Federal Register Vol. 80, No.115,

On October 28, 2013, DHS published a notice of proposed rulemaking (NPRM) in the Federal Register, entitled Change to Existing Regulation Concerning the Interest Rate Paid on Cash Deposited to Secure Immigration Bonds. 78 FR 64183. We received two comments on the proposed rule. No public meeting was requested, and none was held.

U.S. Immigration and Customs Enforcement (ICE) may release certain aliens from detention during removal proceedings after a custody determination has been made pursuant to 8 CFR 236.1(c). As a condition of his/her release from custody, an alien may be required to post an immigration bond. Currently, about 91 percent of the immigration bonds issued each year is secured by cash (cash bonds). (Fiscal Year 2013 Total, Cash Bonds and Surety Bonds—on file with the Bonds Branch, ICE Financial Operations—Burlington). The other 9 percent of the immigration bonds are issued by surety companies (surety bonds) certified by the Department of the Treasury to post bonds on behalf of the Federal government pursuant to 31 U.S.C. 9304-9308 and 31 CFR part 223. ICE deposits cash pledged as security on cash bonds in a fund maintained by Treasury known as the Immigration Bond Deposit Account. These funds are held “in trust” for the obligor and currently earn simple interest at the rate of 3 percent per annum. 8 U.S.C. 1363(a); 8 CFR part 293. Immigration bonds are not in effect for a set period of time. They remain in effect until they are breached or canceled. On average, a cash bond is in effect for about 34 months. (Data on file with ICE Financial Operations—Burlington).

In 1970, Congress added section 293 of the Immigration and Nationality Act (INA), as amended, to pay interest at a rate determined by the Secretary of the Treasury, not to exceed 3 per centum per annum, on cash received as security for immigration bonds. Public Law 91-313 (July 10, 1970) (codified at 8 U.S.C. 1363). Effective on the date of its publication in the Federal Register, July 23, 1971, the interest rate set by Treasury—3 per centum per annum—has been paid on cash bond deposits received after April 27, 1966. 36 FR 13677 (8 CFR part 293). Thus, since 1971, the Government has paid simple interest at the rate of 3 percent per year on cash deposited by bond obligors to secure immigration bonds. Interest is earned on a cash bond from the date the bond is issued until it is breached or canceled. The amount of interest earned varies depending on the face amount of the bond and the length of time it remains in effect. For example, a $5,000 cash bond in effect for 3 years would earn $450 in interest with a 3 percent per annum interest rate.

In the NPRM published on October 28, 2013, DHS proposed to modify the current 8 CFR 293.2, which states that “effective from date of deposit occurring after April 27, 1966, the interest rate shall be 3 per centum per annum.” DHS proposed to revise this provision to explicitly state that Treasury will set the interest rate directly. Thus, DHS proposed to utilize the rate set by Treasury in issuing interest payments, with DHS having no role in setting the rate. 78 FR 64183.

The October 2013 NPRM provided for a public comment period of 60 days, which ended on December 27, 2013. During that time period, DHS received two public comments. One of the comments recommended the interest rate be set at the flat rate of one-half of one percent. DHS considered the comment and decided not to adopt it. As discussed above, Treasury possesses the statutory authority to set the interest rate on cash received as security for immigration bonds. Public Law 91-313 (July 10, 1970) (codified at 8 U.S.C. 1363). DHS does not possess the statutory authority to set the rate in the manner suggested by the commenter.

The second comment, submitted by a bonding agency, opposed the rule because the rule did not specify that any change in the interest rate would only apply to cash bonds posted after Treasury issues a new interest rate. The commenter proposed keeping the current 3 percent interest rate for all bonds posted prior to the effective date of an interest rate change until the bond was breached or canceled. For bonds posted after the effective date of the rule, the commenter proposed applying the interest rate in effect at the time the bond was posted throughout the life of the bond.

DHS has decided against adopting this proposal. DHS understands that Treasury may set a fluctuating, market-based rate that will not exceed the statutory 3 percent ceiling. Assuming that Treasury sets such a rate, DHS will apply the new rate to all cash bond deposits as of the rate's effective date. Unless Treasury's published rate requires otherwise, DHS will adjust any Treasury-determined rate each time the rate changes. Consistent with 8 U.S.C. 1363, bond deposits will continue to receive the 3 percent rate until the new Treasury rate goes into effect. After the effective date of a new rate, DHS will apply the new Treasury rate to all bond deposits.

After considering different options for how to finalize this regulation, including the method proposed in the second comment, DHS has determined that unless Treasury's published rate requires otherwise, it will apply any new Treasury rate to all bond deposits regardless of when the bond was posted. DHS made this decision for a number of reasons. If DHS adopted the second comment and assigned a fixed interest rate based on the date the bond was posted, DHS would not be able to effectuate a determination by Treasury that a fluctuating rate be applied to cash bond deposits. Under 8 U.S.C. 1363(a), cash received as security on an immigration bond “shall bear interest at a rate determined by the Secretary of the Treasury.” The second comment's proposal—that DHS require multiple interest rates to be paid on bonds depending on the date the bond was posted—is inconsistent with the statutory language.

DHS's approach also has the advantage of applying any new interest rate uniformly to cash bond deposits. All deposits will continue to receive the 3 percent rate until a new interest rate goes into effect. As of the effective date of the new rate, the new rate will be applied to all of the deposits and, as the rate changes, each succeeding new rate will be applied to all of the deposits. This approach recognizes Treasury's broad discretion under statute to set an appropriate rate. This approach has the further advantage of allowing any new interest rate's budget impact to be monitored.

DHS has carefully considered how the new rule impacts the ability of an alien to secure a cash bond and expects that any effects will be negligible. For a variety of reasons, DHS believes that cash bond obligors are generally insensitive to changes in the bond interest rate. For instance, in DHS's experience, the vast majority of cash bond obligors are the alien's family members or friends who post bonds for the primary purpose of releasing the alien from custody. The interest earned on the cash deposits for these obligors is incidental to effectuating the alien's release. Moreover, if any cash bond obligors are so sensitive to a change in the bond's interest rate that they want to terminate their obligations under the bond, a process exists that allows the possible early surrender of the bonded alien. Any obligor may ask the DHS office that posted the bond to authorize surrender of the alien before being required to do so by DHS. Such a request may be granted at the discretion of the office where the bond was posted. If the request is granted, the bond would be canceled once the obligor effectuates surrender of the alien, and the cash deposit would be refunded.

Finally, the second commenter noted the possibility of unfair surprise if the interest rate were to change during the life of the bond, because “the depositing party was advised of, and relied upon, the 3% interest rate at the time the cash deposit was made.” While Treasury's initial determination of a 3 percent interest rate was published in a 1971 regulation, 8 CFR 293.2, DHS notes that, since 1970, it has been Treasury's statutory prerogative to determine the interest rate. The bond agreement between DHS and the bond obligor does not contain an interest rate as one of its terms and does not guarantee that the interest rate originally determined by Treasury would be in effect for the life of the bond. ICE Form I-352. Instead, by statute, Treasury is authorized to determine the interest rate, and DHS calculates the amount of interest earned based on the rate set by Treasury, the face amount of the bond, and the number of days that the bond was in effect. Even assuming a future change in the interest rate frustrates the expectations of an obligor who was aware of the 3 percent rate, ICE may nonetheless apply a new rate to a bond deposit after the new rate goes into effect because ICE will not be attaching new legal consequences to completed, past conduct. Instead, ICE will be applying the new rate to an open cash bond—an agreement whose fulfillment is still a work in progress. Until Treasury sets a new interest rate, cash deposits currently securing bonds will continue to receive the 3 percent interest rate. As described above, following implementation of a new interest rate, deposits could begin receiving a different rate. This approach will therefore have an exclusively future effect.

DHS developed this rule after considering numerous statutes and executive orders related to rulemaking. The below sections summarize our analyses based on a number of these statutes and executive orders.

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The Office of Management and Budget (OMB) has not designated this rule a “significant regulatory action” under section 3(f) of Executive Order 12866. Accordingly, OMB did not review the proposed rule and has not reviewed the final rule.

The proposed and final rules explicitly state that Treasury is authorized by statute to set the interest rate paid on cash deposited to secure immigration bonds, provided that the rate cannot exceed 3 percent per year and cannot be less than 0. In deciding to propose this rule, DHS considered whether DHS would implement any possible future changes to the current fixed interest rate of 3 percent per annum that may be made by Treasury, through informal rulemaking or other means. DHS rejected this alternative. Because Congress authorized the Secretary of the Treasury to set the rate directly, the approach that DHS proposed and adopts here is a more efficient and cost-effective process.

The proposed and final rules further do not make any changes to the current interest rate paid to cash bond obligors; under current law, a change to the current interest rate paid cannot be made except under Treasury's sole authority. As this rulemaking does not make any changes to the current fixed 3 percent per annum interest rate, this rule does not impose any costs on bond obligors.

As noted above, under current law, Treasury has the sole authority to set the interest rate that DHS uses to determine the amount of interest paid for cash immigration bonds. The rule provides that Treasury will set the interest rate directly and will publish the interest rate on the Treasury Web site or through another mechanism. This will save DHS resources by removing the intermediate step for DHS to implement Treasury's decision by informal rulemaking.

Under the Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

This rule does not impose any direct costs on small entities. Consequently, DHS certifies this final rule would not impose a significant economic impact on a substantial number of small entities. DHS received no public comments challenging this certification.

This final rule is not a major rule as defined by 5 U.S.C. 804, for purposes of congressional review of agency rulemaking under the Small Business Regulatory Enforcement Fairness Act of 1996, Pub. L. 104-121. This rule would not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based companies to compete with foreign-based companies in domestic or export markets.

All Departments are required to submit to OMB for review and approval, any reporting or recordkeeping requirements inherent in a rule under the Paperwork Reduction Act of 1995, Pub. L. 104-13, 109 Stat. 163 (1995), 44 U.S.C. 3501-3520. This rule does not change or require a collection of information.

A rule has implications for federalism under Executive Order 13132, Federalism, if it has 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. We have analyzed this rule under the Order and have determined that it does not have implications for federalism.

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

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

This rule meets applicable standards in section 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. DHS has determined that this rule meets the requirements of E.O. 12988 because it does not involve any retroactive effects, preemptive effects, or any other matters addressed in E.O. 12988.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and will not have a significant adverse effect on the supply, distribution, or use of energy.

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

U.S. Department of Homeland Security Management Directive (MD) 023-01 establishes procedures that the Department and its components use to comply with the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321-4375, and the Council on Environmental Quality (CEQ) regulations for implementing NEPA, 40 CFR parts 1500-1508. CEQ regulations allow federal agencies to establish categories of actions which do not individually or cumulatively have a significant effect on the human environment and, therefore, do not require an Environmental Assessment or Environmental Impact Statement. 40 CFR 1508.4. DHS MD 023-01 lists the Categorical Exclusions that the Department has found to have no such effect. MD 023-01 app. A tbl.1.

This final rule amends 8 CFR part 293 to change the interest rate for immigration bonds secured by cash from a fixed rate of 3 percent per year to a rate determined by the Secretary of the Treasury, provided that the rate does not exceed 3 percent per year and is not less than 0. DHS has analyzed this rule under MD 023-01. ICE has determined that this action is one of a category of actions which does not individually or cumulatively have a significant effect on the human environment. This rule clearly fits within the two Categorical Exclusions found in MD 023-01, Appendix A, Table 1: A3(a): “Promulgation of rules . . . of a strictly administrative and procedural nature”; and A3(d): “Promulgation of rules . . . that interpret or amend an existing regulation without changing its environmental effect.” This rule is not part of a larger action. This rule presents no extraordinary circumstances creating the potential for significant environmental effects. Therefore, this rule is categorically excluded from further NEPA review.

For the reasons discussed in the preamble, DHS amends 8 CFR part 293 as follows:

The FAA has determined, in accordance with 5 U.S.C. 553(b)(3)(B) and (d)(3), that notice and opportunity for prior public comment hereon are unnecessary because the substance of these special conditions has been subject to the public comment process in several prior instances with no substantive comments received. The FAA therefore finds that good cause exists for making these special conditions effective upon issuance.

We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data. We ask that you send us two copies of written comments.

We will consider all comments we receive on or before the closing date for comments. We will consider comments filed late if it is possible to do so without incurring expense or delay. We may change these special conditions based on the comments we receive.

On October 11, 2006, Honda Aircraft Company applied for a type certificate for their new model HA-420. On October 10, 2013, Honda Aircraft Company requested an extension with an effective application date of October 1, 2013. This extension changed the type certification basis to amendment 23-62.

The HA-420 is a four to five passenger (depending on configuration), two crew, lightweight business jet with a 43,000-foot service ceiling and a maximum takeoff weight of 9963 pounds. The airplane is powered by two GE-Honda Aero Engines (GHAE) HF-120 turbofan engines.

The turbofan engines are mounted on a single pylon on each wing near the aft fuselage. These types of aft mounted engine installations, along with the need to protect such installed engines from fires, were not envisioned in the development of the part 23 normal category regulations. The performance of the airplane is such that a pilot may not be able to locate a suitable landing site and safely land the airplane prior to a fire escaping the fire containment capabilities of the engine fire zone.

Under the provisions of 14 CFR 21.17, Honda Aircraft Company must show that the model HA-420 meets the applicable provisions of part 23, as amended by Amendment 23-1 through Amendment 23-62 thereto.

If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR part 23) do not contain adequate or appropriate safety standards for the model HA-420 because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

In addition to the applicable airworthiness regulations and special conditions, the model HA-420 must comply with the fuel vent and exhaust emission requirements of 14 CFR part 34 and the noise certification requirements of 14 CFR part 36. In addition, the FAA must issue a finding of regulatory adequacy under section 611 of Public Law 92-574, the “Noise Control Act of 1972.”

The FAA issues special conditions, as defined in § 11.19, under § 11.38 and they become part of the type certification basis under § 21.17(a)(2).

Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, the special conditions would also apply to the other model.

The model HA-420 will incorporate the following novel or unusual design features: Turbofan engines are mounted on a single pylon on each wing near the aft fuselage not in the pilot's line of sight.

This type of configuration was not envisioned in the development of part 23 normal category airplanes. Therefore, a special condition for the engine fire extinguishing system on the model HA-420 is required.

As the extinguishing agent is subject to change during the service life of the airplane, the certification basis must include SC 23.1195, SC 23.1197, SC 23.1199, and SC 23.1201 in their entirety.

Part 23 has historically addressed fire protection through prevention, identification, and containment. Prevention has been accomplished by minimizing the potential for ignition of flammable fluids and vapors. Identification has traditionally been achieved by the location of the engines within the pilot's primary field of view and/or with the incorporation of fire detection systems. This philosophy has provided for both the rapid detection of a fire and confirmation when it has been extinguished. Containment has been provided through the isolation of designated fire zones through flammable fluid shutoff valves and firewalls. The containment philosophy also ensures components of the engine control system will function effectively to permit a safe shutdown of the engine. However, containment has only been required to be demonstrated for 15 minutes. In the event of a fire in a traditional part 23 airplane, the corrective action is to land as soon as possible. For a small, simple aircraft originally envisioned by part 23, it is possible to descend the aircraft to a suitable landing site within 15 minutes. Thus, if the isolation means do not extinguish the fire, the occupants can safely exit the aircraft prior to breaching the firewall. These simple and traditional aircraft normally have the engine located away from critical flight control systems and primary structure. This has ensured that throughout the fire event the pilot can maintain control and continue safe flight. It has also made predicting the effects of a fire relatively easy. Other design features of these simple and traditional aircraft, such as low stall speeds and short landing distances, ensure that even in the event of an off field landing the potential for a catastrophic outcome has been minimized.

Amendment 23-62 applies to the model HA-420 and addresses the concerns above by requiring engine fire extinguishing for engines embedded in the fuselage or in pylons on the aft fuselage, but do not address engines mounted in pylons over the wing as used on the model HA-420. The engine fire concerns for engines mounted in overwing pylons near the aft fuselage are the same as those associated with engines mounted in pylons on the aft fuselage; therefore, the engine fire extinguishing requirements included in part 23, amendments 23-1 through 23-62 apply.

As discussed above, these special conditions are applicable to the model HA-420. Should Honda Airplane Company apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, the special conditions would apply to that model as well.

This action affects only certain novel or unusual design features on one model of airplanes. It is not a rule of general applicability and affects only the applicant who applied to the FAA for approval of these features on the airplane.

The substance of these special conditions has been subjected to the notice and comment period in several prior instances, identified above, and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. Therefore, notice and opportunity for prior public comment hereon are unnecessary and the FAA finds good cause, in accordance with 5 U.S.C. 553(b)(3)(B) and (d)(3), making these special conditions effective upon issuance. The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment described above.

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all The Boeing Company Model 747-8F and 747-8 series airplanes. The NPRM published in the Federal Register on August 26, 2014 (79 FR 50875). The NPRM was prompted by reports of delamination damage to LE VCK flaps. The NPRM proposed to require repetitive inspections to detect delamination damage of the LSA on the LE VCK flaps at positions 6 through 9 (left wing) and 18 through 21 (right wing), and corrective actions if necessary. We are issuing this AD to detect and correct delamination damage to certain LE VCK flaps, which can reduce the lightning strike protection capability on the LE VCK flaps and result in an uncommanded motion of the trailing edge flap system. Such uncommanded flap motion, without shutdown of the trailing edge or leading edge flaps, could cause unexpected changes in lift, potentially resulting in asymmetric lift and loss of control of the airplane.

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM (79 FR 50875, August 26, 2014) and the FAA's response to each comment.

Boeing requested that we revise the NPRM (79 FR 50875, August 26, 2014) to describe the affected LE flaps with lightning strike applique installed as the LE VCK flaps at positions 6 through 9 (left wing) and 18 through 21 (right wing). Boeing pointed out that only the affected flaps should be specified, instead of all LE VCK flaps.

We agree with the commenter's request. Not all LE VCK flaps are affected by the identified unsafe condition. We have revised the SUMMARY section of this final rule and paragraph (e) of this AD to specify “certain” LE VCK flaps. We have also revised the DISCUSSION section of this final rule and paragraph (g) of this AD to specify LE VCK flaps at position 6 through 9 (left wing) and 18 through 21 (right wing).

Boeing requested that we revise the service bulletin title in the “Differences Between this Proposed AD and the Service Information” section and paragraphs (g) and (h) of the NPRM (79 FR 50875, August 26, 2014) from Boeing Alert Service Bulletin 747-57-2338, dated January 14, 2014; to Boeing Special Attention Service Bulletin 747-57-2338, dated January 14, 2014.

Boeing also requested that we revise “Original issue” in paragraph (h) of the NPRM (79 FR 50875, August 26, 2014) to “Original Issue.”

We agree with the commenter's request to correct the identified typographical errors. We have revised paragraphs (g) and (h) of this AD accordingly. However, because the “Differences Between this Proposed AD and the Service Information” section is not repeated in the final rule, no change is necessary in this regard.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (79 FR 50875, August 26, 2014) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (79 FR 50875, August 26, 2014).

We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.

We reviewed Boeing Special Attention Service Bulletin 747-57-2338, dated January 14, 2014. The service information describes procedures for inspections to detect delamination damage of the LSA on the LE VCK flaps and corrective actions. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section of this AD.

We estimate that this AD affects 6 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

We have received no definitive data that would enable us to provide cost estimates for the on-condition actions specified in this AD.

According to the manufacturer, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This AD will not have federalism implications under Executive Order 13132. This AD will 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.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

(3) Will not affect intrastate aviation in Alaska, and

(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

This AD is a final rule that involves requirements affecting flight safety, and we did not provide you with notice and an opportunity to provide your comments prior to it becoming effective. However, we invite you to participate in this rulemaking by submitting written comments, data, or views. We also invite comments relating to the economic, environmental, energy, or federalism impacts that resulted from adopting this AD. The most helpful comments reference a specific portion of the AD, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should send only one copy of written comments, or if comments are filed electronically, commenters should submit them only one time. We will file in the docket all comments that we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning this rulemaking during the comment period. We will consider all the comments we receive and may conduct additional rulemaking based on those comments.

On March 3, 2015, we issued Emergency AD 2015-05-51 to correct an unsafe condition for Agusta Model A109A helicopters, serial numbers 7154 through 7255, and for all Model A109A II helicopters. Emergency AD 2015-05-51 requires replacing blade part number (P/N) 109-0103-01-7 with blade P/N 109-0103-01-9 or 109-0103-01-115. The emergency AD was sent previously to all known U.S. owners and operators of these helicopters. This action was prompted by an error in the IPC that allows installing blade P/N 109-0103-01-7 on certain serial-numbered Model A109A helicopters and on Model A109A II helicopters.

Emergency AD 2015-05-51 was prompted by Emergency AD No. 2015-0025-E, dated February 18, 2015, issued by EASA, which is the Technical Agent for the Member States of the European Union, to correct an unsafe condition for certain serial-numbered Agusta Model A109A and all Model A109A II helicopters. EASA advises of the installation of blade P/N 109-0103-01-7 on Model A109A II helicopters. In a subsequent investigation, it was determined that blade P/N 109-0103-01-7 is only eligible for installation on Model A109A helicopters up to serial number (S/N) 7153. EASA states that for Model A109A and A109A II helicopters, the current IPC incorrectly allows installing blade P/N 109-0103-01-7 on all helicopters. The EASA AD requires identifying each blade P/N 109-0103-01-7 and replacing it with P/N 109-0103-01-9 or P/N 109-0103-01-115. The EASA AD also prohibits installing blade P/N 109-0103-01-7 on Model A109A helicopters from S/N 7154 through 7255 inclusive and on all Model A109A II helicopters.

These helicopters have been approved by the aviation authority of Italy and are approved for operation in the United States. Pursuant to our bilateral agreement with Italy, EASA, its technical representative, has notified us of the unsafe condition described in the EASA EAD. We are issuing this AD because we evaluated all information provided by EASA and determined the unsafe condition exists and is likely to exist or develop on other helicopters of these same type designs.

AgustaWestland Alert Bollettino Tecnico No. 109-142, dated February 17, 2015, specifies determining whether the affected part-numbered blade is installed and, if installed, replacing it with blade P/N 109-0103-01-9 or P/N 109-0103-01-115. Also, the service information states that AgustaWestland has updated the A109A/AII IPC to give the correct information about the applicable configuration.

This AD requires, before further flight, replacing blade P/N 109-0103-01-7 with blade P/N 109-0103-01-9 or 109-0103-01-115.

We estimate that this AD will affect 34 helicopters of U.S. Registry.

We estimate that operators may incur the following costs in order to comply with this AD. Labor costs are estimated at $85 per hour. We estimate 1 work hour to replace a blade and $143,000 for required parts, for a total cost of $143,085 per blade.

Providing an opportunity for public comments prior to adopting these AD requirements would delay implementing the safety actions needed to correct this known unsafe condition. Therefore, we found and continue to find that the risk to the flying public justifies waiving notice and comment prior to the adoption of this rule because the previously described unsafe condition can adversely affect the controllability of the helicopter and the required action must be accomplished before further flight.

Since an unsafe condition exists that requires the immediate adoption of this AD, we determined that notice and opportunity for public comment before issuing this AD are impracticable and contrary to the public interest and that good cause existed for making the AD effective immediately by Emergency AD 2015-05-51, issued on March 3, 2015, to all known U.S. owners and operators of these helicopters. These conditions still exist and the AD is hereby published in the Federal Register as an amendment to section 39.13 of the Federal Aviation Regulations (14 CFR 39.13) to make it effective to all persons.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We determined that this AD will not have federalism implications under Executive Order 13132. This AD will 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.

For the reasons discussed, I certify that this AD:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

3. Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction; and

4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared an economic evaluation of the estimated costs to comply with this AD and placed it in the AD docket.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2008-06-18, Amendment 39-15430 (73 FR 14670, March 19, 2008). AD 2008-06-18 applied to all Airbus Model A300 B4-600, B4-600R, and F4-600R series airplanes, and Model A300 C4-605R Variant F airplanes (collectively called Model A300-600 series airplanes); and Model A300 series airplanes. The NPRM published in the Federal Register on September 3, 2014 (79 FR 52263). The NPRM proposed to continue to require repetitive inspections for any cracking of the wing lower skin panel and associated internal support structure, and if necessary, corrective actions such as modifying the lower panel inboard of rib 9 aft of the rear spar and repairing cracks. The NPRM also proposed to reduce some compliance times.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2012-0203, dated October 1, 2012 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition on all Airbus Model A300 B4-600, B4-600R, and F4-600R series airplanes, and Model A300 C4-605R Variant F airplanes (collectively called Model A300-600 series airplanes); and Model A300 series airplanes. The MCAI states:

You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov/#!documentDetail;D=FAA-2014-0618-0002.

We gave the public the opportunity to participate in developing this AD. The following presents the comment received on the NPRM (79 FR 52263, September 3, 2014) and the FAA's response to each comment.

United Parcel Service (UPS) requested that the proposed compliance times be revised to be less complex. UPS stated that the proposed compliance times contain a method known as “Average Flight Time” (AFT) which results in a variable flight hour limit and adds an unnecessary complexity to the threshold table and subsequent inspection actions. UPS added that use of the AFT method, along with a lack of standard procedures for implementing the AFT method would create uncertainty for operators and inspectors trying to determine the correct compliance time. UPS stated that in review of prior FAA ADs, including AD 98-18-02, that the FAA does not concur with the AFT compliance time methodology as “. . . such adjustments may not address the unsafe condition in a timely manner” and “. . . they (AFT compliance times) do not fit into the AD tracking process for operators or for Principle Maintenance Inspectors (PMIs) attempting to ascertain compliance with ADs.” UPS compiled a table of fixed compliance times that it suggested would be simpler to use instead of the proposed AFT-based compliance times.

We disagree with the commenter's request to revise the compliance times in this AD. In AD 98-18-02, Amendment 39-10718 (63 FR 45689, August 27, 1998), and certain other ADs, the required actions referred to service information that contained inspection thresholds and intervals based on airplane flight cycles only. Therefore, the FAA did not agree with the use of the “average flight time” (AFT) method to adjust the inspection thresholds and intervals, which were based only on flight cycles. However, for this AD the compliance times in Airbus Service Bulletin A300-57-0177, Revision 05, dated March 23, 2007, and Airbus Service Bulletin A300-57-6029, Revision 08, dated April 25, 2013, have been determined for a combination of flight cycles and flight hours for which the AFT methodology is appropriate.

We acknowledge that a fixed compliance time for a fleet could be easier for operators to schedule and record compliance. Therefore, under the provisions of paragraph (j)(1) of this AD, we will consider requests for approval of an alternative method of compliance (AMOC) if a proposal is submitted that is supported by technical data that includes fatigue and damage tolerance analysis We have not changed this AD in this regard.

We reviewed the available data, including the comment received, and determined that air safety and the public interest require adopting this AD as proposed except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (79 FR 52263, September 3, 2014) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (79 FR 52263, September 3, 2014).

Airbus has issued Service Bulletin A300-57-6029, Revision 08, dated April 25, 2013. The service information describes procedures for inspecting the wing lower skin panel and associated internal support structure aft of the rear spar and inboard of rib 9 and applying applicable corrective measures. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section of this AD.

We estimate that this AD affects 162 airplanes of U.S. registry.

The actions that were required by AD 2008-06-18, Amendment 39-15430 (73 FR 14670, March 19, 2008), and retained in this AD take about 2 work-hours per product, at an average labor rate of $85 per work-hour. Based on these figures, the estimated cost of the actions that were required by AD 2008-06-18 is $170 per product.

We also estimate that it will take about 2 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this AD on U.S. operators to be $27,540, or $170 per product.

In addition, we estimate that any necessary follow-on actions would take about 12 work-hours and require parts costing $10,000, for a cost of $11,020 per product. We have no way of determining the number of aircraft that might need these actions.

A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number. The control number for the collection of information required by this AD is 2120-0056. The paperwork cost associated with this AD has been detailed in the Costs of Compliance section of this document and includes time for reviewing instructions, as well as completing and reviewing the collection of information. Therefore, all reporting associated with this AD is mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at 800 Independence Ave. SW., Washington, DC 20591, ATTN: Information Collection Clearance Officer, AES-200.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We determined that this AD will not have federalism implications under Executive Order 13132. This AD will 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.

For the reasons discussed above, I certify that this AD:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

3. Will not affect intrastate aviation in Alaska; and

4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

You may examine the AD docket on the Internet at http://www.regulations.gov/#!docketDetail;D=FAA-2014-0618; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone 800-647-5527) is in the ADDRESSES section.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2007-13-05, Amendment 39-15109 (72 FR 33856, June 20, 2007). AD 2007-13-05 applied to all The Boeing Company Model 777-200, -200LR, -300, and -300ER series airplanes. The NPRM published in the Federal Register on July 29, 2014 (79 FR 43981). The NPRM was prompted by a determination by the manufacturer that, after AD 2007-13-05 was issued, the procedure for the rudder freeplay inspection did not properly detect excessive freeplay in the rudder control load loop. The NPRM proposed to continue to require repetitive freeplay inspections and lubrication of the right and left elevators, rudder, and rudder tab; and related investigative and corrective actions if necessary. We are issuing this AD to detect and correct excessive wear in the load loop components of the control surfaces, which could lead to excessive freeplay of the control surfaces, flutter, and consequent loss of control of the airplane.

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM (79 FR 43981, July 29, 2014) and the FAA's response to each comment.

A4A, on behalf of American Airlines (AA), stated that AA is already in compliance with the requirements proposed in the NPRM (79 FR 43981, July 29, 2014).

Boeing requested that the airplanes referenced in the SUMMARY section and Discussion paragraph of the NPRM (79 FR 43981, July 29, 2014) be changed from “all The Boeing Company Model 777 airplanes” to “most of The Boeing Company Model 777 airplanes.” Boeing stated that Model 777-200F airplanes are not affected by the NPRM.

We agree to change the phrase “all The Boeing Company Model 777 airplanes” for clarity. This final rule supersedes AD 2007-13-05, Amendment 39-15109 (72 FR 33856, June 20, 2007), which was applicable to all Boeing Model 777-200, -200LR, -300, and -300ER series airplanes. At the time AD 2007-13-05 was published, all Model 777-200, -200LR, -300, and -300ER series airplanes were referred to as “all The Boeing Company Model 777 airplanes.” Since then, Model 777F has been added to the U.S. type certificate data sheet. We have revised the SUMMARY section of this final rule to specify all The Boeing Company Model 777-200, -200LR, -300, and -300ER series airplanes. The Discussion paragraph of the NPRM (79 FR 43981, July 29, 2014) is not restated in this final rule.

Boeing requested that we clarify the unsafe condition specified in the SUMMARY section, Discussion paragraph, and paragraph (e) of the NPRM. Boeing stated that the repetitive freeplay inspections of the right and left elevators, rudder, and rudder tab proposed in the NPRM (79 FR 43981, July 29, 2014) would not prevent, detect, or correct flutter; the proposed freeplay inspections would detect excessive wear in the load loop components of the control surfaces. Boeing pointed out that excessive wear could lead to excessive freeplay of the control surfaces, which could cause unacceptable airframe vibration during flight.

Based on the explanation provided by the commenter, we agree to clarify the unsafe condition that is the basis for issuing this final rule. However, we will not replace the word “flutter” with “unacceptable airframe vibration” because the unsafe condition is flutter, not vibration. We have revised the unsafe condition statement as follows, “We are issuing this AD to detect and correct excessive wear in the load loop components of the control surfaces, which could lead to excessive freeplay of the control surfaces, flutter, and consequent loss of control of the airplane.” This revision appears in the SUMMARY section and Discussion paragraph of the SUPPLEMENTARY INFORMATION section of this final rule, as well as paragraph (e) of this AD.

Boeing requested that we revise paragraph (g) of the proposed AD (79 FR 43981, July 29, 2014) by deleting “rudder” from the following sentence: “If during any inspection required by this paragraph, the rudder freeplay exceeds any applicable measurement . . . .” Boeing explained that this statement is incorrect because it is not just the rudder freeplay, but if any elevator, rudder, or rudder tab freeplay exceeds any applicable measurement specified in the service information, the applicable corrective actions need to be accomplished before further flight.

We agree to revise the specified sentence in paragraph (g) of this AD, because corrective actions before further flight are needed for any elevator, rudder, or rudder tab freeplay that exceeds any applicable measurement specified in Boeing Special Attention Service Bulletin 777-27-0062, Revision 2, dated January 27, 2014.

Japan Airlines (JAL) and United Airlines noted that there are typographical errors in Appendix B and Appendix C of Boeing Special Attention Service Bulletin 777-27-0062, Revision 2, dated January 27, 2014. JAL requested that the FAA issue an AD to mandate the incorporation of the next revision (Revision 3) of Boeing Special Attention Service Bulletin 777-27-0062, or provide an exception to these typographical errors in this AD. United Airlines requested that the FAA issue a global alternative method of compliance (AMOC) to correct the errors identified in Boeing Special Attention Service Bulletin 777-27-0062, Revision 2, dated January 27, 2014.

We agree that Appendix B and Appendix C of Boeing Special Attention Service Bulletin 777-27-0062, Revision 2, dated January 27, 2014, contain typographical errors. However, we do not consider that delaying this action until after the release of the manufacturer's planned service bulletin revision is warranted. Because some of these typographical errors affect the procedures for correctly measuring the freeplay of the rudder tab surface, we have provided the corrections for those errors in paragraph (i) of this AD instead of issuing an AMOC. Paragraph (i) of the proposed AD (79 FR 43981, July 29, 2014) has been redesignated as paragraph (i)(1) in this AD, and new paragraphs (i)(2), (i)(3), and (i)(4) have been added to this AD. We have also revised paragraph (g) of this AD to refer to paragraphs (i)(1) through (i)(4) of this AD.

Paragraph (k)(4) of the NPRM (79 FR 43981, July 29, 2014) stated that AMOCs approved previously for AD 2007-13-05, Amendment 39-15109 (72 FR 33856, June 20, 2007), are not approved as AMOCS for the requirements of this AD. We have now determined that AMOCs for certain actions required by AD 2007-13-05 are acceptable for the corresponding requirements of this AD. We have revised paragraph (k)(4) of this AD and added new paragraphs (k)(5) and (k)(6) to this AD to include this information.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously, and minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (79 FR 43981, July 29, 2014) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (79 FR 43981, July 29, 2014).

We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.

We reviewed Boeing Special Attention Service Bulletin 777-27-0062, Revision 2, dated January 27, 2014. The service information describes procedures for repetitive freeplay inspections and lubrication of the right and left elevators, rudder, and rudder tab, and related investigative and corrective actions. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section of this AD.

We estimate that this AD affects 142 airplanes of U.S. registry. The new actions of this AD would add no additional economic burden to that imposed by AD 2007-13-05, Amendment 39-15109 (72 FR 33856, June 20, 2007). The current costs for this AD are repeated for the convenience of affected operators, as follows:

We have received no definitive data that would enable us to provide cost estimates for the on-condition corrective actions specified in this AD.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will 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.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

(3) Will not affect intrastate aviation in Alaska, and

(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

On May 18, 2015, we issued Emergency AD 2015-10-51, which requires incorporating an operational limitation into the Limitations section of the airplane flight manual (AFM) or airplane flight manual supplement (AFMS). This emergency AD was sent previously to all known U.S. owners and operators of all aircraft that incorporate Avidyne Corporation (Avidyne) Integrated Flight Displays (IFDs) part number (P/N) 700-00083-() loaded with software release 9.3.1.0 or earlier release (referred to as Model R9—10 inch), P/N 700-00171-() loaded with software release 9.2.5.0 or earlier release (referred to as Model R9—12 inch), and P/N 700-00182-() loaded with software release 10.0.3.0 or earlier release (referred to as Model IFD540).

This action was prompted by reports of Avidyne IFDs displaying incorrect course deviation indication information during GPS approaches (incorrect display of lateral deviations). This condition occurs when the airplane is flying in certain approaches, the leg to the Final Approach Fix (FAF) is active, and the leg to the FAF is not aligned with the final approach course (i.e., an angled entry to the FAF). The software of the Avidyne IFDs as referenced above will produce lateral deviations to the final approach course as soon as the leg to the FAF becomes active. Therefore, when the leg does not align with the final approach course, the course deviation indicator (CDI) will show a deviation when, in fact, the aircraft is on the proper course for the active leg. This could result in the pilot making flight decisions that put the aircraft in unsafe flight conditions, flying into airspace that was, by the GPS approach design, to be avoided (terrain, obstacle, traffic, restricted).

We are issuing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This AD requires incorporating an operational limitation into the Limitations section of the airplane flight manual (AFM) or airplane flight manual supplement (AFMS). The operational limitation will contain the following:

• Flying a full procedure (non Vector-to-Final) GPS approach, with a course change at the Final Approach Fix (FAF), is prohibited.”

• “Flying a GPS approach, with a Direct-To or with an Omni-Bearing Selector (OBS) leg to the FAF, is prohibited.”

An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because of the Avidyne IFDs displaying incorrect course deviation indication information during GPS approaches (incorrect display of lateral deviations), which could result in the pilot making flight decisions that put the aircraft in unsafe flight conditions, flying into airspace that was, by the GPS approach design, to be avoided (terrain, obstacle, traffic, restricted). Therefore, we find that notice and opportunity for prior public comment are impracticable and that good cause exists for making this amendment effective in less than 30 days.

This AD is a final rule that involves requirements affecting flight safety and was not preceded by notice and an opportunity for public comment. However, we invite you to send any written data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include Docket Number FAA-2015-2191 and Directorate Identifier 2015-CE-015-AD at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments.

We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this AD.

We estimate that this AD affects 324 products installed on airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This AD will not have federalism implications under Executive Order 13132. This AD will 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.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

(3) Will not affect intrastate aviation in Alaska, and

(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Learjet Inc. Model 45 airplanes. The NPRM published in the Federal Register on April 16, 2014 (79 FR 21416). The NPRM was prompted by reports of non-conforming windshield supports (coupe rails). The NPRM proposed to require a general visual inspection to detect gouging and scratches and to determine if a radius has been removed; an ultrasound inspection to measure the dimensions of the lower coupe rails; an eddy current inspection to detect cracks of the lower coupe rails; replacement of the lower coupe rails if necessary; and revision of the maintenance or inspection program, as applicable. We are issuing this AD to detect and correct non-conforming windshield supports, which could result in uncontrolled cabin depressurization. Non-conforming windshield supports could also compromise the capability of the windshield to withstand a bird strike.

We revised paragraph (h) of this AD to state that incorporation of certain tasks into the maintenance or inspection program, as applicable, must be done in accordance with a method approved by the Manager, Wichita Aircraft Certification Office (ACO), ACE-115W, FAA. For informational purposes, we have added new Notes 1 and 2 to paragraph (h) of this AD to refer to the latest maintenance manuals as guidance material for revising the maintenance or inspection program. (Earlier revisions were referenced previously in table 1 to paragraph (h) of the NPRM (79 FR 21416, April 16, 2014)). The change to this AD should allow operators to obtain appropriate versions of maintenance manuals in order to facilitate compliance.

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM (79 FR 21416, April 16, 2014), and the FAA's response to each comment.

Learjet Inc. requested that we revise the NPRM (79 FR 21416, April 16, 2014) to clarify whether actions accomplished using Bombardier Recommended Service Bulletin 40-56-03, dated April 30, 2012; or Bombardier Recommended Service Bulletin 45-56-3, dated April 30, 2012; is acceptable for compliance with the actions required by paragraph (g) of the NPRM. Learjet Inc. reasoned that many operators have already done those actions using this service information.

We agree to clarify. Actions required by paragraph (g) of this AD, if performed before the effective date of this AD using Bombardier Recommended Service Bulletin 40-56-03, dated April 30, 2012; or Bombardier Recommended Service Bulletin 45-56-3, dated April 30, 2012; as applicable; are acceptable for compliance with the requirements of paragraph (g) of this AD. We have added a new paragraph (j) to this AD to provide credit for these actions. We have redesignated subsequent paragraphs accordingly.

Learjet Inc. requested that we revise table 1 to paragraph (h) of the NPRM (79 FR 21416, April 16, 2014) to allow the incorporation of IRN V5323168, as specified in Bombardier Learjet 45 Maintenance Manual (MM) MM-104, Revision 62; and Bombardier Learjet 40 Maintenance Manual MM-105 Revision 30; both dated June 2, 2014. Learjet Inc. explained that IRN U5323168 was revised to V5323168 in Bombardier Learjet 45 Maintenance Manual MM-104, Revision 62; and Bombardier Learjet 40 Maintenance Manual MM-105, Revision 30; both dated June 2, 2014. Learjet Inc. stated that there were no actual changes to the content of the IRN in Chapter 4 of the MMs, but the “U” was revised to a “V” to coincide with changes to the verbiage in the same IRN in Chapter 5 of those MMs.

As discussed previously, we added new Notes 1 and 2 to paragraph (h) of this AD to refer to the latest revisions of the maintenance manuals, which include references to the appropriate IRNs referenced by the commenter. No additional change to this AD is necessary.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (79 FR 21416, April 16, 2014) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (79 FR 21416, April 16, 2014).

We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.

We reviewed Bombardier Recommended Service Bulletin 40-56-03, Revision 1, dated October 15, 2012; and Bombardier Recommended Service Bulletin 45-56-3, Revision 1, dated October 15, 2012. The service information describes procedures for a general visual inspection of the coupe rails to detect gouging and scratches, and to determine if a radius has been removed; an ultrasound inspection to measure the dimensions of the lower coupe rails; an eddy current inspection to detect cracks of the lower coupe rails; and replacement of the lower coupe rails if necessary. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section of this AD.

We estimate that this AD affects 351 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

We estimate the following costs to do any necessary replacement that would be required based on the results of the inspection. We have no way of determining the number of aircraft that might need this replacement:

According to the manufacturer, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This AD will not have federalism implications under Executive Order 13132. This AD will 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.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

(3) Will not affect intrastate aviation in Alaska, and

(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Airbus Model A318, A319, A320, and A321 series airplanes. The NPRM published in the Federal Register on August 26, 2014 (79 FR 50872).

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2013-0278, dated November 26, 2013 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition on all Airbus Model A318, A319, A320, and A321 series airplanes. The MCAI states:

You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov/#!documentDetail;D=FAA-2014-0585-0002.

We gave the public the opportunity to participate in developing this AD. We have considered the comments received. The following presents the comments received on the NPRM (79 FR 50872, August 26, 2014) and the FAA's response to each comment.

United Airlines stated that, while they appreciated the opportunity to comment, they had no comments on the NPRM (79 FR 50872, August 26, 2014).

Delta Air Lines (DAL) requested that the second sentence in paragraph (h) of the NPRM (79 FR 50872, August 26, 2014) be revised to add a provision for when an operator can show compliance if the “review conclusively determined that the suspect part number and batch number was never installed on the aircraft.” DAL contended that the additional provision would allow an operator with an airplane that was not identified in Airbus Service Bulletin A320-35-1069, dated April 26, 2013, and on which the originally installed pipe was never replaced, to be in compliance with the proposed AD without knowing the part number (P/N) and installation date.

We agree that if operators can conclusively determine that the crew oxygen pipes having P/N D3511032000640 have never been installed on an airplane after June 2011, then AD compliance can be demonstrated for paragraph (h) of this AD. However, we do not agree to revise paragraph (h) of this AD as the current language requires operators to either do the inspection for the part or verify that the part is not installed by reviewing their maintenance records. If an operator can verify through review of maintenance records that no crew oxygen pipe having P/N D3511032000640 was installed after June 2011, then compliance with paragraph (h) of this AD can be demonstrated. We have not changed this AD in this regard.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD as proposed except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (79 FR 50872, August 26, 2014) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (79 FR 50872, August 26, 2014).

Airbus has issued Service Bulletin A320-35-1069, dated April 26, 2013. The service information describes procedures for inspecting the crew oxygen pipe to determine the batch number of the pipe, and replacing the crew oxygen pipe, as applicable. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section of this AD.

We estimate that this AD affects 2 airplanes of U.S. registry.

We also estimate that it will take about 2 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this AD on U.S. operators to be $340, or $170 per product.

In addition, we estimate that any necessary follow-on actions will take about 5 work-hours, for a cost of $425 per product. We have no way of determining the number of aircraft that might need this action.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We determined that this AD will not have federalism implications under Executive Order 13132. This AD will 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.

For the reasons discussed above, I certify that this AD:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

3. Will not affect intrastate aviation in Alaska; and

4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

You may examine the AD docket on the Internet at http://www.regulations.gov/#!docketDetail;D=FAA-2014-0585; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone 800-647-5527) is in the ADDRESSES section.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

History

On December 9, 2014, the FAA published in the Federal Register a notice of proposed rulemaking (NPRM) to establish Class E airspace for the Tucumcari, NM area, creating controlled airspace at the Tucumcari VORTAC within Albuquerque ARTCC boundaries (79 FR 72998) Docket No. FAA-2014-0902. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. One positive comment was received from the National Business Aviation Association.

Class E airspace designations are published in paragraph 6005 of FAA Order 7400.9Y dated August 6, 2014, and effective September 15, 2014, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.

This document amends FAA Order 7400.9Y, airspace Designations and Reporting Points, dated August 6, 2014, and effective September 15, 2014. FAA Order 7400.9Y is publicly available as listed in the ADDRESSES section of this final rule. FAA Order 7400.9Y lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This action amends Title 14 Code of Federal Regulations (14 CFR) Part 71 by establishing Class E airspace extending upward from 1,200 feet above the surface at the Tucumcari VORTAC navigation aid, Tucumcari, NM, to contain aircraft while in IFR conditions under control of Albuquerque ARTCC by safely vectoring aircraft from en route airspace to terminal areas. Controlled airspace is needed for the safety and management of IFR operations within the confines of Albuquerque ARTCC airspace.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this regulation: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the U.S. Code. Subtitle 1, Section 106 (f), describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it establishes controlled airspace at the Tucumcari VORTAC, Tucumcari, NM.

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1E, “Environmental Impacts: Policies and Procedures,” paragraph 311a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:

Authority for This Rulemaking

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority.

This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it updates the locations named in the titles of restricted areas R-5301, R-5302A, R-5302B, and R-5302C in North Carolina.

A discrepancy has been identified in the location names listed in the titles of restricted areas R-5301, R-5302A, R-5302B, and R-5302C, in North Carolina. Currently, the location in the title of R-5301 reads “Albemarle Sound, NC” and the location in the titles of R-5302A, B, and C reads “Harvey Point, NC.” A review of aeronautical charts reveals that the location names should be reversed. R-5301 lies physically over Harvey Point. NC; while R-5302A, B, and C are situated above Albemarle Sound.

This action amends Title 14 Code of Federal Regulations (14 CFR) part 73 by making an editorial change to the location names listed in the titles of restricted areas R-5301, R-5302A, R-5302B, and R-5302C in North Carolina. As noted above, the locations currently listed in the restricted area descriptions are inaccurate. The title that reads “R-5301 Albemarle Sound, NC” is changed to read “R-5301 Harvey Point, NC.” The titles for restricted areas R-5302A, R-5302B, and R-5302C, which currently read “Harvey Point, NC,” are changed to read “Albemarle Sound, NC.” This is an editorial change to update the locations in the titles of restricted areas R-5301, R-5302A, R-5302B, and R-5302C in North Carolina. The areas are correctly depicted on aeronautical charts. This change does not affect the boundaries, designated altitudes, activities conducted within the restricted areas or the actual physical location of the airspace; therefore, notice and public procedure under 5 U.S.C. 553(b) are unnecessary.

The FAA has determined that this action only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this regulation: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1E, Environmental Impacts: Policies and Procedures, paragraph 311d. This action is an administrative change to the titles in the descriptions of the affected restricted areas to reflect the correct locations. It does not alter the dimensions, altitudes, times of designation or actual physical locations of the airspace; therefore, it is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exists that warrant preparation of an environmental assessment.

In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 73, as follows:

The Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) to implement the recommendations presented at the Australia Group (AG) Intersessional meeting held in Budapest, Hungary, on November 18-22, 2013, and adopted pursuant to the AG silent approval procedure in January/February 2014. The AG is a multilateral forum consisting of 41 participating countries that maintain export controls on a list of chemicals, biological agents, and related equipment and technology that could be used in a chemical or biological weapons program. The AG periodically reviews items on its control list to enhance the effectiveness of participating governments' national controls and to achieve greater harmonization among these controls.

The AG intersessional recommendations adopted in January 2014 addressed the merger of the AG “List of Animal Pathogens for Export Control” with the AG “List of Biological Agents for Export Control” to create a single AG common control list for all of these pathogens and toxins (i.e., the AG “List of Human and Animal Pathogens and Toxins for Export Control”).

This final rule amends the EAR to reflect the merger of these two AG common control lists by removing ECCN 1C352 (animal pathogens) from the CCL and adding the pathogens previously controlled under ECCN 1C352 to ECCN 1C351 (human and zoonotic pathogens and “toxins”). The latter ECCN is renamed to indicate that it now controls both human and animal pathogens and “toxins.” This rule also renumbers the items in ECCN 1C351.a, and certain items in ECCN 1C351.c to accommodate the addition to ECCN 1C351 of those items that were controlled under ECCN 1C352 prior to the publication of this rule. The following table lists the viruses that are controlled under ECCN 1C351.a, as a result of the removal of ECCN 1C352 and the aforementioned amendments to ECCN 1C351, and indicates the previous and current CCL designations for each item.

The redesignations of, and additions to, the bacteria controlled under ECCN 1C351.c are indicated in the following table. The designations of the bacteria listed in ECCN 1C351.c.1 through .c.14 were not affected by the amendments to ECCN 1C351 and the removal of ECCN 1C352.

This rule also makes a number of conforming amendments to other EAR provisions to reflect the removal of ECCN 1C352 and the merger of the animal pathogens previously controlled under this ECCN with the human pathogens and toxins controlled under ECCN 1C351.

Specifically, this rule amends Section 740.20 (License Exception Strategic Trade Authorization (STA)) by removing two references to ECCN 1C352 from paragraph (b)(2)(v), which excludes from STA eligibility certain items on the CCL that are subject to chemical/biological (CB) license requirements to destinations indicated under CB Column 1 on the Commerce Country Chart (Supplement No. 1 to part 738 of the EAR). This rule also removes the reference to ECCN 1C352 from Section 742.2(a)(1)(i), which identifies the items on the CCL that require a license for CB reasons to destinations indicated under CB Column 1 on the Commerce Country Chart.

In addition, this rule amends Supplement No. 1 to part 742 (Non-proliferation of Chemical and Biological Weapons) to remove references to ECCN 1C352 from paragraph (3), paragraphs (9)(ii) and (9)(iii), and paragraph (12). This rule also amends Section 752.3 to remove the reference to ECCN 1C352 from paragraph (a)(2), which identifies items controlled for CB reasons that are excluded from eligibility for Special Comprehensive Licenses. None of these changes affect the application of the aforementioned EAR provisions to the items previously controlled under ECCN 1C352, because all of these items are now controlled under ECCN 1C351, which continues to be referenced by each of these EAR provisions.

This rule also makes conforming amendments to ECCNs 1C353, 1C991, 1E001, and 1E351 to reflect the removal of ECCN 1C352 and the merger of the animal pathogens previously controlled under this ECCN with the human pathogens and toxins controlled under ECCN 1C351. Specifically, this rule amends the List of Items controlled section in ECCN 1C353 to remove references to ECCN 1C352 from: (1) The Related Controls paragraph; (2) paragraphs .a.1 and .b.1 of the “Items” paragraph; and (3) the introductory text and paragraph .b of Technical Note 3 to ECCN 1C353. ECCN 1C991 is amended to remove the reference to ECCN 1C352 from paragraph .a of the “Items” paragraph under the List of Items Controlled section. The License Requirements section of ECCN 1E001 is amended by removing the reference to ECCN 1C352 from the “Control(s)” language for “Country Chart—CB Column 1.” In addition, this rule amends ECCN 1E351 to remove references to ECCN 1C352 from the ECCN heading and from the “Control(s)” language for “Country Chart—CB Column 1” in the License Requirements section of the ECCN. None of these changes affect the controls in ECCNs 1C353, 1C991, 1E001, and 1E351 on items related to former ECCN 1C352, because each of these ECCNs continues to control items related to ECCN 1C351, which now includes all of the items that were controlled under ECCN 1C352 prior to the publication of this rule.

The AG intersessional recommendations adopted in February 2014 made changes to the AG “Control List of Dual-Use Chemical Manufacturing Facilities and Equipment and Related Technology and Software.” This rule amends Export Control Classification Number (ECCN) 2B350 to reflect the AG intersessional changes to this AG common control list. Specifically, ECCN 2B350 (Chemical Manufacturing Facilities and Equipment) is amended by revising the controls in 2B350.g on valves, casings (valve bodies) designed for such valves, and preformed casing liners designed for such valves. Prior to the publication of this final rule, 2B350.g controlled valves with nominal sizes greater than 1.0 cm (3/8 in.), and casings (valve bodies) or preformed casing liners designed for such valves, in which all surfaces that come in direct contact with the chemical(s) being produced, processed, or contained are made from specified materials. These valves, casings, and preformed casing liners continue to be controlled under 2B350.g, but the controls have been expanded, to control valves, in addition to those described above, that have all of the following characteristics: (1) A nominal size equal to or greater than 2.54 cm (1 inch) and equal to or less than 10.16 cm (4 inches); (2) casings (valve bodies) or preformed casing liners in which all surfaces that come in direct contact with the chemical(s) being produced, processed, or contained are made from specified materials; and (3) a closure element designed to be interchangeable. These two categories of valves are now controlled under 2B350.g.1 and .g.2, respectively, while the casings (valve bodies) or preformed casing liners designed for such valves are controlled under 2B350.g.3.

In addition, this rule adds a new Technical Note 1 to 2B350.g to indicate that all surfaces of the valves controlled by 2B350g.1, and the casings (valve bodies) and preformed casing liners controlled by 2B350.g.3, that come in direct contact with the chemical(s) being produced, processed, or contained are controlled by 2B350.g if they are made from any of the following materials:

a. Alloys with more than 25% nickel and 20% chromium by weight;

b. Nickel or alloys with more than 40% nickel by weight;

c. Fluoropolymers (polymeric or elastomeric materials with more than 35% fluorine by weight);

d. Glass (including vitrified or enameled coating or glass lining);

e. Tantalum or tantalum alloys;

f. Titanium or titanium alloys;

g. Zirconium or zirconium alloys;

h. Niobium (columbium) or niobium alloys; or

i. Ceramic materials, as follows:

i.1. Silicon carbide with a purity of 80% or more by weight;

i.2. Aluminum oxide (alumina) with a purity of 99.9% or more by weight; or

i.3. Zirconium oxide (zirconia).

The materials specified in new Technical Note 1 to 2B350.g are identical to those identified, prior to the publication of this rule, in ECCN 2B350.g.1 through g.9. The Technical Note to 2B350.g that defined “nominal size,” for purposes of 2B350.g, is now designated as Technical Note 2 to 2B350.g.

The overall impact of the AG intersessional changes on ECCN 2B350.g was the addition of another category of valves under 2B350.g.2, together with casings (valve bodies) and preformed casing liners designed for such valves having the characteristics described in 2B350.g.3. Although the casings (valve bodies) and preformed casing liners for valves described in 2B350.g.2 are controlled separately, under 2B350.g.3, the presence of these components in valves not controlled under 2B350.g.1 that have a nominal size equal to or greater than 2.54 cm (1 inch) and equal to or less than 10.16 cm (4 inches), and a closure element that is designed to be interchangeable, makes such valves subject to control under 2B350.g.2.

This rule also amends ECCN 2B350 to reflect the adoption by the AG of the November 2013 intersessional recommendation concerning pumps described on the AG “Control List of Dual-Use Chemical Manufacturing Facilities and Equipment and Related Technology and Software.” Specifically, this rule adds a new Technical Note to ECCN 2B350.i to clarify how the terms “multi-seal” and “seal-less” are used with respect to the controls on pumps described in this ECCN. The new Technical Note explains that the term seals, as used in the ECCN 2B350.i controls on pumps, refers to seals that come into direct contact with the chemical(s) being processed (or that are designed to do so) and that provide a sealing function where a rotary or reciprocating drive shaft passes through the pump body.

In addition to the AG intersessional changes described above, this rule amends ECCN 1C350 (Precursor chemicals) by adding a Technical Note 3 at the end of the License Requirements section of this ECCN. This new Technical Note is intended to provide guidance, consistent with the AG “List of Chemical Weapons Precursors,” in determining whether a particular precursor chemical or mixture is controlled under ECCN 1C350. Technical Note 3 states that the CAS numbers indicated in ECCN 1C350 are intended to assist in identifying whether a particular precursor chemical or mixture is controlled under this ECCN, irrespective of nomenclature. However, this Technical Note also cautions that precursor chemicals of the same structural formula (e.g., hydrates) are controlled by ECCN 1C350, regardless of name or CAS number, and that CAS numbers cannot be used as unique identifiers in all situations because some forms of the listed precursor chemical have different CAS numbers, and mixtures containing a precursor chemical listed in ECCN 1C350 may also have different CAS numbers.

In a change unrelated to any revisions to the AG common control lists or guidelines, this rule also amends ECCN 2B350 (Chemical Manufacturing Facilities and Equipment) to authorize the use of License Exception LVS (shipments of limited value) for single shipments of $2,000 or less. This change is consistent with the requirements of Section 740.3 of the EAR, except that eligible destinations for ECCN 2B350 items under License Exception LVS are limited to those Country Group B destinations indicated in Supplement No. 1 to part 740 of the EAR that are not also included in Country Group D:3 (Chemical & Biological).

BIS has received a number of inquiries concerning the requirements of the License Exception RPL (servicing and replacement of parts and equipment) “one-for-one replacement” provisions with respect to commodities controlled under ECCN 2B350 on the CCL. In particular, exporters have requested clarification concerning the requirement in Section 740.10(a)(2)(iii) of the EAR that “the parts, components, accessories, or attachments to be replaced must either be destroyed abroad or returned promptly to the person who supplied the replacements, or to a foreign firm that is under the effective control of that person.” The major concern expressed, in this regard, is whether an item (i.e., a commodity in ECCN 2B350) would be considered to be “destroyed,” for purposes of this requirement, if that item were not repairable.

BIS considers a commodity (e.g., a commodity controlled under ECCN 2B350) to be “destroyed,” for purposes of the RPL requirement in Section 740.10(a)(2)(iii) of the EAR, if that commodity is: (1) No longer capable of functioning for the purpose for which it was designed (i.e., due to normal wear and tear, a defect, or damage); and (2) not capable of being repaired to function for the purpose for which it was designed. In addition, a commodity that is identified on the CCL will be considered to be “destroyed” only if that commodity no longer possesses the characteristics that made it subject to control by the ECCN under which it was classified prior to its being “destroyed” (i.e., the classification of the commodity must change and the resulting commodity may be designated as EAR99, provided that it is not enumerated or otherwise described in another ECCN on the CCL).

This interpretation by BIS is consistent with, but broader in scope than, the treatment of certain “scrap” described in Interpretation #7 under Section 770.2 of the EAR, which applies to specified items that are no longer capable of functioning for the purpose for which they were designed, or of being repaired to function for that purpose, because the items have been damaged (e.g., by means of mangling, crushing, or cutting) to such a degree that they have been rendered useless (i.e., beyond the possibility of restoration to their original identity and condition). The difference is that Interpretation #7 addresses only a single method by which items can be “destroyed” (i.e., damage to the item), while BIS's interpretation of the term “destroyed,” as used in RPL, also refers to the inability of an item to function (i.e., for the purpose for which it was designed,) as a result of normal wear and tear to the item or because of a defect in the item, coupled with the inability to repair the item to restore its functionality. In short, turning an item into “scrap” is only one means of “destroying” its functionality, for purposes of the EAR.

BIS intends to publish a separate rule that will propose amendments to License Exception RPL and Interpretation #7 (see Section 770.2 of the EAR) in order to provide additional clarification concerning what is meant in the EAR when items are referred to as having been “destroyed.”

This rule does not contain any changes based on the understandings reached at the June 2014 AG Plenary meeting, because no amendments to the EAR were required as a result of these understandings.

The changes made by this rule only marginally affect the scope of the EAR controls on human and animal pathogens/toxins and chemical manufacturing facilities/equipment.

Although the ECCN 2B350.g controls on valves, casings (valve bodies) designed for such valves, and preformed casing liners designed for such valves were expanded, the expanded controls apply only to a relatively small percentage of items not controlled under 2B350.g prior to the publication of this rule. Consequently, any increase in the number of license applications resulting from this change is not expected to be significant, when considered as a percentage of all such items. Furthermore, any increase in the number of license applications submitted to BIS, as a result of the amendments to ECCN 2B350.g, is expected to be offset by the amendment to ECCN 2B350 that authorizes the use of License Exception LVS for all items controlled by this ECCN, subject to the requirements described in Section 740.3 of the EAR and the specific limitations indicated in the LVS paragraph of this ECCN.

In addition, the scope of the CCL-based CB controls on human and animal pathogens and toxins was not affected by the merger of the animal pathogens previously controlled under ECCN 1C352 with the human pathogens and toxins in ECCN 1C351 (i.e., no pathogens or toxins were either added to, or removed from, the CCL, nor were there any changes in the scope of the CB license requirements for any of these pathogens or toxins). Therefore, these changes are not expected to have a significant impact on the number of license applications that will have to be submitted for such items.

The conforming amendments to Section 740.20(b)(2)(v), Section 742.2(a)(1)(i), Supplement No. 1 to part 742 (i.e., paragraphs (3), (9)(ii), (9)(iii), and (12) of the Supplement) and Section 752.3(a)(2), as described above, did not have any effect on the application of these provisions to the items that were controlled under ECCN 1C352 prior to the publication of this rule. Although these EAR provisions no longer contain references to ECCN 1C352, they continue to reference ECCN 1C351, which now includes the animal pathogens previously controlled under ECCN 1C352.

The conforming amendments to ECCNs 1C353, 1C991, 1E001, and 1E351, as described above, also did not have any effect on the scope of the CCL-based CB controls on items related to human and animal pathogens and toxins (e.g., genetic elements, vaccines, and technology related to such pathogens and toxins). Although ECCNs 1C353, 1C991, 1E001, and 1E351 no longer contain references to ECCN 1C352, they continue to reference ECCN 1C351, which now includes the animal pathogens that were controlled under ECCN 1C352 prior to the publication of this rule. For this reason, the removal of ECCN 1C352 by this rule did not affect either the scope of the items controlled under ECCN 1C353, 1C991, 1E001, or 1E351 for CB reasons or the level of CB controls applicable to such items. Therefore, these conforming changes are not expected to have a significant impact on the number of license applications that will have to be submitted for such items.

Although the Export Administration Act expired on August 20, 2001, the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), as amended by Executive Order 13637 of March 8, 2013, 78 FR 16129 (March 13, 2013), and as extended by the Notice of August 7, 2014, 79 FR 46959 (August 11, 2014), has continued the Export Administration Regulations in effect under the International Emergency Economic Powers Act. BIS continues to carry out the provisions of the Export Administration Act, as appropriate and to the extent permitted by law, pursuant to Executive Order 13222 as amended by Executive Order 13637.

1. Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been designated a “significant regulatory action,” although not economically significant, under section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget.

2. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This rule contains a collection of information subject to the requirements of the PRA. This collection has been approved by OMB under Control Number 0694-0088 (Multi-Purpose Application), which carries a burden hour estimate of 58 minutes to prepare and submit form BIS-748. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing the burden, to Jasmeet Seehra, Office of Management and Budget (OMB), and to the Regulatory Policy Division, Bureau of Industry and Security, Department of Commerce, as indicated in the ADDRESSES section of this rule.

3. This rule does not contain policies with Federalism implications as that term is defined in Executive Order 13132.

4. The provisions of the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, the opportunity for public participation, and a delay in effective date, are inapplicable because this regulation involves a military and foreign affairs function of the United States (See 5 U.S.C. 553(a)(1)). Immediate implementation of these amendments is non-discretionary and fulfills the United States' international obligation to the Australia Group (AG). The AG contributes to international security and regional stability through the harmonization of export controls and seeks to ensure that exports do not contribute to the development of chemical and biological weapons. The AG consists of 41 member countries that act on a consensus basis and the amendments set forth in this rule implement changes made to the AG common control lists (as a result of the adoption of the recommendations made at the November 2013 AG intersessional meeting) and other changes that are necessary to ensure consistency with the controls maintained by the AG. Since the United States is a significant exporter of the items in this rule, immediate implementation of this provision is necessary for the AG to achieve its purpose. Any delay in implementation will create a disruption in the movement of affected items globally because of disharmony between export control measures implemented by AG members, resulting in tension between member countries. Export controls work best when all countries implement the same export controls in a timely and coordinated manner.

Further, no other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this final rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule under the Administrative Procedure Act or by any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are not applicable. Therefore, this regulation is issued in final form.

For the reasons stated in the preamble, parts 740, 742, 752 and 774 of the Export Administration Regulations (15 CFR parts 730-774) are amended as follows:

In a notice published in the Federal Register on April 8, 2014 (79 FR 19301), we announced that we filed a food additive petition (FAP 4A4803) submitted by Eastman Chemical Company, c/o Keller and Heckman LLP, 1001 G St. NW., Suite 500 West, Washington, DC 20001 (petitioner). The petition proposed to amend the food additive regulations in § 172.185 (21 CFR 172.185) TBHQ by removing the upper bound of the specified melting point range (126.5 °C to 128.5 °C) and by adding an acceptance criterion to measure purity of the additive. Specifically, the petition proposed to allow the use of TBHQ with a melting point that is 126.5 °C or higher. In addition to this change in melting point specification, the petition also proposed to add an acceptance criterion for purity of not less than 99.0 percent TBHQ, as tested by the titration assay specified in the most current edition of the Food Chemicals Codex (FCC).

TBHQ is the chemical 2-(1,1-dimethylethyl)-1,4-benzenediol (Chemical Abstracts Service Registry Number 1948-33-0). In the Federal Register of November 30, 1972 (37 FR 25356), we issued a final rule that was codified in 21 CFR 121.1244 to provide for the safe use of TBHQ in food under certain conditions, including a melting point range for TBHQ of 126.5 °C-128.5 °C. An amendment to § 121.1244 was issued in the Federal Register of December 10, 1976 (41 FR 53981) to recognize the name “TBHQ” as the common name for tertiary butylhydroquinone, and to add the Chemical Abstracts Service Registry Number and nomenclature in the introductory text of § 121.1244. In the Federal Register of March 15, 1977 (42 FR 14302 at 14495), TBHQ was recodified from § 121.1244 to § 172.185. No amendments to the TBHQ regulation have been made since then.

The melting point range of 126.5 °C-128.5 °C was originally included by FDA in the regulation for TBHQ as part of the chemical identity of the additive and to ensure purity. The melting point range describes the initial and final temperatures at which the substance melts. Data provided in the subject petition show that TBHQ with an initial melting point of 126.5 °C has a purity of not less than 99 percent, which is consistent with the petitioner's proposed acceptance criterion specification. However, according to the petitioner, analytical and manufacturing variability can result in batches of TBHQ that have a final melting point greater than 128.5 °C, but are of suitably high purity. Using the titration assay for TBHQ in the FCC 9th Edition (the most current edition), the petitioner analyzed multiple samples of TBHQ with a final melting point above 128.5 °C. All samples had a purity of at least 99 percent. Based on their analysis of these data, the petitioner concluded that, while melting point has utility in identifying TBHQ, a maximum melting point specification limit is unnecessary in the regulation to ensure purity. We agree with the petitioner and have concluded that the data provided support their request to remove the upper bound of the melting point range specified in § 172.185(a), and add a purity acceptance criterion of not less than 99 percent determined using the titration assay for TBHQ in the FCC 9th Edition or an equivalent method (Ref. 1).

The petitioner did not propose any modifications to the use or intended technical effect of TBHQ as currently permitted in § 172.185. As such, the petitioner's proposed amendments will have no impact on dietary exposure of TBHQ. Therefore, we did not reevaluate the dietary exposure to TBHQ (Ref. 1). The petitioner also stated that there are no changes to the manufacturing process and therefore no new components will be introduced into the diet.

No new toxicology studies were submitted in support of the safety of the petition request. The petitioner referenced the toxicological data that had been previously submitted and evaluated when the regulation for TBHQ was first issued (37 FR 25356). As part of the safety evaluation for this petition, we conducted an updated literature search for new toxicological studies related to the safety of TBHQ. Our literature search did not reveal any new safety issues with the regulated use of TBHQ or any safety concerns regarding TBHQ with a final melting point in excess of 128.5 °C (Ref. 2).

FDA is incorporating by reference the monograph for TBHQ in the FCC 9th edition (the most current edition), which was approved by the Office of the Federal Register. You may purchase a copy of the material from the United States Pharmacopeial Convention, 12601 Twinbrook Pkwy., Rockville, MD 20852, 1-800-227-8772, http://www.usp.org/.

The FCC is a compendium of internationally recognized standards for the purity and identity of food ingredients. The FCC monograph for TBHQ contains a description of a titration assay, which is an analytical method used to determine the purity of TBHQ.

Based on the data and information in the petition and other relevant material, we conclude that the proposed amendments to remove the upper bound of the melting point range in the regulation for TBHQ and to add a purity acceptance criterion are safe and appropriate. Therefore, we are amending the regulations in 21 CFR part 172 as set forth in this document.

In accordance with § 171.1(h) (21 CFR 171.1(h)), the petition and the documents that we considered and relied upon in reaching our decision to approve the petition will be made available for public disclosure (see FOR FURTHER INFORMATION CONTACT). As provided in § 171.1(h), we will delete from the documents any materials that are not available for public disclosure.

We have considered the environmental effects of this rule. As stated in the April 8, 2014, Federal Register notice of petition for FAP 4A4803 (79 FR 19301), we have determined, under 21 CFR 25.30(i), that this action is of a type that does not individually or cumulatively have a significant effect on the human environment such that neither an environmental assessment nor an environmental impact statement is required. We have not received any new information or comments that would affect that determination.

This final rule contains no collection of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 is not required.

If you will be adversely affected by one or more provisions of this regulation, you may file with the Division of Dockets Management (see ADDRESSES) either electronic or written objections. You must separately number each objection, and within each numbered objection you must specify with particularity the provision(s) to which you object, and the grounds for your objection. Within each numbered objection, you must specifically state whether you are requesting a hearing on the particular provision that you specify in that numbered objection. If you do not request a hearing for any particular objection, you waive the right to a hearing on that objection. If you request a hearing, your objection must include a detailed description and analysis of the specific factual information you intend to present in support of the objection in the event that a hearing is held. If you do not include such a description and analysis for any particular objection, you waive the right to a hearing on the objection.

It is only necessary to send one set of documents. Identify documents with the docket number found in brackets in the heading of this document. Any objections received in response to the regulation may be seen in the Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday, and will be posted to the docket at http://www.regulations.gov.

Our review of this petition was limited to section 409 of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 348). This final rule is not a statement regarding compliance with other sections of the FD&C Act. For example, the Food and Drug Administration Amendments Act of 2007, which was signed into law on September 27, 2007, amended the FD&C Act to, among other things, add section 301(ll) of the FD&C Act (21 U.S.C. 331(ll)). Section 301(ll) of the FD&C Act prohibits the introduction or delivery for introduction into interstate commerce of any food that contains a drug approved under section 505 of the FD&C Act (21 U.S.C. 355), a biological product licensed under section 351 of the Public Health Service Act (42 U.S.C. 262), or a drug or biological product for which substantial clinical investigations have been instituted and their existence has been made public, unless one of the exemptions in section 301(ll)(1) to (4) of the FD&C Act applies. In our review of this petition, we did not consider whether section 301(ll) of the FD&C Act or any of its exemptions apply to food containing this additive. Accordingly, this final rule should not be construed to be a statement that a food containing this additive, if introduced or delivered for introduction into interstate commerce, would not violate section 301(ll) of the FD&C Act. Furthermore, this language is included in all food additive final rules and therefore should not be construed to be a statement of the likelihood that section 301(ll) of the FD&C Act applies.

The following references have been placed on display in the Division of Dockets Management (see ADDRESSES) and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday, and are available electronically at http://www.regulations.gov.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs and redelegated to the Director, Center for Food Safety and Applied Nutrition, 21 CFR part 172 is amended as follows:

FDA is amending the animal drug regulations to reflect approval actions for NADAs and ANADAs during March and April 2015, as listed in table 1. In addition, FDA is informing the public of the availability, where applicable, of documentation of environmental review required under the National Environmental Policy Act (NEPA) and, for actions requiring review of safety or effectiveness data, summaries of the basis of approval (FOI Summaries) under the Freedom of Information Act (FOIA). These public documents may be seen in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, between 9 a.m. and 4 p.m., Monday through Friday. Persons with access to the Internet may obtain these documents at the CVM FOIA Electronic Reading Room: http://www.fda.gov/AboutFDA/CentersOffices/OfficeofFoods/CVM/CVMFOIAElectronicReadingRoom/default.htm. Marketing exclusivity and patent information may be accessed in FDA's publication, Approved Animal Drug Products Online (Green Book) at: http://www.fda.gov/AnimalVeterinary/Products/ApprovedAnimalDrugProducts/default.htm.

In addition during March and April 2015, ownership of, and all rights and interest in, the following approved applications have been transferred as follows:

Following these changes of sponsorship, LFB USA, Inc., is now the sponsor of an approved application. Accordingly, § 510.600 (21 CFR 510.600) is being amended to add this firm to the list of sponsors of approved applications.

The animal drug regulations are also being amended to reflect several non-substantive changes. These technical amendments are being made to improve the accuracy of the regulations.

This rule does not meet the definition of “rule” in 5 U.S.C. 804(3)(A) because it is a rule of “particular applicability.” Therefore, it is not subject to the congressional review requirements in 5 U.S.C. 801-808.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs and redelegated to the Center for Veterinary Medicine, 21 CFR parts 510, 520, 522, 526, and 528 are amended as follows:

The collections of information contained in these regulations have been reviewed and approved by the Office of Management and Budget under control number 1545-0015. The collections of information are in §§ 20.2010-2(a), 20.2010-2(a)(1), 20.2010-2(a)(3)(i), 20.2010-2(a)(7)(ii)(B), and 20.2010-2(b). Responses to each collection of information are voluntary to obtain the benefit of being able to elect portability or to take advantage of the special reporting requirements applicable to certain assets, and, for certain estates, to opt out of a deemed portability election. The likely respondents are executors of estates of decedents survived by a spouse.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number.

Books and records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.

This document amends the Estate Tax Regulations (26 CFR part 20) under sections 2001 and 2010 of the Internal Revenue Code (Code) and the Gift Tax Regulations (26 CFR part 25) under section 2505 of the Code. On December 17, 2010, in section 303 of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Public Law 111-312 (124 Stat. 3296, 3302) (TRUIRJCA), Congress amended section 2010(c) of the Code to allow portability of the applicable exclusion amount between spouses and made conforming amendments to sections 2505(a), 2631(c), and 6018(a)(1) of the Code. The changes made by TRUIRJCA to sections 2010(c), 2505(a), 2631(c), and 6018(a)(1) of the Code were scheduled to expire after December 31, 2012, pursuant to section 304 of TRUIRJCA. However, on January 2, 2013, Congress enacted the American Taxpayer Relief Act of 2012, Public Law 112-240 (126 Stat. 2313) (ATRA), which made portability permanent. In section 101(c)(2) of ATRA, Congress made a technical correction to section 2010(c)(4)(B) of the Code, retroactive to the original date of enactment of section 303 of TRUIRJCA, by amending clause (i) to replace “basic exclusion amount” with “applicable exclusion amount.”

On June 18, 2012, temporary regulations relating to this topic (TD 9593, 77 FR 36150) (“2012 temporary regulations”) and a notice of proposed rulemaking cross-referencing the temporary regulations (REG-141832-11, 77 FR 36229) (“NPRM”) were published in the Federal Register. No requests to speak at the scheduled public hearing were received, and the hearing was canceled. Comments responding to the NPRM were received and are available for public inspection and copying at http://www.regulations.gov or upon request. After consideration of all the comments, the proposed rules in the NPRM are adopted as amended by this Treasury decision. The public comments and revisions are discussed in this preamble.

Section 2010(c) of the Code allows the estate of a decedent who is survived by a spouse to make a portability election, which generally allows the surviving spouse to apply the decedent's deceased spousal unused exclusion (DSUE) amount to the surviving spouse's own transfers during life and at death. Under section 2010(c)(5)(A), a portability election is effective only if made on an estate tax return filed by the executor of the decedent's estate within the time prescribed by law for filing such return. Section 20.2010-2T(a)(1) of the 2012 temporary regulations requires every estate electing portability of a decedent's DSUE amount to file an estate tax return within nine months of the decedent's date of death, unless an extension of time for filing has been granted.

A commenter requested that the final regulations address the availability of an extension of time under §§ 301.9100-2 and 301.9100-3 of the Procedure and Administration Regulations to elect portability under section 2010(c)(5)(A) of the Code. Section 301.9100-2(b) provides an automatic six-month extension of time for making certain statutory and regulatory elections if the return is timely filed. Because the portability election is deemed to be made by the timely filing of a complete and properly prepared estate tax return, this relief provision will not be helpful with regard to the portability election unless the return that was timely filed was not complete or properly prepared and that insufficiency is corrected within six months from the unextended due date of the return.

Section 301.9100-3 allows the grant of an extension of time for making regulatory elections that do not meet the requirements for an automatic extension of time under § 301.9100-2. An extension under § 301.9100-3 to elect portability is not available to estates that are required to file an estate tax return based on the applicable amount in section 6018(a) because, in such a case, the due date for the portability election is prescribed by statute and § 301.9100-3 applies only to an election whose due date is prescribed by regulation. See sections 2010(c)(5)(A), 6075(a), and 6018(a); § 301.9100-1(b). However, an extension of time under § 301.9100-3 to elect portability may be available to estates that are under the value threshold described in section 6018 for being required to file an estate tax return. In such a case, the due date for the portability election is prescribed by regulation, not by statute. See Rev. Proc. 2014-18, 2014-7 IRB 513, section 2.03.

The Treasury Department and the IRS believe that clarifying the availability of an extension of time under § 301.9100-3 to elect portability will assist taxpayers in understanding and meeting their tax responsibilities. Accordingly, the final regulations provide that an extension of time to elect portability will not be granted under § 301.9100-3 to any estate that is required to file an estate tax return because the value of the gross estate equals or exceeds the threshold amount described in section 6018, but may be granted under the rules set forth in § 301.9100-3 to estates with a gross estate value below that threshold amount and thus not otherwise required to file an estate tax return.

As transitional relief in the wake of TRUIRJCA and ATRA, the Treasury Department and the IRS have published guidance regarding the availability of an automatic extension of time for executors of certain estates under the filing threshold of section 6018(a) to file an estate tax return to elect portability of an unused exclusion amount. See Notice 2012-21, 2012-10 IRB 450; Rev. Proc. 2014-18. The Treasury Department and the IRS continue to receive, and are continuing to consider, requests for permanent extensions of this type of relief. However, such relief is not included in the final regulations.

Section 20.2010-2T(a)(2) of the 2012 temporary regulations provides that upon the timely filing of a complete and properly prepared estate tax return, an executor of the estate of a decedent survived by a spouse will have elected portability of the decedent's DSUE amount, unless the executor validly opts out of making the portability election. The inclusion of a computation of the DSUE amount is an essential requirement of a complete and properly prepared estate tax return intended to make the portability election. See section 2010(c)(5)(A) and § 20.2010-2T(b)(1). Section 20.2010-3T(c) provides that the portability election applies (and generally is available to the surviving spouse) upon the decedent's death, but, to the extent the DSUE amount subsequently is reduced or cannot be substantiated, the DSUE amount will not be available to the surviving spouse.

A commenter requested that the final regulations address whether an estate can make a “protective” election if a DSUE amount is not reflected on an otherwise complete and properly prepared estate tax return at the time of its timely filing, but subsequent adjustments to amounts on the estate tax return would result in unused exclusion of that decedent. The following example illustrates such a scenario. An executor files a complete and properly prepared estate tax return that shows a DSUE amount equal to zero at the time of the return's timely filing and does not follow the instructions set forth in the instructions for opting out of portability. At the same time, the executor also files a protective claim for refund attributable to a claim against the estate. Subsequently, the estate becomes entitled to a deduction under section 2053 for a payment made in satisfaction of the claim against the estate which reduces the estate tax and results in unused exemption.

In this example, the Treasury Department and the IRS believe that the executor has elected portability in accordance with § 20.2010-2T(a)(2) and that the recomputed DSUE amount will be available to the decedent's surviving spouse. The final regulations clarify this intended result by providing in § 20.2010-2(b) that the computation requirement in section 2010(c)(5)(A) will be satisfied if the estate tax return is prepared in accordance with the requirements of § 20.2010-2(a)(7). Accordingly, there is no need for a protective election.

Several commenters requested that the final regulations allow a surviving spouse who is not an executor as defined in section 2203 of the Code to file an estate tax return and make the portability election in several different circumstances. A few of the circumstances described include those in which the spouse is given the right to file the estate tax return in a prenuptial or marital agreement, or the spouse has petitioned the appropriate local court for the spouse's appointment as an executor solely for the limited purpose of filing the estate tax return and the executor does not make the portability election. The Treasury Department and the IRS recognize the possibility that an executor may exercise the executor's discretion to not make the portability election, thus causing the estate to forfeit the opportunity to elect portability, but note that section 2010(c)(5) of the Code permits only the executor of the decedent's estate to file the estate tax return and make the portability election. The 2012 temporary regulations address the circumstances in which an appointed executor or a non-appointed executor may file the estate tax return and decide whether or not to elect portability. The Treasury Department and the IRS believe that any consideration of what, if any, state law action might bring the surviving spouse within the definition of executor under section 2203 is outside of the scope of this regulation. Accordingly, the final regulations adopt the applicable rules in the 2012 temporary regulations without change.

Section 20.2010-2T(a)(2) provides that the estate of a decedent survived by a spouse makes the portability election by timely filing a complete and properly prepared estate tax return for the decedent's estate. Section 20.2010-2T(a)(7)(i) provides that an estate tax return prepared in accordance with all applicable requirements is considered a “complete and properly prepared” estate tax return. Section 20.2010-2T(a)(7)(ii)(A), however, provides a special rule applicable to estates that are not otherwise required to file an estate tax return under section 6018. For these estates, the executor does not need to report the value of certain property that qualifies for the marital or charitable deduction. The 2012 temporary regulations also included exceptions to the application of the special rule by providing specific circumstances under which the special rule will not apply.

A commenter suggested that the final regulations elaborate on the circumstances under which a timely filed estate tax return may be considered so deficient as to render the estate tax return incomplete for purposes of electing portability. The Treasury Department and the IRS acknowledge that, as with all tax returns, some errors or omissions made with respect to an estate tax return will be considered minor and correctible. However, the Treasury Department and the IRS consider the issue of whether an estate tax return is complete and properly prepared to be determined most appropriately on a case-by-case basis by applying standards as prescribed in current law. Therefore, this suggestion has not been adopted.

A commenter recommended that the final regulations modify the special rule in § 20.2010-2T(a)(7)(ii)(A) to narrow the exceptions to the application of the special rule, thus allowing more estates to avoid the expense of a potentially-complicated appraisal to value assets includible in the gross estate. Specifically, the commenter recommended that the special rule in § 20.2010-2T(a)(7)(ii)(A) should apply to certain property, the value of which qualifies for the marital deduction or charitable deduction (marital deduction property or charitable deduction property), when: (i) The marital deduction property or charitable deduction property is a stated number of shares of stock and a stated number of shares of the same stock are includible in the gross estate but are not marital deduction property or charitable deduction property; (ii) the property represents the balance of the value of shares remaining after a non-marital or non-charitable bequest of shares based on a specific value; and (iii) the property represents the marital or charitable portion of a fractional division of property, whether by bequest, spousal election, or disclaimer. In the first two instances, the value of the marital deduction property or charitable deduction property may be relevant to assessing the accuracy of the valuation of the nondeductible interest and whether any valuation premium or discount is warranted. In the last instance, because any beneficiary's share of the estate usually can be satisfied in a manner other than with that beneficiary's proportional share of each individual asset, it will be necessary to know the total value in order to verify the non-deductible portion of the estate. Therefore, the Treasury Department and the IRS continue to believe that § 20.2010-2T(a)(7)(ii)(A) appropriately excludes the described circumstances from application of the special rule. While the final regulations do not adopt the commenter's suggestion to narrow the exceptions to the application of the special rule, the final regulations provide flexibility to refine the rules in subregulatory guidance at any time in the future when the IRS may determine that additional guidance would be appropriate with regard to the application of the special rule to particular types of transfers.

The same commenter suggested that the exception in § 20.2010-2T(a)(7)(ii)(A)(2) is made unnecessarily broad by its reference to “another provision of the Code.” The commenter was concerned that, because the fair market value of a bequeathed asset determines the basis of that asset in the hands of the legatee, the value of all estate assets would have an impact on section 1014, and, thus, all assets would have to be valued. In referring to value needed to determine an estate's eligibility under other Code sections such as sections 2032 and 2032A, the Treasury Department and the IRS did not intend to include a basis determination under section 1014. Accordingly, the language of § 20.2010-2T(a)(7)(ii)(A)(2) has been clarified.

Finally, a commenter repeated a suggestion (first made in response to a request for comments in Notice 2011-82, 2011-42 IRB 516) that the IRS prepare a shorter version of the estate tax return to be used by estates that are not otherwise required to file an estate tax return but do so only to elect portability. The Treasury Department and the IRS have reconsidered this suggestion, taking into account several factors including: The information needed by the IRS to compute and verify the DSUE amount; how such an abbreviated return would differ from a return qualifying for the special rule regarding valuations under § 20.2010-2(a)(7)(ii); the past experience of the IRS regarding the accuracy of abbreviated returns; the administrative issues in creating and maintaining alternate return forms; and the reasons provided by commenters. The Treasury Department and the IRS have concluded that, on balance, a timely filed, complete, and properly prepared estate tax return affords the most efficient and administrable method of obtaining the information necessary to compute and verify the DSUE amount, and the alleged benefits to taxpayers from an abbreviated form is far outweighed by the anticipated administrative difficulties in administering the estate tax. In addition, the “Technical Explanation of the Revenue Provisions Contained in the `Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010' Scheduled for Consideration by the United States Senate,” J. Comm. on Tax'n, 111th Cong., JCX-55-10 (December 10, 2010), suggests that estates electing portability that are not otherwise required to file an estate tax return under section 6018(a) are intended to be subject to the same filing requirements applicable to estates required to file an estate tax return under section 6018(a). For these reasons, this suggestion is not adopted.

The preamble to the 2012 regulations discussed comments and proposals the Treasury Department and the IRS had received on the proper application of the portability rules to qualified domestic trusts (QDOTs) created for spouses who are not U.S. citizens. The preamble noted that each of the proposals raised issues of fairness, complexity, and administrability.

The QDOT rules in the 2012 temporary regulations provide that the executor of a decedent's estate claiming a marital deduction for property passing to a QDOT shall compute the decedent's DSUE amount on the decedent's estate tax return for the purpose of electing portability in the same way the DSUE amount is computed for any other decedent. However, because the estate tax payments made from the QDOT after the decedent's death are part of the decedent's estate tax liability, the decedent's DSUE amount must be redetermined upon the final distribution or other taxable event on which estate tax under section 2056A is imposed (generally, this occurs upon the termination of all QDOTs created by or funded with assets passing from the decedent or upon the death of the surviving spouse). See § 20.2010-2T(c)(4). The QDOT rules in the 2012 temporary regulations further provide that the earliest date such a decedent's DSUE amount may be included in determining the applicable exclusion amount available to the surviving spouse or the surviving spouse's estate is the date of the event that triggers the final estate tax liability of the decedent under section 2056A. See § 20.2010-3T(c)(2). The preamble to the 2012 temporary regulations requested further comments on the QDOT issue.

A commenter challenged this delay in the surviving spouse's ability to use the decedent's DSUE amount if the surviving spouse becomes a United States citizen after the decedent's estate tax return is filed and after property passes to a QDOT for the benefit of that surviving spouse.

Under section 2056A(b)(12), the estate tax imposed under section 2056A(b)(1) will cease to apply to property held in a QDOT if the surviving spouse becomes a United States citizen (a fact to be certified to the IRS under § 20.2056A-10(a)(2)) and either of the following requirements are met: (A) the spouse was a resident of the United States at all times after the death of the decedent and before the spouse becomes a citizen of the United States, or (B) no tax was imposed by section 2056A(b)(1)(A) with respect to any distribution before the spouse becomes a citizen. If the spouse becomes a U.S. citizen, but does not satisfy either of these two requirements, section 2056A(b)(12)(C) provides that the section 2056A(b)(1) estate tax will cease to apply to the QDOT if the spouse elects (i) to treat any distribution on which tax was imposed by section 2056A(b)(1)(A) as a taxable gift made by the spouse during the year in which the spouse becomes a U.S. citizen or in any subsequent year, and thereby including each such distribution in the spouse's own adjusted taxable gifts for both estate and gift tax purposes, and (ii) to treat any reduction in the tax imposed by section 2056A(b)(1)(A) by reason of the credit allowable under section 2010 with respect to the decedent as a credit allowable to such surviving spouse under section 2505 for purposes of determining the amount of the credit allowable under section 2505 with respect to taxable gifts made by the surviving spouse during the year in which the spouse becomes a U.S. citizen or any subsequent year.

The Treasury Department and the IRS conclude that, if the surviving spouse of the decedent becomes a citizen of the United States and the requirements under section 2056A(b)(12) and the corresponding regulations are satisfied so that the tax imposed by section 2056A(b)(1) no longer applies, then the decedent's DSUE amount is no longer subject to adjustment and will become available for transfers by the surviving spouse as of the date the surviving spouse becomes a citizen of the United States. Accordingly, the final regulations make clarifying changes in §§ 20.2010-2(c)(4), 20.2010-3(c)(3), and 25.2505-2(d)(3).

A commenter also requested clarification of the rules in §§ 20.2010-3T(b), 25.2505-2T(b) and 25.2505-2T(c) as they apply to a QDOT. Section 25.2505-2T(b) provides that, in the case of a surviving spouse making a gift, the surviving spouse will be considered to apply any available DSUE amount to the taxable gift before the surviving spouse's own basic exclusion amount. Sections 20.2010-3T(b) and 25.2505-2T(c) address how to compute the DSUE amount included in the applicable exclusion amount of a surviving spouse who previously has applied a DSUE amount of one or more deceased spouses. These rules are applicable to all surviving spouses but can be applied only after the surviving spouse determines the spouse's available DSUE amount, if any. Sections 20.2010-3T(c)(2) and 25.2505-2T(d)(2) provide rules governing the date DSUE can be taken into consideration by the surviving spouse or the surviving spouse's estate when property passes from a decedent for the benefit of a surviving spouse in one or more QDOTs and the decedent elects portability. The Treasury Department and the IRS believe that the impact of these rules in the context of QDOTs is sufficiently clear. Thus, the final regulations adopt these rules without change, except that the rule in § 25.2505-2T(d)(2) is now provided in § 25.2505-2(d)(3).

Section 2010(c)(5)(B) grants the IRS the authority to examine returns of each deceased spouse of the surviving spouse to determine the DSUE amount allowed to be included in the applicable exclusion amount of the surviving spouse, even if the period of limitations under section 6501 has expired for assessing gift or estate tax with respect to the returns of the deceased spouse. The Treasury Department and the IRS received several comments and recommendations related to this examination authority.

First, a commenter requested that the final regulations provide that, during an examination to determine the allowable DSUE amount, the examination authority of the IRS be limited to issues of the reporting and valuation of assets, and not extend to other legal issues that may impact the availability of the DSUE amount to the surviving spouse. The Treasury Department and the IRS note that section 2010(c)(5)(B) grants broad statutory authority to the IRS to examine the correctness of any return, without regard to the period of limitations on assessment, “to make determinations with respect to [the allowable DSUE] amount for purposes of carrying out [section 2010(c) of the Code].” Thus, the Treasury Department and the IRS conclude that limiting such authority is inconsistent with the statute. Accordingly, this suggestion is not adopted.

Second, a commenter requested confirmation that, in the examination of a return for the purpose of determining the allowable DSUE amount that takes place after the expiration of the period of limitations on assessment of tax, the valuation of assets may be adjusted upward or downward with a possible result that the allowable DSUE amount may decrease or increase. The accurate valuation of assets reported on an estate or gift tax return, regardless of whether the valuation is higher or lower than the reported value, is fundamental to the examination of such a return and fundamental to the accurate determination of the DSUE amount available to the surviving spouse. The Treasury Department and the IRS accordingly conclude no clarifying change is necessary on this issue.

Third, a commenter suggested the final regulations consider whether, in the examination of a return for the purpose of determining the allowable DSUE amount that takes place after the expiration of the period of limitations on assessment of tax, an adjustment to the value of an asset reported on the return affects the basis of that asset under section 1014. Section 1014 generally provides that the basis of property acquired from a decedent is the fair market value of such property on the decedent's date of death. The Treasury Department and the IRS believe that a change to the date-of-death value of an asset included in the estate of a decedent survived by a spouse, made pursuant to an examination of a return of that decedent after the expiration of the period of limitations on the assessment of tax on that return, does not necessarily result in a change to the basis of that asset under section 1014. Rather, the basis of property acquired from a decedent is determined in accordance with the existing principles of section 1014. The Treasury Department and the IRS conclude that the scope of the examination authority granted in section 2010(c)(5)(B) is sufficiently clear and, therefore, make no change in the final regulations.

Fourth, a commenter suggested that the final regulations clarify the deductibility of administrative expenses associated with the examination to determine the allowable DSUE amount. The Treasury Department and the IRS conclude that any expenses associated with an examination to determine the DSUE amount to be included in the applicable exclusion amount of the surviving spouse should be treated as any other expense associated with the preparation of the surviving spouse's return. Thus, in the case of an examination arising with respect to a gift tax return of the surviving spouse, such expenses are not deductible and, in the case of an examination arising with respect to an estate tax return of the surviving spouse, such expenses may be deductible if such expenses meet all of the applicable requirements for deductibility under section 2053. The Treasury Department and the IRS believe that the standards for deducting expenses for estate and gift tax purposes are sufficiently clear so that no change to the 2012 temporary regulations is necessary.

Finally, a commenter suggested clarifying who may participate in the examination to determine the DSUE amount to be included in the applicable exclusion amount of the surviving spouse. In general, pursuant to the current rules, each taxpayer has the authority to participate in the resolution of the issues raised in the audit of his or her return. However, the Treasury Department and the IRS believe addressing this issue is outside the scope of this final regulation and, therefore, make no change in the final regulation.

A commenter requested further guidance on the rules in §§ 20.2010-3T(e) and 25.2505-2T(f), which prohibit a noncitizen, nonresident surviving spouse, or the estate of such a surviving spouse, from taking into account the DSUE amount of any deceased spouse except to the extent allowed under any treaty obligation of the United States. First, the commenter suggested the final regulations clarify the specificity a treaty must employ in referencing portability or the DSUE amount for the exception to apply. The Treasury Department and the IRS consider this question regarding the interpretation of treaty language to be outside the scope of these final regulations and, thus, decline to make this change.

Next, the commenter requested that the final regulations allow a surviving spouse who becomes a U.S. citizen after the death of the deceased spouse to take into account the DSUE amount of such deceased spouse. Because a surviving spouse who becomes a U.S. citizen is subject to the estate and gift tax rules of chapter 11 and 12 that apply to U.S. citizens and residents, the Treasury Department and the IRS believe it is appropriate that such a surviving spouse be permitted to take into account the DSUE amount available from any deceased spouse as of the date such surviving spouse becomes a U.S. citizen, provided the deceased spouse's executor has made the portability election. Accordingly, the final regulations include such a rule in §§ 20.2010-3 and 25.2505-2.

Multiple commenters have requested guidance on the application of Rev. Proc. 2001-38, 2001-24 IRB 1335, when an estate makes a portability election under section 2010(c)(5)(A) as well as an election under section 2056(b)(7) to treat qualified terminable interest property (QTIP) as passing to the surviving spouse for purposes of the marital deduction.

Rev. Proc. 2001-38 provides a procedure by which the IRS will disregard and treat as a nullity for Federal estate, gift, and generation-skipping transfer tax purposes a QTIP election made under section 2056(b)(7) in cases where the election was not necessary to reduce the estate tax liability to zero. The commenter notes that, with the introduction of portability of a deceased spouse's unused exclusion amount, an executor may purposefully elect both portability and QTIP treatment and the rationale for the rule voiding the election in Rev. Proc. 2001-38 (that the election was of no benefit to the taxpayer) is no longer applicable. The Treasury Department and the IRS intend to provide guidance, by publication in the Internal Revenue Bulletin, to clarify whether a QTIP election made under section 2056(b)(7) may be disregarded and treated as null and void when an executor has elected portability of the DSUE amount under section 2010(c)(5)(A).

A commenter noted that §§ 20.2010-3T and 25.2505-2T include an incorrect basic exclusion amount for the applicable year in the examples. The final regulations correct this mistake.

The NPRM requested comments on, and reserved § 20.2010-2(c)(3) to provide guidance on, the impact of the credits in sections 2012 through 2015 on computing the DSUE amount. One comment was received, and advocated for a rule in computing the DSUE amount that the tentative tax is equal to the net estate tax after the application of all available credits. The commenter stated that a deceased spouse's applicable credit amount should not be applied to the extent one or more of the estate tax credits are available to reduce the decedent's estate tax.

The amount of the allowable credit in sections 2012 through 2015 can be determined only after subtracting from the tax imposed by section 2001 the applicable credit amount determined under section 2010. Accordingly, to the extent the applicable credit amount is applied to reduce the tax imposed by section 2001 to zero, the credits in sections 2012 through 2015 are not available. The rule in section 2010(c)(4) for computing the DSUE amount does not take into account any unused credits arising under sections 2012 through 2015. Based on these considerations, the Treasury Department and the IRS conclude that no adjustment to the computation of the DSUE amount to account for any unused credits is warranted. Accordingly, § 20.2010-2(c)(3) of the final regulations clarifies that eligibility for credits against the tax imposed by section 2001 does not factor into the computation of the DSUE amount.

It has been determined that these final regulations are not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory flexibility assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these final regulations. It is hereby certified that the collection of information contained in this regulation will not have a significant economic impact on a substantial number of small entities. This certification is based on the fact that these regulations primarily affect estates of a decedent which generally are not small entities under the Act. Thus, we do not expect a substantial number of small entities to be affected. Therefore, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of the Code, the 2012 temporary regulations, as well as the cross-referencing notice of proposed rulemaking preceding these final regulations, were submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small entities, and no comments were received.

For copies of recently issued revenue procedures, revenue rulings, notices, and other guidance published in the Internal Revenue Bulletin or Cumulative Bulletin, please visit the IRS Web site at http://www.irs.gov.

The principal author of these final regulations is Karlene Lesho, Office of the Associate Chief Counsel (Passthroughs and Special Industries). Other personnel from the IRS and the Treasury Department participated in their development.

Accordingly, 26 CFR parts 20, 25, and 602 are amended as follows:

The Patient Protection and Affordable Care Act, Public Law 111-148, was enacted on March 23, 2010; the Health Care and Education Reconciliation Act, Public Law 111-152, was enacted on March 30, 2010. These statutes are collectively known as the Affordable Care Act. The Affordable Care Act reorganizes, amends, and adds to the provisions of part A of title XXVII of the Public Health Service Act (PHS Act) relating to group health plans and health insurance issuers in the group and individual markets. The term “group health plan” includes both insured and self-insured group health plans.1 The Affordable Care Act adds section 715(a)(1) to the Employee Retirement Income Security Act (ERISA) and section 9815(a)(1) to the Internal Revenue Code (the Code) to incorporate the provisions of part A of title XXVII of the PHS Act into ERISA and the Code, and make them applicable to group health plans, and health insurance issuers providing health insurance coverage in connection with group health plans. The PHS Act sections incorporated by this reference are sections 2701 through 2728.

Section 2715 of the PHS Act, as added by the Affordable Care Act, directs the Departments of Labor, Health and Human Services (HHS), and the Treasury (the Departments) 2 to develop standards for use by a group health plan and a health insurance issuer offering group or individual health insurance coverage in compiling and providing a summary of benefits and coverage (SBC) that “accurately describes the benefits and coverage under the applicable plan or coverage.” PHS Act section 2715 also calls for the “development of standards for the definitions of terms used in health insurance coverage.”

In accordance with the statute, the Departments, in developing such standards, consulted with the National Association of Insurance Commissioners (referred to in this document as the “NAIC”),3 and the NAIC provided its final recommendations to the Departments regarding the SBC on July 29, 2011. On August 22, 2011, the Departments published proposed regulations (2011 proposed regulations) and an accompanying document soliciting comments on the template, instructions, and related materials for implementing the disclosure provisions under PHS Act section 2715.4 After consideration of all the comments received on the 2011 proposed regulations and accompanying documents, the Departments published joint final regulations to implement the disclosure requirements under PHS Act section 2715 on February 14, 2012 (2012 final regulations) and an accompanying document with the template, instructions, and related materials.5

After the 2012 final regulations were published, the Departments released Frequently Asked Questions (FAQs) regarding implementation of the SBC provisions as part of six issuances. The Departments released FAQs about Affordable Care Act Implementation Parts VII, VIII, IX, X, XIV, and XIX to answer outstanding questions, including questions related to the SBC.6 These FAQs addressed questions related to compliance with the requirements of the 2012 final regulations, implemented additional safe harbors,7 and released updated SBC materials.

On December 30, 2014, the Departments issued proposed regulations (December 2014 proposed regulations), as well as a new proposed SBC template, instructions, an updated uniform glossary, and other materials to incorporate some of the feedback the Departments have received and to make some improvements to the template.8 The draft updated template, instructions, and supplementary materials are available at http://cciio.cms.gov and http://www.dol.gov/ebsa/healthreform/regulations/summaryofbenefits.html.

On March 30, 2015, the Departments released an FAQ stating that the Departments intend to finalize changes to the regulations in the near future but intend to utilize consumer testing and offer an opportunity for the public, including the NAIC, to provide further input before finalizing revisions to the SBC template and associated documents.9 The Departments anticipate the new template and associated documents will be finalized by January 2016 and will apply to coverage that would renew or begin on the first day of the first plan year (or, in the individual market, policy year) that begins on or after January 1, 2017 (including open season periods that occur in the Fall of 2016 for coverage beginning on or after January 1, 2017).

After consideration of the comments and feedback received from stakeholders in response to the December 2014 proposed regulations, the Departments are publishing these final regulations. In response to the 2014 proposed regulations, the Departments received comments on the regulations as well as the template and associated documents. The Departments received many comments on the proposed changes to the template and associated documents but received very few comments relating to the regulations. As stated in the FAQ issued on March 30, 2015, the Departments anticipate the new template and associated documents will be finalized by January 2016, and, therefore, only the comments on the regulations will be addressed in this final rule. Comments relating to the template and associated documents will be addressed when those documents are finalized.

Under paragraph (a)(1)(i) of the 2012 final regulations, a health insurance issuer offering group health insurance coverage must provide an SBC to a group health plan (or its sponsor) upon an application by the plan for health coverage. The issuer must provide the SBC as soon as practicable following receipt of the application, but in no event later than seven business days following receipt of the application. The Departments proposed to add language to clarify that, under the 2012 final regulations, a health insurance issuer offering group health insurance coverage (or plan, if applicable, under paragraph (a)(1)(ii), as discussed below) is not required to automatically provide the SBC again if the issuer already provided the SBC before application to any entity or individual, provided there is no change in the information required to be in the SBC.

The comments the Departments received on this clarification generally supported the proposed language and, accordingly, these final regulations finalize the language of the proposed regulations without change. Therefore, these final regulations include language clarifying that, if the issuer provides the SBC upon request before application for coverage, the requirement to provide an SBC upon application is deemed satisfied, and the issuer is not required to automatically provide another SBC upon application to the same entity or individual, provided there is no change to the information required to be in the SBC. However, if there has been a change in the information required to be included in the SBC, a new SBC that includes the changed information must be provided upon application (that is, as soon as practicable following receipt of the application, but in no event later than seven business days following receipt of the application).

Under paragraph (a)(i)(B) of the 2012 final regulations, if there is any change in the information required to be in the SBC that was provided upon application and before the first day of coverage, the issuer must update and provide a current SBC to the plan (or its sponsor) no later than the first day of coverage. If the information is unchanged, the issuer does not need to provide the SBC again in connection with coverage for that plan year, except upon request. The December 2014 proposed regulations stated that if the plan sponsor is negotiating coverage terms after an application has been filed and the information required to be in the SBC changes, an updated SBC is not required to be provided to the plan or its sponsor (unless an updated SBC is requested) until the first day of coverage. The updated SBC should reflect the final coverage terms under the policy, certificate, or contract of insurance that was purchased.

Some commenters supported the clarification and stated that if there is a change in the information required, a new SBC that includes the changed information must be provided upon application. Other commenters stated that enrollees in both the group and individual markets need to know of pending plan changes during open and special enrollment periods so that they can make informed decisions about their plan options.

These final regulations finalize the language of the proposed regulations without change. Therefore, if the plan sponsor is negotiating coverage terms after an application has been filed and the information required to be in the SBC changes, an updated SBC is not required to be provided to the plan or its sponsor (unless an updated SBC is requested) until the first day of coverage. The updated SBC is required to reflect the final coverage terms under the policy, certificate, or contract of insurance that was purchased.

Under paragraph (a)(1)(ii) of 2012 final regulations, a group health plan (including the plan administrator), and a health insurance issuer offering group health insurance coverage, must provide an SBC to a participant or beneficiary 10 with respect to each benefit package offered by the plan or issuer for which the participant or beneficiary is eligible.11 The December 2014 proposed regulations clarified that if the plan or issuer provides the SBC prior to application for coverage, the plan or issuer is not required to automatically provide another SBC upon application, if there is no change to the information required to be in the SBC. If there is any change to the information required to be in the SBC by the time the application is filed, the plan or issuer must update and provide a current SBC as soon as practicable following receipt of the application, but in no event later than seven business days following receipt of the application.

The comments the Departments received on this proposal generally supported adopting the language of the proposed regulations, which incorporates this clarification of the 2012 final regulations. Therefore, these final regulations provide that if an SBC was provided upon request before application, the requirement to provide the SBC upon application is deemed satisfied, provided there is no change to the information required to be in the SBC. However, if there has been a change in the information required to be in the SBC, a new SBC that includes the updated information must be provided as soon as practicable following receipt of the application, but in no event later than seven business days following receipt of the application.

Under the 2012 final regulations, if there is any change to the information required to be in the SBC that was provided upon application and before the first day of coverage, the plan or issuer must update and provide a current SBC to a participant or beneficiary no later than the first day of coverage. The December 2014 proposed regulations addressed how to satisfy the requirement to provide an SBC when the terms of coverage are not finalized. Those proposed regulations proposed that if the plan sponsor is negotiating coverage terms after an application has been filed and the information required to be in the SBC changes, the plan or issuer is not required to provide an updated SBC (unless an updated SBC is requested) until the first day of coverage. The updated SBC would be required to reflect the final coverage terms under the policy, certificate, or contract of insurance that was purchased. The Departments did not receive comments relating to this provision, and, therefore, these final regulations finalize the language of the proposed regulations without change.

Under the 2012 final regulations, the plan or issuer must also provide the SBC to individuals enrolling through a special enrollment period, also called special enrollees.12 Special enrollees must be provided with an SBC no later than when a summary plan description is required to be provided under the timeframe set forth in ERISA section 104(b)(1)(A) and its implementing regulations, which is 90 days from enrollment.

The December 2014 proposed regulations followed the approach of the 2012 final rules with respect to this requirement and did not include a proposed change. The proposed regulations provided that, to the extent individuals who are eligible for special enrollment would like to receive SBCs earlier than this timeframe, they may request an SBC with respect to any particular plan, policy, or benefit package and the SBC is required to be provided as soon as practicable, but in no event later than seven business days following receipt of the request. The Departments received several comments relating to the timeframe. While some commenters supported the existing requirement, other commenters stated that the Departments should require plans and issuers to provide the SBC to special enrollees upon enrollment or by the first day of coverage. Some commenters stated that rules should require plans and issuers to treat special enrollees the same as applicants for coverage, which would require provision of the SBC as soon as practicable following receipt of an application, but in no event later than seven business days following receipt of the application.

The Departments recognize the importance of special enrollees having information about a plan, policy, or benefit package for which they are eligible; however, special enrollees have the opportunity to obtain this information by requesting the SBC. Accordingly, these regulations retain the provision of the proposed regulations regarding special enrollees without change. To the extent that individuals who are eligible for special enrollment and are contemplating their coverage options would like to receive SBCs earlier, they may always request an SBC with respect to any particular plan, policy, or benefit package, and the SBC is required to be provided as soon as practicable, but in no event later than seven business days following receipt of the request. Therefore, these final regulations continue to provide that the plan or issuer must provide the SBC to individuals enrolling through a special enrollment period, also called special enrollees, no later than when a summary plan description is required to be provided under the timeframe set forth in ERISA section 104(b)(1)(A) and its implementing regulations, which is 90 days from enrollment.

Paragraph (a)(1)(iii) of the 2012 final regulations sets forth three special rules to streamline provision of the SBC and avoid unnecessary duplication with respect to group health coverage. In addition to retaining these three existing special rules, the Departments proposed adding two additional provisions, and codifying an enforcement safe harbor set forth in a previous FAQ,13 to ensure participants and beneficiaries receive information while preventing unnecessary duplication. The first proposed provision sought to address circumstances where an entity required to provide an SBC with respect to an individual has entered into a binding contract with another party to provide the SBC to the individual. In such a case, the proposed regulations stated that the entity would be considered to satisfy the requirement to provide the SBC with respect to the individual if specified conditions are met:

(1) The entity monitors performance under the contract; 14

(2) If the entity has knowledge that the SBC is not being provided in a manner that satisfies the requirements of this section and the entity has all information necessary to correct the noncompliance, the entity corrects the noncompliance as soon as practicable; and

(3) If the entity has knowledge the SBC is not being provided in a manner that satisfies the requirements of this section and the entity does not have all information necessary to correct the noncompliance, the entity communicates with participants and beneficiaries who are affected by the noncompliance regarding the noncompliance, and begins taking significant steps as soon as practicable to avoid future violations.

In response to this proposal, some commenters expressed concern that the proposed approach would permit circumstances where a group health plan that contracts with a third party administrator is deemed compliant with the requirements, although certain participants and beneficiaries under the plan have not received an SBC. On the other hand, the Departments received comments recommending the final regulations eliminate the requirement to monitor the performance of contractors, arguing that it is unnecessary and unduly burdensome.

In light of all the comments received, the Departments finalize the proposed approach without change. The approach set forth by the Departments works to achieve the goals of preventing unnecessary duplication for plans and issuers, while incorporating safeguards to ensure that participants and beneficiaries receive the requisite information. The Departments believe that the requirement to monitor the performance under the contract is necessary to ensure that participants and beneficiaries receive the information to which they are entitled. The Departments may provide additional guidance if the Departments become aware of situations where participants and beneficiaries are not being provided SBCs in accordance with these final regulations.

The second provision proposed by the Departments addressed unnecessary duplication with respect to a group health plan that uses two or more insurance products provided by separate issuers to insure benefits under the plan. The Departments recognize that a plan sponsor may purchase an insurance product for certain coverage from a particular issuer and purchase a separate insurance product or self-insure with respect to other coverage (such as outpatient prescription drug coverage). In these circumstances, the first issuer may or may not know of the existence of other coverage, or whether the plan sponsor has arranged the two benefit packages as a single plan or two separate plans.

To address these arrangements, the December 2014 proposed regulations proposed that, with respect to a group health plan that uses two or more insurance products provided by separate issuers, the group health plan administrator is responsible for providing complete SBCs with respect to the plan. The group health plan administrator may contract with one of its issuers (or other service providers) to perform that function. Absent a contract to perform the function, an issuer has no obligation to provide coverage information for benefits that it does not insure. The comments the Departments received on this proposed provision generally supported the approach, and therefore these regulations also finalize this rule without change.

To address concerns regarding unnecessary duplication in situations where plans may have benefits provided by more than one issuer, the Departments set forth an enforcement safe harbor in an FAQ on May 11, 2012,15 which permitted the provision of multiple partial SBCs if certain conditions were satisfied. The Departments extended this enforcement safe harbor for one year on April 23, 2013,16 and indefinitely on May 2, 2014.17 The Departments requested comment on whether to codify this policy in the final regulations.

Some commenters supported the policy in the enforcement safe harbor and either requested the Departments extend the enforcement safe harbor or codify it in regulations. Other commenters requested that the Departments require plan administrators to synthesize the information into a single SBC in order to meet the SBC content requirements when two or more insurance products are provided by separate issuers with respect to a single group health plan.

These final regulations codify this enforcement safe harbor, which permits a group health plan administrator to synthesize the information into a single SBC or provide multiple partial SBCs that, together, provide all the relevant information to meet the SBC content requirements.

Paragraph (a)(1)(iv) of the HHS 2012 final regulations sets forth standards applicable to individual health insurance coverage, under which the provision of the SBC by an issuer offering individual market coverage largely parallels the group market requirements described above, with only those changes necessary to reflect the differences between the two markets. The rules provide that a health insurance issuer offering individual health insurance coverage must provide an SBC to an individual or dependent upon receiving an application for any health insurance policy as soon as practicable following receipt of the application, but in no event later than seven business days following receipt of the application.18 If there is any change in the information required to be in the SBC that was provided upon application and before the first day of coverage, the issuer must update and provide a current SBC to an individual or dependent no later than the first day of coverage.

The December 2014 proposed regulations proposed to clarify when the issuer must provide the SBC again if the issuer already provided the SBC prior to application. HHS proposed that if the issuer provides the SBC prior to application for coverage, the issuer is not required to automatically provide another SBC upon application, if there is no change to the information required to be in the SBC. If there is any change to the information required to be in the SBC that was provided prior to application for coverage by the time the application is filed, the issuer must update and provide a current SBC to the same individual or dependent as soon as practicable following receipt of the application, but in no event later than seven business days following receipt of the application.

The comments received on this proposal generally supported adopting the language of the proposed regulation. Therefore, these final regulations provide that if an SBC was provided upon request before application, the requirement to provide the SBC upon application is deemed satisfied, provided there is no change to the information required to be in the SBC. However, if there has been a change in the information that is required to be in the SBC, a new SBC that includes the changed information must be provided as soon as practicable following receipt of the application, but in no event later than seven business days following receipt of the application.

HHS also proposed to address situations where an issuer offering individual market insurance coverage, consistent with applicable Federal and State law, automatically reenrolls an individual and any dependents into a different plan or product than the plan in which these individuals were previously enrolled. If the issuer automatically re-enrolls an individual covered under a policy, certificate, or contract of insurance (including every dependent) into a policy, certificate, or contract of insurance under a different plan or product, HHS proposed that the issuer would be required to provide an SBC with respect to the coverage in which the individual (including every dependent) will be enrolled, consistent with the timing requirements that apply when the policy is renewed or reissued. The comments received regarding this proposal supported this proposed approach. Therefore, these final regulations finalize the proposed approach without change.

Student health insurance coverage is a type of individual health insurance coverage provided pursuant to a written agreement between an institution of higher education and a health insurance issuer to students enrolled in that institution of higher education, and their dependents, that meet certain specified conditions.19 The December 2014 proposed regulations proposed to extend an anti-duplication rule similar to that provided with respect to group health coverage to student health insurance coverage. HHS proposed that the requirement to provide an SBC with respect to an individual would be considered satisfied for an entity (such as an institution of higher education) if another party (such as a health insurance issuer) provides a timely and complete SBC to the individual. HHS solicited comments on whether or not a requirement to monitor the provisioning of the SBC in this circumstance should be added.

The comments received generally supported this proposal. Most of the commenters supported requiring the entity that is contracting the provisioning of the SBC to a different entity to monitor the contract to ensure individuals receive an SBC. However, a few commenters stated that such a requirement would be unnecessary and unduly burdensome.

Considering the comments received, these final regulations adopt an anti-duplication provision with respect to providing SBCs for student health insurance coverage, with the addition of a duty to monitor that parallels the duty to monitor that is being finalized with respect to the anti-duplication rule for group health plans. HHS believes that the requirement to monitor the performance under the contract is necessary to ensure that individuals receive the information to which they are entitled. HHS may provide additional guidance if the Departments become aware of situations where individuals are not being provided SBCs in accordance with these final regulations.

PHS Act section 2715(b)(3) generally provides that the SBC must include nine statutory content elements. The 2012 final regulations added three content elements: (1) for plans and issuers that maintain one or more networks of providers, an Internet address (or similar contact information) for obtaining a list of the network providers; (2) for plans and issuers that use a formulary in providing prescription drug coverage, an Internet address (or similar contact information) for obtaining information on prescription drug coverage under the plan or coverage; and (3) an Internet address for obtaining the uniform glossary, as well as a contact phone number to obtain a paper copy of the uniform glossary, and a disclosure that paper copies of the uniform glossary are available.

One of the statutory content elements is a statement of whether the plan or coverage provides minimum essential coverage (MEC) as defined under section 5000A(f) of the Code, and whether the plan's or coverage's share of the total allowed costs of benefits provided under the plan or coverage is not less than 60% of those costs. In April 2013, the Departments issued an updated SBC template (and sample completed SBC) with the addition of statements regarding whether the plan or coverage provides MEC (as defined under section 5000A(f) of the Code) and whether the plan or coverage meets the minimum value (MV) requirements.20 In Affordable Care Act Implementation FAQs Part XIV, issued contemporaneously with the updated SBC template in April 2013, the Departments stated that this language is required to be included in SBCs provided with respect to coverage beginning on or after January 1, 2014.21

The Departments also stated in Affordable Care Act Implementation FAQs Part XIV that if a plan or issuer was unable to modify the SBC template for these disclosures, the Departments would not take any enforcement action against a plan or issuer for using the original template authorized at the time the 2012 final regulations were issued, provided that the SBC was furnished with a cover letter or similar disclosure stating whether the plan or coverage does or does not provide MEC and whether the plan's or coverage's share of the total allowed costs of benefits provided under the plan or coverage does or does not meet the MV standard under the Affordable Care Act.22 As stated in the FAQ issued on March 30, 2015, the Departments anticipate finalizing the new template and associated documents by January 2016. Therefore, until the new template and associated documents are finalized and applicable, plans and issuers may continue to rely on the flexibility provided in Affordable Care Act Implementation FAQs Part XIV 23 and the Departments will not take enforcement action against a plan or issuer that provides an SBC with a cover letter or similar disclosure with the required MEC and MV statements.24

Under section 1303(b)(3)(A) of the Affordable Care Act and implementing regulations at 45 CFR 156.280(f), a Qualified Health Plan (QHP) issuer that elects to offer a QHP that provides coverage of abortion services for which federal funding is prohibited (non-excepted abortion services) must provide a notice to enrollees, as part of the SBC provided at the time of enrollment, of coverage of such services.

The December 2014 proposed regulations proposed to require issuers of QHPs sold through an individual market Exchange to disclose on the SBC these QHPs whether abortion services are covered or excluded, and whether coverage is limited to services for which federal funding is allowed (excepted abortion services). Several commenters supported this proposal. Some commenters recommended that the requirement to disclose coverage or exclusion of abortion services be expanded to all plans and issuers offering coverage in all markets, not only issuers of QHPs in the individual market. Finally, some commenters recommended limiting the required disclosure to only a QHP issuer that offers a QHP providing coverage of non-excepted abortion services.

After consideration of all the comments regarding this proposal, these final regulations adopt the proposed approach without change. These final regulations require that QHP issuers must disclose on the SBC for QHPs sold through an individual market Exchange whether abortion services are covered or excluded, and whether coverage is limited to excepted abortion services. HHS feels that this level of transparency is important to facilitate comparisons across individual market QHPs, and to avoid confusion regarding which abortion services are or are not covered.

The December 2014 proposed regulations were published contemporaneously with proposed updates to the SBC template, instructions, and associated documents. The proposed updates to the SBC template instructions and associated documents included guidance for QHP issuers regarding the wording and placement of the abortion disclosure requirement on the SBC. We received numerous comments regarding the proposed language for the disclosure, as well as the placement of the disclosure on the SBC template. As previously stated, the Departments anticipate finalizing the new template and associated documents, separately from this final rule, by January 2016. HHS will consider and address the comments regarding the wording and placement of the disclosure in finalizing the new template and associated documents. HHS acknowledges that QHP issuers will not have final guidance regarding the specific wording and placement of this disclosure until the template, instructions, and associated documents are finalized. Therefore, until the new template and associated documents are finalized and applicable, individual market QHP issuers may adopt any reasonable wording and placement of the disclosure on the SBC. Individual market QHP issuers may also provide the disclosure in a cover letter or other similar disclosure provided with the SBC. Consistent with the effective dates described in section K of this final rule, this requirement is applicable for individual market QHP issuers for SBCs issued in connection with coverage that begins on or after January 1, 2016.

For Multi-State Plan issuers, the Office of Personnel Management will issue guidance about the wording and placement of the abortion disclosure requirement on the SBC.

The statute provides that the SBC must include “a contact number for the consumer to call with additional questions and an Internet web address where a copy of the actual individual coverage policy or group certificate of coverage can be reviewed and obtained.” The 2012 final regulations state that the SBC must include “contact information for questions and obtaining a copy of the plan document or the insurance policy, certificate, or contract of insurance (such as a telephone number for customer service and an Internet address for obtaining a copy of the plan document or the insurance policy, certificate, or contract of insurance).” These final regulations clarify that all plans and issuers must include on the SBC contact information for questions.

Questions have arisen as to whether PHS Act section 2715(b)(3)(i) (which requires that an SBC include “. . . an Internet web address where a copy of the actual individual coverage policy or group certificate of coverage can be reviewed and obtained”) and associated regulations require that all plans and issuers must post underlying plan documents automatically on an Internet Web site. Some commenters stated that plans and issuers should be required to post actual policy and underlying plan documents as well as direct links to the plan's prescription drug formulary. Other commenters stated that the Departments should permit plan sponsors to decide whether the underlying plan documents are posted online. Others stated that mandating self-insured group health plans to post underlying plan information online is redundant and burdensome.

The statutory language regarding this requirement refers specifically to an “individual coverage policy” and “group certificate of coverage.” This statutory provision does not reference group health plan coverage that provides benefits on a self-insured basis. While the Departments recognize that such information may be useful to consumers, based on the statutory language, the Departments may only require issuers to post the underlying individual coverage policy or group certificate of coverage to an Internet address. Accordingly, these final regulations provide that issuers must also include an Internet web address where a copy of the actual individual coverage policy or group certificate of coverage can be reviewed and obtained. The Departments note that these final regulations require these documents to be easily available to individuals, plan sponsors, and participants and beneficiaries shopping for coverage prior to submitting an application for coverage. For the group market only, because the actual “certificate of coverage” is not available until after the plan sponsor has negotiated the terms of coverage with the issuer, an issuer is permitted to satisfy this requirement with respect to plan sponsors that are shopping for coverage by posting a sample group certificate of coverage for each applicable product. After the actual certificate of coverage is executed, it must be easily available to plan sponsors and participants and beneficiaries via an Internet web address.

The Departments note that nothing in this section prohibits issuers and group health plan sponsors from making additional underlying group health plan or policy documents more readily available to participants and beneficiaries, including by posting them on the internet. HHS encourages issuers to make all relevant policy documents easily accessible to individuals shopping for, and enrolled in, coverage to facilitate comparison of policy options and understanding of benefits available under a particular plan or policy.

The Departments also note that, separate from the SBC requirement, provisions of other applicable laws require disclosure of plan documents and other instruments governing the plan. For example, ERISA section 104 and the Department of Labor's implementing regulations 25 provide that, for plans subject to ERISA, the plan documents and other instruments under which the plan is established or operated must generally be furnished by the plan administrator to plan participants 26 upon request. In addition, the Department of Labor's claims procedure regulations (applicable to ERISA plans), as well as the Departments' claims and appeals regulations under the Affordable Care Act (applicable to all non-grandfathered group health plans and health insurance issuers in the group and individual markets),27 set forth rules regarding claims and appeals, including the right of claimants (or their authorized representatives) upon appeal of an adverse benefit determination (or a final internal adverse benefit determination) to be provided by the plan or issuer, upon request and free of charge, reasonable access to and copies of all documents, records, and other information relevant to the claimant's claim for benefits. Plans and issuers must continue to comply with these provisions and any other applicable laws.

PHS Act section 2715 sets forth standards related to the appearance and language of the SBC. Specifically, the SBC is to be presented in a culturally and linguistically appropriate manner utilizing terminology understandable by the average plan enrollee, in a uniform format that does not exceed four double-sided pages in length, and does not include print smaller than 12-point font. Plans and issuers have informed the Departments that they are concerned about including all of the required information in the SBC while also satisfying the limitation on the length of the document of four double-sided pages. Comments were invited on potential ways to reconcile the statutory page limit with the statutory content, appearance, and format requirements, particularly the need for the summary to present information in an understandable, accurate, and meaningful way that facilitates comparisons of health options, including those that have disparate and comparatively complex features. Specifically, the Departments invited comments on the sorts of plans that have difficulty meeting the statutory limit, and what other sorts of accommodations may be appropriate for those plans.

Some commenters expressed concern regarding the difficulty of complying with the statutory page limit. One commenter stated that it is difficult to provide customers with clear and accurate information while describing the benefits provided under certain complex plan designs. As discussed above, the statute requires that the SBC not exceed four pages, and these final regulations retain the interpretation set forth in the 2012 final regulations that the SBC can be four double-sided pages. The Departments will address specific issues related to completing the four-page template, as well as the issues plans and issuers encounter meeting these requirements with the finalization of the new template and associated documents, separate from this final rule.

To facilitate faster and less burdensome disclosure of the SBC and to be consistent with PHS Act section 2715(d)(2), which permits disclosure in either paper or electronic form, the 2012 final regulations set forth rules to permit greater use of electronic transmittal of the SBC. For SBCs provided electronically by a plan or issuer to participants and beneficiaries, the 2012 final regulations make a distinction between a participant or beneficiary who is already covered under the group health plan and a participant or beneficiary who is eligible for coverage but not enrolled in a group health plan. For participants and beneficiaries who are already covered under the group health plan, the 2012 final regulations permit provision of the SBC electronically, if the requirements of the Department of Labor's regulations at 29 CFR 2520.104b-1 are met. Paragraph (c) of those regulations includes an electronic disclosure safe harbor.28 For participants and beneficiaries who are eligible for but not enrolled in coverage, the 2012 final regulations permit the SBC to be provided electronically, if the format is readily accessible 29 and a paper copy is provided free of charge upon request. Additionally, to reduce paper copies that may be unnecessary, if the electronic form is an Internet posting, the plan or issuer must timely advise the individual in paper form (such as a postcard) or email that the documents are available on the Internet, provide the Internet address, and notify the individual that the documents are available in paper form upon request. The Departments note that the rules for participants and beneficiaries who are eligible for but not enrolled in coverage are substantially similar to the requirements for an issuer providing an electronic SBC to a group health plan (or its sponsor) under paragraph (a)(4)(i) of the regulations. Finally, plans, and participants and beneficiaries (both those covered and those eligible but not enrolled), have the right to receive an SBC in paper form, free of charge, upon request.

In Affordable Care Act Implementation FAQs Part IX, question 1, the Departments adopted an additional safe harbor related to electronic delivery of SBCs.30 In the December 2014 proposed regulations, the Departments proposed to codify this safe harbor through rulemaking. Commenters generally supported permitting electronic delivery of SBCs. Some commenters requested the Departments adopt the safe harbor outlined in the FAQ. Other commenters recommended adopting the safe harbor standard for all individuals receiving the SBC without making any distinction as to whether the individual is already enrolled in the plan.

These final regulations adopt the safe harbor for electronic delivery set forth in the FAQ without expanding the application of the safe harbor to all individuals entitled to receive the SBC. The Departments note that these rules provide a mechanism by which all SBCs may be provided electronically. The Departments believe that the approach set forth in the FAQ achieves an appropriate balance between ensuring participants and beneficiaries receive the necessary information, while allowing plans and issuers to provide such information electronically. Thus, SBCs may be provided electronically to participants and beneficiaries in connection with their online enrollment or online renewal of coverage under the plan. SBCs also may be provided electronically to participants and beneficiaries who request an SBC online. In either case, the individual must have the option to receive a paper copy upon request.

The HHS 2012 final regulations established a provision under paragraph (a)(4)(iii)(C) that deems health insurance issuers in the individual market to be in compliance with the requirement to provide the SBC to an individual requesting summary information about a health insurance product prior to submitting an application for coverage if the issuer provides the content required under paragraph (a)(2) of the regulations to the federal health reform Web portal described in 45 CFR 159.120. Issuers must submit all of the content required under paragraph (a)(2), as specified in guidance by the Secretary, to be deemed compliant with the requirement to provide an SBC to an individual requesting summary information prior to submitting an application for coverage. HHS intends to continue to facilitate the operation of this deemed compliance option for individual market issuers. An issuer must provide all SBCs other than the “shopper” SBC contemplated in the deemed compliance provision as required under the 2012 final regulations (and any future final regulations), including providing the SBC at the time of application and renewal.

The Departments note that, consistent with the 2012 final regulations, an issuer in the individual market must provide the SBC in a manner that can reasonably be expected to provide actual notice regardless of the format. An issuer in the individual market satisfies the form requirements set forth in the 2012 final regulations if it does at least one of the following: (1) Hand-delivers a paper copy of the SBC to the individual or dependent; (2) mails a paper copy of the SBC to the mailing address provided to the issuer by the individual or dependent; (3) provides the SBC by email after obtaining the individual's or dependent's agreement to receive the SBC or other electronic disclosures by email; (4) posts the SBC on the Internet and advises the individual or dependent in paper or electronic form, in a manner compliant with 45 CFR 147.200(a)(4)(iii)(A)(1) through (3), that the SBC is available on the Internet and includes the applicable Internet address; or (5) provides the SBC by any other method that can reasonably be expected to provide actual notice.

The 2012 final regulations also provide that the obligation to provide an SBC cannot be satisfied electronically in the individual market unless: The format is readily accessible; the SBC is displayed in a location that is prominent and readily accessible; the SBC is provided in an electronic form that can be electronically retained and printed; the SBC is consistent with the appearance, content, and language requirements; and the issuer notifies the individual that a paper SBC is available upon request without charge.31

The December 2014 proposed regulations proposed to clarify the form and manner for SBCs provided by a self-insured non-Federal governmental plan. Under the proposal, such SBCs could be provided in paper form. Alternatively, such SBCs could be provided electronically if the plan conforms to either the substance of the provisions applicable to ERISA plans (in paragraph (a)(4)(ii) of the regulations) or to individual health insurance coverage (in paragraph (a)(4)(iii) of the regulations).

The Departments did not receive any comments regarding this proposal. Therefore, the Departments are finalizing the proposal without change, to allow for self-insured non-Federal governmental plans to provide an SBC in either paper form, or electronically if the plan conforms to either the substance of the provisions applicable to ERISA plans (in paragraph (a)(4)(ii) of the regulations) or to individual health insurance coverage (in paragraph (a)(4)(iii) of the regulations).

PHS Act section 2715(b)(2) provides that standards shall ensure that the SBC “is presented in a culturally and linguistically appropriate manner.” The 2012 final regulations provide that a plan or issuer for this purpose is considered to provide the SBC in a culturally and linguistically appropriate manner if the thresholds and standards of 45 CFR 147.136(e), implementing standards for the form and manner of notices related to internal claims appeals and external review, are met as applied to the SBC.32

To help plans and issuers meet the language requirements of paragraph (a)(5) of the 2012 final regulations, as requested by commenters, HHS provided written translations of the SBC template, sample language, and the uniform glossary in Chinese, Navajo, Spanish, and Tagalog (the four languages with populations meeting the thresholds outlined in 45 CFR 147.136(e)).33 HHS may also make these materials available in other languages to facilitate voluntary distribution of SBCs to other individuals with limited English proficiency. The Departments requested comment on this standard, and on other potential standards that could facilitate consistency across the Departments' programs.

Some commenters requested an additional standard that would require the translation of the SBC into any language spoken by 500 individuals or 5 percent of individuals in the plan's service area or an employer's workforce, whichever is less, and to include taglines in at least 15 languages on all SBCs that indicate the availability of translated SBCs and oral language services. Some commenters were concerned that the 10 percent standard for language and translation services is insufficient to present the SBC in a culturally and linguistically appropriate manner and cited different Federal standards for other disclosures. Other commenters supported the existing requirement from the 2012 final regulations or stated that the prevalence of speakers of a language in a particular state is the best criteria for identifying which language services should be provided.

The Departments believe that it is important to provide SBCs in a culturally and linguistically appropriate manner to ensure that individuals get the important information needed to properly evaluate coverage options. The standard established under the 2012 final regulations addresses the need to provide language services to ensure that consumers receive SBCs in an understandable format while balancing that need with the goal of keeping administrative costs down. Additionally, a rule based on a particular number or percentage of a plan's population, rather than a county's population, may increase administrative costs and make it difficult for plans and issuers to provide SBCs that comply with the page limitations. Therefore, these final rules continue to provide that a plan or issuer is considered to provide the SBC in a culturally and linguistically appropriate manner if the thresholds and standards of 45 CFR 147.136(e), implementing standards for the form and manner of notices related to internal claims appeals and external review, are met as applied to the SBC.34 35

In general, PHS Act section 2715(f) provides that a group health plan (including its administrator), and a health insurance issuer offering group or individual health insurance coverage, that willfully fails to provide the information required under this section are subject to a fine. In the December 2014 proposed regulations, the Department of Labor proposed that it will use the same process and procedures for assessment of the civil fine as used for failure to file an annual report under 29 CFR 2560.502c-2 and 29 CFR part 2570, subpart C. In accordance with ERISA section 502(b)(3), 29 U.S.C. 1132(b)(3), the Secretary of Labor is not authorized to assess this fine against a health insurance issuer. Moreover, the IRS proposed to clarify that the IRS will enforce this section using a process and procedure consistent with section 4980D of the Code. The Departments did not receive comments on this proposal to utilize existing processes and procedures under ERISA and the Code and therefore finalize these proposals without change.

In August 2012, the Departments issued FAQs 36 that provided a temporary nonenforcement policy with respect to group health plans providing Medicare Advantage benefits, which are Medicare benefits financed by the Medicare Trust Funds, for which the benefits are set by Congress and regulated by the Centers for Medicare & Medicaid Services. The December 2014 proposed regulations proposed to add language to codify this temporary relief and exempt from the SBC requirements a group health plan benefit package that provides Medicare Advantage benefits. Medicare Advantage benefits are not health insurance coverage, and Medicare Advantage organizations are not required to provide an SBC with respect to such benefits. Additionally, there are separately required disclosures required to be provided by Medicare Advantage organizations to ensure that enrollees in these plans receive the necessary information about their coverage and benefits.

The Departments did not receive comments opposing the proposal to exempt group health plans providing Medicare Advantage benefits from the SBC requirements. Therefore, these final regulations finalize without change the proposal to codify the relief and exempt from the SBC requirements a group health plan benefit package that provides Medicare Advantage benefits.

In May 2012, the Departments issued FAQs addressing insurance products that are no longer being offered for purchase (“closed blocks of business”). The Departments had provided temporary enforcement relief through an FAQ provided that certain conditions were met: (1) The insurance product is no longer being actively marketed; (2) the health insurance issuer stopped actively marketing the product prior to September 23, 2012, when the requirement to provide an SBC was first applicable to health insurance issuers; and (3) the health insurance issuer has never provided an SBC with respect to such product.37 The Departments reiterated that relief in the December 2014 proposed regulations, and we do so again in these final regulations. But, we again note that if an insurance product was actively marketed for business on or after September 23, 2012, and is no longer being actively marketed for business, or if the plan or issuer ever provided an SBC in connection with the product, the plan and issuer must provide the SBC with respect to such coverage, as required by PHS Act section 2715 and these final regulations.

The December 2014 proposed regulations proposed that these rules, if finalized, would apply for disclosures with respect to participants and beneficiaries who enroll or re-enroll in group health coverage through an open enrollment period (including re-enrollees and late enrollees) beginning on the first day of the first open enrollment period that begins on or after September 1, 2015. With respect to disclosures to participants and beneficiaries who enroll in group health coverage other than through an open enrollment period (including individuals who are newly eligible for coverage and special enrollees), the requirements were proposed to apply beginning on the first day of the first plan year that begins on or after September 1, 2015. For disclosures to plans, and to individuals and dependents in the individual market, these requirements were proposed to apply to health insurance issuers beginning on September 1, 2015. Comments received generally supported these applicability dates, except that a number of commenters suggested that the requirements apply with respect to the individual market for coverage beginning on or after January 1, 2016. These final regulations adopt the applicability dates as proposed, except that for disclosures to individuals and dependents in the individual market, the requirements apply to health insurance issuers with respect to SBCs issued for coverage that begins on or after January 1, 2016. Until these final regulations become applicable, plans and issuers must continue to comply with the 2012 final regulations, as applicable.

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects; distributive impacts; and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been designated a “significant regulatory action” under section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget.

A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any one year). As discussed below, the Departments have concluded that these final regulations would not have economic impacts of $100 million or more in any one year or otherwise meet the definition of an “economically significant rule” under Executive Order 12866. Nonetheless, consistent with Executive Orders 12866 and 13563, the Departments have provided an assessment of the potential benefits and the costs associated with these final regulations.

These final regulations are expected to have only small benefits and costs as they primarily provide clarifications of the previous 2012 final regulations and also incorporate into regulations previous guidance issued by the Departments that has taken the form of responses to frequently asked questions or enforcement safe harbors.38 The Departments have not been able to quantify these costs and benefits, but they are qualitatively discussed below.

The clarifications would help lower costs as they establish that duplicate SBCs do not have to be provided upon application if a previous SBC was provided and there have been no changes to the required information. The clarification also prevents unnecessary duplications for plans and issuers, while incorporating safeguards to ensure that participants and beneficiaries (and covered individuals and dependents) receive the required information. These final regulations also provide flexibility in providing SBCs for the situation where a plan has multiple issuers and also adopt the safe harbor for electronic delivery previously set forth in an FAQ, thereby reducing the cost of delivery.

These final regulations also require an issuer to provide an internet web address where a copy of the actual individual coverage policy or group certificate of coverage can be reviewed and obtained. The costs associated with this requirement are discussed in the Paperwork Reduction Act section below.

These final rules are not subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), because these final regulations make no changes to the existing collection of information as defined in 44 U.S.C. 3502(3).

Please note that the proposed regulations included an ICR related to the revision of the SBC template that has been omitted in these final regulations as the Departments intend to utilize consumer testing and offer an opportunity for public comment before finalizing revisions to the SBC template. An analysis under the PRA will be conducted when the SBC template is finalized.

These final regulations require health insurance issuers offering group and individual health insurance coverage must include in the SBC an Internet web address where a copy of the actual individual coverage policy or group certificate of coverage can be reviewed and obtained. These documents are required to be easily available to individuals, plan sponsors, and participants and beneficiaries shopping for coverage prior to submitting an application for coverage. With respect to group health coverage, because the actual “certificate of coverage” is not available until after the plan sponsor has negotiated the terms of coverage with the issuer, an issuer is permitted to satisfy this requirement with respect to plan sponsors that are shopping for coverage by posting a sample group certificate of coverage for each applicable product. After the actual certificate of coverage is executed, it must be easily available to plan sponsors and participants and beneficiaries via an Internet web address.

Some commenters stated that requiring the individual coverage policy documents and group certificates of coverage be made available by posting to an Internet web address would be unduly burdensome because of the requirement to make the documents available to individuals and plan sponsors shopping for coverage, but not yet enrolled in coverage. The December 2014 proposed regulations estimated the burden for this requirement to be de minimis because the documents already exist and issuers already have web addresses where the materials can be made available. Additionally, HHS understands that issuers already frequently make these materials available online to individuals, plan sponsors, and participants and beneficiaries after enrollment in coverage. These final regulations clarify that these documents must be made available online to those shopping for coverage prior to enrollment as well. It is not expected that group health insurance issuers will be providing access to group certificates of coverage prior to execution of the final group certificate of coverage. Instead, HHS anticipates and expects that the sample group certificate of coverage that underlies the product being marketed and sold, and that have been filed with and approved by a state Department of Insurance, are what will be provided prior to the execution of the actual group certificate of coverage. Based on this HHS still believes that the requirement to make these documents available via an Internet web address will result in only a de minimis burden on issuers.

These final regulations make no other revisions to the existing collection of information. The December 2014 proposed regulations included an ICR related to the revision of the SBC template that has been omitted in these final regulations as the Departments intend to utilize consumer testing and offer an opportunity for public comment before finalizing revisions to the SBC template. An analysis under the PRA will be conducted when the SBC template is finalized.

The Department notes that persons are not required to respond to, and generally are not subject to any penalty for failing to comply with, an ICR unless the ICR has a valid OMB control number.

The 2015-2017 paperwork burden estimates are summarized as follows:

Type of Review: Revision.

Agency: Department of Health and Human Services.

Title: Summary of Benefits and Coverage Uniform Glossary

CMS Identifier (OMB Control Number): CMS-10407 (0938-1146).

Affected Public: Private sector.

Total Respondents: 126,500.

Total Responses: 41,153,858.

Frequency of Response: On-going.

Estimated Total Annual Burden Hours (three year average): 322,411 hours.

Estimated Total Annual Cost Burden (three year average): $7,207,361.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes certain requirements with respect to Federal rules that are subject to the notice and comment requirements of section 553(b) of the Administrative Procedure Act (5 U.S.C. 551 et seq.) and which are likely to have a significant economic impact on a substantial number of small entities. Unless the head of an agency certifies that a proposed rule is not likely to have a significant economic impact on a substantial number of small entities, section 603 of the RFA requires that the agency present an initial regulatory flexibility analysis (IRFA) describing the rule's impact on small entities and explaining how the agency made its decisions with respect to the application of the rule to small entities.

The RFA generally defines a “small entity” as (1) a proprietary firm meeting the size standards of the Small Business Administration (SBA) (13 CFR 121.201) pursuant to the Small Business Act (15 U.S.C. 631 et seq.), (2) a nonprofit organization that is not dominant in its field, or (3) a small government jurisdiction with a population of less than 50,000. (States and individuals are not included in the definition of “small entity.”)

There are several different types of small entities affected by these final regulations. For issuers and third party administrators, the Departments use as their measure of significant economic impact on a substantial number of small entities a change in revenues of more than 3 to 5 percent. For plans, the Departments continue to consider a small plan to be an employee benefit plan with fewer than 100 participants.39 Further, while some large employers may have small plans, in general small employers maintain most small plans. Thus, the Departments believe that assessing the impact of this final rule on small plans is an appropriate substitute for evaluating the effect on small entities. The definition of small entity considered appropriate for this purpose differs, however, from a definition of small business that is based on size standards promulgated by the Small Business Administration (SBA) (13 CFR 121.201) pursuant to the Small Business Act (15 U.S.C. 631 et seq.).

The Departments carefully considered the likely impact of these final rules on small entities in connection with their assessment under Executive Order 12866. The incremental changes of these final regulations impose minimal additional costs, but also serve to reduce the costs of compliance by providing help to plans and service providers by providing clarifications. These final regulations also incorporate into regulations previous guidance from the Departments that has taken the form of responses to frequently asked questions or enforcement safe harbors. Accordingly, pursuant to section 605(b) of the RFA, the Departments hereby certify that these final regulations will not have a significant economic impact on a substantial number of small entities.

Section 202 of the Unfunded Mandates Reform Act (UMRA) of 1995 requires that agencies assess anticipated costs and benefits before issuing any final rule that includes a Federal mandate that could result in expenditure in any one year by State, local or Tribal governments, in the aggregate, or by the private sector, of $100 million in 1995 dollars updated annually for inflation. In 2015, that threshold level is approximately $144 million. These final regulations include no mandates on State, local, or Tribal governments. These final regulations propose requirements regarding standardized consumer disclosures that would affect private sector firms (for example, health insurance issuers offering coverage in the individual and group markets, and third-party administrators providing administrative services to group health plans), but we conclude that these costs would not exceed the $144 million threshold. Thus, the Departments of Labor and HHS conclude that these final regulations would not impose an unfunded mandate on State, local or Tribal governments or the private sector. Regardless, consistent with policy embodied in UMRA, the final requirements described in this notice of final rulemaking has been designed to be the least burdensome alternative for State, local and Tribal governments, and the private sector while achieving the objectives of the Affordable Care Act.

Executive Order 13132 outlines fundamental principles of federalism, and requires the adherence to specific criteria by Federal agencies in the process of their formulation and implementation of policies that have “substantial direct effects” on the States, the relationship between the national government and States, or on the distribution of power and responsibilities among the various levels of government. Federal agencies promulgating regulations that have federalism implications must consult with State and local officials and describe the extent of their consultation and the nature of the concerns of State and local officials in the preamble to the regulation.

In the Departments of Labor's and HHS' view, these final regulations have federalism implications because they would have direct effects on the States, the relationship between the national government and the States, or on the distribution of power and responsibilities among various levels of government relating to the disclosure of health insurance coverage information to consumers. Under these final regulations, all group health plans and health insurance issuers offering group or individual health insurance coverage, including self-funded non-federal governmental plans as defined in section 2791 of the PHS Act, would be required to follow uniform standards for compiling and providing a summary of benefits and coverage to consumers. Such Federal standards developed under PHS Act section 2715(a) would preempt any related State standards that require a summary of benefits and coverage that provides less information to consumers than that required to be provided under PHS Act section 2715(a).

In general, through section 514, ERISA supersedes State laws to the extent that they relate to any covered employee benefit plan, and preserves State laws that regulate insurance, banking, or securities. While ERISA prohibits States from regulating a plan as an insurance or investment company or bank, the preemption provisions of section 731 of ERISA and section 2724 of the PHS Act (implemented in 29 CFR 2590.731(a) and 45 CFR 146.143(a)) apply so that the requirements in title XXVII of the PHS Act (including those added by the Affordable Care Act) are not to be construed to supersede any provision of State law which establishes, implements, or continues in effect any standard or requirement solely relating to health insurance issuers in connection with individual or group health insurance coverage except to the extent that such standard or requirement prevents the application of a requirement of a Federal standard. The conference report accompanying HIPAA indicates that this is intended to be the “narrowest” preemption of State laws (See House Conf. Rep. No. 104-736, at 205, reprinted in 1996 U.S. Code Cong. & Admin. News 2018).

States may continue to apply State law requirements except to the extent that such requirements prevent the application of the Affordable Care Act requirements that are the subject of this rulemaking. Accordingly, States have significant latitude to impose requirements on health insurance issuers that are more restrictive than the Federal law. However, under these final rules, a State would not be allowed to impose a requirement that modifies the summary of benefits and coverage required to be provided under PHS Act section 2715(a), because it would prevent the application of these final rules' uniform disclosure requirements.

In compliance with the requirement of Executive Order 13132 that agencies examine closely any policies that may have federalism implications or limit the policy making discretion of the States, the Departments of Labor and HHS have engaged in efforts to consult with and work cooperatively with affected States, including consulting with, and attending conferences of, the National Association of Insurance Commissioners and consulting with State insurance officials on an individual basis. It is expected that the Departments of Labor and HHS will act in a similar fashion in enforcing the Affordable Care Act, including the provisions of section 2715 of the PHS Act. Throughout the process of developing these final regulations, to the extent feasible within the applicable preemption provisions, the Departments of Labor and HHS have attempted to balance the States' interests in regulating health insurance issuers, and Congress' intent to provide uniform minimum protections to consumers in every State. By doing so, it is the Departments of Labor's and HHS' view that they have complied with the requirements of Executive Order 13132.

Pursuant to the requirements set forth in section 8(a) of Executive Order 13132, and by the signatures affixed to this final rule, the Departments certify that the Employee Benefits Security Administration and the Centers for Medicare & Medicaid Services have complied with the requirements of Executive Order 13132 for the attached final rules in a meaningful and timely manner.

For purposes of the Department of the Treasury it has been determined that this notice of final rulemaking is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these final regulations. For a discussion of the impact of this final rule on small entities, please see section V.C. of this preamble. Pursuant to section 7805(f) of the Code, this notice of final rulemaking has been submitted to the Small Business Administration for comment on its impact on small business.

These final regulations are subject to the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq.), which specifies that before a rule can take effect, the Federal agency promulgating the rule shall submit to each House of the Congress and to the Comptroller General a report containing a copy of the rule along with other specified information, and has been transmitted to Congress and the Comptroller General for review.

The Department of the Treasury regulations are adopted pursuant to the authority contained in sections 7805 and 9833 of the Code.

The Department of Labor regulations are adopted pursuant to the authority contained in 29 U.S.C. 1027, 1059, 1135, 1161-1168, 1169, 1181-1183, 1181 note, 1185, 1185a, 1185b, 1185d, 1191, 1191a, 1191b, and 1191c; sec. 101(g), Public Law 104-191, 110 Stat. 1936; sec. 401(b), Public Law 105-200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 512(d), Public Law 110-343, 122 Stat. 3881; sec. 1001, 1201, and 1562(e), Public Law 111-148, 124 Stat. 119, as amended by Public Law 111-152, 124 Stat. 1029; Secretary of Labor's Order 1-2011, 77 FR 1088 (January 9, 2012).

The Department of Health and Human Services regulations are adopted pursuant to the authority contained in sections 2701 through 2763, 2791, and 2792 of the PHS Act (42 U.S.C. 300gg through 300gg-63, 300gg-91, and 300gg-92), as amended.

Internal Revenue Service

Accordingly, 29 CFR part 2590 is amended as follows:

For the reasons stated in the preamble, the Department of Health and Human Services amends 45 CFR part 147 as follows:

Boh Bros. Construction Company, on behalf of the Louisiana Department of Transportation and Development, requested a temporary deviation from the operating schedule on the US 90 highway bridge (East Pearl River Bridge), a swing span bridge across the Pearl River, mile 8.8 between Slidell, St. Tammany Parish, Louisiana and Pearlington, Hancock County, Mississippi. The bridge has a vertical clearance of 10 feet above mean high water in the closed-to-navigation position and unlimited clearance in the open-to-navigation position.

Navigation at the site of the bridge consists mainly of small tows with barges, some commercial sightseeing boats, and some recreational pleasure craft. Based on prior experience, as well as coordination with waterway users, it has been determined that this closure will not have a significant effect on these vessels. No alternate routes are available.

In accordance with 33 CFR 117.486(b), the draw of the US 90 highway bridge shall open on signal; except that, from 7 p.m. to 7 a.m. the draw shall open on signal if at least four hours notice is given. Vessels that do not require an opening will be allowed to pass at the slowest safe speed. The bridge will be unable to open in the event of an emergency.

The closure is necessary for the replacement of structural and electrical components of the draw span and two submarine cables. These operations will continue until completed and will not allow the normal operation of the bridge. Normal operations of the bridge will commence upon completion of the work. Notices will be published in the Eighth Coast Guard District Local Notice to Mariners and will be broadcast via the Coast Guard Broadcast Notice to Mariners System.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.

The CSX Railway Company has requested a temporary deviation from the operating schedule of the swing span railroad bridge across Bayou Sara, mile 0.1, near Saraland, Mobile County, Alabama. The bridge provides three feet of vertical clearance in the closed-to-navigation position. Due to the core boring operations within the bridge footprint and safety concerns, vessels will not be allowed to pass through the bridge while the work is ongoing. The bridge will be unable to open in the event of an emergency.

In accordance with 33 CFR 117.105, the bridge currently opens on signal for the passage of vessels except that between the hours of 6 p.m. and 10 a.m. daily, it opens on signal if at least eight hours notice is given. This deviation allows the swing span of the bridge to remain in the closed-to-navigation position from 6 a.m. on June 29, 2015 until 6 a.m. on June 30, 2015.

Navigation on the waterway consists of fishing vessels and recreational craft. An alternate route is not available. Based on prior experience of minimal traffic and the current regulation requiring eight hours notice between 6 p.m. and 10 a.m. each day, it has been determined that this closure will not have a significant effect on these vessels.

The closure is necessary for core boring operations within the footprint of the bridge. These operations will continue until completed and will not allow the normal operation of the bridge. Normal operations will commence upon completion of the work. Notices will be published in the Eighth Coast Guard District Local Notice to Mariners and will be broadcast via the Coast Guard Broadcast Notice to Mariners System.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.

Table of Acronyms DHS Department of Homeland Security FR Federal Register NPRM Notice of Proposed Rulemaking A. Regulatory History and Information

The Coast Guard is issuing this final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.”

Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because a safety zone is in the public interest in that the final details for this event were not received by the Coast Guard until April 20, 2015, and the first event is scheduled for May 23, 2015. Further, allowing this event to go forward without a safety zone in place would expose mariners and the public to unnecessary dangers associated with fireworks displays.

For similar reasons, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register.

The legal basis for the rule is the Coast Guard's authority to establish safety zones: 33 U.S.C. 1231; 33 CFR 1.05-1, 160.5; Department of Homeland Security Delegation No. 0170.1.

On May 23 and July 4, 2015, with rain dates of May 24 and July 5, 2015, fireworks will be launched from a barge with a fall out zone that covers part of Indian River Bay near Millsboro, Delaware. The purpose of the rule is to promote public and maritime safety during a fireworks display, and to protect mariners transiting the area from the potential hazards associated with a fireworks display, such as accidental discharge of fireworks, dangerous projectiles, and falling hot embers or other debris.

To mitigate the risks associated with a fireworks display, the Captain of the Port, Delaware Bay will establish a temporary safety zone on the Indian River Bay, near Millsboro, Delaware. The safety zone will encompass all waters of Indian River Bay, within a 200 foot radius of the fireworks barge in approximate position 38-36.58 N., 075-09.00 W., adjacent to Millsboro, Delaware. The safety zone will be enforced from 8:45 p.m. to 10:15 p.m. on May 23 and July 4, 2015, unless cancelled earlier by the Captain of the Port. Should inclement weather require cancellation of the fireworks display on the above scheduled dates, the safety zone will be enforced from 8:45 p.m. to 10:15 p.m. on May 24 and July 5, 2015, respectively.

Entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port, Delaware Bay, or her designated representative. The Captain of the Port, Delaware Bay, or her representative may be contacted via VHF channel 16 or at 215-271-4807.

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

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders. Although this regulation will restrict access to the regulated area, the effect of this rule will not be significant because: (i) The Coast Guard will make extensive notification of the Safety Zone to the maritime public via maritime advisories so mariners can alter their plans accordingly; (ii) entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port, Delaware Bay; (iii) this rule will be enforced for only the duration of the fireworks display, and (iv) the size and duration of the zone are relatively limited in scope.

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule will affect the following entities, some of which may be small entities: The owners or operators of vessels intending to anchor or transit along a portion of Indian River Bay, adjacent to Millsboro, Delaware, on May 23 and July 4, 2015, with rain dates of May 24 and July 5, 2015, from 8:45 p.m. to 10:15 p.m., unless cancelled earlier by the Captain of the Port.

This safety zone will not have a significant economic impact on a substantial number of small entities for the following reason: The safety zone is limited in size and duration. Sector Delaware Bay will issue maritime advisories widely available to users of the Indian River Bay.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT, above.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on 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. We have analyzed this rule under that Order and determined that this rule does not have implications for federalism.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places or vessels.

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

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

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

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

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

This action is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves implementation of regulations within 33 CFR part 165, applicable to safety zones on the navigable waterways. This zone will temporarily restrict vessel traffic from anchoring or transiting a portion of Indian River Bay near Millsboro, Delaware in order to protect the safety of life and property on the waters while a firework display is conducted. This rule is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under ADDRESSES. We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

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

On June 15, 2010 (75 FR 33704), VA amended 38 CFR part 36. The purpose of the amendments was to eliminate redundant regulations found at 38 CFR 36.4300 through 36.4393 (the “36.4300 series”). VA redesignated the regulations that had previously been published at 38 CFR 36.4800 through § 36.4893 (the “36.4800 series”) to replace the 36.4300 series in its entirety. On October 22, 2010 (75 FR 65238), VA amended the redesignated sections of 36.4301 through 36.4323(3) to replace the incorrect internal cross references to the 36.4800 series contained within those sections, with the updated, accurate internal cross references to the 36.4300 series. That final rule technical citation failed to make the remaining necessary corrections.

With this action, VA is amending the remaining 36.4300 series regulations to update the internal cross-references to the 36.4800 series regulations. This action is necessary because the 36.4800 series has been removed from 38 CFR part 36, making the current cross reference citations to the series obsolete. VA is amending each citation by simply replacing the numbers “48” with “43” (e.g., changing the reference to § 36.4860 to read § 36.4360).

For the convenience of the reader, we have included a redesignation table that shows each affected section, the cross reference that is removed, and the new cross reference that is added in its place.

Because this final rule is only a technical correction to the cross-references in certain regulations, prior notice-and-comment is unnecessary. Accordingly, this final rule is exempt from this requirement under 5 U.S.C. 553(b)(B). For the same reason, there is good cause under 5 U.S.C. 553(d)(3) to publish this rule with an immediate effective date.

For the reasons set forth in the preamble, 38 CFR 36.4324 through 36.4393 are corrected by making the following correction amendments:

This is a summary of the Commission's Second Report and Order and Order on Reconsideration in ET Docket No. 04-35, FCC 15-39, adopted March 27, 2015 and released March 30, 2015. The full text of this document, FCC 15-39, is available for public inspection online at http://www.fcc.gov/document/fcc-adopts-part-4-improvements-item, or during regular business hours in the FCC Reference Information Center, Portals II, 445 12th Street SW., Room CY-A257, Washington, DC 20554.

The Report and Order in this docket, 69 FR 70316, established the Commission's part 4 outage reporting rules, which require certain providers of communications to electronically file reports of network outages that exceed specified thresholds of magnitude and duration. In the Further Notice of Proposed Rulemaking (FNPRM) that accompanied that Report and Order, 69 FR 68859, the Commission sought comment on a proposal to extend outage-reporting requirements for special offices and facilities to cover general aviation airports, a category that includes airports smaller than those already covered by section 4.5(b) of the rules. No comments were received on this proposal, and there remains a lack of record support for its adoption. Moreover, adoption of the proposal would run counter to the reasoning underlying some of the proposals in the (NPRM) that accompanies this document. In particular, we sought comment on excluding from the definition of “special offices and facilities” all airports other than the nation's most heavily trafficked airports, because reports of airport-related outages at such airports have not been significant enough to pose a substantial threat to public safety. Alternatively, we consider, among other potential changes to section 4.5(b), the elimination of airport-specific reporting requirements as duplicative of our proposed TSP-based reporting requirements. Accordingly, we decline to adopt the proposal to extend section 4.5(b) to cover general aviation airports.

The Commission received nine Petitions for Reconsideration of various aspects of the Report and Order, seven of which remain pending. The seven Petitioners are Cingular Wireless LLC (Cingular), CTIA-The Wireless Association (CTIA), Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO); Qwest Corporation and Qwest Communications Corporation (Qwest), Sprint Corporation (Sprint), US Telecom, and, filing jointly, AT&T, BellSouth, MCI, SBC and Verizon (collectively, Joint Petitioners). These seven petitions are disposed of in this Order on Reconsideration. In a companion document, a Notice of Proposed Rulemaking (NPRM) in PS Docket No. 15-80, the Commission seeks comment on modifications to the Part 4 rules to improve their utility.

Certain proposals considered in the (NPRM) incorporate issues raised in various petitions. As we are considering there the merits Petitioners' requests for relief on these issues, we will incorporate into the record those portions of Petitioners' petitions that present substantive arguments on these issues. We also incorporate into the record those portions of any responsive pleadings filed in connection with the Petitions that present substantive arguments relevant to those issues. Any other aspects of the petitions relating to these issues are dismissed as moot.

We now consider those issues raised in the various Petitions that we have not addressed in the (NRPM). We grant or deny each Petition to the extent indicated below.

Before withdrawing its Petition, BellSouth requested therein that the Commission clarify section 4.9(f) to “expressly state that pure resellers (those that do not own, operate, or maintain switching, routing, or transmission facilities) are exempt from the Commission's reporting requirements to the extent that a network failure occurs on resold facilities that are owned, operated, or maintained by an underlying facilities-based provider.” BellSouth argued that pure resellers should not be subject to part 4 reporting obligations because resellers do not have direct access to the outage information that must be reported, and that the only way that a pure reseller becomes aware of a network outage is “typically” through “customer calls, news reports . . . or from the underlying facilities based provider itself” and that “[n]one of these methods . . . are routine or foolproof.” Sprint also addresses this issue in its Petition, focusing on section 4.3(b) of the rules, arguing that pure resellers of wireless service “would not be able to provide any information on the extent and duration of the outage or the cause of the outage.” Rather, Sprint argues, the Commission can obtain this information from reports filed by the underlying facilities-based provider because “customers of these [pure reseller] providers are included in the reports of the affected underlying [facilities-based] wireless carrier.” Sprint argues that the provision “includ[ing] . . . affiliated and non-affiliated entities that maintain or provide communications networks or services used by the provider in offering such communications” could be read as encompassing a wireless service provider that does not own any wireless facilities or maintain a wireless network. Qwest also supports the position that pure resellers should be exempt from part 4 outage reporting.

NASUCA argued in its responsive pleading, on the other hand, that separate reporting by a pure reseller and its underlying facilities-based communications provider would ensure “that . . . the Commission . . . will have a deeper understanding of the full impact of the outage.” It maintained that “only the reseller knows how many telephone numbers in the block it acquired from the LEC [local exchange carrier] are operational and thus affected by the outage,” and it therefore “must be obliged to provide that information.”

Although the applicability of outage reporting requirements to “pure resellers” of communications services was not expressly addressed in Report and Order, the rules adopted therein require “[a]ll . . . communications providers” in covered categories to file reports upon “discovering that they have experienced” a qualifying outage “on any facilities that they own, operate, lease or otherwise utilize.” Thus, resellers in the covered categories are within the reach of the part 4 rules insofar as they “lease or otherwise utilize” facilities to provide communications services to their customers.

The underlying purpose of the part 4 outage reporting rules is to improve network reliability and resiliency, particularly as it affects the Nation's 911 system, by providing the Commission with the ability to analyze data regarding significant outages, regardless of the network(s) in which the underlying causal factors lie. This information enables the Commission to analyze how outages in one network affect other networks and to identify adverse trends. “Pure resellers” may lack direct access to the network facilities they use to provide service, but we agree with NASUCA that such providers may be uniquely positioned to provide information on outages affecting their customers. Similarly, outages induced from higher-level issues may stem from resellers' systems or applications. Finally, we observe that the Commission routinely receives reports of outages pertaining to facilities not under the direct control or ownership of the filing party, and such reports provide a valuable perspective on the course and impact of outages affecting multiple providers. We therefore deny Sprint's petition with respect to this issue.

CTIA, Cingular and Sprint request reconsideration of the Commission's decision to treat planned outages related to network maintenance, repair, and upgrades the same as other outages for purposes of its reporting requirements. CTIA and Cingular maintain that planned system outages should not be reportable events, arguing that normal operational and maintenance requirements of providers may require planned service disruptions in order to conduct maintenance, perform upgrades, or complete repair work, and that these disruptions are intended to enhance network reliability. They also argue that mandated reporting of planned outages imposes undue burdens on providers. Sprint does not argue for the elimination of reporting requirements for planned outages, but rather advocates for an alternative filing requirement whereby providers would file a single report 72 hours after a planned outage.

NASUCA opposes any modification to the requirements for reporting planned outages. NASUCA argues that, as far as consumer and national security interests are concerned, a planned outage is still an outage. NASUCA urges the Commission not to weaken Commission authority at a time that it must be exercised more firmly than ever before because of heightened national security concerns.

The arguments raised by Petitioners on this issue were previously considered and addressed by the Commission in the Report and Order. While the Commission did not specifically consider facts and arguments of Sprint's proposed single field report 72 hours after discovery of a planned outage, the Commission did consider facts and arguments generally concerning the filing requirements. In declining to exempt planned outages from the outage reporting requirements it was adopting, the Commission acknowledged the reliance of both public safety personnel and the general public on wireless services for both emergency and routine communications. Petitioners have not presented facts or arguments in their Petitions that would lead us to reconsider the conclusion that such reliance creates a need for reporting of planned wireless network outages. Indeed, reliance on wireless services for emergency-related communications has only increased since adoption of the Report and Order, making it ever more imperative that wireless network outages are fully reported on a timely basis irrespective of their cause. In addition, the reporting burden associated with such reporting was fully considered in the original rulemaking proceeding. We decline to revisit that issue here. While we acknowledge the difficulties involved in maintaining complex communications networks, we continue to find that exempting planned outages from the scope of reporting would detract from the purposes of part 4. For the foregoing reasons, we deny the Petitions of CTIA, Cingular and Sprint with respect to reporting of planned network outages.

OPASTCO requests that the Commission reconsider its Part 4 outage reporting obligations insofar as they apply to rural telephone companies. In support of its Petition, OPASTCO alleges both procedural and substantive deficiencies in the Report and Order. First, OPASTCO contends that the Commission did not provide sufficient opportunity for comment on the information collections associated with its Part 4 rules before the Office of Management and Budget (OMB) approved them. Second, it alleges that the established 120-minute deadline for filing an initial notification is unduly burdensome as applied to rural providers. Finally, OPASTCO asserts that the Commission's Paperwork Reduction Act (PRA) analysis fails to account fully for the burdens that rural providers will incur in assessing whether they serve “special facilities” as specified in section 4.5(b) or in reporting on their implementation of NRIC best practices. Dobson and TDS Telecom each filed responses in support of OPASTCO's petition.

Neither OPASTCO nor its supporting commenters offer persuasive arguments for reconsideration of the Commission's outage reporting requirements as applied to rural telephone providers. First, any alleged procedural deficiency in OMB's approval of the part 4 information collection has been made moot by the passage of time, as the public has been given subsequent opportunities to comment on the collection as part of OMB's periodic review and re-approval process. We find that this established process is the appropriate forum for addressing perceived deficiencies in the PRA analysis associated with the Commission's part 4 requirements.

We also find that OPASTCO misstates the burden that accrues to rural providers in complying with the 120-minute deadline for filing initial notifications. This obligation extends to outages that last for at least 30 minutes and potentially affect at least 900,000 user minutes, but the 120-minute timeframe for filing an initial notification of the outage commences only upon discovery that a reportable outage exists. Although providers have an obligation to take reasonable steps to discover outages, there is no prescribed timeframe for detecting the presence of an outage, only for reporting on outages that the provider has determined meet the reporting criteria. This discussion further clarifies when the 120-minute timeframe begins, as OPASTCO requests. In practice, providers often have much longer than 120 minutes from the onset of an outage to file the notification. Our experience administering NORS has demonstrated that the established 120-minute deadline sets an appropriate balance between the Commission's need to be timely apprised of critical outages and the needs of providers to deploy scarce resources effectively when these outages occur. In the nine years since the rules went into effect, we are unaware of any small rural provider that has been significantly challenged in complying with the 120-minute deadline. We are therefore not persuaded that this requirement is too burdensome as applied to rural providers.

For the foregoing reasons, we deny the OPASTCO Petition.

Several Petitioners seek reconsideration of the requirement that providers report “DS3 simplex” outages and propose relaxation of the requirement. In the Partial Stay Order the Commission rejected arguments that this requirement should be eliminated outright, but it stayed the reporting obligation insofar as it applied to outages rectified within five days of their discovery. Petitioners have not presented facts or arguments beyond those considered and rejected in the Partial Stay Order that would support reconsideration of the DS3 reporting obligation as applied to outages that persist longer than five days. In fact, as explained in the (NPRM) that accompanies this document, the volume of DS3 simplex outages reported in recent years has led us to propose tightening our DS3 simplex reporting requirements. Accordingly, Petitioners' request for reconsideration of this matter is denied.

In its Petition, Sprint requests that the Commission codify in section 4.11 its stated policy that providers may “withdraw notifications and initial reports in legitimate circumstances,” such as when the filing was made mistakenly. Although the Commission has consistently followed this policy throughout the tenure of NORS, we agree that codifying it in our rules may provide greater assurance to providers. Accordingly, on this issue we grant Sprint's request and amend section 4.11 accordingly.

1. As required by the Regulatory Flexibility Act of 1980 (RFA),1 the Commission has prepared a Final Regulatory Certification (Certification) for the Second Report and Order and Order on Reconsideration. The Certification is set forth as Appendix E. The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, will send a copy of the Second Report and Order and Order on Reconsideration and their Certification to the Chief Counsel for Advocacy of the Small Business Administration (SBA).

The rules adopted in the Second Report and Order and Order on Reconsideration in this document contain no new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13.

The Commission will not send a copy of this Order on Reconsideration pursuant to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A) et seq., because the adopted rule is a rule of “agency organization, procedure, or practice” within the meaning of 5 U.S.C. 804(3)(C).

Accordingly it is ordered that, pursuant to the authority contained in Sections 1, 4(i), 4(j), 4(o), 201(b), 214(d), 218, 251(e)(3), 301, 303(b), 303(g), 303(r), 307, 309(a), 309(j), 316, 332, 403, 615a-1, and 615c of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i)-(j) & (o), 201(b), 214(d), 218, 251(e)(3), 301, 303(b), 303(g), 303(r), 307, 309(a), 309(j), 316, 332, 403, 615a-1, and 615c, this Final Rule, Second Report and Order and Order on Reconsideration in ET Docket 04-35 and PS Docket 15-80 is adopted, effective July 16, 2015.

It is further ordered that, pursuant to Sections 4(i), 302, 303(e) 303(f), 303(g), 303(r), and 405 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 302a, 303(e), 303(f), 303(g), 303(r), and 405, the Petitions for Reconsideration filed by Cingular Wireless, CTIA—The Wireless Association, Qwest Communications, the Organization for the Promotion and Advancement of Small Telecommunications Companies, Sprint and the United States Telecom Association, and the Petition for Reconsideration filed jointly by AT&T, BellSouth, MCI, SBC and Verizon, in ET Docket No. 04-35, are granted, denied and dismissed to the extent indicated herein.

It is further ordered that, pursuant to Sections 4(i), 302, 303(e) 303(f), 303(g), 303(r), and 405 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 302a, 303(e), 303(f), 303(g), 303(r), and 405, the Commission's rules are hereby amended.

It is further ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of the Second Report and Order and Order on Reconsideration, including the Final Regulatory Certification, to the Chief Counsel for Advocacy of the U.S. Small Business Administration.

The Regulatory Flexibility Act of 1980, as amended (RFA) 2 requires that a regulatory flexibility analysis be prepared for rulemaking proceedings, unless the agency certifies that “the rule will not have a significant economic impact on a substantial number of small entities.” 3 The RFA generally defines “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” 4 In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act.5 A small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).6

The Second Report and Order and Order on Reconsideration adopt the following rules:

• The Second Report and Order declines to adopt a proposal to expand the range of airports classified as “special offices and facilities” for purposes of outage reporting under Part 4.

• The Order and Reconsideration codifies in section 4.11 the Commission's longstanding policy of allowing providers to withdraw outage report filings under appropriate circumstances.

The first of these involves a determination not to adopt a substantive rule, while the second merely codifies an existing policy. We thus certify that neither of these rules will have a significant economic impact on a substantial number of small entities.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 4 as follows: