Federal Register Vol. 80, No.116,

The Office of Personnel Management (OPM) is issuing proposed regulations to implement section 2 of the Border Patrol Agent Pay Reform Act of 2014 (Pub. L. 113-277, December 18, 2014, as amended by Pub. L. 114-13, May 19, 2015), hereafter referred to as “BPAPRA.” BPAPRA established a new method of compensating Border Patrol agents for overtime work. These regulations affect only Border Patrol agents employed by the U.S. Customs and Border Protection (CBP) component of the Department of Homeland Security (DHS). Most BPAPRA provisions are effective on the first day of the first pay period beginning on or after January 1, 2016.

Currently, Border Patrol agents generally receive a special form of overtime compensation called “Administratively Uncontrollable Overtime” (AUO) under 5 U.S.C. 5545(c)(2) and 5 CFR 550.151-550.163. AUO may be used for employees who perform substantial amounts of irregular overtime (OT) work that cannot be controlled administratively. AUO provides complete compensation under title 5 for all irregular overtime hours—i.e., overtime that is not regularly scheduled in advance of the workweek. AUO is paid as a percentage of basic pay, generally ranging from 10 to 25 percent, with the exact percentage depending on the average number of irregular overtime hours per week—subject to the title 5 premium pay cap. An employee who is nonexempt under the Fair Labor Standards Act (FLSA) also receives an extra half rate for irregular overtime hours as FLSA overtime pay. AUO recipients receive regular title 5 or FLSA overtime pay for regularly scheduled overtime hours. AUO is basic pay for retirement purposes for recipients who are covered under the special retirement program provisions pertaining to law enforcement officers. Border Patrol agents qualify as such law enforcement officers.

Recently, the use of AUO at DHS has been under scrutiny from the Congress, the Office of Special Counsel, and the Government Accountability Office. Various reviews indicated that AUO was being used improperly for some DHS employees, and DHS has taken actions to address the matter. As documented in the August 26, 2014, report on S. 1691 (i.e., the bill later enacted as BPAPRA) by the Senate Committee on Homeland Security and Governmental Affairs (Senate Report 113-248), the nature of the work performed by Border Patrol agents has changed significantly since the AUO law was first enacted in 1954. In particular, CBP prefers deploying agents for scheduled 10-hour shifts, which is incompatible with AUO, which covers irregular overtime. Congress determined that Border Patrol agents needed a reformed overtime program that is consistent with the current nature of the work and the desired work schedules, and therefore enacted BPAPRA.

Under BPAPRA, in place of AUO, a new form of overtime compensation would apply to Border Patrol agents. The key features of BPAPRA are summarized below:

• Most Border Patrol agents will have the opportunity each year to elect to be assigned to one of three types of “regular tour of duty” which provide different rates of compensation: (1) A Level 1 regular tour of duty, which provides an overtime supplement equal to 25 percent of basic pay for a regular schedule of 10 hours each regular workday, including 2 overtime hours; (2) a Level 2 regular tour of duty, which provides an overtime supplement equal to 12.5 percent of basic pay for a regular schedule with 9 hours each regular workday, including 1 overtime hour; and (3) a Basic regular tour of duty with a regular 8-hour workday, which provides no overtime supplement.

• CBP may assign regular tours of duty in certain circumstances without regard to agent elections. For example, agents assigned to care for canines must be assigned a Level 1 regular tour of duty. Agents in certain positions—headquarters, administrative, or training or fitness instructor—must be assigned a Basic regular tour of duty unless a different tour is justified based on a staffing analysis. In addition, generally no more than 10 percent of agents at a location may have a Level 2 or Basic regular tour of duty. In other words, generally at least 90 percent of agents at a location must have a Level 1 regular tour of duty. CBP may revise the percentage requirement for a location if justified based on a staffing analysis.

• The requirement for 1 or 2 hours of scheduled overtime within a Level 2 or Level 1 regular tour of duty, respectively, applies only if the agent performs work during regular time on that same day. For example, if an agent takes leave for a full 8-hour basic workday, no obligation to perform those scheduled overtime hours accrues on that day, and there is no loss of pay.

• The overtime supplement for regularly scheduled overtime hours within the assigned Level 1 or Level 2 regular tour of duty is a percentage of the agent's hourly rate of basic pay and is multiplied by number of paid hours of basic pay (i.e., hours of regular time, whether work or paid absence) in the biweekly pay period. Thus, the supplement is payable during leave or other paid time off taken from the 40-hour basic workweek.

• The overtime supplement is subject to the title 5 premium pay cap.

• An agent may not receive other premium pay for regularly scheduled overtime hours within his or her regular tour of duty (i.e., hours covered by the overtime supplement).

• The overtime supplement is treated as part of basic pay for retirement and certain other purposes, such as life insurance and severance pay.

• CBP must develop a plan to ensure that the assignment of an overtime supplement to an agent during the period beginning 3 years before the agent reaches retirement age and service requirements is consistent with the agent's career average overtime supplement.

• Overtime work in excess of the biweekly regular tour of duty (generally 100, 90, or 80 hours, as applicable) would be separately compensable. If the additional overtime work is regularly scheduled in advance of the workweek, the work is compensated under the regular title 5 overtime provisions (5 U.S.C. 5542). If the additional overtime work is irregular, the work is compensated by crediting the agent with compensatory time off. However, no more than 10 hours of compensatory time off may be earned in a biweekly pay period (unless a written waiver of this provision is approved in advance) and no more than 240 hours may be earned during a leave year.

• If the agent is absent during required scheduled overtime within the regular tour of duty (i.e., obligated overtime hours), payment of the overtime supplement is not affected but the agent accrues an obligation (debt) to perform other overtime work to make up for work not performed. Any accrued compensatory time off will be applied against that overtime hours debt. Any additional overtime work outside the regular tour of duty in future pay periods will also be applied against that debt.

• All Border Patrol agents are FLSA-exempt. This exemption applies to both the minimum wage and the maximum hours and overtime provisions of the FLSA.

BPAPRA was enacted on December 18, 2014 as Public Law 113-277. On May 19, 2015, BPAPRA was amended by Public Law 114-13 to clarify the effective date of certain provisions. Section 1(a) of Public Law 114-13 added a new subsection (i) in section 2 of BPAPRA. That section 2(i) provided that subsections (b), (c), (d), and (g) of section 2 of BPAPRA are effective on the first day of the first pay period beginning on or after January 1, 2016, except that (1) any provision of 5 U.S.C. 5550(b) (as added by section 2(b) of BPAPRA) relating to administering elections and making advance assignments to a regular tour of duty is applicable before the January 2016 effective date to the extent determined necessary by the OPM Director and (2) the OPM Director's authority to issue regulations (in particular, the authority in 5 U.S.C. 5550(b)(1)(B) related to election procedures) is effective as necessary before the January 2016 effective date.

As required by these proposed regulations, CBP must provide election information notices to Border Patrol agents no later than November 1 and agents must make elections for the upcoming annual period no later than December 1. Thus, BPAPRA provisions related to administering annual elections and advance assignments for the annual period beginning in January 2016 must be applied before January 2016.

As provided by Public Law 114-13, regular tours of duty and any associated overtime supplements established under 5 U.S.C. 5550 (as added by section 2(b) of BPAPRA) will first take effect on the first day the first pay period beginning or or after January 1, 2016. That pay period begins on January 10, 2016. Other BPAPRA provisions that are effective on January 10, 2016 include (1) the amendments to 5 U.S.C. 5542 (dealing with overtime pay and compensatory time off) made by section 2(c) of BPAPRA, (2) the amendments to 5 U.S.C. 8331 (dealing with retirement-creditable basic pay) made by section 2(d) of BPAPRA, and (3) the amendments to 5 U.S.C. 5547 (dealing with the premium pay cap) made by section 2(g)(1) of BPAPRA, and (4) the amendments to section 13(a) of the FLSA (dealing with FLSA exemptions) made by section 2(g)(2) of BPAPRA.

In order to implement BPAPRA, OPM is proposing to add a new subpart P, Overtime Pay for Border Patrol Agents, in part 550 (Pay Administration—General) of title 5, Code of Federal Regulations. A section-by-section explanation of the proposed regulations follows. (Note: The descriptions of the proposed regulations are stated in the present tense for readability.)

Section 550.1601 includes the purpose of the proposed regulations—i.e., to implement BPAPRA. It also notes that OPM is relying on its regulatory authority in 5 U.S.C. 5548 as well as section 2(h) of BPAPRA.

Section 550.1602 provides that subpart P applies to GS-1896 Border Patrol agents holding a position in the U.S. Customs and Border Protection (CBP) component of the Department of Homeland Security (DHS). Coverage is not affected if a Border Patrol agent is temporarily detailed to a non-CBP position, since the agent would continue to officially hold a CBP Border Patrol agent position.

Section 550.1603 provides definitions of terms for purposes of subpart P. Certain definitions warrant explanation here. Other definitions are addressed later in the supplementary information in the context of the regulatory provisions in which they are used.

OPM defines the term annual period to mean the 1-year period that begins on the first day of the first pay period beginning on or after January 1 of a given year and ends on the day before the first day of the first pay period beginning on or after January 1 of the next year. The term year in 5 U.S.C. 5550(b)(1)(A) and (C) and the term leave year in 5 U.S.C. 5542(g)(5)(A) are interpreted to be an annual period as defined in § 550.1603. Under BPAPRA, agents make an election for a year, which we are interpreting to be an annual period consisting of full biweekly pay periods. This prevents starting a new regular tour of duty and associated overtime supplement in the middle of a pay period.

The definitions of irregular overtime work and regularly scheduled work parallel the definitions of similar terms in the regular premium pay regulations at 5 CFR 550.103. We are clarifying that irregular overtime work must be “officially ordered or approved,” consistent with the normal standards governing title 5 overtime in 5 U.S.C. 5542(a) and 5 CFR 550.111(a)(1). This means that, consistent with agency policies, authorized management officials must “order” the overtime work in advance or “approve” the overtime work after the fact (when emergency circumstances prevented advance approval). We include a term, regular time, that is used in BPAPRA to refer to the regular basic hours within an agent's 8-hour basic workday within the 40-hour basic workweek.

While BPAPRA used the terms level 1 border patrol rate of pay, level 2 border patrol rate of pay, and basic border patrol rate of pay to identify agents with different overtime supplements and regular tours of duty, the subpart P regulations place the focus on an agent's regular tour of duty and use the terms Level 1 regular tour of duty, Level 2 regular tour of duty, and Basic regular tour of duty to identify the three categories of agents. We also found it clearer to focus on the overtime supplement as a separate payment rather than being rolled into an aggregate rate of pay.

We define a term obligated overtime hours to describe the overtime hours within an agent's regular tour of duty that an agent is obligated to work because he or she had performed work (of any amount) during regular time on the same day. For example, an agent with a Level 1 tour of duty would normally be obligated to work 2 hours of scheduled overtime work within the regular tour, which could add up to 20 overtime hours (10 days × 2 hours per day) in a biweekly pay period. However, if the agent was on leave during all regular time for 2 basic workdays (8 hours each day), the agent would not be obligated to perform the 2 hours of scheduled overtime work within the regular tour on each of those days. Thus, the total number of obligated overtime hours during that pay period would be 16 hours (20 hours minus 4 unobligated hours). Because an agent may have such unobligated overtime hours, the definition of regular tour of duty uses the word “generally” in describing the hours within a normal tour of duty.

The term overtime hours debt is defined as the unsatisfied balance of obligated overtime hours not worked, which represents a debt of hours for which an agent is accountable. As provided in § 550.1626(b), outside-tour overtime hours in the same pay period may be substituted for absences during obligated overtime hours for pay computation purposes. Any remaining obligated overtime hours not worked become part of the agent's overtime hours debt—a debt that the agent can satisfy by applying compensatory time off, as described in § 550.1626(c)(1) or by applying outside-tour overtime hours in future pay periods, as described in § 550.1626(c)(2).

This section reflects various provisions in BPAPRA that give CBP authority to assign work based on its assessment of mission requirements and operational needs. (See BPAPRA section 2(a) and (f)(1) and 5 U.S.C. 5550(g).) The BPAPRA provisions show that Congress intended to ensure that CBP retains full authority to assign work as needed, regardless of the assigned regular tours of duty.

Section 550.1605 restates the instruction found in section 2(f) of BPAPRA, which provides that nothing in the Act shall be “construed to require compensation” of an agent other than for hours during which the agent is actually performing work or using approved paid time off. This reflects Congressional concern regarding alleged abuses of AUO pay that included some employees not performing work during claimed AUO hours.

Section 550.1611 governs the assignment of regular tours of duty for an upcoming annual period to individuals who are employed as agents as of November 1 of the preceding year. The law generally envisions assignments being made for an annual period after giving agents an opportunity to state their preferred tour via an annual election. The law provides that agents must (1) be given information about election options and procedures no later than 60 days before the annual period and (2) make an annual election no later than 30 days before the annual period. Since the beginning of the annual period may vary (since it corresponds to the beginning of the first full pay period in January), we have regulated that the deadline for providing election information is November 1 and the deadline for submitting elections is December 1. These dates meet the statutory time requirements, and provide a consistent set of deadlines that apply each year.

Consistent with the law, section 550.1611(d) provides that an agent who fails to make a timely election must be assigned a Level 1 regular tour of duty. Section 550.1611(e) provides that CBP must inform an agent of an assignment to a tour not elected by the agent. Section 550.1611(f) lists the circumstances (as provided in BPAPRA) under which management is required or allowed to unilaterally assign a regular tour of duty for an annual period that may not match an agent's annual election. For example, an agent assigned to care for a canine must be assigned a Level 1 regular tour of duty. Also, an agent assigned to a headquarters, administrative, training instructor, or fitness instructor position must be assigned a Basic regular tour of duty (with no overtime supplement), except as otherwise justified based on a CBP staffing analysis.

Section 550.1611 does not apply to newly hired agents who—though currently employed as agents on November 1—will be in initial training status as of the first day of the annual period. Instead, special provisions in § 550.1612(a) and (b) apply to such agents. Initial training is defined in § 550.1603 as meaning initial orientation sessions, basic training, and other preparatory activities provided prior to an agent's first regular work assignment in which the agent has authority to make arrests and carry a firearm.

Section 550.1612 addresses other situations in which an agent may be assigned a regular tour of duty that were not addressed in BPAPRA. An individual who is newly hired as an agent during an annual period will generally undergo initial training before commencing a regular work assignment. During any period of initial training, the agent must be assigned a Basic regular tour of duty. (This is consistent with the fact that agents currently do not receive AUO pay during initial training.) Initial training is not “advanced” training during which Level 1 or Level 2 overtime supplements continue for 60 days under the BPAPRA law and regulations (5 U.S.C. 5550(b)(2)(G) or (b)(3)(G) and § 550.1622(b)). As provided in § 550.1612(a), when a newly hired agent begins a regular work assignment (after completing initial training), the agent will have a Level 1 regular tour of duty as the default schedule for the remainder of the annual period. Under applicable circumstances described in § 550.1611(f), CBP may assign instead a Level 2 or Basic tour. In addition, under § 550.1612(b), a newly hired agent will be given an opportunity to submit an election of a preferred type of regular tour of duty that would take effect prospectively. Such election must be submitted no later than 30 days after the agent begins a regular work assignment and, if approved by CBP, would be effective on the first day of the first pay period beginning on or after the later of: (1) The date the election was submitted; or (2) the date the agent completed initial training.

Under § 550.1612(c), an individual who is newly hired as an agent between November 2 and the beginning of the annual period would be allowed to make an election for the upcoming annual period, if the agent will not be in initial training status on the first day of the annual period. Instead of the December 1 election deadline, the election may be submitted within 30 days after the agent received election information, but no later than the day before the first day of the annual period.

Section 550.1612(d) provides that CBP may change an agent's assignment during an annual period under appropriate circumstances described in § 550.1611(f) or § 550.1622(b). For example, CBP may change an assignment to comply with the pay assignment continuity requirement described in §§ 550.1611(f)(5) and 550.1615.

Section 550.1613 requires CBP to develop a written plan to guide the selection of agents for assignment to a particular regular tour of duty contrary to the agents' preferences, when only some agents' preferences can be accommodated. For example, CBP may need to implement the requirement that only 10 percent of agents in a location may have a Level 2 or Basic regular tour of duty when more than 10 percent of agents in that location want such a tour. For example, if 12 percent of agents in a particular location want a Level 2 or Basic regular tour of duty, 2 percent of agents will be required to have a Level 1 regular tour of duty contrary to their personal preference. CBP must have a plan for deciding which agents do not get assigned their desired tour (or, stated differently, which agents are assigned their desired tour).

Section 550.1614 regulates the statutory requirement that, except when justified based on a CBP staffing analysis, no more than 10 percent of agents stationed at a location may be assigned a Level 2 or Basic regular tour of duty (i.e., at least 90 percent of agents at a location must be assigned a Level 1 regular tour of duty). Section 550.1614(d) provides that the pay assignment continuity requirement in § 550.1615 trumps that requirement in § 550.1614.

Under 5 U.S.C. 5550(b)(1)(G) (titled “Pay Assignment Continuity”), as added by BPAPRA, not later than December 18, 2015 (1 year after the date of enactment), CBP must “develop and implement a plan to ensure, to the greatest extent practicable, that the assignment of a border patrol agent under this section during the 3 years of service before the border patrol agent becomes eligible for immediate retirement are consistent with the average border patrol rate of pay level to which the border patrol agent has been assigned during the course of the career of the border patrol agent.” As indicated in 5 U.S.C. 5550(b)(1)(G)(iv), the purpose of this plan is to ensure that “border patrol agents are not able to artificially enhance their retirement annuities.” By law, CBP must develop and implement this plan in consultation with OPM. In addition, this plan and its implementation are subject to any OPM regulations promulgated under its authority to carry out BPAPRA and to administer section 5550.

OPM interprets section 5550(b)(1)(G) as establishing a period of time during which CBP must control the assignment of regular tours of duty to each agent (and thus the overtime supplement percentage) to ensure consistency with the agent's career average overtime supplement percentage. This “control period” is intended to cover the period of time during which an agent could possibly have a high-3 “average pay” period as described in the retirement laws at 5 U.S.C. 8331(4) and 8401(3). The high-3 “average pay period” is a period of 3 consecutive years of creditable service during which an employee has his or her highest rates of retirement-creditable basic pay. The high-3 average pay is used in computing an employee's retirement annuity.

Since the overtime supplement of 25 or 12.5 percent for a Level 1 or Level 2 regular tour of duty, respectively, is retirement-creditable basic pay and may vary over time (and can be the outcome of an agent's voluntary election), this introduces the possibility of an agent electing overtime supplements during a potential high-3 period that would maximize the agent's retirement benefit, without regard to the average overtime supplement elected during the employee's career before the control period. If the overtime supplement used in computing an agent's high-3 average pay is significantly higher than the career average overtime supplement, this means that the retirement fund has not received sufficient employee and agency contributions to fund the agent's annuity benefit. Not only does this pose problems for the retirement fund on a macro level, but it also would result in inequitable treatment of individual agents relative to one another.

Retirement eligibility is based on meeting applicable minimum age and service requirements and an employee's separation. For a Border Patrol agent under the Federal Employees' Retirement System, the minimum age and service requirements for a regular law enforcement officer retirement annuity are: (1) Any age with 25 years of service; or (2) age 50 with 20 years of service. The date of an employee's separation is uncertain until it takes effect. Thus, to achieve the stated goal of this pay assignment continuity provision, it is necessary to control overtime supplement assignments during any and all periods of 3 consecutive years after an agent is within 3 years of meeting age and service requirements. (We recognize that, in rare circumstances, an agent's high-3 period may not be the agent's last 3 years before separation and could contain a period before the control period. For ease of administration, the drafters of BPAPRA assumed that the high-3 period would be the last 3 years before separation and thus always be in the control period.)

Section 5550(b)(1)(G)(i) states that the control period applies “during the 3 years of service before the border patrol agent becomes eligible for immediate retirement.” In one sense, an agent has conditional retirement eligibility once he or she meets age and service requirements, with separation being the condition. In another sense, an agent is not truly retirement eligible until he or she separates. Given the intent of this provision, and the context surrounding this statutory language, we interpret the law as requiring a plan that controls overtime supplement assignments during any possible 3-year period that might precede an agent's separation, which would trigger retirement eligibility. The statutory language cannot logically be interpreted as establishing a control period only during the 3 years preceding the date an agent meets age and service requirements, since the actual high-3 period could be totally outside such a control period, which would defeat the entire purpose of the provision. We note that, in the section-by-section analysis in the Senate committee report on the bill (S. 1691) later enacted as BPAPRA (Senate Report 113-248, pages 13-14), the description of section 5550(b)(1)(G) states that the pay assignment continuity plan is designed to “ensure an agent is unable to artificially enhance his or her retirement pay by electing Level 1 pay during his or her last three years of service when he or she had previously consistently worked at a lower level of pay.” [Italics added for emphasis.] Thus, Congress was focused on the 3 years before separation (based on the generally true assumption that an employee's high-3 period is during those last 3 years). Since an agent's actual separation date is not known in advance, it is necessary to provide pay assignment continuity for all consecutive 3-year periods for any possible separation date. The first possible separation date is when the agent meets retirement age and service requirements; thus, the date 3 years before the first possible separation date begins the control period.

Section 550.1615 regulates the pay assignment continuity requirement found in law at 5 U.S.C. 5550(b)(1)(G). Section 550.1615(a)(1) provides that, in consultation with OPM, CBP must implement a plan to ensure, to the greatest extent practicable, that an agent's overtime supplement during all consecutive 3-year periods within the control period is “consistent” with the agent's career average percentage during his or her career prior to the beginning of the control period. As provided in § 550.1615(a)(2), the overtime supplement percentage used in computing the career average percentage is the assigned percentage (25, 12.5, or 0) without regard to whether a premium pay cap prevents full payment based on that percentage.

Section 550.1615(a)(3) provides additional rules governing the computation of an agent's career average overtime supplement percentage. Based on the statutory language—“the average border patrol rate of pay level to which the border patrol agent has been assigned during the course of the career of the border patrol agent”—we are proposing that an agent's career be considered to encompass only those periods during which the agent was covered by section 5550 and subpart P. In other words, only overtime supplements established under 5 U.S.C. 5550 would be considered in computing the career average. We recognize that many agents have received an AUO supplement, which if considered, could increase or decrease the agent's career average. We also recognize that some agents will be in the control period when the provisions of subpart P first become applicable in January 2016 and that a career average will be immediately needed to apply the pay assignment continuity provisions. Based on the law, we have proposed in § 550.1615(a)(3) that, if an agent is in a control period when the provisions of subpart P first become applicable to the agent, the agent's initially assigned overtime supplement percentage must be considered the agent's career average. We are aware that, under the proposed rule, certain employees in headquarters or other positions for which no overtime supplement is payable would be considered to have a 0 percent career average overtime supplement. We are specifically inviting comments on proposed section 550.1615(a)(3) and will carefully consider those comments in preparing the final regulations.

As provided in § 550.1615(b), the “control period” is the period beginning on the date 3 years before an agent first meets retirement age and service requirements and remains in effect during all subsequent service in a Border Patrol agent position.

As regulated in § 550.1615(c)(1), the two averages are considered to be “consistent” if they are within 2.5 percentage points of one another. CBP must manage agents' assignments (i.e., make unilateral assignments) during the control period as necessary to achieve consistency, notwithstanding any other provision of law or regulation in subpart P. Section 550.1615(c)(2) allows for two exceptions. One exception applies if an agent's overtime supplement is limited by the premium pay cap under §§ 550.105 and 550.107 and the agent voluntarily elects (and CBP approves) a regular tour that results in an average overtime supplement percentage that is less than the agent's career average. For example, an agent's rate of basic pay could be at the premium pay cap (generally level IV of the Executive Schedule) leaving no room for receipt of an overtime supplement. Such an agent could choose to elect a Basic regular tour of duty that would provide no overtime supplement and require no regular overtime work. (The agent could still be ordered to work overtime as needed.) Since the premium pay cap prevents manipulation of the high-3 average pay, this exception poses little or no risk to the retirement fund. As stated in 5 U.S.C. 5550(b)(1)(G)(iv), the goal of the pay assignment continuity provision is to ensure that agents are not able to artificially enhance their retirement annuities. The ability for an agent to enhance his or her annuity is limited or eliminated when the agent is subject to the premium pay cap.

We cannot allow an agent whose overtime supplement is not affected by the premium pay cap to voluntarily elect a lesser percentage during the control period, since the agent could later elect again to have a higher percentage that is consistent with his/her career average. While the overtime supplement used in the agent's high-3 average pay would not exceed a percentage that is consistent with the agent's career average, the agent (and CBP) will have made inadequate retirement contributions during the portion of the control period when the lesser percentage was in effect.

Section 550.1615(c)(2)(ii) provides a necessary exception in cases where CBP determines an agent is unable to perform overtime work on a daily basis due to a physical or medical condition affecting the agent and assigns the agent a Basic regular tour of duty, as described in § 550.1611(f)(2) (which may be applied to make changes in an agent's tour during an annual period, as provided by § 550.1612(d)). This exception relieves CBP of applying the consistency requirement to the affected agent, but only to the extent such assignment makes it impossible to satisfy the consistency requirement during any given consecutive 3-year period. Thus, if the period during which the agent is unable to perform overtime work is short in duration, it would be possible to fully comply with the consistency requirement.

Section 550.1615(d) addresses CBP's authority in connection with the pay assignment continuity requirement. Consistent with 5 U.S.C. 5550(b)(1)(G)(ii), § 550.1615(d)(1) provides that CBP may take such action as is necessary, including unilateral assignment of an agent's regular tour of duty, to implement the pay assignment continuity plan, notwithstanding any provision of BPAPRA or the subpart P regulations. Section 550.1615(d)(2) reflects the provision in 5 U.S.C. 5550(b)(1)(G)(vi), which states that nothing in section 5550(b)(1)(G) may be construed to limit the ability of CBP to assign regular tours as necessary to meet operational requirements. At the same time, as reflected in § 550.1604, various provisions in BPAPRA (section 2(a) and 2(f)(1) of BPAPRA and 5 U.S.C. 5550(g)) make clear that CBP has authority to assign unscheduled work as needed to meet mission needs and operational requirements, notwithstanding the regular tour assigned to agents. Thus, as a general matter, OPM does not consider the need to meet operational requirements as preventing CBP from also controlling agents' regular tour as necessary to comply with the pay assignment continuity requirement.

Section 550.1615(e) sets forth reporting requirements with which CBP must comply so that OPM can monitor and evaluate the effectiveness of CBP's pay assignment continuity plan and assess the actuarial impact on the retirement fund.

Section 550.1615(f) addresses corrective actions that CBP must take if it determines that the consistency requirement is not being met for a particular agent. Under this regulation, CBP is not required to retroactively change an agent's assigned overtime supplement based on violation of the consistency requirement unless there is evidence of fraud, misrepresentation, fault, or lack of good faith on the part of the affected agent in connection with an overtime supplement received by that agent.

Section 550.1616 addresses corrective actions related to assignments made under the §§ 550.1611 through 550.1614. If it is determined that CBP did not comply with applicable statutory or regulatory requirements in assigning an agent to a regular tour of duty under those sections, CBP must take corrective action as soon as practicable. The corrective action would apply prospectively. CBP is not required to retroactively change an agent's assigned tour or overtime supplement, except when CBP determines there exists, in connection with the agent's tour assignment, evidence of fraud, misrepresentation, fault, or lack of good faith on the part of that agent. Since the overtime supplement is retirement-creditable basic pay, retroactive changes in the supplement would be disruptive and could adversely affect an employee's anticipated retirement benefits.

Section 550.1621 lays out the sets of rules that apply to each type of regular tour and provides cross references to those provisions that are addressed in more detail in other places in subpart P. Paragraphs (a)(3) and (b)(3) reflect the statutory rules in 5 U.S.C. 5550(b)(2)(A)(ii) and (b)(3)(A)(ii) that an agent with a Level 1 or Level 2 regular tour of duty has an obligation to perform scheduled overtime work within that tour only on a day the agent “performs work” during the regular time (8-hour basic workday). Thus, for example, if an agent with a Level 1 regular tour of duty takes 8 hours of annual leave on a particular day, the agent does not have an obligation to work 2 hours of scheduled overtime within the tour on that day. Paragraph (e) makes clear that, in applying paragraphs (a)(3) and (b)(3), the term “work” refers to paid hours of work, consistent with § 550.112, except that paid leave and other paid time off are not considered to be work hours. Paragraph (e) also makes clear that official time under 5 U.S.C. 7131 (related to employees representing a labor organization) is “work” in applying paragraphs (a)(3) and (b)(3).

Paragraphs (a)(4) and (b)(4) provide regulations governing the computation of the overtime supplement (25 percent or 12.5 percent, respectively). The overtime supplement is computed on an hourly basis and is equal to 25 percent or 12.5 percent, respectively of an agent's hourly rate of basic pay. The resulting hourly dollar amount is multiplied by the number of paid hours of regular time in the biweekly pay period to determine the biweekly dollar amount of the overtime supplement before application of the premium pay cap. Also, as provided in § 550.1626(a)(5), any hours of regular time that are paid only because of substitution of overtime hours for a period of absence without approval (AWOL) or suspension are excluded from the hours multiplied by the hourly overtime supplement.

Paragraph (d) states the overarching rule that the premium pay cap in 5 U.S.C. 5547 applies to limit, as appropriate, the payment of the overtime supplement or regularly scheduled overtime outside the regular tour and the crediting of compensatory time off for irregular overtime hours. (See 5 U.S.C. 5542(g)(5)(F) and 5547(a) and (e), as amended by BPAPRA. See also section 2(f)(3) of BPAPRA.) Consistent with the longstanding interpretation of 5 U.S.C. 5547, an agent affected by the premium pay cap is still required to perform work as assigned. In effect, an employee who reaches the premium pay cap is considered a salaried employee and the combination of basic pay and any premium pay is considered complete compensation for all hours of work. (In 2015, the premium pay cap for most employees is based on the Executive Schedule (EX) level IV annual rate of $158,700. An employee may receive premium pay in a biweekly pay period only to the extent that the premium pay does not cause the combination of basic pay and premium pay to exceed the cap.)

Section 550.1622(b) regulates a statutory provision providing special treatment of employees during the first 60 days of advanced training in a calendar year. During those 60 days, an agent continues to be assigned to the regular tour otherwise in effect, regardless of the actual number of hours of work on a training day, and will continue to receive the overtime supplement associated with that tour. As a general rule, an agent will be deemed to have worked during any nonwork period within obligated overtime hours on such a training day for the purpose of determining the agent's total hours of work against the applicable biweekly overtime threshold (i.e., 100 hours for a Level 1 tour and 90 hours for a Level 2 tour). (See also § 550.1623(a)(2)(iv).) For example, if an agent with a Level 1 regular tour of duty (requiring 2 obligated overtime hours each basic workday) performs actual work for 0.5 hours during obligated overtime hours on a day of advanced training, the agent would be deemed to work during the remaining 1.5 hours and receive credit for those 1.5 hours in applying the applicable overtime threshold. However, if an agent performs creditable regularly scheduled overtime work outside the regular tour (e.g., night work that is creditable under 5 CFR 410.402(b)(2) as an exception to the normal bar on premium pay during training) on the same day on which credit would otherwise be given for nonwork overtime within the tour, those outside-tour overtime hours will be substituted for any within-tour nonwork overtime hours and reduce the crediting of nonwork hours accordingly.

Section 550.1622(b)(3) implements the statutory requirement that, after an agent has 60 days of advanced training in a calendar year, CBP must assign the agent to a Basic regular tour of duty for any additional day of advanced training. When such an agent is no longer engaged in advanced training, the agent reverts to his or her previously applicable tour.

In applying § 550.1622(b), we rely on the definition of advanced training found in § 550.1603. Advanced training is defined to exclude initial training (i.e., initial orientation sessions, basic training, and other preparatory activities) provided prior to an agent's first regular work assignment in which the agent has authority to make arrests and carry a firearm. The rules on advanced training apply solely to whole-workday training that covers the entire 8-hour block of regular time on a regular workday, since the statutory provisions at § 5550(b)(2)(G) and (b)(3)(G) apply to “days” of advanced training. Training that takes part of a day does not trigger application of the advanced training provision; instead, an agent with such training remains under the normal rules with the normal overtime obligations. (See also proposed § 550.1622(b)(4).)

Section 550.1622(c) regulates a statutory provision providing special treatment of agents assigned to care for a canine as part of their agent duties. During any period an agent is assigned canine care duties, the agent must be assigned a Level 1 regular tour with a 25 percent overtime supplement (unless that requirement is trumped by the pay assignment continuity requirement in § 550.1615). As provided by 5 U.S.C. 5550(b)(1)(F), an agent assigned canine care duties must be credited with 1 hour of regularly scheduled overtime work within the regular tour of duty on each regular workday, regardless of the actual duration of any such care or when the care was actually provided. The canine care may actually be provided anytime, including on a non-workday. Regardless of the time or day the canine care is actually provided or how much time is actually spent providing canine care, an agent with canine care duties is automatically credited with 1 hour of work for canine care on each regular workday. That leaves the agent with an obligation to perform 1 additional overtime hour as part of the agent's regular tour of duty to meet the 2-hour requirement for a Level 1 tour (on any regular workday on which the agent performs any work during regular time). This means that an agent assigned canine care duties actually has a 9-hour daily tour of duty for regular work instead of the 10-hour daily tour that applies to other employees on a Level 1 regular tour of duty.

If an agent is generally assigned to provide care for a canine, but is temporarily relieved of that duty for any reason (e.g., no dog available), the agent may not receive the 1-hour automatic credit for canine care on an affected regular workday.

Section 550.1623 provides rules governing the application of biweekly overtime thresholds that are used to determine: (1) Overtime pay for regularly scheduled overtime hours outside the regular tour under § 550.1624; and (2) crediting of compensatory time off for irregular overtime hours under § 550.1625. As a general rule, the biweekly overtime threshold is 100 hours for a Level 1 tour, 90 hours for a Level 2 tour, and 80 hours for a Basic tour, as provided in § 550.1623(b), unless there is a hybrid pay period, as described in § 550.1623(c),

Paragraph (a)(2) identifies the hours that are included in an agent's total hours of work that are compared to the applicable biweekly overtime threshold. In addition to time that qualifies as actual hours of work under the normal title 5 rules and all types of paid time off hours, we count: (1) Obligated overtime hours during which no work is performed (creating a debt of hours as provided in § 550.1621(a)(8) and (b)(8)) and for which no substitution is made under § 550.1626(b); (2) nonwork hours credited during obligated overtime hours on a day of advanced training (as provided in § 550.1622(b)); and (3) overtime hours within the regular tour that an agent is not obligated to work because he or she performs no work during regular time on that day (as described in § 550.1621(a)(3) and (b)(3)). Crediting these three categories of hours is necessary to align with the 100-hour and 90-hour biweekly overtime thresholds fixed by law for a Level 1 tour and Level 2 tour, respectively. (See 5 U.S.C. 5542(g)(1)(A) and (2)(A).) Without this crediting, there could be hours of work that are outside an agent's regular tour but below the applicable overtime threshold, and there would be no authority to compensate for those hours in any way—a result clearly not intended by Congress. This crediting complies with section 2(f)(2) of BPAPRA, which states that nothing in BPAPRA may be construed to require compensation other than for hours during which an agent is actually performing work or using approved paid time off. The crediting of the three categories of hours is only for purposes of applying the overtime threshold and does not generate any additional compensation for those hours, since they are hours that only could have been potentially compensated by the overtime supplement, the amount of which is not affected by the number of regularly scheduled overtime hours within the regular tour.

Paragraph (c) addresses the possibility of “hybrid pay periods.” One type of hybrid pay period occurs when an agent has one type of regular tour for part of the biweekly pay period and another type for another part of that period—for example, a Level 1 tour for the first week and a Basic tour for the second week. It is possible that an agent's tour could change during a biweekly pay period due to the expiration of the 60-day advanced training period or because CBP takes action under the circumstances described in § 550.1611(f), as allowed under § 550.1612(d). A second type of hybrid pay period occurs when an individual is employed as a Border Patrol agent for only part of the pay period. Since the drafters of BPAPRA did not consider these possibilities, it is necessary to fill in the policy gap via regulation.

Section 550.1624 provides rules governing the payment for regularly scheduled overtime hours beyond the applicable overtime threshold (outside the regular tour). Such hours are paid under the regular title 5 overtime rules in 5 U.S.C. 5542(a) and 5 CFR 550.113. Paragraph (c)(1) reflects a statutory directive that CBP should, to the maximum extent practicable, avoid the use of regularly scheduled overtime work outside the regular tour of duty. However, paragraph (c)(2) makes clear that the general restriction in paragraph (c)(1) does not prevent CBP from assigning outside-tour regularly scheduled overtime work if an agent volunteers to perform such work. For example, an agent may want to work such overtime hours to eliminate an overtime hours debt.

Section 550.1625 provides rules governing the crediting of compensatory time off for irregular overtime hours beyond the applicable overtime threshold. (By definition, any irregular overtime hour is beyond that threshold and outside the regular tour of duty.) The rules in § 550.1625 largely reflect statutory requirements and limitations. In addition, paragraph (c) shows that the call-back overtime provision in 5 U.S.C. 5542(b)(1) remains applicable to agents. In addition, since BPAPRA required that a value be assigned to compensatory time for the purpose of applying the premium pay cap (5 U.S.C. 5542(g)(5)(F)), but did not specify what the value should be, we are regulating that the value is equal to the amount of overtime pay the agent would have received for the period during which the compensatory time off was earned if the overtime had been regularly scheduled overtime hours outside the agent's regular tour. This is consistent with how OPM values compensatory time off under 5 U.S.C. 5543 and 5 CFR 550.114. (See 5 CFR 550.114(g).)

Section 550.1626 provides rules governing the handling of circumstances where an agent has leave without pay during the basic workweek or absences during obligated overtime hours, consistent with 5 U.S.C. 5550(f). Additional hours worked in a biweekly pay period that are “substituted” for leave without pay or absences during obligated overtime hours are, for pay computations purposes, treated as if they are, respectively, regular time hours or obligated overtime hours. Thus, substituted hours are not overtime hours for any purpose, and they may not be considered to be obligated overtime hours under § 550.1621(a)(4) and (b)(4) (when within-tour overtime is substituted for LWOP), regularly scheduled overtime hours under § 550.1624, or irregular overtime hours under § 550.1625, despite their original character prior to substitution.

As provided in § 550.1603, the term leave without pay includes all types of nonpay status, including normal approved leave without pay (regular LWOP), absence without approval (AWOL), suspension, or furlough. Consistent with the treatment of leave without pay under the regular title 5 overtime rules (5 CFR 550.112(d)), these regulations provide for substituting hours outside the basic workweek for leave without pay within the basic workweek—for purposes of computing overtime pay. This treatment is necessary so overtime thresholds are properly applied. As specified in § 550.1626(a)(4), the substitution is done solely for pay computation purposes and does not change the fact that an agent was in a particular nonpay status during the designated hours. For other purposes, the hours that are substituted are considered to have been performed when they were worked, not during the leave without pay hours.

Consistent with 5 U.S.C. 5550(f)(1)(A), § 550.1626(a)(1) provides that an equal period of time outside regular time (which could include work during obligated overtime hours or outside the regular tour) must be substituted for leave without pay during regular time. Consistent with 5 U.S.C. 5550(f)(1)(C), § 550.1626(a)(2) provides that substitutions for leave without pay during regular time must be made before substitutions for absences during obligated overtime hours. Section 550.1626(a)(3) further provides, by authority of regulation, that overtime hours must be substituted in the following priority: first, irregular overtime hours; second, regularly scheduled overtime hours outside the regular tour of duty; and third, regularly scheduled overtime hours within the regular tour of duty. Priority is given to substituting irregular overtime hours, since those hours do not generate a cash payment.

Section 550.1626(a)(5) mandates that overtime hours that are substituted for absence without approval (AWOL) or suspension may not be used in computing an agent's overtime supplement. BPAPRA did not address how substituted hours would affect the computation of the overtime supplement. By regulation, we are allowing hours that are substituted for regular LWOP or furlough to be treated as regular time hours that are multiplied by the hourly overtime supplement. We determined that it would be inappropriate to allow AWOL or suspension hours to generate an increased amount of overtime supplement even if other hours of work are substituted for those hours.

We are not including a regulation to implement 5 U.S.C. 5550(f)(1)(B), which stated that work performed on the same day as a period of leave without pay should be substituted first. We determined that, since overtime pay is computed on a biweekly basis, it makes no difference in an agent's pay entitlements if this same-day priority were followed or not followed.

Section 550.1626(b) addresses substitution of other work outside the regular tour of duty for absence during obligated overtime hours, consistent with 5 U.S.C. 5550(f)(2). Consistent with 5 U.S.C. 5550(f)(2)(B), § 550.1626(b)(2) provides that work performed on the same day as a period of absence during obligated overtime hours must be substituted first, but only in the circumstance where same-day substitution rules make a difference—namely, the application of the advanced training provision in § 550.1622(b)(2) that is applied on a daily basis. Section 550.1626(b)(3) further provides, by authority of regulation, that overtime hours outside the regular tour of duty (remaining after applying paragraphs (a) and (b)(2)) must be substituted for obligated overtime hours not worked in the following priority: first, irregular overtime hours; and second, regularly scheduled overtime hours outside the regular tour of duty. Priority is given to substituting irregular overtime hours, since those hours do not generate a cash payment. Section 550.1626(b)(4) makes clear that substitution of overtime hours is for pay computation purposes and does not change when those hours were actually worked for other purposes.

Section 550.1626(c) addresses situations where an agent does not have sufficient additional work in a biweekly pay period to substitute for all periods of absence during obligated overtime hours, consistent with 5 U.S.C. 5550(f)(3) and (4). It mandates that any unused balance of compensatory time off accrued by an agent under § 550.1625 must be applied towards any overtime hours debt newly accrued in the current pay period. It further mandates that, if an overtime hours debt remains after substitution and after application of unused compensatory time off, any additional work outside an agent's regular tour in future pay periods (that would otherwise be considered overtime work under § 550.1624 or § 550.1625) must be applied towards the overtime hours debt until that debt is satisfied.

Section 550.1626(d) addresses how to handle a situation where an agent has an unsatisfied overtime hours debt at the time of transfer or separation, which is not addressed in BPAPRA but is necessarily addressed in our regulations. At the time of transfer or separation, the overtime hours debt must be converted to a monetary debt equal to the result of multiplying the agent's hourly rate of basic pay by the number of hours owed by the agent. CBP would follow standard debt collection procedures to recover any debt.

Section 550.1631 provides rules regarding the circumstances under which an agent may receive other premium pay (not addressed elsewhere in subpart P), consistent with 5 U.S.C. 5550(c). It further provides that an agent's regular rate of basic pay (without any overtime supplement) must be used in computing any premium pay, consistent with 5 U.S.C. 5550(c)(1) and (d)(2).

Section 550.1632 provides that an agent may receive hazardous duty pay under 5 U.S.C. 5545(d), if otherwise eligible, consistent with 5 U.S.C. 5550(c)(3). It further provides that any hazard pay is computed using an agent's regular rate of basic pay (without any overtime supplement), consistent with 5 U.S.C. 5550(d).

Section 550.1633 identifies the limited purposes for which an overtime supplement is treated as part of an agent's rate of basic pay, consistent with 5 U.S.C. 5550(d). In addition to the purposes prescribed in law (i.e., retirement, severance pay, workers' compensation, and life insurance), OPM is regulating that the overtime supplement is part of basic pay for purposes of advances in pay under 5 U.S.C. 5524a and 5 CFR part 550, subpart B.

Section 550.1634 makes clear that agents remain covered by title 5 provisions related to leave (5 U.S.C. chapter 63) and to other paid time off (e.g., holidays under 5 U.S.C. chapter 61, compensatory time off for religious purposes under 5 U.S.C. 5550a) and that the tour of duty for accrual of leave and for usage of leave or other paid time off is the 40-hour basic workweek.

Section 550.1635 provides that agents may not have a flexible or compressed work schedule under 5 U.S.C. chapter 61, subchapter II. OPM interprets BPAPRA as establishing a special work schedule for all agents under 5 U.S.C. 5550, which supersedes any other authority to establish special schedules. CBP is still permitted to have flexible starting and stopping times for an agent's basic work day if it determines that such flexibility is appropriate for the position in question (e.g., a position with a Basic regular tour of duty that does not require fixed shifts).

Section 550.1636 reflects the Fair Labor Standards Act (FLSA) amendments made by BPAPRA, which provided that the minimum wage and overtime provisions of the FLSA are not applicable to Border Patrol agents (i.e., they are automatically exempt from FLSA by virtue of being a Border Patrol agent). A conforming FLSA exemption is being added to OPM's FLSA regulations at 5 CFR 551.217.

Section 550.1637(a) provides that an agent's regular travel to and from home and a work location within the agent's official duty station (as defined in § 550.112(j)) may not be considered hours of work, which is consistent with 5 U.S.C. 5550(e) as added by BPAPRA. This is also generally consistent with regular title 5 rules related to travel at 5 CFR 550.112(j)(2).

Section 550.1637(b) addresses travel away from an agent's official duty station (as defined in § 550.112(j)). Such travel is subject to the normally applicable hours-of-work rules in 5 U.S.C. 5542(b)(2) and 5 CFR 550.112(g). When an agent travels directly between home and a temporary duty location outside the limits of the agent's official duty station, the time the agent would have spent in normal home to work travel must be deducted from any creditable hours of work while traveling.

Section 550.1638 addresses how official time under 5 U.S.C. 7131 relates to BPAPRA pay provisions. Under 5 U.S.C. 7131—

• “Any employee representing an exclusive representative in the negotiation of a collective bargaining agreement under this chapter shall be authorized official time for such purposes, including attendance at impasse proceeding, during the time the employee otherwise would be in a duty status. The number of employees for whom official time is authorized shall not exceed the number of individuals designated as representing the agency for such purposes.” (See 5 U.S.C. 7131(a).)

• “The Authority shall determine whether any employee participating for, or on behalf of, a labor organization in any phase of proceedings before the Authority shall be authorized official time for such purpose during the time the employee otherwise would be in a duty status.” (See 5 U.S.C. 7131(c).)

• Except as provided in the previous subsections, any employee representing an exclusive representative or in connection with any other matter covered by this chapter “shall be granted official time in any amount the agency and the exclusive representative involved agree to be reasonable, necessary, and in the public interest.” (See 5 U.S.C. 7131(d).)

In drafting proposed regulations to carry out BPAPRA, we determined that certain issues related to official time needed to be addressed. First, the rules in 5 U.S.C. 5550(b)(2)(A)(ii) and (b)(3)(A)(ii) provide that the obligation to perform overtime hours of work as part of an agent's regular tour of duty is triggered only when the agent performs “work” during the 8-hour basic workday on that same day. Thus, we provide in § 550.1621(e) and § 550.1638 that official time is included as “work” in applying those section 5550 provisions. This is consistent with how OPM treats official time during basic (nonovertime) hours as hours of work in applying title 5 and FLSA overtime provisions, based on 5 U.S.C. 7131.

In addition, we clarify in § 550.1638 that Border Patrol agents who use official time to perform union representational duties may elect to have a Level 1 or Level 2 regular tour of duty, but generally must perform regular agency work (as opposed to union representational duties) during obligated overtime hours. However, use of official time during obligated overtime hours or any other overtime hours is permitted if an unplanned event arises incident to representational functions that must be dealt with during the overtime hours.

OPM is proposing conforming changes in a variety of regulations in part 410, part 550, part 551, and part 870. (Note: The descriptions of the proposed regulations below are stated in the present tense for readability.)

Section 410.402 is amended to show the receipt of the Border Patrol agent overtime supplement as a permitted exception to the general bar on premium pay during periods of training.

Section 550.103 is amended to revise the definition of premium pay and add a new definition of regular tour of duty so that these definitions can be used in applying 5 CFR part 550, subpart A (Premium Pay). The revised definition of premium pay makes clear the term includes a Border Patrol agent overtime supplement and the dollar value of compensatory time off earned by a Border Patrol agent, consistent with 5 U.S.C. 5542(g)(5)(F) and 5547(a)(1) and (e) and section 2(f) of BPAPRA.

Section 550.107 is amended to provide that the Border Patrol agent overtime supplement is subject solely to the biweekly premium pay cap (not the annual cap), consistent with the treatment of other premium payments that are retirement-creditable basic pay. In prescribing this treatment, OPM is relying on its broad authority to regulate the premium pay subchapter in 5 U.S.C. 5548 plus its additional broad authority in section 2(h) of BPAPRA to issue regulations to carry out BPAPRA.

Section 550.111 is amended by adding a new paragraph (j), which provides that special overtime thresholds apply to Border Patrol agents for the purpose of paying overtime under the regular title 5 overtime authority (for overtime not compensated by an overtime supplement or by the earning of compensatory time off). (See 5 U.S.C. 5542(g) and § 550.1623.)

Sections 550.122, 550.132, and 550.172 are amended by adding new paragraphs, which provide that night pay differential, holiday premium pay, and Sunday pay are not payable for regularly scheduled overtime within a Border Patrol agent's regular tour duty (i.e., overtime hours compensated via the overtime supplement), consistent with 5 U.S.C. 5550(b)(2)(C), (b)(3)(C), and (c)(1)(A). These new paragraphs also make clear that a Border Patrol agent overtime supplement is not included in the rate of basic pay used to compute the amount of these premium payments for other hours that qualify for such payments, consistent with 5 U.S.C. 5550(c)(1) and (d)(2).

In § 550.202, we are amending the definition of rate of basic pay used in applying the advances in pay regulations so that it includes a Border Patrol agent overtime supplement. This amendment relies on OPM's authority in 5 U.S.C. 5550(d)(1)(B) to regulate the purposes for which the overtime supplement is treated as basic pay.

In § 550.703, we are amending the definition of rate of basic pay used in applying the severance pay regulations so that it includes a Border Patrol agent overtime supplement, consistent with 5 U.S.C. 5550(d)(1)(A).

In § 550.1204, we are amending paragraph (a) to provide that Border Patrol agent compensatory time off does not extend the period of leave used for calculating a lump-sum annual leave payment. This is consistent with the treatment of regular title 5 compensatory time off and with 5 U.S.C. 5542(g)(5)(D), which provides that an agent may not receive any cash value for unused compensatory time off.

In § 550.1205, we are adding a new paragraph (b)(5)(iv), which provides a Border Patrol agent overtime supplement is used in computing any annual leave lump-sum payment. This is an exercise of OPM's regulatory authority in 5 U.S.C. 5553 and is consistent with the treatment of AUO pay that Border Patrol agents have been receiving.

In OPM's FLSA regulations, we are amending § 551.216 and adding a new § 551.217. In § 551.216(c)(2), we are deleting references to Border Patrol agents, since they are no longer covered by the FLSA. In the new § 551.217, we provide that Border Patrol agents are FLSA exempt (for purposes of minimum wage and overtime provisions), as required by the amendments to section 13(a) of the FLSA (29 U.S.C. 213(a)) made by section (g)(2) of BPAPRA.

In OPM's life insurance regulations, we are amending § 870.204 to provide that a Border Patrol agent overtime supplement is treated as part of an agent's “annual pay” used in computing life insurance benefits, as required by 5 U.S.C. 5550(d)(1)(A). (Congress relied on section 5550(d)(1)(A) rather than amend 5 U.S.C. 8704(c) to specifically reference the Border Patrol agent overtime supplement. Under section 8704(c), OPM may prescribe regulations governing the types of pay included in annual pay.)

The Office of Management and Budget has reviewed this proposed rule in accordance with E.O. 12866 and E.O. 13563.

I certify that these proposed regulations will not have a significant economic impact on a substantial number of small entities because they will apply only to Federal agencies and employees.

For the reasons stated in the preamble, OPM is proposing to amend parts 410, 550, 551, and 870 of title 5 of the Code of Federal Regulations as follows:

I. Obtaining Information and Submitting Comments A. Obtaining Information

Please refer to Docket ID NRC-2014-0161 when contacting the NRC about the availability of information for this action. You may obtain publicly-available information related to this action by any of the following methods:

• Federal rulemaking Web site: Go to http://www.regulations.gov and search for Docket ID NRC-2014-0161.

• NRC's Agencywide Documents Access and Management System (ADAMS): You may obtain publicly-available documents online in the ADAMS Public Documents collection at http://www.nrc.gov/reading-rm/adams.html. To begin the search, select “ADAMS Public Documents” and then select “Begin Web-based ADAMS Search.” For problems with ADAMS, please contact the NRC's Public Document Room (PDR) reference staff at 1-800-397-4209, 301-415-4737, or by email to [email protected]. The draft regulatory basis is available in ADAMS under Accession No. ML14324A706.

• NRC's PDR: You may examine and purchase copies of public documents at the NRC's PDR, Room O1-F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852.

Please include Docket ID NRC-2014-0161 in the subject line of your comment submission.

The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at http://www.regulations.gov as well as enter the comment submissions into ADAMS. The NRC does not routinely edit comment submissions to remove identifying or contact information.

If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.

The NRC is requesting comments on a draft regulatory basis to support a proposed rulemaking on financial qualifications for reactor licensing. The regulatory basis explains, in part, why the existing regulations should be updated. It also discusses cost and other impacts of the potential changes.

The specific objective of this proposed rulemaking would be to amend the current financial qualification requirements of “reasonable assurance” under 10 CFR part 50 to conform to the 10 CFR part 70 review standard of “appears to be financially qualified.” Specifically, the proposed rulemaking will remove the detailed requirements found in Appendix C of 10 CFR Part 50 and amend 10 CFR 50.33(f) to remove the requirement for a power reactor applicant to demonstrate that it possesses or can provide reasonable assurance of obtaining the funds necessary for construction and operation. In this proposed rulemaking, the applicant would be required to submit a plan describing how it will proceed to finance the construction and operation of the facility. The plan would ensure that the applicant has both a well-articulated understanding of the size of the project it is undertaking and the financial capacity to obtain the necessary financing before beginning reactor construction.

The proposed rulemaking would permit the NRC to issue licenses with conditions to applicants that may have insufficient (or no) funding at the outset of the license application review. The license conditions would be sufficient and specific to permit a simple, ministerial kind of review to ensure that the applicant's plan is executed before beginning reactor construction.

The NRC requests that stakeholders consider the questions in Enclosure 2 of the draft regulatory basis. The questions, identified during development of the draft regulatory basis, cover the scope, objectives, implementation, and cost of a proposed rulemaking based on this regulatory basis.

The Cumulative Effects of Regulation (CER) describes the challenges that licensees, or other impacted entities (such as State agency partners) may face while implementing new regulatory positions, programs, and requirements (e.g., rules, generic letters, backfits, inspections). The CER is an organizational effectiveness challenge that results from a licensee or impacted entity implementing a number of complex positions, programs or requirements within a limited implementation period and with available resources (which may include limited available expertise to address a specific issue). The NRC has implemented CER enhancements to the rulemaking process to facilitate public involvement throughout the rulemaking process. Therefore, the NRC is specifically requesting comment on the cumulative effects that may result from this proposed rulemaking. In developing comments on the draft regulatory basis, consider the following questions:

(1) In light of any current or projected CER challenges, what should be a reasonable effective date, compliance date, or submittal date(s) from the time the final rule is published to the actual implementation of any new proposed requirements including changes to programs, procedures, or the facility?

(2) If current or projected CER challenges exist, what should be done to address this situation (e.g., if more time is required to implement the new requirements, what period of time would be sufficient, and why such a time frame is necessary)?

(3) Do other regulatory actions (e.g., orders, generic communications, license amendment requests, and inspection findings of a generic nature) by NRC or other agencies influence the implementation of the potential proposed requirements?

(4) Are there unintended consequences? Does the potential proposed action create conditions that would be contrary to the potential proposed action's purpose and objectives? If so, what are the consequences and how should they be addressed?

(5) Please provide information on the costs and benefits of the potential proposed action. This information will be used to support any regulatory analysis by the NRC.

A public meeting will be held on July 8, 2015, from 1:00 p.m.-4:00 p.m. at the NRC Headquarters, One White Flint North, 11555 Rockville Pike, Rockville, Maryland, Room O-4B6.

The purpose of the public meeting is to promote full understanding of this regulatory basis for the proposed rulemaking and to facilitate public comment. The NRC will not be accepting verbal or written comments at the public meeting. All comments must be submitted as indicated in the ADDRESSES section of this document.

Stakeholders should monitor the NRC's public meeting Web site for information about the public meeting at http://www.nrc.gov/public-involve/public-meetings/index.cfm.

The Plain Writing Act of 2010 (Pub. L. 111-274) requires Federal agencies to write documents in a clear, concise, well-organized manner. The NRC has written this document to be consistent with the Plain Writing Act as well as the Presidential Memorandum, “Plain Language in Government Writing,” published June 10, 1998 (63 FR 31883). The NRC requests comment on this document with respect to the clarity and effectiveness of the language used.

Comments Invited

We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2015-1658; Directorate Identifier 2015-NE-18-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed 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 proposed AD.

We propose to adopt a new AD for all GE GEnx-1B turbofan engine models. This proposed AD was prompted by multiple reports of engine oil loss and resultant flight plan diversions. The root cause of the engine oil loss is a non-conforming ball valve in the secondary seal of the oil filler cap. The non-conforming ball valve may prevent correct sealing and lead to oil leakage. This proposed AD would require removal and replacement of the non-conforming ball valve in the oil filler cap. This condition, if not corrected, could result in loss of engine oil, which could lead to failure of one or more engines, loss of thrust control, and damage to the airplane.

We reviewed GE GEnx-1B Service Bulletin (SB) No. 79-0022, Revision 1, dated May 13, 2015. The SB describes procedures for removing and replacing the ball valve in the oil filler cap.

We are proposing 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 proposed AD would require removal and replacement of the non-conforming ball valve in the oil filler cap.

We estimate that this proposed AD will affect 86 engines installed on airplanes of U.S. registry. We also estimate that it will take about 1 hour per engine to comply with this proposed AD. The average labor rate is $85 per hour. We estimate that replacement parts would cost $11 per engine. Based on these figures, we estimate the total cost of the proposed AD to U.S. operators to be $8,256.

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 proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this proposed regulation:

(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 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.

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

Background

This proposed rule is published by the Bureau of Industry and Security (BIS) as part of the Administration's Export Control Reform (ECR) Initiative, the object of which is to protect and enhance U.S. national security interests. The implementation of the ECR includes amendment of the International Traffic in Arms Regulations (ITAR) and its U.S. Munitions List (USML), so that they control only those items that provide the United States with a critical military or intelligence advantage or otherwise warrant such controls, and amendment of the Export Administration Regulations (EAR) to control military items that do not warrant USML controls. This series of amendments to the ITAR and the EAR will reform the U.S. export control system to enhance our national security by: (i) improving the interoperability of U.S. military forces with allied countries; (ii) strengthening the U.S. industrial base by, among other things, reducing incentives for foreign manufacturers to design out and avoid U.S.-origin content and services; and (iii) allowing export control officials to focus government resources on transactions that pose greater national security, foreign policy, or proliferation concerns than those involving our NATO allies and other multi-regime partners.

Following the structure set forth in the final rule titled “Revisions to the Export Administration Regulations: Initial Implementation of Export Control Reform” (78 FR 22660, April 16, 2013) (hereinafter the “April 16 (initial implementation) rule”), this proposed rule describes BIS's proposal for controlling under the EAR's CCL certain dissemination, detection and protection “equipment” and related articles currently controlled under USML Category XIV in the ITAR and certain tooling, production “equipment,” test and evaluation “equipment,” test models and related articles currently controlled under USML Category XVIII of the ITAR.

In the April 16 (initial implementation) rule, BIS created a series of new ECCNs to control items that would be removed from the USML and similar items from the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual Use Goods and Technologies Munitions List (Wassenaar Arrangement Munitions List or WAML) that were already controlled elsewhere on the CCL. That final rule referred to this series of new ECCNs as the “600 series,” because the third character in each of these new ECCNs is the number “6.” The first two characters of the “600 series” ECCNs serve the same function as any other ECCN as described in § 738.2 of the EAR. The first character is a number, within the range of 0 through 9, that identifies the Category on the CCL in which the ECCN is located. The second character is a letter, within the range of A through E, that identifies the product group in a CCL Category. As indicated above, the third character in the “600 series” ECCNs is the number “6,” which distinguishes the items controlled under this series of ECCNs from items identified under other ECCNs on the CCL. With few exceptions, the final two characters identify the WAML category that covers items that are the same or similar to items in a particular “600 series” ECCN.

Pursuant to section 38(f) of the Arms Export Control Act (AECA), the President is obligated to review the USML “to determine what items, if any, no longer warrant export controls under” the AECA. The President must report the results of the review to Congress and wait 30 days before removing any such items from the USML. The report must “describe the nature of any controls to be imposed on that item under any other provision of law.” 22 U.S. C. 2778(f)(1).

The changes proposed in this rule and the State Department's companion rule to Categories XIV and XVIII of the USML are based on a review of these USML Categories by the Defense Department, which worked with the Departments of State and Commerce in preparing the proposed amendments. The review focused on identifying the types of articles that are now controlled by USML Category XIV or Category XVIII that are either: (i) inherently military and otherwise warrant control on the USML; or (ii) of a type common to civil applications, possessing parameters or characteristics that provide a critical military or intelligence advantage to the United States, and are almost exclusively available from the United States. If an article was found to satisfy either or both of these criteria, the article remains on the USML. If an article was found not to satisfy either criterion, but is nonetheless a type of article that is “specially designed” for military applications, then, generally, it is identified in one of the new “600 series” ECCNs proposed by this rule.

All references to the USML in this rule are to the list of defense articles that are controlled for purposes of export, temporary import, or brokering pursuant to the ITAR, and not to the list of defense articles on the United States Munitions Import List (USMIL) that are controlled by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) for purposes of permanent import under its regulations at 27 CFR part 447. Pursuant to section 38(a)(1) of the AECA, all defense articles controlled for export or import, or that are subject to brokering controls, are part of the “USML” under the AECA. For the sake of clarity, references to the USMIL are to the list of defense articles controlled by ATF for purposes of permanent import. All defense articles described in the USMIL or the USML are subject to the brokering controls administered by the U.S. Department of State in part 129 of the ITAR. The transfer of defense articles from the ITAR's USML to the EAR's CCL, for purposes of export controls, does not affect the list of defense articles that are controlled on the USMIL under the AECA for purposes of permanent import or brokering controls.

On January 18, 2011, the President issued Executive Order 13563, affirming general principles of regulation and directing government agencies to conduct retrospective reviews of existing regulations. The revisions proposed in this rule are part of Commerce's retrospective regulatory review plan under Executive Order 13563. Commerce's full plan, completed in August 2011, can be accessed at: http://open.commerce.gov/news/2011/08/23/commerce-plan-retrospective-analysis-existing-rules.

This proposed rule would create five new “600 series” ECCNs in CCL Category 1 (ECCNs 1A607, 1B607, 1C607, 1D607, and 1E607) that would clarify the EAR controls that apply to certain dissemination, detection and protection “equipment” and related items the President determines no longer warrant control under USML Category XIV. Terms such as “part,” “component” “accessories,” “attachments,” and “specially designed” are applied in the same manner in this rule as those terms are defined in Section 772.1 of the EAR. In addition, to assist exporters in determining the control status of their items, a “Specially Designed” Decision Tool and a CCL Order of Review Decision Tool are available on the BIS Web site at: http://www.bis.doc.gov/index.php/decision-tree-tools.

New ECCN 1A607: Military dissemination “equipment” for riot control agents, military detection and protection “equipment” for toxicological agents (including chemical, biological, and riot control agents), and related commodities.

In proposed ECCN 1A607, paragraphs .a through .d, paragraph .i, and paragraphs .l through .w would be reserved. Paragraph .e of ECCN 1A607 would control “equipment” “specially designed” for military use and for the dissemination of any of the riot control agents controlled in ECCN 1C607.a. Paragraph .f of ECCN 1A607 would control protection “equipment” “specially designed” for military use and for defense against either materials controlled by USML Category XIV(a) or (b) or any of the riot control agents in new ECCN 1C607.a. Paragraph .g of ECCN 1A607 would control decontamination “equipment” not controlled by USML Category XIV(f) that is “specially designed” for military use and for the decontamination of objects contaminated with materials controlled by USML Category XIV(a) or (b). Paragraph .h would control “equipment” not controlled by USML Category XIV(f) that is “specially designed” for military use and for the detection or identification of either materials specified by USML Category XIV(a) or (b) or riot control agents controlled by proposed new ECCN 1C607.a. Paragraph .j would control “equipment” “specially designed” to: (i) Interface with a detector, shelter, vehicle, vessel, or aircraft controlled by the USML or a “600 series” ECCN; and (ii) collect and process samples of articles controlled in USML Category XIV(a) or (b). Paragraph .k would control medical countermeasures that are “specially designed” for military use (including pre- and post- treatments, antidotes, and medical diagnostics) and “specially designed” to counter chemical agents controlled by USML Category XIV(a). Paragraph .x would control “parts,” “components,” “accessories,” and “attachments” that are “specially designed” for a commodity controlled under ECCN 1A607.e, .f, .g, .or .j or a defense article controlled in USML Category XIV(f) and that are not enumerated or otherwise described elsewhere in the USML.

New ECCN 1B607: Military test, inspection, and production “equipment” and related commodities “specially designed” for the “development,” “production,” repair, overhaul, or refurbishing of commodities identified in ECCN 1A607 or 1C607, or defense articles enumerated or otherwise described in USML Category XIV.

In proposed ECCN 1B607, paragraph .a would control “equipment,” not including incinerators, that is “specially designed” for the destruction of chemical agents controlled by USML Category XIV(a). Paragraph .b of ECCN 1B607 would control test facilities and “equipment” that are “specially designed” for military certification, qualification, or testing of commodities controlled by new ECCN 1A607.e, .f, .g, or .j or by USML Category XIV(f), except for XIV(f)(1). Paragraph .c would control tooling and “equipment” “specially designed” for the “development,” “production,” repair, overhaul, or refurbishing of commodities controlled under new ECCN 1A607.e, .f, .g, or .j or USML Category XIV(f). Paragraphs .d through .w would be reserved. Paragraph .x would control “parts,” “components,” “accessories,” and “attachments,” not enumerated or otherwise described elsewhere in the USML, that are “specially designed” for a commodity controlled by ECCN 1B607.b or .c or for a defense article controlled by USML Category XIV(f).

New ECCN 1C607: Tear gases, riot control agents and materials for the detection and decontamination of chemical warfare agents.

Proposed ECCN 1C607.a would control specified tear gases and riot control agents. Paragraph .b of ECCN 1C607 would control “biopolymers” not controlled by USML Category XIV(g) that are “specially designed” or processed for the detection or identification of chemical warfare (CW) agents specified by USML Category XIV(a) and the cultures of specific cells used to produce them. Paragraph .c would control specified “biocatalysts” and biological systems that are not controlled by USML Category XIV(g) and are “specially designed” for the decontamination or degradation of CW agents specified by USML Category XIV(a). Paragraph .d would control chemical mixtures not controlled by USML Category XIV(f) that are “specially designed” for military use for the decontamination of objects contaminated with materials specified by USML Category XIV(a) or (b).

New ECCN 1D607: “Software” “specially designed” for the “development,” “production,” operation, or maintenance of items controlled by 1A607, 1B607 or 1C607.

Proposed ECCN 1D607.a would control “software” “specially designed” for the “development,” “production,” operation, or maintenance of items controlled by ECCN 1A607, 1B607 or 1C607. Paragraph .b of ECCN 1D607 would be reserved.

New ECCN 1E607: “Technology” “required” for the “development,” “production,” operation, installation, maintenance, repair, overhaul, or refurbishing of items controlled by ECCN 1A607, 1B607, 1C607, or 1D607.

Proposed ECCN 1E607.a would control “technology” “required” for the “development,” “production,” operation, installation, maintenance, repair, overhaul, or refurbishing of items controlled by ECCN 1A607, 1B607, 1C607, or 1D607. Paragraph .b of ECCN 1E607 would be reserved.

This rule proposes to create three new “600 series” ECCNs in CCL Category 6 (ECCNs 6B619, 6D619 and 6E619) that would clarify the EAR controls that apply to certain tooling, production “equipment,” test and evaluation “equipment,” test models and related articles for Directed Energy Weapons (DEWs) that the President determines no longer warrant control under USML Category XVIII. Terms such as “part,” “component” “accessories,” “attachments,” and “specially designed” are applied in the same manner in this rule as those terms are defined in Section 772.1 of the EAR. In addition, to assist exporters in determining the control status of their items, a “Specially Designed” Decision Tool and a CCL Order of Review Decision Tool are available on the BIS Web site at: http://www.bis.doc.gov/index.php/decision-tree-tools.

New ECCN 6B619: Test, inspection and production “equipment,” and related commodities, “specially designed” for the “development,” “production,” repair, overhaul, or refurbishing of commodities enumerated or otherwise described in USML Category XVIII.

Proposed ECCN 6B619.a would control tooling, templates, jigs, mandrels, molds, dies, fixtures, alignment mechanisms, and test “equipment” not enumerated or otherwise described in USML Category XVIII and not elsewhere specified on the USML that are “specially designed” for the “development,” “production,” repair, overhaul, or refurbishing of commodities controlled by USML Category XVIII. The commodities that would be controlled under proposed ECCN 6B619.a are used to produce directed energy weapons (including non-lethal directed energy weapons, such as active denial systems) and are similar to commodities that are in operation in a number of other countries, some of which are not allies of the United States or members of multinational export control regimes. Research and development is currently underway to determine the possible uses of such commodities (e.g., to protect the Earth from asteroids, or for perimeter security and crowd control). Possession of such commodities does not confer a significant military advantage on the United States and, therefore, the inclusion of such commodities on the CCL would be appropriate.

Paragraphs .b through .w of ECCN 6B619 would be reserved. Paragraph .x would control “parts,” “components,” “accessories,” and “attachments” “specially designed” for a commodity subject to control under paragraph .a of this ECCN and not enumerated or otherwise described in USML Category XVIII and not elsewhere specified on the USML.

New ECCN 6D619: “Software” “specially designed” for the “development,” “production,” operation or maintenance of commodities controlled by 6B619.

Proposed ECCN 6D619 would control “software” “specially designed” for the “development,” “production,” operation or maintenance of commodities controlled by ECCN 6B619. Inclusion of this “software” on the CCL would be appropriate, because it would be limited to “software” “specially designed” for ECCN 6B619 commodities and would not include any “software” for items specifically enumerated or otherwise described on the USML.

New ECCN 6E619: “Technology” “required” for the “development,” “production,” operation, installation, maintenance, repair, overhaul or refurbishing of commodities controlled by 6B619 or “software” controlled by 6D619.

Proposed ECCN 6E619 would control “technology” “required” for the “development,” “production,” operation, installation, maintenance, repair, overhaul or refurbishing of commodities controlled by ECCN 6B619, or “software” controlled by 6D619. Inclusion of this “technology” on the CCL would be appropriate, because it would be limited to “technology” “required” for ECCN 6B619 commodities and would not include any “technology” for items specifically enumerated or otherwise described on the USML.

Pursuant to the framework established in the April 16 (initial implementation) rule, detection and protection “equipment” and related commodities classified under ECCN 1A607; related test, inspection and production “equipment” classified under ECCN 1B607; tear gases, riot control agents and related commodities classified under ECCN 1C607 (except for items listed in ECCN 1C607.a.10, .a.11, .a.12, or a.14, all of which are specifically excluded from WAML Category 7 by Note 1 thereto); related “software” classified under ECCN 1D607 (except “software” for items listed in ECCN 1C607.a.10, .a.11, .a.12, or a.14); and related “technology” classified under ECCN 1E607 (except “technology” for items listed in ECCN 1C607.a.10, .a.11, .a.12, or a.14 and 1D607 “software” therefor) would be subject to the licensing policies that apply to items controlled for national security (NS) reasons, as described in § 742.4(b)(1)—specifically, NS Column 1 controls. The same level of NS controls and licensing policies also would apply to the items that would be controlled under the three new ECCNs (i.e., test, inspection, and production “equipment” classified under ECCN 6B619; related “software” classified under ECCN 6D619; and related “technology” classified under ECCN 6E619) that this rule proposes to add to Category 6 of the CCL. In addition, all of the items that would be controlled under the new ECCNs proposed by this rule would be subject to the regional stability (RS) licensing policies set forth in § 742.6(a)(1), i.e., RS Column 1, as well as antiterrorism (AT Column 1) and United Nations (UN) controls.

Also, in accordance with §§ 742.4(b)(1) and 742.6(b)(1) of the EAR, exports and reexports of “600 series” items controlled for NS or RS reasons will be reviewed consistent with United States arms embargo policies in § 126.1 of the ITAR, if destined to a country listed in Country Group D:5 of Supplement No. 1 to part 740 of the EAR. All items controlled for NS or RS reasons, as set forth in this proposed rule, would be subject to this licensing policy.

BIS believes that the principal effect of this rule, when considered in the context of similar proposed rules being published as part of the ECR, will be to provide greater flexibility for exports and reexports to NATO member countries and other multiple-regime-member countries of items the President determines no longer warrant control on the USML. This greater flexibility would be in the form of: application of the EAR's de minimis threshold principle for items constituting less than a de minimis amount of controlled U.S.-origin content in foreign made items; availability of license exceptions, particularly License Exceptions “Servicing and Replacement of Parts and Equipment” (RPL) and “Strategic Trade Authorization” (STA); elimination of the requirements for manufacturing license agreements and technical assistance agreements in connection with exports of technology; and a reduction in, or elimination of, exporter and manufacturer registration requirements and associated registration fees. Some of these specific effects are discussed in more detail below.

The April 16 (initial implementation) rule imposed certain unique de minimis requirements on items controlled under the new “600 series” ECCNs. Section 734.3 of the EAR provides, inter alia, that, under certain conditions, items made outside the United States that incorporate items subject to the EAR are not subject to the EAR if they do not exceed a “de minimis” percentage of controlled U.S. origin content. Under Section 734.4 of the EAR, as amended by the April 16 (initial implementation) rule, there is no eligibility for de minimis treatment for a foreign-made item that incorporates U.S.-origin “600 series” items when the foreign-made item is destined for a country that is subject to a U.S. arms embargo, i.e., a country listed in Country Group D:5 of Supplement No. 1 to part 740 of the EAR. Items controlled under the new “600 series” ECCNs proposed in this rule would be eligible for de minimis treatment under the EAR, provided that the foreign-made items into which they are incorporated are not destined for a country listed in Country Group D:5. In contrast, the AECA does not permit the ITAR to have a de minimis treatment for USML-listed items, regardless of the significance or insignificance of the U.S.-origin content or the percentage of U.S.-origin content in the foreign-made item (i.e., USML-listed items remain subject to the ITAR when they are incorporated abroad into a foreign-made item, regardless of either of these factors).

The April 16 (initial implementation) rule imposed certain restrictions on the use of license exceptions for items controlled under “600 series” ECCNs on the CCL. The general restrictions that apply to the use of license exceptions for such items are described in § 740.2(a)(13) of the EAR. The EAR provisions that describe the requirements specific to individual license exceptions contain additional restrictions on the use of license exceptions for such items.

For example, this rule proposes limited License Exception STA availability for the new “600 series” ECCNs contained herein. None of the items that would be controlled under these proposed ECCNs would be eligible for the STA “controls of lesser sensitivity” described in § 740.20(c)(2) of the EAR. Instead, STA eligibility for all such items would be limited to the destinations listed in § 740.20(c)(1) of the EAR (i.e., Country Group A:5 destinations indicated in Supplement No. 1 to part 740 of the EAR). In addition, such items must be for: (1) ultimate end-use by a person of a type specified in § 740.20(b)(3)(ii) of the EAR (i.e., the armed forces, police, paramilitary, law enforcement, customs, correctional, fire, or a search and rescue agency of a government of one of the countries listed in Country Group A:5 or the United States Government); or (2) the “development,” “production,” operation installation, maintenance, repair, overhaul, or refurbishing of an item, in one of the countries listed in Country Group A:5 or the United States, that will ultimately be used by any such government agencies, the United States Government, or by a person in the United States. The use of License Exception STA also may be authorized, under certain circumstances described in § 740.20(b)(3)(ii)(C), where the U.S. Government has otherwise authorized the ultimate end-use under a license.

None of the items that would be controlled under the new “600 series” ECCNs proposed by this rule would be treated as “end items” for purposes of License Exception STA and, therefore, such items would not be subject to the License Exception STA eligibility request requirements in § 740.20(g) of the EAR.

Items controlled under proposed new ECCN 1B607 or 6B619 also would be eligible for License Exception LVS (limited value shipments) up to a value of $1,500, TMP (temporary exports), and RPL (servicing and replacement parts). License Exceptions TMP and RPL also would be available for items controlled under new ECCN 1A607.

BIS believes that the restrictions that would apply to the use of license exceptions for the items in the proposed new “600 series” ECCNs would represent an overall reduction from the level of restrictions that currently apply to such items on the USML. This would be particularly true with respect to exports of such items to NATO members and multiple-regime member countries.

Since the beginning of ECR, the Administration has stated that the reforms will be consistent with the United States' obligations to the multilateral export control regimes. Accordingly, the Administration will, in this proposed rule, exercise its national discretion to implement, clarify, and, to the extent feasible, align its controls with those of the regimes. In this rule, proposed ECCNs 1A607 and 1C607 would implement, to the extent possible, the controls in WAML Category 7; proposed ECCNs 1B607 and 6B619 would implement, to the extent possible, the controls in WAML Category 18 for production “equipment;” proposed ECCNs 1D607 and 6D619 would implement, to the extent possible, the controls in WAML Category 21 for “software;” and proposed ECCNs 1E607 and 6E619 would implement, to the extent possible, the controls in WAML Category 22 for “technology.”

BIS seeks comments on this proposed rule. BIS will consider all comments received on or before August 17, 2015. All comments (including any personally identifying information or information for which a claim of confidentially is asserted either in those comments or their transmittal emails) will be made available for public inspection and copying. Parties who wish to comment anonymously may do so by submitting their comments via Regulations.gov, leaving the fields that would identify the commenter blank and including no identifying information in the comment itself.

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, distribute 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 (OMB).

2. Notwithstanding any other provision of law, no person is required to respond to, nor is 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 OMB control number. This proposed rule would affect the following approved collections: Simplified Network Application Processing System (control number 0694-0088), which includes, among other things, license applications; License Exceptions and Exclusions (0694-0137); recordkeeping (0694-0096); export clearance (0694-0122); and the Automated Export System (0607-0152).

As stated in the proposed rule published on July 15, 2011 (76 FR 41958) (the “July 15 proposed rule”), BIS initially estimated that the combined effect of all rules to be published, adding items to the EAR that would be removed from the ITAR as part of the Administration's Export Control Reform Initiative, would increase the number of license applications to be submitted to BIS by approximately 16,000 annually, resulting in an increase in burden hours of 5,067 (16,000 transactions at 17 minutes each) under control number 0694-0088. As the review of the USML has progressed, the interagency group has gained more specific information about the number of items that would come under BIS jurisdiction and whether those items would be eligible for export under license exception. As of June 21, 2012, BIS revised its estimate to reflect an increase in license applications of 30,000 annually, resulting in an increase in burden hours of 8,500 (30,000 transactions at 17 minutes each) under control number 0694-0088. BIS continues to believe that its revised estimate is accurate. Notwithstanding this increase in license applications under the EAR, the net burden that U.S. export controls impose on U.S. exporters is expected to go down, as described below, as a result of the transfer of less sensitive military items to the jurisdiction of the Department of Commerce, under the EAR, and the application of the license exceptions and other provisions in the EAR that are described in this proposed rule.

As proposed by this rule, certain dissemination, detection and protection “equipment” and related articles currently controlled under USML Category XIV in the ITAR and certain tooling, production “equipment,” test and evaluation “equipment,” test models and related articles currently controlled under USML Category XVIII of the ITAR would become subject to the licensing jurisdiction of the Department of Commerce under the EAR and its CCL, and also would be eligible for certain license exceptions, including License Exception STA. For example, items controlled under proposed ECCN 1A607, 1B607, 1C607, 1D607, 1E607, 6B619, 6D619, or 6E619 would become eligible under certain provisions of License Exception STA and would not need a determination of eligibility as described in § 740.20(g) of the EAR. BIS believes that the increased use of License Exception STA resulting from the combined effect of all rules to be published, adding items to the EAR that would be removed from the ITAR as part of the Administration's Export Control Reform Initiative, would increase the burden associated with control number 0694-0137 by about 23,858 hours (20,450 transactions at 1 hour and 10 minutes each).

BIS expects that this increase in burden hours under the EAR would be more than offset by a reduction in the burden hours associated with currently approved collections related to the ITAR. With few exceptions, most exports of the dissemination, detection and protection “equipment” and related articles and the tooling, production “equipment,” test and evaluation “equipment,” test models and related articles that this rule proposes to add to the CCL currently require State Department authorization, even when destined to NATO member states and other close allies. In addition, the exports of “technology” necessary to produce such items in the inventories of the United States and its NATO and other close allies currently require State Department authorization. Under the EAR, as proposed by this rule, such “technology” would become eligible for export to NATO member states and other close allies under License Exception STA, unless otherwise specifically excluded.

The anticipated reduction in burden hours would particularly impact exporters of “parts” and “components” that would no longer be subject to the ITAR, because, with few exceptions, the ITAR currently exempt from license requirements only exports to Canada. Most exports of such “parts” and “components,” even when destined to NATO and other close allies, currently require State Department authorization. Under the EAR, as proposed by this rule, a small number of low-level “parts” and “components” would not require a license to most destinations, while most other “parts” and “components” identified under the proposed new “600 series” ECCNs would be eligible for export to NATO and other close allies under License Exception STA.

Use of License Exception STA imposes a paperwork and compliance burden because, for example, exporters must furnish information about the item that is being exported to the consignee and obtain from the consignee an acknowledgement and commitment to comply with the requirements of the EAR. However, the Administration believes that complying with the requirements of STA is likely to be less burdensome than applying for licenses. For example, under License Exception STA, a single consignee statement can apply to an unlimited number of products, need not have an expiration date and need not be submitted to the government in advance for approval. Suppliers with regular customers can tailor a single statement and assurance to match their business relationship, rather than applying repeatedly for licenses with every purchase order, to supply allied and, in some cases, U.S. forces with routine replacement parts and components.

Even in situations in which a license would be required under the EAR, the burden likely will be reduced, compared to the current license requirement under the ITAR. In particular, license applications for exports of “technology” controlled by ECCN 1E607 or 6E619 are likely to be less complex and burdensome than the authorizations required to export ITAR-controlled “technology,” i.e., Manufacturing License Agreements and Technical Assistance Agreements.

3. This rule does not contain policies with Federalism implications as that term is defined under E.O. 13132.

4. The Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et seq., generally requires an agency to prepare an initial regulatory flexibility analysis (IRFA) for any rule subject to the notice and comment rulemaking requirements under the Administrative Procedure Act (5 U.S.C. 553) or any other statute, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Under section 605(b) of the RFA, however, if the head of an agency certifies that a rule will not have a significant impact on a substantial number of small entities, the RFA does not require the agency to prepare a regulatory flexibility analysis. Accordingly, pursuant to section 605(b), the Chief Counsel for Regulation, Department of Commerce, has certified to the Chief Counsel for Advocacy, Small Business Administration, that this proposed rule, if promulgated, will not have a significant impact on a substantial number of small entities. The rationale for this certification is as follows.

Although BIS does not collect data on the size of entities that apply for, and are issued, export licenses and is, therefore, unable to estimate the exact number of small entities—as defined by the Small Business Administration's regulations implementing the RFA—BIS acknowledges that some small entities may be affected by this proposed rule.

The amendments set forth in this rule are proposed as part of the Administration's ECR initiative, which seeks to revise the USML to be a positive control list—one that does not use generic, catch-all control text to describe items subject to the ITAR—and to move some items that the President has determined no longer warrant control under the ITAR to control under the EAR and its CCL. Such items, along with certain military items currently identified on the CCL (most of which are identified on the WAML), will be controlled under new “600 series” ECCNs on the CCL. In addition, certain other items currently on the CCL will move from existing ECCNs to the new “600 series” ECCNs.

This rule addresses certain dissemination, detection and protection “equipment” and related articles currently enumerated or otherwise described in USML Category XIV (Toxicological Agents, Including Chemical Agents, Biological Agents, and Associated Equipment) and certain tooling, production “equipment,” test and evaluation “equipment,” test models and related articles currently enumerated or otherwise described in USML Category XVIII (Directed Energy Weapons). Most toxicological agents (i.e., chemical and biological agents) and associated equipment and all Directed Energy Weapons (DEWs) systems “specially designed” or modified for military applications, “equipment” “specially designed” or modified to detect, identify or defend against such systems, and “specially designed” “parts,” “components,” “accessories” and “attachments” for such systems or “equipment” would remain on the USML. However, many other “parts” and “components” would become subject to the EAR (as items described in ECCN 1A607.x, 1B607.x, or 6B619.x), unless specifically enumerated or otherwise described on the USML. Many of these “parts” and “components” are more likely, than the USML articles described above, to be produced by small businesses. In addition, officials of the Department of State have informed BIS that license applications for such “parts” and “components” represent a high percentage of the license applications for USML articles reviewed by that department. Changing the jurisdictional status of certain Category XIV and Category XVIII items would reduce the burden on small entities (and other entities as well) through: (i) elimination of some license requirements; (ii) greater availability of license exceptions; (iii) simpler license application procedures; and (iv) reduced or eliminated registration fees.

Moreover, “parts” and “components” that are controlled under the ITAR remain under ITAR control when incorporated into foreign-made items, regardless of the significance or insignificance of the item. This discourages foreign buyers from incorporating such U.S. content. The availability of de minimis treatment under the EAR, for those items that would no longer be controlled under the ITAR, may reduce the disincentive for foreign manufacturers to purchase U.S.-origin “parts” and “components,” a development that potentially would mean greater sales for U.S. suppliers, including small entities.

Many exports and reexports of the Category XIV or Category XVIII articles that would be added to the CCL by this rule (particularly, the “parts” and “components” that would be controlled under new ECCN 1A607.x, 1B607.x, or 6B619.x) would become eligible for license exceptions that apply to exports to U.S. Government agencies, exports of “parts” and “components” for use as replacement parts, temporary exports and limited value exports (for ECCN 1B607 and 6B619 items, only), as well as License Exception STA, thereby reducing the number of licenses that exporters of these items would need. License exceptions under the EAR would allow suppliers to send routine replacement parts and low level parts to NATO and other close allies and export control regime partners for use by those governments and for use by contractors building equipment for those governments or for the U.S. Government without having to obtain export licenses. Under License Exception STA, the exporter would need to furnish information about the item being exported to the consignee and obtain a statement from the consignee that, among other things, would commit the consignee to comply with the EAR and other applicable U.S. laws. Because such statements and obligations can apply to an unlimited number of transactions and have no expiration date, they would create a net reduction in burden on transactions that the government routinely approves through the license application process that the License Exception STA statements would replace.

Even for exports and reexports for which a license would be required, the process for obtaining a license would be simpler and less costly under the EAR. When a USML Category XIV or Category XVIII article is moved to the CCL, the number of destinations for which a license is required would remain unchanged. However, the burden on the license applicant would decrease because the licensing procedure for CCL items is simpler and more flexible than the licensing procedure for USML articles.

Under the USML licensing procedure, an applicant must include a purchase order or contract with its application. There is no such requirement under the CCL licensing procedure. This difference gives the CCL applicant at least two advantages. First, the applicant has a way to determine whether the U.S. Government will authorize the transaction before it enters into potentially lengthy, complex and expensive sales presentations or contract negotiations. Under the USML procedure, the applicant must caveat all sales presentations with a reference to the need for government approval, and is more likely to engage in substantial effort and expense only to find that the government will reject the application. Second, a CCL license applicant need not limit its application to the quantity or value of one purchase order or contract. It may apply for a license to cover all of its expected exports or reexports to a specified consignee over the life of a license (normally four years, but may be longer if circumstances warrant a longer period), thus reducing the total number of licenses for which the applicant must apply.

In addition, many applicants exporting or reexporting items that this rule proposes to transfer from the USML to the CCL would realize cost savings through the elimination of some or all registration fees currently assessed under the USML's licensing procedure. Currently, USML applicants must pay to use the USML licensing procedure even if they never actually are authorized to export. Registration fees for manufacturers and exporters of articles on the USML start at $2,250 per year, increase to $2,750 for organizations applying for one to ten licenses per year and further increase to $2,750 plus $250 per license application (subject to a maximum of three percent of total application value) for those who need to apply for more than ten licenses per year. Conversely, there are no registration or application processing fees for applications to export items listed on the CCL. Once the Category XIV or Category XVIII items that are the subject to this rulemaking are removed from the USML and added to the CCL, entities currently applying for licenses from the Department of State would find their registration fees reduced if the number of USML licenses those entities need declines. If an entity's entire product line is moved to the CCL, its ITAR registration and registration fee requirement would be eliminated.

BIS expects that the changes to the EAR proposed in this rule will have a positive effect on all affected entities, including small entities. While BIS acknowledges that this rule may have some cost impacts on small (and other) entities, those costs are more than offset by the benefits to the entities from the licensing procedures under the EAR, which are much less costly and less time consuming than the procedures under the ITAR. As noted above, any new burdens proposed by this rule would be offset by a reduction in the number of items that would require a license, increased opportunities for use of license exceptions for exports to certain countries, simpler export license applications, reduced or eliminated registration fees and application of a de minimis threshold for foreign-made items incorporating U.S.-origin parts and components, all of which would reduce the incentive for foreign buyers to design out or avoid U.S.-origin content. Accordingly, the Chief Counsel for Regulation, Department of Commerce, has certified to the Chief Counsel for Advocacy, Small Business Administration, that this rule, if implemented, would not have a significant economic impact on a substantial number of small entities. Accordingly, an initial regulatory flexibility analysis is not required, and none has been prepared.

For the reasons stated in the preamble, part 774 of the Export Administration Regulations (15 CFR parts 730-774) is proposed to be amended as follows:

The Directorate of Defense Trade Controls (DDTC), U.S. Department of State, administers the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120-130). The items subject to the jurisdiction of the ITAR, i.e., “defense articles,” are identified on the ITAR's U.S. Munitions List (USML) (22 CFR 121.1). With few exceptions, items not subject to the export control jurisdiction of the ITAR are subject to the jurisdiction of the Export Administration Regulations (“EAR,” 15 CFR parts 730-774, which includes the Commerce Control List (CCL) in Supplement No. 1 to Part 774), administered by the Bureau of Industry and Security (BIS), U.S. Department of Commerce. Both the ITAR and the EAR impose license requirements on exports and reexports. Items not subject to the ITAR or to the exclusive licensing jurisdiction of any other set of regulations are subject to the EAR.

This proposed rule revises USML Category XIV, covering toxicological agents, including chemical agents, biological agents, and associated equipment. The revisions are proposed in order to advance the national security objectives of greater interoperability with U.S. allies, enhancing the defense industrial base, and permitting the U.S. government to focus its resources on transactions of greater concern. Additionally, the revisions are intended to more accurately describe the articles within the subject categories, in order to establish a “bright line” between the USML and the CCL for the control of these articles.

This proposed rule implements changes consistent with the requirements of Executive Order 13546 on Optimizing the Security of Biological Select Agents and Toxins in the United States, which includes direction to address variations in, and limited coordination of, individual executive departments' and agencies' oversight that add to the cost and complexity of compliance. It also directs a risk-based tiering of the biological select agent list. As a result, the proposed control language in paragraph (b) adopts the “Tier 1” pathogens and toxins established in the Department of Health and Human Services and the United States Department of Agriculture select agent regulations (42 CFR part 73 and 9 CFR 121) for those pathogens and toxins that meet specific capabilities listed in paragraph (b). The Tier 1 pathogens and toxins that do not meet these capabilities remain controlled in Export Control Classification Number (ECCN) 1C351 or 1C352 on the CCL.

Additionally, this rule, in concert with the analogous proposed rule published by the Department of Commerce, proposes the movement of riot control agents to the export jurisdiction of the Department of Commerce, as well as the articles covered currently in paragraphs (j), (k), and (l), which include test facilities, equipment for the destruction of chemical and biological agents, and tooling for production of articles in paragraph (f), respectively.

Other changes include the addition of paragraph (a)(5) to control chemical warfare agents “adapted for use in war” and not elsewhere enumerated, as well as the removal of paragraphs (f)(3) and (f)(6) and movement to the CCL of equipment for the sample collection and decontamination or remediation of chemical agents and biological agents. Paragraph (f)(5) for collective protection was removed and partially combined in (f)(4) or the CCL. Proposed paragraph (g) enumerates antibodies, recombinant protective antigens, polynucleotides, biopolymers, or biocatalysts exclusively funded by a Department of Defense contract for detection of the biological agents listed in paragraph (b)(1)(ii).

The Department notes that the controls in paragraph (f)(2) that include the phrase “developed under a Department of Defense contract or other funding authorization” do not apply when the Department of Defense acts solely as a servicing agency for a contract on behalf of another agency of the U.S. government.

The Department notes that the controls in paragraphs (g)(1) and (h) that include the phrase “exclusively funded by a Department of Defense contract” do not apply when the Department of Defense acts solely as a servicing agency for a contract on behalf of another agency of the U.S. government, or, for example, in cases where the Department of Defense provides initial funding for the development of an item but another agency of the U.S. government provides funding to further develop or adapt the item.

Proposed paragraph (h) enumerates certain vaccines funded exclusively by the Department of Defense, as well as certain vaccines controlled in (h)(2) that are specially designed for the sole purpose of protecting against biological agents and biologically derived substances identified in (b). Thus, the scope of vaccines controlled in (h)(2) is circumscribed by the nature of funding, the satisfaction of the term “specially designed” as that term is defined in ITAR § 120.41, and the limitations in (b) that control only those biological agents and biologically derived substances meeting specific criteria. In evaluating the scope of this control, please note that the Department offers a decision tool to aid exporters in determining whether a defense article meets the definition of “specially designed.” This tool is available at http://www.pmddtc.state.gov/licensing/dt_SpeciallyDesigned.htm.

Proposed revised paragraph (i) is updated to provide better clarity on the scope of the control by including examples of Department of Defense tools that are used to determine or estimate potential effects of chemical or biological weapons strikes and incidents in order to plan to mitigate their impacts.

A new paragraph (x) has been added to USML Category XIV, allowing ITAR licensing on behalf of the Department of Commerce for commodities, software, and technology subject to the EAR provided those commodities, software, and technology are to be used in or with defense articles controlled in USML Category XIV and are described in the purchase documentation submitted with the application. The intent of paragraph (x) is not to impose ITAR jurisdiction on commodities, software, and technology subject to EAR controls.

Finally, the rule proposes to only control on the USML chemical or biological agent detectors when they contain Department of Defense reagents, spectra, algorithms, databases, etc.

This proposed rule revises USML Category XVIII, covering directed energy weapons. As with USML Category XIV, the revisions are proposed in order to advance the national security objectives set forth above and to more accurately describe the articles within the subject categories, in order to establish a “bright line” between the USML and the CCL for the control of these articles. A change proposed in this rule would revise paragraph (a) to control only those items that satisfy the paragraph's definition of “directed energy weapon,” which focuses on the sole or primary purpose of the article in order to exclude those items that might achieve the same effect in an incidental, accidental, or collateral manner.

The articles controlled currently in paragraphs (c) and (d) would move to the export control jurisdiction of the Department of Commerce.

The remaining paragraphs in this category would undergo conforming changes to bring their structures into alignment with the analogous provisions found in other revised USML categories.

The proposed revisions to the USML will control items in normal commercial use and on the Wassenaar Arrangement's Dual Use List. The Department welcomes the assistance of users of the lists and requests input on the following:

(1) A key goal of this rulemaking is to ensure the USML and the CCL together control all the items that meet Wassenaar Arrangement commitments embodied in Munitions List Categories 7 (WA-ML7) and 19 (WA-ML19). The public is therefore asked to identify any potential lack of coverage brought about by the proposed rules for Categories XIV and XVIII contained in this proposed rule and the new Category 1 and Category 6 ECCNs published separately by the Department of Commerce when reviewed together.

(2) Another key goal of this rulemaking is to identify items proposed for control on the USML or the CCL that are not controlled on the Wassenaar Arrangement's Munitions or Dual Use List. The public is therefore asked to identify any potential expansion of coverage brought about by the proposed rules for Categories XIV and XVIII contained in this proposed rule and the new Category 1 and Category 6 ECCNs published separately by the Department of Commerce when reviewed together.

(3) A third key goal of this rulemaking is to establish a “bright line” between the USML and the CCL for the control of these materials. The public is asked to provide specific examples of toxicological agents, including chemical agents, biological agents, and associated equipment, as well as directed energy weapons, whose jurisdiction would be in doubt based on this revision. The public is also asked to comment on whether there is a sufficiently clear line drawn between the biological items proposed for control by USML Category XIV(b) and those proposed for control under the CCL.

(4) Although the proposed revisions to the USML do not preclude the possibility that items in normal commercial use would or should be ITAR-controlled because, e.g., they provide the United States with a critical military or intelligence advantage, the U.S. government does not want to inadvertently control items on the ITAR that are in normal commercial use. Items that would be controlled on the USML in this proposed rule have been identified as possessing parameters or characteristics that provide a critical military or intelligence advantage. The public is thus asked to provide specific examples of items, or associated technical data, if any, that would be controlled in the revised USML Categories XIV or XVIII that are now in normal commercial use, or that are commonly used or produced in civilian scientific laboratories. The examples should demonstrate actual commercial or civilian scientific use, not just potential or theoretical use, with supporting documents, as well as foreign availability of such items. Additionally, for any criteria the public believes control items in normal commercial or civilian scientific use, the public is asked to identify parameters or characteristics that cover items exclusively or primarily in military use. Finally, for any criteria the public believes control items in normal commercial use, the public is asked to identify the multilateral controls (such as the Wassenaar Arrangement's Dual Use List), if any, for such items, and the consequences of such items being controlled on the USML.

(5) The public is asked to provide comment on the proposed definition of “non-naturally occurring” in Note 2 to Category XIV(b), if the proposed definition does not appear to be comprehensive. The public is also asked to comment on “non-naturally occurring” in the context of genetic modification and consider whether the definition is sufficient to distinguish military or intelligence purposes from commercial or civilian purposes.

(6) The public is asked to provide specific examples of reagents that may be inadvertently controlled by Category XIV(b), XIV(f), XIV(g), or XIV(m), that are commonly used for scientific research and development, or medical countermeasures that may similarly be inadvertently controlled and the dissemination of which would be in the interest of public health or medical preparedness.

(7) The public is asked to specifically evaluate and comment on the decision process outlined in the proposed rule that would be used to determine whether vaccines that are intended to be developed and used to protect public and veterinary health against any event resulting from exposure to naturally occurring or non-naturally occurring pathogens or toxins is sufficiently clear to allow research and commercial entities to determine whether a vaccine would unintentionally be captured under this rule. Please provide specific examples that demonstrate how the proposed rule would prevent or hinder the ability to develop or utilize vaccines for public health or veterinary benefit under this proposed language and decision process.

(8) In the interest of ensuring the security of and control over certain types of chemical and biological detection equipment, Category XIV(f)(2) could incidentally impose ITAR controls on certain civilian and public health equipment containing the items listed in paragraph (f)(2). Accordingly, as proposed, paragraph (f)(2) may control detection equipment that may not warrant ITAR control, but contains items that are fully or partially Defense-funded. The Department requests comment from the public, including specific examples of equipment that the public believes may be unintentionally controlled by this text by virtue of Defense funding.

In addition, the Department acknowledges that some members of the public may not be able comment meaningfully on this matter because they lack full awareness of items that have previously been fully or partially developed under Defense funding. To the extent that commenters require specific additional information about the scope of Defense funding in certain contexts, the Department requests that commenters identify any relevant gaps in knowledge.

The Department of State is of the opinion that controlling the import and export of defense articles and services is a foreign affairs function of the United States Government and that rules implementing this function are exempt from sections 553 (Rulemaking) and 554 (Adjudications) of the Administrative Procedure Act. Although the Department is of the opinion that this rule is exempt from the rulemaking provisions of the APA, the Department is publishing this rule with a 60-day provision for public comment and without prejudice to its determination that controlling the import and export of defense services is a foreign affairs function. As noted above, and also without prejudice to the Department position that this rulemaking is not subject to the APA, the Department previously published a related Advance Notice of Proposed Rulemaking (RIN 1400-AC78) on December 10, 2010 (75 FR 76935), and accepted comments for 60 days.

Since the Department is of the opinion that this rule is exempt from the rulemaking provisions of 5 U.S.C. 553, it does not require analysis under the Regulatory Flexibility Act.

This proposed amendment does not involve a mandate that will result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any year and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This proposed amendment has been found not to be a major rule within the meaning of the Small Business Regulatory Enforcement Fairness Act of 1996.

This proposed amendment will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this proposed amendment does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this proposed amendment.

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, distributed 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 (OMB).

The Department of State has reviewed the proposed amendment in light of sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden.

The Department of State has determined that this rulemaking will not have tribal implications, will not impose substantial direct compliance costs on Indian tribal governments, and will not preempt tribal law. Accordingly, Executive Order 13175 does not apply to this rulemaking.

Following is a listing of approved collections that will be affected by revision of the U.S. Munitions List (USML) and the Commerce Control List pursuant to the President's Export Control Reform (ECR) initiative. This rule continues the implementation of ECR. The list of collections and the description of the manner in which they will be affected pertains to revision of the USML in its entirety, not only to the categories published in this rule. In accordance with the Paperwork Reduction Act, the Department of State will request comment on these collections from all interested persons. In particular, the Department will seek comment on changes to licensing burden based on implementation of regulatory changes pursuant to ECR, and on projected changes based on continued implementation of regulatory changes pursuant to ECR. The affected information collections are as follows:

(1) Statement of Registration, DS-2032, OMB No. 1405-0002. The Department estimates that between 3,000 and 5,000 of currently-registered persons will not need to maintain registration following full revision of the USML. This would result in a burden reduction of between 6,000 and 10,000 hours annually, based on a revised time burden of two hours to complete a Statement of Registration.

(2) Application/License for Permanent Export of Unclassified Defense Articles and Related Unclassified Technical Data, DSP-5, OMB No. 1405-0003. The Department estimates that there will be 35,000 fewer DSP-5 submissions annually following full revision of the USML. This would result in a burden reduction of 35,000 hours annually.

(3) Application/License for Temporary Import of Unclassified Defense Articles, DSP-61, OMB No. 1405-0013. The Department estimates that there will be 200 fewer DSP-61 submissions annually following full revision of the USML. This would result in a burden reduction of 100 hours annually.

(4) Application/License for Temporary Export of Unclassified Defense Articles, DSP-73, OMB No. 1405-0023. The Department estimates that there will be 800 fewer DSP-73 submissions annually following full revision of the USML. This would result in a burden reduction of 800 hours annually.

(5) Application for Amendment to License for Export or Import of Classified or Unclassified Defense Articles and Related Technical Data, DSP-6, -62, -74, -119, OMB No. 1405-0092. The Department estimates that there will be 2,000 fewer amendment submissions annually following full revision of the USML. This would result in a burden reduction of 1,000 hours annually.

(6) Request for Approval of Manufacturing License Agreements, Technical Assistance Agreements, and Other Agreements, DSP-5, OMB No. 1405-0093. The Department estimates that there will be 1,000 fewer agreement submissions annually following full revision of the USML. This would result in a burden reduction of 2,000 hours annually.

(7) Maintenance of Records by Registrants, OMB No. 1405-0111. The requirement to actively maintain records pursuant to provisions of the International Traffic in Arms Regulations (ITAR) will decline commensurate with the drop in the number of persons who will be required to register with the Department pursuant to the ITAR. As stated above, the Department estimates that up to 5,000 of the currently-registered persons will not need to maintain registration following full revision of the USML. This would result in a burden reduction of 100,000 hours annually. However, the ITAR does provide for the maintenance of records for a period of five years. Therefore, persons newly relieved of the requirement to register with the Department may still be required to maintain records.

Accordingly, for the reasons set forth above, Title 22, Chapter I, Subchapter M, part 121 is proposed to be amended as follows:

Invitation to Comment: We invite you to submit comments regarding this notice. To ensure that your comments have maximum effect in developing the notice of final priority, we urge you to identify clearly the specific section of the proposed priority that each comment addresses.

We invite you to assist us in complying with the specific requirements of Executive Orders 12866 and 13563 and their overall requirement of reducing regulatory burden that might result from this proposed priority. Please let us know of any further ways we could reduce potential costs or increase potential benefits while preserving the effective and efficient administration of the program.

During and after the comment period, you may inspect all public comments about this notice by accessing Regulations.gov. You may also inspect the comments in person in Room 5021, 550 12th Street SW., PCP, Washington, DC, 20202-2800, between the hours of 8:30 a.m. and 4:00 p.m., Washington, DC time, Monday through Friday of each week except Federal holidays. Please contact the person listed under FOR FURTHER INFORMATION CONTACT.

Assistance to Individuals with Disabilities in Reviewing the Rulemaking Record: On request we will provide an appropriate accommodation or auxiliary aid to an individual with a disability who needs assistance to review the comments or other documents in the public rulemaking record for this notice. If you want to schedule an appointment for this type of accommodation or auxiliary aid, please contact the person listed under FOR FURTHER INFORMATION CONTACT.

Purpose of Program: Under the Rehabilitation Act of 1973 (Rehabilitation Act), as amended by WIOA, the Rehabilitation Services Administration (RSA) makes grants to States and public or nonprofit agencies and organizations (including institutions of higher education) to support projects that provide training, traineeships, and TA designed to increase the numbers of, and improve the skills of, qualified personnel (especially rehabilitation counselors) who are trained to provide vocational, medical, social, and psychological rehabilitation services to individuals with disabilities; assist individuals with communication and related disorders; and provide other services authorized under the Rehabilitation Act.

Proposed Priority:

This notice contains one proposed priority.

Workforce Innovation Technical Assistance Center. Background:

WIOA supersedes the Workforce Investment Act of 1998 and amends the Rehabilitation Act, making major changes that affect the management and performance of the VR program and Supported Employment program. Among the changes are: (a) A requirement that States reserve at least 15 percent of their Federal VR allotment for providing or arranging for the provision of pre-employment transition services to students with disabilities; (b) a requirement that States reserve at least 50 percent of their Federal Supported Employment allotment for the provision of supported employment services, including extended services, to youth with the most significant disabilities; (c) a requirement that States provide a 10 percent non-Federal share to match the 50 percent of Supported Employment allotment reserved for the provision of supported employment services to youth with the most significant disabilities; (d) a requirement that VR agencies provide documentation of the completion of certain specified activities to individuals with disabilities, including youth with disabilities, seeking or wanting to maintain employment at a subminimum wage; (e) a heightened emphasis on the achievement of competitive integrated employment by individuals with disabilities; (f) enhanced coordination and integration of the VR program with other core programs of the workforce development system; and (g) new common performance accountability requirements for all core programs of the workforce development system, including the State VR program.

While some of these changes affect documentation or reporting requirements, others represent significant changes in the management and operation of the State VR program and the Supported Employment program. As such, RSA believes that it is appropriate to provide training and TA on the new statutory requirements imposed by WIOA.

RSA believes that a dedicated TA center would help collect and disseminate information about relevant existing, emerging, and evidence-based practices; assist in developing and disseminating new approaches and practices; and coordinate and share activities and approaches related to implementation of WIOA in the topic areas for this priority so that States have the benefit of learning from each other as WIOA implementation proceeds.

Proposed Priority:

The Assistant Secretary for Special Education and Rehabilitative Services proposes a priority to establish a cooperative agreement to create a Workforce Innovation Technical Assistance Center (WITAC) to assist VR agencies in implementing changes affecting the State Vocational Rehabilitation Services and State Supported Employment Services programs under WIOA, and to achieve, at a minimum, the following outcomes:

(a) Implementation of effective and efficient “pre-employment transition services” for students with disabilities, as set forth in section 113 of the Rehabilitation Act;

(b) Implementation by State VR agencies, in coordination with local and State educational agencies and with the Department of Labor, of the requirements in section 511 of the Rehabilitation Act that are under the purview of the Department of Education;

(c) Increased access to supported employment and customized employment services for individuals with the most significant disabilities, including youth with the most significant disabilities, receiving services under the State VR and Supported Employment programs;

(d) An increased percentage of individuals with disabilities who receive services through the State VR agency and who achieve employment outcomes in competitive integrated employment;

(e) Improved collaboration between State VR agencies and other core programs of the workforce development system; and

(f) Implementation of the new common performance accountability system under section 116 of WIOA.

Topic Areas.

The WITAC will develop and provide training and technical assistance (TA) to State VR agency staff and related rehabilitation professionals and service providers in five topic areas related to changes made by WIOA:

(a) Provision of pre-employment transition services to students with disabilities and supported employment services to youth with disabilities;

(b) Implementation of the requirements in section 511 of the Rehabilitation Act that are under the purview of the Department of Education;

(c) Provision of resources and strategies to help individuals with disabilities achieve competitive integrated employment, including customized employment and supported employment;

(d) Integration of the State VR program into the workforce development system; and

(e) Transition to the new common performance accountability system under section 116 of WIOA, including the collection and reporting of common data elements.

Project Activities.

To meet the requirements of this priority, the WITAC must, at a minimum, conduct the following activities:

Knowledge Development Activities.

(a) In the first year, collect information from the literature and from existing State and Federal programs about evidence-based and promising practices relevant to the work of the WITAC and make this information publicly available in a searchable, accessible, and useful format. The WITAC must review, at a minimum:

(1) Literature on evidence-based and promising practices relevant to the work of the WITAC;

(2) The results of State VR agency monitoring conducted by RSA;

(3) State VR agency program and performance data;

(4) Department of Education and Department of Labor policies and guidance on program changes made by WIOA and implementation of those changes; and

(5) Any existing State VR agency memoranda of understanding (MOUs) or agreement (MOAs) related to the work of the WITAC.

(b) In the first year, conduct a survey of relevant stakeholders and VR service providers to identify workforce development TA needs and a process by which TA solutions can be offered to State VR agencies and their partners. The WITAC must survey, at a minimum:

(1) State VR agency staff;

(2) Relevant RSA staff; and

(3) Other stakeholders, including stakeholders from the transition and special education community, the workforce development community, and the rehabilitation community.

(c) Develop and refine one or more curriculum guides for VR staff training for each of the topic areas listed in the Topic Areas section of this priority.

Technical Assistance and Dissemination Activities.

(a) Provide intensive, sustained TA 1 to a minimum of 23 State VR agencies and their associated rehabilitation professionals and service providers in the topic areas set out in this priority. The WITAC must provide intensive, sustained TA to a minimum of two agencies in the first year of the project and to a minimum of seven additional agencies per year in the second, third, and fourth years of the project. These are minimum requirements, and the expectation is that intensive, sustained TA will be provided, to the extent funds are available, to all of the State VR agencies that request intensive, sustained TA. This TA must include:

(1) For topic area (a), how to—

(i) Develop, manage, and implement effective pre-employment transition services to improve the transition of students with disabilities from secondary to postsecondary education and employment;

(ii) Coordinate pre-employment transition services with transition services provided under IDEA; and

(iii) Develop and implement supported employment services for youth with the most significant disabilities;

(2) For topic area (b):

(i) How to provide career-related counseling, information, and referral services to individuals entering and continuing employment at subminimum wages; and

(ii) How to implement documentation requirements for youth with disabilities seeking employment at subminimum wage, in accordance with section 511 of the Rehabilitation Act;

(3) For topic area (c), how to design and implement new services and new roles and responsibilities among partner agencies to increase the percentage of individuals achieving competitive integrated employment and to meet the supported employment and customized employment requirements of the Rehabilitation Act;

(4) For topic area (d), how to develop model relationships between State VR agencies and other core programs of the workforce development system for purposes of implementing the requirements of title I of WIOA, especially those requirements related to integration of core programs into the workforce development system; and

(5) For topic area (e), how to effectively transition to the new common performance accountability system required in section 116 of WIOA and use performance results to implement programmatic changes to improve agency performance.

(b) Provide a range of targeted, specialized TA 2 and universal, general TA 3 products and services on the topic areas in this priority. This TA must include, at a minimum, the following activities:

(1) Establishing and maintaining a state-of-the-art information technology (IT) platform sufficient to support Webinars, teleconferences, video conferences, and other virtual methods of dissemination of information and TA.

(2) Developing and maintaining a state-of-the-art archiving and dissemination system that—

(i) Provides a central location for later use of TA products, including course curricula, audiovisual materials, Webinars, examples of emerging and best practices for the topic areas in this priority, and any other TA products; and

(ii) Is open and available to the public.

(3) Providing a minimum of two Webinars or video conferences over the course of the project on each of the topic areas in this priority to describe and disseminate information about emerging and best practices in each area.

Coordination Activities.

(a) Establish one or more communities of practice that focus on the topic areas in this priority and that act as vehicles for communication and exchange of information among State VR agencies and partners, including the results of TA projects that are in progress or have been completed;

(b) Communicate, collaborate, and coordinate, on an ongoing basis, with other relevant Department-funded projects and those supported by the Social Security Administration (SSA) and the Departments of Labor, Health and Human Services, and Commerce; and

(c) Maintain ongoing communication with the RSA project officer and other RSA staff as required.

Application Requirements.

To be funded under this priority, applicants must meet the application and administrative requirements in this priority. RSA encourages innovative approaches to meet these requirements, which are:

(a) Demonstrate, in the narrative section of the application under “Significance of the Project,” how the proposed project will address State VR agencies' capacity to implement the requirements of WIOA. To meet this requirement, the applicant must:

(1) Demonstrate knowledge of current RSA guidance and State and Federal initiatives designed to improve engagement with the workforce development system and workforce development system partners;

(2) Demonstrate knowledge of current State VR agency and other efforts to improve engagement with secondary schools, youth programs, and other programs that provide services to youth with disabilities for the purpose of assisting such youth to enter postsecondary education or competitive integrated employment; and

(3) Demonstrate knowledge of current State VR agency efforts to engage with State Medicaid, developmental disability, and mental health agencies to develop agreements and provide services leading to competitive integrated employment, including supported employment and customized employment.

(b) Demonstrate, in the narrative section of the application under “Quality of Project Services,” how the proposed project will—

(1) Achieve its goals, objectives, and intended outcomes. To meet this requirement, the applicant must provide—

(i) Measurable intended project outcomes;

(ii) A plan for how the proposed project will achieve its intended outcomes; and

(iii) A plan for communicating, collaborating, and coordinating with key staff in State VR agencies; State and local partner programs; RSA partners, such as the Council of State Administrators of Vocational Rehabilitation, the National Association of State Directors of Special Education, the National Council of State Agencies for the Blind, and other TA centers; and relevant programs within SSA and the Departments of Education, Labor, Health and Human Services, and Commerce.

(2) Use a conceptual framework to develop project plans and activities, describing any underlying concepts, assumptions, expectations, beliefs, or theories, as well as the presumed relationships or linkages among these variables, and any empirical support for this framework.

(3) Be based on current research and make use of evidence-based practices. To meet this requirement, the applicant must describe—

(i) How the current research about adult learning principles and implementation science will inform the proposed TA; and

(ii) How the proposed project will incorporate current research and evidence-based practices in the development and delivery of its products and services.

(4) Develop products and provide services that are of high quality and sufficient intensity and duration to achieve the intended outcomes of the proposed project. To address this requirement, the applicant must describe—

(i) Its proposed activities to identify or develop the knowledge base on emerging and promising practices in the five topic areas listed in the Topic Areas section of this priority;

(ii) Its proposed approach to universal, general TA;

(iii) Its proposed approach to targeted, specialized TA, which must identify—

(A) The intended recipients of the products and services under this approach; and

(B) Its proposed approach to measure the capacity and readiness of State VR agencies to work with the proposed project, assessing, at a minimum, their current infrastructure, available resources, and ability to effectively respond to the TA, as appropriate;

(iv) Its proposed approach to intensive, sustained TA, which must identify—

(A) The intended recipients of the products and services under this approach;

(B) Its proposed approach to measure the readiness of the State VR agencies to work with the proposed project, including the State VR agencies' commitment to the initiative, fit of the initiative, current infrastructure, available resources, and ability to effectively respond to the TA, as appropriate;

(C) Its proposed plan for assisting State VR agencies to build training systems that include professional development based on adult learning principles and coaching; and

(D) Its proposed plan for developing agreements with State VR agencies to provide intensive, sustained TA. The plan must describe how the agreements will outline the purposes of the TA, the intended outcomes of the TA, and the measurable objectives of the TA that will be evaluated.

(5) Develop products and implement services to maximize the project's efficiency. To address this requirement, the applicant must describe—

(i) How the proposed project will use technology to achieve the intended project outcomes; and

(ii) With whom the proposed project will collaborate and the intended outcomes of this collaboration.

(c) Demonstrate, in the narrative section of the application under “Quality of the Evaluation Plan,” how the proposed project will—

(1) Measure and track the effectiveness of the TA provided. To meet this requirement, the applicant must describe its proposed approach to—

(i) Collecting data on the effectiveness of each TA activity from State VR agencies, partners, or other sources, as appropriate; and

(ii) Analyzing data and determining effectiveness of each TA activity, including any proposed standards or targets for determining effectiveness.

(2) Collect and analyze data on specific and measurable goals, objectives, and intended outcomes of the project, including measuring and tracking the effectiveness of the TA provided. To address this requirement, the applicant must describe—

(i) Its proposed evaluation methodologies, including instruments, data collection methods, and analyses;

(ii) Its proposed standards or targets for determining effectiveness;

(iii) How it will use the evaluation results to examine the effectiveness of its implementation and its progress toward achieving the intended outcomes; and

(iv) How the methods of evaluation will produce quantitative and qualitative data that demonstrate whether the project and individual TA activities achieved their intended outcomes.

(d) Demonstrate, in the narrative section of the application under “Adequacy of Project Resources,” how—

(1) The proposed project will encourage applications for employment from persons who are members of groups that have historically been underrepresented based on race, color, national origin, gender, age, or disability, as appropriate;

(2) The proposed key project personnel, consultants, and subcontractors have the qualifications and experience to provide TA to State VR agencies and their partners in each of the topic areas in this priority and to achieve the project's intended outcomes;

(3) The applicant and any key partners have adequate resources to carry out the proposed activities; and

(4) The proposed costs are reasonable in relation to the anticipated results and benefits;

(e) Demonstrate, in the narrative section of the application under “Quality of the Management Plan,” how—

(1) The proposed management plan will ensure that the project's intended outcomes will be achieved on time and within budget. To address this requirement, the applicant must describe—

(i) Clearly defined responsibilities for key project personnel, consultants, and subcontractors, as applicable; and

(ii) Timelines and milestones for accomplishing the project tasks.

(2) Key project personnel and any consultants and subcontractors will be allocated to the project and how these allocations are appropriate and adequate to achieve the project's intended outcomes, including an assurance that such personnel will have adequate availability to ensure timely communications with stakeholders and RSA;

(3) The proposed management plan will ensure that the products and services provided are of high quality; and

(4) The proposed project will benefit from a diversity of perspectives, including those of State and local personnel, TA providers, researchers, and policy makers, among others, in its development and operation.

Types of Priorities:

When inviting applications for a competition using one or more priorities, we designate the type of each priority as absolute, competitive preference, or invitational through a notice in the Federal Register. The effect of each type of priority follows:

Absolute priority: Under an absolute priority, we consider only applications that meet the priority (34 CFR 75.105(c)(3)).

Competitive preference priority: Under a competitive preference priority, we give competitive preference to an application by (1) awarding additional points, depending on the extent to which the application meets the priority (34 CFR 75.105(c)(2)(i)); or (2) selecting an application that meets the priority over an application of comparable merit that does not meet the priority (34 CFR 75.105(c)(2)(ii)).

Invitational priority: Under an invitational priority, we are particularly interested in applications that meet the priority. However, we do not give an application that meets the priority a preference over other applications (34 CFR 75.105(c)(1)).

Final Priority:

We will announce the final priority in a notice in the Federal Register. We will determine the final priority after considering responses to this notice and other information available to the Department. This notice does not preclude us from proposing additional priorities, requirements, definitions, or selection criteria, subject to meeting applicable rulemaking requirements.

Note: This notice does not solicit applications. In any year in which we choose to use this priority, we invite applications through a notice in the Federal Register.

Under Executive Order 12866, the Secretary must determine whether this proposed regulatory action is “significant” and, therefore, subject to the requirements of the Executive order and subject to review by the Office of Management and Budget (OMB). Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action likely to result in a rule that may—

(1) Have an annual effect on the economy of $100 million or more, or adversely affect a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities in a material way (also referred to as an “economically significant” rule);

(2) Create serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3) Materially alter the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles stated in the Executive order.

This proposed regulatory action is not a significant regulatory action subject to review by OMB under section 3(f) of Executive Order 12866.

We have also reviewed this proposed regulatory action under Executive Order 13563, which supplements and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, Executive Order 13563 requires that an agency—

(1) Propose or adopt regulations only on a reasoned determination that their benefits justify their costs (recognizing that some benefits and costs are difficult to quantify);

(2) Tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives and taking into account—among other things and to the extent practicable—the costs of cumulative regulations;

(3) In choosing among alternative regulatory approaches, select those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity);

(4) To the extent feasible, specify performance objectives, rather than the behavior or manner of compliance a regulated entity must adopt; and

(5) Identify and assess available alternatives to direct regulation, including economic incentives—such as user fees or marketable permits—to encourage the desired behavior, or provide information that enables the public to make choices.

Executive Order 13563 also requires an agency “to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible.” The Office of Information and Regulatory Affairs of OMB has emphasized that these techniques may include “identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes.”

We are issuing this proposed priority only on a reasoned determination that its benefits would justify its costs. In choosing among alternative regulatory approaches, we selected those approaches that would maximize net benefits. Based on the analysis that follows, the Department believes that this regulatory action is consistent with the principles in Executive Order 13563.

We also have determined that this regulatory action would not unduly interfere with State, local, and tribal governments in the exercise of their governmental functions.

In accordance with both Executive orders, the Department has assessed the potential costs and benefits, both quantitative and qualitative, of this regulatory action. The potential costs are those resulting from statutory requirements and those we have determined as necessary for administering the Department's programs and activities.

We propose to fund through this priority TA to State VR agencies to improve the quality of VR services and of the competitive integrated employment outcomes achieved by individuals with disabilities, and ultimately to increase the percentage of individuals with disabilities who receive services through the State VR agencies who achieve competitive integrated employment outcomes. This proposed priority would promote the efficient and effective use of Federal funds.

Intergovernmental Review: This program is subject to Executive Order 12372 and the regulations in 34 CFR part 79. One of the objectives of the Executive order is to foster an intergovernmental partnership and a strengthened federalism. The Executive order relies on processes developed by State and local governments for coordination and review of proposed Federal financial assistance.

This document provides early notification of our specific plans and actions for this program.

Accessible Format: Individuals with disabilities can obtain this document in an accessible format (e.g., braille, large print, audiotape, or compact disc) on request to the program contact person listed under FOR FURTHER INFORMATION CONTACT.

Electronic Access to This Document: The official version of this document is the document published in the Federal Register. Free Internet access to the official edition of the Federal Register and the Code of Federal Regulations is available via the Federal Digital System at: www.thefederalregister.org/fdsys. At this site you can view this document, as well as all other documents of this Department published in the Federal Register, in text or Adobe Portable Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, which is available free at the site.

You may also access documents of the Department published in the Federal Register by using the article search feature at: www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department.

The President encourages Federal agencies through Executive Order 13563 to develop balanced regulations by encouraging broad public participation in the regulatory process and an open exchange of ideas. The Department of Health and Human Services (HHS) accordingly urges all interested parties to examine this regulatory proposal carefully and to share your views with us, including any data to support your positions. If you have questions before submitting comments, please see the “For Further Information” box above for the names and contact information of subject-matter experts involved in this proposal's development. We must consider all written comments received during the comment period before issuing a final rule.

If you are a person with a disability and/or a user of assistive technology who has difficulty accessing this document, please contact HRSA's Regulations Officer at: Room 14-101, 5600 Fishers Lane, Rockville, MD 20857; or by telephone at 301-443-1785, to obtain this information in an accessible format. This is not a toll free telephone number.

Please visit http://www.HHS.gov/regulations for more information on HHS rulemaking and opportunities to comment on proposed and existing rules.

Section 602 of Public Law 102-585, the “Veterans Health Care Act of 1992,” enacted section 340B of the Public Health Service Act (PHSA) “Limitation on Prices of Drugs Purchased by Covered Entities,” codified at 42 U.S.C. 256b. The 340B Program permits covered entities “to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.” H.R. REP. No. 102-384(II), at 12 (1992). Eligible covered entity types are defined in section 340B(a)(4) of the PHSA, as amended. Section 340B of the PHSA instructs HHS to enter into a pharmaceutical pricing agreement (PPA) with certain drug manufacturers. If a drug manufacturer signs a PPA, it agrees that the prices charged for covered outpatient drugs to covered entities will not exceed defined 340B ceiling prices, which are based on quarterly pricing data reported to the Centers for Medicare & Medicaid Services (CMS). Section 7102 of the Patient Protection and Affordable Care Act (Pub. L. 111-148) as amended by section 2302 of the Health Care and Education Reconciliation Act (Pub. L. 111-152) (HCERA) (hereinafter referred to as the “Affordable Care Act”), added section 340B(d)(1)(B)(vi) of the PHSA, which provides for: The imposition of sanctions in the form of civil monetary penalties, which—

(I) shall be assessed according to standards established in regulations to be promulgated by the Secretary not later than 180 days after the date of enactment of the Patient Protection and Affordable Care Act;

(II) shall not exceed $5,000 for each instance of overcharging a covered entity that may have occurred; and

(III) shall apply to any manufacturer with an agreement under this section that knowingly and intentionally charges a covered entity a price for purchase of a drug that exceeds the maximum applicable price under subsection (a)(1).

The Affordable Care Act also added section 340B(d)(1)(B)(i)(I) of the PHSA, which requires the “[d]evelopment and publishing through an appropriate policy or regulatory issuance, precisely defined standards and methodology for the calculation of ceiling prices. . . .”

Since 1992, HHS has administratively established the terms and certain elements of the 340B Program through guidelines published in the Federal Register, typically after notice and opportunity for comment. In September 2010, HHS published two advanced notices of proposed rulemaking (ANPRM) in the Federal Register, 340B Drug Pricing Program Administrative Dispute Resolution Process (75 FR 57233 (September 20, 2010)) and 340B Drug Pricing Program Manufacturer Civil Monetary Penalties (75 FR 57230 (September 20, 2010)). The administrative dispute resolution process remains under development and is not included in this notice of proposed rulemaking. HHS intends to address dispute resolution in future rulemaking.

In the manufacturer civil monetary penalties ANPRM, HHS sought comments relevant to this provision and requested comment on nine identified areas: (1) Existing Models; (2) Threshold Determination; (3) Administrative Process Elements; (4) Hearing; (5) Appeals Process; (6) Definitions; (7) Penalty Computation; (8) Payment of Penalty; and (9) Integration of Civil Monetary Penalties with Other Provisions in the Affordable Care Act. The request for comments on existing models requested comments on the appropriateness on the use and adaptation of the procedures codified at 42 CFR part 1003, which includes procedures for the imposition of civil monetary penalties by the HHS Office of the Inspector General. HRSA received 15 comments on the ANPRM. The comments received have been considered in the development of this notice. HHS is also proposing this rule to provide increased clarity in the marketplace for all 340B Program stakeholders as to the calculation of the 340B ceiling price. HHS encourages all stakeholders to provide comments on this notice of proposed rulemaking.

The proposed revisions to 42 CFR part 10 of the regulations are described according to the applicable section of the regulations. The United States District Court for the District of Columbia recently vacated the 340B Program Regulations at 42 CFR part 10 relating to Orphan Drugs. PhRMA v. HHS, No. 13-01501 (D.D.C. May 23, 2014). This NPRM proposes to replace sections 10.1, 10.2, 10.3, and 10.10 with the provisions of this NPRM, add a new section 10.11, and eliminate sections 10.20 and 10.21.

This part implements section 340B of the Public Health Service Act (PHSA) “Limitation on Prices of Drugs Purchased by Covered Entities.”

Section 340B of the PHSA instructs the Secretary of Health and Human Services to enter into agreements with manufacturers of covered outpatient drugs under which the amount to be paid to manufacturers by certain statutorily-defined covered entities does not exceed the 340B ceiling price. Manufacturers participating in the 340B Drug Pricing Program (340B Program) are required to provide these discounts on all covered outpatient drugs sold to participating 340B covered entities.

The Department is proposing to revise the following definitions: “ceiling price,” “covered entity,” “covered outpatient drug,” and “manufacturer.”

The Department is proposing to add the following definitions: “340B drug,” “Average Manufacturer Price (AMP),” “CMS,” “National Drug Code (NDC),” “quarter,” and “wholesaler.”

The definitions for “Pharmaceutical Pricing Agreement (PPA),” and “Secretary” would remain in the section, and the definitions for “Group purchasing organization (GPO),” “orphan drug,” and “participating drug manufacturer” would be removed from the section.

A manufacturer must calculate the ceiling price for all of its covered outpatient drugs on a quarterly basis. The calculation of the 340B ceiling price for a 340B drug is established by statute. Under section 340B(a) of the PHSA, the 340B ceiling price for covered outpatient drugs is calculated by subtracting the unit rebate amount (URA) from the average manufacturer price (AMP) for the smallest unit of measure and will be calculated using six decimal places. To ensure the final price is operational in the marketplace, HRSA then multiplies this amount by the drug's package size and case package size. HRSA will publish the 340B ceiling price rounded to two decimal places.

Under the Medicaid Drug Rebate Program, CMS indexes quarterly AMPs to the rate of inflation (Consumer Price Index adjusted for inflation-urban). Section 1927(c)(2)(A) of the Social Security Act provides that with respect to single source and innovator multiple source drugs, if the AMP increases at a rate faster than inflation, the manufacturer must pay an additional rebate amount which is reflected in a higher URA. Historically, because of the basic rebate and the inflation factor, section 1927(c)(2)(A) could increase the rebate amount a manufacturer must pay to States, resulting in negative 340B prices. As of January 1, 2010, a provision in section 1927(c)(2)(D) of the Social Security Act effectively limited the unit rebate amount to 100 percent of the AMP. Thus, an increase in the basic rebate and inflation factor would not result in a negative 340B price, but could result in a zero 340B price.

HHS recognizes that when the URA equals the AMP in the calculation of the 340B ceiling price, it is not reasonable for a manufacturer to set a 340B ceiling price to $0.00 per unit of measure. HHS proposes that a manufacturer charge a $0.01 per unit of measure for a drug with a ceiling price below $0.01. For those 340B drugs whose calculated price is less than $0.01, the effective ceiling price will be $0.01 per unit of measure.

Manufacturers may not use the prior quarter's pricing, wholesale acquisition cost (WAC), or any other non-340B contract price in place of the penny pricing, as 340B ceiling prices must be based on the immediately preceding calendar quarter pricing data. Using the prior quarter pricing or some other price would nullify the pricing formula.

Calculation of the current quarter ceiling price for each covered outpatient drug is based on pricing data from the immediately preceding calendar quarter. For new drugs, there will be no sales data from which to determine the 340B ceiling price. HHS published final guidelines in 1995 describing ceiling price calculations for new drugs (60 FR 51488 (October 2, 1995)). HHS is proposing to codify the longstanding policy from the 1995 final guidelines in these regulations. HHS proposes that a manufacturer will continue to estimate the 340B ceiling price for the first three quarters a new covered outpatient drug is available for sale. The ceiling price calculation described in paragraph (a) of this section will be required beginning with the fourth quarter the drug is available for sale. A manufacturer must calculate the actual 340B ceiling price for the first three quarters the drug was available for sale and refund or credit covered entities that purchased the covered outpatient drug above the calculated 340B ceiling price no later than the end of the fourth quarter after the drug is available for sale. For example, if a manufacturer with a PPA has a new drug approved for sale in February and that drug meets the definition of covered outpatient drug, the price estimation requirements would apply. The manufacturer would estimate the 340B ceiling price for the first three calendar quarters of availability. Beginning with the fourth quarter (October 1-December 31), the manufacturer will have the necessary pricing data to calculate the ceiling price based on section 340B(a)(1) of the PHSA. The manufacturer would then calculate the actual 340B ceiling price for the first three quarters and refund or credit covered entities which paid above the calculated ceiling price during those quarters. The refunds and credits must be completed by the end of the fourth quarter.

HRSA solicits comments on all aspects of the 340B ceiling price methodology proposed.

Any manufacturer with a pharmaceutical pricing agreement that knowingly and intentionally charges a covered entity more than the ceiling price, as defined in § 10.10, for a covered outpatient drug, may be subject to a civil monetary penalty not to exceed $5,000 for each instance of overcharging a covered entity, as defined in paragraph (b) of this section. Any civil monetary penalty assessed will be in addition to repayment for an instance of overcharging as required by section 340B(d)(1)(B)(ii) of the PHSA. Pursuant to a delegation of authority, the HHS Office of Inspector General (OIG) will have the authority to bring 340B CMP actions utilizing the standards applied to other civil monetary penalties under 42 CFR parts 1003 and 1005.

An instance of overcharging is any order for a certain covered outpatient drug, by NDC, which results in a covered entity paying more than the ceiling price, as defined in § 10.10, for a covered outpatient drug. Each order for an NDC will constitute a single instance, regardless of the number of units of each NDC in that order. Likewise, if a covered entity orders a single bottle of a covered outpatient drug four times in a month, it would be considered four instances of overcharging. This includes any order placed directly with a manufacturer or through a wholesaler, authorized distributor, or agent. An instance of overcharging is considered at the 11-digit NDC level and may not be offset by other discounts provided on any other NDC or discounts provided on the same NDC on other transactions, orders, or purchases. An instance of overcharging may occur at the time of initial purchase or when subsequent ceiling price recalculations resulting from pricing data submitted to CMS occur and the manufacturer refuses to refund or issue a credit to a covered entity. A manufacturer's failure to provide the 340B ceiling price is not considered an instance of overcharging when a covered entity did not initially identify the purchase to the manufacturer as 340B-eligible at the time of purchase. Covered entity orders of non-340B priced drugs will not subsequently be considered an instance of overcharging unless the manufacturer's documented refusal to sell or make drugs available at the 340B price resulted in the covered entity purchasing at the non-340B price. When a manufacturer's documented refusal to sell or make drugs available at the 340B price results in the covered entity purchasing at the non-340B price, a manufacturer's sale at the non-340B price could be considered an instance of overcharging.

All requirements for offering the 340B ceiling price to covered entities apply regardless of the distribution system. Specialty distribution, regardless of justification, must ensure 340B covered entities purchase covered outpatient drugs at or below the ceiling price. Manufacturers commonly use wholesalers to distribute drugs on their behalf. This regulation and associated penalties applies solely to manufacturers, even though other parties, such as wholesalers, have a role in ultimately ensuring the covered entity receives a 340B drug at or below the ceiling prices. Manufacturers should consider the wholesaler role in this process and work out issues in good faith and in normal business arrangements regarding the assurance that the covered entity receives the appropriate price as outlined in this regulation. A manufacturer's failure to ensure that covered entities receive the appropriate 340B discount through its distribution arrangements may be grounds for the assessment of civil monetary penalties under this regulation.

HHS has examined the effects of this rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 8, 2011), the Regulatory Flexibility Act (September 19, 1980, Pub. L. 96-354), the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132 on Federalism (August 4, 1999).

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 is supplemental to and reaffirms the principles, structures, and definitions governing regulatory review as established in Executive Order 12866, emphasizing the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action that is likely to result in a rule: (1) Having an annual effect on the economy of $100 million or more in any 1 year, or adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities (also referred to as “economically significant”); (2) creating a serious inconsistency or otherwise interfering with an action taken or planned by another agency; (3) materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raising novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year), and a “significant” regulatory action is subject to review by the Office of Management and Budget (OMB).

This proposed rule is not likely to have economic impacts of $100 million or more in any 1 year, and therefore has not been designated an “economically significant” rule under section 3(f)(1) of Executive Order 12866. The 340B Program as a whole creates significant savings for entities purchasing drugs through the program, with total savings estimated to be $3.8 billion in FY 2013.1 However, this proposed rule would not significantly affect the impact of the program. This proposed rule incorporates current policies regarding calculation of the ceiling price and introduces manufacturer civil monetary penalties. HHS does not anticipate that the imposition of civil monetary penalties would result in significant economic impacts.

The 340B Program uses information which already must be reported under Medicaid to calculate the statutorily defined 340B ceiling price as required by this proposed rule. Because the components of the ceiling price are already calculated by the manufacturers under the Medicaid program and reported to CMS, HHS does not believe this portion of the proposed rule would have an impact on manufacturers. The impact on manufacturers would also be limited with respect to calculation of the ceiling price as defined in this proposed rule due to the fact that manufacturers regularly calculate the 340B ceiling price and have been since the program's inception.

Separate from calculation of the 340B ceiling price, manufacturers are required to ensure they do not overcharge covered entities, and a civil monetary penalty could result from overcharging if it met the standards in this proposed rule. The use of those penalties would probably be rare. Since the program's inception, issues related to overcharges have been resolved between a manufacturer and a covered entity and any issues have generally been due to technical errors in the calculation. For the penalties to be used as defined in the statute and in this rule, a manufacturer would only be subject to those penalties when the overcharge was a result of a knowing and intentional act. Based on anecdoctal information received from covered entities, HHS anticipates that this would occur very rarely if at all.

This rulemaking also proposes that a manufacturer charge a $0.01 per unit of measure for a drug with a ceiling price below $0.01. A small number of manufacturers have informed HRSA over the last several years that they charge more than $0.01 for a drug with a ceiling price below $0.01. However, this is a long-standing HRSA policy and HRSA believes the majority of manufacturers currently follow the practice of charging a $0.01. Therefore, this portion of the regulation will not result in a significant impact. This proposed regulation would allow HRSA to enforce the policy in a manner that would require the manufacturer to charge a $0.01, and it is likely that manufacturers would charge $0.01 in order to avoid the imposition of a civil monetary penaly for overcharging a covered entity. Therefore, HRSA believes manufacturers that currently do not comply will come into compliance, which will result in the covered enity paying less for these drugs. This will be a cost transfer from the covered entity to the manufacturer.

HHS recognizes that some administrative costs would be incurred for compliance with this proposed rule. HHS does not collect data related to such administrative costs from manufacturers, and compliance costs are expected to vary significantly. HHS believes it is reasonable to assume that manufacturers would use one-half to one full-time compliance officer to ensure compliance with the requirements in this proposed rule. According to the Bureau of Labor Statistics, the mean annual wage for a pharmaceutical compliance officer (NAICS 325400, occupation code 13-1041) is $74,620 in 2014. Inclusion of benefits and overhead (resulting in a total labor cost of 1.5 times mean annual salary) yields a total annual cost of $111,930 for one compliance officer. Thus the estimated annual cost for labor across all 600 manufacturers is between $33,579,000 and $67,158,000.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) and the Small Business Regulatory Enforcement and Fairness Act of 1996, which amended the RFA, require HHS to analyze options for regulatory relief of small businesses. If a rule has a significant economic effect on a substantial number of small entities, the Secretary must specifically consider the economic effect of the rule on small entities and analyze regulatory options that could lessen the impact of the rule. HHS will use an RFA threshold of at least a three percent impact on at least five percent of small entities.

This proposed rule would affect drug manufacturers (North American Industry Classification System code 325412: Pharmaceutical Preparation Manufacturing). The small business size standard for drug manufacturers is 750 employees. While it is possible to estimate the impact of this proposed rule on the industry as a whole, the data necessary to project changes for specific manufacturers or groups of manufacturers were not available. This proposed rule clarifies statutory requirements for all manufacturers, including small manufacturers, and proposes current ceiling price calculation policies be codified in regulation. HHS is not aware of small manufacturers which currently do not follow the ceiling price policies proposed in this regulatory action. HHS welcomes comments concerning the impact of this proposed rule on small manufacturers.

HHS therefore estimates that the economic impact on small entities will be minimal and less than three percent.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year.” In 2013, that threshold level is approximately $141 million. HHS does not expect this proposed rule to exceed the threshold.

HHS has reviewed this proposed rule in accordance with Executive Order 13132 regarding federalism, and has determined that it does not have “federalism implications.” This proposed rule would not “have substantial direct effects on the States, or on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” The proposals in this notice of proposed rulemaking, if implemented, would not adversely affect the following family elements: Family safety, family stability, marital commitment; parental rights in the education, nurture, and supervision of their children; family functioning, disposable income or poverty; or the behavior and personal responsibility of youth, as determined under Section 654(c) of the Treasury and General Government Appropriations Act of 1999. HHS invites additional comments on the impact of this proposed rule from affected stakeholders.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires that OMB approve all collections of information by a Federal agency from the public before they can be implemented. This proposed rule is projected to have no impact on current reporting and recordkeeping burden for manufacturers under the 340B Program. Changes proposed in this rulemaking would result in no new reporting burdens. Comments are welcome on the accuracy of this statement.

For the reasons set forth in the preamble, the Department of Health and Human Services proposes to amend 42 CFR part 10 as follows:

Table of Contents I. Public Participation and Request for Comments II. Executive Summary III. Legal Basis for the Rulemaking IV. Background V. Discussion of the Proposed Rule VI. Regulatory Analyses I. Public Participation and Request for Comments

FMCSA invites you to participate in this rulemaking by submitting comments and related materials.

If you submit a comment, please include the docket number for this rulemaking (FMCSA-2014-0428), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.

To submit your comment online, go to http://www.regulations.gov and click on the “Submit a Comment” box, which will then become highlighted in blue. In the “Document Type” drop down menu, select “Rules,” insert “FMCSA-2014-0428” in the “Keyword” box, and click “Search.” When the new screen appears, click on “Submit a Comment” in the “Actions” column. If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 81/2 by 11 inches, suitable for copying and electronic filing. If you submit comments by mail and would like to know that they reached the facility, please enclose a stamped, self-addressed postcard or envelope.

FMCSA will consider all comments and material received during the comment period and may change this proposed rule based on your comments.

To view comments, as well as any documents mentioned in this preamble, go to http://www.regulations.gov and click on the “Read Comments” box in the upper right hand side of the screen. Then, in the “Keyword” box insert “FMCSA-2014-0428” and click “Search.” Next, click the “Open Docket Folder” in the “Actions” column. Finally, in the “Title” column, click on the document you would like to review. If you do not have access to the Internet, you may view the docket online by visiting the Docket Management Facility in Room W12-140 on the ground floor of the Department of Transportation West Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., e.t., Monday through Friday, except Federal holidays.

In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to www.regulations.gov, as described in the system of records notice (DOT/ALL-14 FDMS), which can be reviewed at www.dot.gov/privacy.

The FMCSRs require that motor carriers operating CMVs in the U.S., including Mexico- and Canada-domiciled carriers, ensure that the vehicles are equipped with the applicable safety equipment and features specified in 49 CFR part 393, Parts and Accessories Necessary for Safe Operations, which includes cross references to safety equipment and features that must be installed at the time of production. The National Highway Traffic Safety Administration (NHTSA) requires vehicle manufacturers to certify that the vehicles they produce for sale and use in the U.S. meet all applicable FMVSS in effect at the time of manufacture. In addition, they must affix an FMVSS certification label to each vehicle in accordance with the requirements of 49 CFR part 567. This NPRM would require U.S.-domiciled motor carriers engaged in interstate commerce to use only CMVs that display an FMVSS certification label affixed by the vehicle manufacturer indicating that the vehicle: (1) satisfied all applicable FMVSS in effect at the time of manufacture; or (2) has been modified to meet those standards and legally imported by a DOT Registered Importer. In the absence of such a label (e.g., because of vehicle damage or deliberate removal), the motor carrier must obtain, and a driver upon demand present, a letter issued by the vehicle manufacturer stating that the vehicle satisfied all applicable FMVSS in effect on the date of manufacture. The manufacturer should be able to determine quickly whether the vehicle was built to comply with the FMVSS by comparing the vehicle identification number (VIN) to its production records.

In the event a vehicle does not display a certification label, motor carriers would be responsible for providing their drivers with a letter from the vehicle manufacturer to present to Federal or State enforcement officials upon request.

This proposed rule would address the National Transportation Safety Board's (NTSB) concerns about the operation of CMVs that do not display certification labels. It would not apply to foreign-domiciled vehicles (i.e., CMVs operated by Mexico- and Canada-domiciled motor carriers) engaged in international traffic, as regulations enforced by U.S. Customs and Border Protection permit such vehicles to be admitted to the U.S. without formal importation, payment of duty, or compliance with the FMVSS.1

Generally, motor carriers engaging in interstate commerce with a principal place of business in the U.S. would not experience any regulatory burden as a result of this rulemaking unless the motor carrier: (1) had vehicles with missing certification labels; or (2) had acquired a vehicle that was not originally manufactured for sale or use in this country that had somehow been improperly imported. The Agency lacks data on the prevalence of such vehicles in the fleets of U.S.-domiciled motor carriers. FMCSA seeks comment on: (1) the size of the CMV population originally certified as FMVSS-compliant that now lacks certification labels because of vehicle damage, deliberate removal, or other reasons; and (2) the number of CMVs operated by U.S.-domiciled carriers that lack certification labels because they were neither designed nor certified to be FMVSS-compliant. FMCSA believes that most missing labels fall into the first of these two categories.

This rulemaking is not intended to deprive motor carriers of the use of vehicles produced in compliance with the appropriate FMVSS, but rather to prevent vehicles not manufactured or modified to meet those standards from being operated by U.S.-domiciled interstate carriers.

FMCSA believes this rulemaking would have no impact on the vast majority of U.S. carriers. Because motor vehicles manufactured for sale or use in the U.S. must display an FMVSS certification label, and because vehicles that are properly imported by a Registered Importer must likewise display an FMVSS certification label, all vehicles operated by U.S. motor carriers would typically already have such labels. However, there may be circumstances where a CMV lacking an FMVSS certification label is used in interstate commerce by an American carrier. This NPRM would force the carrier to incur one-time costs to determine whether the label had simply been lost or, more seriously, whether the vehicle may have been improperly imported. In order to minimize those costs, FMCSA will accept as proof of compliance with the FMVSS a letter from the vehicle manufacturer stating that the subject vehicle satisfied all applicable FMVSS in effect at the time of manufacture. The Agency is unable to quantify the costs associated with this alternative demonstration of compliance, but expects them to be minimal. FMCSA seeks comment on the cost and effectiveness of this letter-based validation process when an FMVSS certification label is missing or too damaged to read.

With regard to benefits, the rule would make it easier for FMCSA and its State partners to identify CMVs operated by U.S.-domiciled motor carriers that may have been introduced into interstate commerce without the proper FMVSS certification.

In the absence of monetizeable benefits, and due to uncertainty regarding the size of the affected population and the costs to comply with this rulemaking, FMCSA proposes to use a threshold analysis to quantify the benefits necessary to offset the costs of the rule. This threshold analysis will be included in the final rule, drawing upon information provided in comments to the docket and other data to establish lower and upper bounds for costs. The Agency seeks comments on the value of a threshold analysis versus a qualitative assessment of the rule's potential impact.

This NPRM is based on the authority of the Motor Carrier Act of 1935 (1935 Act) and the Motor Carrier Safety Act of 1984 (MCSA or 1984 Act), both of which provide broad discretion to the Secretary of Transportation (Secretary) in implementing their provisions.

The 1935 Act provides that the Secretary may prescribe requirements for: (1) qualifications and maximum hours of service of employees of, and safety of operation and equipment of, a motor carrier [49 U.S.C. 31502(b)(1)]; and (2) qualifications and maximum hours of service of employees of, and standards of equipment of, a motor private carrier, when needed to promote safety of operation [49 U.S.C. 31502(b)(2)]. These proposed amendments are based on the Secretary's authority to regulate the safety and standards of equipment of for-hire and private motor carriers.

The 1984 Act gives the Secretary concurrent authority to regulate CMVs and the drivers and motor carriers that operate them, as well as the vehicles themselves [49 U.S.C. 31136(a)]. Section 31136(a) requires the Secretary to publish regulations on CMV safety. Specifically, the Act sets forth minimum safety standards to ensure that: (1) CMVs are maintained, equipped, loaded, and operated safely [49 U.S.C. 31136(a)(1)]; (2) the responsibilities imposed on operators of CMVs do not impair their ability to operate the vehicles safely [49 U.S.C. 31136(a)(2)]; (3) the physical condition of CMV operators is adequate to enable them to operate the vehicles safely [49 U.S.C. 31136(a)(3)]; and (4) the operation of CMVs does not have a deleterious effect on the physical condition of the operators [49 U.S.C. 31136(a)(4)]. Section 32911 of the Moving Ahead for Progress in the 21st Century Act (MAP-21) [Pub. L. 112-141, 126 Stat. 405, 818, July 6, 2012] enacted a fifth requirement, i.e., that the regulations ensure that “(5) an operator of a commercial motor vehicle is not coerced by a motor carrier, shipper, receiver, or transportation intermediary to operate a commercial motor vehicle in violation of a regulation promulgated under this section, or chapter 51 [Transportation of Hazardous Material] or chapter 313 [Commercial Motor Vehicle Operators] of this title” [49 U.S.C. 31136(a)(5)].

This proposed rule would prohibit U.S-domiciled motor carriers from operating CMVs that are not appropriately labeled to document that they met all applicable FMVSS in effect at the time of manufacture. Motor carriers could continue to purchase foreign vehicles for importation into the United States, but NHTSA requires these vehicles to have documentation and labels to verify that they have been modified to comply with the applicable FMVSS. Because FMCSA has exercised its statutory authority to include cross-references to the FMVSS in the FMCSRs, this rulemaking is consistent with 49 U.S.C. 31136(a)(1). This proposed rule does not impact the responsibilities or physical condition of drivers as contemplated by 49 U.S.C. 31136(a)(2) and (3), respectively, and deals with 49 U.S.C. 31136(a)(4) only to the extent that a vehicle operated in accordance with the safety regulations is less likely to have a deleterious effect on the physical condition of a driver. Because both: (1) the number of vehicles operated by U.S.-domiciled motor carriers without an FMVSS certification label; and (2) the cost of demonstrating FMVSS compliance through a letter from the vehicle manufacturer, are expected to be small, the Agency believes that the number of drivers who might be coerced to operate CMVs that do not comply with this rule is de minimis, and may be zero. FMCSA has considered the costs and benefits of the rule, as required by 49 U.S.C. 31136(c)(2)(A) and 31502(d).

Part 567 of title 49 of the Code of Federal Regulations (49 CFR part 567) requires that manufacturers of motor vehicles built for sale or use in the U.S. must affix a label certifying that the motor vehicle meets all applicable FMVSS in effect on the date of manufacture.2 Part 567 provides detailed requirements concerning the location of and information to be displayed on the label. These requirements are applicable to manufacturers of CMVs produced for use in the U.S. The label must be affixed prior to the first sale of the CMV.

The green turtle is currently listed under the ESA as a threatened species globally, with the exception of the Florida and Mexican Pacific coast breeding populations, which are listed as endangered. On March 23, 2015 (80 FR 15271), the Services published a proposed rule to revise these listings because we find that the green turtle is composed of 11 distinct population segments (DPSs) that qualify as “species” for listing under the ESA. We proposed to remove the current range-wide listing and, in its place, list eight DPSs as threatened and three as endangered. We proposed to list the Central West Pacific DPS (including green turtles originating from Guam and CNMI) and the Central South Pacific DPS (including green turtles originating from American Samoa) as endangered. We also proposed to apply existing protective regulations to the DPSs and to continue the existing critical habitat designation (i.e., waters surrounding Culebra Island, Puerto Rico) in effect for the North Atlantic DPS. We solicited comments on these proposed actions; we indicated that comments must be received by June 22, 2015.

We received several requests for additional public hearings. In response to the requests, by this notice we announce that we will host additional public hearings in Guam, CNMI, and American Samoa, and extend the public comment period through July 27, 2015. Previously submitted comments do not need to be resubmitted.

The Services will hold a public hearing in Pago Pago, American Samoa. Interested parties may provide oral or written comments at this hearing, which will be held on July 6, 2015 from 6 to 8 p.m., with an informational open house starting at 5:30 p.m., at Lecture Hall of the American Samoa Community College.

The Services will hold a public hearing in Saipan, CNMI. Interested parties may provide oral or written comments at this hearing, which will be held on July 13, 2015 from 6 to 8 p.m., with an informational open house starting at 5:30 p.m., at the Multipurpose Center, Beach Road, Call Box 1007, Saipan, CNMI 96950.

The Services will hold a public hearing in Mangilao, Guam. Interested parties may provide oral or written comments at this hearing, which will be held on July 15, 2015 from 6 to 8 p.m., with an informational open house starting at 5:30 p.m., at the Multi-Purpose Room of the School of Business and Public Administration, University of Guam, Mangilao, Guam 96923.

These hearings will be physically accessible to people with disabilities. Requests for sign language interpretation or other accommodations should be directed to Jennifer Schultz (see FOR FURTHER INFORMATION CONTACT) as soon as possible, but no later than 7 business days prior to the hearing date.

We intend that any final action resulting from this proposed rule will be based on the best scientific and commercial data available and be as accurate and effective as possible. Therefore, we invite tribal and governmental agencies, the scientific community, and other interested parties to submit comments and new data regarding this proposed rule. In particular, we are seeking targeted information and comments concerning the following:

(1) The persistence or extinction of a breeding population of the eastern puma subspecies within its historical range;

(2) Verifiable reports or evidence of wild-origin pumas within the historical range of the eastern puma subspecies;

(3) Our analysis of the status of the eastern puma; and

(4) The taxonomy of North American pumas.

Please include sufficient information with your submission (such as scientific journal articles or other publications) to allow us to verify any scientific or commercial information you include. Bear in mind that comments simply advocating or opposing the proposed action without providing supporting information will be noted but not considered in making a determination, as section 4(b)(1)(A) of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq.) (Act), directs that determinations as to whether any species is an endangered species or threatened species shall be made “solely on the basis of the best scientific and commercial data available.”

You may submit your comments and materials concerning the proposed rule by one of the methods listed in ADDRESSES. We request that you send comments only to an address listed in ADDRESSES. All comments must be submitted to http://www.regulations.gov, hand delivered, or postmarked by the deadline specified in DATES. If you submit information via http://www.regulations.gov, your entire submission—including any personal identifying information—will be posted on the Web site. If your submission is made via a hardcopy that includes personal identifying information, you may request at the top of your document that we withhold this information from public review; however, we cannot guarantee that we will be able to do so. We will post all hardcopy submissions on http://www.regulations.gov.

Comments and materials we receive, as well as supporting documentation used in preparing this proposed rule, will be available for public inspection on http://www.regulations.gov, or by appointment during normal business hours at the U.S. Fish and Wildlife Service, Maine Field Office (see FOR FURTHER INFORMATION CONTACT).

In making a final decision on this proposal, we will take into consideration the comments and any additional information we receive during the public comment period. Such communications could lead to a final rule that differs from this proposal.

Section 4(b)(5)(E) of the Act provides for one or more public hearings on this proposal, if requested. We must receive requests for public hearings, in writing, at the address shown in the FOR FURTHER INFORMATION CONTACT section within 45 days after the date of this Federal Register publication (see DATES). We will schedule public hearings on this proposal, if any are requested, and announce the dates, times, and places of those hearings, as well as how to obtain reasonable accommodations, in the Federal Register at least 15 days before the first hearing.

In accordance with our policy, “Notice of Interagency Cooperative Policy for Peer Review in Endangered Species Act Activities,” which was published on July 1, 1994 (59 FR 34270), we will seek the expert opinion of at least three appropriate independent specialists regarding scientific data and analyses contained in this proposed rule. We will send copies of this proposed rule to peer reviewers immediately following its publication in the Federal Register. The purpose of such review is to ensure that our decisions are based on scientifically sound data, assumptions, and analysis.

This proposed rule is based on detailed information and indepth analyses contained in the Service's 5-year review for the eastern puma (USFWS 2011, entire), which can be accessed at: http://www.fws.gov/northeast/ECougar. That review includes a thorough discussion of the eastern puma's biology, historical records, and analysis of contemporary sightings. We also take into account information that has become available since 2011, noting that this information corroborates the 5-year review's analysis. All references cited in the 2011 review and this proposed rule are maintained on file at the Service's Maine Field Office (see ADDRESSES).

Under the Act, we maintain a List of Endangered and Threatened Wildlife (List) at 50 CFR 17.11 and a List of Endangered and Threatened Plants at 50 CFR 17.12. On June 4, 1973 (38 FR 14678), we listed the eastern puma (=cougar), Puma (=Felis) concolor couguar, as an endangered subspecies (using the common name of eastern cougar). At that time, critical habitat was not provided for under the Act; consequently, critical habitat was not designated for the eastern cougar. The principal factors leading to the listing of the eastern puma were widespread persecution (poisoning, trapping, hunting, and bounties), decline of forested habitat, and near-extirpation of white-tailed deer populations during the 1800s, which together resulted in the extirpation of most eastern puma populations by 1900.

A Service status review of the puma in North America, including the eastern puma, was issued in 1976 (Nowak 1976). This review, along with status reviews by some States and Canadian provinces (e.g., van Zyll de Jong and van Ingen 1978, R.L. Downing newsletters from 1979 to 1982), suggested that a large number of unverified public reports may be evidence of a persisting, native breeding population of eastern pumas. Such reports led the Service to retain the eastern puma on the List until such time as either a breeding population or extinction could be verified.

The Eastern Cougar Recovery Plan was approved in 1982 (USFWS 1982). During plan preparation, R.L. Downing conducted field surveys and investigated sighting reports and concluded that “no breeding cougar populations have been substantiated within the former range of F.c. couguar since the 1920s.” Nonetheless, the recovery plan states that the eastern cougar could be reclassified from endangered to threatened when one population containing at least 50 breeding adults was found or established. It further states that the eastern cougar could be removed from the List when at least three populations were found or established, with each containing more than 50 breeding adults. Since the plan's approval, no breeding populations have been found, nor have any individual pumas known to be F.c. couguar (such individuals would form the basis of a founder population). Thus, neither of the recovery criteria was ever met.

Section 4(c)(2) of the Act requires that we conduct a review of listed species at least once every 5 years to determine: (1) Whether a species no longer meets the definition of an endangered species or threatened species and should be removed from the List (i.e., delisted), (2) whether a species listed as endangered more properly meets the definition of threatened and should be reclassified to threatened (i.e., downlisted), or (3) whether a species listed as threatened more properly meets the definition of endangered and should be reclassified to endangered. In accordance with 50 CFR 424.11(d), we will consider a species for delisting only if the best scientific and commercial data substantiate that the species is neither endangered nor threatened for one or more of the following reasons: (1) The species is considered extinct, (2) the species is considered recovered, or (3) the data available when the species was listed, or the interpretation of such data, were in error.

Between 1979 and 1991, the eastern puma was included in three cursory 5-year reviews conducted by the Service: A 1979 review of all domestic and foreign species listed prior to 1975 (44 FR 29566, May 21, 1979), a 1985 review of all species listed before 1976 and from 1979 to 1980 (50 FR 29901, July 22, 1985), and a 1991 review of all species listed before 1991 (56 FR 56882, November 6, 1991). None of these reviews recommended a change from the eastern puma's listing classification as endangered.

On January 29, 2007, we published a Federal Register notice announcing a 5-year review specific to the eastern puma and nine other species, and we requested information from the public concerning the eastern puma (72 FR 4018). The assessment of the eastern puma's current status, completed on January 28, 2011 (USFWS 2011), found no evidence of the existence of either an extant population or individual eastern pumas, and concluded, therefore, the subspecies should be considered extinct. The assessment thus concluded that the eastern puma does not meet the definition of either an endangered species or a threatened species under section 3 of the Act.

Section 4 of the Act and its implementing regulations (50 CFR part 424) set forth the procedures for listing species, reclassifying species, and removing species from listed status. “Species” is defined by the Act as including any species or subspecies of fish or wildlife or plants, and any distinct population segment of any species of vertebrate fish or wildlife which interbreeds when mature (16 U.S.C. 1532(16)). To determine whether a species should be listed as endangered or threatened, we assess the likelihood of its continued existence based on the five factors described in section 4(a)(1) of the Act (see Consideration of Factors Under Section 4(a)(1) of the Act). A species may be reclassified or removed from the List on the same basis. With regard to delisting a species due to extinction, “a sufficient period of time must be allowed before delisting to indicate clearly that the species is extinct” (50 CFR 424.11(d)(1)).

According to these standards, we must determine whether the eastern puma is a valid subspecies and whether the subspecies is still extant in order to determine its appropriate listing status. The following sections thus examine the biological and legal information considered to be most germane to the status of the eastern puma as a valid, extant subspecies before looking at factors that may affect the its continued existence.

The eastern puma (Puma (=Felis) concolor couguar) is treated as a subspecies of the puma. The species is also known by many other common names, including, among others, cougar, catamount, mountain lion, panther, painter, and wildcat. As explained in the 5-year review (USFWS 2011, pp. 4-5), the puma is the most widely distributed land mammal in the New World and is one of the most adaptable mammals in the northern hemisphere. At the time of European contact, the puma occurred throughout most of South, Central, and North America. In North America, breeding populations still occupy about one-third of their historical range but are now absent from central and eastern North America outside Florida. The puma is documented historically from eastern North America to about 45 degrees north latitude (roughly equating to the colonial-era range of its primary ungulate prey, white-tailed deer) in a variety of habitats from swamps and everglades in the Southeast to temperate forests in the Northeast. Aside from presence reports, few historical records exist regarding the natural history of the eastern puma.

The eastern puma is one of three subspecies of puma that are federally listed as endangered species under the Act; the others are the Florida panther (Puma (=Felis) concolor coryi), listed in 1967 (32 FR 4001, March 11, 1967), and the Costa Rican puma (Puma (=Felis) concolor costaricensis), listed in 1976 (41 FR 24062, June 14, 1976). Both the Florida panther and Costa Rican puma remain extant, albeit extremely rare.

In Canada, the first status review of the eastern puma by the Committee on the Status of Endangered Wildlife in Canada (COSEWIC) in 1978 assigned endangered status to the taxon Puma concolor couguar based on puma reports in Ontario, Quebec, and the Maritimes provinces. In 1998, the Canadian eastern puma listing was changed from the Endangered to the Data Deficient or Indeterminate category for Ontario, Quebec, New Brunswick, and Nova Scotia.

The eastern cougar (=puma) is listed as endangered in the International Union for Conservation of Nature's (IUCN) Mammal Red Data Book (IUCN 1982). The subspecies is also classified as an Appendix I animal under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), which provides protection from international trade.

Legal protections at the State and provincial levels are discussed under “Historical Range, Abundance, and Distribution” below.

Taxonomy and Genetics: The eastern puma 5-year review (USFWS 2011, pp. 29-35) provides a full discussion of the taxonomic history of this subspecies. As indicated in that review, the current practice is to refer to the species as Puma concolor (Linnaeus 1771) and the eastern subspecies as Puma concolor couguar.

There is ongoing debate about the taxonomic assignment of puma subspecies, including the question as to whether North American pumas comprise a single subspecies or multiple subspecies. In particular, there has been disagreement about whether the scientific community should accept the use of genetics as the driving factor in puma taxonomy, as was done by Culver et al. (2000, entire). The Service's position is that until a comprehensive evaluation of the subspecies status of North American pumas, including genetic, morphometric, and behavioral analyses, is completed, the best available information continues to support the assignment of the eastern taxon to Puma concolor couguar as distinct from other North American subspecies.

In recognizing the eastern puma as a valid subspecies, and thus a valid listed entity, we next evaluate whether the subspecies should be determined extinct. It is important to note that assessing the biological status of the eastern puma as a subspecies does not preclude eventual taxonomic revision.

Biology and Life History: There is little basis for believing that the ecology of eastern pumas was significantly different from puma ecology elsewhere on the continent. Our biological understanding of the eastern puma, therefore, is derived from studies conducted in various regions of North America and, to the extent possible, from eastern puma historical records and museum specimens. This information is detailed in the status review (USFWS 2011) on pages 6 through 8.

Historical Range, Abundance, and Distribution: Details and citations for the following summary are provided in the status review (USFWS 2011, pp. 8-29 and 36-56). Although a lack of reliable sightings and historical records makes it difficult to estimate past abundance and distribution, the available information is discussed below.

In eastern North America at the time of European contact, the puma ranged from Florida to southern Quebec and remained abundant through much of eastern North America during the colonial era. Despite its apparent early abundance, however, only 26 historical specimens of eastern pumas, from seven eastern States and one Canadian province within the subspecies' historical range, reside in museums or other collections.

Based on this admittedly small number of specimens and other scant evidence, Young and Goldman (1946) described the historical range of Felis concolor couguar as southeastern Ontario, southern Quebec, and New Brunswick in Canada, and a region bounded from Maine to Michigan, Illinois, Kentucky, and South Carolina in the eastern United States. The Service's recovery plan for the eastern cougar describes a similar range (USFWS 1982, pp. 1-2), although the range is mapped a little farther north into Ontario. The recovery plan also maps Felis concolor schorgerii, named as a subspecies after Young and Goldman (1946) was published, to the west and F.c. coryi to the south of the eastern puma's range.

The most recently published assessment of the puma in eastern Canada, conducted by the Committee on the Status of Endangered Wildlife in Canada (COSEWIC) (Scott 1998), maps the puma's range throughout southern Ontario and Manitoba. The eastern subspecies is not stipulated in Scott's (1998) range description; indeed, the review questioned whether the eastern puma was ever a valid subspecies. Other authors have also discussed the past distribution of pumas in Canada without acknowledging them as the eastern subspecies. Rosette (2011) asserts that native, free-roaming pumas of unknown origin may continue to survive in Ontario while conceding that no evidence of their presence has been documented for almost 100 years. In Manitoba, on the other hand, several authors have documented a relatively consistent record of pumas, but there is no evidence that these are eastern pumas or that the subspecies ever occurred that far west.

The historical literature indicates that puma populations were thought to have been largely extirpated in eastern North America (except for Florida and perhaps the Smoky Mountains) by the 1870s, and in the Midwest by 1900. According to many historical accounts, pumas were greatly feared and were also persecuted as competitors for game and occasional predators of livestock. Eastern puma populations also decreased as habitat conditions for the puma's primary prey base, white-tailed deer, changed dramatically during this time. By the mid- to late-1800s, human settlement patterns resulted in the extirpation of deer from much of eastern North America. The last records of pumas in most of the eastern States and provinces, from approximately 1790 to 1890, coincided with loss of deer populations and habitat.

By 1929, eastern pumas were believed to be “virtually extinct,” and Young and Goldman (1946) concurred that “they became extinct many years ago.” On the other hand, puma records from New Brunswick in 1932 and Maine in 1938 suggest that a population may have persisted in northernmost New England and eastern Canada.

In the Service's 1976 status review (Nowak 1976), R.M. Nowak stated his belief that the large number of unverified sightings of pumas constituted evidence that certain other populations had also survived or had become reestablished in the central and eastern parts of the continent and may have increased in number since the 1940s. Further, as stated in the Eastern Cougar Recovery Plan (USFWS 1982, pp. 4, 7), R.L. Downing believed it possible that a small population may have persisted in the southern Appalachians into the 1920s. Nonetheless, the field surveys he conducted and the reports he investigated prior to writing the recovery plan led him to conclude that “no breeding cougar populations have been substantiated within the former range of F. c. couguar since the 1920s” (USFWS 1982, p. 6). Scott's (1998) COSEWIC review also concluded that “there is no objective evidence (actual cougar specimens or other unequivocal confirmation) for the continuous presence of cougars since the last century anywhere in eastern Canada or the eastern United States outside of Florida,” and that “there is circumstantial evidence for virtual or complete extirpation” from central Ontario eastward.

The known status of the eastern puma within its historical range is summarized in table 1, below. A more detailed discussion of the historical status, current confirmed and unconfirmed puma sightings, potential habitat, and legal protection (also see Current Legal Status above) of the eastern puma in the states and provinces is provided in the 5-year status review (USFWS 2011, pp. 8-26). To summarize, eastern pumas historically were considered generally common and widespread; however, by the late 1800s, eastern pumas were believed to be extirpated from most of their range. As indicated in table 1, the majority of the most recent confirmed reports date from the mid-1800s to around 1930. Later reports are thought to be indicative of dispersers of western pumas, as in Missouri, or released animals, as in Newfoundland. Although there now appears to be adequate habitat and prey for pumas in various portions of the subspecies' historical range, the many decades of habitat loss and near-extirpation of the puma's primary prey, white-tailed deer, bring into question the continued survival and reproduction of eastern pumas over that time.

Current Biological Status of Pumas in Eastern North America: Our conclusions regarding the current biological status of the eastern puma rely upon three lines of evidence: (1) The detectability of wild pumas, (2) contemporary accounts of puma sightings in eastern North America as evidence of the continued existence of eastern pumas, and (3) the time since the last verified eastern puma occurrence. Recognizing that extinction cannot be demonstrated with absolute certainty (i.e., it is a probabilistic determination), the totality of evidence for the eastern puma provides a basis for drawing robust conclusions about the true status of this subspecies, as discussed below. A more detailed discussion and references are provided in the 5-year status review (USFWS 2011, pp. 36-56).

Detectability of pumas: This line of evidence addresses the question of how likely it is that eastern puma individuals or populations could continue to persist without being detected. If entities are difficult to detect, lack of confirmed sightings may not be indicative of absence; however, if detectability is known to be high, it is much more likely that lack of sightings is evidence of absence. For the eastern puma, detectability differs between individuals and populations. Although individual pumas are difficult to detect, determining the presence of a puma population is possible with a reasonable amount of effort.

Detection of single, transient pumas is particularly problematic because they cover such a large range and leave behind little sign of their occupation (e.g., scrapes, kills, and tracks) in any one place. The best prospect for detecting these animals is through tracks left during their extensive daily movement in the snowy regions of North America.

Numerous searches and surveys have been undertaken to detect the presence of individual pumas, either directly or as part of large carnivore studies, and, by extension, puma populations in eastern North America. Searches have been conducted in areas reputed to harbor pumas, and reports of puma sightings have been investigated extensively. Surveys have utilized a variety of techniques, including trail transects with motion-sensing cameras, hair trap posts and rubbing pads, and snow-covered road surveys to detect the tracks or signs of pumas.

Such studies have yielded few positive results in eastern North America. However, in other parts of North America, pumas have been readily detected through searches and surveys. Additionally, pumas have been detected as a result of road kills; even in areas with small extant populations (such as Florida and South Dakota) and low road densities, pumas killed on roads are reported nearly every month of the year. In contrast, although road mortalities have been documented in the eastern United States and Canada in recent years, the reports are irregular, and in the rare instances where individuals have been verified as wild pumas, they have originated outside the eastern puma's historical range.

Overall, pumas have been readily detectable in areas of North America outside the historical range of the eastern puma. We can thus conclude that pumas and, in particular, puma populations, could be detected with a reasonable amount of effort if present in eastern North America. We further conclude that the searches, surveys, and efforts to verify sightings by the public since the 1950s constitute a reasonable effort, as discussed below and detailed in the 5-year review (USFWS 2011, pp. 26-29). However, despite the detectability of pumas, no evidence has been presented to verify the continued existence of the eastern subspecies or of any breeding population of pumas within its historical range.

Contemporary accounts of pumas in eastern North America as evidence of the continuing existence of the subspecies: As discussed in the 5-year review (USFWS 2011, pp. 36-38), renewed interest in puma conservation over the past 60 years has resulted not only in a profusion of reported sightings by the public but also efforts by scientists to determine the presence of pumas in eastern North America. We summarize these accounts below and discuss whether they constitute a basis for concluding that the eastern puma remains extant.

There were few reports of pumas in eastern North America between the late 1800s and the 1940s and 1950s (see “Historical Range, Abundance, and Distribution” above). The number of reports increased in the 1950s, and states, provinces, and puma organizations began maintaining databases of puma sightings. The increased reporting coincided with coverage in the popular press and assertions by biologists and other writers that there was sufficient evidence to believe that the eastern puma still existed. It also coincided with a growing number of pumas in the North American pet trade.

A surge in reported sightings followed in the 1960s and 1970s, again coincident with publications claiming that a relic population of pumas from the northeastern United States and eastern Canada was repopulating eastern North America. Although based mostly on questionable evidence, many—including wildlife biologists—accepted this hypothesis without critical scientific review.

The sheer volume of anecdotal reports was cited as evidence for the continued existence of pumas, although few of these reports were ever substantiated. By the 1970s, puma advocacy groups had been established, and they, along with many independent researchers and advocates, were investigating sightings and promoting puma recovery. This led to the 1973 listing of the eastern cougar, even though there was no physical evidence showing that populations existed at that time.

Since listing, thousands of reports have been collected by wildlife agencies and puma organizations, including hundreds of puma sightings by reliable witnesses where physical evidence was not available. Most recently, during preparation of the eastern puma 5-year review (from 2007 to 2010), 60 reports of pumas were considered to have some likelihood of validity based on verified identification of tracks; photographic evidence; genetic, hair, or scat samples; or discovery of carcasses (USFWS 2011, appendix B). It is important to note that none of these reports was verified as the eastern subspecies.

A number of formal studies have been undertaken to determine the presence of pumas in eastern North America. One study (Michigan Wildlife Conservancy 2003) detected pumas, but the results and methodology were subsequently contested. Elsewhere in the Midwest, pumas have been detected with trail cameras. A puma sighted in Wisconsin was verified in January 2008 and shot in Chicago, Illinois, in April 2008. This animal was determined to be of North American origin with characteristics similar to South Dakota pumas. In 2009, another Wisconsin puma was treed and photographed on several occasions; DNA analysis was not available for this animal. In eastern Canada, a survey of the Maritime provinces from 2001 to 2004 (Gauthier et al. 2005, entire) confirmed six samples as puma. Of these six samples, several were found to be of South American origin, indicating that released or escaped captive pumas are also present in the wild, while others were verified as North American genotypes without being able to determine if they were of captive or wild origin.

Overall, most of the surveys conducted by wildlife biologists in eastern North America—some of which have targeted pumas while others have targeted different species (e.g., wolves, lynx)— have failed to detect any sign or evidence of the presence of pumas. Details of each survey effort are provided in the eastern puma 5-year review (USFWS 2011, pp. 26-29 and appendix B).

Many puma sightings are reported as “eyewitness” accounts; this type of report has increased with the availability of Internet search engines and is sometimes spurred by news articles that encourage others to report observations. The reliability of such accounts can depend on time of day, experience level of the observer, duration of the observation, and observer trustworthiness. Insufficient field identification and tracking skills, as well as photographs of single tracks rather than a series of tracks, may further compromise reliability. Based on our assessment of puma eyewitness accounts (USFWS 2011, pp. 36-42), it appears that 90 to 95 percent of puma sightings and vocalizations reported by the public involve instances of misidentification and, at times, deliberate hoaxes.

Although documention of sightings by the public in areas where pumas are uncommon can be useful—particularly where protocols for puma sightings and analysis have been established—compilations of unconfirmed sighting reports can also produce a large volume of cogent but misleading information. The problem with treating anecdotal sightings as empirical evidence is compounded when such observations are supplemented by inconclusive physical evidence such as indistinct photographs. Typically, as a species becomes rarer, the proportion of false positives increases; thus, even the most tangible evidence of a puma must be followed by further inquiry to identify it as a wild specimen and ascertain its origins.

Over the past 50 years, thousands of puma sightings have been investigated, at substantial public and private expense. Only a small percentage of investigations have resulted in collection of evidence that could be interpreted or further analyzed, and only a small percentage of the analyses have provided irrefutable proof of a wild puma. The most recent case was a male puma killed on a highway in Milford, Connecticut, in 2011. Genetic analysis of the animal determined that its origin was a population in South Dakota, indicating that it was a transient western puma; the same animal had been documented in Minnesota, Wisconsin, and northern New York prior to arriving in Connecticut.

Despite the large number of contemporary eastern puma accounts, few of the surveys and investigations of puma reports have provided verifiable evidence of the presence of pumas, irrespective of origin, in eastern North America, and even fewer have provided irrefutable proof of a wild puma. Nonetheless, verified puma occurrences have occurred with enough frequency in eastern North America (approximately 15 puma carcasses have been documented in eastern North America north of Florida since 1950) to encourage a widespread belief that a cryptic eastern puma population continues to persist.

In considering whether all this constitutes evidence of an extant eastern puma population, three possible hypotheses have been considered: First, that the observed animals are members of a persistent relic population; second, that they are released or escaped captives; or, third, that they are dispersers from source populations outside of the region. These hypotheses are discussed, in turn, below.

1. A relic population of pumas has survived in eastern North America. Although some hypothesize that the eastern puma has survived in eastern North America since colonial times, the continued existence of a puma population in eastern North America is not corroborated by the historical record, the history of white-tailed deer, or our current understanding of puma ecology (USFWS 2011, pp. 43-46).

As noted above, most eastern pumas were thought to have been virtually extirpated by the late 1800s. Had members of the subspecies survived, they should have been detectable. With some exceptions (e.g., later records in Maine and New Brunswick) authors document a near-absence of records from the late 1800s to the 1950s. Further, despite the verified reports of pumas mentioned above, whenever we have been able to determine the origins of these pumas, they have been shown to be either captive pumas (generally South American pumas or their progeny) or dispersers from western populations. None of these animals has been confirmed as the eastern subspecies.

A number of population viability analyses indicate that both a minimum population size and minimum area of high-quality habitat are needed for long-term puma persistence. The probability of population persistence also depends on favorable demographic factors. Studies to date indicate, very approximately, that puma populations consisting of fewer than 15 to 20 animals and occupying less than 386 to 772 mi2 (1,000 to 2,000 km2) of high-quality habitat would be unlikely to persist over the long term, particularly in the face of any adverse genetic effects (USFWS 2011, pp. 8 and 46). Effects of postsettlement persecution of eastern pumas, compounded by loss of habitat and the near-extirpation of white-tailed deer, severely reduced the probability of persistence using both of these measures. Pumas likely survived longest in remaining large forest tracts where deer were not extirpated and at the northern periphery of their historical range as deer shifted northward (which would explain the later puma records in Maine and New Brunswick). To survive elsewhere in the East, puma populations would have had to persist for decades with extremely low or absent populations of their primary prey, and such persistence is doubtful. Even in northern regions, deer populations were greatly reduced, and snow depths there would have been limiting for pumas.

This information, along with the total absence of verified contemporary eastern puma records, suggests that a remnant population of eastern pumas is highly unlikely to have survived two centuries of intense human exploitation and persecution, habitat changes, and near-eradication of its primary prey. Further, were a relic puma population to have survived, the rebounding of deer populations along with protections from take under the Act would have likely resulted in a corresponding increase in documentation of eastern puma presence and increased likelihood of deterction. Given the lack of verified contemporary records, we therefore find no evidence to support the hypothesis that an undetected relic population of eastern pumas remains extant.

2. Pumas occurring in eastern North America are released or escaped pets. Since the mid-1900s, there has been speculation that perhaps all pumas observed in eastern North America (outside of Florida) are escaped or released captive animals. The findings regarding this hypothesis, presented in the 5-year review (USFWS 2011) on pp. 47-51 and in Appendix B, are summarized below.

Genetic techniques are now available to determine if puma specimens are of North American origin and therefore more likely to be wild animals. Captive puma enthusiasts apparently favor Central and South American animals, and it can be assumed that pumas found in eastern North America with South American DNA are escaped or released captives or their progeny. Since the early 1990s, 24 puma genetic samples have been collected within the historic range of the eastern puma and tested using a variety of techniques (USFWS 2011, Appendix B). Of these, about one-third were found to be of Central or South American origin, one-third were of North American origin, and one-third were identified as pumas but of unknown origin.

In addition to genetic evidence, the increasing frequency of reported puma sightings in the eastern United States and Canada correlates with the increased private ownership, trade, and breeding of pumas that began in the 1940s and 1950s. Zoos formerly sold or gave pumas to individuals or dealers, although this is strictly prohibited today and there currently is a ban on breeding pumas in zoos. More recently, Internet sales of exotic cats have flourished, illustrating the continuing ease of acquiring captive pumas. This situation is exacerbated in some States by enforcement challenges, and these States' lack of information about the number and disposition of captive pumas within their borders. Overall, there are likely thousands of privately-held (both legally and illegally) pumas in the eastern United States, dwarfing the number of pumas in zoos.

Released or escaped pumas are documented in numerous accounts, along with frequent reports of such pumas being recaptured (USFWS 2011, pp. 49-50). It has also been found that individual captive pumas may successfully adapt to conducive conditions in the wild. If released or escaped captives initially avoid recapture or death, they most likely become wandering transients. Overall, it may be possible, although unlikely, for individual captive pumas to transition into a wild existence, establish home ranges, and, like other transient pumas, persist with low detectability.

Nonetheless, the likelihood of escaped or released captive pumas establishing breeding populations is minimal, both because transient pumas are unlikely to recolonize new areas unless there is an adjacent resident puma population, and because their survival prospects are generally low. The multiple reports we have received of pumas in a geographic location over a period of months (but not years) could constitute actual observations of escaped animals. However, if these animals are declawed or defanged, they have little chance of surviving over the long term, particularly at rates needed to establish a population. Further, few of the many reported sightings of puma kittens in eastern North America, which would be indicative of a breeding population, have been substantiated (USFWS 2011, p. 51).

We conclude that the evidence supports the hypothesis that pumas recently found in eastern North America are released or escaped captive animals, with the exception of some animals in Illinois, Wisconsin, and other midwestern States that are dispersing from more westward populations (see discussion below). Genetic and isotope techniques are improving, which will help distinguish whether pumas of North American ancestry are of wild or captive origin.

3. Pumas in eastern North America are dispersers from breeding populations to the west and south. Breeding puma populations in proximity to the eastern puma's historical range occur in Manitoba, North Dakota, South Dakota, possibly Nebraska and Oklahoma, and Florida. The Service's 5-year review discusses the likelihood of immigration of pumas to eastern North America from these populations (USFWS 2011, pp. 51-56).

Regarding dispersal from Florida, there was little evidence until recently that the Florida panther population was expanding northward, but since 1998, four tagged and several unmarked animals have crossed the Caloosahatchee River, previously thought to be a barrier to northward expansion. In addition, an adult male puma killed in Georgia in 2008 originated in Florida. Nonetheless, given the many other substantial barriers to dispersal, it is considered highly unlikely that Florida panthers are dispersing out of Florida with enough frequency to establish populations elsewhere in the Southeast, although adequate prey and habitat are available in Georgia.

As to dispersal from the West, puma populations in most western States are believed to be at historically high levels, and breeding populations have expanded their ranges eastward. Dispersing pumas have been reported since 1990 in the Midwest, primarily west of the Mississippi River and possibly the Great Lakes Region, with over 130 confirmed puma records documented in Wisconsin, Illinois, Nebraska, Kansas, Minnesota, Missouri, and Iowa.

These records confirm that eastward dispersal from breeding populations of western pumas is occurring, especially from North and South Dakota (note the previous mention of a South Dakota puma killed in Connecticut in 2011). Confirmed records of wild-origin pumas exist in many States and provinces bordering the western and northern peripheries of the eastern puma's historical range, and most States in the Midwest now acknowledge the presence of wild pumas. Further, persistent puma presence has been documented in a few areas (Missouri, Iowa, Minnesota, Nebraska), suggesting that individual pumas are successfully surviving in the wild and may have established home ranges.

Suitable, albeit sometimes fragmented, habitat and an adequate prey base are available for pumas in the Midwest and Great Lakes regions, with large populations of white-tailed deer occurring throughout the region. Moreover, numerous dispersal corridors leading to highly suitable habitat areas in the Midwest have been identified within feasible dispersal distances for pumas. Although dispersing pumas frequently travel along deer-rich riparian corridors and generally avoid human-dominated landscapes, pumas are known to disperse across large expanses of inhospitable habitat. Roads and railroad rights-of-way and associated brush belts also provide dispersal corridors. The upper Midwest Region is the most favorable route for cougars repopulating the East from the Dakotas, and Manitoba's puma population may be a potential source for animals observed in Ontario, northern Minnesota, Wisconsin, and Michigan.

Although individual males are known to disperse over long distances, the establishment of puma populations in the Midwest and Great Lakes regions is less likely to occur unless breeding range expansion is facilitated. Female pumas do not move far from their natal areas, and male pumas compete for access to females; that is, in addition to adequate food and cover, dispersing males search for areas occupied by one or more resident females. Thus, range expansion is unlikely unless females disperse—or are released—into new habitats. As would be expected, most of the recent Midwest puma records are of males.

Given evidence of growing puma populations in the West, increased dispersal, and availability of dispersal corridors and prey in the Midwest, we conclude that wild-origin pumas (primarily males) will continue to disperse into the midwestern States and into the historical range of the eastern puma and are the likely source of any wild pumas that currently exist in eastern North America.

Summary: First, it is important to note that the alternative hypotheses for the continuing presence of pumas in eastern North America are not mutually exclusive. Physical evidence indicates that pumas recently found in eastern North America are released or escaped captive animals, with the exception of some wild animals in the Midwest (and one documented in Connecticut) that are dispersing from western populations. The evidence also suggests that these are transient pumas with little potential for naturally establishing breeding populations.

Most significantly, no evidence whatsoever has been found to show that either individual eastern pumas or any relic populations of the eastern puma subspecies remain extant in eastern North America.

Time since last verified eastern puma report: The most recently confirmed records of pumas native to eastern North America are from Tennessee (1930), New Brunswick (1932), and Maine (1938). These records coincide with the extirpation of white-tailed deer in most of its range in the 1800s, with the exception of some remaining large forest tracts, and a shift toward the northern periphery of its historical range during that time. Reports of pumas were made by reputable observers in Missouri as late as 1966, but the taxonomy of these animals has long been in question.

It is notable that areas in eastern North America that still support extant populations of native pumas (e.g., Florida and Manitoba) have had a long and continuous record of confirmed occurrences. In contrast, a long-term record of verified puma occurrences is lacking in regions of eastern North America outside Florida.

Given the puma's life span, generally thought to be 10 to 11 years, it is extremely implausible that non-breeding eastern pumas could have persisted in the wild under conditions of habitat loss and lack of their primary prey base and without being detected for over six decades. It is equally if not more unlikely that breeding populations of the subspecies could have gone undetected for that long. Based on how improbable it is that eastern puma individuals or populations could have weathered such a long period of habitat and prey loss, along with the lack of either a recent report or a long-term record of eastern puma occurrences, we conclude that the time since the last verified eastern puma record is indicative of the long-term absence of this subspecies.

Summary: Overall, we find that pumas (except for single transients) are reasonably detectable, that no contemporary puma sightings in eastern North America have been verified as the eastern puma subspecies since 1938, and that it is extremely unlikely that either individuals or eastern puma populations could have survived the long period during which most of their habitat was lost and their primary prey base was nearly extirpated. We therefore determine the eastern puma subspecies to be extinct.

As mentioned under Assessment of Species Status above, section 4 of the Act and its implementing regulations (50 CFR part 424) set forth the procedures for listing, reclassifying, or removing species from listed status. When we evaluate whether a species should be listed as an endangered species or threatened species, we must consider the five listing factors described in section 4(a)(1) of the Act: (A) The present or threatened destruction, modification, or curtailment of the species' habitat or range; (B) overutilization for commercial, recreational, scientific, or educational purposes; (C) disease or predation; (D) the inadequacy of existing regulatory mechanisms; and (E) other natural or manmade factors affecting the species' continued existence. We must consider these same factors in reclassifying a species or removing it from the List.

The principal factors leading to the listing of the eastern puma were widespread persecution (poisoning, trapping, hunting, and bounties), decline of forested habitat, and near-extirpation of white-tailed deer populations during the 1800s. These impacts led to the extirpation of most eastern puma populations by 1900.

However, because we have determined that all populations of pumas described as the eastern puma, Puma (=Felis) concolor couguar, have been extirpated, analysis of the five factors under section 4(a)(1) of the Act, which apply to threats facing extant species, is tragically irrelevant. As stated above, given the period of time that has passed without verification of even a single eastern puma, the Service believes that the last remaining members of this subspecies perished decades ago. Therefore, the eastern puma is no longer extant and logically can no longer be an endangered species or threatened species because of any of the five factors.

Widespread persecution, decline of forested habitat, and near-extirpation of white-tailed deer populations during the 1800s led to the loss of most eastern puma populations by 1900. Although individual pumas were taken as late as 1932 in New Brunswick and 1938 in Maine, neither the Service's 5-year status review (USFWS 2011) nor information that has become available since then has yielded any convincing evidence to support the hypothesis that small, cryptic populations of the subspecies continue to persist anywhere within its historical range, including northern New England and eastern Canada. These findings are supported by the most recent Canadian Wildlife Service status review (Scott 1998) and by analyses in the revised Florida Panther Recovery Plan (USFWS 2008). We therefore conclude that the subspecies Puma (=Felis) concolor couguar, or eastern puma (=cougar), was likely extirpated from eastern North America prior to its listing in 1973, noting, however, that extirpation had not been substantiated at that time.

We further conclude that although there have been thousands of puma sightings in eastern North America since the 1950s, most are a case of mistaken identity. We acknowledge that a small number of pumas are occasionally encountered in the wild in eastern North America within the historical range of the listed eastern puma. Based on the best available scientific evidence, however, we conclude that these are escaped or released captive animals, or dispersers from western puma populations, not the eastern puma subspecies. Breeding of escaped or released individuals, if it occurs, appears to be an extremely rare event, and there is no evidence of any population established from escaped or released captive animals.

Although it is improbable that pumas can disperse regularly out of Florida, puma range expansion may be occurring in the Midwest from the West. Several wild-origin pumas have been confirmed in that region and are likely dispersers from western populations that have reached carrying capacity. Dispersal into the Midwest will likely increase in frequency as long as western puma populations continue to grow.

With regard to puma taxonomy, we recognize the ongoing debate among scientists about the taxonomic assignment of puma subspecies and whether genetics should be the driving factor in puma taxonomy. Although Culver et al.'s (2000, entire) genetic analysis injected significant uncertainties into current puma taxonomy, we have concluded that until a comprehensive evaluation (including genetic, morphometric, and behavioral analyses) of North American pumas is completed, the best available information continues to support the assignment of the eastern taxon to Puma (=Felis) concolor couguar. We further note that these taxonomic questions do not affect the determinations in this proposed rule regarding the listed entity's biological status.

Taking all these considerations into account, we conclude that the taxon Puma (=Felis) concolor couguar is extinct.

After a thorough review of all available information, we have determined that the subspecies Puma (=Felis) concolor couguar is extinct. Based upon this determination and taking into consideration the definitions of “endangered species” and “threatened species” contained in the Act and the reasons for delisting as specified in 50 CFR 424.11(d), we propose to remove the eastern puma from the List of Endangered and Threatened Wildlife at 50 CFR 17.11.

Conservation measures provided to species listed as endangered or threatened under the Act include recognition, recovery actions, requirements for Federal protection, and prohibitions against certain practices. However, since the Service has determined the eastern cougar to be extinct, this proposed rule, if made final, would remove any Federal conservation measures for any individual pumas (except dispersing Florida panthers) that may subsequently be found within the historical range of the eastern puma.

This proposal, if made final, would revise 50 CFR 17.11 to remove the eastern puma from the List of Endangered and Threatened Wildlife due to extinction. The prohibitions and conservation measures provided by the Act would no longer apply to this subspecies. There is no designated critical habitat for the eastern puma.

Section 4(g)(1) of the Act, added in the 1988 reauthorization, requires us to implement a program, in cooperation with the States, to monitor for not less than 5 years the status of all species that have recovered and been removed from the Lists of Endangered and Threatened Wildlife and Plants (50 CFR 17.11 and 17.12). Based upon the results of more than 25 years of investigating sporadic reports of sightings and our conclusion that the eastern puma is extinct, post-delisting monitoring is not warranted.

We are required by Executive Orders 12866 and 12988 and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule we publish must:

(a) Be logically organized;

(b) Use the active voice to address readers directly;

(c) Use clear language rather than jargon;

(d) Be divided into short sections and sentences; and

(e) Use lists and tables wherever possible.

If you feel that we have not met these requirements, send us comments by one of the methods listed in ADDRESSES. To better help us revise the rule, your comments should be as specific as possible. For example, you should tell us the names of the sections or paragraphs that are unclearly written, which sections or sentences are too long, the sections where you feel lists or tables would be useful, etc.

We have determined that an environmental assessment or an environmental impact statement, as defined under the authority of the National Environmental Policy Act of 1969, need not be prepared in connection with regulations adopted pursuant to section 4(a) of the Act. We published a notice outlining our reasons for this determination in the Federal Register on October 25, 1983 (48 FR 49244).

In accordance with the President's memorandum of April 29, 1994, Government-to-Government Relations with Native American Tribal Governments (59 FR 22951), E.O. 13175, and the Department of the Interior's manual at 512 DM 2, we readily acknowledge our responsibility to communicate meaningfully with recognized Federal Tribes on a government-to-government basis. In accordance with Secretarial Order 3206 of June 5, 1997 (American Indian Tribal Rights, Federal-Tribal Trust Responsibilities, and the Endangered Species Act), we readily acknowledge our responsibilities to work directly with Tribes in developing programs for healthy ecosystems, to acknowledge that tribal lands are not subject to the same controls as Federal public lands, to remain sensitive to Indian culture, and to make information available to Tribes. Accordingly, the Service communicated with Tribes during the 5-year review process, and we are notifying Tribes of our activities regarding this proposal to delist the eastern puma based on extinction.

A complete list of all references cited in this document and in the 5-year review upon which this proposal is based is available upon request from the Service's Maine Field Office (see FOR FURTHER INFORMATION CONTACT). References are also posted on http://www.fws.gov/northeast/ECougar.

The primary authors of this proposed rule are the staff members of the Maine Field Office and the Hadley, Massachusetts, Regional Office.

Accordingly, we propose to amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as set forth below: