a different model of uncertainty. The Newell-Pizer approach models discount rate uncertainty as something that evolves over time; in contrast, one alternative approach would assume that there is a single discount rate with equal probability of 3 percent and 5 percent. Table IV.9 reports on the application of the Newell-Pizer adjustments. The precise numbers depend on the assumptions about the data generating process that governs interest rates. Columns

(1a)and

(1b)assume that “random walk” model best describes the data and uses 3-percent and 5-percent discount rates, respectively. Columns

(2a)and

(2b)repeat this, except that it assumes a “mean-reverting” process. As Newell and Pizer report, there is stronger empirical support for the random walk model. Table IV.9—Global Social Cost of Carbon Estimates ($/ t CO 2 in 2007 in 2007$),* Using Newell & Pizer Adjustment for Future Discount Rate Uncertainty ** Model Study Climate scenario Random- walk model *3%*

(1a)*5%*

(1b)Mean- reverting model *3%*

(2a)*5%*

(2b)1 FUND Anthoff et al. 2009 FUND default 10 0 7 −1 2 FUND Anthoff et al. 2009 SRES A1b 2 0 1 −1 3 FUND Anthoff et al. 2009 SRES A2 15 0 10 −1 4 FUND Link and Tol 2004 No THC 20 6 13 4 5 FUND Link and Tol 2004 THC continues 20 4 13 2 6 FUND Guo et al. 2006 Constant PRTP 9 0 6 −1 7 FUND Guo et al. 2006 Gollier discount 1 14 0 14 0 8 FUND Guo et al. 2006 Gollier discount 2 7 −1 7 −1 FUND Mean 12 1 9 0 9 PAGE Wahba & Hope 2006 A2-scen 97 13 63 8 10 PAGE Hope 2006 13 8 11 DICE Nordhaus 2008 15 9 Summary Model-weighted mean 55 10 36 6 * The sample includes all peer reviewed, non-equity-weighted estimates included in Tol (2008), Nordhaus (2008), Hope (2008), and Anthoff et al. (2009), that are based on the most recent published version of FUND, PAGE, or DICE and use business-as-usual climate scenarios. All values are based on the best available information from the underlying studies about the base year and year dollars, rather than the Tol

(2003)based adjustment factors are not applied to estimates from Guo et al.

(2006)that use a different approach to account for discount rate uncertainty (rows 7-8). The resulting estimates of the social cost of carbon are necessarily greater. When the adjustments from the random walk model are applied, the estimates of the social cost of carbon are $10 and $55, with the 3-percent and 5-percent discount rates, respectively. The application of the mean-reverting adjustment yields estimates of $6 and $36 (2007$). Since the random walk model has greater support from the data, DOE also used the SCC values of $10 and $55 (2007$). When escalated to 2008$, these values are approximately $10 and $56. In summary, in considering the potential global benefits resulting from reduced CO 2 emissions, DOE used values based on a social cost of carbon of approximately $5, $10, $20, $34 and $56 per metric ton avoided in 2007 (values expressed in 2008$). DOE also calculated the domestic benefits based on a value of approximately $1 per metric ton avoided in 2007. To value the CO 2 emissions reductions expected to result from amended standards for CCWs in 2013-2043, DOE escalated the above values for 2007 using a 3-percent escalation rate. As indicated in the discussion above, estimates of SCC are assumed to increase over time since future emissions are expected to produce larger incremental damages as physical and economic systems become more stressed as the magnitude of climate change increases. Although most studies that estimate economic damages caused by increased GHG emissions in future years produce an implied growth rate in the SCC, neither the rate itself nor the information necessary to derive its implied value is commonly reported. However, applying a rate of 3 percent per year is consistent with the range recommended by IPCC (2007). DOE also investigated the potential monetary benefit of reduced NO X and Hg emissions from the TSLs it considered. As noted above, new or amended energy conservation standards would reduce NO X emissions in those 22 States that are not affected by CAIR, in addition to the reduction in site NO X emissions nationwide. DOE estimated the monetized value of NO X emissions reductions resulting from each of the TSLs considered for today's final rule based on environmental damage estimates from the literature. Available estimates suggest a very wide range of monetary values for NO X emissions, ranging from $370 per ton to $3,800 per ton of NO X from stationary sources, measured in 2001$ (equivalent to a range of $442 to $4,540 per ton in 2008$). Refer to the OMB, Office of Information and Regulatory Affairs, “2006 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities,” Washington, DC, for additional information. For Hg emissions reductions, DOE estimated the national monetized values resulting from the TSLs considered for today's rule based on environmental damage estimates from the literature. The impact of mercury emissions from power plants on humans is considered highly uncertain. However, DOE identified two estimates of the environmental damage of Hg based on estimates of the adverse impact of childhood exposure to methyl mercury on IQ for American children, and subsequent loss of lifetime economic productivity resulting from these IQ losses. The high-end estimate of $1.3 billion per year in 2000$ (which works out to $33.3 million per ton emitted per year in 2008$) is based on an estimate of the current aggregate cost of the loss of IQ in American children that results from exposure to Hg of U.S. power plant origin. 36 DOE's low-end estimate of $0.66 million per ton emitted in 2004$ ($0.745 million per ton in 2008$) was derived from an evaluation of mercury control that used different methods and assumptions from the first study, but was also based on the present value of the lifetime earnings of children exposed to Hg. 37 36 Trasande, L., *et al.,* “Applying Cost Analyses to Drive Policy that Protects Children,” 1076 Ann. N.Y. Acad. Sci. 911 (2006). 37 Ted Gayer and Robert Hahn, “Designing Environmental Policy: Lessons from the Regulation of Mercury Emissions,” Regulatory Analysis 05-01, AEI-Brookings Joint Center for Regulatory Studies, Washington, DC (2004). A version of this paper was published in the *Journal of Regulatory Economics* in 2006. The estimate was derived by back-calculating the annual benefits per ton from the net present value of benefits reported in the study. As previously stated, DOE's analysis assumed the presence of nationwide emission caps on SO 2 and caps on NO X emissions in the 28 States covered by CAIR. In the presence of these caps, the NEMS-BT modeling system that DOE used to forecast emissions reduction indicated that no physical reductions in power sector emissions would occur (although there remains uncertainty about whether physical reduction of SO 2 will occur), but that the standards could put slight downward pressure on the prices of emissions allowances in cap-and-trade markets. Estimating this effect is very difficult because factors such as credit banking can change the trajectory of prices. From its modeling to date, DOE is unable to estimate a benefit from energy conservation standards on the prices of emissions allowances at this time. See the environmental assessment in the final rule TSD for further details. V. Discussion of Other Comments Since DOE opened the docket for this rulemaking, it has received more than 44 written comments from a diverse set of parties, including manufacturers and their representatives, wholesalers and distributors, energy conservation advocates, State officials and agencies, and electric utilities. Section IV of this preamble discusses comments DOE received on the analytic methodologies it used. Additional comments DOE received in response to the November 2009 SNOPR addressed the burdens and benefits associated with new energy efficiency standards, the information DOE used in its analyses, results of and inferences drawn from the analyses, impacts of standards, the merits of the different TSLs and standards options DOE considered, other issues affecting adoption of standards for CCWs, and the DOE rulemaking process. DOE addresses these comments in this section. A. Proposed Trial Standard Levels

(TSLs)for Commercial Clothes Washers For the October 2008 NOPR, DOE based the TSLs on efficiency levels explored in the November 2007 ANOPR, and selected the TSLs on consideration of economic factors and current market conditions. ASAP suggested that DOE set TSLs based upon industry benchmarks such as current and forthcoming ENERGY STAR qualification levels and pending Federal tax incentive performance levels. (ASAP, Public Meeting Transcript, No. 40.5 at p. 33 and pp. 148-149) EIEA 2008 provided an Energy Efficient Appliance Credit to manufacturers for any RCW or CCW (front-loading or top-loading) produced domestically through 2010 with an efficiency level of at least 2.0 MEF/6.0 WF, or a larger credit for one that achieves 2.2 MEF/4.5 WF. The legislation also provides a separate tax credit for any top-loading RCW that achieves an efficiency level of at least 1.72 MEF/8.0 WF or a larger credit for one that exceeds 1.8 MEF/7.5 WF. DOE considered the impacts of these tax credits on the CCW industry in detail as part of the MIA. DOE accounts for the Federal tax credit as a direct cash benefit in the base and standards cases that increases the INPV. See section IV.G of today's supplemental notice and appendix 13C of the SNOPR TSD for further discussion of this issue. B. Proposed Standards for Commercial Clothes Washers For the November 2009 SNOPR, DOE made the preliminary determination that the standards for top-loading and front-loading CCWs listed in Table II.1 are technologically feasible and economically justified, and invited comment on these proposed standard levels. In response, Alliance stated that it opposes the standard proposed for top-loading CCWs, noting that it is based on a “residential construction” product with almost no acceptance in the marketplace, instead of a true “commercial construction” product meeting the needs of the U.S. commercial clothes washer market segment. It stated that the proposed standard is inappropriate because equipment meeting the standard would not provide true hot water (120 °F or greater), true warm water (80 °F to 120 °F), or adequate rinsing. Alliance commented that WEB Service Company, California's largest multi-housing route operator, deployed an all-spray-rinse top-loading CCW in the late 1990's and was forced to take back all deployed units because they didn't meet the needs of the users. It stated that it could support a top-loading class standard of MEF ≥ 1.42/WF ≤ 9.5 (TSL 2), and that it supports the proposed standard for front-loading CCWs. (Alliance, No. 66.4 at p. 4; Alliance, No. 67.8 at pp. 1, 4) Whirlpool commented that it supports both the top-loading and front-loading standards proposed in the November 2009 SNOPR. It stated that energy and water consumption levels that are more restrictive than these will likely lead to poor wash performance, poor rinse performance, or both. (Whirlpool, No. 67.11 at p. 3) AHAM and GE stated support for the proposed MEF and water factor levels that DOE proposed for front-loading CCWs. (AHAM, No. 67.12 at p. 3; GE, No. 67.9 at p. 1) GE added that it supports DOE's proposed MEF and WF requirements for front-load commercial clothes washers. In addition, GE expressed support for DOE's proposed MEF and WF requirements for top-load commercial clothes washers, but stated its concern that the max-tech model on which this level is based is designed for a relatively limited segment of the market (the on-premises laundry commercial segment), and that this model has not yet been demonstrated as sustainable in the harsher environment of laundromats, where the units are subject to tougher conditions such as overloading. (GE, No. 67.9 at p. 1) EJ and the California Utilities advocated adoption of a single set of energy and water efficiency standards for all commercial clothes washers, which will deliver greater energy and water savings than separate standards for top-loading and front-loading commercial washers. The California Utilities stated that its preliminary analysis suggests that over the next 30 years, DOE could save as much as 50 percent more in energy savings and over 200 percent more in water savings with a single equipment class standard (set at levels of MEF 2.35/WF 4.4) than the standard that DOE has proposed in the SNOPR. (EJ, No. 67.5 at pp. 10-11; California Utilities, No. 67.10 at pp. 3-4) EJ stated that the proposed separate standards for front-loaders would increase the installed price differential between front-loaders and top-loaders, which could result in increased energy and water consumption to the extent that the increased installed price differential would encourage the market to shift from front-loaders to less efficient top-loaders. It noted that the modest energy and water savings that DOE has estimated for its proposed separate front-loader standards could be exceeded by that standard's impact on the relative shipments of top-loading and front-loading washers. It added that if DOE's standards were to necessitate design changes to top-loaders exclusively, the resulting increase in installed costs for top-loaders would foster the market's transition to front- loaders, increasing the net energy and water savings produced by the standard. (EJ, No. 67.5 at pp. 10-11) EJ and the California Utilities also noted the availability of flexible regulatory approaches that would facilitate adoption of a strong, uniform set of standards for all commercial washers and also minimize any adverse impacts on competition. They stated that DOE could adopt a tiered approach to standards, maintaining a 2013 compliance date for initial energy and water efficiency standards, while phasing in stronger requirements later. This approach, they said, would give the LVM (Alliance) and other manufacturers additional time to raise needed capital and to optimize product designs and manufacturing processes to meet strong standards at a lower cost. (EJ, No. 67.5 at pp. 9-10; California Utilities, No. 67.10 at pp. 4-5) EJ added that alternatively, DOE could accommodate Alliance's key concerns by granting a temporary waiver from compliance with revised standards. This would enable DOE to adopt effective standards while giving Alliance an extended compliance period in which to raise needed capital and optimize its product designs and manufacturing processes. (EJ, No. 67.5 at p. 9-10) The Joint Comment stated that DOE's proposed rule establishing two product classes for CCWs is not satisfactory for either of the proposed classes, as it would require manufacturers to make substantial investments to achieve modest improvements in the efficiency of a protected class of inherently less-efficient top-loaders, while establishing a standard for front-loaders that 97 percent of the front-loading models on the market today already meet. It noted that a stronger standard for front-loaders would widen the price differential between front-loaders and top-loaders, which would encourage a portion of the market to shift from front-loaders back to less efficient top-loaders. The Joint Comment recommended that a standard be set for CCWs as a single product class, with performance levels that are readily achievable by today's high-efficiency front-loading washers. It stated that the highest standard level identified for front-loaders (MEF 2.35/WF 4.4) maximizes energy and life-cycle cost savings when applied to all commercial washers, and thus should be the strongest candidate for adoption. Regarding the problems that the recommended standards could pose for the LVM ( *i.e.,* Alliance), the Joint Comment stated that the standard should take effect in stages, allowing most capital conversion costs to be deferred for an additional two years. It added that the manufacturer hardship waiver process in current law remains open to Alliance should unforeseen circumstances arise making compliance impossible. (Joint Comment, No. 67.6 at p. 1) In considering standards for today's final rule, DOE first notes that it has retained separate equipment classes for top-loading and front-loading CCWs, for reasons discussed in section IV.A. DOE has retained the analyses of standards for both equipment classes that it conducted for the SNOPR, which are described in section IV. Section VI presents a discussion of DOE's reasons for adopting the standard levels in today's final rule. VI. Analytical Results and Conclusions A. Trial Standard Levels DOE analyzed the benefits and burdens of a number of TSLs for the CCWs that are the subject of today's final rule. As discussed in section IV.A, for the October 2008 NOPR, DOE based the TSLs on efficiency levels explored in the November 2007 ANOPR, and selected the TSLs on consideration of economic factors and current market conditions. As also discussed in section IV.C.1.a, DOE eliminated the maximum technologically efficiency level of 1.76 MEF/8.3 WF for the top-loading equipment class in the November 2009 SNOPR. For today's final rule, DOE considered the same TSLs it considered for the November 2009 SNOPR. Table VI.1 presents the TSLs analyzed for today's final rule and the efficiency levels (consisting of a combination of MEF and WF) within each TSL for each class of equipment. In all, DOE has considered five TSLs. TSL 1 corresponds to the first candidate standard level from each equipment class and represents the efficiency level for each class with the least significant design change. TSL 2 represents the second candidate standard level for front-loading washers while keeping top-loading washers at its first candidate standard level. Over 96 percent of the front-loading CCW equipment Stock Keeping Units

(SKUs)currently on the market either meet or exceed the second candidate standard level for front-loading washers. In the case of the second candidate standard level for top-loading washers, a significant percentage of the market, over 35 percent, also meets or exceeds this efficiency level. Therefore, TSL 2 corresponds to the candidate standard levels for each equipment class that still represent a significant share of the market. TSL 3 represents the second candidate standard level for top-loading washers (the maximum efficiency level for this class), and keeps front-loading washers at the second candidate standard level. For TSL 3, front-loading washers were held to the second candidate standard level in order to minimize the equipment price difference between the two equipment classes. For TSL 4, top-loading washers are retained at their maximum efficiency level while front-loading washers are incremented to their third candidate standard level. Finally, TSL 5 corresponds to the maximum technologically feasible level for each equipment class. In progressing from TSL 1 to TSL 5, the LCC savings, NES, and NPV all increase. TSL 5 represents the level with the minimum LCC and maximum NES and NPV. Table VI.1—Trial Standard Levels for Commercial Clothes Washers TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 *Top-Loading:* MEF 1.42 1.42 1.60 1.60 1.60 WF 9.5 9.5 8.5 8.5 8.5 *Front-Loading:* MEF 1.80 2.00 2.00 2.20 2.35 WF 7.5 5.5 5.5 5.1 4.4 B. Significance of Energy Savings To estimate the energy savings through 2043 due to amended energy conservation standards, DOE compared the energy consumption of equipment under the base case to energy consumption of this equipment under each TSL that DOE considered for CCWs. Table VI.2 shows DOE's NES estimates (and national water savings results) for each TSL. The table also shows the magnitude of the savings if they are discounted at 7-percent and 3-percent discount rates. Discounted energy savings represent a policy perspective where energy savings further in the future are less significant than energy savings closer to the present. Each TSL considered in this rulemaking would result in significant energy savings, and the amount of savings increases with higher energy conservation standards (ranging from an estimated 0.04 quads to 0.12 quads, undiscounted, for TSLs 1 through 5). Table VI.2—Summary of Cumulative National Energy and Water Savings for CCWs [Savings for Units Sold from 2013 to 2043] Trial standard level Undiscounted National energy savings, *quads* National water savings, *trillion gallons* 3% Discounted National energy savings, *quads* National water savings, *trillion gallons* 7% Discounted National energy savings, *quads* National water savings, *trillion gallons* 1 0.04 0.00 0.02 0.00 0.01 0.00 2 0.04 0.01 0.02 0.00 0.01 0.00 3 0.10 0.14 0.06 0.08 0.03 0.04 4 0.11 0.16 0.06 0.09 0.03 0.04 5 0.12 0.21 0.07 0.11 0.03 0.06 C. Economic Justification 1. Economic Impacts on Commercial Customers a. Life-Cycle Cost and Payback Period To evaluate the net economic impact of standards on CCW customers, DOE conducted LCC and PBP analyses for each TSL. More efficient CCWs affect customers in two ways:

(1)Purchase price is expected to increase; and

(2)annual operating expense is expected to decrease. DOE analyzed the net effect by calculating the LCC. Inputs used for calculating the LCC include total installed costs, annual energy savings, average electricity prices, energy price trends, repair and maintenance costs, equipment lifetime, and discount rates. Table VI.3 and Table VI.4 show the LCC and PBP results for each CCW application for the top-loading equipment class, and Table VI.5 and Table VI.6 show the results for the front-loading equipment class. DOE's LCC and PBP analyses provided five outputs for each considered TSL. The first three outputs are the percentages of standard-compliant machine purchases that would result in

(1)a net LCC increase,

(2)no impact, or

(3)a net LCC savings for the customer. The fourth output is the average net LCC savings from standard-compliant equipment. The fifth output is the average PBP for the customer purchasing a design that complies with the TSL. For the top-loading equipment class, the highest average LCC savings and shortest PBP occur at TSLs 3, 4, and 5. At these TSLs, 85 percent of multi-family customers have a net benefit, and 96 percent of laundromat customers have a net benefit. For the front-loading equipment class, the highest average LCC savings occur at TSL 5, and the PBP is lower than at TSL 4. TSLs 1 through 3 have little impact because most of the market is already at or above this level in the base case. Table VI.3—Commercial Clothes Washers, Top-Loading, Multi-Family Application: Life-Cycle Cost and Payback Period Results TSL MEF/WF Life-cycle cost Average installed price *$* Average operating cost *$* Average LCC *$* Life-cycle cost savings Average savings *$* Customers with Net cost *%* No impact *%* Net benefit *%* Payback period *years* Median Average Baseline 1.26/9.50 760 3,263 4,023 1, 2 1.42/9.50 883 3,153 4,036 −8.1 43.3 35.3 21.5 11.7 17.3 3, 4, 5 1.60/8.50 974 2,873 3,847 178.6 13.8 1.2 85.0 4.6 5.6 Table VI.4—Commercial Clothes Washers, Top-Loading, Laundromat Application: Life-Cycle Cost and Payback Period Results TSL MEF/WF Life-cycle cost Average installed price *$* Average operating cost *$* Average LCC *$* Life-cycle cost savings Average savings *$* Customers with Net cost *%* No impact *%* Net benefit *%* Payback period *years* Median Average Baseline 1.26/9.50 760 3,422 4,182 1, 2 1.42/9.50 883 3,326 4,209 −17.7 51.4 35.3 13.3 7.9 9.1 3, 4, 5 1.60/8.50 974 3,025 3,999 190.0 2.9 1.2 95.9 2.8 3.0 Table VI.5—Commercial Clothes Washers, Front-Loading, Multi-Family Application: Life-Cycle Cost and Payback Period Results TSL MEF/WF Life-cycle cost Average installed price *$* Average operating cost *$* Average LCC *$* Life-cycle cost savings Average savings *$* Customers with Net cost *%* No impact *%* Net benefit *%* Payback period *years* Median Average Baseline 1.72/8.00 1,365 2,855 4,220 1 1.80/7.50 1,365 2,855 4,091 4.7 0.0 96.3 3.7 0.0 0.0 2, 3 2.00/5.50 1,388 2,726 3,690 19.5 0.0 96.3 3.7 0.4 0.4 4 2.20/5.10 1,428 2,302 3,596 91.5 1.4 23.1 75.5 3.0 3.2 5 2.35/4.40 1,470 2,168 3,484 202.7 1.1 0.0 98.9 2.9 3.1 Table VI.6—Commercial Clothes Washers, Front-Loading, Laundromat Application: Life-Cycle Cost and Payback Period Results TSL MEF/WF Life-cycle cost Average installed price *$* Average operating cost *$* Average LCC *$* Life-cycle cost savings Average savings *$* Customers with Net cost *%* No impact *%* Net benefit *%* Payback period *years* Median Average Baseline 1.72/8.00 1,365 2,014 4,380 1 1.80/7.50 1,365 3,014 4,240 5.2 0.0 96.3 3.7 0.0 0.0 2, 3 2.00/5.50 1,388 2,874 3,787 22.0 0.0 96.3 3.7 0.2 0.2 4 2.20/5.10 1,428 2,400 3,695 93.4 0.0 23.1 76.9 1.8 1.9 5 2.35/4.40 1,470 2,267 3,572 216.1 0.0 0.0 100.0 1.6 1.7 b. Commercial Consumer Subgroup Analysis Using the LCC spreadsheet model, DOE estimated the impact of the considered TSLs on the following CCW customer subgroups:

(1)Small business owners, and

(2)customers without municipal water and sewer. For customers without municipal water and sewer, the LCC impacts and PBPs are similar to the LCC impacts and PBPs for the full sample of CCW customers. But for small business owners (small multi-family property owners and small laundromats), the LCC impacts and PBPs are different from those associated with the general population. For the top-loading equipment class, Table VI.7 shows the LCC impacts and PBPs for small multi-family property owners and small laundromats, while Table VI.8 shows the same for the front-loading equipment class. For all TSLs for both equipment classes, both sets of small business owners, on average, realize LCC savings similar to the general population. The difference between the small business population and the general population occurs in the percentage of each population that realizes LCC savings from standards. With the exception of TSL 1 for top-loading washers, an overwhelming majority of the small business and general populations benefit from standards at each TSL. But for both equipment classes, a larger percentage of the general population benefits from standards than do small business owners. This occurs because small businesses do not have the same access to capital as larger businesses. As a result, smaller businesses have a higher average discount rate than the industry average. Because of the higher discount rates, smaller businesses do not value future operating costs savings from more efficient CCWs as much as the general population. But to emphasize, in spite of the higher discount rates, a majority of small businesses still benefit from higher CCW standards at all TSLs, with the exception of TSL 1 for the top-loading equipment class. Table VI.7—Commercial Clothes Washers, Top-Loading: Life-Cycle Cost and Payback Period Results for Small Business Owners TSL MEF/WF Life-cycle cost Average installed price *$* Average operating cost *$* Average LCC *$* Life-cycle cost savings Average savings *$* Households with Net cost *$* No impact *%* Net benefit *%* Payback period *years* Median Average Multi-Family Application Baseline 1.26/9.50 760 2,659 3,419 1, 2 1.42/9.50 883 2,569 3,452 (22.0) 50.7 35.6 13.7 11.7 17.7 3, 4, 5 1.60/8.50 974 2,341 3,315 112.6 21.2 1.5 77.4 4.5 5.6 Laundromat Application Baseline 1.26/9.50 760 2,963 3,723 1, 2 1.42/9.50 883 2,880 3,764 (26.1) 58.6 35.6 5.8 7.8 9.2 3, 4, 5 1.60/8.50 974 2,620 3,594 140.9 5.6 1.5 92.9 2.8 3.0 Note: Numbers in parentheses indicate negative values. Table VI.8—Commercial Clothes Washers, Front-Loading: Life-Cycle Cost and Payback Period Results for Small Business Owners TSL MEF/WF Life-cycle cost Average installed price *$* Average operating cost *%* Average LCC *$* Life-cycle cost savings Average savings *$* Households with Net cost *%* No impact *%* Net benefit *%* Payback period *years* Median Average Multi-Family Application Baseline 1.72/8.00 1,365 2,327 3,693 1 1.80/7.50 1,365 2,327 3,587 3.7 0.0 96.4 3.6 0.0 0.0 2, 3 2.00/5.50 1,388 2,222 3,265 14.9 0.0 96.4 3.6 0.4 0.5 4 2.20/5.10 1,428 1,877 3,196 69.1 4.1 22.2 73.7 3.0 3.2 5 2.35/4.40 1,470 1,768 3,113 151.7 4.2 0.0 95.8 2.9 3.1 Laundromat Application Baseline 1.72/8.00 1,365 1,643 3,977 1 1.80/7.50 1,365 2,611 3,855 4.2 0.0 96.4 3.6 0.0 0.0 2, 3 2.00/5.50 1,388 2,490 3,467 17.6 0.0 96.4 3.6 0.2 0.2 4 2.20/5.10 1,428 2,079 3,392 75.9 0.0 22.2 77.7 1.8 1.9 5 2.35/4.40 1,470 1,964 3,291 176.4 0.0 0.0 100.0 1.6 1.7 c. Rebuttable-Presumption Payback As discussed above, EPCA establishes a rebuttable presumption that an energy conservation standard is economically justified if the increased purchase cost for equipment that meets the standard is less than three times the value of the first-year energy savings resulting from the standard. (42 U.S.C. 6295(o)(2)(B)(iii)) DOE calculated a rebuttable-presumption PBP for each TSL to determine whether DOE could presume that a standard at that level is economically justified. Table VI.9 shows the rebuttable-presumption PBPs for CCWs. As required by EPCA, DOE based the calculation on the assumptions in the DOE test procedures for CCWs. (42 U.S.C. 6295(o)(2)(B)(iii)) As a result, DOE calculated a single rebuttable-presumption payback value, and not a distribution of PBPs, for each TSL. Table VI.9—Rebuttable-Presumption Payback Periods for Commercial Clothes Washers TSL Payback period, *years* Top-loading Multi-family application Lauundromat application Front-loading Multi-family application Laundromat application 1 >100 >100 0 0 2 >100 >100 1.2 1.3 3 24.0 >100 1.2 1.3 4 24.0 >100 9.4 17.3 5 24.0 >100 10.0 17.6 With the exception of TSLs 1 to 3 for front-loading CCWs, the TSLs in Table VI.9 do not have rebuttable-presumption PBPs of less than 3 years. As stated above, in addition to calculating the rebuttable-presumption PBP DOE routinely conducts a thorough economic analysis that considers the full range of impacts, including those to consumers, manufacturers, the Nation, and the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The results of this full analysis serve as the basis for DOE to definitively determine the economic justification for a potential standard level (thereby supporting or rebutting the results of any preliminary determination of economic justification.) Section IV.D provides a complete discussion of how DOE considered the range of impacts to select the standards in today's final rule. 2. Economic Impacts on Manufacturers For the November 2009 SNOPR, DOE used the INPV in the MIA to compare the financial impacts of different TSLs on CCW manufacturers. 74 FR 57738, 57773-76 (Nov. 9, 2009). The INPV is the sum of all net cash flows discounted by the industry's cost of capital (discount rate). DOE used the GRIM to compare the INPV of the base case (no new energy conservation standards) to that of each TSL for the CCW industry. To evaluate the range of cash-flow impacts on the CCW industry, DOE constructed different scenarios using different assumptions for shipments that correspond to the range of anticipated market responses. Each scenario results in a unique set of cash flows and corresponding industry value at each TSL. These steps allowed DOE to compare the potential impacts on the industry as a function of TSLs in the GRIM. The difference in INPV between the base case and the standards case is an estimate of the economic impacts that implementing that standard level would have on the entire industry. For today's final rule notice, DOE continues to use the above methodology and presents the results in the subsequent sections. See chapter 13 of the TSD for additional information on MIA methodology and results. a. Industry Cash-Flow Analysis Results Using scenarios based on two shipment projections from the NIA, DOE estimated the impact of amended energy conservation standards for CCWs on the INPV of the CCW industry. The impact consists of the difference between INPV in the base case and INPV in the standards case. INPV is the primary metric used in the MIA, and represents one measure of the fair value of the industry in today's dollars. DOE calculated the INPV by summing all of the net cash flows, discounted at the CCW industry's cost of capital or discount rate. As discussed in section IV.G of today's final rule, DOE also considered the impact of Federal production tax credits on the CCW industry. DOE does not include the benefit of these tax credits in its results shown below. DOE includes these results in appendix 13C of the TSD. DOE estimated that the total benefit of these Federal production tax credits to the CCW industry from 2007 through 2010 would be approximately $5.3 million. Because DOE discounts the industry cash flows to the 2009 base year, DOE estimates that approximately $1.6 million of the total benefit from the tax credits will occur during the analysis period. In the scenario that considers the benefits of the tax credits, the base case INPV increases by approximately $1.6 million. As previously stated, although the base-case and standards-case INPV increase as a result of Federal production tax credits, the benefits do not significantly mitigate possible impacts due to standards. For additional information on the assumptions and calculations of Federal production tax credits for CCWs, see appendix 13C of the TSD. Also discussed in section IV.G of today's final rule, DOE incorporated a sensitivity analysis from the NIA that impacts shipments in the MIA. The methodology and subsequent INPV results from the sensitivity analysis are found in appendix 11C of the TSD. To assess the lower end of the range of potential impacts for the CCW industry, DOE considered a scenario wherein unit shipments will not be impacted regardless of new energy conservation standards—this scenario is called the base-case shipments scenario. To assess the higher end of the range of potential impacts for the CCW industry, DOE considered a scenario in which total industry shipments would decrease due to the combined effects of increases in purchase price and decreases in operating costs due to new energy conservation standards—this scenario is called the price elasticity of demand scenario. In both scenarios, it is assumed that manufacturers will be able to maintain the same gross margins (as a percentage of revenues) that are currently obtained in the base case. Table VI.10 through Table VI.11 show the changes in INPV that DOE estimates would result from the TSLs DOE considered for this final rule. Table VI.10—Manufacturer Impact Analysis for Commercial Clothes Washers With Base-Case Shipments. Not Including DOE's Estimates of Federal Production Tax Credits [Preservation of gross margin percentage markup with base-case shipments] Units Base case Trial standard level 1 2 3 4 5 INPV *2008$ millions* 62 65 63 57 54 41 Change in INPV *2008$ millions** 4 1

(20)*%* 5.97 2.24 −7.81 −12.73 −33.09 Amended Energy Conservation Standards Equipment Conversion Expenses *2008$ millions* 0.00 3.12 18.72 22.56 35.87 Amended Energy Conservation Standards Capital Investments *2008$ millions* 0.00 0.62 1.66 2.44 5.09 Total Investment Required *2008$ millions* 0.0 3.7 20.4 25.0 41.0 * Parentheses indicate negative (−) values. Table VI.11—Manufacturer Impact Analysis for Commercial Clothes Washers with Base-Case Shipments. Preservation of Gross Margin Percentage Markup with Base-Case Shipments [Not including DOE's estimates of Federal production tax credits] Units Base case Trial standard level 1 2 3 4 5 INPV *2008$ millions* 62 64 62 55 51 39 Change in INPV *2008$ millions** 2.8 0.5 (7.0) (10.2) (23.0) *%* 4.50 0.76 −11.39 −16.57 −37.30 Amended Energy Conservation Standards Equipment Conversion Expenses *2008$ millions* 0.00 3.12 18.72 22.56 35.87 Amended Energy Conservation Standards Capital Investments *2008$ millions* 0.00 0.62 1.66 2.44 5.09 Total Investment Required *2008$ millions* 0.0 3.7 20.4 25.0 41.0 * Parentheses indicate negative (−) values. The November 2009 SNOPR discusses the estimated impact of amended CCW standards on INPV for each equipment class. 74 FR 57738, 57775-76 (Nov. 9, 2009). See chapter 13 of the TSD for details. b. Cumulative Regulatory Burden While any one regulation may not impose a significant burden on manufacturers, the combined effects of several regulations may have serious consequences for some manufacturers, groups of manufacturers, or an entire industry. Assessing the impact of a single regulation may overlook this cumulative regulatory burden. DOE recognizes that each regulation can significantly affect manufacturers' financial operations. Multiple regulations affecting the same manufacturer can reduce manufacturers' profits and possibly cause manufacturers to exit from the market. DOE did not identify any additional DOE regulations that would affect the manufacturers of CCW apart from the ones discussed in the October 2008 NOPR. 73 FR 62034, 62104 (Oct. 17, 2008). These included other DOE regulations, State regulations, and international standards. For further information about the cumulative regulatory burden on the CCW industry, see chapter 13 of the TSD. c. Impacts on Employment To quantitatively assess the impacts of energy conservation standards on CCW manufacturing employment, DOE used the GRIM to estimate the domestic labor expenditures and number of employees in the base case and at each TSL from 2009 through 2043 for the CCW industry. DOE used statistical data from the U.S. Census Bureau's 2006 *Annual Survey of Manufactures* 38 ( *2006 ASM* ) and 2006 *Current Industry Report* 39 ( *2006 CIR* ), the results of the engineering analysis, and interviews with manufacturers to estimate the inputs necessary to calculate industry-wide labor expenditures and domestic employment levels. 38 The 2006 *Annual Survey of Manufactures* is available online at: *http://www.census.gov/mcd/asmhome.html* . 39 The 2006 *Current Industry Report* is available online at: *http://www.census.gov/cir/www/alpha.html* . Using the GRIM, DOE calculates that there are 188 U.S. production workers in the CCW industry. Using the *CIR* data, DOE estimates that approximately 81 percent of CCWs sold in the United States are manufactured domestically. Today's final rule estimates the impacts on U.S. production workers in the CCW industry impacted by energy conservation standards as shown in Table VI.12. Table VI.12—Change in Total Number of Domestic Production Employees in 2013 in the Commercial Clothes Washer Industry Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 Total Number of Domestic Production Workers in 2013 188 204 204 222 224 228 Change in Total Number of Domestic Production Workers in 2013 16 16 33 36 40 The November 2009 SNOPR discussed the estimated impacts of amended CCW standards on manufacturing employment. 74 FR 57738, 57776-77 (Nov. 9, 2009). A further discussion of the potential impacts of amended energy conservation standards on manufacturing employment for the CCW industry at each TSLs are presented in chapter 13 of the TSD. d. Impacts on Manufacturing Capacity According to the majority of CCW manufacturers, amended energy conservation standards could potentially impact manufacturers' production capacity depending on the efficiency level required. For today's final rule, DOE continues to believe manufacturers will be able to maintain manufacturing capacity levels and continue to meet market demand under amended energy conservation standards as long as manufacturers can continue to offer top-loading and front-loading CCWs. As stated in the November 2009 SNOPR, a very high efficiency standard for top-loading CCWs could potentially cause one or more manufacturer(s) to abandon further manufacture of top-loading CCWs after the compliance date (due to concerns about wash quality, for example). Instead of manufacturing top-loading CCWs, manufacturers could elect to switch their entire production over to front-loading CCWs. Since top-loading and front-loading CCWs share few, if any parts, are built on completely separate assembly lines, and are built at very different production volumes, a manufacturer may not be able to make a platform switch from top-loading to front-loading CCWs without significant impacts on equipment development and capital expenses, along with capacity constraints. 74 FR 57738, 57777 (Nov. 9, 2009). However, for today's final rule, DOE estimates that the energy conservation standard in today's final rule for top-loading CCWs mitigates that risk. As reported in the November 2009 SNOPR, multiple manufacturers stated during interviews that front-loading CCWs represent a relatively small segment of their total production volumes. Depending on the manufacturer, front-loading production capacity may need to be substantially expanded to meet the demand that top-loading production lines currently meet. This expansion could possibly affect capacity until new production lines come on-line to service demand. In addition, manufacturers stated that the higher prices of front-loading washers could lead to a decrease in shipments. This could lead to a permanently lower production capacity as machines are repaired and the equipment lifetime of existing washers is extended. 74 FR 57738, 57777 (Nov. 9, 2009). DOE research continues to suggest that the energy conservation standards in today's final rule can be achieved by all manufacturers using existing platforms and technologies; hence, there appears little reason for the market to wholly transition to front-loading CCWs. A further discussion of the potential impacts of amended energy conservation standards on manufacturing capacity for the CCW industry is presented in chapter 13 of the TSD. e. Impacts on Subgroups of Manufacturers As discussed in the November 2009 SNOPR, 74 FR 57738, 57777 (Nov. 9, 2009), DOE evaluated the impacts of amended energy conservation standards on subgroups of manufacturers. As outlined earlier, an LVM that concentrates on building laundry equipment will be affected disproportionately by any energy efficiency regulation regarding CCWs. The LVM's business is focused mostly on the commercial laundry market segment and its total production volume is many times lower than its diversified competitors. Due to this combination of market concentration and size, the LVM is at greater risk of material harm to its business due to any regulation that affects commercial laundry products than its competitors, regardless of the TSL chosen. For today's final rule, DOE reevaluated the CCW energy conservation standards proposed in the November 2009 SNOPR in response to comments received from interested parties. DOE continues to believe that the energy conservation standards adopted in today's final rule greatly lessen the potential disadvantages faced by the LVM. Further details of the separate analysis of the impacts on the LVM are found in chapter 13 of the TSD. 3. National Impact Analysis a. Amount and Significance of Energy Savings To estimate the energy savings through 2043 that would be expected to result from amended CCW energy conservation standards, DOE compared the projected energy consumption of CCWs under the base case to energy consumption of this equipment under each of the considered TSLs. The energy consumption calculated in the NIA takes into account energy losses in the generation and transmission of electricity as discussed in section VI.B. Table VI.13 and Table VI.14 show the forecasted national energy and water savings at each TSL for top-loading and front-loading CCWs, respectively. In addition to undiscounted savings, the tables show the magnitude of the estimated energy and water savings if the savings are discounted at 7-percent and 3-percent discount rates. Each TSL considered in this rulemaking would result in significant energy and water savings, and the amount of savings increases with higher energy conservation standards. See chapter 11 of the TSD for details of the NIA. Table VI.13—Summary of Cumulative National Energy and Water Savings for Top-Loading Commercial Clothes Washers (2013 to 2043) Trial standard level Undiscounted National energy savings, *quads* National water savings, *trillion gallons* Discounted at 3% National energy savings, *quads* National water savings, *trillion gallons* Discounted at 7% National energy savings, *quads* National water savings, *trillion gallons* 1 0.04 0.00 0.02 0.00 0.01 0.00 2 0.04 0.00 0.02 0.00 0.01 0.00 3 0.10 0.14 0.05 0.08 0.03 0.04 4 0.10 0.14 0.05 0.08 0.03 0.04 5 0.10 0.14 0.05 0.08 0.03 0.04 Table VI.14—Cumulative National Energy and Water Savings for Front-Loading Commercial Clothes Washers (2013 to 2043) Trial standard level Undiscounted National energy savings, *quads* National water savings, *trillion gallons* 3% Discounted National energy savings, *quads* National water savings, *trillion gallons* 7% Discounted National energy savings, *quads* National water savings, *trillion gallons* 1 0.00 0.00 0.00 0.00 0.00 0.00 2 0.00 0.01 0.00 0.00 0.00 0.00 3 0.00 0.01 0.00 0.00 0.00 0.00 4 0.01 0.03 0.01 0.01 0.00 0.01 5 0.02 0.07 0.01 0.04 0.01 0.02 b. Net Present Value of Customer Costs and Benefits The NPV of customer costs and benefits is a measure of the cumulative impact of energy conservation standards. In accordance with the OMB's guidelines on regulatory analysis (OMB Circular A-4, section E, Sept. 17, 2003), DOE calculated an estimated NPV using both a 7-percent and a 3-percent real discount rate. The 7-percent rate is an estimate of the average before-tax rate of return on private capital in the U.S. economy, and reflects the returns on real estate and small business capital as well as corporate capital. DOE used this discount rate to approximate the opportunity cost of capital in the private sector, since recent OMB analysis has found the average rate of return to capital to be near this rate. DOE also used the 3-percent rate to capture the potential effects of standards on private consumption ( *e.g.,* through higher prices for equipment and the purchase of reduced amounts of energy). This rate represents the rate at which society discounts future consumption flows to their present value. This rate can be approximated by the real rate of return on long-term government debt ( *i.e.,* yield on Treasury notes minus annual rate of change in the Consumer Price Index), which has averaged about 3 percent on a pre-tax basis for the last 30 years. Table VI.15 shows the forecasted NPV at each TSL for CCWs. At both 7-percent and 3-percent discount rates, TSLs 1 through 5 show positive cumulative NPVs. The highest NPV is provided by TSL 5: $0.51 billion with 7-percent discount rate, and $1.25 billion with 3-percent discount rate. Table VI.15—Summary of Cumulative Net Present Value for Commercial Clothes Washers (Impacts for Units Sold From 2013 to 2043) TSL NPV, *billion 2008$* Top-loading 7% Discount rate 3% Discount rate Front-loading 7% Discount rate 3% Discount rate Total 7% Discount rate 3% Discount rate 1 0.01 0.07 0.00 0.01 0.01 0.08 2 0.01 0.07 0.01 0.03 0.02 0.10 3 0.34 0.86 0.01 0.03 0.36 0.89 4 0.34 0.86 0.07 0.17 0.41 1.03 5 0.34 0.86 0.17 0.39 0.51 1.25 c. Impacts on Employment In addition to considering the direct employment impacts for the manufacturers of equipment covered by this rulemaking (discussed above,) DOE develops estimates of the indirect employment impacts of proposed standards in the economy in general. As noted previously, DOE expects energy conservation standards for CCWs to reduce energy bills for commercial customers, with the resulting net savings being redirected to other forms of economic activity. The impacts concern a variety of businesses not directly involved in the decision to make, operate, or pay the utility bills for CCWs. Thus, they are “indirect.” To estimate these indirect employment impacts, DOE used an input/output model of the U.S. economy using BLS data (described in section IV.H). In this input/output model, the spending of the money saved on utility bills when more efficient CCWs are deployed is centered in economic sectors that create more jobs than are lost in electric utilities when spending is shifted from electricity to other products and services. As Table VI.16 shows, DOE estimates that net indirect employment impacts from the considered TSLs are likely to be very small. Furthermore, neither the BLS data nor the input/output model DOE uses include the quality or wage level of the jobs. Table VI.16—Net National Indirect Employment Impacts Under Commercial Clothes Washer TSLs TSL Net national change in jobs in 2043, *thousands* 1 0.07 2 0.08 3 0.46 4 0.52 5 0.62 4. Impact on Utility or Performance of Equipment As indicated in section II.G.1.d of the November 2009 SNOPR, the amended standards DOE is adopting today will not lessen the utility or performance of equipment under consideration in this rulemaking. 74 FR 57738, 57745 (Nov. 9, 2009). 5. Impact of Any Lessening of Competition As discussed in the November 2009 SNOPR, 74 FR 57738, 57779 (Nov. 9, 2009), and in section III.D.1.e of this preamble, DOE considers any lessening of competition likely to result from standards. The Attorney General determines the impact, if any, of any lessening of competition. DOE carefully considered the determination received from DOJ in response to the October 2008 NOPR, and accordingly chose efficiency levels for the November 2009 SNOPR that appear achievable by all CCW manufacturers using existing equipment platforms and technologies. As such, DOE stated that there should be minimal impact on the CCW market and hence its manufacturers. To assist the Attorney General in making a determination for the November 2009 SNOPR, DOE provided DOJ with copies of the supplemental notice and the TSD for review. The DOJ did not provide a response to the November 2009 SNOPR. Therefore, DOE considers the impact of any lessening of competition for today's final rule based, in part, on the Attorney General's earlier response, which is reprinted at the end of today's rulemaking. 6. Need of the Nation to Conserve Energy Improving the energy efficiency of CCWs, where economically justified, would likely improve the security of the Nation's energy system by reducing overall demand for energy, potentially reducing the Nation's reliance on foreign sources of energy. Reduced electricity demand would also likely improve the reliability of the electricity system, particularly during peak-load periods. As a measure of this reduced demand, DOE expects the energy savings from the adopted standards to eliminate the need for approximately 0.010 gigawatts

(GW)of generating capacity by 2043. The energy savings from the standards for CCWs also produce environmental benefits in the form of reduced emissions of air pollutants and greenhouse gases associated with energy production, and with use of fossil fuels at sites where CCWs are used. Table VI.17 provides DOE's estimate of cumulative CO 2 , NO X , and Hg emissions reductions that would result from the TSLs considered in this rulemaking. In the environmental assessment (chapter 16 of the TSD), DOE reports estimated annual changes in CO 2 , NO X , and Hg emissions attributable to each TSL. Table VI.17—Cumulative Emissions Reductions Under Commercial Clothes Washer TSLs (in 2013 to 2043) Emissions TSL 1 2 3 4 5 CO 2 , *Mt* 2.36 2.39 5.07 5.66 6.11 NO X , *kt* 1.43 1.45 3.04 3.39 3.66 Hg, *t* 0.0002 0.0002 0.0003 0.0004 0.0004 Mt = million metric tons. kt = thousand metric tons. t = metric tons. As discussed in section IV.J of this final rule, DOE does not report SO 2 emissions reductions from power plants because there is uncertainty about the effect of energy conservation standards on the overall level of SO 2 emissions in the United States due to SO 2 emissions caps. DOE also did not include NO X emissions reduction from power plants in States subject to CAIR because an energy conservation standard would likely not affect the overall level of NO X emissions in those States due to the emissions caps mandated by CAIR. Table VI.18 presents the estimated wastewater discharge reductions due to the TSLs for CCWs. In chapter 16 of the TSD, DOE reports annual changes in wastewater discharge attributable to each TSL. Table VI.18—Cumulative Wastewater Discharge Reductions Under Commercial Clothes Washer Trial Standard Levels [For 2013─2043] TSL 1 2 3 4 5 Wastewater Discharge Reduction, *trillion gallons* 0.00 0.01 0.14 0.16 0.21 As discussed in section IV.J of this final rule, DOE estimated the cumulative monetary value of the economic benefits associated with CO 2 emissions reductions expected to result from amended standards for CCWs. In considering the potential global benefits resulting from reduced CO 2 emissions, DOE used values based on a social cost of carbon of approximately $5, $10, $20, $34 and $56 per metric ton avoided in 2007 (values expressed in 2008$). DOE also calculated the domestic benefits based on a value of approximately $1 per metric ton avoided in 2007. To value the CO 2 emissions reductions expected to result from amended standards for CCWs in 2013-2043, DOE escalated the above values for 2007 using a 3-percent escalation rate. Table VI.19 and Table VI.20 present the cumulative monetary value for each TSL using 7-percent and 3-percent discount rates, respectively. Table VI.19—Estimates of Value of CO 2 Emissions Reductions Under Commercial Clothes Washer Trial Standard Levels at 7-Percent Discount Rate TSL Estimated cumulative CO 2 emission reductions, *Mt* Value of CO 2 emission reductions, *million 2008$* * Domestic CO 2 Value $1/metric ton CO 2 Global CO 2 Value $5/metric ton CO 2 CO 2 Value $10/metric ton CO 2 CO 2 Value $20/metric ton CO 2 CO 2 Value $34/metric ton CO 2 CO 2 Value $56/metric ton CO 2 1 2.36 1 6 12 22 39 65 2 2.39 1 6 12 23 40 66 3 5.07 3 13 25 48 84 140 4 5.66 3 14 28 54 93 156 5 6.11 3 15 31 58 101 168 * Unit values are approximate and are based on escalating 2007$ to 2008$ for consistency with other values presented in this notice. Table VI.20—Estimates of Value of CO 2 Emissions Reductions Under Commercial Clothes Washer Trial Standard Levels at 3-Percent Discount Rate TSL Estimated cumulative CO 2 emission reductions, *Mt* Value of CO 2 emission reductions, *million 2008$* * Domestic CO 2 Value $1/metric ton CO 2 Global CO 2 Value $5/metric ton CO 2 CO 2 Value $10/metric ton CO 2 CO 2 Value $20/metric ton CO 2 CO 2 Value $34/metric ton CO 2 CO 2 Value $56/metric ton CO 2 1 2.36 3 13 26 49 84 141 2 2.39 3 13 26 49 86 143 3 5.07 6 28 55 105 182 303 4 5.66 7 31 61 117 202 337 5 6.11 8 33 66 126 219 364 * Unit values are approximate and are based on escalating 2007$ to 2008$ for consistency with other values presented in this notice. DOE is well aware that scientific and economic knowledge about the contribution of CO 2 and other GHG emissions to changes in the future global climate and the potential resulting damages to the world economy continues to evolve rapidly. Thus, any value placed in this rulemaking on reducing CO 2 emissions is subject to change. DOE, together with other Federal agencies, will continue to review various methodologies for estimating the monetary value of reductions in CO 2 and other GHG emissions. This ongoing review will consider the comments on this subject that are part of the public record for this and other rulemakings, as well as other methodological assumptions and issues. However, consistent with DOE's legal obligations, and taking into account the uncertainty involved with this particular issue, DOE has included in this rule the most recent values and analyses resulting from the ongoing interagency review process. DOE also estimated a range for the cumulative monetary value of the economic benefits associated with NO X and Hg emissions reductions anticipated to result from amended standards for CCWs. The dollar per ton values that DOE used are discussed in section IV.J of this final rule. Table VI.21 and Table VI.22 present the estimates calculated using 7-percent and 3-percent discount rates, respectively. Table VI.21—Estimates of Value of Reductions of NO X and Hg Emissions Under Commercial Clothes Washer Trial Standard Levels at a 7-Percent Discount Rate Commercial clothes washer TSL Cumulative NO X emission reductions, *kt* Value of NO X emission reductions, *million 2008$* Cumulative Hg emission reductions, *t* Value of Hg emission reductions, *million 2008$* 1 1.43 0.19 to 1.96 0.0002 0.00 to 0.03. 2 1.45 0.19 to 1.99 0.0002 0.00 to 0.03. 3 3.04 0.41 to 4.17 0.0003 0.00 to 0.06. 4 3.39 0.45 to 4.64 0.0004 0.00 to 0.07. 5 3.66 0.49 to 5.01 0.0004 0.00 to 0.08. Table VI.22—Estimates of Value of Reductions of NO X and Hg Emissions Under Commercial Clothes Washer Trial Standard Levels at a 3-Percent Discount Rate Commercial clothes washer TSL Cumulative NO X emission reductions, *kt* Value of NO X emission reductions, *million 2008$* Cumulative Hg emission reductions, *t* Value of Hg emission reductions, *million 2008$* 1 1.43 0.38 to 3.92 0.0002 0.00 to 0.03. 2 1.45 0.39 to 3.98 0.0002 0.00 to 0.03. 3 3.04 0.81 to 8.36 0.0003 0.00 to 0.06. 4 3.39 0.91 to 9.31 0.0004 0.00 to 0.07. 5 3.66 0.98 to 10.04 0.0004 0.00 to 0.07. The NPV of the monetized benefits associated with emissions reductions can be viewed as a complement to the NPV of the consumer savings calculated for each TSL considered in this rulemaking. Table VI.23 presents the NPV values for CCWs that would result if DOE were to add the low-end and high-end estimates of the potential benefits resulting from reduced CO 2 , NO X , and Hg emissions to the NPV of consumer savings calculated for each TSL considered in this rulemaking, at both a 7-percent and 3-percent discount rate. For CO 2 , only the low and high global benefit values are used for these tables ($5 and $56 in 2008$). Although adding the value of consumer savings to the values of emission reductions provides a valuable perspective, please note the following:

(1)The national consumer savings are domestic U.S. consumer monetary savings found in market transactions, while the values of emissions reductions are based on ranges of estimates of imputed marginal social costs, which, in the case of CO 2 , are meant to reflect global benefits; and

(2)the assessments of consumer savings and emission-related benefits are performed with different computer models, leading to different time frames for the analyses. For CCWs, the present value of national consumer savings is measured for the period in which units shipped from 2013 to 2043 continue to operate. However, the time frames of the benefits associated with the emission reductions differ. For example, the value of CO 2 emissions reductions is meant to reflect the present value of all future climate-related impacts, even those beyond 2065. Table VI.23—Estimates of Adding NPV of Consumer Savings to NPV of Low- and High-End Global Monetized Benefits From CO 2 , NO X , and Hg Emissions Reductions at All TSLs for Commercial Clothes Washers TSL CO 2 Value of $5/metric ton CO 2 * and low values for NO X and Hg ** *billion 2008$* CO 2 Value of $56/metric ton CO 2 * and high values for NO X and Hg *** *billion 2008$* 7-percent discount rate 3-percent discount rate 7-percent discount rate 3-percent discount rate 1 0.02 0.09 0.08 0.22 2 0.03 0.11 0.09 0.25 3 0.37 0.92 0.50 1.20 4 0.42 1.06 0.57 1.38 5 0.53 1.28 0.68 1.62 * These values per ton represent the global negative externalities of CO 2 . ** Low Values correspond to $442 per ton of NO X emissions and $0.745 million per ton of Hg emissions. *** High Values correspond to $4,540 per ton of NO X emissions and $33.3 million per ton of Hg emissions. 7. Other Factors EPCA allows the Secretary of Energy, in determining whether a standard is economically justified, to consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII) and 6316(a)) In adopting today's amended standards, the Secretary found no relevant factors other than those identified elsewhere in today's final rule. D. Conclusion EPCA contains criteria for prescribing new or amended energy conservation standards. It provides that any such standard for CCWs must be designed to achieve the maximum improvement in energy efficiency that the Secretary determines is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A) and 42 U.S.C. 6316(a)) As stated above, in determining whether a standard is economically justified, the Secretary must determine whether the benefits of the standards exceed its burdens considering the seven factors discussed in section II.B. A determination of whether a standard level is economically justified is not made based on any one of these factors in isolation. The Secretary must weigh each of these seven factors in total in determining whether a standard is economically justified. Further, the Secretary may not establish an amended standard if such standard would not result in “significant conservation of energy,” or “is not technologically feasible or economically justified.” (42 U.S.C. 6295(o)(3)(B) and 42 U.S.C. 6316(a)) In selecting today's energy conservation standards for CCWs, DOE started by examining the maximum technologically feasible levels, and determined whether those levels were economically justified. If DOE determined that the maximum technologically feasible level was not justified, DOE then analyzed the next lower TSL to determine whether that level was economically justified. DOE repeated this procedure until it identified an economically justified TSL. To aid the reader in understanding the benefits and/or burdens of each TSL, Table VI.24 summarizes the quantitative analytical results for each TSL, based on the assumptions and methodology discussed above. These tables present the results—or, in some cases, a range of results—for each TSL. The range of values reported in these tables for industry impacts represents the results for the different markup scenarios that DOE used to estimate manufacturer impacts. In addition to the quantitative results, DOE also considers other burdens and benefits that affect economic justification. In sum, today's standard levels for the equipment that is the subject of this rulemaking reflect DOE's careful balancing of the relevant statutory factors under EPCA. Table VI.24—Summary of Results for Commercial Clothes Washers Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 Primary Energy Saved, *quads* 0.04 0.04 0.10 0.11 0.12 7% Discount Rate 0.01 0.01 0.03 0.03 0.03 3% Discount Rate 0.02 0.02 0.06 0.06 0.07 Primary Water Saved, *trillion gallons* 0.00 0.01 0.14 0.16 0.21 7% Discount Rate 0.00 0.00 0.04 0.04 0.06 3% Discount Rate 0.00 0.00 0.08 0.09 0.11 Generation Capacity Reduction, *gigawatts* ** 0.005 0.005 0.010 0.011 0.012 NPV of Customer Benefit, *2008$ billion:* 7% Discount Rate 0.01 0.02 0.36 0.41 0.51 3% Discount Rate 0.08 0.10 0.89 1.03 1.25 Industry Impacts: Industry NPV, *2008$ million* 4-3 1-0 (5)-(7) (8)-(10) (20)-(23) Industry NPV, *% change* 6.0-4.5 2.2-0.8 (7.8)-(11.4) (12.7)-(16.6) (33.1)-(37.3) Emissions Impacts: † CO 2 , *Mt* 2.36 2.39 5.07 5.66 6.11 NO X , *kt* 1.43 1.45 3.04 3.39 3.66 Hg, *t* 0.0002 0.0002 0.0003 0.0004 0.0004 Value of Emission Reductions: CO 2 , *2008$ million:* †† 7% Discount Rate 6-65 6-66 13-140 14-156 15-168 3% Discount Rate 13-141 13-143 28-303 31-337 33-364 NO X , *2008$ million:* 7% Discount Rate 0.2-2.0 0.2-2.0 0.4-4.2 0.5-4.6 0.5-5.0 3% Discount Rate 0.4-3.9 0.4-4.0 0.8-8.4 0.9-9.3 1.0-10.0 Hg, *2008$ million:* 7% Discount Rate 0.00-0.03 0.00-0.03 0.00-0.06 0.00-0.07 0.00-0.08 3% Discount Rate 0.00-0.03 0.00-0.03 0.00-0.06 0.00-0.07 0.00-0.07 Wastewater Discharge Impacts, *trillion gallons* 0.00 0.01 0.14 0.16 0.21 Mean LCC Savings,* *2008$:* Top-Loading, Multi-Family (8.1) (8.1) 179 179 179 Top-Loading, Laundromat (17.7) (17.7) 190 190 190 Front-Loading, Multi-Family 4.7 19.5 19.5 91 203 Front-Loading, Laundromat 5.2 22.0 22.0 93 216 Median PBP, *years:* Top-Loading, Multi-Family 11.7 11.7 4.6 4.6 4.6 Top-Loading, Laundromat 7.9 7.9 2.8 2.8 2.8 Front-Loading, Multi-Family 0.0 0.4 0.4 3.0 2.9 Front-Loading, Laundromat 0.0 0.2 0.2 1.8 1.6 LCC Customer Impacts: Top-Loading: Multi-Family: Net Cost, *%* 43.3 43.3 13.8 13.8 13.8 No Impact, *%* 35.3 35.3 1.2 1.2 1.2 Net Benefit, *%* 21.5 21.5 85.0 85.0 85.0 Laundromat: Net Cost, *%* 51.4 51.4 2.9 2.9 2.9 No Impact, *%* 35.3 35.3 1.2 1.2 1.2 Net Benefit, *%* 13.3 13.3 95.9 95.9 95.9 Front-Loading: Multi-Family: Net Cost, *%* 0.0 0.0 0.0 1.4 1.1 No Impact, *%* 96.3 96.3 96.3 23.1 0.0 Net Benefit, *%* 3.7 3.7 3.7 75.5 98.9 Laundromat: Net Cost, *%* 0.0 0.0 0.0 0.0 0.0 No Impact, *%* 96.3 96.3 96.3 23.1 0.0 Net Benefit, *%* 3.7 3.7 3.7 76.9 100.0 * Parentheses indicate negative (−) values. For LCCs, a negative value means an increase in LCC by the amount indicated. ** Changes in installed generation capacity by 2043 based on *AEO 2009* April Release Reference Case. † Emissions impacts include physical reductions at power plants and at buildings where the appliance is being used. †† Range of the economic value of CO 2 reductions based on global estimates of the benefit of reduced CO 2 emissions. First, DOE considered TSL 5, the max-tech level. TSL 5 would likely save 0.12 quads of energy and 0.21 trillion gallons of water through 2043, an amount DOE considers significant. DOE projects that TSL 5 would result in a net increase of $0.51 billion in NPV of customer benefits using a discount rate of 7 percent, and of $1.25 billion using a discount rate of 3 percent. The emissions reductions at TSL 5 are 6.11 Mt of CO 2 , 3.66 kt of NO X , and 0.0004 t of Hg. At TSL 5, the estimated benefit of reducing CO 2 emissions based on global estimates of the value of CO 2 ranges from $15 million to $168 million at a 7-percent discount rate, and $33 million to $364 million at a 3-percent discount rate. Total generating capacity in 2043 is estimated to decrease compared to the reference case by 0.012 GW under TSL 5. At TSL 5, DOE projects that the average top-loading CCW customer would experience a decrease in LCC of $179 in multi-family applications and $190 in laundromats. DOE also estimates an LCC decrease for an overwhelming majority of customers that purchase top-loading CCWs—85 percent of customers in multi-family applications and 96 percent of customers in laundromats. The median PBP of the average consumer at TSL 5 in multi-family applications and in laundromats is projected to be 4.6 years and 2.8 years, respectively. At TSL 5, DOE projects that the average front-loading CCW consumer would experience a decrease in LCC of $203 in multi-family applications and $216 in laundromats. DOE also estimates an LCC decrease for an overwhelming majority of customers that purchase front-loading CCWs—99 percent of customers in multi-family applications and 100 percent of customers in laundromats. The median PBP of the average consumer at TSL 5 in multi-family applications and in laundromats is projected to be 2.9 years and 1.6 years, respectively. At TSL 5, DOE estimated the projected change in INPV ranges from a total decrease of $20.4 million for both equipment classes to a total decrease of $23.0 million. At TSL 5, DOE recognizes the risk of very large negative impacts if manufacturers' expectations about reduced shipments are realized. TSL 5 could result in a net loss as high as 37.3 percent in INPV to CCW manufacturers. Also, DOE is especially sensitive to the potentially severe impacts to the LVM of CCWs. Because the LVM's clothes washer revenue is so dependent on CCW sales, DOE is concerned that TSL 5 will cause material harm to the LVM. Although DOE recognizes the increased economic benefits that could result from TSL 5, DOE has concluded that the benefits of a standard at TSL 5 would be outweighed by the potential for disincentivizing customers from purchasing more efficient front-loading CCWs. At TSL 5, front-loading CCWs are highly efficient but have a purchase price estimated to be $497 more expensive than top-loading CCWs. With such a large price differential between the two types of CCWs, and with less than 2 percent of the front-loading market at TSL 5, DOE is concerned that significant numbers of potential customers of front-loading CCWs would choose to purchase a less efficient top-loading unit. As described in section IV.E.2.c, DOE did analyze the impacts of increased purchase prices for each equipment class, but considered each independently of the other. Because the price impacts for more efficient top-loaders are higher than those for more efficient front-loaders, DOE estimated that top-loading CCW sales would decrease slightly more rapidly than for front-loaders. But DOE did not have sufficient data to estimate the cross-price elasticity of demand between the two equipment classes to determine the extent to which customers of front-loadings CCWs would switch to less expensive top-loaders. If potential front-loading CCW customers did decide to switch to less expensive top-loading washers, the NES and NPV realized from TSL 5 would be diminished. DOE notes that in developing the energy savings and water savings estimates for TSL 5, it effectively held constant the ratio of front-loading to top-loading CCW shipments across the various TSLs. Particularly at TSL 3 to TSL 5, the differences in these estimates are small, especially at a 7-percent discount rate. DOE believes that the values in Table VI.24 represent the high end of the potential energy and water savings for these TSLs. Taking into account cross-price elasticity of demand could affect the anticipated energy and water savings of the various TSLs, and it could potentially result in a change in the TSL with the highest projected energy/water savings level. In addition, TSL 5 would adversely impact manufacturers' INPV to a significant extent. Not only does the industry face a potential significant loss in industry INPV, but manufacturers would also need to make significant capital investments for both types of CCWs in order to produce both top-loading and front-loading washers at the maximum technologically feasible levels. After carefully considering the analysis and weighing the benefits and burdens of TSL 5, the Secretary has reached the following conclusion: At TSL 5, the benefits of energy savings, economic benefit, and emissions reductions would be outweighed by the potential for giving customers less incentive to purchase high efficiency front-loading CCWs and the large capital conversion costs that could result in a substantial reduction in INPV for manufacturers. Next, DOE considered TSL 4. TSL 4 would likely save 0.11 quads of energy and 0.16 trillion gallons of water through 2043, an amount DOE considers significant. DOE projects that TSL 4 would result in a net increase of $0.41 billion in NPV of customer benefits using a discount rate of 7 percent, and of $1.03 billion using a discount rate of 3 percent. The emissions reductions at TSL 4 are 5.66 Mt of CO 2 , 3.39 kt of NO X , and 0.0004 t of Hg. At TSL 4, the estimated benefits of reducing CO 2 emissions based on global estimates of the value of CO 2 ranges from $14 million to $156 million at a 7-percent discount rate and $31 million to $337 million at a 3-percent discount rate. Total generating capacity in 2043 is estimated to decrease compared to the reference case by 0.011 GW under TSL 4. At TSL 4, top-loading CCWs have the same efficiency as at TSL 5. Therefore, top-loading CCW customers will experience the same LCC impacts and PBPs as TSL 5. At TSL 4 for front-loading CCWs, DOE projects that the average front-loading CCW consumer would experience a decrease in LCC of $91 in multi-family applications and $93 in laundromats. DOE also estimates an LCC decrease for an overwhelming majority of customers that purchase front-loading CCWs—76 percent of customers in multi-family applications and 77 percent of customers in laundromats. The median PBP of the average consumer at TSL 4 in multi-family applications and in laundromats is projected to be 3.0 years and 1.8 years, respectively. DOE estimated the projected change in INPV ranges from a decrease of $7.8 million to a decrease of $10.2 million. At TSL 4, DOE recognizes the risk of very large negative impacts if manufacturers' expectations about reduced shipments are realized. TSL 4 could result in a net loss as high as 16.6 percent in INPV to CCW manufacturers. Also, DOE is especially sensitive to the potentially severe impacts to the LVM. Since the LVM's clothes washer revenue is so dependent on CCW sales, DOE is concerned that TSL 4 will materially harm the LVM. Although DOE recognizes the increased economic benefits that could result from TSL 4, DOE has the same concerns regarding TSL 4 as for TSL 5. Namely, DOE has concerns as to the potential of TSL 4 to give customers less incentive to purchase more efficient front-loading washers. At TSL 4, front-loading CCWs are highly efficient but have a purchase price estimated to be $454 more expensive than top-loading washers. With such a price differential between the two types of CCWs, and with less than 4 percent of the front-loading market currently meeting TSL 4, DOE is concerned that a significant number of potential customers of front-loading CCWs would be more likely to purchase a top-loading CCW, which is less efficient. If potential front-loading CCW customers did decide to switch to top-loading models, the NES and NPV realized from TSL 4 would be diminished. In addition, TSL 4 would adversely impact manufacturers' INPV to a significant extent. Not only does the industry face a potential loss in industry INPV, but manufacturers would also need to make significant capital investments for both types of CCWs in order to produce both top-loading washers at the maximum technologically feasible level and front-loading washers at a level which only 3 percent of the market currently meets. After carefully considering the analysis and weighing the benefits and burdens of TSL 4, the Secretary has reached the following conclusion: At TSL 4, the benefits of energy savings, economic benefit, and emissions reductions would be outweighed by the potential for giving customers less incentive to purchase high efficiency front-loading CCWs and the large capital conversion costs that could result in a substantial reduction in INPV for manufacturers. Next, DOE considered TSL 3. TSL 3 would likely save 0.10 quads of energy and 0.14 trillion gallons of water through 2043, an amount DOE considers significant. DOE projects that TSL 3 would result in a net increase of $0.36 billion in NPV of customer benefits using a discount rate of 7 percent, and of $0.89 billion using a discount rate of 3 percent. The emissions reductions at TSL 3 are 5.07 Mt of CO 2 , 3.04 kt of NO X , and 0.0003 t of Hg. The estimated benefits of reducing CO 2 emissions based on global estimates of the value of CO 2 ranges from $13 million to $140 million at a 7-percent discount rate, and $28 million to $303 million at a 3-percent discount rate. Total generating capacity in 2043 is estimated to decrease compared to the reference case by 0.010 GW under TSL 3. At TSL 3, top-loading CCWs have the same efficiency as at TSL 5. Therefore, top-loading CCW customers would experience the same LCC impacts and PBPs as TSL 5. At TSL 3 for front-loading CCWs, DOE projects that the average front-loading CCW consumer would experience a decrease in LCC of $19 in multi-family applications and $22 in laundromats. DOE also estimates an LCC decrease for all customers that do not already purchase front-loading CCWs with an efficiency meeting TSL 3. The median PBP of the average consumer at TSL 3 in multi-family applications and in laundromats is projected to be 0.4 years and 0.2 years, respectively. DOE estimated the projected change in INPV ranges from a decrease of $4.8 million to a decrease of $7.0 million. At TSL 3, DOE recognizes the risk of very large negative impacts if manufacturers' expectations about reduced shipments are realized. TSL 3 could result in a net loss as high as 11.4 percent in INPV to CCW manufacturers. Also, DOE is especially sensitive to the potential adverse impacts to the LVM. Since the LVM's clothes washer revenue is so dependent on CCW sales, DOE is concerned that TSL 3 could disproportionately impact the LVM. DOE recognizes the increased economic benefits that could result from TSL 3. DOE still has concerns of the potential for giving customers less incentive to purchase more efficient front-loading washers, but at TSL 3, the price difference between front-loading and top-loading CCWs drops to $414. Given that DOE projects that the average front-loading CCW consumer would experience an LCC savings at TSL 3, DOE believes that most front-loading CCW customers not already purchasing washers at TSL 3 would likely continue to purchase a front-loading unit if standards are set at TSL 3. DOE notes that TSL 3 adversely impacts manufacturers' INPV, but because such a large percentage of the front-loading market is already at TSL 3, manufacturers would likely not need to make significant capital investments for front-loading CCWs. Product development and conversion expenses and capital investments would only be required in order to produce higher efficiency top-loading washers at TSL 3. After considering the analysis and weighing the benefits and the burdens, DOE has concluded that the benefits of a TSL 3 standard outweigh the burdens. In particular, the Secretary has concluded that TSL 3 saves a significant amount of energy and is technologically feasible and economically justified. Further, benefits from carbon dioxide reductions (at a central value of $20) would increase NPV by $48 million (2008$) at a 7% discount rate and $105 million at a 3% discount rate. These benefits from carbon dioxide emission reductions, when considered in conjunction with the consumer savings NPV and other factors described above support DOE's conclusion that TSL 3 is economically justified. Therefore, DOE establishes TSL 3 as the energy conservation standards for CCWs in this final rule. Table VI.25 lists today's energy conservation standards for CCWs. DOE's amended energy conservation standards for CCWs at TSL 3 reflect its conclusion that this standard level would minimize the potential adverse impacts on the LVM and, therefore, would also minimize the adverse impacts on CCW market competition. Table VI.25—Amended Energy Conservation Standards for Commercial Clothes Washers Equipment class Amended energy conservation standards Top-Loading 1.60 Modified Energy Factor/8.5 Water Factor. Front-Loading 2.00 Modified Energy Factor/5.5 Water Factor. DOE also calculated the annualized values for certain benefits and costs under the considered TSLs. The annualized values refer to consumer operating cost savings, consumer incremental product and installation costs, the quantity of emissions reductions for CO 2, NO X, and Hg, and the monetary value of CO 2 emissions reductions (using a value of $20/t CO 2, which is in the middle of the values considered by DOE for valuing the potential global benefits resulting from reduced CO 2 emissions). DOE used a two-step calculation process to convert the time-series of costs and benefits into annualized values. First, DOE calculated a present value for the time-series of costs and benefits using a discount rate of either 3 or 7 percent. From the present value, DOE then calculated the fixed annual payment over the analysis time period (2013 to 2043) that yielded the same present value. The fixed annual payment is the annualized value. Although DOE calculated annualized values, this does not imply that the time-series of cost and benefits from which the annualized values were determined are a steady stream of payments. Table VI.26 presents the annualized values for each TSL considered for CCWs. The tables also present the annualized net benefit resulting from summing the two monetary benefits and subtracting the consumer incremental product and installation costs. Although summing the value of operating savings with the value of CO 2 reductions provides a valuable perspective, please note the following. The operating cost savings are domestic U.S. consumer monetary savings found in market transactions while the CO 2 value is based on an estimate of imputed marginal SCC, which is meant to reflect the global benefits of CO 2 reductions. In addition, the SCC value considers a longer time frame than the period considered for operating cost savings. Table VI.26—Annualized Benefits and Costs for Commercial Clothes Washers by Trial Standard Level TSL Category Unit Primary estimate (AEO reference case) 7% 3% Low estimate (AEO low growth case) 7% 3% High estimate (high growth case) 7% 3% 1 Benefits Monetized Operating Cost Savings *Million 2008$* 12.75 15.32 11.25 13.46 14.63 17.70 Quantified Emissions Reductions CO 2 , *Mt* 0.07 0.07 0.07 0.07 0.07 0.07 NO X , *kt* 0.041 0.044 0.041 0.044 0.041 0.044 Hg, *t* 0.000 0.000 0.000 0.000 0.000 0.000 Monetized Avoided CO 2 Value (at $20/t) *Million 2008$* 2.35 2.73 2.35 2.73 2.35 2.73 Costs Monetized Incremental Product and Installation Costs *Million 2008$* 11.44 11.06 10.67 10.19 12.01 11.65 Net Benefits Monetized Value *Million 2008$* 3.66 6.99 2.93 6.01 4.97 8.79 2 Benefits Monetized Operating Cost Savings *Million 2008$* 13.98 16.79 12.43 14.86 15.90 19.23 Quantified Emissions Reductions CO 2 , *Mt* 0.07 0.07 0.07 0.07 0.07 0.07 NO X , *kt* 0.042 0.045 0.042 0.045 0.042 0.045 Hg, *t* 0.000 0.000 0.000 0.000 0.000 0.000 Monetized Avoided CO 2 Value (at $20/t) *Million 2008$* 2.38 2.77 2.38 2.77 2.38 2.77 Costs Monetized Incremental Product and Installation Costs *Million 2008$* 11.49 11.11 10.72 10.23 12.06 11.70 Net Benefits Monetized Value *Million 2008$* 4.87 8.45 4.09 7.40 6.22 10.30 3 Benefits Monetized Operating Cost Savings *Million 2008$* 60.62 72.82 54.87 65.33 66.59 80.43 Quantified Emissions Reductions CO 2 , *Mt* 0.14 0.16 0.14 0.16 0.14 0.16 NO X , *kt* 0.087 0.094 0.087 0.094 0.087 0.094 Hg, *t* 0.001 0.001 0.001 0.001 0.001 0.001 Monetized Avoided CO 2 Value (at $20/t) *Million 2008$* 5.05 5.88 5.05 5.88 5.05 5.88 Costs Monetized Incremental Product and Installation Costs *Million 2008$* 23.44 22.67 21.85 20.87 24.61 23.87 Net Benefits Monetized Value *Million 2008$* 42.23 56.04 38.07 50.34 47.04 62.44 4 Benefits Monetized Operating Cost Savings *Million 2008$* 68.83 82.66 62.65 74.62 75.33 90.94 Quantified Emissions Reductions CO 2 , *Mt* 0.16 0.17 0.16 0.17 0.16 0.17 NO X , *kt* 0.097 0.105 0.097 0.105 0.097 0.105 Hg, *t* 0.001 0.001 0.001 0.001 0.001 0.001 Monetized Avoided CO 2 Value (at $20/t) *Million 2008$* 5.63 6.56 5.63 6.56 5.63 6.56 Costs Monetized Incremental Product and Installation Costs *Million 2008$* 25.45 24.62 23.81 22.75 26.67 25.87 Net Benefits Monetized Value *Million 2008$* 49.01 64.60 44.47 58.43 54.29 71.63 5 Benefits Monetized Operating Cost Savings *Million 2008$* 81.19 97.52 74.46 88.77 88.24 106.51 Quantified Emissions Reductions CO 2 , *Mt* 0.17 0.19 0.17 0.19 0.17 0.19 NO X , *kt* 0.105 0.113 0.105 0.113 0.105 0.113 Hg, *t* 0.001 0.001 0.001 0.001 0.001 0.001 Monetized Avoided CO 2 Value (at $20/t) *Million 2008$* 6.08 7.08 6.08 7.08 6.08 7.08 Costs Monetized Incremental Product and Installation Costs *Million 2008$* 28.19 27.26 26.47 25.30 29.47 28.57 Net Benefits Monetized Value *Million 2008$* 59.08 77.34 54.08 70.55 64.86 85.02 VII. Procedural Issues and Regulatory Review A. Review Under Executive Order 12866 Executive Order 12866 requires that each agency identify in writing the problem the agency intends to address that warrants new agency action (including, where applicable, the failures of private markets or public institutions), as well as assess the significance of that problem to determine whether any new regulation is necessary. Executive Order 12866, section 1(b)(1). Because today's regulatory action is a “significant regulatory action” under section 3(f)(1) of Executive Order 12866, section 6(a)(3) of the Executive Order requires DOE to prepare and submit for review to the Office of Information and Regulatory Affairs

(OIRA)in OMB an assessment of the costs and benefits of today's rule. Accordingly, DOE presented to the Office of Information and Regulatory Affairs

(OIRA)in the Office of Management and Budget for review the draft final rule and other documents prepared for this rulemaking, including a regulatory impact analysis (RIA). These documents are included in the rulemaking record and are available for public review in the Resource Room of the Building Technologies Program, 950 L'Enfant Plaza, SW., 6th Floor, Washington, DC, 20024,

(202)586-2945, between 9 a.m. and 4 p.m. Monday through Friday, except Federal holidays. The Executive Order requires each agency to identify the problem the agency intends to address that warrants new agency action (including, where applicable, the failures of private markets or public institutions), as well as to assess the significance of that problem in evaluating whether any new regulation is warranted. E.O. 12866, section 1(b)(1). DOE believes that there is a lack of consumer information and/or information processing capability about energy efficiency opportunities in the CCW market. If this is the case, DOE would expect the energy efficiency for CCWs to be randomly distributed across key variables such as energy prices and usage levels. DOE is not able to correlate the consumer's usage pattern and energy price with the efficiency of the purchased equipment, however. In the October 2008 NOPR, DOE sought data on the efficiency levels of existing CCWs by how often they are used and their associated energy prices (and/or geographic regions of the country). 73 FR 62034, 62123 (Oct. 17, 2008). DOE received no such data from interested parties. Therefore, DOE was unable to test for today's final rule the extent to which purchasers of CCWs behave as if they lack information about the costs associated with CCW energy consumption and/or the benefits of more-efficient equipment. In addition, this rulemaking addresses the problem that certain external benefits resulting from improved energy efficiency of CCWs are not captured by the users of such equipment and thus may not play a role in their purchase decisions. These benefits include externalities related to environmental protection and energy security, such as reduced emissions of greenhouse gases. The TSLs that DOE evaluated resulted in CO 2 , NO X , and Hg emissions reductions. DOE also determined a range of possible monetary benefits associated with the emissions reductions. DOE considered both the emissions reductions and their possible monetary benefit in determining the economic feasibility of the TSLs. The November 2009 SNOPR contained a summary of the RIA, which evaluated the extent to which major alternatives to standards for CCWs could achieve significant energy savings at reasonable cost, as compared to the effectiveness of the proposed rule. The complete RIA (Regulatory Impact Analysis for Proposed Energy Conservation Standards for Commercial Clothes Washers) is contained in the TSD prepared for today's rule. The RIA consists of

(1)a statement of the problem addressed by this regulation, and the mandate for government action;

(2)a description and analysis of the feasible policy alternatives to this regulation;

(3)a quantitative comparison of the impacts of the alternatives; and

(4)the national economic impacts of today's standards. As shown in Table VII.1 below, DOE identified the following major policy alternatives for achieving increased energy efficiency in CCWs:

(1)No new regulatory action;

(2)Financial incentives;

(3)Consumer rebates;

(4)Consumer tax credits;

(5)Manufacturer tax credits;

(6)Voluntary energy efficiency targets;

(7)Bulk government purchases;

(8)Early replacement; and

(9)Today's approach (national performance standards). Table VII.1—Non-Regulatory Alternatives to Commercial Clothes Washer Standards Policy alternatives Energy savings,* *quads* Water savings, *trillion* *gallons* Net present value ** *billion 2008$* 7% Discount rate 3% Discount rate No New Regulatory Action 0 0 0 0 Consumer Rebates 0.06 0.07 0.18 0.47 Consumer Tax Credits 0.01 0.01 0.03 0.08 Manufacturer Tax Credits 0.00 0.01 0.02 0.06 Voluntary Energy Efficiency Targets *** 0.02 0.02 0.06 0.15 Early Replacement 0.01 0.01 0.11 0.17 Bulk Government Purchases *** 0.00 0.01 0.02 0.04 Today's Standards at TSL 3 0.10 0.14 0.36 0.89 * Energy savings are in source quads. ** DOE determined the net present value for shipments in 2013-2043. *** Voluntary energy efficiency target and bulk government purchase alternatives are not considered for front-loading washers because the percentage of the market at TSL 3 is well over the market adoption target level that each alternative strives to attain. The net present value amounts shown in Table VII.1 refer to the NPV for CCW consumers. The costs to the government of each policy (such as rebates or tax credits) are not included in the costs for the NPV since, on balance, consumers would be both paying for (through taxes) and receiving the benefits of the payments. As explained in detail in section VI of the November 2009 SNOPR, none of the alternatives DOE examined would save as much energy or have an NPV as high as the proposed standards. The same conclusion applies to the standards in today's rule. Also, several of the alternatives would require new enabling legislation, because DOE does not have authority to implement those alternatives. Additional detail on the regulatory alternatives is found in the RIA chapter in the TSD. B. Review Under the Regulatory Flexibility Act The Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ) requires preparation of an initial regulatory flexibility analysis

(IRFA)for any rule that by law must be proposed for public comment, and a final regulatory flexibility analysis

(FRFA)for any such rule that an agency adopts as a final rule, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. A regulatory flexibility analysis examines the impact of the rule on small entities and considers alternative ways of reducing negative impacts. Also, as required by Executive Order 13272, *Proper Consideration of Small Entities in Agency Rulemaking,* 67 FR 53461 (Aug. 16, 2002), DOE published procedures and policies on February 19, 2003, to ensure that the potential impacts of its rules on small entities are properly considered during the rulemaking process. 68 FR 7990. DOE has made its procedures and policies available on the Office of General Counsel's Web site: *http://www.gc.doe.gov.* For the manufacturers of equipment covered by this rulemaking, the SBA has set two size thresholds that define which entities are “small businesses” for the purposes of the statute. See *http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf.* Because all CCW manufacturers also produce RCWs, limits for both categories are presented in Table VII.2. DOE used these small business definitions to determine whether any small entities would be required to comply with the rule. (65 FR 30836, 30848 (May 15, 2000), as amended at 65 FR 53533, 53544 (September 5, 2000) and codified at 13 CFR Part 121.) The size standards are listed by NAICS code and industry description. Table VII.2—SBA and NAICS Classification of Small Businesses Potentially Affected by This Rule Industry description Revenue limit Employee limit NAICS Residential Laundry Equipment Manufacturing N/A 1,000 335224 Commercial Laundry Equipment Manufacturing N/A 500 333312 As explained in the November 2009 SNOPR, the CCW industry consists of three principal competitors that make up almost 100 percent of the market share. Two of them are high-volume, diversified appliance manufacturers, while the third is a focused laundry equipment manufacturer. Before issuing November 2009 SNOPR, DOE interviewed all major CCW manufacturers. Because all CCW manufacturers also make RCWs, DOE also considered whether a CCW manufacturer could be considered a small business entity in that industry. None of the CCW manufacturers fall into any small business category. As a result, DOE certifies that today's final rule will not have a significant impact on a substantial number of small entities and that a regulatory flexibility analysis is not required. C. Review Under the Paperwork Reduction Act DOE stated in the October 2008 NOPR that this rulemaking would impose no new information and recordkeeping requirements, and that OMB clearance is not required under the Paperwork Reduction Act (44 U.S.C. 3501 *et seq.* ). 73 FR 62034, 62130 (Oct. 17, 2008). DOE received no comments on this in response to the October 2008 NOPR or the November 2009 SNOPR, and, as with the proposed rule, today's final rule imposes no information and recordkeeping requirements. Therefore, DOE has taken no further action in this rulemaking with respect to the Paperwork Reduction Act. D. Review Under the National Environmental Policy Act DOE prepared an environmental assessment of the impacts of today's standards which it published as chapter 16 within the TSD for the final rule. DOE found the environmental effects associated with today's various standard levels for CCWs to be insignificant. Therefore, DOE is issuing a FONSI pursuant to NEPA (42 U.S.C. 4321 *et seq.* ), the regulations of the Council on Environmental Quality (40 CFR parts 1500-1508), and DOE's regulations for compliance with NEPA (10 CFR part 1021). The FONSI is available in the docket for this rulemaking. E. Review Under Executive Order 13132 DOE reviewed this rule pursuant to Executive Order 13132, “Federalism,” 64 FR 43255 (Aug. 4, 1999), which imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have Federalism implications. In accordance with DOE's statement of policy describing the intergovernmental consultation process it will follow in the development of regulations that have federalism implications, 65 FR 13735 (March 14, 2000), DOE examined the November 2009 proposed rule and determined that it would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. 74 FR 57738, 57798 (Nov. 9, 2009). DOE received no comments on this issue in response to the November 2009 SNOPR, and its conclusions on this issue are the same for the final rule as they were for the proposed rule. Therefore, DOE has taken no further action in today's final rule with respect to Executive Order 13132. F. Review Under Executive Order 12988 With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform” (61 FR 4729 (Feb. 7, 1996)) imposes on Federal agencies the general duty to adhere to the following requirements:

(1)Eliminate drafting errors and ambiguity;

(2)write regulations to minimize litigation; and

(3)provide a clear legal standard for affected conduct rather than a general standard and promote simplification and burden reduction. Section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation:

(1)Clearly specifies the preemptive effect, if any;

(2)clearly specifies any effect on existing Federal law or regulation;

(3)provides a clear legal standard for affected conduct while promoting simplification and burden reduction;

(4)specifies the retroactive effect, if any;

(5)adequately defines key terms; and

(6)addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, today's final regulations meet the relevant standards of Executive Order 12988. G. Review Under the Unfunded Mandates Reform Act of 1995 As indicated in the November 2009 SNOPR, DOE reviewed the proposed rule under title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) (UMRA), which imposes requirements on Federal agencies when their regulatory actions will have certain types of impacts on State, local and Tribal governments and the private sector. 74 FR 57738, 57798-99 (Nov. 9, 2009). For a proposed regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted for inflation), section 202 of UMRA requires an agency to publish a written statement assessing the costs, benefits, and other effects of the rule on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a proposed “significant intergovernmental mandate,” and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect small governments. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA (62 FR 12820) (also available at *http://www.gc.doe.gov* ). Although today's final rule does not contain a Federal intergovernmental mandate, it may impose expenditures of $100 million or more on the private sector, although DOE believes such expenditures are likely to be less than $50 million. Section 202 of UMRA authorizes an agency to respond to the content requirements of UMRA in any other statement or analysis that accompanies the supplemental notice. 2 U.S.C. 1532(c). The content requirements of section 202(b) of UMRA relevant to a private sector mandate substantially overlap the economic analysis requirements that apply under section 325(o) of EPCA and Executive Order 12866. The Supplementary Information section of this supplemental notice and the “Regulatory Impact Analysis” section of the SNOPR TSD respond to those requirements. Under section 205 of UMRA, DOE is obligated to identify and consider a reasonable number of regulatory alternatives before promulgating a rule for which a written statement under section 202 is required. DOE is required to select from those alternatives the most cost-effective and least burdensome alternative that achieves the objectives of the rule unless DOE publishes an explanation for doing otherwise or the selection of such an alternative is inconsistent with law. As required by 42 U.S.C. 6295(h) and (o), 6313(e), and 6316(a), today's final rule would establish energy conservation standards for CCWs that are designed to achieve the maximum improvement in energy efficiency that DOE has determined to be both technologically feasible and economically justified. A full discussion of the alternatives considered by DOE is presented in the “Regulatory Impact Analysis” section of the TSD for today's final rule. H. Review Under the Treasury and General Government Appropriations Act, 1999 DOE determined that, for this rulemaking, it need not prepare a Family Policymaking Assessment under section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277). *Id.* DOE received no comments concerning section 654 in response to the November 2009 SNOPR, and, therefore, takes no further action in today's final rule with respect to this provision. I. Review Under Executive Order 12630 DOE determined, under Executive Order 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights,” 53 FR 8859 (March 18, 1988), that today's rule would not result in any takings which might require compensation under the Fifth Amendment to the U.S. Constitution. 73 FR 62034, 62131 (Oct. 17, 2008). DOE received no comments concerning Executive Order 12630 in response to the October 2008 NOPR or November 2009 SNOPR, and, therefore, has taken no further action in today's final rule with respect to this Executive Order. J. Review Under the Treasury and General Government Appropriations Act, 2001 Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most disseminations of information to the public under guidelines established by each agency pursuant to general guidelines issued by OMB. The OMB guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has reviewed today's final rule under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines. K. Review Under Executive Order 13211 Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001) requires Federal agencies to prepare and submit to the OIRA a Statement of Energy Effects for any significant energy action. For the October 2008 NOPR, DOE determined that the proposed rule, which set energy conservation standards for commercial clothes washers, was not a “significant energy action” within the meaning of Executive Order 13211. 73 FR 62034, 62132 (Oct. 17, 2008). The rule was also not designated as such by OIRA. Accordingly, it did not prepare a Statement of Energy Effects on that proposed rule. DOE received no comments on this issue in response to the October 2008 NOPR. As with the October 2008 NOPR, DOE has concluded that today's final rule is not a significant energy action within the meaning of Executive Order 13211, and OIRA has not designated the rule as such. As a result, DOE has not prepared a Statement of Energy Effects on the final rule. L. Review Under the Information Quality Bulletin for Peer Review On December 16, 2004, the OMB, in consultation with the Office of Science and Technology, issued its Final Information Quality Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14, 2005). The purpose of the Bulletin is to enhance the quality and credibility of the Government's scientific information. The Bulletin establishes that certain scientific information shall be peer reviewed by qualified specialists before it is disseminated by the Federal Government. As indicated in the November 2009 SNOPR, this includes influential scientific information related to agency regulatory actions, such as the analyses in this rulemaking. 74 FR 57738, 57799 (Nov. 9, 2009). As more fully set forth in the November 2009 SNOPR, DOE held formal in-progress peer reviews of the types of analyses and processes that DOE has used to develop the energy conservation standards in today's rule, and issued a report on these peer reviews. The report is available at *http://www.eere.energy.gov/buildings/appliance_standards/peer_review.html. Id.* M. Congressional Notification As required by 5 U.S.C. 801, DOE will submit to Congress a report regarding the issuance of today's final rule prior to the effective date set forth at the outset of this notice. The report will state that it has been determined that the rule is a “major rule” as defined by 5 U.S.C. 804(2). DOE also will submit the supporting analyses to the Comptroller General in the U.S. Government Accountability Office

(GAO)and make them available to each House of Congress. VIII. Approval of the Office of the Secretary The Secretary of Energy has approved publication of today's final rule. List of Subjects in 10 CFR Part 431 Administrative practice and procedure, Energy conservation, Household appliances. Issued in Washington, DC, on December 18, 2009. Cathy Zoi, Assistant Secretary, Energy Efficiency and Renewable Energy. For the reasons stated in the preamble, chapter II, subchapter D, of title 10 of the Code of Federal Regulations, part 431 is amended to read as set forth below: PART 431—ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND INDUSTRIAL EQUIPMENT 1. The authority citation for part 431 continues to read as follows: Authority: 42 U.S.C. 6291-6317. 2. Section 431.156 of subpart I is revised to read as follows: § 431.156 Energy and water conservation standards and effective dates. Each CCW manufactured on or after January 8, 2013, shall have a modified energy factor no less than and a water factor no greater than: Equipment class Modified energy factor, *cu. ft./kWh/cycle* Water factor, *gal./cu. ft./cycle* Top-Loading 1.60 8.5 Front-Loading 2.00 5.5 Appendix [The following letter from the Department of Justice will not appear in the Code of Federal Regulations.] DEPARTMENT OF JUSTICE Antitrust Division DEBORAH A. GARZA Acting Assistant Attorney General Main Justice Building, 950 Pennsylvania Avenue, NW., Washington, DC 20530-0001,

(202)514-2401/(202) 616-2645 (Fax), E-mail: *antitrust@usdoj.gov* , Web site: *http://www.usdoj.gov/atr.* December 16, 2008. Warren Belmar, Esq., Deputy General Counsel for Energy Policy, Department of Energy, Washington, DC 20585. Dear Deputy General Counsel Belmar: I am responding to your October 1, 2008, letter seeking the views of the Attorney General about the potential impact on competition of proposed amended energy conservation standards for residential kitchen ranges and ovens, microwave ovens, and commercial clothes washers (CCWs). Your request was submitted under Section 325(0)(2)(B)(i)(V) of the Energy Policy and Conservation Act, as amended, (“ECPA”), 42 U.S.C. § 6295(0)(B)(i)(V), which requires the Attorney General to make a determination of the impact of any lessening of competition that is likely to result from the imposition of proposed energy conservation standards. The Attorney General's responsibility for responding to requests from other departments about the effect of a program on competition has been delegated to the Assistant Attorney General for the Antitrust Division in 28 CFR § 0.40(g). In conducting its analysis the Antitrust Division examines whether a proposed standard may lessen competition, for example, by substantially limiting consumer choice, leaving consumers with fewer competitive alternatives, placing certain manufacturers of a product at an unjustified competitive disadvantage compared to other manufacturers, or by inducing avoidable inefficiencies in production or distribution of particular products. We have reviewed the proposed standards contained in the Notice of Proposed Rulemaking (73 Fed. Reg. 62034, October 17, 2008) and supplementary information submitted to the Attorney General. We also attended the November 13 public meeting on the proposed standards and conducted interviews with industry members. Based on this review, we have determined that legitimate issues arise as to whether the proposed standards adversely effect competition and consumer choice with respect to

(1)gas cooking products with standing pilot lights and

(2)top-loading CCWs. The proposed standards would extend the ban on constant burning pilot lights, currently applicable to cooking appliances equipped with electrical supply cords, to appliances that are not equipped with electrical supply cords. As the notice regarding the proposed standards recognizes, certain consumers, including those with religious and cultural practices that prohibit the use of line electricity, those without access to line electricity, and those whose kitchens do not have appropriate electrical outlets, rely on gas cooking appliances with standing pilots in lieu of electrical ignition devices. For these consumers, gas cooking appliances with electronic ignition are not a reasonable substitute. The notice states that gas cooking appliances may become available with technological options such as battery-powered ignition to replace a standing pilot light. However, it is unclear whether such battery-powered devices have been tested for indoor use and whether they are in compliance with safety standards for such use. If these options prove not to be feasible, then the proposed standard could substantially limit consumer choice by eliminating the cooking appliance that most closely meets these consumers' needs. As to top-loading CCWs, it appears that meeting the proposed standards may require substantial investment in the development of new technology that some suppliers of top-loading CCWs may not find it economical to make. CCWs are used primarily in multi-housing laundries, with top-loading machines accounting for approximately 80 percent of machines in these locations. The remaining 20 percent are front-loading machines, which are more energy efficient but significantly more expensive than top-loading models. There are only three manufacturers of top-loading CCWs selling in the United States. It appears that there is a real risk that one or more of these manufacturers cannot meet the proposed standard. In such a case, CCW purchasers would have fewer competitive alternatives for top-loading machines, potentially resulting in purchasers facing higher prices from the remaining top-loading manufacturer or manufacturers. Although the Department of Justice is not in a position to judge whether manufacturers will be able to meet the proposed standards, we urge the Department of Energy to take into account these possible impacts on competition and the availability of options to consumers in determining its final energy efficiency standard for CCWs and residential gas cooking appliances with constant burning pilots. To maintain competition, the Department of Energy should consider keeping the existing standard in place for top-loading CCWs. The Department of Energy may wish to consider setting a “no standard” standard for residential gas cooking products with constant burning pilots to address the potential for certain customers to be stranded without an economical product alternative. The Department of Justice does not believe that the proposed standards for other products listed in the NOPR would likely lead to an adverse effect on competition. Sincerely, Deborah A. Garza. [FR Doc. E9-30891 Filed 1-7-10; 8:45 am] BILLING CODE 6450-01-P 75 5 Friday, January 8, 2010 Rules and Regulations Part III Department of Transportation Federal Railroad Administration 49 CFR Part 238 Passenger Equipment Safety Standards; Front End Strength of Cab Cars and Multiple-Unit Locomotives; Final Rule DEPARTMENT OF TRANSPORTATION Federal Railroad Administration 49 CFR Part 238 [Docket No. FRA-2006-25268, Notice No. 2] RIN 2130-AB80 Passenger Equipment Safety Standards; Front End Strength of Cab Cars and Multiple-Unit Locomotives AGENCY: Federal Railroad Administration (FRA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: This final rule is intended to further the safety of passenger train occupants by amending existing regulations to enhance requirements for the structural strength of the front end of cab cars and multiple-unit

(MU)locomotives. These enhancements include the addition of requirements concerning structural deformation and energy absorption by collision posts and corner posts at the forward end of this equipment. The requirements are based on standards specified by the American Public Transportation Association (APTA). FRA is also making clarifying amendments to existing regulations for the structural strength of passenger equipment and is clarifying its views on the preemptive effect of this part. DATES: *Effective Date:* This final rule is effective March 9, 2010. Petitions for reconsideration of this final rule must be received not later than February 22, 2010. ADDRESSES: Any petition for reconsideration of the final rule should reference Docket No. FRA-2006-25268, Notice No. 2, and be submitted by any of the following methods: • *Federal eRulemaking Portal.* Go to *http://www.regulations.gov* . Follow the online instructions for submitting comments. • *Mail:* Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Avenue, SE., West Building Ground Floor, Room W12-140, Washington, DC 20590. • *Hand Delivery:* Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Avenue, SE., West Building Ground Floor, Room W12-140, Washington, DC, between 9 a.m. and 5 p.m. Monday through Friday, except Federal holidays. • *Fax:* 202-493-2251. *Instructions:* Note that all petitions for reconsideration received will be posted without change to *http://www.regulations.gov* , including any personal information provided. Please *see* the Privacy Act heading, below. *Docket:* For access to the docket to read background documents, comments, or petitions for reconsideration received, go to *http://www.regulations.gov* anytime, or to the Docket Management Facility, U.S. Department of Transportation, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Follow the online instructions for accessing the dockets. FOR FURTHER INFORMATION CONTACT: Gary G. Fairbanks, Specialist, Motive Power and Equipment Division, Office of Railroad Safety, RRS-14, Mail Stop 25, Federal Railroad Administration, 1200 New Jersey Avenue, SE., Washington, DC 20590 (telephone 202-493-6282); Eloy E. Martinez, Program Manager, Equipment and Operating Practices Division, Office of Railroad Development, Federal Railroad Administration, 55 Broadway, Cambridge, Massachusetts 02142 (telephone 617-494-2599); or Daniel L. Alpert, Trial Attorney, Office of Chief Counsel, Mail Stop 10, Federal Railroad Administration, 1200 New Jersey Avenue, SE., Washington, DC 20590 (telephone 202-493-6026). SUPPLEMENTARY INFORMATION: Table of Contents for Supplementary Information I. Statutory Background II. Proceedings to Date A. Proceedings To Carry Out the Initial 1994 Rulemaking Mandate B. Key Issues Identified for Future Rulemaking C. RSAC Overview D. Establishment of the Passenger Safety Working Group in May 2003 E. Establishment of the Crashworthiness/Glazing Task Force in November 2003 F. Development of the NPRM Published in August 2007 G. Development of This Final Rule III. Technical Background A. Predominant Types of Passenger Rail Service B. Front End Frame Structures of Cab Cars and MU Locomotives C. Accident History D. FRA and Industry Standards for Front End Frame Structures of Cab Cars and MU Locomotives E. Testing of Front End Frame Structures of Cab Cars and MU Locomotives 1. FRA-Sponsored Dynamic Testing in 2002 a. Test Article Designs b. Dynamic Impact Testing c. Analysis 2. Industry-Sponsored Quasi-Static Testing in 2001 a. Test Article Design b. Quasi-Static Testing c. Analysis 3. FRA-Sponsored Dynamic and Quasi-Static Testing in 2008 a. Test Article Design b. Dynamic Testing of a Collision Post c. Quasi-Static Testing of Collision and Corner Posts d. Analysis F. Approaches for Specifying Large Deformation Requirements G. Crash Energy Management and the Design of Front End Frame Structures of Cab Cars and MU Locomotives H. European Standard EN 15227 FCD, Crashworthiness Requirements for Railway Vehicle Bodies IV. Discussion of Specific Comments and Conclusions A. Technical Comments 1. Crash Energy Management 2. Dynamic Performance Requirements 3. Alternative Corner Post Requirements for Designs With Stepwells 4. Use of Testing and Analysis To Demonstrate Compliance 5. Submission of Test Plans for FRA Review 6. Whether the Requirements Affect Vehicle Weight 7. System Safety 8. Other Comments B. Preemption 1. Whether FRA Characterized Its Views on Preemption as the RSAC Consensus 2. Whether FRA's Views Are Consistent With 49 U.S.C. 20106, as Amended 3. Whether FRA's Views on Preemption Affect Safety 4. Whether FRA's Views on Preemption Affect Recovery for Victims of Railroad Accidents 5. How a State May Act as the Owner and Not the Regulator of a Railroad 6. How State Regulation of Push-Pull Operations Is Preempted 7. Whether It Was Necessary To Discuss Preemption in the NPRM 8. Whether FRA Has Authority To Express Its Views on Preemption 9. What Impelled FRA's Views on Preemption 10. Whether FRA's Views on Preemption Affect FELA 11. Whether Preemption Applies Under the Locomotive (Boiler) Inspection Act V. Section-by-Section Analysis VI. Regulatory Impact and Notices A. Executive Order 12866 and DOT Regulatory Policies and Procedures B. Regulatory Flexibility Act and Executive Order 13272 C. Paperwork Reduction Act D. Federalism Implications E. Environmental Impact F. Unfunded Mandates Reform Act of 1995 G. Energy Impact H. Trade Impact I. Privacy Act I. Statutory Background In September of 1994, the Secretary of Transportation (Secretary) convened a meeting of representatives from all sectors of the rail industry with the goal of enhancing rail safety. As one of the initiatives arising from this Rail Safety Summit, the Secretary announced that DOT would begin developing safety standards for rail passenger equipment over a five-year period. In November of 1994, Congress adopted the Secretary's schedule for implementing rail passenger equipment safety regulations and included it in the Federal Railroad Safety Authorization Act of 1994 (the Act), Public Law 103-440, 108 Stat. 4619, 4623-4624 (November 2, 1994). Congress also authorized the Secretary to consult with various organizations involved in passenger train operations for purposes of prescribing and amending these regulations, as well as issuing orders pursuant to them. Section 215 of the Act is codified at 49 U.S.C. 20133. II. Proceedings to Date A. Proceedings To Carry Out the Initial 1994 Rulemaking Mandate The Secretary delegated these rulemaking responsibilities to the Administrator of the Federal Railroad Administration, *see* 49 CFR 1.49(m), and FRA formed the Passenger Equipment Safety Standards Working Group to provide FRA with advice in developing the regulations. On June 17, 1996, FRA published an advance notice of proposed rulemaking (ANPRM) concerning the establishment of comprehensive safety standards for railroad passenger equipment. *See* 61 FR 30672. The ANPRM provided background information on the need for such standards, offered preliminary ideas on approaching passenger safety issues, and presented questions on various passenger safety topics. Following consideration of comments received on the ANPRM and advice from FRA's Passenger Equipment Safety Standards Working Group, FRA published an NPRM on September 23, 1997, to establish comprehensive safety standards for railroad passenger equipment. *See* 62 FR 49728. In addition to requesting written comment on the NPRM, FRA also solicited oral comment at a public hearing held on November 21, 1997. FRA considered the comments received on the NPRM and prepared a final rule establishing comprehensive safety standards for passenger equipment, which was published on May 12, 1999. *See* 64 FR 25540. After publication of the final rule, interested parties filed petitions seeking FRA's reconsideration of certain requirements contained in the rule. These petitions generally related to the following subject areas: Structural design; fire safety; training; inspection, testing, and maintenance; and movement of defective equipment. To address the petitions, FRA grouped issues together and published in the **Federal Register** three sets of amendments to the final rule. Each set of amendments summarized the petition requests at issue, explained what action, if any, FRA decided to take in response to the issues raised, and described FRA's justifications for its decisions and any action taken. Specifically, on July 3, 2000, FRA issued a response to the petitions for reconsideration relating to the inspection, testing, and maintenance of passenger equipment, the movement of defective passenger equipment, and other miscellaneous provisions related to mechanical issues contained in the final rule. *See* 65 FR 41284. On April 23, 2002, FRA responded to all remaining issues raised in the petitions for reconsideration, with the exception of those relating to fire safety. *See* 67 FR 19970. Finally, on June 25, 2002, FRA completed its response to the petitions for reconsideration by publishing a response to the petitions for reconsideration concerning the fire safety portion of the rule. *See* 67 FR 42892. (For more detailed information on the petitions for reconsideration and FRA's response to them, please *see* these three rulemaking documents.) The product of this rulemaking was codified primarily at 49 CFR part 238 and secondarily at 49 CFR parts 216, 223, 229, 231, and 232. Meanwhile, another rulemaking on passenger train emergency preparedness produced a final rule codified at 49 CFR part 239. *See* 63 FR 24629 (May 4, 1998). The rule addresses passenger train emergencies of various kinds, including security situations, and requires the preparation, adoption, and implementation of emergency preparedness plans by railroads connected with the operation of passenger trains. The emergency preparedness plans must include elements such as communication, employee training and qualification, joint operations, tunnel safety, liaison with emergency responders, on-board emergency equipment, and passenger safety information. The rule requires each affected railroad to instruct its employees on the applicable provisions of its plan, and the plan adopted by each railroad is subject to formal review and approval by FRA. The rule also requires each railroad operating passenger train service to conduct emergency simulations to determine its capability to execute the emergency preparedness plan under the variety of emergency scenarios that could reasonably be expected to occur. In addition, in promulgating the rule, FRA established specific requirements for passenger train emergency systems, *e.g.,* to mark all emergency window exits and all windows intended for rescue access by emergency responders, to light or mark all door exits intended for egress, to mark all door exits intended for rescue access by emergency responders, and to provide instructions for the use of such exits and means of rescue access. B. Key Issues Identified for Future Rulemaking Although FRA had completed these rulemakings, FRA had identified various issues for possible future rulemaking, including those to be addressed following the completion of additional research, the gathering of additional operating experience, or the development of industry standards, or all three. One such issue concerned enhancing the requirements for corner posts on cab cars and MU locomotives. *See* 64 FR 25607. FRA requirements for corner posts were based on conventional industry practice at the time, which had not proven adequate in then-recent side swipe collisions with cab cars leading. *Id.* FRA explained that those requirements were being adopted as an interim measure to prevent the introduction of equipment not meeting the requirements, that FRA was assisting APTA in preparing an industry standard for corner post arrangements on cab cars and MU locomotives, and that adoption of a suitable Federal standard would be an immediate priority. *Id.* In broader terms, this issue concerned the behavior of cab car and MU locomotive end frames when overloaded, as during an impact with maintenance-of-way equipment or with a highway vehicle at a highway-rail grade crossing, and thus concerned collision post strength as well. FRA and interested industry members also began identifying other issues related to the passenger equipment safety standards and the passenger train emergency preparedness regulations. FRA decided to address these issues with the assistance of FRA's Railroad Safety Advisory Committee (RSAC). C. RSAC Overview In March 1996, FRA established RSAC, which provides a forum for developing consensus recommendations to FRA's Administrator on rulemakings and other safety program issues. The Committee includes representation from all of the agency's major stakeholders, including railroads, labor organizations, suppliers and manufacturers, and other interested parties. A list of member groups follows: • American Association of Private Railroad Car Owners (AARPCO); • American Association of State Highway and Transportation Officials (AASHTO); • American Chemistry Council; • American Petroleum Institute; • APTA; • American Short Line and Regional Railroad Association (ASLRRA); • American Train Dispatchers Association; • Association of American Railroads (AAR); • Association of Railway Museums; • Association of State Rail Safety Managers (ASRSM); • Brotherhood of Locomotive Engineers and Trainmen (BLET); • Brotherhood of Maintenance of Way Employes Division; • Brotherhood of Railroad Signalmen (BRS); • Chlorine Institute; • Federal Transit Administration (FTA);* • Fertilizer Institute; • High Speed Ground Transportation Association (HSGTA); • Institute of Makers of Explosives; • International Association of Machinists and Aerospace Workers; • International Brotherhood of Electrical Workers (IBEW); • Labor Council for Latin American Advancement;* • League of Railway Industry Women;* • National Association of Railroad Passengers (NARP); • National Association of Railway Business Women;* • National Conference of Firemen & Oilers; • National Railroad Construction and Maintenance Association; • National Railroad Passenger Corporation (Amtrak); • NTSB;* • Railway Supply Institute (RSI); • Safe Travel America (STA); • Secretaria de Comunicaciones y Transporte;* • Sheet Metal Workers International Association (SMWIA); • Tourist Railway Association, Inc.; • Transport Canada;* • Transport Workers Union of America (TWU); • Transportation Communications International Union/BRC (TCIU/BRC); • Transportation Security Administration (TSA);* and • United Transportation Union (UTU). *Indicates associate, non-voting membership. When appropriate, FRA assigns a task to RSAC, and after consideration and debate, RSAC may accept or reject the task. If the task is accepted, RSAC establishes a working group that possesses the appropriate expertise and representation of interests to develop recommendations to FRA for action on the task. These recommendations are developed by consensus. A working group may establish one or more task forces to develop facts and options on a particular aspect of a given task. The individual task force then provides that information to the working group for consideration. If a working group comes to unanimous consensus on recommendations for action, the package is presented to the full RSAC for a vote. If the proposal is accepted by a simple majority of RSAC, the proposal is formally recommended to FRA. FRA then determines what action to take on the recommendation. Because FRA staff play an active role at the working group level in discussing the issues and options and in drafting the language of the consensus proposal, FRA is often favorably inclined toward the RSAC recommendation. However, FRA is in no way bound to follow the recommendation, and the agency exercises its independent judgment on whether the recommendation achieves the agency's regulatory goal, is soundly supported, and is in accordance with policy and legal requirements. Often, FRA varies in some respects from the RSAC recommendation in developing an actual regulatory proposal or final rule. Any such variations would be noted and explained in the rulemaking document issued by FRA. If the working group or RSAC is unable to reach consensus on a recommendation for action, FRA moves ahead to resolve the issue(s) through traditional rulemaking proceedings or other action. D. Establishment of the Passenger Safety Working Group in May 2003 On May 20, 2003, FRA presented, and RSAC accepted, the task of reviewing existing passenger equipment safety needs and programs and recommending consideration of specific actions that could be useful in advancing the safety of rail passenger service. RSAC established the Passenger Safety Working Group (Working Group) to handle this task and develop recommendations for the full RSAC body to consider. Members of the Working Group, in addition to FRA, include the following: • AAR, including members from BNSF Railway Company (BNSF), CSX Transportation, Inc., and Union Pacific Railroad Company; • AAPRCO; • AASHTO; • Amtrak; • APTA, including members from Bombardier, Inc., LDK Engineering, Herzog Transit Services, Inc., Long Island Rail Road (LIRR), Metro—North Commuter Railroad Company (Metro-North), Northeast Illinois Regional Commuter Railroad Corporation (Metra), Southern California Regional Rail Authority (Metrolink), and Southeastern Pennsylvania Transportation Authority (SEPTA); • BLET; • BRS; • FTA; • HSGTA; • IBEW; • NARP; • RSI; • SMWIA; • STA; • TCIU/BRC; • TWU; and • UTU. Staff from DOT's John A. Volpe National Transportation Systems Center (Volpe Center) attended all of the meetings and contributed to the technical discussions. In addition, staff from the NTSB met with the Working Group. The Working Group has held 13 meetings on the following dates and locations: • September 9-10, 2003, in Washington, DC; • November 6, 2003, in Philadelphia, PA; • May 11, 2004, in Schaumburg, IL; • October 26-27, 2004 in Linthicum/Baltimore, MD; • March 9-10, 2005, in Ft. Lauderdale, FL; • September 7, 2005 in Chicago, IL; • March 21-22, 2006 in Ft. Lauderdale, FL; • September 12-13, 2006 in Orlando, FL; • April 17-18, 2007 in Orlando, FL; • December 11, 2007 in Ft. Lauderdale, FL; • June 18, 2008, in Baltimore, MD; • November 13, 2008, in Washington, DC; and • June 8, 2009, in Washington, DC. At the meetings in Chicago and Ft. Lauderdale in 2005, FRA met with representatives of Tri-Rail (the South Florida Regional Transportation Authority) and Metra, respectively, and toured their passenger equipment. The visits were open to all members of the Working Group and FRA believes they have added to the collective understanding of the Group in identifying and addressing passenger equipment safety issues. E. Establishment of the Crashworthiness/Glazing Task Force in November 2003 Due to the variety of issues involved, at its November 2003 meeting the Working Group established four task forces—smaller groups to develop recommendations on specific issues within each group's particular area of expertise. Members of the task forces included various representatives from the respective organizations that were part of the larger Working Group. One of these task forces was assigned the job of identifying and developing issues and recommendations specifically related to the inspection, testing, and operation of passenger equipment as well as concerns related to the attachment of safety appliances on passenger equipment. An NPRM on these topics was published on December 8, 2005, *see* 70 FR 73069, and a final rule was published on October 19, 2006, *see* 71 FR 61835. Another of these task forces was established to identify issues and develop recommendations related to emergency systems, procedures, and equipment, and helped to develop an NPRM on these topics that was published on August 24, 2006, *see* 71 FR 50276, and a final rule that was published on February 1, 2008, *see* 73 FR 6370. Another task force, the Crashworthiness/Glazing Task Force (Task Force), was assigned the job of developing recommendations related to glazing integrity, structural crashworthiness, and the protection of occupants during accidents and incidents. Specifically, this Task Force was charged with developing recommendations for glazing qualification testing and for cab car and MU locomotive end frame optimization. (Glazing and cab car/MU locomotive end frame issues are being handled separately, and glazing is not a subject of this final rule.) The Task Force was also given the responsibility of addressing a number of other issues related to glazing, structural crashworthiness, and occupant protection and recommending any research necessary to facilitate their resolution. Members of the Task Force, in addition to FRA, include the following: • AAR; • Amtrak; • APTA, including members from Bombardier, Inc., General Electric Transportation Systems, General Motors-Electro-Motive Division, Kawasaki Rail Car, Inc., LDK Engineering, LIRR, LTK Engineering Services, Maryland Transit Administration, Massachusetts Bay Transportation Authority (MBTA), Metrolink, Metro-North, Northern Indiana Commuter Transportation District (NICTD), Hyundai Rotem Company, Saint Gobian Sully NA, San Diego Northern Commuter Railroad (Coaster), SEPTA, and STV, Inc.; • BLET; • California Department of Transportation (Caltrans); • NARP; • RSI; and • UTU. While not voting members of the Task Force, representatives from the NTSB attended meetings and contributed to the discussions of the Task Force. In addition, staff from the Volpe Center attended all of the meetings and contributed to the technical discussions. The Task Force held seven meetings on the following dates and locations: • March 17-18, 2004, in Cambridge, MA; • May 13, 2004, in Schaumburg, IL; • November 9, 2004, in Boston, MA; • February 2-3, 2005, in Cambridge, MA; • April 21-22, 2005, in Cambridge, MA; • August 11, 2005, in Cambridge, MA; and • September 9-10, 2008, in Cambridge, MA. F. Development of the NPRM Published in August 2007 The NPRM was developed to address concerns raised and issues discussed about cab car and MU locomotive front end frame structures during the Task Force meetings and pertinent Working Group meetings. Minutes of each of these meetings have been made part of the docket in this proceeding and are available for public inspection. Except for one issue, which is discussed below, the Working Group reached consensus on the principal regulatory provisions contained in the NPRM at its meeting in September 2005. After the September 2005 meeting, the Working Group presented its recommendations to the full RSAC body for concurrence at its meeting in October 2005. All of the members of the full RSAC in attendance at its October 2005 meeting accepted the regulatory recommendations submitted by the Working Group. Thus, the Working Group's recommendations became the full RSAC's recommendations to FRA. After reviewing the full RSAC's recommendations, FRA agreed that the recommendations provided a good basis for a proposed rule, but that test standards and performance criteria more suitable to cab cars and MU locomotives without flat forward ends or with energy absorbing structures used as part of a crash energy management design (CEM), or both, should be specified. The NPRM therefore provided an option for the dynamic testing of cab cars and MU locomotives as a means of demonstrating compliance with the rule. However, FRA made clear that the proposal was not the result of an RSAC recommendation. Otherwise, FRA adopted the RSAC's recommendations with generally minor changes for purposes of clarity and formatting in the **Federal Register** . The NPRM was published in the **Federal Register** on August 1, 2007, *see* 72 FR 42016, and FRA solicited public comment on it. FRA notified the public of its option to submit written comments on the NPRM and to request a public, oral hearing on the NPRM. FRA also invited comment on a number of specific issues related to the proposed requirements for the purpose of developing the final rule. G. Development of This Final Rule This final rule is the product of FRA's review and consideration of the recommendations of the Task Force, Working Group, and full RSAC, and the written comments to the docket. FRA received written comments in response to the publication of the NPRM from a wide array of interested parties. Specifically, FRA received three separate comments from members of the U.S. Congress:

(1)From Senator Kent Conrad, Senator Byron Dorgan, and Congressman Earl Pomeroy;

(2)from Congressman James Oberstar, Chairman, House Committee on Transportation and Infrastructure, and Congressman Bennie Thompson, Chairman, House Committee on Homeland Security; and

(3)from Congressman Adam Schiff. FRA also received comments from the AAR and APTA, which represent freight and passenger railroads, respectively, as well as comments from Caltrans and the Peninsula Corridor Joint Powers Board (Caltrain), which are involved in providing passenger rail service. The BLET and UTU submitted comments on behalf of the railroad employees whom they represent. In addition, FRA received comments from rail car manufacturers Bombardier and Colorado Railcar Manufacturing (CRM), as well as from the firm of Raul V. Bravo + Associates, Inc. (RVB). FRA also received comments from other interested parties: the American Association for Justice (AAJ), formerly known as the Association of Trial Lawyers of America, and the California Public Utilities Commission (CPUC). All Aboard Washington (AAWA), an advocacy organization for promoting rail service in the Pacific Northwest, and a private citizen also commented on the NPRM. At about the same time as the written comment period closed on October 1, 2007, management of DOT rulemaking dockets was transitioning from DOT to the Federal Docket Management System at *http://www.regulations.gov* . This transition led to some delay in the posting of comments to the Web site; however, FRA has considered all such comments in preparing this final rule. FRA notes that Congressman Adam Schiff made a request that FRA hold public hearings to receive oral comment on the NPRM in Los Angeles or Glendale, CA, so that those who have a “deeply-felt” concern for rail safety could be heard. As stated in a January 30, 2008 letter to Congressman Schiff, FRA discussed this request with the Congressman's staff and was informed that the Congressman had decided to reserve his request that FRA convene public hearings on the NPRM. (A copy of this letter has been placed in the public docket for this rulemaking.) No public hearing was held in response to the NPRM. Throughout the preamble discussion of this final rule, FRA refers to comments, views, suggestions, or recommendations made by members of the Task Force, Working Group, and full RSAC. FRA does so to show the origin of certain issues and the nature of discussions concerning those issues at the Task Force, Working Group, and full RSAC level. FRA believes this serves to illuminate factors that it has weighed in making its regulatory decisions, as well as the logic behind those decisions. The reader should keep in mind, of course, that only the full RSAC makes recommendations to FRA and that it is the consensus recommendation of the full RSAC on which FRA acts. However, as noted above, FRA is in no way bound to follow the recommendation, and the agency exercises its independent judgment on whether the recommended rule achieves the agency's regulatory goal, is soundly supported, and is in accordance with policy and legal requirements. III. Technical Background Transporting passengers by rail in the U.S. is very safe. Since the beginning of 1978, about 12.5 billion passengers have traveled by rail, based on reports filed monthly with FRA. The number of rail passengers has steadily increased over the years, and since the year 2000 has averaged more than 525 million passengers per year. On a passenger-mile basis, with an average of about 16.1 billion passenger-miles per year since 2000, rail travel is about as safe as scheduled airline service and intercity bus transportation, and it is far safer than private motor vehicle travel. Passenger rail accidents—while always to be avoided—have a very high passenger survival rate. Yet, as in any form of transportation, there are risks inherent in passenger rail travel. For this reason, FRA continually works to improve the safety of passenger rail operations. FRA's efforts include sponsoring the research and development of safety technologies, providing technical support for industry specifications and standards, and engaging in cooperative rulemaking efforts with key industry stakeholders. FRA has focused in particular on enhancing the crashworthiness of passenger trains. In a passenger train collision or derailment, the principal crashworthiness risks that occupants face are the loss of safe space inside the train from crushing of the train structure and, as the train decelerates, the risk of secondary impacts with interior surfaces. Therefore, the principal goals of the crashworthiness research sponsored by FRA are twofold: First, to preserve a safe space in which occupants can ride out the collision or derailment, and, then, to minimize the physical forces to which occupants are subjected when impacting surfaces inside a passenger train as the train decelerates. Though not a part of this final rule, other crashworthiness research focuses on related issues such as fuel tank safety, for equipment with a fuel tank, and the associated risk of fire if the fuel tank is breached during the collision or derailment. The results of ongoing research on cab car and MU locomotive front end frame structures help demonstrate both the effectiveness and the practicality of the structural enhancements in this final rule to make this equipment more crashworthy. This research is discussed below, along with other technical information providing the background for this rulemaking. A. Predominant Types of Passenger Rail Service FRA's focus on cab car and MU locomotive crashworthiness should be considered in the context of the predominant types of passenger rail service in North America. The first involves operation of passenger trains with conventional locomotives in the lead, typically pulling consists of passenger coaches and other cars such as baggage cars, dining cars, and sleeping cars. Such trains are common on long-distance, intercity rail routes operated by Amtrak. On a daily basis, however, most passenger rail service is provided by commuter railroads, which typically operate one or both of the two most predominant types of service: Push-pull service and MU locomotive service. Push-pull service is passenger train service typically operated, in one direction of travel, with a conventional locomotive in the rear of the train pushing the consist (the “push mode”) and with a cab car in the lead position of the train; and, in the opposite direction of travel, the service is operated with the conventional locomotive in the lead position of the train pulling the consist (the “pull mode”) and with the cab car in the rear of the train. (A cab car is both a passenger car, in that it has seats for passengers, and a locomotive, in that it has a control cab from which the engineer can operate the train.) Control cables run the length of the train, as do electrical lines providing power for heat, lights, and other purposes. MU locomotive service is passenger rail service involving trains consisting of self-propelled electric or diesel MU locomotives. MU locomotives may operate individually but typically operate semi-permanently coupled together as a pair or triplet with a control cab at each end of the consist. During peak commuting hours, multiple pairs or triplets of MU locomotives, or a combination of both, are typically operated together as a single passenger train in MU service. This type of service does not make use of a conventional locomotive as a primary means of motive power. MU locomotive service is very similar to push-pull service as operated in the push mode with the cab car in the lead. By focusing on enhancements to cab car and MU locomotive crashworthiness, FRA seeks to enhance the safety of the two most typical forms of passenger rail service in the U.S. B. Front End Frame Structures of Cab Cars and MU Locomotives Structurally, MU locomotives and cab cars built in the same period are very similar. Both are designed to be occupied by passengers and to operate as the lead units of passenger trains. The principal distinction is that cab cars do not have motors to propel themselves. Unlike MU locomotives and cab cars, conventional locomotives are not designed to be occupied by passengers—only by operating crewmembers. Concern has been raised about the safety of cab car-led and MU locomotive train service due to the closer proximity of the engineer and passengers to the leading end of the train than in conventional locomotive-led service. The principal purpose of cab car and MU locomotive front end frame structures is to provide protection for the engineer and passengers in the event of a collision where the superstructure of the vehicle is directly engaged and the underframe is either not engaged or only indirectly engaged in the collision. In the event of impacts with objects above the underframe of a cab car or MU locomotive, the end frame members are the primary source of protection for the engineer and the passengers. There are various types of cab cars and MU locomotives in current use. As discussed below, flat-nosed, single-level cab cars have been used for purposes of FRA-sponsored crashworthiness research. (The cab cars were originally constructed as MU locomotives but had their traction motors removed for testing.) Flat-nosed designs are representative of a large portion of the cab car and MU locomotive fleet. In a typical flat-nosed cab car, the end frame is composed of several structural elements that act together to resist inward deformations under load. The base of the end frame structure is composed of the end/buffer beam, which is directly connected to the draft sill of the vehicle. For cars that include stepwells, the side sills of the underframe generally do not directly connect to the end/buffer beam. There are four major vertical members connected to the end/buffer beam: two collision posts located approximately at the one-third points along the length of the beam; and two corner posts located at the outermost points of the beam. These structural elements are also connected together through two additional lateral members: a lateral member/shelf located just below the window frame structure; and an anti-telescoping plate at the top. The attachment of the end frame structure to the rest of the vehicle typically occurs at three locations. The first location is at the draft sill at the level of the underframe. This is the main connection where a majority of any longitudinal load applied to the end frame is reacted into the underframe of the vehicle. There are two other connections at the cant/roof rail located at each side of the car just below the level of the roof. When a longitudinal load is applied to the end frame, it is reacted by the draft sill and the cant rails into the main car body structure. A schematic of a typical arrangement is depicted in Figure 1 (although not every cab car or MU locomotive necessarily has every component shown). ER08JA10.000 C. Accident History In a collision involving the front end of a cab car or an MU locomotive, it is vitally important that the end frame behaves in a ductile manner, absorbing some of the collision energy in order to maintain sufficient space in which the engineer and passengers can ride out the event. Several collisions have occurred where the superstructure of a leading cab car has been loaded but the underframe of the car has not. These collisions demonstrate a need for better protecting the cab engineer and passengers from external threats. One example of a collision where the end frame did not effectively absorb collision energy occurred in Portage, IN, in 1998 when a NICTD train consisting of MU locomotives struck a tractor-tandem trailer carrying steel coils that had become immobilized on a grade crossing. 1 The leading MU locomotive impacted a steel coil at a point centered on one of its collision posts, the collision post failed, and the steel coil penetrated into the interior of the locomotive, resulting in three fatalities. Little of the collision energy was absorbed by the collision post, because the post had failed before it could deform in any significant way. 1 National Transportation Safety Board, “Collision of Northern Indiana Commuter Transportation District Train 102 with a Tractor-Trailer Portage, Indiana, June 18, 1998,” RAR-99-03, 07/26/1999. This report is available on the NTSB's Web site at: *http://www.ntsb.gov/publictn/1999/RAR9903.pdf* . There are additional examples of incidents where the end frame of a cab car or an MU locomotive was engaged during a collision and a loss of survivable volume ensued due to the failure of end frame structures. In a collision in Secaucus, NJ, in 1996, a cab car-led New Jersey Transit Rail Operations

(NJTR)train impacted a conventional locomotive-led NJTR train. 2 At the collision interface, the conventional locomotive pushed in or tore loose the collision and corner posts of the cab car. The underframe of the cab car was not loaded. The engineers of both trains and one passenger in the cab car were fatally injured. Also in 1996 in Silver Spring, MD, a collision occurred between a cab car-led Maryland Area Rail Commuter

(MARC)train and a conventional locomotive-led Amtrak train. In the collision, the front left collision and corner posts of the cab car were pushed in and torn loose. The underframe of the cab car was not loaded. 3 Three crewmembers and eight passengers on the MARC train were fatally injured as result of the collision and ensuing fire. Earlier, on January 18, 1993, near Gary, IN, two NICTD trains collided corner-to-corner on intersecting tracks that shared a bridge. One of the trains was at rest and the other had a speed estimated to be 32 mph. The left front corner posts and adjacent car body sidewall structures were destroyed on the leading MU locomotive of each train. Seven passengers were fatally injured. 4 2 National Transportation Safety Board, “Near Head-On Collision and Derailment of Two New Jersey Transit Commuter Trains Near Secaucus, New Jersey, February 9, 1996,” RAR-97-01, 03/25/1997. This report is available on the NTSB's Web site at: *http://www.ntsb.gov/publictn/1997/RAR9701.pdf* . 3 National Transportation Safety Board, “Collision and Derailment of Maryland Rail Commuter *MARC* Train 286 and National Railroad Passenger Corporation *AMTRAK* Train 29 Near Silver Spring, Maryland, on February 16, 1996,” RAR-97-02, 06/17/1997. This report is available on the NTSB's Web site at: *http://www.ntsb.gov/publictn/1997/RAR9702.pdf* . 4 National Transportation Safety Board, “Collision between Northern Indiana Commuter Transportation District Eastbound Train 7 and Westbound Train 12 Near Gary, Indiana, on January 18, 1993,” RAR-93-03, 12/7/1993. The preceding collisions were used to characterize types of loading conditions, which led to the development of a simplified, generalized test scenario, in furtherance of the goal of establishing methods for measuring the crashworthiness performance of end frame structures and developing strategies for incrementally improving their survivability under a range of impact conditions. Although the speeds associated with certain past events are greater than the speed at which full protection can currently be provided, and even though enhancements to passenger train emergency features and other requirements unrelated to crashworthiness, such as fire safety, may overall do as much or more to prevent or mitigate the consequences of these types of events, these collisions do provide indicative loading conditions for developing structural enhancements that can improve crashworthiness performance. FRA also notes that on January 26, 2005, in Glendale, CA, a collision involving an unoccupied sport utility vehicle

(SUV)(that was intentionally parked on the track by a private citizen), two Metrolink commuter trains, and a standing freight train resulted in 11 fatalities and numerous injuries. Eight of the fatalities occurred on a cab car-led commuter train, which derailed after striking the SUV, causing the cab car to be guided down a railroad siding, which resulted in an impact at an approximate speed of 49 mph with the standing freight train. After the collision with the standing freight train, the rear end of the lead cab car buckled laterally, obstructing the right-of-way of an oncoming, conventional locomotive-led commuter train. The rear end of the cab car raked the side of the conventional locomotive-led train, which was moving at an approximate speed of 51 mph, crushing occupied areas of that train. This incident involved enormous quantities of kinetic energy, and the underframe of the leading cab car crushed more than 20 feet inward. Because the strength of the end frame ultimately depends on the strength of the underframe, which failed here, stronger collision posts and corner posts on the front end of the leading cab car would have been, in themselves, of little benefit in absorbing the collision energy. For this reason, as discussed below, FRA has been exploring other crashworthiness strategies, such as CEM, to help mitigate the effects of collisions involving higher impact speeds. Nevertheless, CEM will also require proper end frame performance in order to function as intended. D. FRA and Industry Standards for Front End Frame Structures of Cab Cars and MU Locomotives Both the Federal government and the passenger railroad industry have been working together to improve the crashworthiness of cab cars and MU locomotives. As noted above, in 1999, after several years of development and in consultation with a working group comprised of key industry stakeholders, FRA promulgated the Passenger Equipment Safety Standards final rule. The rule included end frame structure requirements and additional crashworthiness-related requirements for cab cars, MU locomotives, and other passenger equipment. In particular, the final rule provided for strengthened collision posts for new cab cars and MU locomotives ( *i.e.* , those ordered on or after September 8, 2000, or placed in service for the first time on or after September 9, 2002). APTA also issued industry standards in 1999, in furtherance of its initiative to continue the development and maintenance of voluntary industry standards for the safety of railroad passenger equipment. In particular, APTA Safety Standard (SS)-C&S-013-99, Standard for Corner Post Structural Strength for Railroad Passenger Equipment, and SS-C&S-014-99, Standard for Collision Post Structural Strength for Railroad Passenger Equipment, included provisions on end frame designs for cab cars and MU locomotives. (Copies of these standards have been placed in the public docket for this rulemaking.) Specifically, these APTA standards included increased industry requirements for the strength of cab car and MU locomotive vertical end frame members—collision posts and corner posts. The 1999 APTA standards also included industry requirements for the deformation of these end frame vertical members, specifying that they must be able to sustain “severe deformation” before failure of the connections to the underframe and roof structures occurs. In January 2000, APTA requested that FRA develop information on the effectiveness of APTA's then-recently introduced *Manual of Standards and Recommended Practices for Rail Passenger Equipment* , which included APTA SS-C&S-013-99 and APTA SS-C&S-014-99, and FRA's then-recently issued Passenger Equipment Safety Standards rule. This review was intended to look in particular at what increase in crashworthiness was obtained for cab cars and MU locomotives through the combination of these standards and regulations. FRA shared APTA's interest and included full-scale impact tests and associated planning and analysis activities in its overall research plan to gather this information. FRA then developed the details of the testing process in conjunction with APTA's Passenger Rail Equipment Safety Standards (PRESS) Construction and Structural (C&S) Subcommittee. Around this same time, questions arose in the passenger rail industry in applying the APTA standards for collision posts and corner posts to new cab cars and MU locomotives. Views differed as to what the standards actually specified—namely, the meaning of “severe deformation” in the provisions calling for corner and collision posts to sustain “severe deformation” before failure of the posts' attachments. Consequently, there was not common agreement as to whether particular designs met the standards. On May 22, 2003, APTA's PRESS Committee accepted the recommendation of its C&S Subcommittee to replace these provisions in the standards concerning “severe deformation” with a recommended practice that the corner and collision post attachments be able to sustain minimum prescribed loads with negligible deformation. APTA SS-C&S-013-99 and SS-C&S-014-99 were then incorporated in their entirety into APTA SS-C&S-034-99, Rev. 1, Standard for the Design and Construction of Passenger Railroad Rolling Stock. (A copy of APTA SS-C&S-034-99, Rev. 1, has been placed in the public docket for this rulemaking. As discussed below, the latest revision, Rev. 2, of APTA SS-C&S-034-99 is available on APTA's Web site at *http://www.aptastandards.com/portals/0/PRESS_pdfs/Construcstruct/construcstruct%20reaffirm/APTA%20SS-CS-034-99%20Rev%202-Approved.pdf* . The larger compilation of standards and recommended practices for rail passenger equipment of which this standard is a part, APTA's *Manual of Standards and Recommended Practices for Rail Passenger Equipment* , is available on APTA's Web site at *http://aptastandards.com/PublishedDocuments/PublishedStandards/PRESS/tabid/85/Default.aspx* .) When the decision to turn the provisions concerning “severe deformation” into a recommended practice was made, ongoing research from full-scale impact tests was showing that a substantial increase in cab car and MU locomotive crashworthiness could be achieved by designing the posts to first deform and thereby absorb collision energy before failing. 5 As discussed below, in August 2005, APTA's PRESS C&S Subcommittee accepted a revised “severe deformation” standard for collision and corner posts. The standard includes requirements for minimum energy absorption and maximum deflection. The standard thereby eliminates a deficiency in the 1999 APTA standards by specifying test criteria to objectively measure “severe deformation” (or large deformation). 5 Mayville, R., Johnson, K., Tyrell, D., Stringfellow, R., “Rail Vehicle Cab Car Collision and Corner Post Designs According to APTA S-034 Requirements,” American Society of Mechanical Engineers, Paper No. IMECE2003-44114, November 2003. This document is available on the Volpe Center's Web site at: *http://www.volpe.dot.gov/sdd/docs/2003/rail_cw_2003_11.pdf* . All of the published Volpe Center papers and reports on rail equipment crashworthiness can be found at: *http://www.volpe.dot.gov/sdd/pubs-crash.html* . The NPRM in this rulemaking was based on APTA SS-C&S-034-99, Rev. 1, and proposed dynamic performance requirements in the alternative to the quasi-static, large deformation criteria in the APTA Standards. In response to the NPRM, members of industry disagreed with including FRA's proposed dynamic performance requirements in the rule and requested that FRA demonstrate actual compliance with both the quasi-static and the dynamic large deformation requirements that were proposed. As detailed below, these tests were performed in the spring and summer of 2008. FRA has sought to retain the dynamic performance requirements as an alternative to the quasi-static requirements, in particular because the dynamic performance requirements facilitate evaluation of equipment without a flat front-end or traditional corner or collision posts. After discussion within the Task Force, consensus was reached on including dynamic performance requirements in appendix F to part 238 as an alternative to the enhanced collision and corner post requirements in §§ 238.211 and 238.213 of this final rule. As discussed below, the enhanced requirements in §§ 238.211 and 238.213 essentially codify the current APTA standards. E. Testing of Front End Frame Structures of Cab Cars and MU Locomotives This section summarizes the work done by FRA and the passenger rail industry on developing the technical information to support regulations requiring that corner and collision posts in cab car and MU locomotive front end frames fail in a controlled manner when overloaded. Due to the collaborative work of FRA with the passenger rail industry, APTA's current passenger rail equipment standards include deformation requirements, which prescribe how these vertical members should perform when overloaded quasi-statically. 1. FRA-Sponsored Dynamic Testing in 2002 Two full-scale, grade-crossing impact tests were conducted in June 2002 as part of an ongoing series of FRA-sponsored crashworthiness tests of passenger rail equipment carried out with the support of the Volpe Center at FRA's Transportation Technology Center

(TTC)in Pueblo, CO. The purpose of these two tests was to evaluate incremental improvements in the crashworthiness performance, in highway-rail grade-crossing collision scenarios, of modern corner and collision post designs when compared against the performance of older designs. The grade-crossing tests were intended to address the concern of occupant vulnerability to bulk crushing resulting from offset/oblique collisions where the primary load-resisting-structure is the equipment's end frame design. a. Test Article Designs Two end frame designs were developed. The first end frame design was representative of typical designs of passenger rail vehicles in the 1990s prior to 1999. The first end frame design is referred to as the “1990s design.” The second end frame design incorporated all the enhancements required beginning in 1999 by FRA's Passenger Equipment Safety Standards in part 238 and also recommended beginning in 1999 by APTA's standards for corner post and collision post structures, respectively, SS-C&S-013-99 and SS-C&S-014-99. The second end frame design is referred to as the State-of-the-Art

(SOA)design. The two end frame designs developed were then retrofitted onto two Budd Pioneer passenger rail cars for testing. The SOA design differed principally from the 1990s design by having higher values for static loading of the end frame structure and by specifically addressing the performance of the collision and corner posts when overloaded. As noted above, the 1999 APTA standards for cab car and MU locomotive end frame structures included the following statement for both corner and collision posts: [The] post and its supporting structure shall be designed so that when it is overloaded * * * failure shall begin as bending or buckling in the post. The connections of the post to the supporting structure, and the supporting car body structure, shall support the post up to its ultimate capacity. The ultimate shear and tensile strength of the connecting fasteners or welds shall be sufficient to resist the forces causing the deformation, so that shear and tensile failure of the fasteners or welds shall not occur, even with severe deformation of the post and its connecting and supporting structural elements. ( *See* paragraph 4.1 of APTA SS-C&S-013-99, and paragraph 3.1 of APTA SS-C&S-014-99.) Although the term “severe deformation” was not specifically defined in the APTA standards, discussions with APTA technical staff led to specifying “severe deformation” in the SOA design as a horizontal crush of the corner and collisions posts for a distance equal to the posts' depth. Some failure of the parent material in the posts was allowable, but no failure would be allowed in the welded connections, as the integrity of the welded connections prevents complete separation of the posts from their connections. An additional difference in the designs was the exclusion of the stepwells for the SOA design, to allow for extended side sills from the body bolster to the end/buffer beam. By bringing the side sills forward to support the end/buffer beam directly at the corners, the end/buffer beam can be developed to a size similar to the one for the 1990s design. In fact, recent cab car procurements have provided for elimination of the stepwells at the ends of the cars. As compared to the 1990s design, the SOA design had the following enhancements: more substantial corner posts; a bulkhead sheet connecting the collision and corner posts, extending from the floor to the transverse member connecting the posts; and a longer side sill that extended along the engineer's compartment to the end beam, removing the presence of a stepwell. In addition to changes in the cross-sectional sizes and thickness of some structural members, another change in the SOA design was associated with the connection details for the corner posts. In comparison to the corner posts, the collision posts of both the 1990s and SOA designs penetrated both the top and bottom flanges of both the end/buffer beam and the anti-telescoping plate. This was based upon typical practice in the early 1990s for the 1990s design, and a provision in the APTA standard for the SOA design. Yet, the corner posts differed in that the corner posts for the 1990s design did not penetrate both the top and bottom flanges of the end/buffer and anti-telescoping beams, while those in the SOA design did. The SOA design therefore had a significantly stiffer connection that was better able to resist torsional loads transferred to the anti-telescoping plate. b. Dynamic Impact Testing As noted, two full-scale, grade-crossing impact tests were conducted in June 2002. In each test a single cab car impacted a 40,000-pound steel coil resting on a frangible table at a nominal speed of 14 mph. The steel coil was situated such that it impacted the corner post above the cab car's end sill. The principal difference between the two tests involved the end frame design tested: In one test, the cab car was fitted with the 1990s end frame design; in the other, the cab car was fitted with the SOA end frame design. Prior to the tests, the crush behaviors of the cars and their dynamic responses were simulated with car crush and collision dynamics models. The car crush model was used to determine the force/crush characteristics of the corner posts, as well as their modes of deformation. 6 The collision dynamics model was used to predict the extent of crush of the corner posts as a function of impact velocity, as well as predict the three-dimensional accelerations, velocities, and displacements of the cars and coil. 7 Pre-test analyses of the models were used in determining the initial test conditions and instrumentation test requirements. 6 Martinez, E., Tyrell, D., Zolock, J., “Rail-Car Impact Tests with Steel Coil: Car Crush,” American Society of Mechanical Engineers, Paper No. JRC2003-1656, April 2003. This document is available on the Volpe Center's Web site at: *http://www.volpe.dot.gov/sdd/docs/2003/rail_cw_2003_4.pdf.* 7 Jacobsen, K., Tyrell, D., Perlman, A.B., “Rail Car Impact Tests with Steel Coil: Collision Dynamics,” American Society of Mechanical Engineers, Paper No. JRC2003-1655, April 2003. This document is available on the Volpe Center's Web site at: *http://www.volpe.dot.gov/sdd/docs/2003/rail_cw_2003_3.pdf.* The impact speed of approximately 14 mph for both tests was chosen so that there would be significant intrusion (more than 12 inches) into the engineer's cab in the test of the 1990s design, and limited intrusion (less than 12 inches) in the test of the SOA design. This 12-inch deformation metric was chosen to demarcate the amount of intrusion that would leave sufficient space for the engineer to ride out the collision safely. During the full-scale test of the 1990s design, the impact force transmitted to the end structure exceeded the corner post's predicted strength, and the corner post separated from its upper attachment. Upon impact, the corner post began to hinge near the contact point with the coil; subsequently, tearing at the upper connection occurred. The intensity of the impact ultimately resulted in the failure of the upper connection of the corner post to the anti-telescoping plate. More than 30 inches of deformation occurred and the survivable space for the engineer was lost. By contrast, during the test of the SOA end frame design, the corner post remained attached. The maximum rearward deformation measured was approximately 9 inches. The results of this test showed that the SOA end frame design is sufficient to prevent the engineer from being crushed in such an impact. c. Analysis The SOA design performed very closely to pre-test predictions made by the finite element and collision dynamics models. *See* Figure 2, below. As noted, the SOA design crushed approximately 9 inches in the longitudinal direction. ER08JA10.001 Pre-test analyses for the 1990s design using the car crush model and collision dynamics model were in close agreement with the measurements taken during the actual testing of the cab car end frame built to this design. The pre-test analyses also nearly overlay the test results for the force/crush characteristic of the SOA design. As a result, FRA believes that both sets of models are capable of predicting the modes of structural deformation and the total amount of energy consumed during a collision. Careful application of finite-element modeling allows accurate prediction of the crush behavior of rail car structures. Both the methodologies used to design the cab car end frames and the results of the tests show that significant increases in rail passenger equipment crashworthiness can be achieved if greater consideration is given to the manner in which structural elements deform when overloaded. Modern methods of analysis can accurately predict structural crush (severe deformation) and consequently can be used with confidence to develop structures that collapse in a controlled manner. Modern testing techniques allow the verification of the crush behavior of such structures. 2. Industry-Sponsored Quasi-Static Testing in 2001 While FRA's full-scale, dynamic testing program was being planned and conducted with input from key industry representatives, several passenger railroads were incorporating in procurement specifications the then-newly promulgated Federal regulations and industry standards issued in 1999. Specifically, both LIRR and Metro-North had contracted with Bombardier for the development of a new MU locomotive design, the M7 series. Bombardier conducted a series of qualifying quasi-static tests on a mock-up, front-end structure of an M7, including a severe deformation test of the collision post. In addition to the severe deformation test, the other end frame members were also tested elastically at the enhanced loads specified in the APTA standards. The severe deformation qualification test was conducted on February 20, 2001. a. Test Article Design The mock-up test article was developed for the front end of an M7 cab car. The first 19.25 feet of the car was fabricated with great fidelity between the car's body bolster and the extreme most forward end. The mock-up contained all structural elements, but did not contain the corner post rub plates, the plymetal floor, any interior finishing, windows, doors, bonnet, or similar components. b. Quasi-Static Testing Load was applied at incrementally increasing levels with hydraulic jacks while being measured by load cells at the rear of the longitudinal end frame members. Initially, the elastic limit was determined for the post, and then the large deformation test was conducted. The test was stopped, for safety considerations, prior to full separation of the collision post with the end/buffer beam. The maximum deflection in the collision post before yielding occurred at a position 42 inches above the end beam, near the top of the plates used to reinforce the collision post. The plastic shape the collision post acquired during testing was `V'-shaped, with a plastic hinge occurring at 42 inches above the end beam. Some cracking and material failure occurred at the connection of the post with the end beam. The anti-telescoping plate was pulled down roughly three inches, and load was shed to the corner post via the shelf member and the bulkhead sheet. The shape that the collision post experienced was very similar to what was observed from the dynamic testing of the SOA corner post, as discussed above. c. Analysis Under FRA sponsorship, the Volpe Center, with cooperation from Bombardier, conducted non-linear, large deformation analyses to evaluate the performance of the cab car corner and collision posts of the SOA end frame design and the Bombardier M7 design under dynamic test conditions. One of the purposes of this research was to determine whether the level of crashworthiness demonstrated by the SOA prototype design could actually be achieved by a general production design—here, the M7 design. Pre-test analysis predictions of the dynamic performance of the SOA corner post closely matched test measurements. 8 A similar analysis of the corner post was performed on the M7 design, and the results compared closely with the SOA design test and analysis results. Overall, the crashworthiness performance of the collision posts of the SOA and M7 designs were found to be essentially the same, and the M7 corner post design was even found to perform better than the SOA corner post design. This latter difference in performance was attributable to the sidewall support in the M7 design, which was not present in the SOA design. 8 Martinez, E., Tyrell, D., Zolock, J. Brassard, J., “Review of Severe Deformation Recommended Practice Through Analyses—Comparison of Two Cab Car End Frame Designs,” American Society of Mechanical Engineers, Paper No. RTD2005-70043, March 2005. This document is available on the Volpe Center's Web site at: *http://www.volpe.dot.gov/sdd/docs/2005/rail_cw_2005_03.pdf* . Having established the fidelity of the models and modeling approach, a number of comparative simulations were conducted of both the SOA end frame and the M7 end frame under both dynamic and quasi-static test conditions to assess the equivalency of the two different tests for demonstrating compliance with the severe deformation criteria. For both sets of tests, the modes of deformation were very similar at the same extent of longitudinal displacement, and the locations where material failure occurred were also similar. In addition, the predicted force-crush characteristics showed reasonable agreement within the repeatability of the tests. Figure 3, below, shows a comparison of the deformation mode for the M7's collision post, as observed from the quasi-static testing that was conducted and as predicted for the dynamic loading condition. ER08JA10.002 3. FRA-Sponsored Dynamic and Quasi-Static Testing in 2008 In 2008, a full-scale dynamic test and two quasi-static tests were performed on the posts of an SOA end frame. These tests were designed to evaluate the dynamic and quasi-static methods for demonstrating energy absorption of the collision and corner posts. The tests focused on the collision and corner posts individually because of their critical positions in protecting the engineer and passengers in a collision where only the superstructure, not the underframe, is loaded. a. Test Article Design The SOA design was originally developed for the Budd Pioneer car for the 2002 dynamic impact testing. For the testing in 2008, only a Budd M1 car was available, so the design had to be modified to fit a Budd M1. The design of an end frame for retrofit onto the cab end of a Budd Pioneer car was modified to account for differences between the two car designs. In addition, reinforcements to the M1 car body and connections from the end frame to the car body were designed and fabricated. The design of the SOA end frame itself required only a few modifications to adapt to the M1 car body. Due to the rounded nature of the M1 car body as compared to the Pioneer car body, the lateral extent of the anti-telescoping beam was changed slightly so that it extended beyond the corner post by 1.5 inches, as compared to 1.0 inches for the Pioneer car. b. Dynamic Testing of a Collision Post For this test, a 14,000-pound cart impacted a standing car at a speed of 18.7 mph. The cart had a rigid coil shape mounted on the leading end that concentrated the impact load on the car's collision post. The test was conducted against the NPRM's proposed requirements for protecting the engineer's space—namely, that there be no more than 10 inches of permanent, longitudinal deformation and none of the attachments of any of the structural members separate. During the test, the collision post deformed approximately 7.4 inches and absorbed approximately 138,000 foot-pounds of energy. The attachment between the post and the anti-telescoping beam remained intact. The connection between the post and the buffer beam did not completely separate; however, the forward flange and both side webs fractured. The post itself did not completely fail. There was material failure in the back and the sides of the post at the impact location. Overall, the end frame was successful in absorbing energy and preserving space for the engineer and the passengers. Figure 4 depicts three deformation states from the dynamic test: initial contact of the crash cart with the end frame, the greatest intrusion of the end frame, and the final deformation state. ER08JA10.003 c. Quasi-Static Testing of Collision and Corner Posts A quasi-static collision post test was run to compare the quasi-static and the dynamic performance requirements proposed in the NPRM and to demonstrate the efficacy of the quasi-static test method. The NPRM proposed that the collision post absorb at least 135,000 foot-pounds of energy in no more than 10 inches of longitudinal, permanent deformation. Load was applied with the same fixture for the dynamic test. This fixture had a diameter of 48 inches and a width of 36 inches. The fixture was made of a thick, stiff material and reinforced so that it did not deform or absorb energy. Longitudinal string potentiometers at several locations recorded the deformation of the post. Four load cells, connected in parallel, measured the load being applied into the post. The force and the displacement were cross-plotted and the integral was used to calculate the energy absorbed during the test. The test car was coupled to a reaction car. As the load from the hydraulic ram was introduced to the car through the collision post, it was reacted through the couplers. The mode of deformation in the quasi-static collision post test was very similar to the mode of deformation seen in the dynamic collision post test. The collision post pulled down on the anti-telescoping beam. The post was loaded past 15 inches of deformation and did eventually fail completely in the middle. The collision post fractured as it separated from the buffer beam. After 11 inches of crush, the post had absorbed 110,000 foot-pounds of energy. Based on the unloading characteristic measured during the test, 11 inches of crush is approximately equal to 10 inches of permanent deformation. Since the collision post and end frame were supposed to absorb 135,000 foot-pounds of energy in 10 inches of permanent deformation, but only absorbed 110,000 foot-pounds of energy for that distance, the test article did not pass the test requirements. Design details warranted a closer look in determining why the test was unsuccessful. The specimens taken at the location of the fracture revealed that an internal gusset on the post coincided with an exterior shelf tab. The gusset locations were within specification for these posts. However, there is some flexibility with the location of the gusset relative to the location to the shelf tab. In both the dynamic and quasi-static tests, the fracture occurred at the location of both the gusset and the shelf welds. The rigid gusset did not allow the post to oval as it deformed, causing the fracture at the back of the post. Attention turned to conducting a test of the corner post. The NPRM proposed that the corner post absorb at least 120,000 foot-pounds of energy with no more than 10 inches of permanent, longitudinal deformation. The same fixture was used for this test as for the collision post testing. The fixture was centered on the corner post. In response to the results of the quasi-static test of the collision post, the shelf was redesigned so that the tab was removed and the depth of the shelf was decreased. This reduced the number of welds at the corner and back of the post. However, because the corner post was not designed with internal gussets, gusset design details did not need to be addressed. In the quasi-static corner post test, the end frame deformed as expected and absorbed energy while deforming. The anti-telescoping beam was pulled down significantly and the shelf and bulkhead were deformed. The connection between the corner post and the buffer beam fractured, but the post did not separate completely. Also, the connection between the shelf and the post fractured, but the post itself did not fracture. The post and end frame absorbed 136,000 foot-pounds of energy in 11 inches of crush. After elastic recoil, 11 inches of crush is the equivalent of 10 inches of permanent deformation; thus, the test was successful. The testing program demonstrated repeatable methods for assessing the energy-absorbing capability of end frame structures. These methods include both dynamic and quasi-static tests where energy absorption and permanent deformation are used as limiting criteria. The tests also show the improved crashworthiness of the SOA design. d. Analysis Analysis is a crucial part of conducting a full-scale test. Based on the results of the 2002 full-scale dynamic test in which a heavy steel coil impacted the corner post of an SOA end frame design, some fracture was expected in certain key end frame components during the 2008 tests. For this reason, a material failure model, based on the Bao-Wierzbicki fracture criterion, was implemented in the finite element model of the car end frame using ABAQUS/Explicit. The finite element model with material failure was used to assess the effect of fracture on the deformation behavior of car end structures during quasi-static loading and dynamic impact and, in particular, the ability of such structures to absorb energy. The material failure model was implemented in ABAQUS/Explicit for use with shell elements. A series of preliminary calculations was first conducted to assess the effects of element type and mesh refinement on the deformation and fracture behavior of structures similar to those found on cab car and MU locomotive end frames, and to demonstrate that the Bao-Wierzbicki failure model can be effectively applied using shell elements. Model parameters were validated through comparison to the results of the 2002 testing. Material strength and failure parameters were derived from test data for A710 steel. The model was then used to simulate the three full-scale tests that were conducted during 2008 as part of the FRA program—dynamic impact testing of a collision post, and quasi-static load testing of a collision post and a corner post. Analysis of the results of the two collision post tests revealed the need for revisions to both the design of some key end frame components and to key material failure parameters. Using the revised model, pre-test predictions for the outcome of the corner post test were found to be in very good agreement with the actual test results. Overall, the results of the tests in comparison with their pretest analyses show that, at this time, actual testing is necessary to demonstrate performance. However, as modeling methods improve and are shown to predict failure and energy absorption more accurately, there is the potential that use of analysis alone will in the future be acceptable for demonstrating crashworthiness performance. F. Approaches for Specifying Large Deformation Requirements As discussed above, APTA's initial “severe deformation” standard for corner and collision posts, published in 1999, did not contain specific methodologies or criteria for demonstrating compliance with the standard. Consequently, the dynamic tests performed by FRA and the Volpe Center, static tests performed by members of the rail industry, and analyses conducted by the Volpe Center and its contractors all helped to develop the base of information needed to identify the types of analyses and test methodologies to use. Further, evaluation of the test data, with the analyses providing a supporting framework, allowed development of appropriate criteria to demonstrate compliance. The principal criteria developed involve energy absorption through end frame deformation and the maximum amount of that deformation. As shown by FRA and industry testing, energy can be imparted to conventional flat-nosed cab cars and MU locomotives either dynamically or quasi-statically. As shown by Volpe Center analyses, currently available engineering tools can be used to predict the results of such tests. Given the complexity of such analyses, and commensurate uncertainties, there is a benefit to maintaining dynamic testing as an alternative for evaluating compliance with any “severe deformation” standard. There are tradeoffs between quasi-static and dynamic testing of cab car and MU locomotive end frames. Both sets of tests prescribe a minimum amount of energy for end frame deformation. However, the manner in which the energy is applied is different, and the setup of the two types of tests is different. As demonstrated by the tests conducted by Bombardier, quasi-static tests can be conducted by rail equipment manufacturers at their own facilities. Dynamic tests require a segment of railroad track with appropriate wayside facilities; there are few such test tracks available. Nevertheless, dynamic tests do not require detailed knowledge of the car structure to be tested, and allow for a wide range of structural designs. Quasi-static tests require intimate knowledge of the structure being tested, to assure appropriate support and loading conditions, and development of quasi-static test protocols requires assumptions about the layout of the structure, confining structural designs. In addition, dynamic tests more closely approximate accident conditions than quasi-static tests do. In August 2005, APTA's PRESS C&S Subcommittee accepted a revised “severe deformation” standard for collision and corner posts. The standard includes requirements for minimum energy absorption and maximum deflection. The form of the standard is largely based on the testing done by Bombardier, and therefore is quasi-static. The standard eliminates a deficiency of the 1999 standard by specifying test criteria to objectively measure “severe deformation.” The standard can be readily applied to conventional flat-nosed cab cars and MU locomotives but is more difficult to apply to shaped-nosed cab cars and MU locomotives or those with CEM designs, or both. In addition, APTA as well as several equipment manufacturers have expressed an interest in maintaining the presence of a stairwell on the side of the cab car or MU locomotive opposite from where the locomotive engineer is situated. This feature enables multi-level boarding from both low and higher platforms. As such, FRA and the APTA PRESS C&S Subcommittee worked together to develop language associated with providing a safety equivalent to the requirements stipulated for cab car and MU locomotive corner posts in terms of energy absorption and end frame deformation. The Subcommittee agreed that for this arrangement there is sufficient protection afforded by the presence of two corner posts (an end corner post ahead of the stepwell and an internal corner post behind the stepwell) that are situated in front of the occupied space. The load requirements stipulated for such posts differ in that the longitudinal requirements are not equal to the transverse requirements. This in effect changes the shape of these posts so that they are not equal in both width and height. For the end corner post ahead of the stepwell, the longitudinal loading requirements are smaller than the transverse ones. The opposite is true for the corner post behind the stepwell. It was agreed to allow for the combined contribution of both sets of corner posts, together, to provide an equivalent level of protection to that required for corner posts in standard cab car and MU locomotive configurations. *See* the discussion in the Section-by-Section Analysis on the structural requirements for cab cars and MU locomotives with a stairwell located on the side of the equipment opposite from where the locomotive engineer controls the train. G. Crash Energy Management and the Design of Front End Frame Structures of Cab Cars and MU Locomotives Research has shown that passenger rail equipment crashworthiness in train-to-train collisions can be significantly increased if the equipment structure is engineered to crush in a controlled manner. One manner of doing so is to design sacrificial crush zones into unoccupied locations in the equipment. These zones are designed to crush gracefully, with a lower initial force and increased average force. With such crush zones, energy absorption is shared by multiple cars during the collision, consequently helping to preserve the integrity of the occupied areas. While developed principally to protect occupants in train-to-train collisions, such crush zones can also potentially significantly increase crashworthiness in highway-rail grade-crossing collisions. 9 9 Tyrell, D.C., Perlman, A.B., “Evaluation of Rail Passenger Equipment Crashworthiness Strategies,” Transportation Research Record 1825, pp. 8-14, National Academy Press, 2003. This document is available on the Volpe Center's Web site at: *http://www.volpe.dot.gov/sdd/docs/2003/rail_cw_2003_12.pdf.* The approach of including crush zones in passenger rail equipment is termed CEM, and it extends from current, conventional practice. Current practice for passenger equipment operated at speeds not exceeding 125 mph ( *i.e.,* Tier I passenger equipment under part 238) requires that the equipment be able to support large loads without permanent deformation or failure, but does not specifically address how the equipment behaves when it crushes. CEM prescribes that car structures crush in a controlled manner when overloaded and absorb collision energy. In fact, for passenger equipment operating at speeds exceeding 125 mph but not exceeding 150 mph ( *i.e.,* Tier II passenger equipment under part 238), the equipment must be designed with a CEM system to dissipate kinetic energy during a collision, *see* § 238.403, and Amtrak's Acela Express trainsets were designed with a CEM system complying with this requirement. FRA notes that Metrolink is in the process of procuring a new fleet of cars utilizing CEM technology. As part of its response to the Glendale, CA train incident on January 26, 2005, Metrolink determined that CEM design specifications should be included in this planned procurement, and, in coordination with APTA, approached FRA and FTA to draft such specifications. In turn, FRA and FTA formed the ad hoc Crash Energy Management Working Group in May 2005. This working group included government engineers and participants from the rail industry, including passenger railroads, suppliers, labor organizations, and industry consultants, many of whom also participated in the Crashworthiness/Glazing Task Force. The working group developed a detailed technical specification for crush zones in passenger cars for Metrolink to include in its procurement specification, as well as for other passenger railroads to include in future procurements of their own. Metrolink released its specification as part of an invitation for bid, and then awarded the contract to manufacture the equipment to Rotem, a division of Hyundai, now Hyundai Rotem Company (Rotem). Rotem has developed a shaped-nose, CEM design for new Metrolink cab cars. Because of the shaped-nose, it is more difficult to engineer structural members identifiable as full-height collision posts and corner posts that extend from the underframe to the cantrail or roofline at the front end, as specified in the current APTA standard. Consequently, to meet the APTA standard, Rotem has to locate the collision and corner posts inboard of the crush zone, rather than place them at the extreme front end of the cab car. Further, as currently written, the APTA quasi-static standard does not expressly take into account the energy-absorption capability of the crush zone, even if the crush zone would likely be engaged in a grade-crossing impact. Although the APTA standard acknowledges the use of shaped-nose and CEM designs, there remains uncertainty in the standard associated with demonstration of compliance by such designs. (The APTA standard does provide that on cars with CEM designs, compliance may be demonstrated either through analysis or testing as agreed to by the vehicle builder and purchaser, but no test methodology or criteria are provided.) Dynamic performance criteria place fewer constraints on the layout of the cab car or MU locomotive end structure and allow the energy-absorption capability of the crush zone(s) to be expressly taken into account in the design of the collision and corner post structures. As noted, this final rule allows for the application of dynamic performance requirements for collision and corner post structures of cab cars and MU locomotives. FRA believes that the results of the crashworthiness research discussed above provide strong support for including dynamic performance requirements as alternatives to the quasi-static requirements for collision and post requirements in this rule, and that it is particularly necessary to address what FRA believes will be a growing number of cab cars and MU locomotives utilizing CEM designs. H. European Standard EN 15227 FCD, Crashworthiness Requirements for Railway Vehicle Bodies In the NPRM, FRA discussed that then-preliminary European standard prEN 15227 FCD, Crashworthiness Requirements for Railway Vehicle Bodies, included four collision scenarios. This standard is no longer preliminary and is consequently referred to throughout this document as EN 15227, without the preliminary “pr” designation. Collision Scenario 3 of the European standard involves a “train unit front end impact with a large road vehicle on a level crossing.” The standard requires commuter and intercity trains to be able to sustain an impact with a deformable object weighing 33 kips (15,000 kg) at a speed up to 68 mph (110 kph). Calibration tests on components and numerical simulations of the scenario are recommended for showing compliance. FRA has noted key differences between the European standard and the dynamic testing collision scenarios that FRA proposed for both collision posts and corner posts, below, including the amount of energy involved and the character of the object. Assuming that the mass of the train is more than about 25 times as great as the mass of the object (in that the mass of the train roughly corresponds to the mass of a commuter train made up of a cab car, four coaches, and a locomotive; or made up of six MU locomotives), then the total energy dissipated in an EN 15227 Collision Scenario 3-impact is 5.0 million foot-pounds. The total energy absorbed in the collision scenarios included in this final rule are 135,000 foot-pounds for the collision post and 120,000 foot-pounds for the corner post. However, in the European standard, the impacted object is deformable and potentially absorbs a significant amount of the available energy; in the collision scenarios included in this final rule, the object is rigid, and virtually all of the energy is absorbed by the cab car or MU locomotive. A recent paper describes the performance of the SOA end frame in both the FRA and the EN grade-crossing collision scenarios. 10 Specifically, testing and analysis of the SOA end frame's performance in appendix F's collision post test scenario was compared to an analysis of the SOA end frame's performance in EN15227's Collision Scenario 3. 10 Llana, P., “Structural Crashworthiness Standards Comparison: Grade-Crossing Collision Scenarios,” American Society of Mechanical Engineers, Paper No. RTDF2009-18030, October, 2009. This document is available on the Volpe Center's Web site at: *http://www.volpe.dot.gov/sdd/docs/2009/09-18030.pdf.* Table 1 Table 1 summarizes a few key crashworthiness parameters and results from the testing and analysis conducted. Application of the FRA scenario involved only one car; whereas the EN 15227 scenario involved a complete consist or train unit. The difference in weight of one car, 80 kips, versus that of a complete consist, 767 kips, was an order of magnitude. In the FRA scenario, the 14-kip impact object was tested striking the car at 19 mph, resulting in 170 ft-kips of initial kinetic energy. Whereas in the EN 15227 scenario, the 767-kip consist was analyzed striking the deformable lorry at 53 mph, resulting in 72,000 ft-kips of initial kinetic energy. The difference in the amount of initial kinetic energy involved between the two scenarios was two orders of magnitude. Similarly, the impacting objects were quite different. As noted earlier, the FRA scenario provides for a rigid impact object; whereas in the EN 15227 scenario, the impact object is deformable. In the FRA scenario, this resulted in the energy being mostly absorbed by the impacted collision post, with virtually no energy absorbed by the impact object. Whereas in the EN 15227 scenario, both the first car and the impact object absorbed large amounts of energy, with very little energy absorbed by one collision post. Table 1—Comparison of SOA End Frame Performance Applying Appendix F Collision Post Standard and EN 15227 Collision Scenario 3 Parameter Application of Appendix F collision post standard Application of EN 15227 collision scenario 3 specification Type of Train Single car: 80 kips Complete train unit: 767 kips. Impact Object Rigid cart: 14 kips Deformable lorry: 33 kips. Impact Speed 19 mph

(cart)53 mph (consist). Initial Kinetic Energy 170 ft-kips 72,000 ft-kips. Energy Absorbed End frame: 138 ft-kips; Cart: ~0; Collision post: 105 ft-kips Leading car: 1370 ft-kips; Lorry: 950 ft-kips; Collision post: 89 ft-kips. Pass/Fail Criteria Intrusion <= 10 in., no separation Preserve survival spaces, mean deceleration < 7.5g. As the table shows in summary form, the key parameters of these two scenarios are very different, though they are both grade-crossing collision scenarios involving rail vehicles with impact objects. Additionally, comparing the complexity of the analysis required for each scenario, application of the FRA scenario is simpler to analyze. In analyzing the FRA scenario, fewer vehicles are involved, initial kinetic energy is lower, deformations are less, and the deformations that result are virtually all in the car and not the impact object. Overall, FRA believes that the following conclusions can be drawn about the standards in appendix F and those specified in EN 15227's Collision Scenario 3. The appendix F standards concentrate the load on a single post, above the underframe; can be applied to both CEM and non-CEM equipment; and can potentially be used to demonstrate compliance either through analysis or testing. The EN 15227 grade-crossing collision specification distributes the load across the entire end structure; imparts a significant amount of load in the underframe and roof structure; assumes the use of CEM equipment; and can be used to demonstrate compliance through analysis only. Moreover, FRA believes that its dynamic collision scenario is not only easier to analyze, but easier to test than the EN 15227 scenario and imparts more energy to the impacted post than in the EN 15227 scenario. IV. Discussion of Specific Comments and Conclusions As noted above, FRA received written comments on the NPRM from representatives of government; various organizations, including railroad labor; railroads; railroad car manufacturers; railroad engineering firms; and as well as private citizens. The comments can principally be divided into two groups: comments of a technical nature affecting the substance of the requirements proposed, and comments as to the preemptive effect of the requirements proposed. FRA found that these groupings serve the organization of this final rule, even though some comments do not fit neatly into either grouping. Please note that certain comments are not discussed in either of these two groupings; instead, they are discussed directly in the Section-by-Section Analysis or in the Regulatory Impact and Notices portion of this final rule. A. Technical Comments This section contains the discussion of technical comments on the NPRM, as well as comments closely associated with these technical comments. FRA has endeavored to group the comments together by issue to the extent possible, rather than by commenter. Please note that the order in which the comments are discussed, whether by issue or by commenter, is not intended to reflect the significance of the comment raised or the standing of the commenter. Please also note that following the submission of these written comments, FRA convened the Task Force and Working Group to consider and discuss the comments and to help achieve consensus on recommendations for this final rule. As a result, certain of these comments have been superseded by changes made in the rule text from the NPRM to this final rule, and they should not necessarily be understood to reflect the positions of the commenters with respect to the requirements of the final rule. Nevertheless, FRA is setting out all of the comments received and is responding to each of them here so that FRA's positions are clearly understood. 1. Crash Energy Management Caltrans raised concern with FRA's mention of CEM designs in the NPRM, believing that no rail equipment that features a CEM design has been built, that including CEM in the preamble implied that the NPRM included a CEM requirement, and that the implication that CEM designs may provide for a higher level of safety would expose those railroads not employing CEM designs to litigation for not selecting the “safer” design as identified by FRA. FRA notes that Amtrak's Acela Express trainsets use CEM, and CEM is used in European and other vehicles. FRA does believe that, all other things being equal, CEM designs are superior in crashworthiness to conventional designs. Yet, as FRA stated in the preamble to the NPRM, FRA's recognition that fuller application of CEM technologies to cab cars and MU locomotives could enhance their safety would not nullify the preemptive effect of the standards arising from the rulemaking. FRA continually strives to enhance railroad safety, has an active research program focused on doing so, and sets safety standards that it believes are necessary and appropriate for the time that they are issued with a view to amending those standards as circumstances change. FRA has imposed, and will continue to impose, the requirements that it deems necessary for the safe operation of cab cars and MU locomotives in all of the configurations in which they will be operated. FRA is not requiring CEM in this final rule. RVB also raised concerns with the NPRM for its application to CEM designs. RVB asked why the “static strength” requirements had to be met if the CEM requirements for energy absorption are met. RVB stated that the required amount of energy can be absorbed by CEM structures using considerably smaller collision and corner posts. FRA understands that there are potential alternative arrangements using CEM that may place the end frame structure outboard of the crush elements or behind the crush elements. If the end frame is situated outboard of the crush elements (or crash energy absorbers), then the end frame will likely serve as the means for assuring planar introduction of the load into the crush elements, allowing them to react in a progressive, controlled collapse. To accomplish this energy transfer to the crush elements, the end frame must be very rigid, which can make meeting the severe deformation requirements for the end frame more difficult to achieve. Nonetheless, as long as the system of structural and CEM elements protecting the occupied volume performs well under the dynamic performance requirements provided in appendix F of this final rule, FRA is confident that sufficient protection is provided to passengers and crewmembers alike. For end frame members inboard of the crush elements, it is likely that they will serve as the reaction points for the crush elements. As in the case of end frame members outboard of the crush elements, to support the load introduced by the crush elements the end frame may have to be very rigid. As a result, meeting the severe deformation requirements for the end frame may also be more difficult to achieve. Yet, again, as long as the system of structural and CEM elements protecting the occupied volume performs well under the dynamic performance requirements provided in appendix F of this final rule, FRA is confident that the system provides sufficient protection for passengers and crewmembers. Additionally, FRA would like to make clear that the energy-absorption requirements in this rulemaking should not be confused with energy absorption as part of a CEM approach. While inclusion of energy-absorption requirements is consistent with FRA's approach to incrementally build on traditional crashworthiness requirements, and whereas CEM is an advanced crashworthiness approach, FRA did not intend that the energy-absorption requirements in this rulemaking be considered part of a CEM approach. Instead, FRA's inclusion of energy-absorption requirements in this rulemaking is intended to address traditional cab car and MU locomotive designs that have very strong underframes with relatively weaker superstructures, for which it is vitally important to provide protection to crewmembers and passengers in the event that the superstructure is impacted. FRA is incorporating mature technology and design practice to extend from linear-elastic requirements to elastic-plastic requirements together with descriptions of allowable deformations without complete failure of the system. RVB additionally commented that in the NPRM the collision and corner posts must be designed for yield strength in the case where the posts are behind the CEM structure and used as support for the CEM structure. RVB believed that this proposed requirement conflicted with the allowance in the NPRM for the posts to resist loads up to their ultimate strength. RVB believed that, by requiring yield strength in such case, the ultimate strength of the post would be much greater than the amount specified. FRA understands the complexities introduced by using a CEM design that behaves significantly differently than a conventional cab car or an MU locomotive because of its crush zone(s). This is one of the reasons FRA proposed the option to test such designs dynamically, and one of the reasons why FRA has included alternative, dynamic performance requirements in this final rule. FRA has modified the dynamic performance requirements in the final rule from those proposed in the NPRM, and FRA believes that these modifications will help to address concerns with applying the requirements to CEM designs. RVB also commented that since, by definition, a CEM system requires a structure that facilitates controlled collapse of the crush zone(s), the proposal would result in a much higher load imparted to the underframe than by the 800,000-pound compression load requirement, exceeding the yield strength of the structure. RVB claimed that this was another area of significant over-design that was unaddressed in the NPRM. RVB added that by disallowing correction of static strength requirements as they are taken up by CEM systems, a vehicle would be heavier than it needs to be, use more energy to operate, and exert more force on wheels and rails that would increase maintenance costs for equipment and track. FRA believes that the commenter is incorrect in its assertions. FRA agrees that for CEM designs the overall average load that the structure must resist may exceed 800,000 pounds. However, this load is typically spread over a significantly larger area than just the line of draft of the vehicle, as specified for vehicles not utilizing CEM designs. Because the capacity of a vehicle incorporating a CEM design to resist compression loads elastically may be taken into account, FRA does not believe that this will result in over-design of the vehicle. In addition, FRA wishes to dispel the belief that a heavier vehicle would be necessary to meet the requirements proposed in the NPRM and those contained in this final rule. Crashworthiness features from clean-sheet designs can occupy the same space as other material and not weigh in excess of the structure(s) being replaced. There is considerable leeway in designing such systems so that no additional weight is required. Moreover, the vehicle body structure itself typically accounts for only between 25 to 35 percent of the final weight of a vehicle, which minimizes the significance of any weight added to the vehicle to comply with the requirements of this final rule. RVB further commented that one means of recognizing a CEM vehicle addressing the static end strength requirements would be for this part 238 to specify the minimum amount of energy that must be absorbed by each end of a vehicle in a train in a specified collision scenario. According to RVB, dynamic testing of the entire crush zone or testing of the critical crush zone elements, in conjunction with suitable analysis, would be required to confirm compliance, and acceptance criteria would include verification that

(i)the required minimum energy has been absorbed,

(ii)the occupied volume is not compromised, and

(iii)climbing/telescoping does not occur under the collision scenario. For a CEM vehicle, RVB believed that this should be in place of the specific strength requirements for the collision and corner posts, and allow evaluation of the car ends as a system. FRA recognizes the possibilities raised by the commenter. FRA intends to work with the APTA PRESS C&S Subcommittee to consolidate knowledge gained from the Metrolink CEM design effort to support development of such criteria. Inclusion of such criteria in this part 238 would be the subject of a separate rulemaking activity, however, and such criteria are not included in this final rule. RVB additionally commented that the NPRM suggested that a manufacturer with a CEM system may choose to conduct two dynamic tests instead of conducting quasi-static tests on the individual components. RVB believed the practical situation is that the structure needed to support the CEM system would almost certainly meet the quasi-static requirements proposed in the NPRM. According to RVB, if a dynamic test were to be conducted for a CEM system, it would seem to serve the public better to conduct a dynamic test that verifies the performance of the entire CEM system, not just for how it protects against a steel coil. As noted above, FRA plans on working with the industry to address the issue of more comprehensive requirements for CEM systems. However, with regard to specific application of the requirements of this final rule, a dynamic test of a CEM structural system as contemplated by the commenter may not in itself demonstrate that the superstructure has the strength to protect against the collision scenarios addressed in this rulemaking. In such a dynamic test of a CEM structural system, the entire end structure of the vehicle would potentially absorb all of the collision load. Yet, this final rule specifically targets grade-crossing collision scenarios where only portions of the superstructure are loaded. It is therefore believed that analysis and component testing, not a full-scale test alone, would be necessary to verify the design of a complete CEM system. In its comments, RVB stated that the NPRM introduced requirements that would make manufacturers design to the actual strength of some components rather than rely on the yield stress as a measure of strength. RVB believed that this approach is sensible, particularly as CEM systems are introduced, in that such systems rely on controlled (plastic) deformation and operation at the maximum strength

(load)capacity of structural members in collisions. Nevertheless, RVB believed that there are still numerous transportation requirements that are based on yield strength and that these impose constraints on the design of CEM members that may not be sensible, including the anti-climbing arrangement and the collision and corner post load cases for application points well above the underframe. According to RVB, FRA should consider moving to a true strength approach for all components as it stated is being done in much of the structural engineering community. FRA notes that the commenter is focused on CEM systems for which the rule will probably not be applied for some time, and, if sooner, for systems FRA would have to review individually because such systems are sufficiently different from conventional designs. The requirements based on yield strength work well for non-CEM designs and facilitate their testing and use. RVB also commented on FRA's statement in the NPRM that an energy- absorption requirement of 5 megajoules

(MJ)will effectively prevent a cab car from being used in the lead position for Tier II equipment. RVB believed that this magnitude of energy absorption is feasible for cab cars. FRA recognizes that advancements have been made in the ability of CEM systems to absorb energy. However, FRA continues to believe that for operational speeds in excess of 125 mph, as a rule of general applicability for our nation's railroads, no passengers should be allowed in the lead vehicle. Tier II passenger equipment can operate at speeds where the amount of energy required to be dissipated is too large for any vehicle design to survive a direct impact. Yet, with use of advanced system designs such as Positive Train Control

(PTC)and CEM, the risk may potentially be minimized, and FRA would consider such cases individually in the context of the particular environment in which the equipment would operate. In its comments on the NPRM, Caltrain stated that it would be far more appropriate for FRA to define a risk assessment methodology and prescriptions for addressing risk, letting designers provide alternatives such as CEM that deliver the required performance. Caltrain asked why a collision post inboard of a CEM system would be required to resist the same load as a collision post where there is no CEM system. Caltrain stated that presumably the load would be reduced as the CEM system performs its function, so that a substantially lighter collision post could be used to protect the passenger space, if the CEM system does not otherwise eliminate altogether the need for an interior collision post. Caltrain believed that if it is the intent of FRA to provide this level of flexibility, FRA should make this clear. It is indeed FRA's intent to provide flexibility for vehicle designs with CEM features. In the final rule, FRA has added appendix F to part 238 to provide dynamic performance requirements as alternatives to both the collision and corner post quasi-static requirements. These dynamic performance requirements specify the performance of the end frame, were prepared with CEM designs in mind, and provide the designer leeway in choosing how that performance will be achieved. Nonetheless, FRA is not defining a risk assessment methodology and prescriptions for addressing risk, as an alternative to the collision and corner post quasi-static requirements. FRA believes that appendix F to part 238 provides the flexibility needed while assuring safety with more certainty than by performance of a risk assessment alone. 2. Dynamic Performance Requirements FRA received a number of comments on its proposal to include dynamic performance requirements as an option to demonstrate compliance with the severe deformation requirements for collision and corner posts. In addition to inviting general comment on the proposal, FRA invited specific comment on the dynamic testing collision scenarios included in the proposed rule, including suggestions for any alternative collision scenario or way to address possible future designs. FRA also invited specific comment whether this final rule should provide for all cab cars and MU locomotives to be tested dynamically to demonstrate compliance—whether or not they have a shaped-nosed design or a CEM design—and, if so, whether the collision scenarios included in the proposed rule are appropriate or whether another collision scenario would be. CPUC supported FRA's intent to allow full-scale crash testing as an alternative to quasi-static testing to determine the crashworthiness of a prototype cab car or MU locomotive. APTA expressed support for FRA's approach to bring the Federal structural requirements for cab cars and MU locomotives up to current industry standards, including quasi-static tests with specific pass/fail requirements to demonstrate the ability of collision and corner posts to undergo severe deformations prior to failure. (APTA did advise that FRA make sure to reference in the preamble and section-by-section analysis APTA's most current industry standard, APTA SS-C&S-034-99, Rev. 2—not Rev. 1.) APTA appreciated FRA's concern that future vehicles utilizing CEM designs may require different treatment in Federal structural regulations than those with traditional flat-nosed designs. However, APTA had several concerns about including the proposed dynamic test option to accommodate such designs in the final rule. Noting that FRA has conducted an extensive full-scale collision test program to gain confidence in predictive, finite element analysis models and to support development of industry standards and rulemaking, APTA believed that FRA should not include a dynamic test scenario in the regulation unless and until similar testing supports it. APTA urged FRA to conduct appropriate testing and defer inclusion of dynamic testing in the regulation, even as an option, until those test results are available and validate the model. As discussed in the “Technical Background” portion of this preamble, the testing described by APTA has been completed. In 2008 a full-scale dynamic test and two full-scale quasi-static tests were performed on the posts of an SOA end frame. These tests were designed to evaluate the dynamic and quasi-static methods for demonstrating energy absorption by—and graceful deformation of—the collision and corner posts. FRA believes that these tests support inclusion of the quasi-static and dynamic performance requirements of this final rule and address APTA's concerns. APTA also mentioned that in the NPRM FRA stated that alternative, dynamic performance requirements are necessary because shaped-nose designs may not have readily identifiable, full-height corner and collision posts. APTA stated that, although FRA referred to the CRM and Rotem designs as potential examples of shaped-nose designs, both these designs include easily identifiable, full-height collision and corner posts behind the shaped nose. According to APTA, all evidence points to having collision and corner posts up to their full height as key design features to protect the engineer and passengers from front-end collisions. FRA believes that the dynamic performance requirements in this final rule allow in particular for innovative designs that protect the occupied volume for its full height, even without what would be identified as full-height collision and corner posts. Whether or not the Rotem and CRM designs have full-height collision and corner post structures does not address FRA's underlying concern that the requirements in this final rule would otherwise be too restrictive without the alternative standards based on dynamic testing. For instance, the Stadler Rail equipment procured by the Capital Metropolitan Transportation Authority

(CMTA)in Austin, TX, has no readily identifiable collision or corner post structures and yet has been found to behave well under analysis using the dynamic performance requirements in this final rule. By not allowing for such design innovation, potential use of alternative designs that could demonstrate compliance would be unnecessarily restricted. Further, APTA questioned the safety implications of allowing such key features as full-height collision and corner posts to be optional. APTA stated that all the full-scale testing done by FRA, all the model-validation testing, and all the knowledge gained of how the end frame performs in collisions pertain to equipment with these design features. Until such safety implications are better understood, APTA believed the inclusion of alternative, dynamic performance requirements to be premature. Overall, APTA was not convinced that the proper foundation has been established for adding these dynamic performance requirements to the final rule, nor was APTA convinced that a single dynamic test demonstrates full equivalency for the range of protections provided by traditional full-height collision and corner posts. As provided in the final rule, FRA makes clear that the occupied volume must be protected for its full height, utilizing either the quasi-static or the dynamic performance requirements. FRA expects that for traditional flat-nosed designs, the occupied volume will be protected for its full height by means of full-height collision and corner posts. Yet, for other designs, this protection of the occupied volume for its full height could be achieved by the performance of the entire end frame acting together to prevent intrusion and absorb energy. FRA believes that there are many potential ways of providing protection for the full height of the occupied volume, and this is reflected in the final rule. In its comments on the NPRM, RVB stated that use in dynamic testing of a proxy object that is essentially a steel coil has a historical basis resulting from only a few accidents. RVB believed that the European approach of using a proxy vehicle would be more sensible and that it was not clear why FRA would resist adopting aspects of that approach that are in widespread use in Europe and other countries. As discussed earlier, FRA notes that use of a proxy object that deforms (a deformable lorry, *e.g.* ) adds undue complexity to the analysis of impacts. In addition, development of a proxy object with a repeatable crush response is, in itself, a daunting task, and the cost of developing such an object for each car manufacturer is not cost beneficial. Nevertheless, FRA has modified from the NPRM the manner in which the dynamic testing is conducted, to address related concerns about use of the proxy object. Further, FRA believes that the grade-crossing collision scenarios on which the dynamic testing is based challenges the end frame members in a way that can clearly demonstrate the ability of the end frame to resist significant impact loads. RVB also commented that it was unclear why FRA decided to position the proxy object 19 inches from the car center in the collision post dynamic test. RVB stated that not all collision posts are located 19 inches from the centerline, and believed it would seem better to center the proxy object at the post itself. FRA notes that the location of the collision posts is dictated by the need to place the posts at the one-third points laterally, along the end of the vehicle. With this in mind, positioning the proxy object 19 inches from the car center is intended to engage the end frame where the collision post structure will be. Nevertheless, because the alternative, dynamic performance requirements more fully test the end frame as an integrated whole rather than as individual structural elements, and are not intended to test the strength of an individual element quasi-statically, it is not necessary to specify that the impact be centered on the collision post structure. RVB further commented that the NPRM seemed to impose essentially the same energy-absorption requirements on both the collision and the corner posts in the alternative, dynamic performance requirements, and RVB was unclear if this was FRA's intent. RVB claimed that there is practically no difference between the 20 and 21 mph impact speeds that were proposed for the dynamic performance requirements, asserting that the target speeds used for actual testing would need to be higher than these values to ensure that the speeds are achieved. FRA notes that in conducting a dynamic test there are alternative means of imparting impact energy into the front end of the cab car or MU locomotive. Speed is only one of the elements that make up impact energy. FRA has taken this fact into account in preparing the final rule and restated the dynamic performance requirements in terms of the amount of collision energy imparted. No specific test speeds are stated. Yet, the amount of collision energy is specific for each test of the two types of post structures, and each amount of collision energy was carefully chosen based upon input from industry stakeholders. FRA makes clear that it is not necessary to impart higher levels of energy than specified in this final rule to assure that the requirements are met. Of course, these requirements are minimum standards and may be exceeded by the manufacturer. Additionally, RVB commented that the top of the deformable anti-climber of the FRA CEM-design is approximately 24 inches above the top of the underframe. RVB believed that an impact with a circular proxy object centered 30 inches above the top of the underframe, as proposed in the NPRM, could result in a ramp and alter the trajectory of the object in an undesirable manner. As a result, RVB believed it unclear how much energy would actually be imparted as intended to the structural elements, and that it may not be prudent to conduct a dynamic test in this manner for such a design to demonstrate its compliance. FRA notes that the FRA CEM-design is intended to act as a complete system so that even if a ramp were to form on the deformable anti-climber, the end frame structure would be able to resist intrusion by the proxy object into the occupied space of the vehicle. The deformable anti-climber can absorb a significant amount of energy prior to bottoming out even when loaded in an offset manner. Nevertheless, to minimize the potential for off-axis rotations, FRA has reconsidered use of the standing proxy object specified in the NPRM to be struck by a moving cab car or MU locomotive, and has specified instead use of a proxy object connected to a moving crash cart to strike a standing cab car or MU locomotive. In its comments on the NPRM, Caltrain raised concern with the testing performed by FRA to validate the effectiveness of the proposed collision and corner post requirements. Caltrain stated that the 1998 NICTD grade-crossing accident in Portage, IN, was recreated with a 40,000-pound steel coil at an impact test speed of 14 mph. Caltrain stated that the test speed used to recreate this accident was far lower than in most grade-crossing accidents, and that the test did not actually compare the proposed design to one that was compliant with part 238. Caltrain believed that data from a higher-speed test, using equipment that is compliant with part 238, would be more useful in evaluating potential solutions. As discussed earlier, the SOA design is compliant with part 238 and has been tested. Further, the test cited by the commenter was carefully designed to overload only the structure of interest, and was not intended to replicate the actual collision speed. Moreover, FRA emphasizes that in this rulemaking the agency is taking an incremental approach to improving safety by enhancing the current end frame design of cab cars and MU locomotives. As noted, FRA is separately exploring the application of CEM to provide protection against even higher speed events. In its comments on the NPRM, Caltrans stated that any dynamic testing requirement, even as an option, should be founded in actual testing and validation of the variables and proposed design criteria. Caltrans mentioned that although FRA has conducted tests that simulate a collision with a highway vehicle carrying a roll of coiled steel, the actual tests as conducted had significantly lower impact speeds and greater allowable deformation requirements. Caltrans maintained that until a real-time crash test has been conducted and analyzed by FRA that uses identical testing variables, inclusion of a standard for dynamic testing of end frame designs is premature. FRA notes that the energy involved in the earlier testing supporting the NPRM was in fact equivalent to that proposed in the NPRM. Nevertheless, additional dynamic testing has been performed in support of the requirements in this final rule. Specifically, as discussed in the “Technical Background” section, a dynamic test was successfully conducted on April 16, 2008, and the dynamic performance requirements in this final rule are based on the actual test conditions and amount of collision energy imparted. Caltrans also commented that FRA needs to clarify whether full-height collision and corner post tests are required if the alternative, dynamic performance requirements are used, and if not, whether FRA has performed a structural analysis showing that safety may be maintained in the absence of full-height posts. Caltrans cited FRA's statement that dynamic testing is essential as an option for validating car designs that feature non-flat front ends. Yet, Caltrans believed that current car designs that feature non-flat front ends, CRM's diesel MU locomotive and Metrolink's new Rotem cab car, both feature full-height collision and corner posts. FRA makes clear that the fact that testing collision and corner posts dynamically is provided as an alternative in the final rule does not mean that protecting the full height of the occupied volume is optional under such circumstances. For traditional end frame designs ( *i.e.,* flat-nosed designs) tested dynamically, full-height collision and corner posts are certainly not optional. Yet, FRA believes that the rule must continue to allow flexibility for other design approaches that may use different shapes and structures to protect the full height of the occupied volume. For example, FRA notes that novel designs may effectively prevent intrusion into the occupied volume through application of the concept of deflection—to deflect objects away from the vehicle. For such design approaches, full-height collision and corner posts are not necessarily required, provided, of course, that the occupied volume is nonetheless protected for its full height. FRA has conducted analysis to show that safety can be maintained in the absence of full-height collision and corner posts. Manufacturers attempting to meet the requirements of this final rule must perform the detailed structural analyses to show that safety is maintained in the absence of these structures. In its comments on the NPRM, Bombardier raised a number of concerns with the proposal to include an option for a dynamic method of demonstrating compliance with the proposed severe- deformation requirements for collision and corner posts. Bombardier believed the proposal to be contrary to the recommendation of the Task Force in developing the NPRM. Bombardier stated that it supported the general industry consensus that such dynamic performance requirements should not be included as an option, contending that the proposed dynamic tests were impractical, had not been fully validated, did not adequately test a realistic production design end structure, raised safety concerns, and would be costly. FRA will address each comment in turn. Bombardier stated that due to the significantly higher static load design requirements for collision posts (compared to corner posts), collision posts would be much more substantial in size and strength than corner posts. However, because the proposed dynamic test defined only a 1.0 mph difference between the impact speeds to test both collision and corner post structures, Bombardier believed this illustrated the sensitivity in the size of the post required to resist such a small increase in impact velocity. According to Bombardier, a 1.0 mph difference in test speeds would approach the accuracy achievable for a full-scale impact test, and, from a practical perspective, would create various technical and commercial problems, most likely require re-testing if the actual test speed were only marginally above or below the target speed. For instance, Bombardier claimed that if the actual impact speed during the test of a corner post were 1.0 mph above the target speed for corner posts ( *i.e.,* at the impact speed required to qualify a collision post) there would be a high probability that the corner post would fail and a re-test of another production end frame would be required. Similarly, Bombardier maintained that if the post were tested at a speed slightly below the target value, it may not absorb the energy required in the proposed regulation and, again, a re-test would likely be required to verify compliance. FRA notes that the dynamic performance requirements proposed in the NPRM were intended to be both practical and achievable, as illustrated by the fact that the proposed quasi-static requirements would have required the same levels of energy absorption. These levels of energy absorption were chosen after comparing the performance of the FRA-developed, SOA end frame with a production model tested by the commenter. Moreover, the commenter worked in conjunction with FRA and the Volpe Center to assess the degree of incremental improvement that is reasonably achievable for collision and corner posts, and a paper was published on this topic. ( *See* “Review of Severe Deformation Recommended Practice Through Analyses—Comparison of Two Cab Car End Frame Designs,” cited above.) There are various ways to achieve the impact speeds with the precision required for either the proposed collision post or corner post tests, and the speeds were intended to be minimum speeds that could be exceeded by the manufacturers (as FRA's requirements are safety minimums). Nonetheless, FRA has revised the dynamic performance requirements in this final rule to state the requirements in terms of collision energy rather than collision speed. Like the collision speeds proposed in the NPRM, the specified levels of collision energy may also be exceeded. Bombardier also commented that, while FRA had conducted analysis to determine the severe deformation characteristics of a collision post, no dynamic testing had been conducted to verify the acceptability or practicality of the dynamic test proposed for collision posts. Bombardier stated that, while a dynamic test had been conducted on the SOA corner post, that test used a significantly different proxy object mass (40,000 lbs vs. 10,000 lbs) and different impact speed (14 mph vs. 21 mph) than that proposed in the NPRM. Bombardier maintained that, although FRA analysis showed these to be “equivalent” tests, the actual qualification test proposed in the NPRM had never been validated. Bombardier compared this situation to the proposed changes to the large-object impact test for forward-facing glazing, which the Task Force separately considered, stating that FRA predicted that a test based on energy using a different mass and impact speed would be equivalent to the current glazing requirements but that subsequent tests that were conducted at the request of industry to validate the proposed requirement confirmed that the proposed tests were not equivalent. Therefore, Bombardier contended that until FRA conducts and validates the proposed dynamic tests for both a collision post and a corner post on a production-model end frame, it would be premature to include such requirements in this part. As discussed in the “Technical Background” section, FRA makes clear that the testing cited by the commenter was completed successfully on April 16, 2008, following submission of these comments. The collision post and the entire SOA end frame performed well under the impact conditions prescribed and maintained the requisite safe volume for the locomotive engineer. Equivalency of the testing has been validated. 11 With regard to glazing, FRA believes that a fuller discussion of glazing is necessary in a separate forum, including a discussion of the glazing testing cited by the commenter and the current glazing test requirements. Nevertheless, FRA does not believe that the agency is required to conduct such testing on a production design. FRA does have the responsibility to demonstrate that the rules to be imposed on the industry are achievable and do not impose undue economic costs. Yet, this can be accomplished in different ways, including engineering analysis, prototype testing, and analysis of information provided by the industry on its production designs. This process was followed in the development of the proposed performance standards supporting this final rule. 11 Priante, M., Llana, P., Jacobsen, K., Tyrell, D., Perlman, A.B., “A Dynamic Test of a Collision Post of a State-of-the-Art End Frame Design,” American Society of Mechanical Engineers, Paper No. RTDF2008-74020, September 2008. This document is available on the Volpe Center's Web site at: *http://www.volpe.dot.gov/sdd/docs/2008/08-74020.pdf.* In addition, Bombardier commented that on several occasions industry members pointed out to FRA that, while the full-scale test of the SOA corner post design was valuable to validate specific design features and characteristics, the SOA design did not fully represent a production design. Bombardier stated that on a production-version end frame (flat-nosed), the corner post is set back from the collision post in the longitudinal direction by about 6 inches to accommodate car clearance during curve negotiation, and both the collision and corner posts are connected laterally by the lateral shelf and bulkhead. According to Bombardier, this arrangement would cause the proxy object to impact the structure between the collision and corner posts, rather than directly impact the corner post, in a dynamic test of a production-model corner post. Bombardier likewise believed that for a flat-nosed cab car, the proxy object would impact the structure between the collision and corner posts at 18 inches from the outside of the vehicle, instead of on the corner post (stating, *e.g.,* that the coil would contact the sheathing on a flat-nosed cab car about 4 1/2 ; inches ahead of the corner post), and that this would be greater for a non-flat-nosed car. According to Bombardier, this would result in both the collision and corner posts sharing the impact load and that it would therefore be possible to design a structure with a weaker corner post than would be required to meet the quasi-static requirements. As FRA has noted, FRA intends that the dynamic performance requirements be applicable to end frame designs that may not have identifiable corner post or collision post structures. For such designs, it is expected that the end frame will act more as an integrated whole in resisting an impact load, rather than having one structural element to resist the load by itself. Nonetheless, the final rule directs that the impact loads be applied to the end frame at the corner post and collision post locations. FRA does note that use of a crash cart to impart these loads is not specifically required by this final rule (even though FRA generally assumes that a cart will be used for purposes of the discussion in this preamble and in the examples provided in the rule text). Use of a crash cart is intended to help achieve a more repeatable testing methodology and better focus the impact loads than through use of the proxy object proposed in the NPRM, but allowance is provided for variation in the test set-up so that a car builder may tailor a test in a way that is best suited for a particular design within the requirements specified. Bombardier further commented that, as FRA noted in the NPRM, industry members had raised concerns regarding the safety of conducting full-scale, dynamic testing of collision and corner posts. While these members acknowledged that all testing, including that required for quasi-static testing, requires attention to safety, Bombardier believed that it is much easier to manage the safety of a quasi-static test, which is conducted in a controlled lab/shop environment, than the type of dynamic tests proposed in the NPRM. Noting that during the dynamic test of the SOA corner post one side of the vehicle completely lifted off the rail, Bombardier raised concern about the potential likelihood and consequence of a derailment occurring in a dynamic test of a production-design vehicle at a higher speed, especially one with a shaped-nose. Bombardier believed that there would be particular safety concern in conducting the proposed dynamic test because the 10,000-pound proxy object would be positioned between the rails directly in front of the test vehicle and fall directly in front of the vehicle. Bombardier therefore stated that it would be premature to include the proposed dynamic tests in a Federal regulation, until FRA conducts and validates the safety of these tests on a collision post and a corner post for both a flat-nosed and a shaped-nose, production-model end frame. As discussed earlier, FRA has modified the alternative, dynamic performance requirements in this final rule so that the testing methodology is safer and more repeatable. Specifically, FRA has modified the testing methodology so that the proxy object is set in motion to strike a standing cab car or MU locomotive. The resultant speed of the cab car or MU locomotive from being struck by the object is expected to be approximately 3 mph. Even if a cart connected to the proxy object should derail during the test, the cart is much lighter than a cab car or MU locomotive, and would present a much lesser safety hazard than would a derailment of those heavier vehicles. FRA believes that this revised test methodology sufficiently addresses the safety concerns raised by the commenter. Bombardier also commented that while the NPRM indicated that a dynamic test option is needed to address cars with shaped noses or CEM designs, or both, all of the analysis and testing that had been conducted had been directed to assure that flat-nosed cab end structures undergo “graceful,” severe deformation and maximize the energy absorbed by the post structure before total failure of the top or bottom post connections occurs. Bombardier believed that utilizing a dynamic test to validate a shaped-nose design significantly deviates from the original intent of the severe-deformation requirements. According to Bombardier, shaped-nose designs would inherently be much stiffer than flat-nosed designs, and as a result would have a much greater tendency to deflect the proxy object rather than absorb the energy through severe structural deformation. Bombardier therefore maintained that the proposed dynamic test option would not be a measure of the severe-deformation performance of shaped-nose designs. Additionally, Bombardier stated that CEM designs would have well-defined, severe-deformation requirements that typically require significantly more energy absorption than that defined in the NPRM for collision and corner posts, and as such, requiring the proposed dynamic (severe-deformation) test option would be redundant. Consequently, Bombardier recommended that the proposed requirements for the dynamic test option be deleted and that the proposed quasi-static test requirements for the collision and corner posts be retained for only flat-nosed designs. FRA notes that the goal of dynamic testing is preservation of a survivable space for the train crew and passengers. Flat-nosed designs must be able to absorb energy and deform gracefully because these designs are inherently required to interact with objects that threaten the superstructure of the car. Yet, FRA disagrees with not allowing the industry the alternative to use dynamic performance requirements. A dynamic test does not have to be conducted—it is provided as an alternative to demonstrate compliance. There are certain designs for which it would be difficult, if not impossible, to test quasi-statically, such as the Stadler Rail equipment procured by the CMTA. Moreover, for a quasi-static test in which the front end of the car is not flat, or the post is not centered on the specified impact point, applying a high force could cause the impactor shape to shift vertically or laterally, when all it should do is move longitudinally. The benefit of a dynamic test as an alternative is that the force would be applied quickly and the test could be conducted properly, even if the cart moved laterally or vertically and derailed. Bombardier also commented that it did not agree with the justifications outlined in the NPRM for including alternative, dynamic performance requirements. Bombardier stated that there was significant discussion in the NPRM about CEM and European standard EN 15227, Crashworthiness Requirements for Railway Vehicle Bodies, and its four collision scenarios. Bombardier believed that extreme care must be taken when comparing such a European standard with the severe-deformation requirements proposed in the NPRM and in the current APTA standards. According to Bombardier, FRA must clarify that EN 15227 is a standard for the qualification of a CEM system, where a large quantity of energy is absorbed, and not a severe deformation standard for collision and corner posts where a very small amount of energy absorption is required. However, Bombardier did agree that the approach in the European standard should be taken into consideration at the time when CEM standards are developed for North American application. FRA believes that it was appropriate in the NPRM to reference the European standard and its adoption of dynamic test standards. FRA did not intend to indicate that the European standard was comparable to the dynamic performance requirements proposed in the NPRM, and FRA did highlight several differences between them. As noted above, FRA has made a more technical comparison of the European deformable-lorry requirements and the dynamic performance requirements in this final rule. This effort involved taking FRA's prototype end frame design and using finite element analysis to compare its performance with the European specification and the final rule's requirements. Significant differences were found between the rule's dynamic performance requirements and those described in the European standard, including: the safety of conducting such testing, the repeatability of the results obtained, the ease of analysis, and the focus on the performance of the superstructure of the cab car or MU locomotive. The FRA dynamic performance requirements entail lower amounts of collision energy designed to provide repeatable results under conditions that are readily analyzable with a clear means of assessing adequate performance. The same was not found to be true of the European standard. In its comments on the NPRM, CRM raised concern with actual dynamic testing of collision and corner posts using curved-shaped equipment, believing that the curved shape can be addressed in a quasi-static test but that the results would likely differ with those from a dynamic test. FRA notes that, although the manner of load application can vary, dynamic testing provides immediate feedback as to how the tested structure will perform in an actual collision. Quasi-static testing of a shaped structure has to simplify for how the load enters the structure and reacts; consequently, the test results may not be truly reflective of actual performance. For this reason, FRA believes that the alternative, dynamic performance requirements in this final rule are better applicable to non-traditionally-shaped cab cars and MU locomotives. CRM also commented that the dynamic testing proposed for the corner post of an aerodynamically-shaped car would impart larger lateral and vertical loads on the corner post than on the collision post. As FRA has noted, the dynamic performance requirements included in this final rule facilitate testing of end frame designs without readily identifiable collision or corner post structures. In this light, instead of focusing on whether an individual corner post or collision post structure is capable of resisting an applied load, the focus is more appropriately placed on the ability of the end frame structure as an integrated whole to withstand the impact. In fact, the end frame may be intentionally shaped to deflect a striking object, which would be an acceptable means of complying with the dynamic performance requirements. Additionally, CRM raised concern about the repeatability of energy-absorbing testing, stating that it has found that physical properties, such as yield, can be 30-percent higher than the published minimum. CRM asked if FRA has experience in the repeatability of identical energy-absorption tests with substantially-varying material properties, noting that repeatability studies it had seen were for multiple test samples made with both the same heat and physical properties. FRA recognizes that material variability is a concern. Manufacturers may need to request that specific material testing be conducted when ordering materials for constructing cab cars and MU locomotives in compliance with this rule. Nevertheless, differences in yield strength are not as important as differences in the elongation to failure of the material, because most of the performance of interest is associated with plastic deformations. FRA has conducted dynamic and quasi-static tests of nominally the same design with varied results in energy absorption. This experience has demonstrated the importance of validating analysis through testing. Small design details can have dramatic effects and should be considered carefully in highly loaded areas. 3. Alternative Corner Post Requirements for Designs With Stepwells The BLET raised concern with the proposed corner post requirements for cab cars and MU locomotives utilizing low-level passenger boarding on the non-operating side of the cab end. The BLET believed that the proposed requirements for corner post resistance were significantly lower than those for the operating side. The BLET stated that it has consistently voiced the position that current crashworthiness protection for this equipment is so low that the only practical recourse a locomotive engineer has after realizing a collision is impending is to place the train's brakes in emergency and flee the operating cab, running through the car toward the rear. While the BLET did believe that the standards proposed in § 238.213(b) would mark a significant improvement for the engineer's immediate worksite, it believed that lesser, non-operating side requirements in § 238.213(c) would still create a Hobson's choice for a locomotive engineer in the seconds immediately preceding a collision. Claiming that there would be a much greater potential for the non-operating side of the car to deform in such a way as to provide insufficient survivability, the BLET stated that both sides of the equipment should be required to withstand the same level of force. The BLET added that it is noteworthy that the non-operating side of the equipment is typically located on the “railroad” side of the train and that, as a result, impacts on that side are more likely to involve railroad equipment, producing higher collision forces. Similarly, in a frontal raking collision between two trains made of up this equipment, the BLET believed that the two “weaker” corners would meet, with potentially catastrophic consequences for passengers and crewmembers alike. The BLET also stated that the Volpe Center had researched and tested stepwell configurations and determined that it was viable to design a stepwell that was capable of supporting the end/buffer beam so that the non-operating side of the cab could comply with proposed § 238.213(b). FRA notes that, after a review and analysis of technical information, both FRA and APTA's PRESS C&S Subcommittee determined that the proposed alternative arrangement would provide a level of safety equivalent to that on locomotive engineer's side of the cab end. Moreover, the analysis did not show that an impact on the non-operating side of the cab end would be more likely to spread damage across the full width of the cab end as described by the commenter. Nevertheless, in light of the comments raised, FRA conducted a further review and analysis of the available technical information. That review and analysis reaffirmed FRA's determination that the engineer and other occupants would not be placed at greater risk as a result of the corner post arrangement on the non-operating side of the cab end. FRA has therefore decided to retain this provision in the final rule. However, the final rule contains an additional requirement that FRA review and approve plans for manufacturing cab cars and MU locomotives with this corner post design arrangement. Each plan must detail how the corner post requirements will be met, including what the acceptance criteria will be to evaluate compliance. FRA believes that this close oversight will help to alleviate concerns that the manufactured designs are in any way less safe for crewmembers and passengers to occupy. Another commenter on the NPRM, Caltrans, expressed its support of the proposed requirement that car designs featuring low-level passenger boarding in an end vestibule opposite from the engineer's seating location have two corner posts on that non—operating side of the car. However, Caltrans stated that the rule must make clear that this requirement applies only to those cars with a passenger loading stepwell in the same vestibule as the engineer's control location. Caltrans believed that this provision should not encompass its car design where the engineer is located on the second level of the car and the side door is on the opposite side on the lower level. FRA agrees with the comment raised by Caltrans and makes clear that the provision does not apply to a design where the stepwell and engineer's cab are not in the very same vestibule. APTA's comments on the NPRM expressed support for the proposal to allow vehicle designs with two corner posts on the non-engineer's side of the cab end. According to APTA, this proposal would allow vehicles to continue to have stepwells for low-platform boarding, which APTA noted is an operational necessity for many passenger railroads. APTA did raise concern that neither the preamble nor the proposed rule text specifically acknowledged that the corner post ahead of the stepwell be allowed to fail when applying the loads to the corner post behind the stepwell. APTA believed that allowing a structural member to fail as part of a test or analysis is an unusual concept for a Federal regulation and that it warrants clear discussion in the preamble. FRA agrees that testing a post all the way through to complete failure has safety implications and should not be done without thorough analysis first. As noted, FRA has modified this provision to require FRA review and approval of a plan, including acceptance criteria, to evaluate compliance with these corner post requirements. FRA believes that this oversight will help to address the concern raised by the commenter. 4. Use of Testing and Analysis To Demonstrate Compliance FRA requested specific comment on whether and under what circumstances analysis and scale model or fixture testing might be acceptable to demonstrate compliance with the alternative, dynamic performance requirements. A number of comments were received in response to this request, and in addressing them FRA discusses their application to both the quasi-static and the dynamic performance requirements, as appropriate. Bombardier commented that the severe-deformation requirements proposed in the NPRM (for either the quasi-static or the dynamic performance requirements) would result in a significant, added cost for cab cars and MU locomotives, particularly as a percentage of the overall procurement cost for small orders. Bombardier contended that if these severe-deformation requirements were truly considered to be safety requirements, then it is imperative that they be required for all new equipment, regardless of the size of the order. Bombardier noted that since the proposed quasi-static requirements were also contained in an APTA standard (APTA SS-C&S-034-99, Rev. 2), the quasi-static requirements would not impose a greater cost burden on the industry than what it already accepts. However, Bombardier maintained that the actual cost to conduct dynamic testing, which would be expected to be done at a location offsite of the manufacturer's facility, would most likely be much greater than for quasi-static testing. Consequently, before any dynamic performance requirements are included in the regulation, Bombardier believed that a proper cost-benefit analysis would be needed and that it was not evident from the information in the public docket that a valid cost-benefit analysis had been conducted. Bombardier noted that the section-by-section analysis seemed to imply that verification of compliance with either the quasi-static or dynamic performance requirements would require an actual test, while the preamble did state that modern methods of analysis can accurately predict structural crush (severe deformation) and consequently can be used with confidence to develop structures that collapse in a controlled manner. Bombardier added that the proposed rule text was itself silent as to whether an actual test would be required or whether analysis could be used to verify compliance with the severe-deformation requirements. Bombardier therefore believed that FRA should clarify what would be required to demonstrate compliance with the severe-deformation requirements and should include the associated costs in the cost-benefit analysis. FRA notes that it did ask the commenter and other members of the Task Force to provide FRA with estimated costs for each testing alternative for FRA to review. FRA did not receive this specific cost information. FRA agrees with Bombardier that the cost of meeting the quasi-static test requirements is likely not to add to the costs of manufacturing or purchasing new passenger equipment. However, FRA does not agree that the costs of dynamic testing would be greater than the costs of quasi-static testing. Based upon the testing program sponsored by FRA at the TTC in Pueblo, CO, the overall cost of conducting either quasi-static or dynamic testing should be comparable. But even more important, FRA believes that dynamic testing provides at least the same level of confidence in the safety of the equipment tested as through quasi-static testing, and a manufacturer or railroad could voluntarily choose to conduct dynamic testing. The voluntary act of a manufacturer or railroad would provide sufficient evidence that dynamic testing does not materially add to costs, and no specific benefit-cost analysis is needed to provide a voluntary alternative. As FRA has noted, FRA does agree that actual physical testing should be required and that large orders, as well as small orders alike, should undergo actual testing. Yet, as discussed elsewhere in this preamble, FRA does not believe that actual physical testing of a complete, production-design vehicle is required, and FRA recognizes in particular the potential cost of doing so for small car orders. CRM also raised concerns as to the cost of demonstrating compliance with the regulation to manufacturers of small orders of cab cars or MU locomotives. CRM believed that consideration needs to be given to these manufacturers to protect them from undue financial and schedule hardships. FRA has taken into account the costs of this final rule to manufacturers of small orders of cab cars or MU locomotives. As noted, FRA believes that for both large and small orders, the manufacturer must perform actual physical testing. However, FRA does not believe that actual physical testing of a complete, production-design vehicle is required. FRA recognizes in particular the potential cost of doing so for small order sizes. Compliance may be demonstrated by a combination of engineering analysis and physical testing on a smaller scale. CRM further commented that destructive testing could be very expensive. CRM stated that its customers generally order in small quantities, often in the range of two to three cars. According to CRM, producing a 19.25-foot long section of the end of a car for destructive testing would represent a considerable, additional expenditure. CRM therefore requested that FRA clarify that the test sample need not be a large end section of the car, noting that as the NPRM is focused on the post structure and its attachments, the test sample should be limited to just that. CRM nonetheless estimated the costs of quasi-static testing to be approximately $250,000 for each design after a capital expenditure of $75,000 for test fixtures. FRA agrees that the entire car need not be tested. Bombardier has conducted quasi-static end frame tests where the end of the car was tested only to the body bolster; this would be appropriate. ( *See* “Review of Severe Deformation Recommended Practice Through Analyses—Comparison of Two Cab Car End Frame Designs,” cited above.) There are a variety of ways of testing the end frame structure that would not require production of a test specimen of the 19.25-foot size described. Current testing of end frames (both dynamically as well as a quasi-statically) is intended to ensure that the superstructure with some supporting structure can deform gracefully while not allowing permanent deformations in the car body structure too much of a distance behind the connection points. As a result, considerably smaller test articles may be used, provided of course that both the collision post and corner post structures are subject to actual testing. In addition, FRA believes that the costs estimated by CRM for testing are too high, absent more specific cost information from the commenter, and that any expenditure for test fixtures should be a one-time cost that could be spread over many orders. In addition, CRM proposed that analysis be allowed in lieu of actual testing for orders of less than 50 cars, provided that the analysis methods have been validated by actual testing. In its comments on the NPRM, Caltrain also requested clarification whether actual testing is required to demonstrate compliance, or whether analysis would be acceptable. Caltrain believed that it had been decided that for purposes of complying with the APTA collision and corner posts standards on which this rulemaking is based, current computer finite element modeling methods were adequate to verify design performance, in part due to the cost associated with destructive testing. FRA believes that there is no substitute for conducting actual testing, as we have seen from the quasi-static test of the collision post that did not meet the energy-absorbing requirement due to the location of a rigid gusset, even though the modeling showed that it would. 12 In particular, because there are always some uncertainties associated with new designs and materials, some degree of testing is required whether for material characterization or sub-assembly testing to confirm that the modes of deformation and failure are modeled appropriately. FRA recognizes that after several designs have been tested and approved, perhaps future designs that are very similar to the older designs could be accepted through analysis only. The individual car builder would still have to demonstrate good experience conducting large deformation analyses, including material failure. 12 Muhlanger, M., Llana, P., Tyrell, D., “Dynamic and Quasi-Static Grade Crossing Collision Tests,” American Society of Mechanical Engineers, Paper No. JRC2009-63035, March 2009. This document is available on the Volpe Center's Web site at: *http://www.volpe.dot.gov/sdd/docs/2009/09-63035.pdf* . APTA stated that FRA asked for specific comment on whether and under what circumstances analysis and scale model or fixture testing might be acceptable to demonstrate compliance with the dynamic performance requirements. APTA stated that this was a key question, noting that the rule text proposed that compliance “be demonstrated.” APTA believed that either a test or analysis could apparently fulfill the requirement and that there was no indication or guidance of when analysis would suffice in lieu of testing. APTA recommended that, until the industry, in partnership with FRA, can reasonably describe under what circumstances a test must be done and when analysis alone is sufficient, the option for dynamic testing should not be included. FRA notes that due to uncertainty associated with progression of material failure, some level of actual physical testing is necessary. But this uncertainty is not limited to demonstrating compliance with the dynamic performance requirements; it would also apply for demonstrating compliance with the quasi-static requirements. In this preamble to the final rule, FRA is providing additional guidance in response to similar comments received on the need for and extent of actual physical testing. In general, FRA believes that a combination of actual physical testing and analysis is appropriate to demonstrate compliance with the requirements in this final rule, and FRA encourages manufacturers to approach FRA should they have any questions or concerns about demonstrating the compliance of cab cars or MU locomotives they manufacture with this final rule's requirements. 5. Submission of Test Plans for FRA Review In part because FRA recognized that questions may arise in applying the proposed dynamic performance requirements in situations not clearly anticipated today, FRA requested comment on whether this final rule should include either an option or a requirement that the test methodology be submitted for FRA review prior to the conduct of destructive testing. APTA commented that it believed such pre-approval to be unwise. APTA stated that delay awaiting FRA approval would impact schedules, extend the already extensive procurement process, and expose car builders to liquidated damages should FRA review be delayed. Instead, if FRA were to impose a requirement to submit a test plan, APTA recommended that FRA include a presumption that the plan is approved by some reasonable time after submittal to FRA, to avoid increasing the commercial risk to car builders. Caltrans' comments raised similar concern with the inclusion of a requirement that test plans be submitted to FRA for approval, asserting a great possibility of project delay while the railroad or its contract equipment supplier is awaiting FRA's response. In addition, CRM commented that, while its involvement with Volpe Center staff in the analysis and testing of its equipment has been very informative and helpful, it did not recommend mandating the submittal of test plans. CRM believed that doing so would require FRA to budget for a staff to support this effort in a timely manner so that delivery schedules remain unaffected. Nonetheless, CRM recommended that FRA publish guidelines for preparing analyses and conducting tests so that manufacturers know to follow an approach with which FRA agrees. In response to these comments, FRA makes clear that it welcomes the submittal of test plans for its review. For instance, if a manufacturer were to conduct a test without using appropriate instrumentation or without applying a load at the appropriate location, a new test would likely be costly and would likely have been avoided had a test plan been submitted to FRA for review. Nevertheless, FRA agrees with the commenters and, in general, is not imposing new submittal requirements. As noted, however, FRA is requiring the submission and approval of plans to ensure compliance with the alternative corner post requirements for the non-engineer's side of the cab end of vehicles with stepwells for low-level platform boarding. *See* § 238.213(c) and appendix F. FRA does encourage submission of other plans for the safety of new designs that are significantly different than conventional equipment, and FRA believes that manufacturers would benefit by approaching FRA before such designs are complete to prevent the need for redesign or retrofit. In this regard, FRA notes that § 238.111 (Pre-revenue service acceptance testing plan) contains specific requirements for the preparation and submittal of pre-revenue service acceptance testing plans for passenger equipment that has not been used in revenue service in the United States. Pursuant to § 238.111(b)(2), such plans must be submitted to FRA at least 30 days prior to conducting the testing, but FRA approval is required for Tier II passenger equipment only. Of course, it is within the purview of FRA to review the crashworthiness of all equipment prior to its placement in service, and to assess the compliance of all equipment with the requirements of the Federal railroad safety laws and regulations. 6. Whether the Requirements Affect Vehicle Weight AWA commented that, while it stands firmly for rail safety, it was concerned with any policies or institutions that have the effect of limiting the development and operation of passenger trains and pushing existing or potential rail passengers onto already crowded highways and putting more people at greater risk. As stated in its comments, AWA believed the NPRM to be the latest in a series of FRA rules that attempt to enforce safety by adding yet more heavy metal to already massive passenger trains. AWA raised concern with increasing the weight of America's “uniquely bulky” passenger rail fleet compared with the “extremely safe, lighter” trains of Switzerland, Germany, Sweden, or Japan, and how the added monetary costs of such heavier trains in terms of purchase and greater energy consumption may discourage or inhibit passenger rail carriers from acquiring rail cars or running passenger trains. AWA recommended FRA reconsider its action and consider the impacts of mandating even heavier and costlier “steel-wheeled Hummers.” AWA recommended that FRA look to harmonize passenger rail car construction and safety standards with the widely-accepted standards of the International Union of Railways (UIC), a worldwide organization for the promotion of rail transport and cooperation, so that rail agencies and operators can afford to provide more people with passenger rail service. Similarly, a private citizen principally commented that rather than increasing crashworthiness requirements and the weight of cab cars, FRA should first investigate whether existing UIC standards for end strength and buff strength would provide equal or better safety than the current FRA standards. The commenter believed that increasing the weight of passenger equipment should be a major concern from both an economic and an environmental point of view, causing greater wear on the track, increased energy consumption, and decreased operational performance. The commenter believed that reducing car weight and enabling use of European designs can reduce costs, and that there is a definite environmental and economic impact from having collision standards that differ from those in Europe or Asia. As noted earlier, FRA wishes to dispel the belief that there is a meaningful correlation between an increase in a vehicle's crashworthiness and its weight. As FRA has stated, crashworthiness features from clean-sheet designs can occupy the same space as other material and not weigh in excess of the structure(s) being replaced. There is considerable leeway in designing such systems so that no additional weight is required, and the car body structure itself typically accounts for only between 25 to 35 percent of the final car weight. In fact, FRA found that the FRA/Volpe SOA end frame design added less than 500 pounds to vehicle weight. This difference is less than a one-percent increase in the weight of the vehicle over a typical 1990s design, but represents a considerable increase in improved crashworthiness performance. A vehicle with such a design was found capable of safely withstanding the same collision scenario at nearly a 50-percent greater collision speed—or more than double the amount of collision energy—as opposed to one without. Further, the requirements in this final rule are performance-driven, similar to the new European standards calling for scenario-defined loading of the superstructure with energy and displacement evaluation criteria, as discussed above. In fact, the two are in much closer harmony when compared with FRA's more traditional requirements for cab cars and MU locomotives. The two sets of requirements differ principally in how compliance is demonstrated. FRA believes that the methods called for in this final rule are significantly less complicated than the methods provided in the European standards, while addressing similar concerns. Nonetheless, as FRA has previously stated, the rail operating environment in the United States generally requires passenger equipment to operate commingled with very heavy and long freight trains, often over track with frequent highway-rail grade-crossings used by heavy highway equipment. European and Asian passenger operations, on the other hand, are generally intermingled with freight equipment of lesser weight, and in many cases highway-rail grade-crossings also pose lesser hazards to passenger trains in Europe and Asia due to lower highway vehicle weight. FRA is necessarily concerned with the level of safety provided by passenger equipment designed to European and other international standards when such equipment is intended to be operated in the United States and must ensure that the designs are appropriate for the nation's operating environment. FRA does believe that these new requirements for collision posts and corner posts will significantly enhance the performance of the posts in protecting occupants of cab cars and MU locomotives, while having little if any effect on total vehicle weight. 7. System Safety Caltrain's comments on the NPRM raised issues not only on the NPRM itself but also on FRA's overall approach to regulation. Caltrain asserted that if the entire system, made up of components that may not be compliant with specific FRA regulations, can be shown to be as safe or safer than a system made up of components that individually meet FRA's regulations, then the true mission of both FRA and the railroad has been met. Caltrain recommended that FRA reword the NPRM so as not to discourage railroads from taking a systems-based approach to safety. In this regard, Caltrain recommended that FRA direct some of its research funds toward examining the safe use of CEM designs that do not have an inner structure compliant with part 238, to improve energy efficiency as well as international trade possibilities. FRA notes that there are already procedures in place to allow the operation of equipment built to alternative standards. FRA permits such flexibility and has reviewed and approved the proposed operation of alternatively-designed equipment for CMTA. Moreover, FRA has established the Engineering Task Force of the Passenger Safety Working group to produce a set of technical evaluation criteria and procedures for passenger rail equipment built to alternative designs. The technical evaluation criteria and procedures are intended to provide an engineering-based method of comparing the crashworthiness of alternatively-designed equipment to the crashworthiness of equipment designed to the structural standards set forth in part 238. The initial focus of this effort will be on Tier I standards. When completed, the criteria and procedures would not only form a technical basis for making determinations concerning equivalent safety pursuant to § 238.201 but also provide a technical framework for presenting evidence to FRA in support of any request for waiver of the compressive

(buff)strength requirement set forth in § 238.203. *See,* generally, 49 CFR part 211 (Rules of Practice). The criteria and procedures could be incorporated into part 238 at a later date after notice and opportunity for public comment. However, FRA strongly believes that, based upon research already conducted on application of CEM to conventional passenger rail equipment, the prescribed occupied-volume strength is required to serve as the foundation against which crush elements can react and thereby achieve high levels of energy absorption in reasonable crush distances while not creating too severe an interior deceleration environment. Caltrain raised additional concern with FRA's approach in the NPRM to mitigate risk by increasing the survivability of an incident rather than by implementing a broader, systems approach that would first take into account the railroad's efforts to avoid the incident altogether or lower its probability of occurrence. Caltrain cited and agreed with FRA's promotion of system safety planning in the railroad industry, but believed that FRA has applied system safety planning in too limited a way. Caltrain believed that the NPRM focuses on increasing the survivability of a low-probability event, and thus mandates the solution rather than encourage the railroad to avoid the incident altogether. Caltrain stated that focusing on safety at the component level provides a lower return on investment than by broadening that focus to the system level. Caltrain cited the Washington Metropolitan Area Transit Authority's (WMATA) approach to addressing the safety of its operations on tracks that parallel freight operations. Caltrain stated that after WMATA first mitigated the risk of derailing its own trains into the freight railroad's right-of-way by maintaining its vehicles and tracks to tight standards, WMATA ultimately decided to install an intrusion detection system to provide warning of freight train derailments fouling WMATA's tracks. Caltrain believed that if WMATA had taken the approach presented in the NPRM, however, rather than a system safety approach, WMATA would have bought larger and heavier vehicles, incurred additional and continuing costs as a result, and would nonetheless not have avoided the risk of injury to passengers and crewmembers should a collision occur. As Caltrain noted, FRA does encourage railroads to engage in system safety planning, and FRA even proposed to make system safety planning a requirement for passenger railroads. *See* 62 FR 49728, 49800. Elements of system safety planning are a part of the Passenger Equipment Safety Standards, *see* discussion at 64 FR 25548-25550, and FRA is newly examining system safety requirements for passenger railroads in the Passenger Safety Working Group's Passenger Safety Task Force. Moreover, FRA has long followed a policy of focusing on both collision-mitigation and collision-avoidance measures, as both are necessary for safe railroading. Collision-mitigation measures alone do not eliminate the risk of injuries to passenger and crewmembers should a collision occur, but neither do collision-avoidance measures eliminate the risk of a collision in any currently-practical way given, *e.g.,* the potential (however remote) for a rail to suddenly break under a train and cause a derailment. FRA therefore applies complementary approaches to reducing overall risk, including tightening track safety standards and implementing PTC systems. (On July 21, 2009, FRA published an NPRM implementing a requirement of the Rail Safety Improvement Act of 2008 (RSIA of 2008), Div. A of Public Law 110-432; 122 Stat. 4848 *et seq.* (Oct. 16, 2008), that certain passenger and freight railroads install PTC systems, *see* 74 FR 35950.) It is nonetheless paramount to establish, in addition to collision-avoidance methods, a base minimum level of crashworthiness performance. Here, as a regulatory agency issuing a rule of general applicability for passenger equipment that may be operated commingled with freight trains and over public highway-rail grade-crossings used by heavy highway vehicles, FRA believes that certain minimum enhancements to collision mitigation measures are necessary. These enhancements have been developed with the industry and can be readily met as a result of improvements and maturity in design techniques available to manufacturers. FRA notes that WMATA operates in a different environment as a rapid transit system not connected to the general railroad system, and WMATA is not subject to FRA's jurisdiction. But even WMATA cannot eliminate the risk of a collision altogether, and collisions of WMATA trains have resulted in significant loss of life and damage. On June 22, 2009, a WMATA train traveling in a curve struck the rear end of another WMATA train, which had stopped for a station. The lead car of the oncoming train telescoped and overrode the rear car of the stopped train by about 50 feet, resulting in 9 fatalities and numerous injuries. *See* letter dated September 22, 2009, from Deborah A.P. Hersman, Chairman, NTSB, to Joseph C. Szabo, Administrator, FRA, conveying Safety Recommendations R-09-20 and -21 (Urgent), and R-09-22. This letter is available on the NTSB's Web site at: *http://www.ntsb.gov/Recs/letters/2009/R09_20_21_22.pdf* . Four and a half years earlier, on November 3, 2004, a non-revenue WMATA train rolled backwards down a grade and struck a train that was in the process of discharging and loading passengers at a station. The car at the rear end of the striking train overrode the leading end of the first car of the stopped train and sustained a loss of about 34 linear feet of the passenger occupant volume, which was almost half the length of the passenger compartment. Had the passenger compartment not been empty, the loss of that length of occupant volume could have caused numerous fatalities. *See* “Collision Between Two Washington Metropolitan Area Transit Authority Trains at the Woodley Park-Zoo/Adams Morgan Station in Washington, DC, November 3, 2004,” NTSB Report No. RAR-06-01, adopted on March 23, 2006. This report is available on the NTSB's Web site at: *http://www.ntsb.gov/publictn/2006/RAR0601.pdf* . 8. Other Comments Bombardier commented that the structural loads (including those for severe deformation) defined in APTA SS-C&S-034-99, Rev. 2, specify requirements for collision and corner posts that act together with the supporting car body structure and intervening connections. To make this regulation consistent with the industry standard, therefore, Bombardier recommended that this final rule adopt the same approach. FRA agrees with the commenter and has modified this final rule accordingly. The intent has always been to have the entire end frame act as a system and resist intrusion of objects that threaten the superstructure of the cab car or MU locomotive. CRM sought to extend the effective date of the final rule so as not to impact existing orders. In addition, CPUC supported FRA's proposed applicability dates for the collision and corner post requirements as enhancements to safety while still allowing manufacturers and industry buyers adequate time to develop and provide the required additional cab car and MU locomotive strengthening. FRA did not intend to impact existing orders. While this final rule may have an effective date of March 9, 2010 the new collision and corner posts requirements apply to cab cars and MU locomotives ordered on or after May 10, 2010, or placed in service for the first time March 8, 2012. This date range is consistent with other applicability dates imposed by FRA, and FRA believes they are achievable. In other comments on the NPRM, the BLET expressed disappointment that the proposed rule did not include general cab standards. The BLET stated that, while the proposed rule would make significant and meaningful strides in improving crashworthiness, no consideration has been given to any other ergonomic issue, including cab size, vibration, noise, and seat construction. The BLET believed that equipment is evolving to the point where locomotive engineers are confined to essentially small cages, creating both safety and security risks that are foreseeable and avoidable. FRA understands that this rule does not address general cab standards. Instead, this rule is focused on improving the crashworthiness of the front end structure of cab cars and MU locomotives in the event of an impact generating collision forces that overload the superstructure of the car. General cab standards include consideration of structural layout, ergonomics, and human factors, and would need to be addressed in a separate RSAC effort. Caltrain commented on FRA's statement in the NPRM that FRA's crashworthiness research program focuses on two objectives: preservation of a safe space in which occupants can ride out a collision or derailment, and minimization of physical forces to which occupants are subjected when impacting surfaces inside a passenger train as the train decelerates. Caltrain did not believe that the NPRM adequately addressed the second objective. Caltrain stated that the amount of energy absorbed by the collision and corner posts will not significantly lower secondary-impact velocities. FRA notes that for events that primarily load the superstructure ( *i.e.* , end frame) of the cab car or MU locomotive, secondary-impact response for passengers is not a real concern. For example, since highway vehicles weigh much less than trains, a collision with a highway vehicle at a grade crossing would not impart dangerously high decelerations to the train or the train occupants but could impart significant loads to the end frame, making protection of the occupied volume paramount. In addition, Caltrain commented that making the car body stronger seems secondary to preventive measures, and even contrary to FRA's stated objective of reducing secondary-impact velocities. Caltrain stated that in a train-to-train collision, rigid non-CEM vehicles will experience higher secondary-impact velocities than vehicles equipped with CEM and that by focusing on the specific approach in the NPRM, FRA may be overlooking more cost-effective solutions. FRA notes that it is not necessarily true that use of CEM will result in lower secondary-impact forces in a train-to-train collision. Secondary-impact forces may actually be higher as part of a CEM-design that mitigates initial impact forces by dissipating the forces more evenly throughout the train. Test data has shown cars in a CEM-train to have higher secondary-impact velocities. B. Preemption A number of comments were filed on the topic of Federal preemption concerning the safety of operating a cab car or an MU locomotive as the leading unit of a passenger train, as well as concerning passenger equipment safety in general. Several of these comments were from members of Congress. These and other comments on the topic of Federal preemption are generally grouped by issue and are addressed below. 1. Whether FRA Characterized Its Views on Preemption as the RSAC Consensus Several commenters raised the concern that FRA's statements in the NPRM wrongly conveyed the idea that a consensus had been expressed within RSAC on the preemptive effect of the rulemaking. Specifically, the BLET, which is an RSAC member and was a participant in RSAC meetings on the rulemaking, asserted that RSAC never addressed, much less reached consensus on, the preemptive effect of the proposed rule. The BLET contended that FRA erroneously claimed that RSAC agreed by consensus to the preemption provision espoused in the NPRM, stating that RSAC meeting documents reflect discussion of technical issues only. The UTU, which also is an RSAC member and was a participant in RSAC meetings on the rulemaking as well, similarly commented that it was never involved in any discussions regarding the preemption of State common law. The UTU disagreed with FRA's characterization of how federalism issues were addressed by RSAC, citing FRA's statement in the NPRM that FRA had received no indication of concerns about the federalism implications of the rulemaking. The CPUC also raised the same issue, referring to the UTU's comment that the UTU was not involved in any discussions regarding the preemption of State common law. The CPUC itself commented that the ASRSM's RSAC representative advised the CPUC that it too could not recall a discussion regarding the preemption of State law. FRA makes clear that it did not intend to convey that RSAC had reached consensus on FRA's statements in the NPRM as to preemption. Indeed, FRA did not make preemption an issue within RSAC on which it sought consensus. Nonetheless, FRA believes that commenters have read too much into what FRA did say in the NPRM. In discussing the federalism implications of the rulemaking in Section V.A. of the NPRM's preamble, FRA stated the following: [F]ederalism concerns have been considered in the development of this NPRM both internally and through consultation within the RSAC forum, as described in Section II of this preamble, above. The full RSAC, which reached consensus on the proposal (with the exception discussed above concerning cab cars and MU locomotives without flat-ends or with CEM designs, or both) and then recommended it to FRA, has as permanent voting members two organizations representing State and local interests: AASHTO and ASRSM. As such, these State organizations concurred with the proposed requirements (again, with the exception noted above). The RSAC regularly provides recommendations to the FRA Administrator for solutions to regulatory issues that reflect significant input from its State members. To date, FRA has received no indication of concerns about the Federalism implications of this rulemaking from these representatives or from any other representative on the Committee. 72 FR 42036. FRA did state that RSAC, with one exception, had reached consensus on the proposed requirements. These requirements were the amendments to §§ 238.205 (Anti-climbing mechanism), 238.211 (Collision posts), and 238.213 (Corner posts). For this reason, FRA explicitly mentioned that consensus had not been reached on dynamic test standards for cab cars and MU locomotives. FRA should have made clearer that it did not intend to convey that RSAC's consensus included the proposed modification to § 238.13 (Preemptive effect), or any of FRA's views on preemption. FRA did not consider § 238.13 a proposed requirement, and FRA did not make it an issue for which consensus was sought. To the extent that FRA had discussed preemption in RSAC, FRA had explained to RSAC members what it has told the public and continues to say regarding the permissibility of a railroad not to operate Tier I passenger trains in a push-pull configuration—in particular, the freedom of a State or local authority funding its own railroad to direct that its railroad not operate trains in push-pull fashion. ( *See* below for a fuller discussion of this issue.) FRA also believes that some confusion may have arisen from FRA's use of customary language discussing the federalism implications of its rulemaking actions in general and the consultation afforded through RSAC. Because FRA's rulemaking actions have preemptive effect by virtue of 49 U.S.C. 20106 (Section 20106), discussed further below, RSAC serves as a forum in which FRA can consult with State and local officials early in the process of developing proposed regulations in accordance with the executive order on federalism. FRA recognizes the value in such consultations and the ability of State and local interests to raise federalism concerns with proposed regulatory actions. Here, no federalism concerns had been raised in RSAC regarding the proposed requirements in the rulemaking—what would become national standards through a final rule—and FRA represented that fact using a customary formulation. FRA did not intend that representation to mean that RSAC members had no objections to any of FRA's statements on federalism in the NPRM. FRA makes clear that no such meaning or implication was intended. 2. Whether FRA's Views Are Consistent With 49 U.S.C. 20106, as Amended A number of commenters, including members of Congress, raised concern that FRA's statements in the NPRM were not consistent with revisions made to 49 U.S.C. 20106 by the Implementing Recommendations of the 9/11 Commission Act of 2007 (9/11 Commission Act of 2007), Public Law 110-53, Aug. 3, 2007. Congressmen James Oberstar and Bennie Thompson jointly commented that they had strong concern over the preemption language included in the preamble. They requested that FRA issued a revised NPRM to delete portions of the preamble inconsistent with revisions made to Section 20106. In the alternative, the Congressmen believed that FRA should include a revised preemptive effect discussion in the preamble of the final rule to reflect Congress' intent that such regulations do not preempt State tort claims. The Congressmen commented that Congress did not intend that the Federal Railroad Safety Act of 1970

(FRSA)(formerly 45 U.S.C. 421 *et seq.* , now repealed and reenacted as positive law primarily in chapter 201 of title 49) would be interpreted to prevent injured victims from asserting their rights under common law, and raised concern that FRA's views on preemption may serve to immunize negligent railroad companies and prevent train derailment victims from holding these companies accountable for their injuries. The Congressmen stated that the 9/11 Commission Act of 2007 clarified that Section 20106 is intended as a limited preemption provision to prevent States from implementing their own rail safety regulations in certain instances and was not designed to preempt cases brought by victims of railroad derailments. The Congressmen believed that the law sends a loud and clear message that FRSA in no way preempts State common law claims and to the extent the U.S. Supreme Court has construed a Congressional intent to federally preempt State law claims against railroads Congress has cleared up any confusion. Accordingly, the Congressmen believed that statements in the preamble to the NPRM containing language attempting to preempt State common law standards contradicts Congressional intent and subverts the legislative determination that Congress does not want to leave victims of negligent railroads without any recourse. Three other members of Congress also jointly commented on FRA's statements in the NPRM concerning preemption and requested that FRA revise its discussion in light of the revisions made to Section 20106 by the 9/11 Commission Act of 2007. Senators Kent Conrad and Byron Dorgan and Congressman Earl Pomeroy noted that section 1528 of the 9/11 Commission Act of 2007 clarified the intent of Congress with respect to the preemptive effect of FRSA but that, perhaps as a result of chronology, the preamble to the NPRM made no reference to the Congressional action. The Congressmen believed that certain statements in the preamble could be interpreted to contradict the language that Congress had just enacted and that it would be inappropriate to issue a final rule that does not accurately reflect current law. The Congressmen cited as an example the statement “FRA believes that it has preempted any State law, regulation, or order, including State common law.” The Congressmen raised concern that this statement could be read to undermine the intent of Congress that FRSA not preclude victims of railroad accidents from seeking redress under State law for their injuries and losses, and could inform the interpretation of FRSA by the courts or other interested parties. The Congressmen requested that FRA revise the preamble to make explicit reference to the amendments to Section 20106 and make clear that FRSA does not prevent victims of railroad accidents from holding railroad companies to account for their actions in a court of law. In addition to members of Congress, the AAJ commented that in the 9/11 Commission Act of 2007 Congress reiterated its intent to preserve State tort claims against negligent railroads. The AAJ asserted that section 1528 of this law sends a loud and clear message that Section 20106 in no way preempts State common law claims and that to the extent the U.S. Supreme Court has construed a Congressional intent in Section 20106 to preempt State law, Congress has cleared up any confusion. The AAJ concluded that there is no room for argument that the 9/11 Commission Act of 2007 does anything but restore the rights of victims to sue negligent railroads under State law. Finally, the BLET commented that it could not be clearer that Congress intended to preserve State common law causes of action in the circumstances defined in the 9/11 Commission Act of 2007. The BLET stated that the conference report on the legislation makes clear that Congress did not intend to preempt all State causes of action in every area where FRA has issued—or has considered but declined to issue—safety regulations. The BLET also commented that when FRA published the NPRM, the bill was on the President's desk. FRA believes it important to address the comments raised as to why the NPRM does not reflect the changes made to Section 20106 by the 9/11 Commission Act of 2007. FRA believes that the timing of the NPRM's issuance has led to misunderstandings reflected in the comments. Although the NPRM was published on August 1, 2007, it was issued by FRA on July 26, 2007. At the time of the NPRM's issuance, Congress was still deliberating the legislation: the Senate agreed to it that same day, and the House passed it the following day, July 27, 2007. When Congress cleared the bill for the White House, the NPRM was being processed for publication at the **Federal Register.** Consequently, the NPRM did not reflect any changes made to Section 20106 by the 9/11 Commission Act of 2007, signed by the President on August 3, 2007. As discussed elsewhere in this final rule, FRA is amending the existing preemption provision in this part, § 238.13 (Preemptive effect), to conform to the revisions made to Section 20106 by the 9/11 Commission Act of 2007. FRA makes clear that any statement in the NPRM that is contrary to Section 20106, as amended effective August 3, 2007, should be ignored. Nonetheless, FRA believes that its statements in the NPRM are consistent with the 9/11 Commission Act of 2007's clarification to Section 20106 and that there may have been misunderstandings as to the meaning of FRA's statements in the NPRM, relating in particular to what the commenters intend the terms “claim” and “standard” to mean. FRA believes that some of the comments overstate what FRA said in the NPRM about the preemptive effect of Section 20106, even prior to its amendment. FRA was careful to convey that Federal preemption under Section 20106 applied to standards of care under State law—as opposed to claims (causes of action) under State law. They are different. As discussed further below, the 9/11 Commission Act of 2007 added new subsection

(b)to Section 20106 to clarify the preemptive effect of FRSA so as not to restrict enumerated “causes of action” under State law. While FRA's regulations may preempt the standard of care, they do not preempt the underlying action in tort. In this regard, FRA did not make the broad statement by itself that “FRA believes that it has preempted any State law, regulation, or order, including State common law.” FRA made that statement only in a fuller sentence that expressly limited its meaning: “FRA believes that it has preempted any State law, regulation, or order, including State common law, concerning the operation of a cab car or MU locomotive as the leading unit of a passenger train.” *See* 72 FR 42036. In this instance, FRA did intend to convey that where a claim is based on a State standard concerning the operation of a cab car or MU locomotive, FRA has through its regulatory actions preempted any State standard that restricts the push-pull operation of a Tier I passenger train. However, FRA did not—and does not—find that any claim under State law is preempted merely because a train is operating in push-pull mode. FRA believes this to be consistent with the 9/11 Commission Act of 2007. A fuller discussion follows. This rule preempts State common law standards of care. The Supreme Court has spoken clearly on the subject of preempting State common law by Section 20106. The question was squarely presented to the Court in *CSX Transp., Inc.* v. *Easterwood* , 507 U.S. 658 (1993), which involved a grade-crossing collision. One of the respondent's claims in the case was that, despite FRA's Track Safety Standards (49 CFR part 213) which permit a maximum speed of 60 m.p.h. over the Class Four track involved in the case and train speed at the collision being below 60 m.p.h., “petitioner [CSX] breached its common-law duty to operate its train at a moderate and safe rate of speed.” *Id.* at 673. The Court's answer was “[w]e hold that, under the FRSA, Federal regulations adopted by the Secretary of Transportation pre-empt respondent's negligence action only insofar as it asserts that petitioner's train was traveling at an excessive speed.” *Id.* at 676. In reaching that judgment, the Court reasoned that “[a]ccording to § [20106], applicable Federal regulations may pre-empt any state `law, rule, regulation, order, or standard relating to railroad safety.' Legal duties imposed on railroads by the common law fall within the scope of these broad phrases.” *Id.* at 664. The Supreme Court very plainly held that the State common law standard of care was preempted by FRA's Track Safety Standards, but that the underlying negligence action was not. That is completely in accord with the amendment Congress enacted to Section 20106 in section 1528 of the 9/11 Commission Act of 2007. The Supreme Court's interpretation of Section 20106 was confirmed and further explained in a subsequent case involving a grade-crossing wreck in which the plaintiff had alleged that the railroad negligently failed to maintain adequate warning devices at the grade-crossing in question. The Supreme Court held: Sections 646.214(b)(3) and

(4)[the Federal Highway Administration regulations mandating the installation of particular warning devices when certain conditions exist] “cover the subject matter” of the adequacy of warning devices installed with the participation of Federal funds. As a result, the FRSA pre-empts respondent's state tort claim that the advance warning signs and reflectorized crossbucks installed at the Oakwood Church Road crossing were inadequate. Because the TDOT [Tennessee Department of Transportation] used Federal funds for the signs' installation, §§ 646.214(b)(3) and

(4)governed the selection and installation of the devices. And because the TDOT determined that warning devices other than automatic gates and flashing lights were appropriate, its decision was subject to the approval of the FHWA. *See* 23 CFR 646.214(b)(4). Once the FHWA approved the project and the signs were installed using Federal funds, the Federal standard for adequacy displaced Tennessee statutory and common law addressing the same subject, thereby pre-empting respondent's claim. *Norfolk Southern Ry. Co.* v. *Shanklin* , 529 U.S. 344, 358-359 (2000). It could not be clearer that, before Congress amended Section 20106 in 2007, it provided for preemption of State common law by DOT regulations. Congress was moved to amend Section 20106 by two court cases, *Lundeen* v. *Canadian Pacific Ry. Co.* , 507 F.Supp.2d 1006 (D.Minn. 2007), and *Mehl* v. *Canadian Pacific Ry., Ltd.* , 417 F.Supp.2d 1104 (D.N.D. 2006), which left without a legal remedy tort plaintiffs injured in a hazardous material release from a train wreck in Minot, ND. The judge's opinion in *Lundeen* said: Preemption bars private claims for FRA violations. Congress has given the Secretary of Transportation “exclusive authority” to impose civil penalties and request injunctions for violations of the railroad safety regulations. FN4 49 U.S.C. 20111(a); *Abate* v. *S. Pac. Transp. Co.* , 928 F.2d 167, 170 (5th Cir. 1991) (“The structure of the FRSA indicates that Congress intended to give Federal agencies, not private persons, the sole power of enforcement.”). FN4. The single exception to the Secretary's exclusive authority exists when the Federal government fails to act promptly. In such cases, state government agencies can file suit, impose penalties, or seek injunctions. 49 U.S.C. 20113. Indeed, the FRSA has “absolved railroads from any common law liability for failure to comply with the safety regulations.” *Mehl* , 417 F.Supp.2d at 1120. This is the regulatory scheme which Congress has imposed. And when Congress has clearly spoken, any relief from its regime must come from Congress rather than the Courts. Private actions against railroads based on Federal regulations are preempted. *Lundeen, supra at* 1016. The amendment to Section 20106 made by section 1528 of the 9/11 Commission Act of 2007 did not change the text the Supreme Court has interpreted. Instead, Congress enacted a very precise cure for the problem presented by *Lundeen* and *Mehl* by amending Section 20106 to redesignate the then-existing language of the section as subsection (a), and adding new subsections

(b)and (c). Subsection

(a)provides that a State may adopt or continue in force a law, regulation or order related to railroad safety or security, until the Secretary of Transportation (with respect to safety) or the Secretary of Homeland Security (with respect to security) has acted to cover the subject matter. Once there are Federal requirements covering a particular subject, a State may adopt or continue only an additional or more stringent law, regulation, or order if it is necessary to eliminate or reduce an essentially local safety or security hazard, is not incompatible with Federal law, and does not unreasonably burden interstate commerce. New subsection

(b)clarifies that causes of action under State tort law may be available to injured parties if they are based on the violation of the Federal standard of care created by a Federal regulation or order, or violation of a plan required to be created by Federal regulation or order. New subsection

(c)provides that nothing in the section creates a Federal cause of action or Federal question jurisdiction, so that tort cases can be heard in State court. New subsection

(b)to Section 20106 makes clear that, as the Supreme Court held in *Easterwood* , regulations or orders issued by the Secretary of Transportation preempt the State standard of care, but not the underlying cause of action in tort, thereby preserving the ability of injured parties to seek redress in court. Since FRA's Track Safety Standards were involved in both *Easterwood* and *Lundeen,* they are especially apt for illuminating FRA's interpretation of the amended statute. The Track Safety Standards substantially subsume the subject matters of standards for railroad track and train speeds over it and, therefore, preempt State standards, both statutory and common law, pertaining to those subjects. Nevertheless, under Section 20106(b)(1)(A), a private plaintiff may bring a tort action for damages alleging injury as a result of violation of the Track Safety Standards, such as for train speed exceeding the maximum speed permitted under 49 CFR 213.9 over the class of track being traversed. Similarly, under Section 20106(b)(1)(B), a private plaintiff may bring a tort action for damages alleging injury as a result of violation of a railroad's continuous welded rail

(CWR)plan required by the Track Safety Standards (the key issue in *Lundeen* ). Provisions of a railroad's CWR plan that exceed the requirements of part 213 are not included in the Federal standard of care. Under Section 20106(b)(1)(C), a private plaintiff may bring a tort action for damages alleging injury as a result of violation of a State law, regulation, or order that is not incompatible with subsection (a)(2), such as Ohio's regulation of minimum track clearances in rail yards found not to be preempted in *Tyrrell* v. *Norfolk Southern Ry. Co.,* 248 F.3d 517 (6th Cir. 2001). It is a settled principle of statutory construction that, if the statute is clear and unambiguous, it must be applied according to its terms. *Carcieri* v. *Salazar,* 129 S.Ct. 1058 (U.S., 2009). Read by itself, Section 20106(a) preempts State standards of care, but does not expressly say whether anything replaces the preempted standards of care for purposes of tort suits. The focus of that provision is clearly on who regulates railroad safety: the Federal government or the States. It is about improving railroad safety, for which Congress deems nationally uniform standards to be necessary in the great majority of cases. That purpose has collateral consequences for tort law which new Section 20106, subsections

(b)and

(c)address. New subsection (b)(1) creates three exceptions to the possible consequences flowing from subsection (a). One of those exceptions ((b)(1)(B)) precisely addresses an issue presented in *Lundeen* that Congress wished to rectify: it allows plaintiffs to sue a railroad in tort for violation of its own plan, rule, or standard that it created pursuant to a regulation or order issued by either of the Secretaries. None of those exceptions covers a plan, rule, or standard that a regulated entity creates for itself in order to produce a higher level of safety than Federal law requires, and such plans, rules, or standards were not at issue in *Lundeen.* The key concept of Section 20106(b) is permitting actions under State law seeking damages for personal injury, death, or property damage to proceed using a Federal standard of care. A plan, rule, or standard that a regulated entity creates pursuant to a Federal regulation logically fits the paradigm of a Federal standard of care—Federal law requires it and determines its adequacy. A plan, rule, or standard, or portions of one, that a regulated entity creates on its own in order to exceed the requirements of Federal law does not fit the paradigm of a Federal standard of care—Federal law does not require it and, past the point at which the requirements of Federal law are satisfied, says nothing about its adequacy. That is why FRA believes that Section 20106(b)(1)(B) covers the former, but not the latter. The basic purpose of the statute—improving railroad safety—is best served by encouraging regulated entities to do more than the law requires and would be disserved by increasing potential tort liability of regulated entities that choose to exceed Federal standards, which would discourage them from ever exceeding Federal standards again. In this manner, Congress adroitly preserved its policy of national uniformity of railroad safety regulation expressed in Section 20106(a)(1) and assured plaintiffs in tort cases involving railroads, such as *Lundeen,* of their ability to pursue their cases by clarifying that Federal railroad safety regulations preempt the standard of care, not the underlying causes of action in tort. Under this interpretation, all parts of the statute are given meanings that work together effectively and serve the safety purposes of the statute. Because the language of the statute is clear, there is no need to resort to the legislative history to properly interpret the statute. *See Ratzlaf* v. *United States,* 510 U.S. 135, 147-148

(1994)(“[W]e do not resort to legislative history to cloud a statutory text that is clear.”). 3. Whether FRA's Views on Preemption Affect Safety The BLET commented that FRA's views on preemption serve to immunize the railroad industry for its actions or inactions, contrary to FRA's duties as a safety regulator. The BLET stated that immunizing railroads from liability in all cases except where a Federal regulation or statute is violated will diminish safety and increase costs to the public in the long run, asserting that the public will bear the cost of damages caused by private railroads who have acted negligently but not in violation of a Federal law or regulation. The BLET believed that FRA's views on preemption will make FRA's minimum safety standards a ceiling above which no railroad will venture, to avoid voluntary exposure to liability flowing from a failure to adhere to its own higher standard. The BLET maintained that, thereafter, higher standards will not come about except through rulemaking, which it viewed as a time-consuming and somewhat imprecise process. In addition, the BLET commented that even if FRA's views protect publicly-funded transportation agencies, the decision to do so should be a State one. FRA believes that the BLET's comments minimize the significance of FRA's safety regulations. FRA has issued detailed safety regulations covering a broad range of areas, and has both ongoing and planned safety rulemaking activities on a variety of topics. It is not a small matter for a railroad to maintain compliance with every applicable safety regulation issued by FRA, and that responsibility continues only to increase. In particular, this responsibility is growing as FRA implements the numerous safety rulemaking mandates in the RSIA of 2008. Moreover, the RSIA of 2008 itself added to the body of railroad safety statutory laws with which railroads must comply. These efforts are all directed toward promoting safety—the safety of railroad employees, passengers, and the public, overall—in a systematic and comprehensive way. The BLET is clearly incorrect in arguing that FRA is immunizing railroads from tort liability except where they violate a Federal safety standard. State law, both statutory and common law, is preempted only where FRA's regulations substantially subsume the subject matter of the State law and FRA's regulations, while extensive, are not encyclopedic. The BLET's contention that a railroad that complies with the Federal standard of care set by Federal law should nevertheless be held to be negligent * for the very behavior required by Federal law* would make a nullity of Federal railroad safety laws. If the BLET's view were to be adopted, the effective railroad safety standard would be set by the most recent jury verdict in each State and national uniformity of safety regulation would no longer exist. That is clearly inconsistent with the statute and the case law. Nor does FRA believe that our views on preemption will preclude railroads from exceeding Federal railroad safety standards. Railroads regularly exceed these standards now. A railroad that abides only by the minimum Federal safety standards would constantly run the risk of incurring civil penalty liability. For example, because wheels wear from use, no freight railroad would logically operate its fleet of rail equipment at the very minimum Federal safety standards for wheels; any usage of the equipment would potentially wear the wheels out of compliance, rendering them defective *per se* under 49 CFR part 215. Similarly, no railroad would logically maintain its track to the very minimum standards allowed by FRA's Track Safety Standards, as the railroad should know that any usage of the track could potentially bring it out of compliance by, for example, widening the gage. *See* 49 CFR 213.9. Further, as discussed above, FRA believes that Congress has encouraged railroads to exceed Federal safety standards and that Section 20106 does not increase the potential tort liability of railroads that choose to do so. In addition, FRA disagrees that its duties as a safety regulator preclude it from providing its views on the preemptive effect of its regulations. A variety of considerations go into setting safety standards, including their relationship to other safety laws and standards. For example, as noted in the NPRM, FRA has directed extensive efforts to provide for the safety of Tier I passenger-occupied equipment operated as the leading units of passenger trains, such as by providing for increased collision post strength for the forward ends of cab cars and MU locomotives in the 1999 final rule. Had FRA intended to impose restrictions in the 1999 final rule on operating this equipment in the lead, FRA may have acted differently in imposing the crashworthiness requirements that it did on this equipment. This very final rule FRA is issuing today will enhance crashworthiness requirements for cab cars and MU locomotives, specifically recognizing that this equipment is operated as the leading units of passenger trains. Finally, FRA believes that the comments raised essentially disregard the possibility that FRA requirements may in fact be more restrictive than State law would be. In the original Passenger Equipment Safety Standards rulemaking, for example, FRA addressed a number of comments from State departments of transportation that applying the static end strength (or “buff” strength) requirements, § 238.203, to existing passenger equipment was too restrictive. *See* 64 FR 25544-25545. FRA also addressed similar comments on other provisions of the rule, such as from the Washington State Department of Transportation, which believed FRA had not justified the requirements for side structure, § 238.217. *See* 64 FR 25608-25609. Potentially, these States may have deemed less restrictive requirements appropriate. 4. Whether FRA's Views on Preemption Affect Recovery for Victims of Railroad Accidents The AAJ asserted that Federal preemption would prevent victims of the 2005 Glendale, CA, Metrolink derailment from seeking justice, that common carriers like Metrolink owe the highest degree of care to their passengers, and that if a court affords deference to FRA's preamble, the NPRM would effectively render that obligation meaningless. Similar to other comments that have been raised, the AAJ commented that State common law should govern railroad safety issues in that they are unique to each community and therefore more effectively addressed under State law. The AAJ believed that Federal regulations cannot effectively ensure that the public is protected from hazards caused by a railroad's inability to follow operating rules. The AAJ maintained that Federal regulations are minimum standards and are not intended to provide maximum protection, asserting that the justice system offers a deterrent against railroad companies' violations of Federal, State, and local regulations. The AAJ stated that the public needs a mechanism to compensate individuals for losses suffered at the hands of negligent railroad operators or otherwise these injured individuals could become a burden to the public. FRA notes that it has already addressed, above, comments that State common law should govern railroad safety issues. The 9/11 Commission Act of 2007 expressly clarified the criteria providing for State law causes of action but left untouched the provisions in Section 20106 governing national uniformity of regulation. Once the Secretary of Transportation has covered a subject matter through a regulation or order, and thus established a Federal standard of care, Section 20106 preempts State standards of care regarding this subject matter. Nonetheless, FRA believes it important to address specifically the AAJ's claim that FRA's views would prevent the victims of the Glendale incident from seeking justice. The Glendale derailment was the result of a deliberate, criminal act. The perpetrator was found guilty of 11 counts of murder. Surely, nothing FRA has said about Federal preemption should be construed in any way to mean that victims of the Glendale derailment may not seek redress against the criminal perpetrator. Nor should anything FRA has said about Federal preemption be construed to mean that these victims may not pursue negligence claims against Metrolink. As discussed elsewhere in this preamble, FRA agrees that railroads owe their passengers and employees a high degree of care and that victims of railroad accidents may hold railroads accountable in tort for their actions. Surely nothing FRA has said should be interpreted to preclude a claim for negligence based on a railroad's failure to comply with a Federal law, standard, or order or, where none of those apply, State law. In this regard, FRA believes that the AAJ's comments significantly minimize the degree to which railroads are in fact responsible for complying with a broad range of safety laws, regulations (such as this final rule), and orders, with a host of new requirements arising from the RSIA of 2008, as noted above. To a considerable degree, this reflects a difference of view over whether safety standards are better set by twelve jurors good and true, most of whom probably do not know anything about railroad safety, or by experts in railroad safety to whom Congress has assigned the task. Of course, those jurors can do a fine job of finding the facts and applying the legal standard to them. In a recent case involving Federal preemption under a U.S. Food and Drug Administration

(FDA)regulation, the Supreme Court eloquently explained why Congress's decision to preempt State common law makes sense: [I]n the context of this legislation excluding common-law duties from the scope of pre-emption would make little sense. State tort law that requires a manufacturer's catheters to be safer, but hence less effective, than the model the FDA has approved disrupts the federal scheme no less than state regulatory law to the same effect. Indeed, one would think that tort law, applied by juries under a negligence or strict-liability standard, is less deserving of preservation. A state statute, or a regulation adopted by a state agency, could at least be expected to apply cost-benefit analysis similar to that applied by the experts at the FDA: How many more lives will be saved by a device which, along with its greater effectiveness, brings a greater risk of harm? A jury, on the other hand, sees only the cost of a more dangerous design, and is not concerned with its benefits; the patients who reaped those benefits are not represented in court. As Justice BREYER explained in *Lohr,* it is implausible that the MDA [Medical Device Amendments] was meant to “grant greater power (to set state standards `different from, or in addition to' federal standards) to a single state jury than to state officials acting through state administrative or legislative lawmaking processes.” 518 U.S., at 504, 116 S.Ct. 2240. That perverse distinction is not required or even suggested by the broad language Congress chose in the MDA, FN4 and we will not turn somersaults to create it. *Riegel* v. *Medtronic, Inc.* 128 S.Ct. 999, 1008 (U.S., 2008). (Footnote omitted.) The Supreme Court's logic is equally applicable to regulations under the Federal railroad safety laws, including this one. 5. How a State May Act as the Owner and Not the Regulator of a Railroad FRA received comment from the CPUC indicating that there was confusion as to what FRA intended to convey by explaining the difference between a State acting as an “owner” of a railroad—in distinction to a regulator of a railroad—in directing a railroad's operations. The CPUC commented that it understood that FRA interprets Section 20106 so that States that own or control a passenger railroad may impose more stringent standards on their railroad(s) than those prescribed in the NPRM, as long as the more stringent State standards are not in conflict with the Federal standards and are wholly distinct and not derived from the statutory provision— *i.e.,* not a part of the State's regulatory authority over passenger railroads but resulting from its status as an owner of a passenger railroad. The CPUC then concluded that since FRA has “approved” of cab car-forward operations of Tier I passenger trains, States may not prohibit these operations on passenger railroads they own since such a restriction would conflict with the NPRM. Yet, the CPUC then understood that if the State wishes to increase the load-bearing capability of collision posts, corner posts and other structural elements, it may where it is the owner of the passenger railroad. The CPUC asserted that FRA was in effect establishing a Federal public safety policy that permits States to raise safety requirements above minimum Federal standards on railroads they own but limits States to the minimum standards on private railroads. The CPUC believed that this policy would severely limit State police powers even when State regulation neither conflicts with Federal law or regulation nor unreasonably burdens interstate commerce. FRA appreciates the CPUC's comments for purposes of clarifying FRA's discussion in the NPRM concerning the application of preemption to the actions of a State or local entity in the role of “owner” of a railroad versus those of a State or local entity in the role of regulator of a railroad. FRA has pointed out that commuter rail service is typically provided by public benefit corporations chartered by State or local governments. This legal arrangement essentially places the State or local entity in the role of “owner” of the railroad, and FRA sought to make clear that when a State or local governmental entity acts in this capacity to direct that the railroad exceed FRA's standards, it is not acting as a regulator of railroad operations. Instead, it is effectively acting in a private capacity concerning the operation of its own railroad. The fact that it is a public entity does not somehow convert its action into a law, regulation, or order related to railroad safety that invokes the statutory provisions governing the preemptive effect of FRA's regulation of this area. Specifically, FRA intended to make clear that when a State acts in this private capacity to direct its own railroad to exceed FRA's requirements or prohibit its own railroad from doing something FRA's requirements permit, it need not be concerned with satisfying Section 20106(a)'s three-part, “essentially local safety or security hazard” exception for State regulation, as the State's action is wholly distinct, and does not derive, from the exception provided in the statute. This latter point may not have been conveyed clearly enough in the NPRM; FRA is restating it here for clarity. Further, FRA makes clear that even though States and local entities may act in a private capacity concerning their own railroads, this fact does not alter in any way FRA's views as to the preemptive effect of FRA's comprehensive regulation of passenger equipment safety, and the safe operation of cab cars and MU locomotives in particular, when the State or local governmental entity is acting in a regulatory capacity. Nor does FRA mean in any way to suggest that because States and local entities may act in a private capacity concerning their own railroad, a State or local court or jury has the ability to decide how the railroad should have acted. FRA makes clear that its views on a State or local entity's ability to run its own railroad do not extend to a State or local court or jury's ability to apply a standard of care that deviates from the Federal standard of care established by an FRA regulation or order. Additionally, FRA sought to make clear in the NPRM that even when the State or local governmental entity acts in this private capacity and directs that its passenger railroad operate in a manner more stringent than FRA's requirements, it may not direct that its railroad operate in a manner inconsistent with FRA's requirements. The CPUC's comments indicate that there may have been some confusion on this point, however. The CPUC believed that FRA has “approved” of cab car-forward operations of Tier I passenger trains, and that, as a result, States may not prohibit these operations on passenger railroads they own since such a restriction would conflict with the NPRM. FRA did not intend such conclusions to be drawn. First, FRA makes clear that our regulations permit but do not require cab car-forward operations of Tier I-compliant passenger trains; there is no FRA approval process. Moreover, the fact that FRA's regulations permit cab car-forward operations does not prohibit a State, acting in a private capacity as the owner of its own railroad, from deciding not to use cab car-forward operations. For example, in no way would a State's decision directing its own railroad to operate each of its trains with a conventional locomotive in the lead conflict with any regulatory decision FRA has made. Both methods of operation are permitted under FRA's regulations and operators are free to choose among permitted methods of operation. ( *See* the separate discussion on push-pull train operations, below.) The CPUC's comments indicate that it understood the overall issue when it noted that if the State wishes to increase the load-bearing capability of collision posts, corner posts and other structural elements of its equipment, it may if it is the owner of the passenger railroad. Indeed, that analysis applies in the same way to cab car-forward operations of Tier I passenger trains. FRA also wishes to make clear that in no way did FRA intend to convey that freight railroads operate under less stringent safety standards—including those voluntarily imposed—because the railroads are typically owned by non-governmental entities. The CPUC additionally commented that the balance determined by FRA in weighing freight railroad safety with the business of freight railroading is heavily slanted towards the railroad industry at the expense of public safety since the public is subjected to “minimum” railroad safety regulations and the States are prohibited from requiring more stringent regulation. In the NPRM, FRA compared a State or local governmental entity's ability to act in a private capacity concerning the operation of its own railroad to that of a non-governmental entity that owns a freight railroad, for purposes of illustrating how the public entity is permitted to act in a private capacity to direct that its passenger railroad operate in a manner more stringent than FRA's requirements and not implicate preemption concerns. FRA believed this comparison particularly appropriate because freight railroads—like passenger railroads—regularly exceed FRA's safety standards as a matter of course, and they are encouraged to do so. Surely, a governmental entity that owns a freight railroad may choose to exceed FRA's requirements without concern for implicating the statutory provision governing preemption. While the CPUC's comment may not have been directed to this discussion in the NPRM, FRA believes that this clarification is helpful to place the discussion in a fuller context. 6. How State Regulation of Push-Pull Operations Is Preempted Congressman Adam Schiff commented that FRA's views in the NPRM may have the effect of preempting State laws on pushing trains with cab cars in the lead. He stated that in response to the January 2005 Metrolink derailment in Glendale, CA, he had placed in the FY2006 transportation appropriations bill a measure that led FRA to conduct a historical study of push-pull passenger rail operations that found that derailments and general fatalities were somewhat higher when push-pull trains were operated in the push mode. He believed that FRA's views could threaten the authority of States to require a higher level of passenger train safety or to seek redress for a wide variety of unsafe railroad practices, stating that the role of FRA is to adopt regulations to protect the traveling public from injury and death because of unsafe railroad operations and that State and local regulators must be allowed to take further steps to ensure that public transportation is as safe as possible. He additionally commented that any regulatory action should be avoided that may preempt States and localities from regulating railroad safety in ways that do not affect interstate commerce but do improve passenger safety, and believed that preemption should seldom be employed but on those rare occasions when it is required and that it should be used to set a floor and never a ceiling on the public's safety and well-being. As a result, he requested that FRA clarify that Federal preemption will not affect local and State limitations on the use of cab cars as the leading units of passenger trains, asserting that such regulations are designed to increase public safety and will not affect the national operations of rail service providers or rail car manufacturers. FRA notes first that the nature of Federal preemption under Section 20106, even as amended, is that States and localities are restricted from acting as regulators concerning the operation of trains with cab cars in the lead, given Federal regulation of the matter. Nonetheless, as discussed earlier, FRA believes that in fact States and localities have the capability to act in a non-regulatory way either as owners or funders of commuter rail systems to restrict the operation of trains with cab cars in the lead, and, preemption concerns aside, could seemingly do so more directly. FRA will use the example of Metrolink, which operates wholly within the State of California and is a joint powers authority comprised of five county transportation planning agencies: The Los Angeles County Metropolitan Transportation Authority, the Orange County Transportation Authority, the Riverside County Transportation Commission, San Bernardino Associated Governments, and the Ventura County Transportation Commission. FRA makes clear that the representatives of those California counties who are designated as members of Metrolink's board of directors are not preempted from directing that Metrolink not run trains with cab cars as the leading units. Nor would the State of California be preempted from conditioning any grant of State funds to Metrolink on its not running trains with cab cars as the leading units. Preemption does not apply in either situation. While the authority does not apply in this situation, Congress has addressed Congressman Schiff's concerns in another way to some extent. The statute provides that States may regulate until the Secretary of Transportation prescribes a regulation or issues an order covering the subject matter of the State regulation. The statute also provides that a State may adopt or continue in force an additional or more stringent law, regulation, or order related to railroad safety or security when the law, regulation, or order is necessary to eliminate or reduce an essentially local safety hazard, is not incompatible with a law, regulation, or order of the United States Government, and does not unreasonably burden interstate commerce. Thus, while Congress prescribed national uniformity of railroad safety regulation, it also provided exceptions through which States can address matters Congress or FRA has not. Where FRA does regulate, the clear expectation is that the States will participate in the rulemaking process. If a State has a better idea or perceives a risk others have not seen, that State has several avenues through which it can get its concerns addressed. The State can petition FRA for rulemaking. The State can participate in RSAC and help formulate recommendations to the Administrator of FRA for regulatory action. The State can comment on notices of proposed rulemaking FRA issues. In these ways, State ideas and concerns can be embodied in uniform national regulations in keeping with the policy Congress established in the statute. The overwhelming majority of railroad safety issues are capable of being handled in uniform national regulations, and should be. FRA also notes that although the study cited by Congressman Schiff tended to favor conventional locomotive-led train service over cab car- and MU locomotive-led train service for resistance to derailment in highway-rail grade-crossing collisions on the raw data, no statistically significant difference was found between the modes of operation. *See* “Report to the House and Senate Appropriations Committees: The Safety of Push-Pull and Multiple-Unit Locomotive Passenger Rail Operations,” June 2006, available on FRA's Web site at: *http://www.fra.dot.gov/downloads/safety/062606FRAPushPullLetterandReport.pdf* . The accident record did show a higher fatality rate for occupants of cab car-led trains than occupants of conventional locomotive-led trains in commuter service, yet (passenger occupied) MU locomotive-led trains compiled a superior safety record and experienced fatality rates less than conventional locomotive-led trains or any competing mode of transportation. The report explained that FRA's broad approach to safety is to focus on areas of the highest risk and thus the greatest potential for safety gains and that, by contrast, a narrower focus on one aspect of the safety issues (cab car- or MU locomotive-led operations versus conventional locomotive-led operations) could result in simply shifting risk from one place to another. FRA noted that compared to cab car- or MU locomotive-led trains, conventional locomotive led-trains may reduce the number of fatalities due to loss of occupant volume at the colliding interface, but in more serious events the structural crush is passed back to other areas of the train, potentially increasing the risk to other train occupants. The September 12, 2008 head-on train collision in Chatsworth, CA, which resulted in the deaths of 25 people and the injury of numerous others, involved a conventional locomotive-led Metrolink train. The NTSB and FRA are currently investigating the collision and the NTSB has not yet determined the probable cause of the accident. Nevertheless, preliminary information indicates that most, if not all, of the passenger fatalities resulted from structural crush caused by collision energy passed through the locomotive. FRA has not evaluated the Chatsworth accident to determine whether the outcome would have been different had the cab car at the rear of the train been the leading unit. However, the Chatsworth accident tragically exemplifies that risks are inherent in any mode of passenger train operation and that the safety focus must necessarily be broader than just restricting cab cars from operating as the leading units of passenger trains. 7. Whether It Was Necessary To Discuss Preemption in the NPRM The AAJ commented that inclusion of “overbroad” preemption analysis in the NPRM was unnecessary because it has no substantive effect on the regulation and is not binding on courts. Moreover, the AAJ claimed that FRA provided no reasoned explanation for what it believed was an unauthorized attempt to expand the reach of FRSA preemption. The AAJ also stated that FRA buried the preemption discussion within the text of the preamble without any mention of it in the summary of the NPRM, and believed that the title and summary of the NPRM hid the fact that FRA appeared to circumvent Congress and declare retroactive and future application of Federal preemption to the issue of pushing passenger trains with cab cars in the lead. In response to these comments, which are also addressed in part below, FRA notes that it did explain why it was discussing preemption in the NPRM, stating that “since issues have arisen regarding the preemptive effect of this part on the safety of operating a cab car as the leading unit of a passenger train, FRA believes that clarification of its views on the matter is needed to address any misunderstanding.” 72 FR 42028. In particular, in discussing the preemptive effect of part 238, FRA sought to distinguish preemption of State regulation from a State's ability to act in a private capacity to restrict cab cars from operating as the leading units of passenger trains, as discussed above, thereby effectively achieving the same result. In fact, despite FRA's efforts to clarify its views, comments on the NPRM demonstrate that there still is confusion as to FRA's views. By the statements in the preamble of this final rule, FRA hopes to definitively clear up this confusion so that FRA's views are understood as FRA intends that they be. Moreover, FRA believes that a reading of the NPRM shows anything but an intent to hide its views on preemption concerning the operation of a cab car as the leading unit of a passenger train. The NPRM concerned the crashworthiness of cab cars and MU locomotives and was not that large a rulemaking document. The NPRM itself contained a table of contents, which identified where “Federalism Implications” were discussed in the preamble. *See* 72 FR 42017. The section on “Federalism Implications” in turn pointed the reader further to the discussion of § 238.13 (Preemptive effect) in the section-by-section analysis. Nonetheless, to the extent that a member of the public interested in the safety of cab cars and MU locomotives may not read beyond the Summary section of this final rule, FRA is stating in the Summary that this final rule clarifies FRA's views on the preemptive effect of this part. 8. Whether FRA Has Authority To Express Its Views on Preemption The BLET stated that FRA's comments on preemption improperly address matters reserved for the Legislative and Judicial Branches and raise serious separation-of-powers questions. The BLET termed “troubling” that FRA's views were the latest in a series of similar actions by Executive Branch agencies. The BLET stated that Congress expresses its intent and that courts address questions about the intent, and that Congress can step in and overrule the judiciary as was done with passage of the 9/11 Commission Act of 2007. Similarly, the AAJ commented that FRA does not have authority to regulate with force of law, absent a clear and express delegation of that authority from Congress. The AAJ stated that FRA may exercise preemptive authority if Congress has explicitly delegated the authority and does so in a way that is consistent with Congressional intent. The AAJ claimed that Congress has never delegated preemptive authority to FRA and has provided instead a very limited scope of preemption under FRSA, asserting that FRA is not permitted to adopt regulations which preempt an individual's common law tort remedies. The AAJ further commented that Congress has not shown any intent to preempt State tort law actions or to prevent causes of action based on Federal law and regulations, citing case law. The AAJ cited in particular to *Sprietsma* v. *Mercury Marine* , 537 U.S. 51 (2002), to support its assertion that any Congressional desire to achieve uniformity in transportation safety regulation does not justify preemption of common law claims. FRA notes that some of these comments overlap with other comments that FRA has addressed. As to comments questioning FRA's authority to express its views on preemption, FRA believes its authority to do so arises out of its very authority to preempt State and local laws. There is no question that the Supremacy Clause of Article VI of the U.S. Constitution provides Congress with the power to preempt State law. “Preemption may result not only from action taken by Congress itself: A Federal agency acting within the scope of its congressionally delegated authority may preempt state regulation.” *Louisiana Public Service Commission* v. *FCC* , 476 U.S. 355, 369 (1986). Since Congress provided that delegation very forthrightly in Section 20106 and the Supreme Court has interpreted the statute to provide for preemption of State law by FRA regulations, there can be no real question that FRA has authority to preempt State regulation. *See* the discussion elsewhere in this preamble of the *Easterwood* and *Shanklin* cases. By virtue of FRA's authority to preempt State law and the President's direction in Executive Order 13132 that agencies discuss the preemptive effect of their rules in the preambles to those rules, FRA may express its views as to the preemptive effect of its regulations. The BLET surely would expect FRA to do so if a State or locality were to pass a law, or a State or local court were to issue an order, that potentially endangered the safety of the BLET's members and which FRA believed was preempted by Federal law. In this regard, in providing for national uniformity of regulation, Section 20106 protects against the potential for ever-changing and conflicting State and local standards adopted by individual juries, which could compromise railroad safety. Moreover, it would be irrational to forbid FRA from expressing its views as to the preemptive effect of its regulations when such FRA views have in fact been found to merit deference. *See Union Pacific RR* v. *California Public Utilities Comm'n* , 346 F.3d 851, 867 (9th Cir. 2003). That case, in which FRA argued that some of its regulations are preemptive and some are not, also well illustrates the benefits for the courts of FRA clearly discussing what FRA intends to preempt and what it does not. The Supreme Court has made clear that it expects such agency discussions of preemption. As we explained in *Hillsborough County* v. *Automated Medical Laboratories, Inc.* , 471 U.S. 707, 718, 105 S.Ct. 2371, 2377, 85 L.Ed.2d 714 (1985), it is appropriate to expect an administrative regulation to declare any intention to pre-empt state law with some specificity: “[B]ecause agencies normally address problems in a detailed manner and can speak through a variety of means, * * * we can expect that they will make their intentions clear if they intend for their regulations to be exclusive. *California Coastal Com'n* v. *Granite Rock Co.* 480 U.S. 572, 583 (1987). FRA notes in particular that the case cited by the AAJ, *Sprietsma* v. *Mercury Marine* , does not apply to national uniformity of railroad safety regulation or the preemption of State common law by such regulations. *Sprietsma* involved a different statute, the Federal Boat Safety Act, which contains an express savings clause stating that “[c]ompliance with this chapter [46 U.S.C. chapter 43] or standards, regulations, or orders prescribed under this chapter does not relieve a person from liability at common law or under State law.” 46 U.S.C. 4311(g). Common law standards of care are not preempted under the Federal Boat Safety Act, because Congress expressly said otherwise. (The United States itself argued as *amicus curiae* in support of the Supreme Court's holding.) Congress has, however, expressly provided for Federal preemption in the railroad safety area when the Secretary of Transportation has issued a regulation or order covering a particular subject matter. *See* prior discussion of Section 20106. 9. What Impelled FRA's Views on Preemption The BLET asserted that FRA's discussion of preemption in the NPRM was a “naked attempt” to influence the outcome of a judicial appeal in which a railroad appellant was the defendant. The BLET stated that FRA made the outstanding claim that the possibility that the 1999 final rule would be amended at some unspecified later date preempts all State law by the complete absence of a standard, which preemption FRA then activated retroactively by publishing the NPRM. In this regard, the BLET cited the following passage from the NPRM: FRA specifically stated in the final rule that additional effort needed to be made to enhance corner post safety standards for cab cars and MU locomotives—leading to the NPRM that FRA is issuing today. 64 FR at 25607. However, FRA made clear that the very fact that it identified the possibility of specifying additional regulations did not nullify the preemptive effect of the final rule, both in terms of the issues addressed by the specific requirements imposed, and those as to which FRA considered specific requirements but ultimately chose to allow a more flexible approach. 72 FR 42030. The BLET asserted its belief that FRA transformed the addition of security language to the rail safety preemption statute in 2002 into preemption of State common law pertaining to standards that were not imposed in 1999. The BLET commented that the 2002 amendment to then-existing Section 20106 did nothing more than extend current safety preemption to matters of rail security and, given that the NPRM is a proposed safety rule, the BLET contended that the mere fact that Congress extended preemption from safety to security matters provided no basis whatsoever for FRA to address the subject. Further, the BLET alleged that FRA “put its thumbs on the scale of justice” in stating that FRA had prohibited cab car-forward operations for Tier II but not for Tier I equipment and that FRA's choice was intended to be preemptive of State standards. The BLET maintained that there is substantial evidence that FRA published its preamble discussion to assist Metrolink in its appeal of a California court decision in which preemption relating to cab car-forward operations was an issue. The BLET stated that when the 1999 final rule was published, FRA never even suggested that the prohibition pertaining to cab car-forward operation of Tier II passenger equipment preempted all State and local law concerning the subject of cab car-forward operation of Tier I equipment, including common law. FRA notes that the BLET's comments highlight an inadvertent error in the NPRM in which the verb “to make” was stated in the past tense rather than the present tense. In the passage set out above, FRA had intended to state the following: However, FRA makes clear that the very fact that it identified the possibility of specifying additional regulations did not nullify the preemptive effect of the final rule, both in terms of the issues addressed by the specific requirements imposed, and those as to which FRA considered specific requirements but ultimately chose to allow a more flexible approach. Emphasis added. FRA does recognize that in stating “to make” in the past tense, the passage erroneously conveys that FRA made that explicit statement in the 1999 final rule. FRA did not make that statement in the 1999 final rule. Nonetheless, in a similarly-worded passage on the next page of the NPRM, the NPRM correctly stated the following: FRA's decision to revisit in this NPRM subjects addressed in the 1999 final rule does not change the preemptive effect of the comprehensive requirements imposed in that rule. As noted earlier, FRA's recognition in the 1999 final rule that additional work needed to be completed to enhance the crashworthiness of cab cars and MU locomotives does not nullify the preemptive effect of the standards then imposed for this equipment. 72 FR 42031. As this passage helps makes clear, FRA's point in citing the 1999 final rule was surely not to change what was stated in that final rule. FRA's point was to note that in promulgating the 1999 final rule FRA identified the possibility of specifying additional regulations to enhance safety after the completion of additional research efforts, but that identifying that possibility did not nullify the preemptive effect of that final rule on State or local standards. In the same way, FRA's recognition in this final rule that fuller application of CEM technologies to cab cars and MU locomotives could enhance their safety is not intended to nullify the preemptive effect of the standards arising from the rulemaking. FRA reiterates that it continually strives to enhance railroad safety, has an active research program focused on doing so, and sets safety standards that it believes are necessary and appropriate for the time that they are issued with a view to amending those standards as circumstances change. If FRA's regulations were not accorded preemptive effect merely because FRA may amend its regulations at some point in the future, preemption would never apply, nor, it seems, would preemptive effect seemingly be accorded to any DOT regulation because DOT may amend any of its regulations in the future. In addition, FRA believes that the BLET's comments make too much out of FRA's mention of the Homeland Security Act of 2002's amendment to 49 U.S.C. 20106 that added language concerning the preemptive effect of rail security regulations and orders. *See* 72 FR 42028. FRA noted that Section 20106 had been amended and FRA stated that it was proposing to amend § 238.13 (Preemptive effect) so that the regulatory section was more consistent with the revised statutory language addressing railroad security. *Id.* After doing so, FRA then explained as follows: In addition, since issues have arisen regarding the preemptive effect of this part on the safety of operating a cab car as the leading unit of a passenger train, FRA believes that clarification of its views on the matter is needed to address any misunderstanding. As described below, through a variety of initiatives spanning more than a decade, FRA has comprehensively and intentionally covered the subject matter of the requirements for passenger equipment, planning for the safe use of passenger equipment, and the manner in which passenger equipment is used. *Id.* It is the discussion “described below” that resulted in virtually every comment made by the BLET on FRA's preemption views. FRA reiterates those views except as they are expressly changed in this final rule. FRA clearly separated mention of the 2002 statutory amendment from the rest of the discussion. FRA notes that it proposed amending § 238.13 in part to reflect expressly that FRA's Passenger Equipment Safety Standards have a role in rail security. For example, if a passenger train collision were caused by intentional terrorist act, FRA's crashworthiness requirements would help to protect survivable space for the train occupants, FRA's fire safety standards would help lessen the likelihood that a fire would result, FRA's passenger train emergency system requirements would help facilitate both passenger escape and rescue, and other FRA standards would likely help mitigate the consequences of the act. While FRA has addressed the BLET comment as to what was said in the 1999 final rule, FRA again emphasizes that FRA is not only authorized to express its views as to the preemptive effect of its regulations and orders but has an obligation to do so when issues arise as to their preemptive effect. The NPRM was not the first occasion for FRA to express its views on the preemptive effect of this part on the safety of operating a cab car as the leading unit of a passenger train, and FRA clarified its views in light of misunderstandings that had arisen. That some confusion appears to have remained even after FRA did so in the NPRM is reason for FRA to believe that it may not have been clear enough, which has led FRA to be detailed in its responses to all of the preemption comments on the NPRM. Preemption is both complex and important; it merits extensive discussion when that is necessary to convey a complete understanding of the issues. It was necessary in this NPRM because the preemptive effect of FRA's actions had widely been misunderstood. FRA recognizes that the NPRM was published during ongoing litigation concerning the operation of a train with a cab car as the leading unit, but the underlying incident, other incidents, and concerns as to enhancing the end structure of cab cars and MU locomotives were the impetus for issuing the NPRM and for its timing. FRA cannot stand silent about the meaning and effect of its rules because litigation is underway. Litigation is often underway or imminent somewhere. If litigation were a bar to rulemaking or to full explanations of rules FRA issues, very little rulemaking would get done. FRA tries to explain its regulatory actions fully and clearly trusting that those explanations will assist the regulated community and the courts alike and believing that it is our job to do so. FRA does that to advance railroad safety. FRA is consistently an advocate for railroad safety, and its rules and interpretations of those rules are intended to protect and enhance the safety of railroad employees and passengers, and citizens in the vicinity of railroads, and the property of everyone within range. Of course, expressions of the agency's views are likely to help or hurt the case of some particular litigant, but that is not FRA's concern. As recited above, *Union Pacific RR* v. *California Public Utilities Comm'n* , 346 F.3d 851, 867 (9th Cir. 2003), well illustrates that FRA's forthright and clear expression of its views may help one litigant on some claims and the other side on other claims in the same case. FRA does not take or alter its positions based on who the litigants are. When, however, it appears that a court or courts have misconstrued FRA's regulations, the agency has an obligation in the interest of safety to correct the record. After all, FRA issued the regulation or interpretation as it did because that represented FRA's best expert judgment concerning how to advance railroad safety. Necessarily, in the agency's view, a misconstruction of its regulations is likely to impair railroad safety and permitting that impairment to continue is unacceptable. Both the technical aspects of railroad safety and preemption under 49 U.S.C. 20106 are arcane and difficult subjects on which the regulated community and courts, alike, are entitled to the best explanations the technical experts at FRA can provide. In the case that appears to concern the BLET, it seems that the discussion of preemption in the NPRM did assist a California appellate court, and that is entirely appropriate. 10. Whether FRA's Views on Preemption Affect FELA The BLET asserted that FRA's views on preemption conflict with legislatively promulgated and judicially recognized rights under the Federal Employers' Liability Act (FELA), 45 U.S.C. 51 *et seq.* (FELA provides that employees of common carriers by railroad engaged in interstate or foreign commerce may recover for work-related injuries caused in whole or in part by their employer's negligence.) The BLET stated that FELA has been liberally construed and that juries are given great leeway to determine whether there has been negligence or not. The BLET noted that FRA did not mention whether its views on preemption extended to FELA, but the BLET believed that FRA has created unnecessary tension with FELA by limiting theories of liability to violations of positive regulation—and excluding from liability that which has not been regulated. The BLET recommended that FRA avoid creating any such conflict by essentially limiting FRA's statements on preemption to what the statute expressly states and referencing the statute. As the BLET points out, FRA made no reference to FELA in FRA's discussion of preemption in the NPRM. FRA does not understand the basis for the BLET's concern that FRA is somehow “limiting theories of liability to violations of positive regulation—and excluding from liability that which has not been regulated.” Neither the NPRM nor this final rule does that. The statute and the regulation plainly state that a Federal standard of care created by regulation displaces State standards of care covering the same subject matter. State standards of care covering other subject matter are not preempted. FRA's discussion was limited to Federal railroad safety laws, regulations, and orders for which FRA has responsibility to administer or enforce. FELA is a railroad labor law, which FRA neither administers nor enforces. FELA is also a Federal law and, therefore, not expressly a subject of preemption under 49 U.S.C. 20106. Occasionally, however, conflicts arise between Federal statutes and courts must resolve them. Courts have concluded that, in certain circumstances, Federal railroad safety laws may preclude some FELA claims. Several courts have decided, for example, that the FRSA precludes an action under FELA where a railroad employee claims that he or she was injured because of a negligently excessive train speed, and where the train was not exceeding the speed limit set by FRSA regulations. These courts have reasoned that permitting such FELA claims would be contrary to “Congress' intent [in passing the FRSA] that railroad safety regulations be nationally uniform to the extent practicable.” *Lane* v. *R.A. Sims, Jr., Inc.* , 241 F.3d 439, 443 (5th Cir. 2001); *see also Waymire* v. *Norfolk & W. Ry. Co.* , 218 F.3d 773, 776 (7th Cir. 2000); *Rice* v. *Cincinnati, New Orleans & Pac. Ry. Co.* , 955 F.Supp. 739, 740-41 (E.D.Ky. 1997); *Thirkill* v. *J.B. Hunt Transp., Inc.* , 950 F.Supp. 1105, 1107 (N.D.Ala. 1996). But *see Earwood* v. *Norfolk S. Ry. Co.* , 845 F.Supp. 880, 891 (N.D.Ga. 1993) (concluding that a FELA action based on excessive speed was not precluded by the FRSA). *Tufariello* v. *Long Island R. Co.* , 458 F.3d 80, 86 (C.A.2 (N.Y.), 2006). Nothing in this final rule changes how courts resolve perceived conflicts between Federal railroad safety laws and FELA claims. As the examples cited above show, Federal courts were already applying preclusion analyses based on Section 20106 to reconcile Federal railroad safety laws, where they apply, and FELA. Courts regularly interpret Federal statutes that present potential conflicts, and FRA anticipates that courts hearing FELA cases will have little difficulty reconciling FELA and the current text of Section 20106. 11. Whether Preemption Applies Under the Locomotive (Boiler) Inspection Act The AAR commented that FRA gave incomplete guidance on preemption by referring only to Section 20106 in the NPRM. While the AAR took no issue with what FRA stated regarding Section 20106, the AAR pointed out that preemption also applies under the Locomotive (Boiler) Inspection Act

(LBIA)to requirements affecting locomotives and the NPRM would affect locomotive requirements. (The LBIA was repealed and reenacted as positive law in 49 U.S.C. ch. 207 (sections 20701-20703), “Locomotives,” by Public Law 103-272 (July 5, 1994); FRA is nonetheless referring to these provisions by their former name as they are commonly known.) The AAR stated that the LBIA preempts all requirements pertaining to locomotives, regardless of whether there is a Federal requirement addressing the subject matter of a State requirement. According to the AAR, a requirement could be preempted by the LBIA even if it is not preempted under Section 20106. The AAR noted that FRA recognizes preemption under the LBIA, citing 49 CFR 230.5, the preemption provision for FRA's Steam Locomotive Inspection and Maintenance Standards, which states in part: “The Locomotive Boiler Inspection Act (49 U.S.C. 20701-20703) preempts all State laws or regulations concerning locomotive safety. *Napier* v. *Atlantic Coast Line R.R.* , 272 U.S. 605 (1926).” The AAR added that in issuing this standard, FRA explained that while Section 20106 “would ordinarily set the standard for preemption of a rule issued under [49 U.S.C.] 20701, the broader field preemption provided by the LBIA (as interpreted by the courts) seems the more appropriate standard to apply in light of this rule's subject matter.” 64 FR 62828, 62836 (Nov. 17, 1999). The AAR believed the same is true here and that to portray the scope of Federal preemption accurately, § 238.13 needs to refer to both Section 20106 and the LBIA. The AAR suggested amending § 238.13 by adding the above-referenced statement from § 230.5. FRA believes that the AAR is correct and that preemption under the LBIA also applies to locomotives covered by part 238. FRA recognizes that the LBIA has been consistently interpreted as totally preempting the field of locomotive safety, extending to the design, the construction, and the material of every part of the locomotive and tender and all appurtenances thereof. Although the LBIA has no preemption provision, it has been held to preempt the entire field of locomotive safety. *See Napier* v. *Atlantic Coast R.R.,* 272 U.S. 605 (1926). The 1999 Passenger Equipment Safety Standards final rule was issued in part under the authority of the LBIA, sections 20701-20702, as was the NPRM in this rulemaking. This rulemaking directly imposes requirements on locomotives, as both cab cars and MU locomotives are locomotives. They are also considered passenger cars under part 238. The subject matter of part 238 is broader than just locomotives and passenger cars, covering all passenger equipment, which includes baggage, private, and other cars. Because of the broad subject matter of part 238 and the fact that the (former) FRSA rulemaking authority now codified in 49 U.S.C. 20103 was a basis for the rule, FRA originally cited the FRSA preemption provision codified in 49 U.S.C. 20106. However, that action was not meant to exclude the possibility of preemption under the LBIA applying as well. FRA has not been presented with an actual issue involving a passenger locomotive where FRA views on the effect of Federal preemption would differ depending on whether preemption under FRSA or the LBIA applies. Because the courts have consistently held since *Napier* in 1926 that the LBIA preempts the field of the design, the construction, and the material of every part of the locomotive and tender and all appurtenances thereof, FRA has presumed that preemption under the LBIA applies. Nevertheless, it is good regulatory practice to say so explicitly and FRA now does that. FRA amends § 238.13 at this time citing the LBIA. V. Section-by-Section Analysis Amendments to 49 CFR Part 238, Passenger Equipment Safety Standards Subpart A—General Section 238.13 Preemptive Effect This section informs the public as to FRA's views regarding the preemptive effect of this part. As discussed above, FRA is amending this section to conform to the revisions made to Section 20106 by the 9/11 Commission Act of 2007. FRA notes that its discussion of the comments raised on the NPRM provides detailed analysis of the preemptive effect of this part, and FRA is not repeating that discussion here. FRA also notes that the preemptive effect of this part is discussed in the section on “Federal Implications” in Section VI.D. of the preamble to this final rule. Subpart C—Specific Requirements for Tier I Passenger Equipment Section 238.205 Anti-Climbing Mechanism In the NPRM, FRA proposed to amend paragraph

(a)of this section to correct an error in the rule text. In relevant part, this paragraph stated that “all passenger equipment * * * shall have at both the forward and rear ends an anti-climbing mechanism capable of resisting an upward or downward vertical force of 100,000 pounds without failure.” However, FRA had intended that the words “without failure” actually read as “without permanent deformation,” as stated in the preamble accompanying the issuance of this paragraph. Specifically, FRA explained in the accompanying preamble that the anti-climbing mechanism must be capable of resisting an upward or downward vertical force of 100,000 pounds “without permanent deformation.” *See* 64 FR 25604; May 12, 1999. Use of the “without permanent deformation” criterion is consistent with North American industry practice, and FRA had not intended to relax that practice. Consequently, FRA had proposed to correct § 238.205(a) expressly to require that the anti-climbing mechanism be capable of resisting an upward or downward vertical force of 100,000 pounds without permanent deformation. In comments on the NPRM, CRM was supportive of the clarification to this anti-climbing provision, but CRM raised concern about the precedent set by making the clarification retroactive. As a result, CRM wanted it made clear that the date for the change be stated prospectively in the CFR itself. FRA brought this issue before the Task Force for its consideration. The consensus of the Task Force was to correct the rule text for all passenger equipment placed in service for the first time once the final rule takes effect, and to leave the rule text in its original for passenger equipment already placed in service. The Task Force could not cite an instance where passenger equipment subject to the requirements of this section and already placed in service had not been constructed with an anti-climbing mechanism capable of resisting an upward or downward vertical force of 100,000 pounds without permanent deformation. For this reason, the Task Force believed there was no real safety concern in leaving the rule text in its original for existing passenger equipment. FRA agrees with the Task Force's recommendation here and finds that, under the circumstances, it is appropriate to modify the rule text to apply the clarification to all passenger equipment placed in service for the first time on or after the effective date of the final rule. The rule text modification will take place immediately for such equipment newly placed in service, given that all equipment being placed in service now should meet this requirement. FRA notes that it has set out the entire text of this section for ease of use, although FRA is amending paragraph

(a)only. No change to paragraph

(b)has been made or is intended. Section 238.209 Forward End Structure of Locomotives, Including Cab Cars and MU Locomotives FRA is principally amending this section by revising it and adding a new paragraph

(b)so that the forward end structure of a cab car or an MU locomotive may comply with the requirements of appendix F to this part in lieu of the requirements of either § 238.211 (Collision posts) or § 238.213 (Corner posts), or both, provided that the end structure is designed to protect the occupied volume for its full height, from the underframe to the anti-telescoping plate (if used) or roof rails. *See* the discussion of §§ 238.211 and 238.213 and appendix F, below. In part because of this change, FRA is amending the heading of this section to make clear that the requirements apply to cab cars and MU locomotives. Cab cars and MU locomotives are locomotives and have been subject to the requirements of this section since its issuance. FRA has also shortened “[f]orward-facing end structure” to “[f]orward end structure,” in the section heading. FRA believes that referring to the forward or front end structure is appropriate since this section already referred to the “forward end structure” in former paragraph

(c)of the section, redesignated as paragraph (a)(1)(iii), and, as noted above, this section is being amended to expressly reference requirements for cab cars and MU locomotives that are stated in this final rule as applying to the forward end structure. Nonetheless, FRA makes clear that it is not changing the original requirements of this section for the skin covering the forward-facing end of each locomotive; FRA has only redesignated these requirements as paragraph

(a)of this section. FRA does note that an issue has arisen whether the skin must be made of steel plate, or whether a material of lesser yield strength may be used. FRA makes clear that the intent of this section has always been to allow for use of material of lesser yield strength that, due to its increased thickness, *e.g.,* provides strength at least equivalent to that for the steel plate specified. For instance, aluminum material of lesser yield strength may be used to comply with the requirements of paragraph

(a)if it is of sufficient thickness to provide at least the strength equivalent to that of a steel plate that is 1/2 -inch thick and has a yield strength of 25,000 pounds-per-square-inch. Section 238.211 Collision Posts This final rule enhances requirements for collision posts at the forward ends of cab cars and MU locomotives. The enhancements are based on the provisions of paragraphs

(a)through

(d)of section 5.3.1.3.1, Cab-end collision posts, of APTA SS-C&S-034-99, Rev. 2. FRA has modified the provisions of this APTA standard for purposes of their adoption as a Federal regulation. FRA is setting out § 238.211 in its entirety in the rule text for ease of use. In the NPRM, FRA had elided paragraphs (a)(1) and (a)(2) and paragraph (b)(1) of this section, using asterisks to represent that the text of these paragraphs would be unchanged. However, FRA is including these paragraphs in this final rule so that this section, as amended, may be read more easily in its entirety. Paragraph

(b)formerly required that each locomotive, including a cab car and an MU locomotive, ordered on or after September 8, 2000, or placed in service for the first time on or after September 9, 2002, have two collision posts at its forward end, each post capable of withstanding a 500,000-pound longitudinal force at the point even with the top of the underframe and a 200,000-pound longitudinal force exerted 30 inches above the joint of the post to the underframe. These requirements were based on AAR Standard S-580, and had been the industry practice for all locomotives built since August 1990. *See* 64 FR 25606. Subsequently, industry standards for locomotive crashworthiness were enhanced, with APTA focusing on standards for passenger-occupied locomotives, *i.e.,* cab cars and MU locomotives, and the AAR focusing on standards for freight locomotives. The AAR's efforts helped support development of the locomotive crashworthiness rulemaking, published as a final rule on June 28, 2006. *See* 71 FR 36887. That final rule specifically addresses the safety of conventional locomotives and does not apply to passenger-occupied locomotives. Nevertheless, FRA believes that conceptual approaches taken in the locomotive crashworthiness final rule are applicable to this rulemaking, as discussed below. To clearly delineate the relationship between the locomotive crashworthiness final rule and part 238, FRA has inserted a cross-reference in the introductory text of paragraph

(b)to indicate that since the locomotive requirements for collision posts in subpart D of part 229 became effective for locomotives manufactured on or after January 1, 2009, those more stringent requirements—and not the requirements of this paragraph—apply to conventional locomotives. In the NPRM, FRA proposed correcting paragraph (b)(2) so that the rule text is consistent with the clear intent of the provision. As explained in the preamble accompanying the issuance of this paragraph in the May 12, 1999 final rule, paragraph (b)(2) provides for the use of an equivalent end structure in place of the two forward collision posts described in paragraph (b)—specifically, paragraphs (b)(1)(i) and (b)(1)(ii). *See* 64 FR 25606. However, the rule text made express reference only to the collision posts in “paragraph (b)(1)(i) of this section.” This provision was not intended to be limited to the collision posts described in paragraph (b)(1)(i) alone, but instead to the collision posts described in paragraph (b)(1) as a whole—both paragraphs (b)(1)(i) and (b)(1)(ii). As a result, FRA proposed to correct this clear error in the rule text. In its comments on the NPRM, the BLET raised concern with this provision, first noting the purpose of collision posts as explained by FRA in the final rule governing the crashworthiness of freight locomotives. According to the BLET, because the height and positioning of the collision posts are what creates the survivable space during an accident, FRA imposes strict standards if a railroad wants to deviate from the AAR S-580 standard in the locomotive crashworthiness final rule. The BLET therefore found problematic that paragraph (b)(2) would provide for an equivalent end structure that could withstand the sum of the forces each collision post must withstand, in lieu of the two collision posts. The BLET believed that the level of protection provided by two collision posts is greater than the sum of the forces because of added energy dissipation provided by the outer sheeting of the locomotive superstructure. Additionally, the BLET believed that a differently-designed end structure that meets the equivalency requirement may or may not—depending upon its design and construction—provide the same amount of survivable space during an accident. Accordingly, the BLET urged FRA to revise paragraph (b)(2) in a way that addresses both of these concerns. As FRA discussed in the NPRM, FRA proposed to correct paragraph (b)(2) of this section so that use of an equivalent end structure would be allowed only in place of the two forward collision posts described in paragraphs (b)(1)(i) and (b)(1)(ii) of this section—not paragraph (b)(1)(i) alone. FRA sought to clear up a discrepancy between the rule text and the preamble explaining the provision, as well a lack of consistency within this paragraph

(b)as a whole. FRA has interpreted this provision in accordance with the preamble to the May 12, 1999 final rule, and would not consider any locomotive front end structures constructed otherwise to be compliant. FRA understands the BLET to be concerned that, even given this background, an end structure built in accordance with this corrected paragraph would present safety concerns. In large part for reasons discussed elsewhere in this final rule in support of new paragraph

(c)of this section, FRA disagrees. Paragraph

(c)of this section is essentially the counterpart to—and an enhancement of—the requirements of this paragraph

(b)for new cab cars and MU locomotives. New paragraph

(c)of this section applies to all cab cars and MU locomotives ordered on or after May 10, 2010, or placed in service for the first time on or after March 8, 2012. Further, as noted earlier, as a result of FRA's locomotive crashworthiness final rule cited by the BLET, paragraph

(b)does not apply to conventional passenger locomotives that are manufactured on or after January 1, 2009, as they are subject to the requirements of subpart D of part 229. Paragraph

(b)of this section therefore has limited applicability for new passenger locomotives, essentially only those new cab cars and MU locomotives ordered prior to May 10, 2010, and placed in service for the first time prior to March 8, 2012. FRA notes that paragraph (b)(2) is intended to assure a minimum level of overall end frame performance that prevents intrusions into the occupied volume, including the locomotive engineer's cab. End frames designed compliant with paragraph (b)(2) are intended to act as a system to help keep objects out of the cab. FRA wishes to allow for design innovation where alternative structures can be utilized that will provide equivalent levels of protection. There are examples of alternative, end frame arrangements that provide equivalent protection and are shaped so as to help deflect the object as the end frame deforms, thereby preventing intrusion into the cab area. FRA does not believe that use of structures designed compliant with paragraph (b)(2) places engineers at greater risk than use of traditional collision post structures compliant with paragraph (b)(1). FRA has redesignated former paragraph

(c)as paragraph (d), revised it, and added a new paragraph

(c)in its place. New paragraphs (c)(2)(i) and (c)(2)(ii) are similar to paragraphs (b)(1)(i) and (b)(1)(ii) of this section. One principal difference is that the final rule requires that each collision post be able to support the specified forces for angles up to 15 degrees from the longitudinal. In effect, this requires each post to support a significant lateral load, and is intended to reflect the uncertainty in the direction that a load is imparted during an impact. The requirement is also intended to encourage the use of collision posts with closed ( *e.g.,* rectangular) cross-sections, rather than with open ( *e.g.,* I-beam) cross-sections. Beams with open cross-sections tend to twist and bend across the weaker axis when overloaded, regardless of the direction of load. Beams with closed cross-sections are less likely to twist when overloaded, and are more likely to sustain a higher load as they deform, absorbing more energy. Paragraph (c)(2)(iii) does not have a counterpart in paragraph (b). This paragraph requires that the collision post be able to support a 60,000-pound horizontal force applied anywhere along its length, from its attachment to floor-level structure up to its attachment to roof-level structure. This requirement is intended to provide a minimum level of collision post strength at any point along its full height—not only at its connection to the underframe or at 30 inches above that point. The requirement must also be met for any angle within 15 degrees of the longitudinal axis. FRA notes that the forces specified in paragraph (c)(2) that the collision posts are required to withstand are more appropriately described as horizontal forces, not merely longitudinal forces, as they are applied at any angle within 15 degrees of the longitudinal axis, the same as provided in Section 5.3.1.3.1 of APTA SS-C&S-034-99, Rev. 2, on which this paragraph is based. Although the proposed rule text in the NPRM did not explicitly describe these forces as “horizontal forces,” FRA is doing so in this final rule to be consistent with the APTA standard and to make the rule text more clear. As discussed earlier, FRA received a number of comments on paragraph (c)(3), originally proposed as paragraph (c)(2) in the NPRM. FRA has modified this paragraph as a result, and this paragraph represents the consensus recommendation of RSAC. FRA had proposed that each collision post also be able to absorb a prescribed amount of energy while deforming and without separating from its supporting structure. This proposed requirement was intended to provide a level of protection similar to the SOA end frame design, as discussed earlier in the Technical Background section of the preamble, above. To comply with this requirement, the NPRM proposed that a quasi-static test, such as the test conducted by Bombardier on the M7 design, be used to show compliance. The NPRM also presented the option of dynamic testing to demonstrate compliance. As discussed earlier, FRA believes that dynamic performance requirements have been sufficiently validated and that dynamic testing should be included as an alternative for demonstrating compliance. However, FRA agrees with the Task Force in developing the final rule that instead of including in this paragraph an option for the dynamic testing of cab cars and MU locomotives, as was proposed in the NPRM, alternative requirements based on dynamic testing be included in appendix F to this part. Although FRA believes that the dynamic performance requirements will be applied to shaped-nose designs or CEM designs, or designs with both, these requirements may also be applied to conventional flat-nosed designs. Please *see* the “Discussion of Specific Comments and Conclusions” portion of the preamble, above, for additional guidance on the requirements of paragraph (c)(3). As proposed in the NPRM, FRA has redesignated existing paragraph

(c)as paragraph

(d)of this section. No other change is intended. There is no paragraph

(e)in this final rule. In the NPRM, FRA cited examples of shaped-nosed designs that place the engineer back from the extreme forward end of the vehicle and offer the potential for significantly increased protection for the engineer in collisions. In this regard, FRA had proposed to add a paragraph

(e)to provide relief from utilization of a traditional end frame structure, provided that an equivalent level of protection is afforded occupants by the components of a CEM system. *See* 72 FR 42038. The intent was to recognize that an equivalent level of protection may be provided against intrusion into occupied space, and that end frame structures could be set back from the very end of the cab car or MU locomotive as part of a CEM system. In the FRA CEM design tested in March 2006, the end frame structure was reinforced in order to support the loads introduced through the deformable anti-climber. Significantly more energy was absorbed in the deformation of the crush zone elements than the combined requirements outlined for both collision and corner posts while preserving all space for the locomotive engineer and passengers. 13 In the CEM design being procured by Metrolink, an equivalent end frame structure is placed outboard of occupied space with crush elements between the very end of the nose and the equivalent end frame structure of the cab car. For a grade-crossing collision above the underframe of the cab car, it is expected that perhaps an order of magnitude or larger of collision energy will be absorbed prior to any deformations into occupied space. 13 Tyrell, D., Jacobsen, K., Martinez, E., “A Train-to-Train Impact Test of Crash Energy Management Passenger Rail Equipment: Structural Results,” American Society of Mechanical Engineers, Paper No. IMECE2006-13597, November 2006. This document is available on the Volpe Center's Web site at: *http://www.volpe.dot.gov/sdd/docs/2006/rail_cw_2006_07.pdf.* Nonetheless, FRA has decided that proposed paragraph

(e)is not necessary to retain in this final rule. Dynamic performance requirements are provided as alternative requirements in appendix F to this part, and are therefore available to apply to cab cars and MU locomotives with CEM designs. The ability to apply dynamic performance requirements to the end frame structure provides the relief that was intended by the addition of proposed paragraph (e), and this final rule will help to facilitate the introduction of cab cars and MU locomotive with CEM designs. Section 238.213 Corner Posts This final rule enhances requirements for corner posts at the forward ends of cab cars and MU locomotives. The enhancements are based on the provisions of paragraphs

(a)through

(d)of Section 5.3.2.3.1, Cab end corner posts, and Section 5.3.2.3.3, Cab end-non-operator side of cab-alternate requirements of APTA SS-C&S-034-99, Rev. 2. FRA has modified the provisions of this APTA standard for purposes of their adoption as a Federal regulation. Together with the enhanced requirements for collision posts, this action will increase the strength of the front end structure of cab cars and MU locomotives up to what the main structure can support, and also require explicit consideration of the behavior of the front end structure when overloaded. As proposed in the NPRM, FRA has revised this section in its entirety. FRA has revised this section by re-designating former paragraph

(b)as paragraph (a)(2), making conforming changes to paragraph (a), and adding new paragraphs

(b)and (c). FRA has made conforming changes to paragraph

(a)so that it is consistent with this section in its entirety, as revised. In particular, FRA has re-stated the corner post requirements in terms of “force” resisted, rather than “load” resisted. However, FRA makes clear that no change is intended to the formerly stated requirements; on the contrary, FRA is using the same terminology throughout this section so as to minimize any confusion that may result from using different terms when the same meaning is intended. Paragraph

(b)is intended to augment the requirements of paragraph

(a)for cab cars and MU locomotives ordered on or after May 10, 2010, or placed in service for the first time on or after March 8, 2012. Paragraph (b)(2) therefore requires that higher loads be resisted at the specified locations than its counterpart in paragraph (a). Paragraph (b)(3) includes quasi-static performance requirements for demonstrating that the corner posts absorb energy while deforming. In the NPRM, proposed paragraph (b)(2)(i) contained quasi-static test requirements for demonstrating energy absorption and deformation. The proposed requirements were intended to provide a level of protection similar to the SOA end frame design, as described in the Technical Background portion of the preamble, above. A quasi-static test, similar to the test conducted by Bombardier on the M7, would be appropriate to demonstrate compliance. Additionally, proposed paragraph (b)(2)(ii) provided for dynamic qualification of the energy absorption and deformation requirements, as an alternative to demonstrating compliance quasi-statically. FRA proposed that the end structure would need to be capable of withstanding a frontal impact with a proxy object intended to approximate lading carried by a highway vehicle under specific conditions. As discussed earlier, FRA believes that dynamic performance requirements have been sufficiently validated and that dynamic testing should be included as an alternative for demonstrating compliance. However, FRA agrees with the Task Force in developing the final rule that instead of including in this paragraph an option for the dynamic testing of cab cars and MU locomotives, as was proposed in the NPRM, alternative requirements based on dynamic testing be included in appendix F to this part. Although FRA believes that the dynamic performance requirements will be applied to shaped-nose designs or CEM designs, or designs with both, the requirements may also be applied to conventional flat-nosed designs. Please *see* the “Discussion of Specific Comments and Conclusions” portion of the preamble, above, for additional guidance on the requirements of paragraph (b)(3). FRA notes that collision posts have more available space and a stronger support structure than corner posts due to their location in the middle of the end frame. Hence, they can absorb more energy than corner posts, and the energy absorption requirements specified for collision posts in this final rule are greater than those specified for corner posts, as a result. Nevertheless, these new requirements for corner posts more than double the amount of energy required for the posts to fail, when compared to the 1990s end frame design. Paragraph

(c)prescribes the requirements for corner posts in cab cars and MU locomotives ordered on or after May 10, 2010, or placed in service for the first time on or after March 8, 2012, utilizing low-level passenger boarding on the side of the equipment opposite from where the locomotive engineer is seated. A graphical description of the forward end of a cab car or an MU locomotive utilizing low-level passenger boarding on the non-operating side of the cab end is provided in Figure 1 to subpart C. In this arrangement, the non-operating side of the vehicle is protected by two corner posts (an end corner post ahead of the stepwell and an internal corner post behind the stepwell) that are situated in front of the occupied space and provide protection for the occupied space; the rule allows for the combined contribution of both sets of corner posts to provide an equivalent level of protection to that required for the corner post design arrangement in other configurations. As discussed earlier, FRA received a number of comments on this provision as proposed in the NPRM. In particular, the BLET raised concern that this provision could lead to a diminution of safety by designing the corner post ahead of the stepwell to be weaker than the one behind the stepwell. Although FRA has explained that safety is not diminished, the final rule contains an additional requirement that FRA review and approve plans for manufacturing cab cars and MU locomotives with this corner post design arrangement. Each plan must detail how the corner post requirements will be met, including what the acceptance criteria will be to evaluate compliance. FRA believes that this close oversight will help to alleviate concerns that the manufactured designs are in any way less safe for crewmembers and passengers to occupy. Specifically, paragraph

(c)requires that the corner post load requirements of paragraph

(b)be met for the corner post on the operating side of the cab. The requirements for the two corner posts on the side opposite from the engineer's control stand are described in paragraphs (c)(2) and (c)(3). The structural requirements for the end corner post ahead of the stepwell are described in paragraph (c)(2). The higher magnitude forces applied in the longitudinal direction will result in a corner post that is wider than it is deep. The structural load requirements for the corner post behind the stepwell are described in paragraph (c)(3). The higher magnitude forces applied in the transverse direction will result in a corner post that is deeper than it is wide. In paragraph (c)(4), FRA is also requiring that the combination of the corner post ahead of the stepwell and the corner post behind the stepwell be capable of absorbing collision energy while deforming. The requirements of this paragraph are virtually identical to those for corner ports subject to paragraph (b)(3). In the NPRM, proposed paragraph (c)(3)(i) contained quasi static test requirements for demonstrating energy absorption and deformation. Additionally, proposed paragraph (c)(3)(ii) provided for dynamic qualification of the energy absorption and deformation requirements, as an alternative to demonstrating compliance quasi-statically. As noted earlier, FRA agreed with the Task Force in developing this final rule that instead of including in this paragraph an option for the dynamic testing of cab cars and MU locomotives, as was proposed in the NPRM, alternative requirements based on dynamic testing be included in appendix F to this part. This has been done. There is no paragraph

(d)in this final rule. Similar to the proposed addition of § 238.211(e), discussed above, FRA had proposed to add a paragraph

(d)to provide relief from utilization of a traditional end frame structure, provided that an equivalent level of protection is afforded occupants by the components of a CEM system. *See* 72 FR 42038. The intent was to recognize that an equivalent level of protection may be provided against intrusion into occupied space, and that end frame structures could be set back from the very end of the cab car or MU locomotive as part of a CEM system. In the FRA CEM design tested in March 2006, the end frame structure was reinforced in order to support the loads introduced through the deformable anti-climber. Significantly more energy was absorbed in the deformation of the deformable anti-climber than the combined requirements outlined for both collision and corner posts while preserving all space for the locomotive engineer and passengers. *Id.* In the CEM design being procured by Metrolink, an equivalent end frame structure is placed outboard of occupied space with crush elements between the very end of the nose and the equivalent end frame structure of the cab car. For a grade-crossing collision above the underframe of the cab car, it is expected that perhaps an order of magnitude or larger of collision energy will be absorbed prior to any deformations into occupied space. Nonetheless, FRA has decided that proposed paragraph

(d)is not necessary to retain in this final rule. Dynamic performance requirements are provided as alternative requirements in appendix F to this part, and are therefore available to apply to cab cars and MU locomotives with CEM designs. The ability to apply dynamic performance requirements to the end frame structure provides the relief that was intended by the addition of proposed paragraph (d), and this final rule will help to facilitate the introduction of cab cars and MU locomotive with CEM designs. Appendix A to Part 238—Schedule of Civil Penalties This appendix contains a schedule of civil penalties to be used in connection with this part. Because such penalty schedules are statements of agency policy, notice and comment are not required prior to their issuance. *See* 5 U.S.C. 553(b)(3)(A). Nevertheless, FRA invited comment on the proposed penalty schedule in light of the proposed changes to part 238. No comment was received. FRA does not find it necessary to amend the penalty schedule as a result of the changes made to part 238 by this final rule. This final rule amends existing sections of part 238 for which guideline penalty amounts are already provided in the penalty schedule. As a result, the penalty schedule remains unchanged. As noted in the NPRM, in December 2006 FRA published proposed statements of agency policy that would amend the schedules of civil penalties issued as appendixes to FRA's safety regulations, including part 238. *See* 71 FR 70589; Dec. 5, 2006. The proposed revisions are intended to reflect more accurately the safety risks associated with violations of the rail safety laws and regulations, as well as to make sure that the civil penalty amounts are consistent across all safety regulations. Although the schedules are statements of agency policy, and FRA has authority to issue the revisions without having to follow the notice and comment procedures of the Administrative Procedure Act, FRA provided members and representatives of the general public an opportunity to comment on the proposed revisions before amending them. FRA has evaluated all of the comments received in preparing final statements of agency policy, and the schedule of civil penalties to part 238 may be revised as a result of that separate proceeding, independent of this rulemaking. Appendix F to Part 238—Alternative Dynamic Performance Requirements for Front End Structures of Cab Cars and MU Locomotives FRA is adding appendix F to part 238 to provide alternatives to the requirements of §§ 238.211 and 238.213. Cab cars and MU locomotives are not required to comply with both the requirements of those sections and the requirements of this appendix. Either set of requirements is adequate for the purpose, depending on the technical challenge(s) presented. As specified in § 238.209(b), the forward end of a cab car or an MU locomotive may comply with the requirements of this appendix in lieu of the requirements of either § 238.211 or § 238.213, or both. The requirements of this appendix are intended to be equivalent to the requirements of those sections and allow for the application of dynamic performance criteria to cab cars and MU locomotives as an alternative to the requirements of those sections. The alternative dynamic performance requirements are applicable to all cab cars and MU locomotives and may, in particular, be helpful for evaluating the compliance of cab cars and MU locomotives with shaped-noses or CEM designs, or both. In any case, the end structure must be designed to protect the occupied volume for its full height, from the underframe to the anti-telescoping plate (if used) or roof rails. FRA notes that, in developing the NPRM, concern was raised as to the safety of conducting full-scale, dynamic testing; the technical tradeoffs between quasi-static test requirements and dynamic test requirements were discussed in the Technical Background section of the preamble to the NPRM. FRA explained that there are safety concerns associated with both quasi-static and dynamic testing, and in a quasi-static test particular care must be taken due to the potential for the sudden release of stored energy should there be material failure. Proper planning and execution of each test are required. Nonetheless, FRA has revised the dynamic performance requirements to minimize safety concerns, as discussed earlier in the preamble to this final rule. (Again, by noting that caution must be exercised in planning and executing the tests, FRA does not intend in any way to oust the jurisdiction of the Occupational Safety and Health Administration of the U.S. Department of Labor with regard to the safety of employees performing the tests.) FRA notes that the approach in this appendix is similar to that followed in the locomotive crashworthiness final rule, in which the front end structure requirements are principally stated in the form of performance criteria for given collision scenarios. *See* appendix E to part 229; 71 FR 36915. In that final rule, FRA adopted performance criteria, rather than more prescriptive design standards, to allow for greater flexibility in the design of locomotives and better encourage innovation in locomotive designs. *See* 71 FR 36895-36898. Of course, the requirements in §§ 238.211 and 238.213 are forms of performance criteria; the distinction is that the performance criteria relate to quasi-static loading conditions—instead of dynamic loading conditions. Please *see* the “Discussion of Specific Comments and Conclusions” section in the preamble, above, for additional guidance on the requirements of this appendix and of paragraph (b)(3) in particular for cab cars and MU locomotives utilizing low-level passenger boarding on the non-operating side of the cab. VI. Regulatory Impact and Notices A. Executive Order 12866 and DOT Regulatory Policies and Procedures This final rule has been evaluated in accordance with existing policies and procedures, and it has been determined not to be significant under either Executive Order 12866 or DOT policies and procedures (44 FR 11034; Feb. 26, 1979). FRA has prepared and placed in the docket a regulatory evaluation addressing the economic impact of this final rule. Document inspection and copying facilities are available at the Docket Management Facility, U.S. Department of Transportation, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. Docket material is also available for inspection on the Internet at *http://www.regulations.gov* . Photocopies may also be obtained by submitting a written request to the FRA Docket Clerk at Office of Chief Counsel, Mail Stop 10, Federal Railroad Administration, 1200 New Jersey Avenue, SE., Washington, DC 20590; please refer to Docket No. FRA-2006-25268. Through this final rule, FRA is enhancing its minimum requirements for the performance of collision posts and corner posts on cab cars and MU locomotives. These requirements apply only to newly constructed passenger equipment used as cab cars or MU locomotives. The requirements are based on current industry standards for front end frame structures, which, to FRA's knowledge, every cab car or MU locomotive currently in production for operation in the United States already meets. As such, the requirements are not expected to affect any units in production or planned for production for operation in the United States. This rule essentially codifies these industry standards and will likely not cause railroads to incur costs beyond those they already incur voluntarily. In this regard, it is also likely that this rule will lead to no additional safety benefits, because, as previously mentioned, industry already makes cab cars and MU locomotives that meet these requirements and is assumed to do so in the absence of this final rule. The rule's requirements may affect cab cars and MU locomotives from other potential manufacturers of equipment for operation in the United States if the equipment is of a design that does not meet current industry standards. However unlikely this scenario, FRA's analysis considers the hypothetical costs and benefits of requiring equipment subject to this final rule from a non-compliant design to be made compliant with the rule's requirements. Since there are alternative methods to meet the requirements of this final rule, the level of cost burden would depend on the method used. For purposes of analysis, FRA selected a method that would serve as a reasonable proxy. The analysis assumes that costs would stem from slightly higher costs of producing the equipment and slightly higher energy costs resulting from operating the equipment in proportion to its assumed additional weight. (FRA notes that although the analysis assumes that the additional weight would be one quarter of one percent (0.25%) of the weight of the equipment, FRA is not making a finding that a cab car or MU locomotive would necessarily be heavier as a result of manufacturing it in compliance with this final rule.) At the same time, the analysis assumes that benefits would arise from increased safety for passengers and crewmembers—safety that is provided by a more crashworthy end frame structure that is assumed to result both in some fatalities avoided and in injuries avoided. In particular, assuming the number of new cab cars and MU locomotives that would not be built to these requirements and that therefore would be affected by this rule increases by 3 percent annually for the 20 years following implementation of this rule, FRA's analysis finds that, at a 7 percent discount rate, adopting this rule would cost $4,056,265 in 2007 dollars over the 20-year period. The analysis further assumes that it would not be unreasonable to attain total safety benefits for the 20-year period of $16,334,389 in 2007 dollars at a 7 percent discount rate, meaning that net benefits at a 7 percent discount rate would be $12,278,124. Analyzed at an incremental level, this rule would then result in an average cost of $1,304 per unit in 2007 dollars and would yield average benefits of $5,252 per unit in 2007 dollars. Average net benefits for each unit constructed in compliance with this rule would then be $3,948 in 2007 dollars. At a 3 percent discount rate, adopting this rule would then cost $7,367,882 in 2007 dollars and would yield total benefits of $22,081,319 in 2007 dollars. Net benefits at a 3 percent discount rate would then be $14,713,437 in 2007 dollars. Calculated at the per unit basis at a 3 percent discount rate, adopting this rule would then cost $2,369 on average per unit in 2007 dollars and would result in benefits of $7,100 on average per unit in 2007 dollars. Thus, average net benefits per unit at a 3 percent discount rate would then be $4,731 in 2007 dollars. B. Regulatory Flexibility Act and Executive Order 13272 To ensure that the potential impact of this rule on small entities was properly considered, FRA developed this rule in accordance with Executive Order 13272 (“Proper Consideration of Small Entities in Agency Rulemaking”) and DOT's policies and procedures to promote compliance with the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ). The Regulatory Flexibility Act requires an agency to review regulations to assess their impact on small entities. An agency must conduct a regulatory flexibility analysis unless it determines and certifies that a rule is not expected to have a significant impact on a substantial number of small entities. As discussed in earlier sections of this preamble, the principal goals of crashworthiness rules promulgated by FRA are twofold: first, preserve a safe space for occupants, and, next, minimize the forces that occupants are subjected to when impacting interior surfaces. The APTA standards developed in 1999, and revised in 2003 and 2006, provide that new cab cars and MU locomotives have front end structures with corner and collision posts able to sustain minimum prescribed loads and absorb collision energy. This rule codifies these industry standards, which are based on quasi-static performance criteria. This rule also includes dynamic performance criteria that can be applied to any type of front end structure design (shaped-nose, CEM, flat-nosed, or otherwise) in lieu of the quasi-static performance criteria, which should reduce the uncertainty involved in demonstrating compliance. Inclusion of these alternative criteria should also enable car builders to more easily incorporate alternative, front end structure designs, which may lead to safer, less costly, or otherwise improved cab cars and MU locomotives. FRA notes that the crashworthiness requirements proposed in the NPRM and contained in this final rule were developed in consultation with a working group that includes Amtrak, individual commuter railroads, individual passenger car manufacturers, and APTA, which represents commuter railroads and passenger car manufacturers in rulemaking matters. As discussed in earlier sections of this preamble, the quasi-static performance criteria in the final rule are basically unchanged from the NPRM, while FRA has restated the alternative, dynamic performance criteria principally to make the criteria easier to apply. FRA has considered all of the comments submitted to the rulemaking docket and appreciates the information provided by the many parties. No comments were received specifically regarding FRA's initial analysis of the impact of this rule on small entities. As discussed below, FRA is certifying that this final rule will result in “no significant economic impact on a substantial number of small entities.” The universe of the entities considered by FRA comprises only those small entities that can reasonably be expected to be directly affected by the provisions of this rule. “Small entity” is defined in 5 U.S.C. 601(3) as having the same meaning as “small business concern” under section 3 of the Small Business Act. This includes any small business concern that is independently owned and operated, and is not dominant in its field of operation. Section 601(4) likewise includes within the definition of “small entities” not-for-profit enterprises that are independently owned and operated, and are not dominant in their field of operations. The U.S. Small Business Administration

(SBA)stipulates “size standards” for small entities. It provides that the largest a for-profit railroad business firm may be (and still classify as a “small entity”) is 1,500 employees for “Line-Haul Operating” railroads, and 500 employees for “Short-Line Operating” railroads. Additionally, section 601(5) defines as “small entities” governments of cities, counties, towns, townships, villages, school districts, or special districts with populations less than 50,000. SBA size standards may be altered by Federal agencies in consultation with SBA, and in conjunction with public comment. Pursuant to the authority provided to it by SBA, FRA has published a final policy, which formally establishes small entities as railroads that meet the line haulage revenue requirements of a Class III railroad. Currently, the revenue requirements are $20 million or less in annual operating revenue, adjusted annually for inflation. The $20 million limit (adjusted annually for inflation) is based on the Surface Transportation Board's threshold of a Class III railroad carrier, which is adjusted by applying the railroad revenue deflator adjustment. The principal entities subject to this rule by application of § 238.3(a)(1) are governmental jurisdictions or transit authorities that provide commuter rail service—none of which is small for purposes of the SBA ( *i.e.,* no entity serves a locality with a population less than 50,000). These entities also receive Federal transportation funds. Intercity rail service providers Amtrak and the Alaska Railroad Corporation are also subject to this rule under § 238.3(a)(1), but they are not small entities and likewise receive Federal transportation funds. While other railroads are subject to this final rule by the application of § 238.3, FRA is not aware of any railroad subject to this rule that is a small entity that will be impacted by this rule. For example, railroads that provide short-haul rail passenger train service in a metropolitan or suburban area as specified in § 238.3(a)(2) are subject to this rule, but FRA is not aware that any railroad in existence that would fall in this category (and is not otherwise a commuter railroad) operates with cab cars or MU locomotives, or intends to acquire any new cab cars or MU locomotives that would be subject to the requirements of this final rule, or both. Tourist, scenic, excursion, and historic passenger railroad operations are exempt from part 238; therefore, these smaller operations would not incur any costs from this final rule. Having made these determinations, FRA certifies that this final rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act or Executive Order 13272. C. Paperwork Reduction Act The information collection requirements in this final rule have been submitted to the Office of Management and Budget

(OMB)for review and approval in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). The section that contains a new information collection requirement (49 CFR 238.213) and the estimated time to fulfill that requirement are both summarized in the following table. The table summarizes the information collection requirements arising out of the May 12, 1999 Passenger Equipment Safety Standards final rule, 64 FR 25540. Please note that the table does not include those information collection requirements added by the February 1, 2008 Passenger Train Emergency Systems final rule, 73 FR 6370, as they are covered under a separate approval, OMB No. 2130-0576, which is current until March 31, 2011. CFR section Respondent universe Total annual responses Average time per response Total annual burden hours 216.14—Special Notice for Repairs 27 railroads 9 forms 5 minutes 1 —Passenger Equipment 229.47—Emergency Brake Valve —Marking Brake Pipe Valve as Such 27 railroads 30 markings 1 minute 1 —MU, Cab Car Locomotives—Marking Emergency Brake Valve as Such 27 railroads 5 markings 1 minute .08 238.7—Waivers 27 railroads 5 waivers 2 hours 10 238.15—Movement of Passenger Equipment with Power Brake Defects —Defects Found at Inspection Point 27 railroads 1,000 tags 3 minutes 50 —Defects Developed en Route 27 railroads 288 tags 3 minutes 14 —Conditional requirement—Notification 27 railroads 144 notifications 3 minutes 7 238.17—Movement of Passenger Equipment with Other Than Power Brake Defects —Defects Found at Inspection Point 27 railroads 200 tags 3 minutes 10 —Defects Developed en Route 27 railroads 76 tags 3 minutes 4 —Special Requisites—Movement of Passenger Equipment with Safety Appliance Defect—Crewmember Notifications 27 railroads 38 notifications 30 seconds .32 238.21—Petitions for Special Approval of Alternative Standards 27 railroads 1 petition 16 hours 16 —Petitions for Special Approval of Alternative Compliance 27 railroads 1 petition 120 hours 120 —Petitions for Special Approval of Pre-Revenue Service Acceptance Testing Plan 27 railroads 10 petitions 40 hours 400 —Comments on petitions public/railroad industry 4 comments 1 hour 4 238.103—Fire Safety —Procuring New Pass. Equipment—Fire Safety Analysis 2 new railroads 2 analyses 150 hours 300 —Existing Equipment—Final Fire Safety Analysis 27 railroads 1 analysis 40 hours 40 —Transferring/Changing Existing Equipment—Revised Fire Safety Analysis 27 railroads 3 analyses 20 hours 60 238.107—Inspection, Testing, and Maintenance Plans—Review by Railroads 27 railroads 12 reviews 60 hours 720 238.109—Employee/Contractor Training —Training Employees and Contractors—Mech. Inspection 7,500 employees/contractors 2,500 employees/contractors/100 trainers 1.33 hours 3,458 —Recordkeeping—Employee/Contractor Current Qualifications 27 railroads 2,500 records 3 minutes 125 238.111—Pre-Revenue Service Acceptance Testing Plan —Passenger Equipment That Has Previously Been Used in Revenue Service in the U.S 9 equipment manufacturers 2 plans 16 hours 32 —Passenger Equipment That Has Not Been Previously Used in Revenue Service in the U.S 9 equipment manufacturers 2 plans 192 hours 384 —Subsequent Equipment Orders 9 equipment manufacturers 2 plans 60 hours 120 238.213—Corner Posts—Plans (New Requirement) 27 railroads 10 plans 40 hours 400 238.229—Safety Appliances —Welded Safety Appliances Considered Defective: Lists 27 railroads 27 lists 1 hour 27 —Lists Identifying Equipment with Welded Safety Appliances 27 railroads 27 lists 1 hour 27 —Defective Welded Safety Appliances—Tags 27 railroads 4 tags 3 minutes .20 —Notification to Crewmembers about Non-Compliant Equipment 27 railroads 2 notifications 1 minute .0333 —Inspection Plans 27 railroads 27 plans 16 hours 432 —Inspection Personnel—Training 27 railroads 54 employees 4 hours 216 —Remedial action: Defect/Crack in Weld—Record 27 railroads 1 record 2.25 hours 2 —Petitions for Special Approval of Alternative Compliance—Impractical Equipment Design 27 railroads 15 petitions 4 hours 60 —Records of Inspection/Repair of Welded Safety Appliance Brackets/Supports 27 railroads 3,054 records 12 minutes 611 238.230—Safety Appliances—New Equipment —Inspection Record of Welded Equipment by Qualified Employee 27 railroads 100 records 6 minutes 10 —Welded Safety Appliances: Documentation for Equipment Impractically Designed to Mechanically Fasten Safety Appliance Support 27 railroads 15 documents 4 hours 60 238.231—Brake System —Inspection and Repair of Hand/Parking Brake: Records 27 railroads 2,500 forms 21 minutes 875 —Procedures Verifying Hold of Hand/Parking Brake 27 railroads 27 procedures 2 hours 54 238.237—Automated Monitoring —Documentation for Alerter/Deadman Control Timing 27 railroads 3 documents 2 hours 6 —Defective Alerter/Deadman Control: Tagging 27 railroads 25 tags 3 minutes 1 238.303—Exterior Calendar Day Mechanical Inspection of Passenger Equipment —Notice of Previous Inspection for Added Equipment 27 railroads 25 notices 1 minute 1 —Dynamic Brakes Not in Operating Mode: Tag 27 railroads 50 tags 3 minutes 3 —Conventional Locomotives Equipped with Inoperative Dynamic Brakes: Tagging 27 railroads 50 tags 3 minutes 3 —MU Passenger Equipment Found with Inoperative/Ineffective Air Compressor at Exterior Calendar Day Inspection: Documents 27 railroads 4 documents 2 hours 8 —Written Notice to Train Crew about Inoperative/Ineffective Air Compressors 27 railroads 100 notices 3 minutes 5 —Records of Inoperative Air Compressors 27 railroads 100 records 2 minutes 3 —Record of Exterior Calendar Day Mechanical Inspection 27 railroads 2,376,920 records 10 minutes + 1 minute 435,769 238.305—Interior Calendar Day Mechanical Inspection of Passenger Cars —Tagging of Defective End/Side Doors 27 railroads 540 tags 1 minute 9 —Records of Interior Calendar Day Inspection 27 railroads 1,968,980 records 5 minutes + 1 minute 196,898 238.307—Periodic Mechanical Inspection of Passenger Cars and Unpowered Vehicles —Alternative Inspection Intervals: Notifications 27 railroads 2 notifications 5 hours 10 —Notice of Seats/Seat Attachments Broken or Loose 27 railroads 200 notices 2 minutes 7 —Records of Each Periodic Mechanical Inspection 27 railroads 19,284 records 200 hours/2 minutes 3,857,443 —Detailed Documentation of Reliability Assessments as Basis for Alternative Inspection Interval 27 railroads 5 documents 100 hours 500 238.311—Single Car Test —Tagging to Indicate Need for Single Car Test 27 railroads 50 tags 3 minutes 3 238.313—Class I Brake Test —Record for Additional Inspection for Passenger Equipment That Does Not Comply with § 238.231(b)(1) 27 railroads 15,600 records 30 minutes 7,800 238.315—Class IA Brake Test —Notice to Train Crew That Test Has Been Performed 27 railroads 18,250 verbal notices 5 seconds 25 —Communicating Signal Tested and Operating 27 railroads 365,000 tests 15 seconds 1,521 238.317—Class II Brake Test —Communicating Signal Tested and Operating 27 railroads 365,000 tests 15 seconds 1,521 238.321—Out-of-Service Credit —Passenger Car: Out-of-Use Notation 27 railroads 1,250 notes 2 minutes 42 238.445—Automated Monitoring —Performance Monitoring: Alerters/Alarms 1 railroad 10,000 alerts 10 seconds 28 —Monitoring System: Self-Test Feature: Notifications 1 railroad 21,900 notifications 20 seconds 122 238.503—Inspection, Testing, and Maintenance Requirements—Plans 1 railroad 1 plan 1,200 hours 1,200 238.505—Program Approval Procedures —Submission of Program/Plans and Comments on Programs rail industry 3 comments 3 hours 9 All estimates include the time for reviewing instructions, searching existing data sources, gathering or maintaining the needed data, and reviewing the information. For information or a copy of the paperwork package submitted to OMB, contact Mr. Robert Brogan, Office of Safety Information Clearance Officer, at 202-493-6292 or via e-mail at *robert.brogan@dot.gov;* or Ms. Kimberly Toone, Office of Administration Information Clearance Officer, at 202-493-6132 or via e-mail at *kimberly.toone@dot.gov* . Organizations and individuals desiring to submit comments on the collection of information requirements should direct them to the Office of Management and Budget, 725 17th St., NW., Washington, DC 20590, Attn: FRA OMB Desk Officer, or via e-mail at *oira_submissions@omb.eop.gov.* OMB is required to make a decision concerning the collection of information requirements contained in this final rule between 30 and 60 days after publication of this final rule in the **Federal Register.** Therefore, a comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication. FRA is not authorized to impose a penalty on persons for violating information collection requirements which do not display a current OMB control number, if required. FRA intends to obtain current OMB control numbers for any new information collection requirements resulting from this rulemaking action prior to the effective date of the final rule. The OMB control number, when assigned, will be announced by separate notice in the **Federal Register.** D. Federalism Implications This final rule has been analyzed in accordance with the principles and criteria contained in Executive Order 13132, “Federalism” (64 FR 43255, Aug. 10, 1999). Executive Order 13132 requires FRA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” are defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Under Executive Order 13132, the agency may not issue a regulation with federalism implications that imposes substantial direct compliance costs and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, the agency consults with State and local governments, or the agency consults with State and local government officials early in the process of developing the regulation. Where a regulation has federalism implications and preempts State law, the agency seeks to consult with State and local officials in the process of developing the regulation. FRA has determined that this final rule will not have substantial direct effects on the States, on the relationship between the national government and the States, nor on the distribution of power and responsibilities among the various levels of government. In addition, FRA has determined that this final rule will not impose substantial direct compliance costs on State and local governments. Therefore, the consultation and funding requirements of Executive Order 13132 do not apply. However, this final rule has preemptive effect. As discussed earlier, FRA is clarifying the preemptive effect of this final rule and the underlying regulations it is proposing to amend. Section 20106 provides that States may not adopt or continue in effect any law, regulation, or order related to railroad safety or security that covers the subject matter of a regulation prescribed or issued by the Secretary of Transportation (with respect to railroad safety matters) or the Secretary of Homeland Security (with respect to railroad security matters), except when the State law, regulation, or order qualifies under the “essentially local safety or security hazard” exception to Section 20106. The intent of Section 20106 is to promote national uniformity in railroad safety and security standards. 49 U.S.C. 20106(a)(1). This intent was expressed even more specifically in 49 U.S.C. 20133, which mandated that the Secretary of Transportation prescribe “regulations establishing minimum standards for the safety of cars used by railroad carriers to transport passengers” and consider such matters as “the crashworthiness of the cars” before prescribing the regulations. This final rule is intended to add to and enhance these regulations, originally issued on May 12, 1999, pursuant to 49 U.S.C. 20133. Thus, subject to a limited exception for essentially local safety or security hazards, this final rule establishes a uniform Federal safety standard that must be met, and State requirements covering the same subject matter are displaced, whether those State requirements are in the form of a State law, including common law, regulation, or order. In particular, FRA believes that it has preempted any State law, regulation, or order, including State common law standards of care, concerning the operation of a cab car or MU locomotive as the leading unit of a passenger train. As discussed earlier, FRA notes that RSAC, which endorsed and recommended adoption of the requirements of this final rule, has as permanent members two organizations representing State and local interests: AASHTO and ASRSM. Both of these State organizations concurred with the RSAC recommendation endorsing the requirements of this final rule. RSAC regularly provides recommendations to the Administrator of FRA for solutions to regulatory issues that reflect significant input from its State members. As discussed earlier, FRA has received federalism concerns in comments on the NPRM from members of RSAC, from the CPUC, and from other commenters. FRA again makes clear that the RSAC recommendation to the Administrator on the NPRM neither contained a preemption provision in the rule text, nor did it include the interpretive discussion in the preamble to the NPRM. Nor did RSAC, which includes AASHTO and ASRSM, address the comments raised on preemption in developing this final rule. Nonetheless, FRA believes that this final rule is in accordance with the principles and criteria contained in Executive Order 13132, which says “where national standards are required by Federal statutes, consult with appropriate State and local officials in developing those standards.” The standards are embodied in the rule text, and the rule text was the subject of the consultations that focused principally on what the substantive requirements of the rule should be. FRA notes that the BLET commented that FRA, in developing the NPRM, did not consult with any truly local interests, asserting that AASHTO and ASRSM are comprised of State—not local—executive branch representatives. Further, the BLET commented that there was no evidence that FRA had consulted with any member of a State or local legislative or judicial branch, or a State's attorney general. The BLET contended that FRA's preamble comments created a significant Federal question and required consultation under Executive Order 13132 that had not been performed. FRA believes that local interests are sufficiently represented through RSAC for purposes of the consultations required to be undertaken by FRA in developing proposed regulations under Executive Order 13132. For instance, FRA understands that while all State departments of transportation are active members of AASHTO, several sub-State transportation agencies are associate members, including local transportation officials. Further, even though ASRSM is comprised of State officials, FRA has not relied on the fact that another RSAC member, APTA, itself has as members local government agencies and metropolitan planning organizations. APTA took no issue with FRA's views on preemption. Instead, APTA “applaud[ed] FRA's strong leadership on the issues surrounding Federal preemption of State and local regulation,” stating in particular that “consistent standards are absolutely vital to the safe, efficient operation of the nation's rail system.” Further, FRA believes it fair to consider commuter railroads on RSAC to represent local interests in part as they are generally the products of local governments for providing rail service for the benefit of their local metropolitan areas. For example, as noted earlier, Metrolink is a joint powers authority comprised of five county transportation planning agencies in southern California. These local transportation agencies are surely local interests with the meaning of Executive Order 13132 and are the appropriate ones to consult because they are the only local interests likely to have the relevant technical knowledge. Moreover, FRA did not receive any adverse comment from any local official on FRA's views as to the preemptive effect of the rulemaking. (The CPUC of course commented adversely on behalf of the State of California.) It is also worth noting in this context that local governments have no role at all under the Federal railroad safety laws in regulating railroad safety—that which is not done by the Federal Government is reserved to the States. FRA believes that it has satisfied the consultation requirements in the Executive Order. In sum, FRA has analyzed this final rule in accordance with the principles and criteria contained in Executive Order 13132. As explained above, FRA has determined that this final rule has no federalism implications, other than the preemption of State laws covering the subject matter of this final rule, which occurs by operation of law under Section 20106 whenever FRA issues a rule or order, and under the LBIA (49 U.S.C. 20701-20703) by its terms. Accordingly, FRA has determined that preparation of a federalism summary impact statement for this final rule is not required. E. Environmental Impact FRA has evaluated this final rule in accordance with its “Procedures for Considering Environmental Impacts” (FRA's Procedures) ( *see* 64 FR 28545 (May 26, 1999)) as required by the National Environmental Policy Act ( *see* 42 U.S.C. 4321 *et seq.* ), other environmental statutes, Executive Orders, and related regulatory requirements. FRA has determined that this final rule is not a major FRA action (requiring the preparation of an environmental impact statement or environmental assessment) because it is categorically excluded from detailed environmental review pursuant to section 4(c)(20) of FRA's Procedures. *See* 64 FR 28547 (May 26, 1999). In accordance with section 4(c) and

(e)of FRA's Procedures, the agency has further concluded that no extraordinary circumstances exist with respect to this regulation that might trigger the need for a more detailed environmental review. As a result, FRA finds that this final rule is not a major Federal action significantly affecting the quality of the human environment. F. Unfunded Mandates Reform Act of 1995 Pursuant to Section 201 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 2 U.S.C. 1531), each Federal agency “shall, unless otherwise prohibited by law, assess the effects of Federal regulatory actions on State, local, and Tribal governments, and the private sector (other than to the extent that such regulations incorporate requirements specifically set forth in law).” Section 202 of the Act (2 U.S.C. 1532) further requires that “before promulgating any general notice of proposed rulemaking that is likely to result in the promulgation of any rule that includes any Federal mandate that may result in expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any 1 year, and before promulgating any final rule for which a general notice of proposed rulemaking was published, the agency shall prepare a written statement” detailing the effect on State, local, and Tribal governments and the private sector. The final rule will not result in the expenditure, in the aggregate, of $100,000,000 or more (as adjusted annually for inflation) in any one year, and thus preparation of such a statement is not required. G. Energy Impact Executive Order 13211 requires Federal agencies to prepare a Statement of Energy Effects for any “significant energy action.” *See* 66 FR 28355 (May 22, 2001). Under the Executive Order, a “significant energy action” is defined as any action by an agency (normally published in the **Federal Register** ) that promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking: (1)(i) That is a significant regulatory action under Executive Order 12866 or any successor order, and

(ii)is likely to have a significant adverse effect on the supply, distribution, or use of energy; or

(2)that is designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. FRA stated in the NPRM that it had evaluated this rulemaking in accordance with Executive Order 13211 and had determined that the rulemaking is not likely to have a significant adverse effect on the supply, distribution, or use of energy. In comments on the NPRM, however, some commenters disagreed with FRA's determination. In sum, the commenters claimed that this rulemaking would increase the weight of passenger rail equipment and would adversely affect energy usage because heavier railcars require more energy to operate. FRA continues to find that this regulatory action is not a “significant energy action” within the meaning of Executive Order 13211. As discussed above, the requirements in this final rule are based on current industry standards for front end frame structures, which, to FRA's knowledge, every cab car and MU locomotive currently in production for operation in the United States already meets. As such, the standards are not expected to affect any units in production or planned for production for operation in the United States. This rule essentially codifies these industry standards and will likely not cause railroads to incur costs beyond those that they already incur voluntarily. Moreover, even when FRA has assumed that a cab car or MU locomotive would be heavier as a result of manufacturing it to comply with the requirements of this final rule, operation of the slightly heavier cab car or MU locomotive is assumed to result in only a slightly higher energy cost. This assumed energy cost is minimal and in proportion to the assumed additional weight of the equipment—increases of one quarter of one percent (0.25%) in both the energy cost and equipment weight. Nonetheless, FRA has not made a finding that a cab car or MU locomotive would necessarily be heavier as a result of manufacturing it in compliance with this final rule. H. Trade Impact The Trade Agreements Act of 1979 (Pub. L. 96-39, 19 U.S.C. 2501 *et seq.* ) prohibits Federal agencies from engaging in any standards or related activities that create unnecessary obstacles to the foreign commerce of the United States. Legitimate domestic objectives, such as safety, are not considered unnecessary obstacles. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards. In issuing the NPRM, FRA assessed the potential effect of this rulemaking on foreign commerce and believed that the proposed requirements would be consistent with the Trade Agreements Act. FRA noted that the proposed requirements are safety standards, which are not considered unnecessary obstacles to trade. Moreover, FRA sought, to the extent practicable, to state the requirements in terms of the performance desired, rather than in more narrow terms restricted to a particular design, so as not to limit different, compliant designs by any manufacturer—foreign or domestic. In commenting on the NPRM, the CPUC concurred with FRA that the safety of passenger cars is paramount and that legitimate safety objectives are not considered unnecessary obstacles to the foreign commerce of the United States. In its comments, however, Caltrain disagreed with FRA's assertions and asked that FRA reconsider its proposal. Caltrain recommended that FRA allow alternative, proven designs to be considered when presented as components of an entire system, rather than requiring the alternative designs to meet the requirements of the regulation as written for any vehicle on any railroad. FRA maintains that its actions in this rulemaking are consistent with the Trade Agreements Act. This final rule is a rule of general applicability, intended to apply to Tier I passenger vehicles in general use. The alternative performance requirements in appendix F provide flexibility in vehicle design for use on any railroad. FRA did not intend to specify requirements for vehicles operating under particular conditions on a particular railroad. Nonetheless, existing FRA regulations provide separate processes for considering the safety of vehicles in such circumstances, and they are also neutral with respect to the country of origin of the vehicles. For related discussion on the international effects of part 238, please *see* the preamble to the May 12, 1999 Passenger Equipment Safety Standards final rule on the topic of “United States international treaty obligations.” *See* 64 FR 25545. I. Privacy Act Anyone is able to search the electronic form of all comments or petitions for reconsideration received into any of FRA's dockets by the name of the individual submitting the comment or petition for reconsideration (or signing the comment or petition for reconsideration, if submitted on behalf of an association, business, labor union, *etc.* ). You may review DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78), or you may visit *http://DocketsInfo.dot.gov* . List of Subjects in 49 CFR Part 238 Passenger equipment, Penalties, Railroad safety, Reporting and recordkeeping requirements. The Rule For the reasons discussed in the preamble, FRA amends part 238 of chapter II, subtitle B of title 49, Code of Federal Regulations, as follows: PART 238—[AMENDED] 1. The authority citation for part 238 continues to read as follows: Authority: 49 U.S.C. 20103, 20107, 20133, 20141, 20302-20303, 20306, 20701-20702, 21301-21302, 21304; 28 U.S.C. 2461, note; and 49 CFR 1.49. Subpart A—General 2. Revise § 238.13 to read as follows: § 238.13 Preemptive effect.

(a)Under 49 U.S.C. 20106, issuance of these regulations preempts any State law, regulation, or order covering the same subject matter, except an additional or more stringent law, regulation, or order that is necessary to eliminate or reduce an essentially local safety or security hazard; is not incompatible with a law, regulation, or order of the United States Government; and does not unreasonably burden interstate commerce.

(b)This part establishes Federal standards of care for railroad passenger equipment. This part does not preempt an action under State law seeking damages for personal injury, death, or property damage alleging that a party has failed to comply with the Federal standard of care established by this part, including a plan or program required by this part. Provisions of a plan or program that exceed the requirements of this part are not included in the Federal standard of care.

(c)Under 49 U.S.C. 20701-20703 (formerly the Locomotive (Boiler) Inspection Act), the field of locomotive safety is preempted, extending to the design, the construction, and the material of every part of the locomotive and tender and all appurtenances thereof. To the extent that the regulations in this part establish requirements affecting locomotive safety, the scope of preemption is provided by 49 U.S.C. 20701-20703. Subpart C—Specific Requirements for Tier I Passenger Equipment 3. Revise § 238.205 to read as follows: § 238.205 Anti-climbing mechanism.

(a)Except as provided in paragraph

(b)of this section, all passenger equipment placed in service for the first time on or after September 8, 2000, and prior to March 9, 2010, shall have at both the forward and rear ends an anti- climbing mechanism capable of resisting an upward or downward vertical force of 100,000 pounds without failure. All passenger equipment placed in service for the first time on or after March 9, 2010, shall have at both the forward and rear ends an anti-climbing mechanism capable of resisting an upward or downward vertical force of 100,000 pounds without permanent deformation. When coupled together in any combination to join two vehicles, AAR Type H and Type F tight-lock couplers satisfy the requirements of this paragraph (a).

(b)Except for a cab car or an MU locomotive, each locomotive ordered on or after September 8, 2000, or placed in service for the first time on or after September 9, 2002, shall have an anti-climbing mechanism at its forward end capable of resisting both an upward and downward vertical force of 200,000 pounds without failure. Locomotives required to be constructed in accordance with subpart D of part 229 of this chapter shall have an anti-climbing mechanism in compliance with § 229.206 of this chapter, in lieu of the requirements of this paragraph. 4. Revise § 238.209 to read as follows: § 238.209 Forward end structure of locomotives, including cab cars and MU locomotives. (a)(1) The skin covering the forward-facing end of each locomotive, including a cab car and an MU locomotive, shall be:

(i)Equivalent to a 1/2 -inch steel plate with a yield strength of 25,000 pounds-per-square-inch—material of a higher yield strength may be used to decrease the required thickness of the material provided at least an equivalent level of strength is maintained;

(ii)Designed to inhibit the entry of fluids into the occupied cab area of the equipment; and

(iii)Affixed to the collision posts or other main vertical structural members of the forward end structure so as to add to the strength of the end structure.

(2)As used in this paragraph (a), the term “skin” does not include forward-facing windows and doors.

(b)The forward end structure of a cab car or an MU locomotive may comply with the requirements of appendix F to this part in lieu of the requirements of either § 238.211 (Collision posts) or § 238.213 (Corner posts), or both, provided that the end structure is designed to protect the occupied volume for its full height, from the underframe to the anti-telescoping plate (if used) or roof rails. 5. Revise § 238.211 to read as follows: § 238.211 Collision posts.

(a)Except as further specified in this paragraph, paragraphs

(b)through

(d)of this section, and § 238.209(b)—

(1)All passenger equipment placed in service for the first time on or after September 8, 2000, shall have either:

(i)Two full-height collision posts, located at approximately the one-third points laterally, at each end. Each collision post shall have an ultimate longitudinal shear strength of not less than 300,000 pounds at a point even with the top of the underframe member to which it is attached. If reinforcement is used to provide the shear value, the reinforcement shall have full value for a distance of 18 inches up from the underframe connection and then taper to a point approximately 30 inches above the underframe connection; or

(ii)An equivalent end structure that can withstand the sum of forces that each collision post in paragraph (a)(1)(i) of this section is required to withstand. For analysis purposes, the required forces may be assumed to be evenly distributed at the end structure at the underframe joint.

(2)The requirements of this paragraph

(a)do not apply to unoccupied passenger equipment operating in a passenger train, or to the rear end of a locomotive if the end is unoccupied by design.

(b)Except for a locomotive that is constructed on or after January 1, 2009, and is subject to the requirements of subpart D of part 229 of this chapter, each locomotive, including a cab car and an MU locomotive, ordered on or after September 8, 2000, or placed in service for the first time on or after September 9, 2002, shall have at its forward end, in lieu of the structural protection described in paragraph

(a)of this section, either:

(1)Two forward collision posts, located at approximately the one-third points laterally, each capable of withstanding:

(i)A 500,000-pound longitudinal force at the point even with the top of the underframe, without exceeding the ultimate strength of the joint; and

(ii)A 200,000-pound longitudinal force exerted 30 inches above the joint of the post to the underframe, without exceeding the ultimate strength; or

(2)An equivalent end structure that can withstand the sum of the forces that each collision post in paragraph (b)(1) of this section is required to withstand. (c)(1) Each cab car and MU locomotive ordered on or after May 10, 2010, or placed in service for the first time on or after March 8, 2012, shall have at its forward end, in lieu of the structural protection described in paragraphs

(a)and

(b)of this section, two forward collision posts, located at approximately the one-third points laterally, meeting the requirements set forth in paragraphs (c)(2) and (c)(3) of this section:

(2)Each collision post acting together with its supporting car body structure shall be capable of withstanding the following loads individually applied at any angle within 15 degrees of the longitudinal axis:

(i)A 500,000-pound horizontal force applied at a point even with the top of the underframe, without exceeding the ultimate strength of either the post or its supporting car body structure;

(ii)A 200,000-pound horizontal force applied at a point 30 inches above the top of the underframe, without exceeding the ultimate strength of either the post or its supporting car body structure; and

(iii)A 60,000-pound horizontal force applied at any height along the post above the top of the underframe, without permanent deformation of either the post or its supporting car body structure.

(3)Prior to or during structural deformation, each collision post acting together with its supporting car body structure shall be capable of absorbing a minimum of 135,000 foot-pounds of energy (0.18 megajoule) with no more than 10 inches of longitudinal, permanent deformation into the occupied volume, in accordance with the following:

(i)The collision post shall be loaded longitudinally at a height of 30 inches above the top of the underframe;

(ii)The load shall be applied with a fixture, or its equivalent, having a width sufficient to distribute the load directly into the webs of the post, but of no more than 36 inches, and either:

(A)A flat plate with a height of 6 inches; or

(B)A curved surface with a diameter of no more than 48 inches; and

(d)The end structure requirements of this section apply only to the ends of a semi-permanently coupled consist of articulated units, provided that:

(1)The railroad submits to FRA under the procedures specified in § 238.21 a documented engineering analysis establishing that the articulated connection is capable of preventing disengagement and telescoping to the same extent as equipment satisfying the anti-climbing and collision post requirements contained in this subpart; and

(2)FRA finds the analysis persuasive. 6. Revise § 238.213 to read as follows: § 238.213 Corner posts. (a)(1) Except as further specified in paragraphs

(b)and

(c)of this section and § 238.209(b), each passenger car shall have at each end of the car, placed ahead of the occupied volume, two full-height corner posts, each capable of resisting together with its supporting car body structure:

(i)A 150,000-pound horizontal force applied at a point even with the top of the underframe, without exceeding the ultimate strength of either the post or its supporting car body structure;

(ii)A 20,000-pound horizontal force applied at the point of attachment to the roof structure, without exceeding the ultimate strength of either the post or its supporting car body structure; and

(iii)A 30,000-pound horizontal force applied at a point 18 inches above the top of the underframe, without permanent deformation of either the post or its supporting car body structure.

(2)For purposes of this paragraph (a), the orientation of the applied horizontal forces shall range from longitudinal inward to lateral inward. (b)(1) Except as provided in paragraph

(c)of this section, each cab car and MU locomotive ordered on or after May 10, 2010, or placed in service for the first time on or after March 8, 2012, shall have at its forward end, in lieu of the structural protection described in paragraph

(a)of this section, two corner posts ahead of the occupied volume, meeting all of the requirements set forth in paragraphs (b)(2) and (b)(3) of this section:

(2)Each corner post acting together with its supporting car body structure shall be capable of withstanding the following loads individually applied toward the inside of the vehicle at all angles in the range from longitudinal to lateral:

(i)A 300,000-pound horizontal force applied at a point even with the top of the underframe, without exceeding the ultimate strength of either the post or its supporting car body structure;

(ii)A 100,000-pound horizontal force applied at a point 18 inches above the top of the underframe, without permanent deformation of either the post or its supporting car body structure; and

(iii)A 45,000-pound horizontal force applied at any height along the post above the top of the underframe, without permanent deformation of either the post or its supporting car body structure.

(3)Prior to or during structural deformation, each corner post acting together with its supporting car body structure shall be capable of absorbing a minimum of 120,000 foot-pounds of energy (0.16 megajoule) with no more than 10 inches of longitudinal, permanent deformation into the occupied volume, in accordance with the following:

(i)The corner post shall be loaded longitudinally at a height of 30 inches above the top of the underframe;

(ii)The load shall be applied with a fixture, or its equivalent, having a width sufficient to distribute the load directly into the webs of the post, but of no more than 36 inches and either:

(A)A flat plate with a height of 6 inches; or

(B)A curved surface with a diameter of no more than 48 inches; and

(iii)There shall be no complete separation of the post, its connection to the underframe, its connection to either the roof structure or anti-telescoping plate (if used), or of its supporting car body structure. (c)(1) Each cab car and MU locomotive ordered on or after May 10, 2010, or placed in service for the first time on or after March 8, 2012, utilizing low-level passenger boarding on the non-operating side of the cab end shall meet the corner post requirements of paragraph

(b)of this section for the corner post on the side of the cab containing the control stand. In lieu of the requirements of paragraph

(b)of this section, and after FRA review and approval of a plan, including acceptance criteria, to evaluate compliance with this paragraph (c), each such cab car and MU locomotive may have two corner posts on the opposite (non-operating) side of the cab from the control stand meeting all of the requirements set forth in paragraphs (c)(2) through (c)(4) of this section:

(2)One corner post shall be located ahead of the stepwell and, acting together with its supporting car body structure, shall be capable of withstanding the following horizontal loads individually applied toward the inside of the vehicle:

(i)A 150,000-pound longitudinal force applied at a point even with the top of the underframe, without exceeding the ultimate strength of either the post or its supporting car body structure;

(ii)A 30,000-pound longitudinal force applied at a point 18 inches above the top of the underframe, without permanent deformation of either the post or its supporting car body structure;

(iii)A 30,000-pound longitudinal force applied at the point of attachment to the roof structure, without permanent deformation of either the post or its supporting car body structure;

(iv)A 20,000-pound longitudinal force applied at any height along the post above the top of the underframe, without permanent deformation of either the post or its supporting car body structure;

(v)A 300,000-pound lateral force applied at a point even with the top of the underframe, without exceeding the ultimate strength of either the post or its supporting car body structure;

(vi)A 100,000-pound lateral force applied at a point 18 inches above the top of underframe, without permanent deformation of either the post or its supporting car body structure; and

(vii)A 45,000-pound lateral force applied at any height along the post above the top of the underframe, without permanent deformation of either the post or its supporting car body structure.

(3)A second corner post shall be located behind the stepwell and, acting together with its supporting car body structure, shall be capable of withstanding the following horizontal loads individually applied toward the inside of the vehicle:

(i)A 300,000-pound longitudinal force applied at a point even with the top of the underframe, without exceeding the ultimate strength of either the post or its supporting car body structure;

(ii)A 100,000-pound longitudinal force applied at a point 18 inches above the top of the underframe, without permanent deformation of either the post or its supporting car body structure;

(iii)A 45,000-pound longitudinal force applied at any height along the post above the top of the underframe, without permanent deformation of either the post or its supporting car body structure;

(iv)A 100,000-pound lateral force applied at a point even with the top of the underframe, without exceeding the ultimate strength of either the post or its supporting car body structure;

(v)A 30,000-pound lateral force applied at a point 18 inches above the top of the underframe, without permanent deformation of either the post or its supporting car body structure; and

(vi)A 20,000-pound lateral force applied at any height along the post above the top of the underframe, without permanent deformation of either the post or its supporting car body structure.

(4)Prior to or during structural deformation, the two posts in combination acting together with their supporting body structure shall be capable of absorbing a minimum of 120,000 foot-pounds of energy (0.16 megajoule) in accordance with the following:

(i)The corner posts shall be loaded longitudinally at a height of 30 inches above the top of the underframe;

(ii)The load shall be applied with a fixture, or its equivalent, having a width sufficient to distribute the load directly into the webs of the post, but of no more than 36 inches and either:

(A)A flat plate with a height of 6 inches; or

(B)A curved surface with a diameter of no more than 48 inches; and

(iii)The corner post located behind the stepwell shall have no more than 10 inches of longitudinal, permanent deformation. There shall be no complete separation of the corner post located behind the stepwell, its connection to the underframe, its connection to either the roof structure or anti-telescoping plate (if used), or of its supporting car body structure. The corner post ahead of the stepwell is permitted to fail. (A graphical description of the forward end of a cab car or an MU locomotive utilizing low-level passenger boarding on the non-operating side of the cab end is provided in Figure 1 to subpart C of this part.) 7. Add Figure 1 to Subpart C of Part 238 to read as follows: ER08JA10.004 8. Add appendix F to part 238 to read as follows: Appendix F to Part 238—Alternative Dynamic Performance Requirements for Front End Structures of Cab Cars and MU Locomotives As specified in § 238.209(b), the forward end of a cab car or an MU locomotive may comply with the requirements of this appendix in lieu of the requirements of either § 238.211 (Collision posts) or § 238.213 (Corner posts), or both. The requirements of this appendix are intended to be equivalent to the requirements of those sections and allow for the application of dynamic performance criteria to cab cars and MU locomotives as an alternative to the requirements of those sections. The alternative dynamic performance requirements are applicable to all cab cars and MU locomotives, and may in particular be helpful for evaluating the compliance of cab cars and MU locomotives with shaped-noses or crash energy management designs, or both. In any case, the end structure must be designed to protect the occupied volume for its full height, from the underframe to the anti-telescoping plate (if used) or roof rails. The requirements of this appendix are provided only as alternatives to the requirements of §§ 238.211 and 238.213, not in addition to the requirements of those sections. Cab cars and MU locomotives are not required to comply with both the requirements of those sections and the requirements of this appendix, together. Alternative Requirements for Collision Posts (a)(1) In lieu of meeting the requirements of § 238.211, the front end frame acting together with its supporting car body structure shall be capable of absorbing a minimum of 135,000 foot-pounds of energy (0.18 megajoule) prior to or during structural deformation by withstanding a frontal impact with a rigid object in accordance with all of the requirements set forth in paragraphs (a)(2) through (a)(4) of this appendix: (2)(i) The striking surface of the object shall be centered at a height of 30 inches above the top of the underframe;

(ii)The striking surface of the object shall have a width of no more than 36 inches and a diameter of no more than 48 inches;

(iii)The center of the striking surface shall be offset by 19 inches laterally from the center of the cab car or MU locomotive, and on the weaker side of the end frame if the end frame's strength is not symmetrical; and

(iv)Only the striking surface of the object interacts with the end frame structure.

(3)As a result of the impact, there shall be no more than 10 inches of longitudinal, permanent deformation into the occupied volume. There shall also be no complete separation of the post, its connection to the underframe, its connection to either the roof structure or the anti-telescoping plate (if used), or of its supporting car body structure. (A graphical description of the frontal impact is provided in Figure 1 to this appendix.)

(4)The nominal weights of the object and the cab car or MU locomotive, as ballasted, and the speed of the object may be adjusted to impart the minimum of 135,000 foot-pounds of energy (0.18 megajoule) to be absorbed (Ea), in accordance with the following formula: E a = E 0 −E f Where: E 0 = Energy of initially moving object at impact = 1/2 m 1 *V 0 2 . E f = Energy after impact = 1/2 (m 1 + m 2 )*V f 2 . V 0 = Speed of initially moving object at impact. V f = Speed of both objects after collision = m 1 *V 0 /(m 1 + m 2 ). m 1 = Mass of initially moving object. m 2 = Mass of initially standing object. (Figure 1 shows as an example a cab car or an MU locomotive having a weight of 100,000 pounds and the impact object having a weight of 14,000 pounds, so that a minimum speed of 18.2 mph would satisfy the collision-energy requirement.) Alternative Requirements for Corner Posts (b)(1) In lieu of meeting the requirements of § 238.213, the front end frame acting together with its supporting car body structure shall be capable of absorbing a minimum of 120,000 foot-pounds of energy (0.16 megajoule) prior to or during structural deformation by withstanding a frontal impact with a rigid object in accordance with all of the requirements set forth in paragraphs (b)(2) through (b)(4) of this appendix: (2)(i) The striking surface of the object shall be centered at a height of 30 inches above the top of the underframe;

(ii)The striking surface of the object shall have a width of no more than 36 inches and a diameter of no more than 48 inches;

(iii)The center of the striking surface shall be aligned with the outboard edge of the cab car or MU locomotive, and on the weaker side of the end frame if the end frame's strength is not symmetrical; and

(iv)Only the striking surface of the object interacts with the end frame structure. (3)(i) Except as provided in paragraph (b)(3)(ii) of this appendix, as a result of the impact, there shall be no more than 10 inches of longitudinal, permanent deformation into the occupied volume. There shall also be no complete separation of the post, its connection to the underframe, its connection to either the roof structure or the anti-telescoping plate (if used), or of its supporting car body structure. (A graphical description of the frontal impact is provided in Figure 2 to this appendix.); and

(ii)After FRA review and approval of a plan, including acceptance criteria, to evaluate compliance with this paragraph (b), cab cars and MU locomotives utilizing low-level passenger boarding on the non-operating side of the cab may have two, full-height corner posts on that side, one post located ahead of the stepwell and one located behind it, so that the corner post located ahead of the stepwell is permitted to fail provided that—

(A)The corner post located behind the stepwell shall have no more than 10 inches of longitudinal, permanent deformation; and

(B)There shall be no complete separation of that post, its connection to the underframe, its connection to either the roof structure or the anti-telescoping plate (if used), or of its supporting car body structure.

(4)The nominal weights of the object and the cab car or MU locomotive, as ballasted, and the speed of the object may be adjusted to impart the minimum of 120,000 foot-pounds of energy (0.16 megajoule) to be absorbed (Ea), in accordance with the following formula: E a = E 0 −E f Where: E 0 = Energy of initially moving object at impact = 1/2 m 1 *V 0 2 . E f = Energy after impact = 1/2 (m 1 + m 2 )*V f 2 . V 0 = Speed of initially moving object at impact. V f = Speed of both objects after collision = m 1 *V 0 /(m 1 + m 2 ). m 1 = Mass of initially moving object. m 2 = Mass of initially standing object. (Figure 2 shows as an example a cab car or an MU locomotive having a weight of 100,000 pounds and the impact object having a weight of 14,000 pounds, so that a minimum speed of 17.1 mph would satisfy the collision-energy requirement.) BILLING CODE 4910-06-P ER08JA10.005 ER08JA10.006 Issued in Washington, DC, on December 31, 2009. Karen J. Rae, Deputy Administrator. [FR Doc. E9-31411 Filed 1-7-10; 8:45 am] BILLING CODE 4910-06-C 75 5 Friday, January 8, 2010 Rules and Regulations Part IV Environmental Protection Agency 40 CFR Parts 262, 263, 264, et al. Revisions to the Requirements for: Transboundary Shipments of Hazardous Wastes Between OECD Member Countries, Export Shipments of Spent Lead-Acid Batteries, Submitting Exception Reports for Export Shipments of Hazardous Wastes, and Imports of Hazardous Wastes; Final Rule ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 262, 263, 264, 265, 266, and 271 [EPA-HQ-RCRA-2005-0018; FRL-9098-7] RIN 2050-AE93 Revisions to the Requirements for: Transboundary Shipments of Hazardous Wastes Between OECD Member Countries, Export Shipments of Spent Lead-Acid Batteries, Submitting Exception Reports for Export Shipments of Hazardous Wastes, and Imports of Hazardous Wastes AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: This rule amends certain existing regulations promulgated under the hazardous waste provisions of the Resource Conservation and Recovery Act

(RCRA)regarding hazardous waste exports from and imports into the United States. Specifically, the amendments implement recent changes to the agreements concerning the transboundary movement of hazardous waste among countries belonging to the Organization for Economic Cooperation and Development (OECD), establish notice and consent requirements for spent lead-acid batteries intended for reclamation in a foreign country, specify that all exception reports concerning hazardous waste exports be sent to the International Compliance and Assurance Division in the Office of Enforcement and Compliance Assurance's Office of Federal Activities in Washington, DC, and require U.S. receiving facilities to match EPA-provided import consent documentation to incoming hazardous waste import shipments and to submit to EPA a copy of the matched import consent documentation and RCRA hazardous waste manifest for each import shipment. DATES: This final rule is effective July 7, 2010. The incorporation by reference of certain publications listed in the rule is approved by the Director of the Federal Register as of July 7, 2010. ADDRESSES: EPA has established a docket for this action under Docket ID No. EPA-HQ-RCRA-2005-0018. All documents in the docket are listed on the *http://www.regulations.gov* Web site. Although listed in the index, some information is not publicly available, *e.g.,* Confidential Business Information

(CBI)or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through *http://www.regulations.gov* or in hard copy at the RCRA Docket, EPA/DC, EPA West, Room 3334, 1301 Constitution Ave., NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is

(202)566-1744, and the telephone number for the RCRA Docket is

(202)566-0270). FOR FURTHER INFORMATION CONTACT: Laura Coughlan, Materials Recovery and Waste Management Division, Office of Resource Conservation and Recovery (5304P), Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460; telephone number:

(703)308-0005; fax number:

(703)308-0514; e-mail address: *coughlan.laura@epa.gov.* SUPPLEMENTARY INFORMATION: I. General Information A. Does This Final Rule Apply to Me? B. List of Acronyms Used in This Final Rule C. What are the Statutory Authorities for This Final Rule? II. Background A. OECD Revisions B. SLAB Revisions C. Exception Reports for Hazardous Waste Exports D. Documenting Hazardous Waste Import Shipments E. Proposed Rule III. Summary of the Final Rule A. Changes to 40 CFR 262.10(d) B. Changes to 40 CFR Part 262, Subpart E C. Changes to 40 CFR Part 262, Subpart H D. Changes to 40 CFR 263.10(d) E. Changes to 40 CFR 264.12(a)(2) and 40 CFR 265.12(a)(2) F. Changes to 40 CFR 264.71(a)(3) and 40 CFR 265.71(a)(3) G. Changes to 40 CFR 266.80(a) H. Changes to 40 CFR 271.1 IV. Discussion of Comments Received in Response to the Proposed Rulemaking and the Agency's Responses A. OECD Revisions B. SLAB Revisions C. Export Exception Report Technical Correction and Import Revisions V. Future Rulemaking VI. Costs and Benefits of the Final Rule A. Introduction B. Analytical Scope C. Cost Impacts D. Benefits VII. State Authorization A. Applicability of Rules in Authorized States B. Effect on State Authorization VIII. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform Act of 1995 E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments G. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use I. National Technology Transfer Advancement Act J. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations K. Congressional Review Act I. General Information A. Does This Final Rule Apply to Me? 1. OECD Revisions The revisions regarding the OECD in this final rule affect all persons who export or import hazardous waste, export or import universal waste, or export spent lead-acid batteries (SLABs) destined for recovery operations in OECD Member countries, except for Mexico and Canada. Any transboundary movement of hazardous wastes between the United States and either Mexico or Canada will continue to be governed (or addressed) by their respective bilateral agreements and applicable regulations. Potentially affected entities may include, but are not limited to: Industry sector NAICS SIC Utilities 221100 4939 Petroleum and Coal Products Manufacturing 324 29 Chemical Manufacturing 325100 28 Primary Metal Manufacturing 331 33 Fabricated Metal Product Manufacturing 332 34 Machinery Manufacturing 333 35 Computer and Electronic Product Manufacturing 334110 357 Electrical Equipment, Appliance, and Component Manufacturing 335 36 Transportation Equipment Manufacturing 336 37 Miscellaneous Manufacturing 339900 39 Scrap and Waste Materials 423930 5093 Material Recovery Facilities 562920 4953 2. SLAB Revisions The revisions regarding SLABs in this final rule affect all persons who export SLABs for reclamation in any foreign country. Potentially affected entities may include, but are not limited to: Industry sector NAICS SIC Hazardous Waste Collectors 562112 4212 Recyclable Material Hauling, Long-Distance 484230 4213 Batteries, Automotive, Merchant Wholesalers 423120 5013 Lead-acid Storage Batteries, Manufacturing 335911 3691 Automotive Parts, Accessories, and Tire Stores 441310 5013 Tire Dealers 441320 5014 All other General Merchandise Stores 452990 5399 New Car Dealers 441110 5511 Recyclable Material Wholesaler 423930 5093 Other Waste Collection 562119 4212 Recyclable Material Collection 562111 4212 Services, Solid Waste Collection Marinas 713930 4493 General Freight Trucking, Long-Distance, TL 484121 4213 General Freight Trucking, Long-Distance, LTL 484122 4213 Specialized Freight Trucking 484200 4213 Freight Carriers (except air couriers), Air Scheduled 481112 4512 Freight Charter Services, Air 481212 4522 Freight Railways, Line-Haul 482111 4011 Freight Transportation, Deep Sea, to and from Domestic Ports 483113 4424 Freight Transportation, Deep Sea, to or from Foreign Ports 483111 4412 3. Exception Report Revisions for Exports Under Subparts E and H of 40 CFR Part 262 The exception report change to 40 CFR part 262, subpart E and subpart H of this final rule affect all persons who export hazardous waste, universal waste, or SLABs to any foreign country. Potentially affected entities may include, but are not limited to: Industry sector NAICS SIC Utilities 221100 4939 Petroleum and Coal Products Manufacturing 324 29 Chemical Manufacturing 325100 28 Primary Metal Manufacturing 331 33 Fabricated Metal Product Manufacturing 332 34 Machinery Manufacturing 333 35 Computer and Electronic Product Manufacturing 334110 357 Electrical Equipment, Appliance, and Component Manufacturing 335 36 Transportation Equipment Manufacturing 336 37 Miscellaneous Manufacturing 339900 39 Scrap and Waste Materials 423930 5093 4. Import Revisions The revisions regarding imports in this final rule affect all facilities receiving imported hazardous waste from a foreign country that must comply with either 264.71(a)(3) or 265.71(a)(3). This includes those hazardous waste import shipments originating in OECD Member countries, as well as in non-OECD countries. Potentially affected entities may include, but are not limited to: Industry sector NAICS SIC Hazardous Waste Collectors 562112 4212 Recyclable Material Wholesaler 423930 5093 Other Waste Collection 562119 4212 Recyclable Material Collection Services, Solid Waste Collection 562111 4212 Scrap and Waste Materials 423930 5093 Material Recovery Facilities 562920 4953 The lists of potentially affected entities in the above tables may not be exhaustive. The Agency's aim is to provide a guide for readers regarding those entities that potentially could be affected by this action. However, this action may affect other entities not listed in these tables. If you have questions regarding the applicability of this final rule to a particular entity, consult the person listed in the preceding section entitled FOR FURTHER INFORMATION CONTACT . B. List of Acronyms Used in This Final Rule Acronym Meaning BCI Battery Council International. CBI Confidential Business Information. CERCLA Comprehensive Environmental Response, Compensation, and Liability Act. CFR Code of Federal Regulations. EPA U.S. Environmental Protection Agency. FR Federal Register. HSWA Hazardous and Solid Waste Amendments. LAB Lead-Acid Battery. NAICS North American Industrial Classification System. NTTAA National Technology Transfer and Advancement Act. NAFTA North American Free Trade Agreement. OECD Organization for Economic Cooperation and Development. OMB Office of Management and Budget. OSWER Office of Solid Waste and Emergency Response. RCRA Resource Conservation and Recovery Act. RFA Regulatory Flexibility Act. SIC Standard Industrial Classification. SLAB Spent Lead-Acid Battery. SBREFA Small Business Regulatory Enforcement Fairness Act. TRI Toxics Release Inventory. UMRA Unfunded Mandates Reform Act. C. What Are the Statutory Authorities for This Final Rule? The authority to promulgate this rule is found in sections 1006, 2002(a), 3001-3010, 3013, and 3017 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act (RCRA), and as amended by the Hazardous and Solid Waste Amendments, 42 U.S.C. 6905, 6912, 6921-6930, 6934, and 6938. II. Background A. OECD Revisions 1. What Is the OECD? The OECD is an international organization established in 1960 to assist Member countries in achieving sustainable economic growth, employment, and an increased standard of living, while simultaneously ensuring the protection of human health and the environment. OECD Member countries are concerned with a host of international socio-economic and political issues, including environmental issues. To address these issues, the OECD Council may negotiate Council Decisions, which are international agreements that create binding commitments on the United States under the terms of the OECD Convention, unless otherwise provided in the Articles of the 1960 Convention. One such Council Decision addresses the transboundary movement of waste, which is the subject of this final rule. There are currently thirty OECD Member countries: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, South Korea, Spain, Sweden, Switzerland, Turkey, the United Kingdom, and the United States. The OECD country Web site for each Member country may be found at *http://www.oecd.org/infobycountry/.* 2. What OECD Decisions Form the Basis of the OECD Revisions in This Final Rule? The current RCRA regulations regarding waste shipments destined for recovery within the OECD are found in 40 CFR part 262, subpart H. These regulations are based on the March 30, 1992, “Decision of the Council C(92)39/FINAL Concerning the Control of Transfrontier Movements of Wastes Destined for Recovery” (hereinafter referred to as the 1992 Decision) that EPA then promulgated as a final rule under RCRA on April 12, 1996 (61 FR 16289). Since that time, the OECD has made a number of changes to the waste shipment regime, necessitating changes to the RCRA regulations. On June 14, 2001, the OECD Council amended the “Decision of the Council C(92)39/FINAL Concerning the Control of Transfrontier Movements of Wastes Destined for Recovery” by adopting “Revision of Decision C(92)39/FINAL on the Control of Transboundary Movement of Wastes Destined for Recovery Operations” (hereafter referred to as the 2001 OECD Decision). The goal of the 2001 OECD Decision was to harmonize the procedures and requirements of the OECD with those of the Basel Convention 1 and to eliminate duplicative activities between the two international organizations as much as practical. These changes include revisions to the original established framework (such as reducing the levels of control from a three-tiered system to a two-tiered system), while also adding entirely new provisions (for example, the new certificate of recovery requirement). Subsequent to the 2001 OECD Decision, an addendum, C(2001)107/ADD1 (hereafter referred to as the 2001 OECD Addendum), which consists of revised versions of the notification and movement documents and the instructions to complete them, was adopted by the OECD Council on February 28, 2002. The addendum was incorporated into the 2001 OECD Decision as section C of Appendix 8, and the combined version was issued in May 2002 as C(2001)107/FINAL. The appendices of Decision C(2001)107/Final were amended three times by C(2004)20, C(2005)141, and C(2008)156. 2 The Decision, “Decision of the Council C(2001)107/FINAL, Concerning the Control of Transboundary Movements of Wastes Destined for Recovery Operations, as amended by C(2004)20; C(2005)141 and C(2008)156,” is hereinafter referred to as the Amended 2001 OECD Decision. 1 The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal is a comprehensive global environmental agreement on hazardous and other wastes. The Convention has 172 Member countries, also known as Parties, and aims to protect human health and the environment against the adverse effects resulting from the generation, management, transboundary movements and disposal of hazardous and other wastes. A copy of the convention text has been placed in the docket established for this rulemaking. More information on the Basel Convention may be found at *http://www.basel.int.* 2 Copies of these amendments have been placed in the docket established for this rulemaking. B. SLAB Revisions 1. What are SLABs? Lead-acid batteries

(LABs)are secondary, wet cell batteries that contain liquid and can be recharged for many uses. They are the most widely used rechargeable batteries in the world and are mainly used as starting, lighting, and ignition

(SLI)power batteries found in automobiles and other vehicles. A rechargeable SLAB is spent if it no longer performs effectively and cannot be recharged. Battery failure is most commonly attributed to water loss and grid corrosion during normal use. SLABs are considered both solid and hazardous wastes under Subtitle C of RCRA, because they are classified as spent materials that exhibit the toxicity characteristic for lead ( *e.g.,* D008), and the corrosivity characteristic for the sulfuric acid electrolyte in the battery ( *e.g.,* D001). For a full discussion of SLAB composition and how SLABs are managed, please *see* Sections II.B.1 and II.B.2 of the proposed rule (73 FR 58393). 2. How Must a Business Manage SLABs Intended for Domestic Recycling or Disposal? Businesses subject to the RCRA hazardous waste regulations may choose from three options for managing hazardous waste spent lead-acid batteries. They may manage the batteries under the streamlined standards specifically for SLABs found in 40 CFR part 266, subpart G, the streamlined Universal Wastes standards for all hazardous waste batteries found in 40 CFR part 273, or the full Subtitle C hazardous waste management regulations found in 40 CFR parts 262-265, 267, 268, and 270. For the complete discussion of what these requirements entail for disposal or recycling within the United States, please *see* Section II.B.3 of the proposed rule (73 FR 58394). 3. What Does a Business Have To Do When Exporting SLABs for Recycling? A company seeking to export SLABs may choose from the same three regulatory options described above. If they choose to follow the universal waste regulations, exporters of SLABs for reclamation are subject to the export requirements in 40 CFR part 273 (including the notice and consent requirements) or, if the SLABs are to be exported to an OECD Member country for recovery, the export requirements (including notice and consent) in 40 CFR part 262, subpart H. The second option would be for the export to follow the full subtitle C hazardous waste export regulations in 40 CFR part 262, subparts E or H. Most likely, SLAB exporters will choose to follow the regulatory provisions specific to SLABs in 40 CFR part 266, subpart G. Prior to today's rule, under part 266, SLABs that were destined for reclamation were exempt from the RCRA export requirements in 40 CFR part 262, subparts E and H (including the notice and consent requirements). Today's rule adds export requirements to part 266 that mirror those that apply to universal waste, as described later in this preamble. C. Exception Reports for Hazardous Waste Exports Prior to this final rule, under 40 CFR part 262, subparts E and H, exception reports were required to be submitted by the exporter to the EPA Administrator if any of the following occurred:

(1)The exporter did not receive a copy of the RCRA hazardous waste manifest (if applicable) signed by the transporter identifying the point of departure of the waste from the United States, within forty-five

(45)days from the date it was accepted by the initial transporter;

(2)Within ninety

(90)days from the date the hazardous waste was accepted by the initial transporter, the exporter did not receive written confirmation from the recovery facility that the hazardous waste was received;

(3)The hazardous waste was returned to the United States. D. Documenting Hazardous Waste Import Shipments Prior to this final rule, under §§ 264.71(a)(3) and 265.71(a)(3), U.S. receiving treatment, storage, and disposal facilities (TSDFs) had to submit a copy of the hazardous waste manifest to EPA to document individual hazardous waste import shipments within 30 days of shipment delivery. E. Proposed Rule On October 6, 2008, EPA published a **Federal Register** notice seeking comment on proposed revisions to the requirements regarding the export and import of hazardous wastes from and into the United States ( *see* 73 FR 58388 and following pages). First, we proposed to modify the requirements concerning the transboundary movement of hazardous waste destined for recovery among Member countries to the OECD in order to implement the Amended 2001 OECD Decision. The changes, largely in 40 CFR part 262, subpart H, included reducing the number of control levels, exempting qualifying shipments sent for laboratory analyses from certain paperwork requirements, requiring recovery facilities to submit a certificate of recovery, adding provisions for the return or re-export of wastes subject to the Amber control procedures, and clarifying certain existing provisions that were identified as potentially ambiguous to the regulated community. Second, we proposed to amend the regulations in 40 CFR part 266, subpart G regarding the management of SLABs being reclaimed to require notice and consent for those batteries intended for reclamation in a foreign country, mirroring the existing export requirements for exports of RCRA universal waste batteries, to create a more uniform practice for exporting SLABs for recovery under RCRA. Third, we proposed a technical correction in the exception reporting requirements of §§ 262.55 and 262.87(b) for hazardous waste exports to specify that all exception reports submitted to EPA be sent to the International Compliance and Assurance Division in the Office of Enforcement and Compliance Assurance's Office of Federal Activities in Washington, DC rather than to the Administrator to ensure better oversight of return shipments to the U.S. and compliance with the exception reporting requirements without any additional regulatory burden for U.S. exporters. Fourth and last, we proposed to amend: the hazardous waste import requirements in 40 CFR part 262, subpart F to require that U.S. importers give the initial transporter a copy of the EPA-provided documentation confirming EPA's consent to the import of the hazardous waste when they provide the RCRA hazardous waste manifest; and, the import shipment document submittal requirements in §§ 264.71(a)(3) and 265.71(a)(3) to require that the U.S. receiving facility submit to EPA a copy of the EPA consent documentation along with the RCRA hazardous waste manifest within thirty days of import shipment delivery. Both proposed amendments were intended to improve EPA's oversight of such imports. For a more detailed description of the proposed revisions, as well as the intended benefits of each revision, please *see* Section I.D of the proposed rule (73 FR 58390 and following pages). The Agency received four sets of comments in response to its October 6, 2008 proposal. The more significant comments on this proposal are addressed later in this preamble, but all are addressed in background documents for today's final rule, which are in the docket. After considering all comments, we are finalizing the revisions substantially as proposed, with one modification. III. Summary of the Final Rule A. Changes to 40 CFR 262.10(d) This final rule updates § 262.10(d) to reflect that export shipments of SLABs being managed under 40 CFR part 266, subpart G that are destined for recovery in any of the OECD Member countries listed in § 262.58(a)(1) are now subject to 40 CFR part 262, subpart H. This change is necessary to conform with the scope in the updated § 262.80(a). B. Changes to 40 CFR Part 262, Subpart E This final rule amends the exception reporting requirements in § 262.55 to specify that all exception reports be submitted to the International Compliance and Assurance Division in the Office of Enforcement and Compliance Assurance's Office of Federal Activities in Washington, DC rather than to the Administrator. In addition, this rule also updates § 262.58(a) to reflect that export shipments of SLABs being managed under 40 CFR part 266, subpart G that are destined for recovery in any of the OECD Member countries listed in § 262.58(a)(1) are subject to the requirements of subpart H. Finally, this rule adds language in § 262.58(b) of subpart E to clarify that hazardous waste exports subject to subpart E and hazardous waste imports subject to subpart F are not subject to subpart H in order to reduce confusion for U.S. exporters and importers. C. Changes to 40 CFR Part 262, Subpart H All but the last three changes discussed below are necessary to conform to the revisions in the Amended 2001 OECD Decision. These changes range from substantive revisions and amendments to changes in terminology to simple editorial changes. Collectively, these changes serve to implement the Amended 2001 OECD Decision, as well as clarify certain sections that were previously ambiguous to the regulated community. Changes to 40 CFR part 262, subpart H include: 1. Changes in Terminology In the Amended 2001 OECD Decision, the OECD Council updated several terms and definitions used in the 1992 Decision. EPA believes that these changes do not result in substantive changes to the intent of the requirements, but merely bring them in line with current terminology used in practice and in other international agreements. To limit any unnecessary confusion between the U.S. regulations and those of other OECD Member countries and to promote consistency with the Amended 2001 OECD Decision, this final rule adopts the following changes in terminology: • “Transfrontier” to “transboundary”; • “Tracking document” to “movement document”; • “Amber-list controls” to “Amber control procedures”; • “Notifier” to “exporter”; and • “Consignee” to “importer.” 3 3 The change from “consignee” to “importer” is only being made in 40 CFR part 262, subpart H, and does not affect the use of consignee in 40 CFR part 262, subpart E. 2. The number of different levels of control is reduced from three (Green, Amber, and Red) to two (Green and Amber) and the waste lists have been updated. The 2001 OECD Decision replaced the OECD three-tiered waste list (Green, Amber, and Red) system with a two-tiered system (Green and Amber) to conform to the Basel Convention waste lists more closely. Further, the revised OECD waste lists, as provided by the 2004 OECD Amendment, better correspond to those of the Basel Convention. Accordingly, we are making these same conforming changes to EPA's OECD rule. Wastes subject to the Green control procedures are those wastes listed in Parts I and II of Appendix 3 to the Amended 2001 OECD Decision. Part I contains wastes listed in Annex IX of the Basel Convention, to which the OECD has made and noted adjustments, as appropriate. Part II contains additional wastes subject to the Green control procedures, which the OECD has assessed as not posing any risk to human health or the environment under its risk criteria. Wastes subject to the Amber control procedures are those wastes listed in Parts I and II of Appendix 4 to the Amended 2001 OECD Decision. Part I contains wastes listed in Annexes II and VIII of the Basel Convention, to which the OECD has made and noted adjustments, as appropriate. Part II contains additional wastes subject to the Amber control procedures, which the OECD has assessed as posing a risk to human health or the environment under its risk criteria. Further, all wastes formerly appearing on the Red list are subject to the Amber control procedures. U.S. importers and exporters of hazardous waste subject to the subpart H requirements of 40 CFR part 262 should be aware that wastes listed in Part I of both the new OECD Amber and Green waste lists have not retained their OECD waste codes. Consequently, the relevant Basel waste codes should be used when implementing the export and import procedures. However, wastes listed in Part II of both the new OECD Amber and Green waste lists do retain their original OECD waste codes, as listed in the 1992 Decision. This two-part system is necessary to ensure that wastes not yet explicitly listed under the Basel Convention will continue to have the same level of control applied to them when destined for recovery under the Amended 2001 OECD Decision. Both the Green waste list and the Amber waste list are cited in § 262.89. This rule amends § 262.89(d) to incorporate by reference the most current OECD waste lists from the Amended 2001 OECD Decision. Further, the elimination of the Red list allows for the consolidation of the provisions currently found in § 262.89(b) and (c), which appears in new final § 262.89(b). 3. References to Unlisted Wastes Have Been Eliminated in Favor of “Wastes Not Covered in Appendices 3 and 4 of the OECD Decision” Section 262.83(d) previously addressed the general notification requirements for unlisted wastes. Today's rule renumbers this section as § 262.83(c) since the previous § 262.83(c) addressed “Red-list wastes,” which is no longer included in the final rule. Today's rule also replaces the term “unlisted wastes” with the phrase “wastes not covered in Appendices 3 and 4 of the OECD Decision,” 4 so that wastes not on these lists are not automatically subject to the Amber control procedures. Rather, “wastes not covered in Appendices 3 and 4 of the OECD Decision” will be subject to the domestic rules and regulations of the countries of concern. 4 Section 262.81 in the final revisions to the regulatory text in 40 CFR part 262, subpart H defines “OECD Decision” as “Decision of the Council C(2001)107/FINAL, Concerning the Control of Transboundary Movements of Wastes Destined for Recovery Operations, as Amended by C(2004)20; C(2005)141 and C(2008)156” for the purposes of the subpart. 4. Transboundary Movements May Now Qualify for a Laboratory Analysis Exemption The Amended 2001 OECD Decision allows Member countries to decide through their domestic laws and regulations that waste samples normally subject to the Amber control procedures will only be subject to the Green control procedures ( *e.g.,* the existing controls normally applied in commercial transactions) if such samples are destined for laboratory analyses to assess its physical or chemical characteristics, or to determine its suitability for recovery operations, and providing that the amount of the waste samples qualifying for this exemption are not more than the minimum quantity reasonably needed to perform the analyses adequately in each particular case up to a maximum of twenty-five kilograms (25 kg/55 lbs). Analytical samples also must be appropriately packaged and labeled and must be carried out under the terms of all applicable international transport agreements. Furthermore, any transboundary movement of such samples through non-OECD Member countries shall be subject to international law and to all applicable national laws and regulations. This final rule allows waste samples that are sent for laboratory analyses to be controlled under the Green control procedures, as opposed to the Amber control procedures, provided they meet the same conditions as set forth in the Amended 2001 OECD Decision. U.S. exporters should be aware, however, that even if their shipments qualify for the laboratory analyses exemption under U.S. domestic law, some Member countries may elect to still apply the Amber control procedures to such shipments, requiring the exporter of a waste sample for laboratory analyses to inform the competent authorities of such a movement. Therefore, we recommend that U.S. exporters check with the competent authorities of each country to find out if they require the Amber control procedures for a sample that would qualify for the laboratory analyses exemption. 5. Recovery Facilities Must Submit a Certificate of Recovery This final rule implements the Amended 2001 OECD Decision's requirement that a duly authorized representative of the recovery facility submit a certificate of recovery to all interested parties ( *i.e.,* exporter, country of export, country of import), documenting that recovery of the waste has been completed. A valid certificate of recovery is defined as a signed, written and dated statement that affirms that the waste was recovered in the manner agreed to by the parties to the contract. 5 This final rule also requires, as does the Amended 2001 OECD Decision, that the recovery facility send the certificate of recovery as soon as possible, but no later than thirty

(30)days after the completion of recovery and no later than one

(1)calendar year following the receipt of the waste by the recovery facility to the exporter and competent authorities of the countries of export and import by mail, e-mail followed by mail, or fax followed by mail. This final rule incorporates the certificate of recovery provisions of the Amended 2001 OECD Decision in § 262.83(e). 5 Under both the 1992 Decision and the Amended 2001 OECD Decision, transboundary movements of wastes subject to the Amber control procedures may only occur under the terms of a valid written contract, or chain of contracts, or equivalent arrangements between facilities controlled by the same legal entity, starting with the exporter and terminating at the recovery facility. The contracts must:

(a)Clearly identify the generator of each type of waste, each person who shall have legal control of the wastes and the recovery facility;

(b)provide that relevant requirements of the OECD Decisions are taken into account and binding on all parties; and

(c)specify which party to the contract shall assume responsibility for ensuring alternative management of the wastes including, if necessary, the return of the wastes. The Amended 2001 OECD Decision states that the completion of block 19 of the OECD movement document, and the submission of signed copies to the exporter and relevant competent authorities, fulfils the certificate of recovery requirement. Although the OECD movement document is recommended, the Amended 2001 OECD Decision does not require recovery facilities to use it. While some recovery facilities may not be subject to the import and other requirements because they are not importing RCRA hazardous waste, these entities should be aware that the competent authorities of the exporting Member countries may still impose the conditions outlined in the Amended 2001 OECD Decision before the transactions can be completed. Thus, if the waste is considered non-hazardous in the United States, EPA would not require a certificate of recovery from a U.S. facility. However, the competent authority of the country of export may require a certificate of recovery, and may require that the exporter include such a requirement in the contract between the exporter and importer. 6. Amendments to the Notification Requirements The Amended 2001 OECD Decision introduced a series of notification requirements that oblige EPA to make conforming amendments to its hazardous waste regulations. Specifically, this final rule amends § 262.83(e) (which has been renumbered as § 262.83(d)) by incorporating several new items that must be included in the notification, including: • Exporter and importing recovery facility e-mail address; • E-mail address for importer (if different from the importing recovery facility); • Address, telephone, fax, and e-mail of intended transporter(s); • Means of transport envisioned; and • Specification of the type of recovery operation(s) that will be used. 7. Amendments to Procedures for Exports to Pre-Approved Facilities Under the Amended 2001 OECD Decision and its predecessor, a pre-approved recovery facility (also known as a pre-consented recovery facility) is one that has been identified in advance by the competent authority having jurisdiction over that facility as acceptable for receiving certain hazardous waste imports under simplified and accelerated notification procedures. For these facilities, the competent authority must inform the OECD secretariat that the facility is pre-approved, and the waste types that are acceptable for recovery. Pre-approval may be granted for a specific time frame and may be revoked at any time by the relevant competent authority. The Amended 2001 OECD Decision established a time period for objection to transboundary movements to pre-approved facilities and lengthened the allowable coverage period for notifications. Specifically, the Decision established a time period of seven

(7)working days during which the relevant competent authorities may object to the transboundary movements of waste to pre-approved facilities. The Decision also established that the allowable coverage period for general notifications (or the period of time for which consent may be granted) may extend up to three

(3)years. Today's final rule amends the current regulations to incorporate these changes in § 262.83(b)(2)(ii) to reflect the seven

(7)day time period and in § 262.83(b)(2)(i) to reflect the allowable coverage period of up to three

(3)years for notifications. 8. New Procedures for the Pretreatment of Hazardous Wastes at R12/R13 Recovery Facilities The final rule incorporates the Amended 2001 OECD Decision's new requirements for R12 and R13 recovery facilities. R12 and R13 recovery facilities are transfer and storage/accumulation facilities, respectively, that do not recover the wastes themselves. Because hazardous wastes destined for recovery may have to undergo treatment before a R1-R11 6 recovery facility actually recovers them, the OECD considers R12 and R13 facilities as “intermediate or temporary operations.” The primary reason for the new requirements is to ensure that the subsequent R1-R11 recovery operation receives the hazardous waste and completes its recovery in an environmentally sound manner. 6 Recovery operations R1 through R11 are defined as follows: R1, use as a fuel (other than in direct incineration) or other means to generate energy; R2, solvent reclamation/regeneration; R3, recycling/reclamation of organic substances which are not used as solvents; R4, recycling/reclamation of metals and metal compounds; R5, recycling/reclamation of other inorganic materials; R6, regeneration of acids or bases; R7, recovery of components used for pollution abatement; R8, recovery of components used from catalysts; R9, used oil re-refining or other reuses of previously used oil; R10, land treatment resulting in benefit to agriculture or ecological improvement; and, R11, uses of residual materials obtained from any of the operations numbered R1-R10. Specifically, when the notification document lists an R12/R13 recovery facility, the exporter must indicate in the same notification document the recovery facility or facilities where the subsequent R1-R11 recovery operation takes place or may take place. In addition, the R12/R13 recovery facility shall: • Certify the receipt of the hazardous waste by sending a copy of the duly completed movement document within three

(3)working days of the receipt of such wastes to the exporter and all competent authorities concerned; • Retain the original movement document for three

(3)years; • Certify the completion of the R12/R13 recovery operation by submitting a certificate of recovery as soon as possible, but no later than thirty

(30)days after the completion of the R12/R13 recovery operation at that facility and no later than one

(1)calendar year following the receipt of the waste by the R12/R13 recovery facility; and • Send the certificate of recovery to the exporter and to the competent authorities of the countries of export and import by either mail, e-mail followed by mail, or by fax followed by mail. The control procedures applied to the transboundary movement of hazardous waste from an R12/R13 recovery facility to a subsequent R1-R11 recovery facility vary depending on whether these facilities are located within the same Member country or in a different Member country. When the subsequent R1-R11 recovery facility is located within the same Member country, the R12/R13 recovery facility must obtain from the subsequent R1-R11 recovery facility a certificate that the “final” recovery of the hazardous waste at that facility has been completed within one

(1)calendar year following the delivery of the hazardous waste to the R1-R11 facility. The format of the certificate of recovery is not fixed, but it must, at a minimum, identify the code number of the notification document and the serial number of the movement documents to which it pertains. The R12/R13 recovery facility must then transmit the certification document prepared by the R1-R11 recovery facility to the competent authorities of the countries of import and export as soon as possible, but no later than one

(1)calendar year following the delivery of the hazardous waste to the R1-R11 recovery facility. When the subsequent R1-R11 facility is not located in the same Member country as the R12/R13 facility, a new notification must be made for the transboundary movement of hazardous waste by the R12/R13 recovery facility. In addition, the applicable procedures differ depending upon the country where the final recovery operation occurs. In particular, if the final R1-R11 recovery facility is located in the initial country of export, then the normal Amber control procedures shall apply. In this case, the R12/R13 facility must submit a new notification document to its competent authority and obtain consent from its competent authority and from the initial country of export to the export of the hazardous waste back to that country for final recovery. If, however, the final R1-R11 recovery facility is located in a country different from the initial country of export, then the Amber control procedures shall apply, but also the movement will in effect be treated as a “re-export” of waste to a third country. In this case, not only is a new notification document required, but the competent authority of the initial country of export must also be notified of the transboundary movement, and consent must be obtained from the original country of export and the new countries of import, export, and transit. For example, if a hazardous waste is exported from the United States to a R12/R13 facility in France, and then will be sent to a subsequent R1-R11 recovery facility in Germany, the R12/R13 facility in France must submit a notification to and obtain consent from France (the new country of export), the United States (the original country of export) and Germany (the new country of import for final recovery). The final rule incorporates all of these requirements in § 262.82(f). 9. New Provisions Regarding Mixtures of Hazardous Wastes The Amended 2001 OECD Decision contains controls and provisions related to the mixture of hazardous waste. Specifically, the Amended 2001 OECD Decision defines a mixture of hazardous waste as one that results from the intentional or unintentional mixing of two or more different hazardous wastes. However, under the Amended 2001 OECD Decision, a single shipment of hazardous wastes, consisting of two or more wastes, where each is separated, is not considered a mixture of hazardous waste. The Amended 2001 OECD Decision also provides that: • A mixture of two or more Green wastes should be subject to the Green control procedures. However, the regulated community should be aware that some OECD Member countries may require, by domestic law that mixtures of different Green wastes be subject to the Amber control procedures. • A mixture consisting of a Green waste and more than a “de minimis” amount of Amber waste is subject to the Amber control procedures. In the absence of internationally accepted criteria, the term “de minimis” should be defined according to national regulations and procedures. • A mixture containing two or more Amber wastes is subject to the Amber control procedures. In this final rule, EPA has revised the text in § 262.82(a) to clarify that only those wastes and waste mixtures considered hazardous under U.S. national regulations will be subject to the Amber control procedures within the United States. This is consistent with longstanding EPA policy, and should minimize confusion for the regulated community. For example, under the existing RCRA hazardous waste regulations, any mixture of an Amber waste that exhibits one or more of the hazardous characteristics of ignitability, corrosivity, reactivity, or toxicity under RCRA with a Green waste shall be considered an Amber waste if the mixture still exhibits one or more of the RCRA hazardous waste characteristics and, thus, be subject to the Amber control procedures. Conversely, if the resulting mixture no longer exhibits one or more of the RCRA hazardous characteristics, it will instead be considered a Green waste, and be subject to the Green control procedures. Because other OECD Member countries may require that the mixtures listed above (that the U.S. sometimes considers subject to the Green control procedures) be subject to the Amber control procedures, the final rule includes notes stating that other OECD Member countries may subject such mixtures to the Amber control procedures. In such cases, U.S. importers and exporters should be prepared to follow the Amber control procedures within those OECD Member countries. Finally, the Amended 2001 OECD Decision requires that notification for a transboundary movement of a mixture of hazardous wastes falling under the Amber control procedures should be made by the person performing the mixing activity (the generator of the mixture) or any other person acting as an exporter in place of the person performing the mixing activity. In the notification, relevant information on each fraction of the waste, including its code numbers, has to be given in order of importance. This final rule imposes these requirements in 40 CFR 262.82(a)(3). 10. New Provisions Regarding the Return and Re-Export of Hazardous Wastes Subject to the Amber Control Procedures This final rule adopts the Amended 2001 OECD Decision's more precise provisions (than the earlier 1992 Decision) on measures to be taken in case a transboundary movement of hazardous waste is subject to the Amber control procedures and cannot be completed as intended ( *e.g.,* not in accordance with the notification, consents given by the competent authorities, or the terms of the contract). There may be a number of reasons for this non-completion, for example, an accident during the transport of the hazardous waste, improper notification, or any illegal action taken by someone involved with the movement of the hazardous waste. The Amended 2001 OECD Decision provides that if this uncompleted movement of hazardous waste (hereafter referred to as the “incident”), takes place in the country of import, the competent authority of that country shall immediately inform the competent authority of the country of export. The competent authorities of the concerned countries are to cooperate in resolving the incident by making all necessary arrangements to ensure the best alternative management of the hazardous waste. If alternative arrangements cannot be made to recover these wastes in an environmentally sound manner in the country of import, the hazardous waste must be returned to the country of export or re-exported to a third country.

(a)Return of Hazardous Waste to the Country of Export Under the Amended 2001 OECD Decision, the return of the hazardous waste to the country of export is to take place within ninety

(90)days from the time when the country of export was informed of the incident, unless the concerned countries agree to another period of time. The competent authorities of both countries of export and transit (if applicable) are to be informed about the return of the hazardous waste and the reasons for its return. These authorities are prohibited from opposing or preventing the return of the hazardous waste to the country of export, so long as the movement complies with the requirements set out by the country of export's domestic law. If the waste is returned through a country of transit, the competent authority of that country is to be notified and consent obtained in accordance with the normal Amber control procedures. When the incident occurs in the United States, the U.S. importer must inform EPA of the need to return the shipment. EPA will then inform the countries of export and transit, citing the reason(s) for returning the waste, and request written consent to the return by any transit country as needed. If the return shipment will cross any transit country, the return shipment may only occur after EPA provides a copy of the transit country's consent to the U.S. importer. The U.S. importer must complete the return within ninety

(90)days from the time EPA informs the country of export of the need to return the waste unless otherwise informed by EPA in writing of an alternate timeframe for the return. When the incident involves an export shipment from the United States, the U.S. exporter must provide for the return of the hazardous waste shipment within ninety

(90)days from the time the country of import informs EPA of the need to return the shipment unless otherwise informed by EPA in writing of an alternate timeframe for the return. The U.S. exporter must also submit an exception report to EPA.

(b)Re-Export of Hazardous Waste From the Country of Import to a Third Country Under the Amended 2001 OECD Decision, the re-export from the country of import to a third country is considered a new transboundary movement of hazardous waste. As a result, the Amber control procedures are applicable. The initial importer becomes the exporter of the hazardous waste and, consequently, assumes all responsibilities as an exporter. In addition, the notification must also include the competent authority of the initial country of export who, in accordance with the Amber control procedures, may object to the re-export if the movement does not comply with the requirements set out by its domestic law. Re-export of a hazardous waste shipment from the United States to a third country may therefore only occur after the importer (acting as the new exporter) submits a notification to EPA in compliance with the notice and consent procedures of § 262.83 and obtains consent from the original country of export, the new country of import, and any transit countries.

(c)Return of Hazardous Waste From the Country of Transit to the Country of Export If the incident takes place in the country of transit, the exporter should make arrangements so that the hazardous waste still can be recovered in an environmentally sound manner in the recovery facility of the importing country to where it was originally destined. The competent authority of the country of transit is to immediately inform the competent authorities of the countries of export and import and any other countries of transit. If the exporter is unable to arrange for the recovery of the hazardous waste in an environmentally sound manner at the recovery facility to where it was originally destined, the hazardous waste should be returned, adhering to subsection

(a)above, to the country of export within ninety

(90)days from the time when the country of export was informed of the incident or such other period of time as the concerned countries agree. The competent authorities of the country of export and the countries of transit are to be informed of the return, but they are prohibited from opposing or preventing the return of the hazardous wastes to the country of export, so long as the movement complies with the requirements set out by the country of export's domestic law. When the United States is the transit country where the incident occurs, the U.S. transporter must inform EPA of the need to return the shipment. EPA will then inform the country of export, citing the reason(s) for returning the waste. The U.S. transporter must then complete the return within ninety

(90)days from the time EPA informs the country of export of the need to return the waste unless otherwise informed by EPA in writing of an alternate timeframe for the return. When the waste shipment from the incident originated in the United States, the U.S. exporter must provide for the return of the hazardous waste shipment within ninety

(90)days from the time the country of transit informs EPA of the need to return the shipment unless otherwise informed by EPA in writing of an alternate timeframe for the return. The U.S. exporter must also submit an exception report to EPA. This final rule sets forth these re-export and return provisions of the Amended 2001 OECD Decision in §§ 262.82(c), 262.82(d), and 262.82(e). 11. SLABs Are Now Covered by EPA's OECD Rule This final rule updates § 262.80(a) and § 262.89(a) to reflect that export shipments of SLABs being managed under 40 CFR part 266, subpart G that are destined for recovery in any of the OECD Member countries listed in § 262.58(a)(1) are subject to 40 CFR part 262, subpart H. 12. Technical Corrections to EPA's OECD Rule This final rule makes several technical corrections to EPA's current OECD rule, including corrections to capitalization, syntax, and punctuation errors. In these changes, EPA is not making any substantive revisions, but is seeking to eliminate any confusion on the part of the regulated community by striving for consistency both within the regulations and with the terms of the Amended 2001 OECD Decision. Some examples of these types of revisions include changing “Subpart” to “subpart,” “OECD member” to “OECD Member,” and “thirty days” to “thirty

(30)days.” 13. Change to the Submittal Address for Exception Reports This final rule amends the exception reporting requirements in § 262.87(b) to specify that all exception reports are to be submitted to the International Compliance and Assurance Division in the Office of Enforcement and Compliance Assurance's Office of Federal Activities in Washington, DC rather than the Administrator. D. Changes to 40 CFR 263.10(d) This final rule updates § 263.10(d) to reflect that export shipments of SLABs being managed under 40 CFR part 266, subpart G that are destined for recovery in any of the OECD Member countries listed in § 262.58(a)(1) are now subject to 40 CFR part 262, subpart H. This change is necessary to conform with the scope in the updated § 262.80(a). E. Changes to 40 CFR 264.12(a)(2) and 40 CFR 265.12(a)(2) This final rule amends §§ 264.12(a)(2) and 265.12(a)(2) by, among other things, requiring owners or operators of recovery facilities to submit a certificate of recovery as soon as possible after the recovery is completed, but no later than thirty

(30)days after the completion of recovery and no later than one

(1)calendar year following the receipt of the hazardous waste. This change is necessary to conform to the Amended 2001 OECD Decision. F. Changes to 40 CFR 264.71(a)(3) and 40 CFR 265.71(a)(3) This final rule amends §§ 264.71(a)(3) and 265.71(a)(3) by requiring owners or operators of facilities receiving imported hazardous wastes to submit to EPA a copy of the relevant written documentation of EPA's consent to the import along with a copy of the RCRA hazardous waste manifest for the incoming shipment within thirty

(30)days of shipment delivery. This will enable EPA to match the individual shipment manifest to the consent for an annual notice from a foreign exporter. G. Changes to 40 CFR 266.80(a) EPA is amending the table located at 40 CFR 266.80 by including two additional rows to the current table. These additional rows contain the new provisions that require exporters and transporters of SLABs being sent to a foreign country for reclamation to meet the universal waste requirements concerning the export of SLABs for reclamation. Specifically, exporters will need to either comply with the requirements in 40 CFR part 262, subpart H when the shipments are destined to any of the OECD Member countries listed in § 262.58(a)(1), or with the following requirements when the shipments are destined for any country not listed in § 262.58(a)(1): • Comply with the requirements applicable to a primary exporter in 40 CFR 262.53, 262.56(a)(1) through (4), (6), and

(b)and 262.57; • Export such SLABs only upon consent of the receiving country and in conformance with the EPA Acknowledgement of Consent as defined in subpart E of 40 CFR part 262 of this chapter; and • Provide a copy of the EPA Acknowledgment of Consent for the shipment to the transporter transporting the shipment for export. The transporter of SLABs being sent to a foreign country for reclamation will need to comply with the applicable requirements in 40 CFR part 262, subpart H when the shipments are destined to any of the OECD Member countries listed in § 262.58(a)(1). For export shipments of SLABs destined for a country not listed in § 262.58(a)(1), such as Canada or Mexico, the transporter will not be able to accept a shipment if the transporter knows the shipment does not conform to the EPA Acknowledgment of Consent, and will have to ensure that: • A copy of the EPA Acknowledgment of Consent accompanies the shipment; and • The shipment is delivered to the foreign facility designated by the person initiating the shipment. The new requirements at 40 CFR 266.80 will ensure greater protection of human health and the environment through notification, tracking, and management of SLABs. In addition to harmonizing the RCRA hazardous waste regulations for SLABs with the notification and consent requirements in the RCRA universal waste rules, today's final rule harmonizes the export requirements for SLABs with the Amended 2001 OECD Decision. (Note that the exemption from the RCRA hazardous waste manifest requirements for exporters and transporters of SLABs for reclamation will continue to remain in effect, although SLAB shipments for recovery to any of the OECD Member countries listed in § 262.58(a)(1) must be accompanied by a movement document per § 262.84 that is separate from the RCRA hazardous waste manifest.) The table located at 40 CFR 266.80 describes the various kinds of SLAB handlers and their respective legal requirements. Some SLAB handlers may find that more than one description located in the table applies to their SLAB management activities. It is the SLAB handler's responsibility to read all seven descriptions and carefully consider any and all requirements which may apply. 1. Export Shipments of SLABs to OECD Member Countries Listed in § 262.58(a)(1) Exporters and transporters of SLABs destined for reclamation in any of the OECD Member countries listed in § 262.58(a)(1) will have to comply with all applicable sections of 40 CFR part 262, subpart H for wastes subject to the Amber control procedures. For a complete listing of the final OECD requirements, exporters and transporters should consult the regulatory text for 40 CFR part 262, subpart H in this final rule. In addition to the changes in subpart H discussed in earlier sections, the applicable Amber control procedures include, but are not limited to, the following:

(a)Notification of Intent To Export Exporters of SLABs destined for reclamation are required to comply with the Amber control procedures in § 262.83. Under the Amber control procedures, an exporter must submit a complete notification to EPA of its intent to export at least 45 days before the export is scheduled to leave the United States (or at least ten days if the shipment is going to a pre-approved facility in the country of import). The notification can cover export activities spanning a period of up to and including 12 months (or up to three years, depending on the procedures of the importing country, if the shipment is going to a pre-approved facility in the country of import). Exporters may use the OECD Notification form in Appendix 8 of the Amended 2001 OECD Decision, or whatever notification form may be required by the country of import, but are not required by EPA to do so. A complete notification includes, but is not limited to: • Contact information and the EPA ID number (if applicable) for the exporter; • Point of departure from country of export; • A waste description and quantity of the hazardous waste being exported; • The RCRA waste code(s) (if applicable), United Nations number, and OECD waste code for the hazardous waste (SLABs are classified as Amber waste A1160 under the Amended 2001 OECD Decision); • Planned mode(s) of transportation; • Contact information for all intended transporters; • Contact information and the OECD recovery operation code(s) ( *e.g.* , R1-R13) for both the importer and the final recovery facility (if different sites); • The requested period of exportation; • A list of all transit countries, along with the points of entry and departure, through which the hazardous waste will be sent; and • A certification by the exporter that a contract or chain of contracts or equivalent arrangements among all parties to the final shipment are in place and are legally enforceable in all concerned countries. If the notification is complete, EPA will forward it to the importing country and any transit country(ies). Within three working days of receiving the notification, the importing country must send either an Acknowledgement of Receipt or a list of items that the notification lacks directly to U.S. EPA, to the exporter, and to any countries of transit. The countries of import and transit have thirty

(30)days from the date on the Acknowledgement of Receipt (seven days for shipments going to pre-approved facilities) to object or consent explicitly to the proposed shipment. Any explicit objection or consent by the country of import or transit will be sent simultaneously to U.S. EPA, the exporter, and any other interested country ( *e.g.* , of import or transit). If no objections are submitted within the thirty day

(30)period (seven days for shipments going to pre-approved facilities), under the provisions of the Amended 2001 OECD Decision, tacit (or implied) consent is assumed and the movement of the hazardous wastes may commence. The subsequent SLAB shipments must be in accordance with the information from the notification that was reviewed and approved by the receiving country in its consent. Any changes to the information listed in the notification, such as changes to proposed total amounts to be exported or the ports of entry to be used, would require renotification and shipments could not take place until either tacit or written consent was obtained.

(b)Shipment Tracking Under § 262.84, shipments of SLABs that are exported must be accompanied by a movement document from the initiation of the shipment until it reaches the final recovery facility. This movement document is described in § 262.84 and is different from the RCRA hazardous waste manifest. Exporters may use the OECD Movement form in Appendix 8 of the Amended 2001 OECD Decision, or whatever movement form may be required by the country of import, but are not required by EPA to use any particular form. Exporters must provide the initial transporter with the movement document. Transporters are prohibited from accepting a shipment of SLABs without such a movement document, and are required to ensure that the movement document accompanies the shipment from the initiation of the shipment until it reaches the final recovery facility. The movement document must include all the information from the notification, as well as the following: • Date movement commenced; • Name (if not the exporter), address, telephone and fax numbers, and e-mail of person originating the movement document (Note that this person is equivalent to the primary exporter under 40 CFR part 262, subpart E); • Company name and EPA ID number (if applicable) of all transporters; • Identification (license, registered name or registration number) of means of transport, including types of packaging envisaged; • Any special precautions to be taken by transporter(s) during transportation; • Certification/declaration signed by the exporter that no objection to the shipment has been lodged; and • Appropriate signatures for each custody transfer ( *e.g.* , transporter, importer, and owner or operator of the recovery facility).

(c)Annual Reporting Under § 262.87(a), any person exporting SLABs who meets the definition of primary exporter in § 262.51 or who initiates the movement document under § 262.84 will have to submit to the International Compliance and Assurance Division in the Office of Enforcement and Compliance Assurance's Office of Federal Activities in Washington, DC, an annual report summarizing the types, quantities, frequency, and ultimate destination of all SLABs exported during the previous calendar year. Reports are due by March 1st of every year.

(d)Exception Reporting Under § 262.87(b), any person exporting SLABs who meets the definition of primary exporter in § 262.51 or who initiates the movement document under § 262.84 must file an exception report with the International Compliance and Assurance Division in the Office of Enforcement and Compliance Assurance's Office of Federal Activities in Washington, DC, if either of the following occurs: • Within ninety

(90)days from the date the SLAB shipment was accepted by the initial transporter, the exporter has not received written confirmation from the recovery facility that the SLAB shipment was received; or • The SLAB shipment is returned to the United States.

(e)Recordkeeping Under § 262.87(c), any person exporting SLABs who meets the definition of primary exporter in § 262.51 or who initiates the movement document under § 262.84 must keep the following records: • A copy of each notification of intent to export and all written consents obtained from the competent authorities of countries concerned ( *e.g.* , export, transit, and import) for a period of at least three

(3)years from the date the SLAB shipment was accepted by the initial transporter; • A copy of each annual report for a period of at least three

(3)years from the due date of the report; • A copy of any exception reports and a copy of each confirmation of delivery ( *i.e.* , movement document) sent by the recovery facility to the exporter for at least three

(3)years from the date the SLAB shipment was accepted by the initial transporter or received by the recovery facility, whichever is applicable; and • A copy of each confirmation of recovery sent by the recovery facility to the exporter for at least three

(3)years from the date that the recovery facility completed the processing of the SLAB shipment. 2. Export Shipments of SLABs to Countries Not Listed in § 262.58(a)(1)

(a)Notification of Intent To Export Exporters of SLABs destined for reclamation in countries not listed in § 262.58(a)(1), such as Canada or Mexico, are required to comply with the primary exporter notification requirements in § 262.53, and may export the SLABs only upon consent of the receiving country and in conformance with the EPA Acknowledgement of Consent, as defined in 40 CFR part 262, subpart E. Specifically, the exporter has to submit a complete notification of its intent to export to EPA at least 60 days before the export is scheduled to leave the United States. The notification can cover export activities spanning a period of up to and including 12 months. This complete notification contains: • Contact information and the EPA ID number (if applicable) for the primary exporter; • A description and quantity of the SLABs to be exported; • The RCRA waste code(s) (if applicable), U.S. DOT proper shipping name, hazard class, and United Nations number as identified in 49 CFR parts 171 through 177; • Planned mode(s) of transportation and type(s) of containers; • A description of the manner in which the SLABs will be treated, stored, or disposed of (including recovery) in the receiving country; • The planned frequency and time period of exportation; • A list of all transit countries through which the SLABs will be sent, and a description of the approximate length of time the hazardous waste will remain in each country and the nature of its handling while there; • All points of entry to and departure from each foreign country through which the SLABs will pass; and • The name and site address of the consignee 7 and any alternate consignee. 7 As noted previously, this is equivalent to the “importer” in the final revisions to 40 CFR part 262, subpart H. If after proper notification, the receiving country consents to the receipt of the hazardous waste, EPA will forward an EPA Acknowledgment of Consent to the exporter. If, on the other hand, the receiving country objects to the receipt of the hazardous waste or withdraws a prior consent, EPA will notify the exporter in writing. EPA will also notify the exporter of any responses from transit countries. The subsequent SLAB shipments must be in accordance with the information from the notification that was reviewed and approved by the receiving country in its consent. Any changes to the information listed in the notification (with the exception of changes to the primary exporter's telephone number, the listed means of transportation, or a decrease in the total amount to be exported) would require renotification and shipments could not take place until the exporter received an EPA Acknowledgement of Consent for the renotification.

(b)Shipment Documentation and Tracking Exporters of SLABs must provide a copy of the EPA Acknowledgment of Consent for the SLAB shipment to the transporter transporting the shipment for export. Transporters are prohibited from accepting a SLAB export shipment if the transporter knows the shipment does not conform to the EPA Acknowledgment of Consent. In addition, the transporter must ensure that: • A copy of the EPA Acknowledgment of Consent accompanies the SLAB export shipment; and • The SLAB export shipment is delivered to the facility designated by the person initiating the shipment. Unlike SLAB export shipments to countries listed in § 262.58(a)(1) that must comply with 40 CFR part 262, subpart H, SLAB export shipments destined for countries not listed in § 252.58(a)(1) do not have any shipment tracking documentation requirements or exception reporting requirements because they are exempt from the RCRA hazardous waste manifest requirements and are not required to comply with the movement document requirements in § 262.84.

(c)Annual Reporting Exporters of SLABs must follow the requirements applicable to a primary exporter detailed in § 262.56 “Annual reports” (a)(1) through (4), (6), and (b). Specifically, exporters will have to file with the EPA Administrator an annual report summarizing the types, quantities, frequency, and ultimate destination of all SLABs exported during the previous calendar year. Reports are due by March 1st of every year.

(d)Recordkeeping Under § 262.57, exporters of SLABs must keep the following records: • A copy of each notification of intent to export for at least three years from the date the SLAB export shipment was accepted by the initial transporter; • A copy of each EPA Acknowledgment of Consent for at least three years from the date the SLAB export shipment was accepted by the initial transporter; and • A copy of each annual report for at least three years from the due date of the report. H. Changes to 40 CFR 271.1 This final rule amends Table 1 and Table 2 of § 271.1 by adding references to the revisions which amend 40 CFR part 262, subpart E to reflect that subpart E implements the Hazardous and Solid Waste Amendments of 1984. IV. Discussion of Comments Received in Response to the Proposed Rulemaking and the Agency's Responses The Agency received comments from four entities: the Basel Action Network (BAN), a nongovernmental organization focused on the Basel Convention and in particular on the issue of illegal trade in hazardous wastes to developing countries; the Association of Battery Recyclers (ABR), a national trade association representing the lead recycling industry; Johnson Controls, Inc. (JCI), a global supplier of batteries to the automotive aftermarket and original equipment manufacturers; and Dow Chemical Company (DOW), a global chemical manufacturer. The comments were focused on specific issues or provisions in the proposed rule. To the extent that comments were not submitted on various aspects or provisions of the proposal, the Agency is finalizing those portions of the proposal, as-is, except in one case. That exception is discussed in section C below. A. OECD Revisions BAN argued that EPA should subject all wastes on the OECD amber list to amber control procedures when being exported regardless of whether the materials are RCRA hazardous wastes. This comment is outside the scope of this rulemaking, as EPA did not propose any changes to the fundamental regulatory framework regarding the applicability of the OECD provisions in 40 CFR part 262, subpart H ( *see* Section II.A.5 of the proposed rule at 73 FR 58393). Moreover, it is important to recognize that the Amended 2001 OECD Decision and its predecessor have long recognized and allowed a Member country to determine if a waste on an OECD list is hazardous based on its “national procedures” ( *see* Annex I, Section II.4 of the “Decision of the Council C(92)39/FINAL Concerning the Control of Transfrontier Movements of Wastes Destined for Recovery” and Chapter II, Section B.4 of the Amended 2001 Decision). Discussion on how RCRA implementation of “national procedures” impacts transboundary movements of wastes subject to the RCRA exemptions, exclusions and recycling provisions can be found in the April 12, 1996, preamble to the original OECD rule (61 FR 16290-16316). EPA is therefore finalizing the scope of the OECD provisions in subpart H, as proposed. BAN also commented that EPA should prohibit all exports of OECD amber listed wastes to non-OECD countries for any reason. ABR similarly commented that EPA should prohibit all exports of SLABs to non-OECD countries. EPA cannot grant this request since the statute does not give EPA the legal authority to implement an outright ban on hazardous waste exports. Specifically, RCRA section 3017 prohibits exports of hazardous waste unless either:

(1)The shipments are covered under and conform to the terms specified in an agreement between the U.S. and the receiving country; or

(2)the exporter has submitted written notification to EPA, obtained written consent from the receiving country via EPA, attached a copy of the written consent to the RCRA hazardous waste manifest for each shipment, and ensures that the shipments comply with the terms of the receiving country's consent. Moreover, section 3017 directs the State Department, on behalf of EPA, to forward a copy of the notification to the intended country of import within 30 days of EPA receiving a complete notification concerning a proposed waste export that would not be covered under the terms of an existing international agreement. Therefore, an outright ban regarding all exports of any individual hazardous waste ( *e.g.* SLABs) or all hazardous wastes to non-OECD countries would require changes to the statutory language and is outside the scope of this regulatory action. In practice, EPA has rarely received inquiries for hazardous waste exports to non-OECD countries. When approached by potential exporters who ask about exporting hazardous wastes to non-OECD countries that are, however, parties to the Basel Convention, it is EPA's practice to actively discourage such exports by informing them of the Basel Convention prohibition on transboundary shipments of hazardous waste between Basel Parties and a non-Party like the United States in the absence of a formal agreement per Article 11 of the Basel Convention ( *e.g.,* the U.S.-Canada bilateral agreement, the U.S.-Mexico bilateral agreement, or the OECD multilateral agreement). The United States has no agreement with a non-OECD country for exports of RCRA hazardous wastes. A review of hazardous waste export notices between 1995-2007 indicates no approved or even proposed exports of RCRA hazardous waste to a non-OECD country. In the interest of transparency, however, EPA intends to post online at *http://www.epa.gov/epawaste/hazard/international/hazard/index.htm* summary information for all future notices we receive concerning a proposed export of RCRA hazardous waste to a non-OECD country. The online information will list the exporter name, exporter address, waste text description, proposed receiving country, and consent status ( *e.g.,* notice submitted to foreign country, whether the foreign country consents or objects). Moreover, EPA's cover letters for notices concerning exports to non-OECD countries will remind the countries, when appropriate, of the relevant Basel hazardous waste listing and the Basel Convention prohibition on transboundary shipments of hazardous waste between Basel Parties and a non-Party like the United States. In another comment, BAN asserted that EPA has not yet implemented the 1986 OECD Council Decision-Recommendation C(86)64(final) 8 (“1986 OECD Decision-Recommendation”), and should do so immediately. This comment is outside the scope of this rulemaking, as EPA proposed revisions to the OECD provisions to implement the Amended 2001 OECD Decision. 8 “Decision-Recommendation of the Council on Exports of Hazardous Wastes from the OECD area,” issued June 5, 1986. This document is available online at *http://webdomino1.oecd.org/horizontal/oecdacts.nsf/linkto/C(86)64,* and a copy has been placed in the docket established for this rulemaking. Finally, BAN suggested that the U.S. should simultaneously ratify the Basel Convention and the Basel Ban Amendment. However, ratification of the Basel Convention, with or without the Basel Ban Amendment, would require Congressional action to provide EPA the legislative authority to implement either of these, and thus, is outside the scope of this rulemaking. Dow stated that it supported EPA revising the existing regulations to implement the Amended 2001 OECD Decision, and that the revisions will clarify and streamline the import and export process among OECD Member countries. B. SLAB Revisions Three of the commenters recognized the need to require notification and consent for SLABs being exported for reclamation in a foreign country, and all four commenters supported EPA establishing the notice and consent export requirements. As part of ABR's comment suggesting that EPA ban all exports of SLABs to non-OECD countries (which is discussed in the previous section), ABR submitted data that analyzed export shipments of SLABs and other lead scrap based on the harmonized tariff code classifications between 2006-2008. The data indicated shipments of lead scrap and/or SLABs to non-OECD countries ( *e.g.,* China and India). ABR asserted that this data demonstrates that many exporters were mislabeling their SLAB shipments as non-battery scrap, and that EPA might be underestimating the amount of SLABs that were exported for reclamation between 2006-2008. However, after reviewing the analysis conducted by ABR, who generally supports the proposed rule, we do not believe that ABR's data would lead to a significantly different answer, and cause EPA to reconsider its position. In particular, ABR's data indicated total exports of SLABs and lead scrap were approximately 220,000 metric tons in 2006 and approximately 250,000 metric tons in 2007, with about 8% of the total exports in 2006 going to non-OECD countries. In comparison, EPA's data on SLAB exports estimated that 269,171 metric tons were exported in 2006, and that 1.77% went to non-OECD countries. Because the maximum annual amount of SLABs exported between 2006-2007 based on ABR's data is less than the annual amount based on EPA's data, the Agency believes it most appropriate that the data used in the economic analysis for the proposed rule should continue to be used, and not revised to include the ABR data in the economic analysis for the final rule. As a general note, if anyone has specific knowledge pertaining to specific export shipments that they believe are in violation of the RCRA hazardous waste regulations, we encourage them to submit it using EPA's Web site at *http://www.epa.gov/compliance/complaints/index.html.* ABR further commented that adding export requirements to 40 CFR part 266, subpart G that reference the 40 CFR part 262 requirements was confusing, and instead recommended that EPA simply require that all SLABs destined for export to be managed as Universal Waste batteries under 40 CFR part 273. EPA does not agree that requiring all SLABs that will be exported in the future be managed under 40 CFR part 273 would be easier or less confusing. EPA's policy has long allowed collectors and managers of SLABs destined for recycling to choose either Part 273 or Part 266 ( *see* Section IV.B.2.b of the 1995 Final Universal Waste Rule at 60 FR 25504 and following pages). We believe that having the same export requirements for SLAB exports in 40 CFR part 273 and 40 CFR part 266, subpart G is the most straightforward approach to ensuring that SLAB exports for reclamation are appropriately controlled, and the references to requirements in 40 CFR part 262 should be no more confusing than the previously established references to 40 CFR parts 261 and 268. EPA is therefore finalizing the 40 CFR part 266, subpart G requirements as proposed. JCI commented that a three-year time period for notice and consent of exports (as opposed to a one-year time period) would reduce the burden on U.S. exporters while still providing sufficient notification to the importing country of proposed shipments. While the Amended 2001 OECD Decision does allow importing countries to issue extended consents that last for up to three years when the proposed shipment is destined for a facility that the importing country has “pre-approved” for such imports, OECD countries are neither required to pre-approve facilities nor to issue such extended consents. The international agreements covering exports from the United States that are in place with Canada, Mexico, and the OECD all specify a one-year time period as the standard maximum length of time that a notification and consent can cover. Consistent with those agreements and with all other RCRA export regulatory requirements in 40 CFR parts 261, 262 and 273, EPA is therefore retaining the one-year time period for SLABs being exported under 40 CFR part 266, subpart G. Dow made a general comment of support for the revisions to the SLAB regulations. C. Export Exception Report Technical Correction and Import Revisions BAN and Dow both made a general comment of support for the proposed technical corrections regarding export exception reports and import consent documentation submissions, as proposed. Therefore, EPA is finalizing the technical corrections as proposed. The final rule however, does not include the proposed requirement in 40 CFR part 262, subpart F that RCRA hazardous waste importers give a copy of the EPA-provided import consent documentation to the initial transporter along with the RCRA hazardous waste manifest. According to longstanding EPA policy, any party who helped arrange for the importation ( *e.g.,* a broker, a transporter, or the waste management facility), may be considered an importer. 9 Because EPA's consents are currently communicated only to the competent authority of the exporting country, the proposal stated that EPA would need to provide or otherwise make available to U.S. importers the documentation confirming the Agency's consent. We asked for comment in the proposed rule on how best to provide the consent documentation to the RCRA importer, but received no comments on this issue. Foreign notices we receive regarding proposed imports of hazardous waste do not generally identify the party acting as the importer under the RCRA regulations, but the notices always have to list the foreign generator, the waste to be imported, the intended management of the waste, and the U.S. TSDF that will dispose of or recover the imported hazardous waste. 9 *See* June 25, 1985, memo from John H. Skinner, Director of the Office of Solid Waste to Harry Seraydarian, Director, Toxics and Waste Management Division, EPA Region IX, “Determining Who Assumes Generator Responsibilities for Importations of Hazardous Waste.” Since we should be able to reliably identify the TSDF, and the TSDF should have enough knowledge of their individual customers and contracts to match up the incoming shipment manifests with the EPA-provided import consent documentation, we have decided to provide the import consent documentation directly to the TSDF listed on each consent document and require each TSDF receiving hazardous waste from a foreign source to send back a copy of the relevant import consent documentation along with a signed copy of the RCRA hazardous waste manifest within 30 days of delivery. Because receiving facilities would have received the consent documentation directly under the proposal for those instances when they were acting as the RCRA importer of record, making this change is a logical outgrowth of the proposal and does not require a supplemental notice. V. Future Rulemaking 1. Changes to OECD Member Country List Qualified countries may be invited to accede to the OECD Convention as new Members. The OECD Convention defines qualified countries as those that have demonstrated the basic values shared by all Members: An open market economy, democratic pluralism, and respect for human rights. Any decision to invite a new country to become a Member of the OECD must be unanimous, although abstentions may be allowed. Thus, no new Member may be admitted over the objection of the United States (or any other Member country). In order to accommodate changes in OECD membership as quickly as possible, EPA will publish in the **Federal Register** any future amendments to the list of OECD Member countries set forth in § 262.58(a)(1), as a final rule without prior notice and opportunity for comment. EPA believes that the Agency would be able to make a “good cause” finding under the Administrative Procedure Act

(APA)(5 U.S.C. 553(b)(3)(B) to make these future amendments without prior notice and comment. EPA believes notice and an opportunity for comment on future amendments to § 262.58(a)(1) to reflect the updates to the OECD list of Member countries would be unnecessary, because the United States, as an OECD Member country, is legally obligated to implement OECD Decisions with respect to all OECD Member countries. 2. Changes to OECD Waste List The OECD waste list is incorporated by reference and cited in § 262.89(d). If the OECD amends its waste list in the future by decision of the OECD Council (with the concurrence of the United States), EPA will publish a notice of these amendments in the **Federal Register** as a final rule without prior notice and an opportunity for comment. EPA believes that the Agency would be able to make a “good cause” finding under the Administrative Procedure Act

(APA)(5 U.S.C. 553(b)(3)(B)) to make these future amendments without prior notice and comment because the purpose of § 262.89(d) is solely informational—to provide an up-to-date reference of the OECD waste list. Public comment on such updates is unnecessary, as EPA would have no discretion to modify this list. VI. Costs and Benefits of the Final Rule A. Introduction The value of any regulatory action is traditionally measured by the net change in social welfare that it generates. The Agency's economic assessment conducted in support of this final action evaluates costs, cost savings, benefits, and other impacts, such as environmental justice, children's health, unfunded mandates, regulatory takings, and small entity impacts. To conduct this analysis, we developed and implemented a methodology for examining the impacts, and followed appropriate guidelines and procedures for examining equity considerations, children's health, and other impacts. B. Analytical Scope This analysis assesses the final integration of the Amended 2001 OECD Decision into the existing U.S. regulations governing shipments (export/import/transit) of hazardous wastes destined for recovery between the U.S. and other OECD Member countries. In addition, we assess the newly final export regulations for SLABs to OECD and non-OECD countries. Also incorporated into the analysis is the requirement that a receiving facility subject to 40 CFR parts 264 or 265 submit to EPA a copy of the documentation confirming EPA's consent to the import when it submits to EPA the RCRA hazardous waste manifest for the import shipment of hazardous waste. Finally, this action revises the current language in §§ 262.55 and 262.87(b) to require exception reports to be submitted directly to the International Compliance and Assurance Division in the Office of Enforcement and Compliance Assurance's Office of Federal Activities in Washington, DC, rather than to the EPA Administrator. There is no discernable cost impact associated with this final requirement for exception reports to be submitted directly to the Director. First, we assessed potential cost impacts (positive and negative) of the final revisions to the OECD rule, including: • Exemptions for wastes destined for laboratory analyses, • The requirement to provide a certificate of recovery, • Information collection requirements associated with the exchange and accumulation recovery operations, and • The notification requirements related to the return of wastes. Next, we assessed potential cost impacts (positive and negative) of the final revisions to the SLAB regulations, including: • Notification requirements for SLAB exporters, • The renotification requirements associated with any changes to the original SLAB export notification, • The annual reporting requirements, • Additional reporting requirements (if requested by EPA), and • SLAB exporter recordkeeping requirements. Finally, we analyzed the final requirements that a receiving facility subject to 40 CFR parts 264 or 265 submit to EPA a copy of the documentation confirming EPA's consent to the import when it submits to EPA the RCRA hazardous waste manifest for the import shipment of hazardous waste. We also included an estimate for potentially affected entities to read the regulation, which is, by default, a necessary requirement for understanding the regulation. Cost impacts associated with reading the regulation are assessed for exporters, importers, and transporters. C. Cost Impacts The total incremental cost for the OECD portion of the final rule during the first year of implementation, including reading the rule, is estimated to be $14,494. This is a net impact estimate that includes a total net incremental cost increase to the regulated community of $13,656, and a total net cost increase to EPA of $838. The total incremental annual net cost for the OECD portion after the first year of implementation, excluding reading the rule, is estimated to be $9,700. The total incremental cost for the SLAB portion of the final rule during the first year of implementation, including reading the rule, is estimated at $850,000. The first year total incremental cost is expected to be about $780,000 for the affected U.S. industry and about $71,000 for EPA. The total incremental annual cost after the first year of implementation, excluding reading the rule, is estimated to be $400,000. The combined total cost of the final rule (OECD portion, plus SLAB portion, plus import consent documentation portion) is estimated at $910,000 for the first year. Approximately 93% of this total is attributable to the SLAB portion of the rule, followed by the EPA import consent documentation requirements representing about 5% of the total. The OECD portion accounts for less than 2% of the total first year cost of the rule. After the first year, the total incremental cost of the final rulemaking is estimated at $460,000. Cost estimates presented in this section are based on our estimates for the number of potentially affected importers, exporters, and transporters. Numerous data sources were used in the derivation of these estimates, including: RCRAInfo, the Waste International Tracking System (WITS), industry consultations, the Biennial Report, the International Trade Commission (ITC), Environment Canada, and SEMARNAT 10 data. A full explanation of the data sources, analytical methodology, assumptions, and limitations associated with the findings presented above is presented in our Cost Assessment 11 document prepared in support of this final action. This document is available in the docket to today's rule. 10 Secretaría de Medio Ambiente y Recursos Naturales (SEMARNAT). 11 *Cost Assessment for the Final Rule on Exports and Imports of Hazardous Waste Destined for Recovery Among OECD Countries, Exports of Spent Lead-Acid Batteries from the U.S., and Import Consent Documentation.* D. Benefits We have prepared a qualitative assessment of the benefits anticipated from this action. Overall, this action is expected to result in improved regulatory efficiency of the affected materials, while ensuring improved data collection and enhanced enforcement capabilities. Specific benefits include the following: • Increasing regulatory efficiency by implementing provisions in the Amended 2001 OECD Decision that were meant to clarify the scope of control and make the control procedures more precise; • Helping to improve market efficiency by allowing exporters to ship wastes more quickly and store for shorter periods of time; • Encouraging the environmentally sound recovery of hazardous wastes, thereby reducing the risks associated with treatment and disposal; and • Providing for the improved ability to acquire information regarding the quantities of SLABs exported from the U.S. and the destination facilities to which the SLABs are exported. VII. State Authorization A. Applicability of Rules in Authorized States Under section 3006 of RCRA, EPA may authorize qualified States to administer their own hazardous waste programs in lieu of the Federal program within the State. Following authorization, EPA retains enforcement authority under sections 3008, 3013, and 7003 of RCRA, although authorized States have primary enforcement responsibility. The standards and requirements for State authorization are found at 40 CFR part 271. Prior to enactment of the Hazardous and Solid Waste Amendments of 1984 (HSWA), a State with final RCRA authorization administered its hazardous waste program entirely in lieu of EPA administering the Federal program in that State. The Federal requirements no longer applied in the authorized State, and EPA could not issue permits for any facilities in that State, since only the State was authorized to issue RCRA permits. When new, more stringent Federal requirements were promulgated, the State was obligated to enact equivalent authorities within specified time frames. However, the new Federal requirements did not take effect in an authorized State until the State adopted the Federal requirements as State law. In contrast, under RCRA section 3006(g) (42 U.S.C. 6926(g)), which was added by HSWA, new requirements and prohibitions imposed under HSWA authority take effect in authorized States at the same time that they take effect in unauthorized States. EPA is directed by the statute to implement these requirements and prohibitions in authorized States, including the issuance of permits, until the State is granted authorization to do so. While States must still adopt more stringent HSWA related provisions as State law to retain final authorization, EPA implements the HSWA provisions in authorized States until the States do so. Authorized States are required to modify their programs only when EPA enacts Federal requirements that are more stringent than existing Federal requirements. RCRA section 3009 allows the States to impose standards more stringent than those in the Federal program ( *see also* 40 CFR 271.1). Therefore, authorized States may, but are not required to, adopt Federal regulations, both HSWA and non-HSWA, that are considered less stringent than previous Federal regulations. B. Effect on State Authorization Because of the Federal government's special role in matters of foreign policy, EPA does not authorize States to administer Federal import/export functions in any section of the RCRA hazardous waste regulations. This promotes national coordination, uniformity and the expeditious transmission of information between the United States and foreign countries. Although States do not receive authorization to administer the Federal government's export functions in 40 CFR part 262, subpart E, import functions in 40 CFR part 262, subpart F, import/export functions in 40 CFR part 262, subpart H, or the import/export related functions in any other section of the RCRA hazardous waste regulations, State programs are still required to adopt those provisions in today's rule that are more stringent than existing Federal requirements to maintain their equivalency with the Federal program ( *see* for example, 40 CFR 271.10(e)). Today's rule contains many amendments to 40 CFR part 262, subpart H, a number of which are more stringent. The rule also contains amendments to § 262.10, § 262.55, § 262.58, § 263.10(d), § 264.12(a)(2), § 264.71, § 265.12(a)(2), and § 265.71, almost all of which are more stringent. The States that have adopted 40 CFR part 262, subparts E and H, 40 CFR part 263, 40 CFR part 264 or 40 CFR part 265 must adopt the provisions listed above that are more stringent. In addition, States that have adopted management standards for spent lead-acid batteries analogous to 40 CFR part 266, subpart G must adopt the changes in today's rule which are more stringent. States are not required to adopt the amendments in this rule that are not more stringent. However, EPA strongly encourages States to incorporate all the import and export related requirements into their regulations for the convenience of the regulated community and for completeness, particularly where a State has already incorporated 40 CFR part 262, subparts E, and H, the import/export manifest and OECD movement document related requirements in § 263.10(d), the import manifest and OECD movement document submittal requirements in §§ 264.12(a)(2), 264.71, 265.12(a)(2), and 265.71, or the management provisions for SLABs in 40 CFR part 266, subpart G. When a State adopts the import/export provisions in this final rule, care should be taken not to replace Federal or international references with State terms. The provisions of today's notice take effect in all States on July 7, 2010, since these import and export requirements will be administered by the Federal government as a foreign policy matter, and will not be administered by States. VIII. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review Under Executive Order

(EO)12866 (58 FR 51735, October 4, 1993), this action is a “significant regulatory action.” This action may raise novel legal or policy issues [3(f)(4)] arising out of legal mandates, although it is not economically significant. Accordingly, EPA submitted this action to the Office of Management and Budget

(OMB)for review under EO 12866. Any changes made in response to OMB's recommendations have been documented in the docket for this action. This final rule is projected to result in a net increase in costs to certain importers, exporters, and transporters of affected hazardous wastes. Increased costs are also projected for the Federal government. The total net cost of this rule is estimated to be $910,000 during the first year following rule implementation. Exporters are projected to account for approximately 69 percent of this total. Benefits of this action include increased regulatory efficiency, reduced risks associated with the treatment and disposal of hazardous wastes, and improved data collection. The total net cost estimate for this rule is significantly below the $100 million threshold 12 established under part 3(f)(1) of the Order. Thus, this rule is not considered to be an economically significant action. However, in an effort to comply with the spirit of the Order, we have prepared an economic assessment 13 in support of this final rule. The RCRA docket established for today's rulemaking contains a copy of this document. 12 This $100 million threshold applies to both costs, and cost savings. 13 *Cost Assessment for the Final Rule on Exports and Imports of Hazardous Waste Destined for Recovery Among OECD Countries, Exports of Spent Lead-Acid Batteries from the U.S., and Import Consent Documentation (Cost Assessment).* B. Paperwork Reduction Act The information collection requirements in this rule have been submitted for approval to the Office of Management and Budget

(OMB)under the *Paperwork Reduction Act,* 44 U.S.C. 3501 *et seq.* The information collection requirements are not enforceable until OMB approves them. The Information Collection Request

(ICR)document prepared by EPA has been assigned EPA ICR number 2308.02. The final rule requires that the affected sources submit the following: • *Under the final OECD revisions:* U.S. recovery facilities will have to submit a certificate of recovery to the foreign exporter, and to the competent authority of the country of export and EPA, as soon as possible, but no later than thirty

(30)days after the completion of recovery and no later than one

(1)calendar year following receipt of the waste; U.S. facilities that exchange or accumulate waste shipments ( *e.g.,* R12/R13 facilities) before final recovery at another facility ( *e.g.,* R1-R11 facilities) will have to prepare and provide a certificate of recovery for the R12/R13 recovery operations, and provide and maintain a copy of the certificate of recovery for the subsequent R1-R11 recovery operations; U.S. recovery facilities, including R12/R13 facilities, that must re-export or otherwise return the hazardous waste shipment will have to submit new notification documents and comply with the associated Amber control procedures; and U.S. exporters will have to keep records of the additional certifications of recovery and any R12/R13 certifications they receive from recovery facilities in other OECD Member countries. • *Under the final SLAB revisions:* SLAB exporters will have to comply with the full subpart H requirements if going to the OECD Member countries listed in § 262.58(a)(1) ( *e.g.,* submitting notices, originating a movement document for each shipment, keeping records of all confirmations of receipt and recovery they receive, submitting exception reports and annual reports, and recordkeeping); and comply with portions of the subpart E requirements if going elsewhere ( *e.g.,* submitting notices, providing a copy of EPA's Acknowledgement of Consent for each shipment, submitting annual reports and recordkeeping). • *Under the final import documentation revisions:* U.S. receiving facilities will have to submit to EPA copies of the documentation confirming EPA's consent to the import each time they submit to EPA a copy of the RCRA hazardous waste manifest for each hazardous waste import shipment within thirty

(30)days of shipment delivery. All affected sources will have to retain records of this paperwork for a period of three

(3)years, which is consistent with the RCRA hazardous waste requirements of §§ 262.53, 262.56, 262.57, 262.83, 262.87, 264.71 and 265.71. The collection of the requested information is mandatory, as it is needed by EPA as a part of its overall compliance and enforcement program for the protection of human health and the environment. The estimated annual public reporting burden for the new paperwork requirements in the final rule is 4.63 hours/year per respondent under the final OECD revisions; 20.74 hours/year per respondent under the final SLAB revisions; and 8.44 hours/year per respondent under the final import consent documentation. The annual public recordkeeping burden is estimated to average 10.20 hours/year per respondent under the final OECD revisions, and 0.25 hours/year per respondent under the final SLAB revisions. The total annual public burden is estimated to be 14,854 hours at a cost of $832,400 during the first year of implementation, and 8,799 hours at a cost of $381,400 after the first year. The capital and start-up costs plus total operation and maintenance costs are expected to be negligible. Burden is defined at 5 CFR 1320.3(b). 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. When this ICR is approved by OMB, the Agency will publish a technical amendment to 40 CFR part 9 in the **Federal Register** to display the OMB control number for the approved information collection requirements contained in this final rule. C. Regulatory Flexibility Act The Regulatory Flexibility Act

(RFA)generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impacts of today's rule on small entities, small entity is defined as:

(1)A small business as defined by the Small Business Administration's

(SBA)regulations 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 today's final rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. We have determined that a substantial number of potentially affected small businesses (importers, exporters, and transporters) will not experience significant negative economic impacts. For the purpose of our impact analyses, small business is defined either by the number of employees or by the dollar amount of sales. The level at which a business is considered small is determined for each North American Industrial Classification System (NAICS) code by the Small Business Administration. No small governmental jurisdiction or small not-for-profit organizations are expected to be affected by this action. While a significant number of exporters may be small businesses, the results of our analysis indicate that the cost to individual small entities in each potentially affected sector (as identified by NAICS codes) is likely to be insignificant. This determination was made by comparing annual compliance costs under the rule to the average annual sales of small business in the industry sectors likely affected by the rule. According to the U.S. Small Business Administration's small business size standards, firms in most of these industry sectors are classified as a “small business” if they have fewer than 750 employees. For purposes of this analysis, the Agency examined a subset of small entities expected to face the largest relative impacts as measured by cost to sales ratios. The average annual gross sales of the potentially impacted small companies within this subset with fewer than 20 employees were found to range from $0.4 million to $4.1 million, depending upon the NAICS sector. The annual compliance costs for these companies, as a percentage of average annual gross sales, was found to range from 0.01 percent to 0.08 percent. The regulatory flexibility screening analysis prepared in support of this determination is incorporated into the *Cost Assessment,* which is available in the docket established for this rule. D. Unfunded Mandates Reform Act of 1995 This action contains no Federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538 for State, local, or Tribal governments or the private sector. UMRA does not apply to rules that are necessary for the national security or the ratification or implementation of international treaty obligations ( *e.g.,* the Amended 2001 OECD Decision, the U.S.-Canada bilateral waste agreement). Therefore, this action is not subject to the requirements of sections 202 or 205 of the UMRA. Finally, this action is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. As explained previously, EPA does not authorize States to administer Federal import/export functions in any section of the RCRA hazardous waste regulations because of the Federal government's special role in matters of foreign policy. E. Executive Order 13132: Federalism This action 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. Specifically, this final rule does not have Federalism implications because the State and local governments do not administer the export and import requirements under RCRA. Thus, Executive Order 13132 does not apply to this action. F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments This final rule does not have Tribal implications, as specified in Executive Order 13175. No Tribal governments are known to own or operate businesses that may be affected by this rule. Thus, Executive Order 13175 does not apply to this final rule. G. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks This action is not subject to EO 13045 (62 FR 19885, April 23, 1997) because it is not economically significant as defined in Executive Order 12866, and because the Agency does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children residing in the United States. This rule is intended to improve regulatory efficiency, enhance waste tracking procedures, and increase accountability among all parties associated with international shipments, and does not directly affect the level of protection provided to human health or the environment in the United States. H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use This action is not subject to Executive Order 13211 (66 FR 28355 (May 22, 2001)) because it is not a significant regulatory action under Executive Order 12866. This rule will not seriously disrupt energy supply, distribution patterns, prices, imports or exports. In fact, this rule is designed to improve regulatory efficiency and improve information collection, in part by implementing revisions and clarifications to the existing regulations. I. National Technology Transfer Advancement Act Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law 104-113, 12(d) (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 ( *e.g.,* materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards. This final rulemaking does not involve technical standards. Therefore, EPA did not consider the use of any voluntary consensus standards. J. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations Executive Order

(EO)12898 (59 FR 7629 (Feb. 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 final rule will not have disproportionately high and/or adverse human health or environmental effects on minority or low-income populations because it does not directly affect the level of protection provided to human health or the environment in the United States. This rule is intended to improve regulatory efficiency, enhance waste tracking procedures, and increase accountability among all parties associated with international shipments. K. Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 *et seq.,* as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the **Federal Register.** A major rule cannot take effect until 60 days after it is published in the **Federal Register.** This action is not a “major rule” as defined by 5 U.S.C. 804(2). This rule will be effective July 7, 2010. List of Subjects 40 CFR Part 262 Environmental protection, Exports, Hazardous materials transportation, Hazardous waste, Imports, Incorporation by reference, International organizations, Labeling, Packaging and containers, Recycling, Reporting and recordkeeping requirements. 40 CFR Part 263 Environmental protection, Hazardous materials transportation, Hazardous waste, Imports. 40 CFR Part 264 Environmental protection, Hazardous waste, Imports, Packaging and containers, Reporting and recordkeeping requirements. 40 CFR Part 265 Environmental protection, Hazardous waste, Imports, Packaging and containers, Reporting and recordkeeping requirements. 40 CFR Part 266 Environmental protection, Exports, Spent lead-acid batteries, Recycling, Waste treatment and disposal. 40 CFR Part 271 Environmental protection, Administrative practice and procedure, Hazardous materials transportation, Hazardous waste, Intergovernmental relations, Penalties, Reporting and recordkeeping requirements. Dated: December 23, 2009. Lisa P. Jackson, Administrator. For the reasons stated in the preamble, title 40, chapter 1 of the Code of Federal Regulations is amended as follows. PART 262—STANDARDS APPLICABLE TO GENERATORS OF HAZARDOUS WASTE 1. The authority citation for part 262 continues to read as follows: Authority: 42 U.S.C. 6906, 6912, 6922-6925, 6937, and 6938. 2. Section 262.10(d) is amended by revising paragraph

(d)to read as follows: § 262.10 Purpose, scope, and applicability.

(d)Any person who exports or imports wastes that are considered hazardous under U.S. national procedures to or from the countries listed in § 262.58(a)(1) for recovery must comply with subpart H of this part. A waste is considered hazardous under U.S. national procedures if the waste meets the Federal definition of hazardous waste in 40 CFR 261.3 and is subject to either the Federal RCRA manifesting requirements at 40 CFR part 262, subpart B, the universal waste management standards of 40 CFR part 273, State requirements analogous to 40 CFR part 273, the export requirements in the spent lead-acid battery management standards of 40 CFR part 266, subpart G, or State requirements analogous to the export requirements in 40 CFR part 266, subpart G. 3. 262.55 is amended by revising the introductory text to read as follows: § 262.55 Exception reports. In lieu of the requirements of § 262.42, a primary exporter must file an exception report with the Office of Enforcement and Compliance Assurance, Office of Federal Activities, International Compliance Assurance Division (2254A), Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460, if any of the following occurs: 4. Section 262.58 is revised to read as follows: § 262.58 International agreements.

(a)Any person who exports or imports wastes that are considered hazardous under U.S. national procedures to or from designated Member countries of the Organization for Economic Cooperation and Development

(OECD)as defined in paragraph (a)(1) of this section for purposes of recovery is subject to subpart H of this part. The requirements of subparts E and F of this part do not apply to such exports and imports. A waste is considered hazardous under U.S. national procedures if the waste meets the Federal definition of hazardous waste in 40 CFR 261.3 and is subject to either the Federal RCRA manifesting requirements at 40 CFR part 262, subpart B, the universal waste management standards of 40 CFR part 273, State requirements analogous to 40 CFR part 273, the export requirements in the spent lead-acid battery management standards of 40 CFR part 266, subpart G, or State requirements analogous to the export requirements in 40 CFR part 266, subpart G.

(1)For the purposes of subpart H, the designated OECD Member countries consist of Australia, Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Poland, Portugal, the Republic of Korea, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom, and the United States.

(2)For the purposes of subpart H of this part, Canada and Mexico are considered OECD Member countries only for the purpose of transit.

(b)Any person who exports hazardous waste to or imports hazardous waste from: A designated OECD Member country for purposes other than recovery ( *e.g.,* incineration, disposal), Mexico (for any purpose), or Canada (for any purpose) remains subject to the requirements of subparts E and F of this part, and is not subject to the requirements of subpart H of this part. 5. Subpart H is revised to read as follows: Subpart H—Transboundary Movements of Hazardous Waste for Recovery Within the OECD Sec. 262.80 Applicability. 262.81 Definitions. 262.82 General conditions. 262.83 Notification and consent. 262.84 Movement document. 262.85 Contracts. 262.86 Provisions relating to recognized traders. 262.87 Reporting and recordkeeping. 262.88 Pre-approval for U.S. recovery facilities [Reserved]. 262.89 OECD waste lists. Subpart H—Transboundary Movements of Hazardous Waste for Recovery Within the OECD § 262.80 Applicability.

(a)The requirements of this subpart apply to imports and exports of wastes that are considered hazardous under U.S. national procedures and are destined for recovery operations in the countries listed in § 262.58(a)(1). A waste is considered hazardous under U.S. national procedures if the waste:

(1)Meets the Federal definition of hazardous waste in 40 CFR 261.3; and

(2)Is subject to either the Federal RCRA manifesting requirements at 40 CFR part 262, subpart B, the universal waste management standards of 40 CFR part 273, State requirements analogous to 40 CFR part 273, the export requirements in the spent lead-acid battery management standards of 40 CFR part 266, subpart G, or State requirements analogous to the export requirements in 40 CFR part 266, subpart G.

(b)Any person (exporter, importer, or recovery facility operator) who mixes two or more wastes (including hazardous and non-hazardous wastes) or otherwise subjects two or more wastes (including hazardous and non-hazardous wastes) to physical or chemical transformation operations, and thereby creates a new hazardous waste, becomes a generator and assumes all subsequent generator duties under RCRA and any exporter duties, if applicable, under this subpart. § 262.81 Definitions. The following definitions apply to this subpart. *Competent authority* means the regulatory authority or authorities of concerned countries having jurisdiction over transboundary movements of wastes destined for recovery operations. *Countries concerned* means the OECD Member countries of export or import and any OECD Member countries of transit. *Country of export* means any designated OECD Member country listed in § 262.58(a)(1) from which a transboundary movement of hazardous wastes is planned to be initiated or is initiated. *Country of import* means any designated OECD Member country listed in § 262.58(a)(1) to which a transboundary movement of hazardous wastes is planned or takes place for the purpose of submitting the wastes to recovery operations therein. *Country of transit* means any designated OECD Member country listed in § 262.58(a)(1) and (a)(2) other than the country of export or country of import across which a transboundary movement of hazardous wastes is planned or takes place. *Exporter* means the person under the jurisdiction of the country of export who has, or will have at the time the planned transboundary movement commences, possession or other forms of legal control of the wastes and who proposes transboundary movement of the hazardous wastes for the ultimate purpose of submitting them to recovery operations. When the United States (U.S.) is the country of export, *exporter* is interpreted to mean a person domiciled in the United States. *Importer* means the person to whom possession or other form of legal control of the waste is assigned at the time the waste is received in the country of import. *OECD area* means all land or marine areas under the national jurisdiction of any OECD Member country listed in § 262.58. When the regulations refer to shipments to or from an OECD Member country, this means OECD area. *OECD* means the Organization for Economic Cooperation and Development. *Recognized trader* means a person who, with appropriate authorization of countries concerned, acts in the role of principal to purchase and subsequently sell wastes; this person has legal control of such wastes from time of purchase to time of sale; such a person may act to arrange and facilitate transboundary movements of wastes destined for recovery operations. *Recovery facility* means a facility which, under applicable domestic law, is operating or is authorized to operate in the country of import to receive wastes and to perform recovery operations on them. *Recovery operations* means activities leading to resource recovery, recycling, reclamation, direct re-use or alternative uses, which include: R1 Use as a fuel (other than in direct incineration) or other means to generate energy. R2 Solvent reclamation/regeneration. R3 Recycling/reclamation of organic substances which are not used as solvents. R4 Recycling/reclamation of metals and metal compounds. R5 Recycling/reclamation of other inorganic materials. R6 Regeneration of acids or bases. R7 Recovery of components used for pollution abatement. R8 Recovery of components used from catalysts. R9 Used oil re-refining or other reuses of previously used oil. R10 Land treatment resulting in benefit to agriculture or ecological improvement. R11 Uses of residual materials obtained from any of the operations numbered R1-R10. R12 Exchange of wastes for submission to any of the operations numbered R1-R11. R13 Accumulation of material intended for any operation numbered R1-R12. *Transboundary movement* means any movement of wastes from an area under the national jurisdiction of one OECD Member country to an area under the national jurisdiction of another OECD Member country. § 262.82 General conditions.

(a)*Scope.* The level of control for exports and imports of waste is indicated by assignment of the waste to either a list of wastes subject to the Green control procedures or a list of wastes subject to the Amber control procedures and by the national procedures of the United States, as defined in § 262.80(a). The OECD Green and Amber lists are incorporated by reference in § 262.89(d).

(1)Listed wastes subject to the Green control procedures.

(i)Green wastes that are not considered hazardous under U.S. national procedures as defined in § 262.80(a) are subject to existing controls normally applied to commercial transactions.

(ii)Green wastes that are considered hazardous under U.S. national procedures as defined in § 262.80(a) are subject to the Amber control procedures set forth in this subpart.

(2)Listed wastes subject to the Amber control procedures.

(i)Amber wastes that are considered hazardous under U.S. national procedures as defined in § 262.80(a) are subject to the Amber control procedures set forth in this subpart.

(ii)Amber wastes that are considered hazardous under U.S. national procedures as defined in § 262.80(a), are subject to the Amber control procedures in the United States, even if they are imported to or exported from a designated OECD Member country listed in § 262.58(a)(1) that does not consider the waste to be hazardous. In such an event, the responsibilities of the Amber control procedures shift as provided:

(A)For U.S. exports, the United States shall issue an acknowledgement of receipt and assume other responsibilities of the competent authority of the country of import.

(B)For U.S. imports, the U.S. recovery facility/importer and the United States shall assume the obligations associated with the Amber control procedures that normally apply to the exporter and country of export, respectively.

(iii)Amber wastes that are not considered hazardous under U.S. national procedures as defined in § 262.80(a), but are considered hazardous by an OECD Member country are subject to the Amber control procedures in the OECD Member country that considers the waste hazardous. All responsibilities of the U.S. importer/exporter shift to the importer/exporter of the OECD Member country that considers the waste hazardous unless the parties make other arrangements through contracts. Note to Paragraph (a)(2): Some wastes subject to the Amber control procedures are not listed or otherwise identified as hazardous under RCRA, and therefore are not subject to the Amber control procedures of this subpart. Regardless of the status of the waste under RCRA, however, other Federal environmental statutes ( *e.g.,* the Toxic Substances Control Act) restrict certain waste imports or exports. Such restrictions continue to apply with regard to this subpart.

(3)Procedures for mixtures of wastes.

(i)A Green waste that is mixed with one or more other Green wastes such that the resulting mixture is not considered hazardous under U.S. national procedures as defined in § 262.80(a) shall be subject to the Green control procedures, provided the composition of this mixture does not impair its environmentally sound recovery. Note to Paragraph (a)(3)(i): The regulated community should note that some OECD Member countries may require, by domestic law, that mixtures of different Green wastes be subject to the Amber control procedures.

(ii)A Green waste that is mixed with one or more Amber wastes, in any amount, *de minimis* or otherwise, or a mixture of two or more Amber wastes, such that the resulting waste mixture is considered hazardous under U.S. national procedures as defined in § 262.80(a) are subject to the Amber control procedures, provided the composition of this mixture does not impair its environmentally sound recovery. Note to Paragraph (a)(3)(ii): The regulated community should note that some OECD Member countries may require, by domestic law, that a mixture of a Green waste and more than a *de minimis* amount of an Amber waste or a mixture of two or more Amber wastes be subject to the Amber control procedures.

(4)Wastes not yet assigned to an OECD waste list are eligible for transboundary movements, as follows:

(i)If such wastes are considered hazardous under U.S. national procedures as defined in § 262.80(a), such wastes are subject to the Amber control procedures.

(ii)If such wastes are not considered hazardous under U.S. national procedures as defined in § 262.80(a), such wastes are subject to the Green control procedures.

(b)*General conditions applicable to transboundary movements of hazardous waste:*

(1)The waste must be destined for recovery operations at a facility that, under applicable domestic law, is operating or is authorized to operate in the importing country;

(2)The transboundary movement must be in compliance with applicable international transport agreements; and Note to Paragraph (b)(2): These international agreements include, but are not limited to, the Chicago Convention (1944), ADR (1957), ADNR (1970), MARPOL Convention (1973/1978), SOLAS Convention (1974), IMDG Code (1985), COTIF (1985), and RID (1985).

(3)Any transit of waste through a non-OECD Member country must be conducted in compliance with all applicable international and national laws and regulations.

(c)*Provisions relating to re-export for recovery to a third country:*

(1)Re-export of wastes subject to the Amber control procedures from the United States, as the country of import, to a third country listed in § 262.58(a)(1) may occur only after an exporter in the United States provides notification to and obtains consent from the competent authorities in the third country, the original country of export, and any transit countries. The notification must comply with the notice and consent procedures in § 262.83 for all countries concerned and the original country of export. The competent authorities of the original country of export, as well as the competent authorities of all other countries concerned have thirty

(30)days to object to the proposed movement.

(i)The thirty

(30)day period begins once the competent authorities of both the initial country of export and new country of import issue Acknowledgements of Receipt of the notification.

(ii)The transboundary movement may commence if no objection has been lodged after the thirty

(30)day period has passed or immediately after written consent is received from all relevant OECD importing and transit countries.

(2)In the case of re-export of Amber wastes to a country other than those listed in § 262.58(a)(1), notification to and consent of the competent authorities of the original OECD Member country of export and any OECD Member countries of transit is required as specified in paragraph (c)(1) of this section, in addition to compliance with all international agreements and arrangements to which the first importing OECD Member country is a party and all applicable regulatory requirements for exports from the first country of import.

(d)*Duty to return or re-export wastes subject to the Amber control procedures.* When a transboundary movement of wastes subject to the Amber control procedures cannot be completed in accordance with the terms of the contract or the consent(s) and alternative arrangements cannot be made to recover the waste in an environmentally sound manner in the country of import, the waste must be returned to the country of export or re-exported to a third country. The provisions of paragraph

(c)of this section apply to any shipments to be re-exported to a third country. The following provisions apply to shipments to be returned to the country of export as appropriate:

(1)Return from the United States to the country of export: The U.S. importer must inform EPA at the specified address in § 262.83(b)(1)(i) of the need to return the shipment. EPA will then inform the competent authorities of the countries of export and transit, citing the reason(s) for returning the waste. The U.S. importer must complete the return within ninety

(90)days from the time EPA informs the country of export of the need to return the waste, unless informed in writing by EPA of another timeframe agreed to by the concerned Member countries. If the return shipment will cross any transit country, the return shipment may only occur after EPA provides notification to and obtains consent from the competent authority of the country of transit, and provides a copy of that consent to the U.S. importer.

(2)Return from the country of import to the United States: The U.S. exporter must provide for the return of the hazardous waste shipment within ninety

(90)days from the time the country of import informs EPA of the need to return the waste or such other period of time as the concerned Member countries agree. The U.S. exporter must submit an exception report to EPA in accordance with § 262.87(b).

(e)*Duty to return wastes subject to the Amber control procedures from a country of transit.* When a transboundary movement of wastes subject to the Amber control procedures does not comply with the requirements of the notification and movement documents or otherwise constitutes illegal shipment, and if alternative arrangements cannot be made to recover these wastes in an environmentally sound manner, the waste must be returned to the country of export. The following provisions apply as appropriate:

(1)Return from the United States (as country of transit) to the country of export: The U.S. transporter must inform EPA at the specified address in § 262.83(b)(1)(i) of the need to return the shipment. EPA will then inform the competent authority of the country of export, citing the reason(s) for returning the waste. The U.S. transporter must complete the return within ninety

(90)days from the time EPA informs the country of export of the need to return the waste, unless informed in writing by EPA of another timeframe agreed to by the concerned Member countries.

(2)Return from the country of transit to the United States (as country of export): The U.S. exporter must provide for the return of the hazardous waste shipment within ninety

(90)days from the time the competent authority of the country of transit informs EPA of the need to return the waste or such other period of time as the concerned Member countries agree. The U.S. exporter must submit an exception report to EPA in accordance with § 262.87(b).

(f)*Requirements for wastes destined for and received by R12 and R13 facilities.* The transboundary movement of wastes destined for R12 and R13 operations must comply with all Amber control procedures for notification and consent as set forth in § 262.83 and for the movement document as set forth in § 262.84. Additional responsibilities of R12/R13 facilities include:

(1)Indicating in the notification document the foreseen recovery facility or facilities where the subsequent R1-R11 recovery operation takes place or may take place.

(2)Within three

(3)days of the receipt of the wastes by the R12/R13 recovery facility or facilities, the facility(ies) shall return a signed copy of the movement document to the exporter and to the competent authorities of the countries of export and import. The facility(ies) shall retain the original of the movement document for three

(3)years.

(3)As soon as possible, but no later than thirty

(30)days after the completion of the R12/R13 recovery operation and no later than one

(1)calendar year following the receipt of the waste, the R12 or R13 facility(ies) shall send a certificate of recovery to the foreign exporter and to the competent authority of the country of export and to the Office of Enforcement and Compliance Assurance, Office of Federal Activities, International Compliance Assurance Division (2254A), Environmental Protection Agency, 1200 Pennsylvania Avenue, NW. Washington, DC 20460, by mail, e-mail without digital signature followed by mail, or fax followed by mail.

(4)When an R12/R13 recovery facility delivers wastes for recovery to an R1-R11 recovery facility located in the country of import, it shall obtain as soon as possible, but no later than one

(1)calendar year following delivery of the waste, a certification from the R1-R11 facility that recovery of the wastes at that facility has been completed. The R12/R13 facility must promptly transmit the applicable certification to the competent authorities of the countries of import and export, identifying the transboundary movements to which the certification pertain.

(5)When an R12/R13 recovery facility delivers wastes for recovery to an R1-R11 recovery facility located:

(i)In the initial country of export, Amber control procedures apply, including a new notification;

(ii)In a third country other than the initial country of export, Amber control procedures apply, with the additional provision that the competent authority of the initial country of export shall also be notified of the transboundary movement.

(g)*Laboratory analysis exemption.* The transboundary movement of an Amber waste is exempt from the Amber control procedures if it is in certain quantities and destined for laboratory analysis to assess its physical or chemical characteristics, or to determine its suitability for recovery operations. The quantity of such waste shall be determined by the minimum quantity reasonably needed to perform the analysis in each particular case adequately, but in no case exceed twenty-five kilograms (25 kg). Waste destined for laboratory analysis must still be appropriately packaged and labeled. § 262.83 Notification and consent.

(a)*Applicability.* Consent must be obtained from the competent authorities of the relevant OECD countries of import and transit prior to exporting hazardous waste destined for recovery operations subject to this subpart. Hazardous wastes subject to the Amber control procedures are subject to the requirements of paragraph

(b)of this section; and wastes not identified on any list are subject to the requirements of paragraph

(c)of this section.

(b)*Amber wastes.* Exports of hazardous wastes from the United States as described in § 262.80(a) that are subject to the Amber control procedures are prohibited unless the notification and consent requirements of paragraph (b)(1) or paragraph (b)(2) of this section are met.

(1)Transactions requiring specific consent:

(i)*Notification.* At least forty-five

(45)days prior to commencement of each transboundary movement, the exporter must provide written notification in English of the proposed transboundary movement to the Office of Enforcement and Compliance Assurance, Office of Federal Activities, International Compliance Assurance Division (2254A), Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460, with the words “Attention: OECD Export Notification” prominently displayed on the envelope. This notification must include all of the information identified in paragraph

(d)of this section. In cases where wastes having similar physical and chemical characteristics, the same United Nations classification, the same RCRA waste codes, and are to be sent periodically to the same recovery facility by the same exporter, the exporter may submit one general notification of intent to export these wastes in multiple shipments during a period of up to one

(1)year. Even when a general notification is used for multiple shipments, each shipment still must be accompanied by its own movement document pursuant to § 262.84.

(ii)*Tacit consent.* If no objection has been lodged by any countries concerned ( *i.e.,* exporting, importing, or transit) to a notification provided pursuant to paragraph (b)(1)(i) of this section within thirty

(30)days after the date of issuance of the Acknowledgement of Receipt of notification by the competent authority of the country of import, the transboundary movement may commence. Tacit consent expires one

(1)calendar year after the close of the thirty

(30)day period; renotification and renewal of all consents is required for exports after that date.

(iii)*Written consent.* If the competent authorities of all the relevant OECD importing and transit countries provide written consent in a period less than thirty

(30)days, the transboundary movement may commence immediately after all necessary consents are received. Written consent expires for each relevant OECD importing and transit country one

(1)calendar year after the date of that country's consent unless otherwise specified; renotification and renewal of each expired consent is required for exports after that date.

(2)Transboundary movements to facilities pre-approved by the competent authorities of the importing countries to accept specific wastes for recovery:

(i)*Notification.* The exporter must provide EPA a notification that contains all the information identified in paragraph

(d)of this section in English, at least ten

(10)days in advance of commencing shipment to a pre-approved facility. The notification must indicate that the recovery facility is pre-approved, and may apply to a single specific shipment or to multiple shipments as described in paragraph (b)(1)(i) of this section. This information must be sent to the Office of Enforcement and Compliance Assurance, Office of Federal Activities, International Compliance Assurance Division (2254A), Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460, with the words “OECD Export Notification—Pre-approved Facility” prominently displayed on the envelope. General notifications that cover multiple shipments as described in paragraph (b)(1)(i) of this section may cover a period of up to three

(3)years. Even when a general notification is used for multiple shipments, each shipment still must be accompanied by its own movement document pursuant to § 262.84.

(ii)Exports to pre-approved facilities may take place after the elapse of seven

(7)working days from the issuance of an Acknowledgement of Receipt of the notification by the competent authority of the country of import unless the exporter has received information indicating that the competent authority of any countries concerned objects to the shipment.

(c)*Wastes not covered in the OECD Green and Amber lists.* Wastes destined for recovery operations, that have not been assigned to the OECD Green and Amber lists, incorporated by reference in § 262.89(d), but which are considered hazardous under U.S. national procedures as defined in § 262.80(a), are subject to the notification and consent requirements established for the Amber control procedures in accordance with paragraph

(b)of this section. Wastes destined for recovery operations, that have not been assigned to the OECD Green and Amber lists incorporated by reference in § 262.89(d), and are not considered hazardous under U.S. national procedures as defined by § 262.80(a) are subject to the Green control procedures.

(d)*Notifications submitted under this section must include the information specified in paragraphs (d)(1) through (d)(14) of this section:*

(1)Serial number or other accepted identifier of the notification document;

(2)Exporter name and EPA identification number (if applicable), address, telephone, fax numbers, and e-mail address;

(3)Importing recovery facility name, address, telephone, fax numbers, e-mail address, and technologies employed;

(4)Importer name (if not the owner or operator of the recovery facility), address, telephone, fax numbers, and e-mail address; whether the importer will engage in waste exchange recovery operation R12 or waste accumulation recovery operation R13 prior to delivering the waste to the final recovery facility and identification of recovery operations to be employed at the final recovery facility;

(5)Intended transporter(s) and/or their agent(s); address, telephone, fax, and e-mail address;

(6)Country of export and relevant competent authority, and point of departure;

(7)Countries of transit and relevant competent authorities and points of entry and departure;

(8)Country of import and relevant competent authority, and point of entry;

(9)Statement of whether the notification is a single notification or a general notification. If general, include period of validity requested;

(10)Date(s) foreseen for commencement of transboundary movement(s);

(11)Means of transport envisaged;

(12)Designation of waste type(s) from the appropriate OECD list incorporated by reference in § 262.89(d), description(s) of each waste type, estimated total quantity of each, RCRA waste code, and the United Nations number for each waste type;

(13)Specification of the recovery operation(s) as defined in § 262.81.

(14)Certification/Declaration signed by the exporter that states: I certify that the above information is complete and correct to the best of my knowledge. I also certify that legally-enforceable written contractual obligations have been entered into, and that any applicable insurance or other financial guarantees are or shall be in force covering the transboundary movement. Name: Signature: Date: Note to Paragraph (d)(14): The United States does not currently require financial assurance for these waste shipments. However, U.S. exporters may be asked by other governments to provide and certify to such assurance as a condition of obtaining consent to a proposed movement.

(e)*Certificate of Recovery.* As soon as possible, but no later than thirty

(30)days after the completion of recovery and no later than one

(1)calendar year following receipt of the waste, the U.S. recovery facility shall send a certificate of recovery to the exporter and to the competent authorities of the countries of export and import by mail, e-mail without a digital signature followed by mail, or fax followed by mail. The certificate of recovery shall include a signed, written and dated statement that affirms that the waste materials were recovered in the manner agreed to by the parties to the contract required under § 262.85. § 262.84 Movement document.

(a)All U.S. parties subject to the contract provisions of § 262.85 must ensure that a movement document meeting the conditions of paragraph

(b)of this section accompanies each transboundary movement of wastes subject to the Amber control procedures from the initiation of the shipment until it reaches the final recovery facility, including cases in which the waste is stored and/or sorted by the importer prior to shipment to the final recovery facility, except as provided in paragraphs (a)(1) and

(2)of this section.

(1)For shipments of hazardous waste within the United States solely by water (bulk shipments only), the generator must forward the movement document with the manifest to the last water (bulk shipment) transporter to handle the waste in the United States if exported by water, (in accordance with the manifest routing procedures at § 262.23(c)).

(2)For rail shipments of hazardous waste within the United States which originate at the site of generation, the generator must forward the movement document with the manifest (in accordance with the routing procedures for the manifest in § 262.23(d)) to the next non-rail transporter, if any, or the last rail transporter to handle the waste in the United States if exported by rail.

(b)The movement document must include all information required under § 262.83 (for notification), as well as the following paragraphs (b)(1) through (b)(7) of this section:

(1)Date movement commenced;

(2)Name (if not exporter), address, telephone, fax numbers, and e-mail of primary exporter;

(3)Company name and EPA ID number of all transporters;

(4)Identification (license, registered name or registration number) of means of transport, including types of packaging envisaged;

(5)Any special precautions to be taken by transporter(s);

(6)Certification/declaration signed by the exporter that no objection to the shipment has been lodged, as follows: I certify that the above information is complete and correct to the best of my knowledge. I also certify that legally-enforceable written contractual obligations have been entered into, that any applicable insurance or other financial guarantees are or shall be in force covering the transboundary movement, and that: 1. All necessary consents have been received; OR 2. The shipment is directed to a recovery facility within the OECD area and no objection has been received from any of the countries concerned within the thirty

(30)day tacit consent period; OR 3. The shipment is directed to a recovery facility pre-approved for that type of waste within the OECD area; such an authorization has not been revoked, and no objection has been received from any of the countries concerned. (Delete sentences that are not applicable) Name: Signature: Date:

(7)Appropriate signatures for each custody transfer ( *e.g.,* transporter, importer, and owner or operator of the recovery facility).

(c)Exporters also must comply with the special manifest requirements of 40 CFR 262.54(a), (b), (c), (e), and

(i)and importers must comply with the import requirements of 40 CFR part 262, subpart F.

(d)Each U.S. person that has physical custody of the waste from the time the movement commences until it arrives at the recovery facility must sign the movement document ( *e.g.,* transporter, importer, and owner or operator of the recovery facility).

(e)Within three

(3)working days of the receipt of imports subject to this subpart, the owner or operator of the U.S. recovery facility must send signed copies of the movement document to the exporter, to the Office of Enforcement and Compliance Assurance, Office of Federal Activities, International Compliance Assurance Division (2254A), Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460, and to the competent authorities of the countries of export and transit. If the concerned U.S. recovery facility is a R12/R13 recovery facility as defined under § 262.81, the facility shall retain the original of the movement document for three

(3)years. § 262.85 Contracts.

(a)Transboundary movements of hazardous wastes subject to the Amber control procedures are prohibited unless they occur under the terms of a valid written contract, chain of contracts, or equivalent arrangements (when the movement occurs between parties controlled by the same corporate or legal entity). Such contracts or equivalent arrangements must be executed by the exporter and the owner or operator of the recovery facility, and must specify responsibilities for each. Contracts or equivalent arrangements are valid for the purposes of this section only if persons assuming obligations under the contracts or equivalent arrangements have appropriate legal status to conduct the operations specified in the contract or equivalent arrangements.

(b)Contracts or equivalent arrangements must specify the name and EPA ID number, where available, of paragraph (b)(1) through (b)(4) of this section:

(1)The generator of each type of waste;

(2)Each person who will have physical custody of the wastes;

(3)Each person who will have legal control of the wastes; and

(4)The recovery facility.

(c)Contracts or equivalent arrangements must specify which party to the contract will assume responsibility for alternate management of the wastes if their disposition cannot be carried out as described in the notification of intent to export. In such cases, contracts must specify that:

(1)The person having actual possession or physical control over the wastes will immediately inform the exporter and the competent authorities of the countries of export and import and, if the wastes are located in a country of transit, the competent authorities of that country; and

(2)The person specified in the contract will assume responsibility for the adequate management of the wastes in compliance with applicable laws and regulations including, if necessary, arranging the return of wastes and, as the case may be, shall provide the notification for re-export.

(d)Contracts must specify that the importer will provide the notification required in § 262.82(c) prior to the re-export of controlled wastes to a third country.

(e)Contracts or equivalent arrangements must include provisions for financial guarantees, if required by the competent authorities of any countries concerned, in accordance with applicable national or international law requirements. Note to Paragraph (e): Financial guarantees so required are intended to provide for alternate recycling, disposal or other means of sound management of the wastes in cases where arrangements for the shipment and the recovery operations cannot be carried out as foreseen. The United States does not require such financial guarantees at this time; however, some OECD Member countries do. It is the responsibility of the exporter to ascertain and comply with such requirements; in some cases, transporters or importers may refuse to enter into the necessary contracts absent specific references or certifications to financial guarantees.

(f)Contracts or equivalent arrangements must contain provisions requiring each contracting party to comply with all applicable requirements of this subpart.

(g)Upon request by EPA, U.S. exporters, importers, or recovery facilities must submit to EPA copies of contracts, chain of contracts, or equivalent arrangements (when the movement occurs between parties controlled by the same corporate or legal entity). Information contained in the contracts or equivalent arrangements for which a claim of confidentiality is asserted in accordance with 40 CFR 2.203(b) will be treated as confidential and will be disclosed by EPA only as provided in 40 CFR 260.2. Note to Paragraph (g): Although the United States does not require routine submission of contracts at this time, the OECD Decision allows Member countries to impose such requirements. When other OECD Member countries require submission of partial or complete copies of the contract as a condition to granting consent to proposed movements, EPA will request the required information; absent submission of such information, some OECD Member countries may deny consent for the proposed movement. § 262.86 Provisions relating to recognized traders.

(a)A recognized trader who takes physical custody of a waste and conducts recovery operations (including storage prior to recovery) is acting as the owner or operator of a recovery facility and must be so authorized in accordance with all applicable Federal laws.

(b)A recognized trader acting as an exporter or importer for transboundary shipments of waste must comply with all the requirements of this subpart associated with being an exporter or importer. § 262.87 Reporting and recordkeeping.

(a)*Annual reports.* For all waste movements subject to this subpart, persons ( *e.g.,* exporters, recognized traders) who meet the definition of primary exporter in § 262.51 or who initiate the movement documentation under § 262.84 shall file an annual report with the Office of Enforcement and Compliance Assurance, Office of Federal Activities, International Compliance Assurance Division (2254A), Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460, no later than March 1 of each year summarizing the types, quantities, frequency, and ultimate destination of all such hazardous waste exported during the previous calendar year. (If the primary exporter or the person who initiates the movement document under § 262.84 is required to file an annual report for waste exports that are not covered under this subpart, he may include all export information in one report provided the following information on exports of waste destined for recovery within the designated OECD Member countries is contained in a separate section.) Such reports shall include all of the following paragraphs (a)(1) through (a)(6) of this section specified as follows:

(1)The EPA identification number, name, and mailing and site address of the exporter filing the report;

(2)The calendar year covered by the report;

(3)The name and site address of each final recovery facility;

(4)By final recovery facility, for each hazardous waste exported, a description of the hazardous waste, the EPA hazardous waste number (from 40 CFR part 261, subpart C or D), designation of waste type(s) and applicable waste code(s) from the appropriate OECD waste list incorporated by reference in § 262.89(d), DOT hazard class, the name and U.S. EPA identification number (where applicable) for each transporter used, the total amount of hazardous waste shipped pursuant to this subpart, and number of shipments pursuant to each notification;

(5)In even numbered years, for each hazardous waste exported, except for hazardous waste produced by exporters of greater than 100kg but less than 1,000kg in a calendar month, and except for hazardous waste for which information was already provided pursuant to § 262.41:

(i)A description of the efforts undertaken during the year to reduce the volume and toxicity of the waste generated; and

(ii)A description of the changes in volume and toxicity of the waste actually achieved during the year in comparison to previous years to the extent such information is available for years prior to 1984; and

(6)A certification signed by the person acting as primary exporter or initiator of the movement document under § 262.84 that states: I certify under penalty of law that I have personally examined and am familiar with the information submitted in this and all attached documents, and that based on my inquiry of those individuals immediately responsible for obtaining the information, I believe that the submitted information is true, accurate, and complete. I am aware that there are significant penalties for submitting false information including the possibility of fine and imprisonment.

(b)*Exception reports.* Any person who meets the definition of primary exporter in § 262.51 or who initiates the movement document under § 262.84 must file an exception report in lieu of the requirements of § 262.42 (if applicable) with the Office of Enforcement and Compliance Assurance, Office of Federal Activities, International Compliance Assurance Division (2254A), Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460, if any of the following occurs:

(1)He has not received a copy of the RCRA hazardous waste manifest (if applicable) signed by the transporter identifying the point of departure of the waste from the United States, within forty-five

(45)days from the date it was accepted by the initial transporter;

(2)Within ninety

(90)days from the date the waste was accepted by the initial transporter, the exporter has not received written confirmation from the recovery facility that the hazardous waste was received;

(3)The waste is returned to the United States.

(c)*Recordkeeping.*

(1)Persons who meet the definition of primary exporter in § 262.51 or who initiate the movement document under § 262.84 shall keep the following records in paragraphs (c)(1)(i) through (c)(1)(iv) of this section:

(i)A copy of each notification of intent to export and all written consents obtained from the competent authorities of countries concerned for a period of at least three

(3)years from the date the hazardous waste was accepted by the initial transporter;

(ii)A copy of each annual report for a period of at least three

(3)years from the due date of the report;

(iii)A copy of any exception reports and a copy of each confirmation of delivery ( *i.e.,* movement document) sent by the recovery facility to the exporter for at least three

(3)years from the date the hazardous waste was accepted by the initial transporter or received by the recovery facility, whichever is applicable; and

(iv)A copy of each certificate of recovery sent by the recovery facility to the exporter for at least three

(3)years from the date that the recovery facility completed processing the waste shipment.

(2)The periods of retention referred to in this section are extended automatically during the course of any unresolved enforcement action regarding the regulated activity or as requested by the Administrator. § 262.88 Pre-approval for U.S. recovery facilities [Reserved]. § 262.89 OECD waste lists.

(a)*General.* For the purposes of this subpart, a waste is considered hazardous under U.S. national procedures, and hence subject to this subpart, if the waste:

(1)Meets the Federal definition of hazardous waste in 40 CFR 261.3; and

(b)If a waste is hazardous under paragraph

(a)of this section, it is subject to the Amber control procedures, regardless of whether it appears in Appendix 4 of the OECD Decision, as defined in § 262.81.

(c)The appropriate control procedures for hazardous wastes and hazardous waste mixtures are addressed in § 262.82.

(d)The OECD waste lists, as set forth in Annex B (“Green List”) and Annex C (“Amber List”) (collectively “OECD waste lists”) of the 2009 “Guidance Manual for the Implementation of Council Decision C(2001)107/FINAL, as Amended, on the Control of Transboundary Movements of Wastes Destined for Recovery Operations,” are incorporated by reference. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. This material is incorporated as it exists on the date of the approval and a notice of any change in these materials will be published in the **Federal Register** . The materials are available for inspection at: the U.S. Environmental Protection Agency, Docket Center Public Reading Room, EPA West, Room 3334, 1301 Constitution Avenue NW., Washington, DC 20004 (Docket # EPA-HQ-RCRA-2005-0018) or at the National Archives and Records Administration (NARA), and may be obtained from the Organization for Economic Cooperation and Development, Environment Directorate, 2 rue André Pascal, F-75775 Paris Cedex 16, France. For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html.* To contact the EPA Docket Center Public Reading Room, call

(202)566-1744. To contact the OECD, call +33

(0)1 45 24 81 67. PART 263—STANDARDS APPLICABLE TO TRANSPORTERS OF HAZARDOUS WASTE The authority citation for part 263 continues to read as follows: Authority: 42 U.S.C. 6906, 6912, 6922-6925, 6937, and 6938. Section 263.10(d) is amended by revising paragraph

(d)to read as follows: § 263.10 Scope.

(d)A transporter of hazardous waste subject to the Federal manifesting requirements of 40 CFR part 262, or subject to the waste management standards of 40 CFR part 273, or subject to State requirements analogous to 40 CFR part 273, that is being imported from or exported to any of the countries listed in 40 CFR 262.58(a)(1) for purposes of recovery is subject to this Subpart and to all other relevant requirements of subpart H of 40 CFR part 262, including, but not limited to, 40 CFR 262.84 for movement documents. PART 264—STANDARDS FOR OWNERS AND OPERATORS OF HAZARDOUS WASTE TREATMENT, STORAGE, AND DISPOSAL FACILITIES 8. The authority citation for part 264 continues to read as follows: Authority: 42 U.S.C. 6905, 6912(a), 6924, and 6925. 9. Section 264.12 is amended by revising paragraph (a)(2) to read as follows: § 264.12 Required notices.

(a)* * *

(2)The owner or operator of a recovery facility that has arranged to receive hazardous waste subject to 40 CFR part 262, subpart H must provide a copy of the movement document bearing all required signatures to the foreign exporter; to the Office of Enforcement and Compliance Assurance, Office of Federal Activities, International Compliance Assurance Division (2254A), Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460; and to the competent authorities of all other countries concerned within three

(3)working days of receipt of the shipment. The original of the signed movement document must be maintained at the facility for at least three

(3)years. In addition, such owner or operator shall, as soon as possible, but no later than thirty

(30)days after the completion of recovery and no later than one

(1)calendar year following the receipt of the hazardous waste, send a certificate of recovery to the foreign exporter and to the competent authority of the country of export and to EPA's Office of Enforcement and Compliance Assurance at the above address by mail, e-mail without a digital signature followed by mail, or fax followed by mail. 10. Section 264.71 is amended by revising paragraphs (a)(3) and

(d)to read as follows: § 264.71 Use of manifest system.

(a)* * *

(3)If a facility receives hazardous waste imported from a foreign source, the receiving facility must mail a copy of the manifest and documentation confirming EPA's consent to the import of hazardous waste to the following address within thirty

(30)days of delivery: Office of Enforcement and Compliance Assurance, Office of Federal Activities, International Compliance Assurance Division (2254A), Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460.

(d)Within three

(3)working days of the receipt of a shipment subject to 40 CFR part 262, subpart H, the owner or operator of a facility must provide a copy of the movement document bearing all required signatures to the exporter, to the Office of Enforcement and Compliance Assurance, Office of Federal Activities, International Compliance Assurance Division (2254A), Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460, and to competent authorities of all other concerned countries. The original copy of the movement document must be maintained at the facility for at least three

(3)years from the date of signature. PART 265—INTERIM STATUS STANDARDS FOR OWNERS AND OPERATORS OF HAZARDOUS WASTE TREATMENT, STORAGE, AND DISPOSAL FACILITIES 11. The authority citation for part 265 continues to read as follows: Authority: 42 U.S.C. 6905, 6906, 6912, 6922, 6923, 6924, 6925, 6935, 6936, and 6937. 12. Section 265.12 is amended by revising paragraph (a)(2) to read as follows: § 265.12 Required notices.

(a)* * *

(3)working days of receipt of the shipment. The original of the signed movement document must be maintained at the facility for at least three

(3)years. In addition, such owner or operator shall, as soon as possible, but no later than thirty

(30)days after the completion of recovery and no later than one

(1)calendar year following the receipt of the hazardous waste, send a certificate of recovery to the foreign exporter and to the competent authority of the country of export and to EPA's Office of Enforcement and Compliance Assurance at the above address by mail, e-mail without a digital signature followed by mail, or fax followed by mail. 13. Section 265.71 is amended by revising paragraphs (a)(3) and

(d)to read as follows: § 265.71 Use of manifest system.

(a)* * *

(d)Within three

(3)working days of the receipt of a shipment subject to 40 CFR part 262, subpart H, the owner or operator of a facility must provide a copy of the movement document bearing all required signatures to the exporter, to the Office of Enforcement and Compliance Assurance, Office of Federal Activities, International Compliance Assurance Division (2254A), Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460, and to competent authorities of all other countries concerned. The original copy of the movement document must be maintained at the facility for at least three

(3)years from the date of signature. PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES 14. The authority citation for part 266 is revised to read as follows: Authority: 42 U.S.C. 1006, 2002(a), 3001-3009, 3014, 3017, 6905, 6906, 6912, 6921, 6922, 6924-6927, 6934, and 6937. 15. In § 266.80(a) the table is revised to read as follows: § 266.80 Applicability and requirements.

(a)* * * If your batteries . . . And if you . . . Then you . . . And you . . .

(1)Will be reclaimed through regeneration (such as by electrolyte replacement) are exempt from 40 CFR parts 262 (except for § 262.11), 263, 264, 265, 266, 268, 270, 124 of this chapter, and the notification requirements at section 3010 of RCRA are subject to 40 CFR parts 261 and § 262.11 of this chapter.

(2)Will be reclaimed other than through regeneration generate, collect, and/or transport these batteries are exempt from 40 CFR parts 262 (except for § 262.11), 263, 264, 265, 266, 270, 124 of this chapter, and the notification requirements at section 3010 of RCRA are subject to 40 CFR parts 261 and § 262.11, and applicable provisions under part 268.

(3)Will be reclaimed other than through regeneration store these batteries but you aren't the reclaimer are exempt from 40 CFR parts 262 (except for § 262.11), 263, 264, 265, 266, 270, 124 of this chapter, and the notification requirements at section 3010 of RCRA are subject to 40 CFR parts 261, § 262.11, and applicable provisions under part 268.

(4)Will be reclaimed other than through regeneration store these batteries before you reclaim them must comply with 40 CFR 266.80(b) and as appropriate other regulatory provisions described in 266.80(b) are subject to 40 CFR parts 261, § 262.11, and applicable provisions under part 268.

(5)Will be reclaimed other than through regeneration don't store these batteries before you reclaim them are exempt from 40 CFR parts 262 (except for § 262.11), 263, 264, 265, 266, 270, 124 of this chapter, and the notification requirements at section 3010 of RCRA are subject to 40 CFR parts 261, § 262.11, and applicable provisions under part 268.

(6)Will be reclaimed through regeneration or any other means export these batteries for reclamation in a foreign country are exempt from 40 CFR parts 263, 264, 265, 266, 268, 270, 124 of this chapter, and the notification requirements at section 3010 of RCRA. You are also exempt from part 262, except for 262.11, and except for the applicable requirements in either:

(1)40 CFR part 262 subpart H; or

(2)262.53 “Notification of Intent to Export, 262.56(a)(1) through (4)(6) and

(b)“Annual Reports,” and 262.57 “Recordkeeping” are subject to 40 CFR part 261 and § 262.11, and either must comply with 40 CFR part 262, subpart H (if shipping to one of the OECD countries specified in 40 CFR 262.58(a)(1)), or must:

(a)Comply with the requirements applicable to a primary exporter in 40 CFR 262.53, 262.56(a)

(1)through (4), (6), and

(b)and 262.57; and

(b)Export these batteries only upon consent of the receiving country and in conformance with the EPA Acknowledgement of Consent as defined in subpart E of part 262 of this chapter; and

(c)Provide a copy of the EPA Acknowledgment of Consent for the shipment to the transporter transporting the shipment for export.

(7)Will be reclaimed through regeneration or any other means Transport these batteries in the U.S. to export them for reclamation in a foreign country are exempt from 40 CFR parts 263, 264, 265, 266, 268, 270, 124 of this chapter, and the notification requirements at section 3010 of RCRA must comply with applicable requirements in 40 CFR part 262, subpart H (if shipping to one of the OECD countries specified in 40 CFR 262.58(a)(1)), or must comply with the following:

(a)you may not accept a shipment if you know the shipment does not conform to the EPA Acknowledgment of Consent;

(b)you must ensure that a copy of the EPA Acknowledgment of Consent accompanies the shipment; and

(c)you must ensure that the shipment is delivered to the facility designated by the person initiating the shipment. PART 271—REQUIREMENTS FOR AUTHORIZATION OF STATE HAZARDOUS WASTE PROGRAMS 16. The authority citation for part 271 continues to read as follows: Authority: 42 U.S.C. 6905, 6912(a), and 6926. 17. Section 271.1(j) is amended by adding the following entry to Table 1 and Table 2 in chronological order by date of publication in the Federal Register, to read as follows: § 271.1 Purpose and scope.

(j)* * * Table 1—Regulations Implementing the Hazardous and Solid Waste Amendments of 1984 Promulgation date Title of regulation Federal Register reference Effective date * * * * * * * Jan. 8, 2010 Exports of hazardous waste [Insert FR page numbers] July 7, 2010. Table 2—Self-Implementing Provisions of the Hazardous and Solid Waste Amendments of 1984 Effective date Self-implementing provision RCRA citation Federal Register reference * * * * * * * July 7, 2010 Exports of hazardous waste 3017(a) [Insert Federal Register reference for publication of final rule]. [FR Doc. E9-31081 Filed 1-7-10; 8:45 am] BILLING CODE 6560-50-P 75 5 Friday, January 8, 2010 Presidential Documents Part V The President Proclamation 8470—National Mentoring Month, 2010 Proclamation 8471—National Slavery and Human Trafficking Prevention Month, 2010 Title 3— The President Proclamation 8470 of January 4, 2010 National Mentoring Month, 2010 By the President of the United States of America A Proclamation Every day, mentors in communities across our Nation provide crucial support and guidance to young people. Whether a day is spent helping with homework, playing catch, or just listening, these moments can have an enormous, lasting effect on a child’s life. During National Mentoring Month, we recognize those who give generously of themselves by mentoring young Americans. As tutors, coaches, teachers, volunteers, and friends, mentors commit their time and energy to kids who may otherwise lack a positive, mature influence in their lives. Their impact fulfills critical local needs that often elude public services. Our government can build better schools with more qualified teachers, but a strong role model can motivate students to do their homework. Lawmakers can put more police officers on our streets and ensure our children have access to high-quality health care, but the advice and example of a trusted adult can keep kids out of harm’s way. Mentors are building a brighter future for our Nation by helping our children grow into productive, engaged, and responsible adults. Many of us are fortunate to recall a role model from our own adolescent years who pushed us to succeed or pulled us back from making a poor decision. We carry their wisdom with us throughout our lives, knowing the unique and timeless gift of mentorship. During this month, I encourage Americans to give back by mentoring young people in their communities who may lack role models, and pass that precious gift on to the next generation. NOW, THEREFORE, I, BARACK OBAMA, President of the United States of America, by virtue of the authority vested in me by the Constitution and the laws of the United States, do hereby proclaim January 2010 as National Mentoring Month. I call upon public officials, business and community leaders, educators, and Americans across the country to observe this month with appropriate ceremonies, activities, and programs. IN WITNESS WHEREOF, I have hereunto set my hand this fourth day of January, in the year of our Lord two thousand ten, and of the Independence of the United States of America the two hundred and thirty-fourth. OB#1.EPS [FR Doc. 2010-312 Filed 1-7-10; 11:15 am]

Connectionstraces to 47

Traces to 47 documents